NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 8—Commitments and Contingencies (Continued) The following table reconciles changes in the Company’s accrued warranties and related costs (in millions):
## Table 0 ##
The Company generally does not indemnify end-users of its operating system and application software against legal claims that the software infringes third-party intellectual property rights.
Other agreements entered into by the Company sometimes include indemnification provisions under which the Company could be subject to costs and/or damages in the event of an infringement claim against the Company or an indemnified third-party.
However, the Company has not been required to make any significant payments resulting from such an infringement claim asserted against itself or an indemnified third-party and, in the opinion of management, does not have a potential liability related to unresolved infringement claims subject to indemnification that would have a material adverse effect on its financial condition or operating results.
Therefore, the Company did not record a liability for infringement costs as of either September 29, 2007 or September 30, 2006.
Concentrations in the Available Sources of Supply of Materials and Product Certain key components including, but not limited to, microprocessors, enclosures, certain LCDs, certain optical drives, and application-specific integrated circuits (‘‘ASICs’’) are currently obtained by the Company from single or limited sources which subjects the Company to supply and pricing risks.
Many of these and other key components that are available from multiple sources including, but not limited to, NAND flash memory, DRAM memory, and certain LCDs, are at times subject to industry-wide shortages and significant commodity pricing fluctuations.
In addition, the Company has entered into certain agreements for the supply of critical components at favorable pricing, and there is no guarantee that the Company will be able to extend or renew these agreements when they expire.
Therefore, the Company remains subject to significant risks of supply shortages and/or price increases that can adversely affect gross margins and operating margins.
In addition, the Company uses some components that are not common to the rest of the global personal computer, consumer electronics and mobile communication industries, and new products introduced by the Company often utilize custom components obtained from only one source until the Company has evaluated whether there is a need for and subsequently qualifies additional suppliers.
If the supply of a key single-sourced component to the Company were to be delayed or curtailed, or in the event a key manufacturing vendor delays shipments of completed products to the Company, the Company’s ability to ship related products in desired quantities and in a timely manner could be adversely affected.
The Company’s business and financial performance could also be adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source.
Continued availability of these components may be affected if producers were to decide to concentrate on the production of common components instead of components customized to meet the Company’s requirements.
Finally, significant portions of the Company’s CPUs, iPods, iPhones, logic boards, and other assembled products are now manufactured by outsourcing partners, primarily in various parts of Asia.
A significant concentration of this outsourced manufacturing is currently performed by only a few of the Company’s outsourcing partners, often in single locations.
Certain of these outsourcing partners are the sole-sourced supplier of components and manufacturing outsourcing for many of the Company’s key products, including but not limited to, assembly
substances, including asbestos (i. e.  A&E).
The Company’s asbestos claims typically involve potential liability for bodily injury from exposure to asbestos or for property damage resulting from asbestos or products containing asbestos.
The Company’s environmental claims typically involve potential liability for (a) the mitigation or remediation of environmental contamination or (b) bodily injury or property damages caused by the release of hazardous substances into the land, air or water.
As of December 31, 2006, roughly 7% of the Company’s gross reserves are an estimate of the Company’s ultimate liability for A&E claims.
The Company’s A&E liabilities stem from Mt.
McKinley’s direct insurance business and Everest Re’s assumed reinsurance business.
This estimate is made based on assessments of the underlying exposures as the result of (1) long and variable reporting delays, both from insureds to insurance companies and from ceding companies to reinsurers; (2) historical data, which is more limited and variable on A&E losses than historical information on other types of casualty claims; and (3) unique aspects of A&E exposures for which ultimate value cannot be estimated using traditional reserving techniques.
There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims.
Among the uncertainties are: (a) potential passing of many years between exposure and manifestation of any bodily injury or property damage; (b) difficulty in identifying sources of asbestos or environmental contamination; (c) difficulty in properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure.
With respect to asbestos claims in particular, several additional factors have emerged in recent years that further compound the difficulty in estimating the Company’s liability.
These developments include: (a) the significant growth over a short period of time in the number of claims filed, in part reflecting a much more aggressive plaintiff bar and including claims against defendants who may only have a “peripheral” connection to asbestos; (b) a disproportionate percentage of claims filed by individuals with no physical injury, which should have little to no financial value but which have increasingly been considered in jury verdicts and settlements; (c) the growth in the number and significance of bankruptcy filings by companies as a result of asbestos claims (including, more recently, bankruptcy filings in which companies attempt to resolve their asbestos liabilities in a manner that is prejudicial to insurers and forecloses insurers from participating in the negotiation of asbestos related bankruptcy reorganization plans); (d) the concentration of claims in a small number of states that favor plaintiffs; (e) the growth in the number of claims that might impact the general liability portion of insurance policies rather than the product liability portion; (f) measures adopted by specific courts to ameliorate the worst procedural abuses; (g) an increase in settlement values being paid to asbestos claimants, especially those with cancer or functional impairment; (h) legislation in some states to address asbestos litigation issues; and (i) the potential that other states or the U.  S.  Congress may adopt legislation on asbestos litigation.
Anecdotal evidence suggest that new claims filing rates have decreased, that new filings of asbestosdriven bankruptcies have decreased and legislative reforms are beginning to diminish the potential ultimate liability for asbestos losses.
Management believes that these uncertainties and factors continue to render reserves for A&E and particularly asbestos losses significantly less subject to traditional actuarial analysis than reserves for other types of losses.
Given these uncertainties, management believes that no meaningful range for such ultimate losses can be established, particularly for asbestos.
Further, A&E reserves may be subject to more variability than non-A&E reserves and such variation could have a material adverse effect on the Company’s financial condition, results of operation and/or cash flow.
The Company establishes reserves to the extent that, in the judgment of management, the facts and prevailing law reflect an exposure for the Company or its ceding companies.
The following table summarizes incurred losses with respect to A&E on both a gross and net of retrocessional basis for the years indicated:
## Table 1 ##
The Company endeavors to actively engage with every insured account posing significant potential asbestos exposure to Mt.
McKinley.
Such engagement can take the form of pursuing a final settlement, negotiation, litigation, or the monitoring of claim activity under Settlement in Place (“SIP”) agreements.
SIP agreements generally condition an insurer’s payment upon the actual claim experience of the insured and may have annual payment caps or other measures to control the insurer’s payments.
The Company’s Mt.
McKinley operation is currently managing seven SIP agreements, three of which were executed prior to the acquisition of Mt.
McKinley in 2000.
The Company’s preference with respect to coverage settlements is to execute settlements that call for a fixed schedule of payments, because such settlements eliminate future uncertainty.
The Company has significantly enhanced its classification of insureds by exposure characteristics over time, as well as its analysis by insured for those it considers to be more exposed or active.
Those insureds identified as relatively less exposed or active are subject to less rigorous, but still active management, with an emphasis on monitoring those characteristics, which may indicate an increasing exposure or levels of activity.
The Company continually focuses on further enhancement of the detailed estimation processes used to evaluate potential exposure of policyholders, including those that may not have reported significant A&E losses.
Everest Re’s book of assumed A&E reinsurance is relatively concentrated within a limited number of contracts and for a limited period, from 1977 to 1984.
Because the book of business is relatively concentrated and the Company has been managing the A&E exposures for many years, its claim staff is familiar with the ceding companies that have generated most of these liabilities in the past and which are therefore most likely to generate future liabilities.
The Company’s claim staff has developed familiarity both with the nature of the business written by its ceding companies and the claims handling and reserving practices of those companies.
This level of familiarity enhances the quality of the Company’s analysis of its exposure through those companies.
As a result, the Company believes that it can identify those claims on which it has unusual exposure, such as non-products asbestos claims, for concentrated attention.
However, in setting reserves for its reinsurance liabilities, the Company relies on claims data supplied, both formally and informally by its ceding companies and brokers.
This furnished information is not always timely or accurate and can impact the accuracy and timeliness of the Company’s ultimate loss projections.
The following table summarizes the composition of the Company’s total reserves for A&E losses, gross and net of reinsurance, for the periods indicated:
## Table 2 ##
(1) Additional reserves are case specific reserves established by the Company in excess of those reported by the ceding company, based on the Company’s assessment of the covered loss.
(Some amounts may not reconcile due to rounding. )
Additional losses, including those relating to latent injuries and other exposures, which are as yet unrecognized, the type or magnitude of which cannot be foreseen by either the Company or the industry, may emerge in the future.
Such future emergence could have material adverse effects on the Company’s future financial condition, results of operations and cash flows.
Commission and brokerage increased by 5.9% to $184.4 million in 2012 compared to $174.0 million in 2011 reflecting higher contingent commissions in 2012.
Segment other underwriting expenses increased to $30.6 million in 2012 compared to $26.3 million for the same period in 2011.
The increases are primarily attributable to higher personnel benefit costs.
Insurance.
The following table presents the underwriting results and ratios for the Insurance segment for the periods indicated.
## Table 3 ##
Premiums.
Gross written premiums increased by 18.2% to $1,268.7 million in 2013 compared to $1,073.1 million in 2012.
This increase was primarily driven by California workers’ compensation, crop and nonstandard auto business.
Net written premiums increased by 27.5% to $1,086.2 million in 2013 compared to $852.1 million in 2012.
The larger increase in net written premiums compared to gross written premiums is mainly due to less use of reinsurance, particularly on the crop business.
Premiums earned increased 21.7% to $1,037.4 million in 2013 compared to $852.4 million in 2012.
The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Gross written premiums increased by 10.0% to $1,073.1 million in 2012 compared to $975.6 million in 2011.
This increase was primarily driven by crop and primary A&H medical stop loss business, partially offset by the termination and runoff of several large casualty programs.
Net written premiums increased by 3.9% to $852.1 million in 2012 compared to $820.5 million in 2011.
The lower increase in net written premiums in comparison to gross written premiums is primarily attributable to a higher level of reinsurance employed for the crop business.
Premiums earned increased 3.8% to $852.4 million in 2012 compared to $821.2 million in 2011.
The change in premiums earned is relatively consistent with the increase in net written premiums.

<table><tr><td></td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>Beginning accrued warranty and related costs</td><td>$284</td><td>$188</td><td>$105</td></tr><tr><td>Cost of warranty claims</td><td>-281</td><td>-267</td><td>-188</td></tr><tr><td>Accruals for product warranties</td><td>227</td><td>363</td><td>271</td></tr><tr><td>Ending accrued warranty and related costs</td><td>$230</td><td>$284</td><td>$188</td></tr></table>
<table><tr><td>(Dollars in thousands)</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Gross basis:</td><td></td><td></td><td></td></tr><tr><td>Beginning of period reserves</td><td>$649,460</td><td>$728,325</td><td>$765,257</td></tr><tr><td>Incurred losses</td><td>113,400</td><td>77,050</td><td>171,729</td></tr><tr><td>Paid losses</td><td>-112,726</td><td>-155,915</td><td>-208,661</td></tr><tr><td>End of period reserves</td><td>$650,134</td><td>$649,460</td><td>$728,325</td></tr><tr><td>Net basis:</td><td></td><td></td><td></td></tr><tr><td>Beginning of period reserves</td><td>$450,350</td><td>$506,675</td><td>$534,369</td></tr><tr><td>Incurred losses</td><td>106,595</td><td>81,351</td><td>159,422</td></tr><tr><td>Paid losses</td><td>-45,533</td><td>-137,676</td><td>-187,116</td></tr><tr><td>End of period reserves</td><td>$511,412</td><td>$450,350</td><td>$506,675</td></tr></table>
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Case reserves reported by ceding companies</td><td>$135.4</td><td>$141.5</td><td>$161.0</td></tr><tr><td>Additional case reserves established by the Company (assumed reinsurance)(1)</td><td>116.1</td><td>150.2</td><td>139.7</td></tr><tr><td>Case reserves established by the Company (direct insurance)</td><td>38.9</td><td>63.0</td><td>133.8</td></tr><tr><td>Incurred but not reported reserves</td><td>264.4</td><td>283.9</td><td>352.3</td></tr><tr><td>Gross reserves</td><td>554.8</td><td>638.7</td><td>786.8</td></tr><tr><td>Reinsurance receivable</td><td>-21.9</td><td>-25.6</td><td>-37.7</td></tr><tr><td>Net reserves</td><td>$532.9</td><td>$613.1</td><td>$749.1</td></tr><tr><td>______________</td><td></td><td></td><td></td></tr></table>
<table><tr><td></td><td colspan="3">Years Ended December 31,</td><td colspan="2">2013/2012</td><td colspan="2">2012/2011</td></tr><tr><td>(Dollars in millions)</td><td>2013</td><td>2012</td><td>2011</td><td>Variance</td><td>% Change</td><td>Variance</td><td>% Change</td></tr><tr><td>Gross written premiums</td><td>$1,268.7</td><td>$1,073.1</td><td>$975.6</td><td>$195.6</td><td>18.2%</td><td>$97.5</td><td>10.0%</td></tr><tr><td>Net written premiums</td><td>1,086.2</td><td>852.1</td><td>820.5</td><td>234.1</td><td>27.5%</td><td>31.6</td><td>3.9%</td></tr><tr><td>Premiums earned</td><td>$1,037.4</td><td>$852.4</td><td>$821.2</td><td>$185.0</td><td>21.7%</td><td>$31.3</td><td>3.8%</td></tr><tr><td>Incurred losses and LAE</td><td>931.5</td><td>700.3</td><td>705.9</td><td>231.2</td><td>33.0%</td><td>-5.6</td><td>-0.8%</td></tr><tr><td>Commission and brokerage</td><td>133.7</td><td>117.6</td><td>137.7</td><td>16.1</td><td>13.7%</td><td>-20.1</td><td>-14.6%</td></tr><tr><td>Other underwriting expenses</td><td>119.3</td><td>103.0</td><td>89.5</td><td>16.3</td><td>15.8%</td><td>13.5</td><td>15.1%</td></tr><tr><td>Underwriting gain (loss)</td><td>$-147.0</td><td>$-68.5</td><td>$-111.9</td><td>$-78.6</td><td>114.8%</td><td>$43.5</td><td>-38.8%</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>Point Chg</td><td></td><td>Point Chg</td></tr><tr><td>Loss ratio</td><td>89.8%</td><td>82.2%</td><td>86.0%</td><td></td><td>7.6</td><td></td><td>-3.8</td></tr><tr><td>Commission and brokerage ratio</td><td>12.9%</td><td>13.8%</td><td>16.8%</td><td></td><td>-0.9</td><td></td><td>-3.0</td></tr><tr><td>Other underwriting expense ratio</td><td>11.5%</td><td>12.0%</td><td>10.8%</td><td></td><td>-0.5</td><td></td><td>1.2</td></tr><tr><td>Combined ratio</td><td>114.2%</td><td>108.0%</td><td>113.6%</td><td></td><td>6.2</td><td></td><td>-5.6</td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

Question: Which year is Incurred losses and LAE the most?
Answer: 2013