Activity in the reserves for unpaid losses and LAE is summarized as follows (in thousands):

 

 

 

 

The $7.0 million favorable development, $5.2 million favorable development and $10.0 million unfavorable development in prior accident years recognized in 2015, 2014 and 2013, respectively, represent normal changes in our loss reserve estimates. In 2015 and 2014, the aggregate loss reserve estimates for prior years were decreased to reflect favorable loss development when the available information indicated a reasonable likelihood that the ultimate losses would be less than the previous estimates. In 2013,  the aggregate loss reserve estimates for prior years were increased to reflect unfavorable loss development when the available information indicated a reasonable likelihood that the ultimate losses would be more than the previous estimates. Generally, changes in reserves are caused by variations between actual experience and previous expectations and by reduced emphasis on the Bornhuetter-Ferguson method due to the aging of the accident years.

 

 

The $7.0 million decrease in reserves for unpaid losses and LAE recognized in 2015 was attributable to $7.4 million favorable development on claims incurred in the 2014 accident year, $1.5 million unfavorable development on claims incurred in the 2013 accident year and $1.1 million favorable development on claims incurred in the 2012 and prior accident years. Our Standard Commercial P&C operating unit,  Workers Compensation operating unit, Specialty Commercial operating unit and our MGA Commercial Products operating unit accounted for $5.4 million, $2.0 million, $2.0 million and $0.2 million, respectively, of the decrease in reserves recognized during 2015.  The decrease in reserves for our Standard Commercial P&C operating unit was primarily related to our general liability lines of business. The decrease in reserves for our Workers Compensation operating unit was attributable to the 2014, 2013 and 2012 and prior accident years.  The decrease in reserves for our Specialty Commercial operating unit was primarily related to $0.9 million favorable development in our general aviation line of business, $0.8 million favorable development in our medical professional liability products and $0.3 million favorable development in our commercial excess liability line of business. The decrease in reserves in our MGA Commercial Products operating unit primarily related to our commercial auto liability and general liability lines of business. These favorable developments were partially offset by unfavorable development of $2.6 million in our Specialty Personal Lines operating unit primarily attributable to the 2014 accident year.

 

The $5.2 million decrease in reserves for unpaid losses and LAE recognized in 2014 was attributable to $7.2 million favorable development on claims incurred in the 2013 accident year, $4.4 million unfavorable development on claims incurred in the 2012 accident year and $2.4 million favorable development on claims incurred in the 2011 and prior accident years.  Our Standard Commercial P&C operating unit, Specialty Personal Lines operating unit, Workers Compensation operating unit and Specialty Commercial operating unit accounted for $4.1 million, $2.9 million, $1.9 million and $1.0 million, respectively, of the decrease in reserves recognized during 2014.  The decrease in reserves for our Standard Commercial P&C operating unit was primarily related to our commercial auto and general liability lines of business.  The decrease in reserves for our Specialty Personal Lines operating unit was primarily attributable to the 2013 accident year.  The decrease in reserves for our Workers Compensation operating unit was attributable to the 2013, 2012 and 2011 and prior accident years.  The decrease in reserves for our Specialty Commercial operating unit was primarily related to $0.9 million favorable development in our commercial excess liability line of business and $0.4 million favorable development in our medical professional liability products, partially offset by a $0.3 million unfavorable development in our general aviation line of business.  These favorable developments were partially offset by unfavorable development of $4.7 million in our MGA Commercial Products operating unit primarily related to our commercial auto liability and general liability lines of business.

 

The $10.0 million increase in reserves for unpaid losses and LAE recognized in 2013 was attributable to $5.0 million unfavorable development on claims incurred in the 2012 accident year, $1.7 million unfavorable development on claims incurred in the 2011 accident year and $3.3 million unfavorable development on claims incurred in the 2010 and prior accident years.  Our MGA Commercial Products operating unit and Specialty Personal Lines operating unit accounted for $16.0 million and $1.8 million of the increase in reserves recognized during 2013.  The increase in reserves for our MGA Commercial Products operating unit was primarily related to commercial auto liability line of business.  The increase in reserves for our Specialty Personal Lines operating unit was primarily related to personal auto in the 2012 accident year.  These unfavorable developments were partially offset by favorable prior years’ loss development of $3.7 million in our Standard Commercial P&C operating unit, $2.6 million in our Specialty Commercial operating unit and $1.5 million in our Workers Compensation operating unit.  The decrease in reserves for our Standard Commercial P&C operating unit was primarily related to commercial auto and general liability lines of business.  The decrease in reserves for our Specialty Commercial operating unit was driven by $2.3 million of favorable claims development in the 2011 and prior accident years related to our aircraft liability lines of business, partially offset by $0.1 million unfavorable claims development in the 2012 accident year related to our aircraft hull coverage.  Further contributing to the decrease in reserves for our Specialty Commercial operating unit was $0.4 million of favorable claims development in our primary/excess & umbrella lines of business. The decrease in reserves for our Workers Compensation operating unit was related to the 2012 and 2011 accident years.