Fourth Quarter 2012 Highlights (all figures compare fourth quarter 2012 results to the results for the same period in 2011 except as noted):
Gross premiums written and managed increased 10.8% to $481.2 million in the fourth quarter. Excluding programs, policies in-force increased by 1.1% as of December 31, 2012, compared to December 31, 2011. For the fourth quarter of 2012, premiums on renewed Commercial Insurance business excluding programs increased 5.3% and premiums on renewed Personal Insurance business increased 5.6%, resulting in an overall premium increase on renewal business of 5.4%. In the fourth quarter of 2012, our Commercial Insurance business renewal retention rate excluding programs was 83.7% and our Personal Insurance business renewal retention rate was 73.5%, resulting in an overall retention rate of 77.8%.
Total revenues increased 4.4% to $475.0 million in the fourth quarter of 2012. Net premiums earned in the fourth quarter of 2012 were $410.5 million, which were reduced by $18.0 million in catastrophe reinsurance reinstatement premiums.
Net investment income was $30.1 million compared to $32.1 million. The tax equivalent book yield on our investment portfolio, excluding the reciprocal exchanges, was 4.5% at December 31, 2012 compared to 4.7% at December 31, 2011. Net realized investment gains were $21.0 million compared to gains of $4.1 million. Total commission and fee income was $13.5 million compared to $11.7 million.The net combined ratio was 131.8%, compared with 98.4%. The net combined ratio excluding the impact of catastrophes and reserve development was 100.5%, compared with 99.0% in the fourth quarter of 2011. The net loss ratio was 92.7% compared to 64.9%. The loss ratio in the fourth quarter of 2012 included 29.9 points from Superstorm Sandy. (Excluding the business that we manage on behalf of the reciprocal exchanges, the net loss ratio was 91.8%, including 30.0 points from Superstorm Sandy, compared to 65.0%.)