Premiums earned increased 13.2 percent to $121,545,000 for the third quarter of 2012, from $107,416,000 for the third quarter of 2011. Premium income increased 10.6% in the property and casualty insurance segment and 21.4% in the reinsurance segment. In the property and casualty insurance segment, the majority of the increase is attributed to rate level increases, growth in insured exposures and an increase in retained policies. In the reinsurance segment, the increase is attributed to an offshore energy and liability proportional account in which Employers Mutual Casualty Company began participating effective January 1, 2012, an increase in “earned but not reported” premium on other pro rata accounts and rate level increases implemented during the January 1 renewal season. As previously disclosed, the 2012 revenue stream on the offshore energy and liability account is somewhat back-loaded because it is a new account and the majority of the underlying policies are expected to have effective dates in the months of June and July. For the nine months ended September 30, 2012, premiums earned increased 12.1 percent to $341,575,000 from $304,635,000 in 2011.
Catastrophe losses totaled $10,824,000 ($0.55 per share after tax) in the third quarter of 2012, compared to a record $26,366,000 ($1.33 per share after tax) in the third quarter of 2011. For the first nine months of 2012, catastrophe losses totaled $45,374,000 ($2.29 per share after tax), compared to an unprecedented $76,836,000 ($3.86 per share after tax) in the first nine months of 2011. On a segment basis, catastrophe losses amounted to $31,494,000 in the property and casualty insurance segment and $13,880,000 in the reinsurance segment during the first nine months of 2012.
Partially offsetting the significant decline in catastrophe losses is $6,776,000 ($0.34 per share after tax) of losses associated with a crop reinsurance program in the reinsurance segment. The crop reinsurance loss estimate is subject to uncertainty because the crop yields and commodity prices that will be used to calculate the ultimate loss have not been finalized. Because the losses from the crop reinsurance program are not attributable to a specific event, they are not subject to the $4,000,000 cap on losses per event under the excess of loss reinsurance agreement.