“Premiums earned are now reflecting previously implemented rate increases,” stated Kelley. “We continue to see moderate rate improvement in the personal lines and are beginning to see small rate increases in most commercial lines as well, although that market remains very competitive. Other factors contributing to the increase in premiums earned are increases in commercial lines’ policy retentions, exposures and endorsements, as well as a decline in return premiums resulting from audits of policyholders’ insured exposures. In our reinsurance segment, premium rates improved during 2011 due to the large number of severe global events. Looking ahead, we do not expect commercial lines premium rate levels to increase significantly in 2012 as a result of the record catastrophe losses of 2011, however, we do expect steady rate improvement throughout the year and into 2013.”Investment income decreased 7.0 percent to $11,228,000 in the fourth quarter of 2011 from $12,075,000 in the fourth quarter of 2010. For the year ended December 31, 2011, investment income decreased 6.8 percent to $46,111,000 from $49,489,000 in 2010. The large declines in investment income are attributed to a persistent decline in the average coupon rate on fixed maturity securities during the past several years and an increase in short-term investments, which carry far lower yields. Catastrophe losses totaled $3,495,000 ($0.18 per share after tax) in the fourth quarter of 2011 compared to $3,051,000 ($0.15 per share after tax) in the fourth quarter of 2010. For the year ended December 31, 2011, catastrophe losses totaled a record $80,331,000 ($4.04 per share after tax) compared to $42,144,000 ($2.10 per share after tax) in 2010. On a segment basis, 2011 catastrophe losses amounted to$52,448,000 ($2.64 per share after taxes) in the property and casualty insurance segment and $27,883,000 ($1.40 per share after tax) in the reinsurance segment. The Company experienced $11,390,000 ($0.58 per share after tax) of favorable development on prior years’ reserves during the fourth quarter of 2011, compared to $4,562,000 ($0.23 per share after tax) in the fourth quarter of 2010. For the year ended December 31, 2011, the Company experienced $33,099,000 ($1.67 per share after tax) of favorable development compared to $50,749,000 ($2.53 per share after tax) in 2010. As in recent periods, development resulting from the final settlement of prior accident years’ claims was the main driver of the favorable development. The most recent actuarial analysis of the Company’s carried reserves indicates a level of adequacy consistent with other recent evaluations.