- Underwriting income of $113.3 million and a combined ratio of 61.2%, compared to $127.9 million and 47.7%, respectively. The decrease in underwriting income was primarily driven by a $35.8 million increase in current accident year net claims and claim expenses principally due to the floods in Europe during late May and early June 2013 (the "European Floods") and the tornadoes that impacted Texas and Oklahoma during May 2013 (the "May 2013 U.S. Tornadoes") and a decrease of $18.6 million in favorable development on prior accident years net claims and claim expenses, partially offset by a $47.5 million increase in net premiums earned due to a combination of higher gross premiums written during the preceding twelve months and a decrease in ceded premiums written principally within the Company's catastrophe unit.
- The net negative impact (2) from the European Floods and May 2013 U.S. Tornadoes was $20.0 million and $18.8 million, respectively, for a total of $38.8 million from these events, as detailed in the table below.
- Gross premiums written increased $35.9 million, or 5.4%, to $703.2 million with the increase being driven by growth in the Company's specialty unit and Lloyd's segment, partially offset by a decrease in the Company's catastrophe unit.
- Total investment losses of $43.5 million, which includes the sum of net investment income, net realized and unrealized (losses) gains on investments and net other-than-temporary impairments, compared to gains of $44.8 million. The decrease was primarily driven by lower total returns in the Company's fixed maturity investment portfolio as a result of a rising interest rate environment and widening credit spreads.
- Other income declined $10.7 million to $0.6 million, compared to $11.3 million, primarily driven by a $4.1 million decrease in the profitability in the Company's weather and energy risk management operations and a $4.7 million reduction in the fair value of the Company's assumed and ceded reinsurance contracts accounted for at fair value.
|Three months ended June 30, 2013||European Floods||May 2013 U.S. Tornadoes||Total|
|(in thousands, except percentages)|
|Net claims and claim expenses incurred||$||(30,378||)||$||(26,271||)||$||(56,649||)|
|Reinstatement premiums earned||6,666||3,157||9,823|
|Net negative impact on underwriting result||$||(23,627||)||$||(22,740||)||(46,367||)|
|Redeemable noncontrolling interest||3,621||3,968||7,589|
|Net negative impact (2)||$||(20,006||)||$||(18,772||)||$||(38,778||)|
|Percentage point impact on consolidated combined ratio||9.2||8.3||17.8|
|Net negative impact on Reinsurance segment underwriting result||$||(19,647||)||$||(21,723||)||$||(41,370||)|
|Net negative impact on Lloyd's segment underwriting result||(3,980||)||(1,017||)||(4,997||)|
|Net negative impact on underwriting result||$||(23,627||)||$||(22,740||)||$||(46,367||)|
- a $21.2 million, or 56.9% increase in the Company's specialty unit to $58.5 million, compared to $37.3 million, primarily due to a number of new contracts and higher renewal rates across certain lines of business within the specialty unit; and partially offset by
- a $2.8 million decrease in the Company's catastrophe unit primarily reflecting reduced risk-adjusted pricing in the Florida market as a whole and the non-renewal of a number of contracts during the June renewals, partially offset by net positive reinstatement premiums written of $9.8 million during the current quarter related to the European Floods and May 2013 U.S. Tornadoes (compared to net negative reinstatement premiums written of $30.7 million in the comparative quarter related to the 2011 New Zealand and Tohoku Earthquakes), and $37.4 million of gross premiums written related to increased quota share premium in the second quarter of 2013.