Acquisition costs and other underwriting expense of $543.7 million increased $145.3 million from $398.4 million for 2012. Acquisition costs and other underwriting expenses less ceding commissions totaled $346.7 million compared with $244.5 million to 2011. The expense ratio was 24.4%, up from 23.6% in 2011.
Other expense of $161.3 million increased $74.7 million from $86.6 million in 2011.
Total assets of $7.4 billion increased $1.7 billion, or 29.5%, from $5.7 billion at December 31, 2011. Total cash, cash equivalents and investments of $2.7 billion increased $610 million, or 29.2%, from $2.1 billion as of December 31, 2011. Shareholders' equity of $1.1 billion increased 28.5% from $891 million at year-end 2011.
During 2012, the Board of Directors declared cash dividends totaling $0.39 per share. In addition, on August 6, 2012, the Board of Directors declared a 10% stock dividend. As of December 31, 2012, the Company's long-term debt-to-capitalization ratio was 20.9% compared with 23.9% as of December 31, 2011.(1) References to operating earnings, operating diluted EPS, and operating return on equity are Non-GAAP financial measures defined by the Company as net income, diluted earnings per share and return on equity excluding after-tax net realized investment gain and loss on securities, non-cash amortization of certain intangible assets, non-cash interest on convertible senior notes net of tax, foreign currency transaction gain and loss and gain on acquisition net of tax. Please see the Non-GAAP Financial Measures table at the end of this release for important information about the use of these Non-GAAP measures and their reconciliation to GAAP. (2) In September 2012, the Company paid a ten percent stock dividend. As a result, prior year's weighted average common shares outstanding, diluted shares outstanding, earnings per share, diluted earnings per share and operating diluted earnings per share have been adjusted. The dividend resulted in a reduction in basic earnings per share and diluted operating earnings per share of $0.06 and a reduction in diluted earnings per share of $0.05 for the three months ended December 31, 2011. The dividend resulted in a reduction in basic earnings per share of $0.27, a reduction in diluted earnings per share of $0.25 and a reduction in operating diluted earnings per share of $0.26 for the year ended December 31, 2011. Conference Call: On February 14, 2013 at 9:00 AM ET, CEO Barry Zyskind and CFO Ron Pipoly will review these results via a conference call and webcast that may be accessed as follows: