The amount of our debt obligations decreased by $14 million in 2016, compared with 2015. Our 10.3 percent ratio of debt to total capital (debt plus shareholders’ equity) at year-end 2016 decreased by 1.0 percentage point compared with the prior-year ratio and remained comfortably within our target range.
Our field claims representatives establish case reserves when claims are reported to the company to provide for our unpaid loss and loss expense obligation associated with individual claims. Field claims managers supervise and review all claims with case reserves less than $100,000. Additionally, a headquarters supervisor and regional claims manager review all claims under $100,000 if litigation or a certain specialty claim is involved. All claims with case reserves of $100,000 or greater are reviewed and approved by an experienced headquarters supervisor and regional claims manager - up from a threshold amount of $35,000 for several years prior to 2015. Upper-level headquarters claims managers also review case reserves of $175,000 or more - up from a threshold amount of $100,000 for several years prior to 2015.
Management ultimately determined the pricing for each Level 3 security that we considered to be the best exit price valuation. Broker quotes are obtained for thinly traded securities that subsequently fall within the Level 3 hierarchy. We have generally obtained and evaluated two nonbinding quotes from brokers; our investment professionals determine our best estimate of fair value.
Other written premiums consist primarily of premiums ceded to reinsurers as part of our ceded reinsurance program and in total contributed $15 million more in 2016 to net written premiums than in 2015. A decrease in ceded premiums, other than Cincinnati Re premiums, contributed $1 million to net written premium growth in 2016, compared with 2015. Other written premiums also included a more favorable adjustment for 2016, compared with 2015, for estimated direct written premiums of policies in effect but not yet processed in our commercial lines insurance segment. This written premium adjustment has an immaterial effect on earned premiums.
Consolidated property casualty commission expenses rose $27 million, or 3 percent, in 2016, with profit-sharing commissions for agencies decreasing by less than $1 million. Commission expenses as a percent of earned premiums resulted in a ratio that decreased by 0.2 percentage-points compared with 2015, as earned premiums rose 5 percent. The 2016 ratio for other underwriting expenses was 0.3 percentage-points higher than 2015, reflecting an 8 percent increase in those expenses that outpaced growth in earned premiums. During 2016, we continued to carefully manage expenses while also making strategic investments that include enhancement of underwriting expertise, such as personal lines staff additions to support high net worth market expansion.
Most of the incurred losses and loss expenses shown in the personal lines insurance segment three-year highlights table are for the respective current accident years, with reserve development on prior accident years shown separately. Since approximately two-thirds of our personal lines current accident year incurred losses and loss expenses represent net paid amounts, the remaining one-third represents reserves for our estimate of ultimate losses and loss expenses. These reserves develop over time, and we re-estimate previously reported reserves as we learn more about the development of the related claims. The table below illustrates that development. For example, the 71.4 percent accident year 2015 loss and loss expense ratio reported as of December 31, 2015, developed favorably by 1.0 percentage points to 70.4 percent due to claims settling for less than previously estimated, or due to updated reserve estimates for unpaid claims, as of December 31, 2016. Accident year 2014 for the personal lines insurance segment developed favorably during 2015 and then developed unfavorably during 2016, as indicated by the progression over time for the ratios in the table. The unfavorable development during 2016 reflects the personal auto reserve addition described above.
The ratio increase was largely due to strategic investments that included enhancement of underwriting expertise, such as personal lines staff additions to support our high net worth market expansion.
Excess and surplus lines commission expense as a percent of earned premiums for 2016 rose slightly from 2015, driven by an increase in profit-sharing commissions for agencies. Other underwriting expenses increased in 2016, compared with 2015, largely due to strategic investments that include enhancement of underwriting expertise, such as upgrades to systems used in underwriting excess and surplus lines insurance policies. Those ratio-increase effects offset the favorable ratio-decrease effects of higher earned premiums and ongoing expense management efforts. In 2015, the ratio declined, largely due to earned premiums rising faster than those expenses.
The excess and surplus lines market is expected to see the magnitude of rate increases continue to decline on several classes of business due to increased capacity in the market. Competition is expected to remain strong, especially on large accounts, due primarily to standard market insurance companies insuring businesses that previously were written by excess and surplus lines insurers. Firming is expected to continue for specific classes of business where loss costs are exceeding rates, such as habitational for property coverages and general liability for liquor liability coverages.
Over the past several years, we have worked to maintain a portfolio of simple, yet competitive, products primarily under the LifeHorizons banner. Our product development efforts emphasize death benefit protection and guarantees. Distribution expansion within our property casualty insurance agencies remains a high priority. Our 34 life field marketing representatives work in partnership with our 138 property casualty field marketing representatives. Approximately 62 percent of our term and other life insurance product premiums were generated through our property casualty insurance agency relationships.
Total revenues in 2016 for our Other operations increased, compared with 2015, primarily due to earned premiums from our Cincinnati Re reinsurance assumed operations that began in 2015. Other also includes noninvestment operations of the parent company and its commercial leasing and financial services subsidiary, CFC Investment Company. Total expenses for Other also increased in 2016, primarily due to losses and loss expenses and underwriting expenses from our Cincinnati Re operations.
Other loss in the table below represents losses before income taxes. For each year shown, Other loss was largely driven by interest expense from debt of the parent company. The net result of Cincinnati Re was an underwriting profit of approximately $8 million in 2016 and approximately $1 million in 2015.
We carried $85 million of net loss and loss expense reserves for asbestos and environmental claims and $45 million of reserves for mold claims at year-end 2016, compared with $84 million and $45 million, respectively, for such claims at year-end 2015. The asbestos and environmental claims amounts for each respective year constituted 1.8 percent and 1.9 percent of total net loss and loss expense reserves at these year-end dates.
Gross life policy reserves were $2.671 billion at year-end 2016, compared with $2.583 billion at year-end 2015. The increase was primarily due to reserves for traditional life insurance contracts. We establish reserves for traditional life insurance policies based on expected expenses, mortality, morbidity, withdrawal rates and investment yields, including a provision for uncertainty. Once these assumptions are established, they generally are maintained throughout the lives of the contracts. We use both our own experience and industry experience adjusted for historical trends in arriving at our assumptions for expected mortality, morbidity and withdrawal rates. We use our own experience and historical trends for setting our assumptions for expected expenses. We base our assumptions for expected investment income on our own experience adjusted for current economic conditions.
Basket retention - Cincinnati Specialty Underwriters has purchased this coverage to limit our retention to $1 million in the event that the same occurrence results in both a property and a casualty loss.
financial condition of the issuer; changes in dividend payment; the length of time fair value had been less than cost; the severity of the decline in fair value below cost; the volatility of the security; and our ability and intent to hold each position until its forecasted recovery.
In May 2015, the FASB issued ASU 2015-09, Financial Services-Insurance: Disclosures About Short-Duration Contracts. ASU 2015-09 requires entities to provide additional disclosures about the liability for loss and loss expense reserves to increase the transparency of significant estimates. ASU 2015-09 also requires entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for loss and loss expense reserves, including reasons for the change and the effects on the financial statements. ASU 2015-09 also requires entities to disclose a rollforward of the liability of loss and loss expense reserves for annual and interim reporting periods. The effective date of ASU 2015-09 is for annual reporting periods beginning after December 15, 2015, and interim reporting periods beginning after December 15, 2016. The Company adopted this ASU as of December 31, 2016. The ASU did not have a material impact on our company’s financial position, cash flows or results of operations, but the ASU required additional disclosures in Note 4, Property Casualty Loss and Loss Expenses, to these consolidated financial statements and will require additional disclosure to our interim reporting periods in 2017.
For the years ended December 31, 2016, 2015 and 2014, there were no credit losses on fixed-maturity securities for which a portion of OTTI has been recognized in other comprehensive income.
$18 million for the personal auto line. Both lines developed unfavorable due to higher loss cost effects in recent accident years, resulting in an increase of our reserve estimate for claims that have not yet been settled.
During 2015, we experienced $184 million of favorable development on prior accident years including $154 million of favorable development in commercial lines, $5 million of adverse development in personal lines and $35 million of favorable development in excess and surplus lines. Favorable development in 2015 was $86 million more than in 2014, due primarily to reduced uncertainty of prior accident year loss and loss expense. This illustrates the potential for revisions inherent in estimating reserves, especially for long-tail lines such as commercial casualty and workers’ compensation. We recognized favorable development of $93 million for the workers' compensation line, largely due to more favorable 2015 workers' compensation trends for estimated payments to be made in future calendar years that were down slightly from 2014. We recognized favorable development of $63 million for the commercial casualty line. Development for products liability was favorable for most prior accident years and development of prior years
Our consolidated statements of income include life insurance contract holders' benefits incurred on ceded business:
$2 million in actuarial loss and less than $1 million in prior service cost.
Four equity compensation plans currently permit us to grant various types of equity awards. We currently grant incentive stock options, nonqualified stock options, service-based restricted stock units and performance-based restricted stock units to associates, including some with market-based performance objectives under our shareholder-approved plans. We also have a Holiday Stock Plan that permits annual awards of one share of common stock to each full-time associate for each full calendar year of service up to a maximum of 10 shares. One of our equity compensation plans permits us to grant stock to our outside directors as a component of their annual compensation. We used treasury shares for share-based compensation award issues or exercises during 2016 and 2015.
Below is a summary of option information for the year 2016: