Operating highlights for Insurance for the twelve months ended December 31, 2012 include:
- Gross written premiums of $1,355.4 million, up 32.8% compared with $1,020.3 million in the twelve months ended December 31, 2011
- Combined ratio of 99.3% compared with 96.1% for the twelve months ended December 31, 2011 (1)
- Favorable prior year loss reserve development of $35.2 million or 3.7 combined ratio points compared with $20.0 million or 2.6 combined ratio points in the twelve months ended December 31, 2011
The combined ratio of 99.3% for the twelve months of 2012 included catastrophe losses, pre-tax and net of reinsurance recoveries and reinstatement premiums, of $62.6 million or 4.2 percentage points. It also included losses, pre-tax net of reinsurance recoveries and reinstatement premiums of $31.1 million or 2.2 percentage points related to the Costa Concordia event. In comparison, the combined ratio for the twelve months of 2011 was 96.1% or 94.3% (1)(2) excluding catastrophe losses.
Net investment income for the fourth quarter of 2012 was $51.1 million compared with $54.2 million in the fourth quarter of 2011. Net realized and unrealized investment gains included in net income for the quarter were $5.6 million, which included $0.1 million of losses from the Company’s interest rate swaps.Unrealized gains in the available for sale investment portfolio, including equity securities, at the end of December 31, 2012 were $355.0 million, a decrease of $37.9 million from the end of the third quarter of 2012. Book yield at December 31, 2012 on the fixed income portfolio was 2.88%, a decrease of 49 basis points from 3.37% at the end of the fourth quarter of 2011. The average credit quality of the fixed income portfolio was AA and it had an average duration of 3.0 years at December 31, 2012, excluding the impact of interest rate swaps, or 2.5 years including the impact of interest rate swaps.