Amortization of deferred acquisition costs in 2014 was $3.88 billion, $61 million or 2% higher than in 2013, primarily reflecting the impact of the acquisition of Dominion, partially offset by declines in the Personal Insurance segment. Amortization of deferred acquisition costs in 2013 was $3.82 billion, $89 million or 2% lower than in 2012. Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.
The Company's effective tax rate was 27%, 26% and 22% in 2014, 2013 and 2012, respectively. The effective tax rates in all years were lower than the statutory rate of 35% primarily due to the impact of tax-exempt investment income on the calculation of the Company's income tax provision. In addition, the effective tax rate for 2013 was reduced by the impact of the resolution of prior year tax matters.
The loss and loss adjustment expense ratio of 57.9% in 2013 was 7.0 points lower than the loss and loss adjustment expense ratio of 64.9% in 2012. Catastrophe losses accounted for 2.6 points and 8.3 points of the 2013 and 2012 loss and loss adjustment expense ratios, respectively. Net favorable prior year reserve development in 2013 and 2012 provided 3.7 points and 4.2 points of benefit, respectively, to the loss and loss adjustment expense ratio. The 2013 underlying loss and loss adjustment expense ratio was 1.8 points lower than the 2012 ratio on the same basis, primarily reflecting the impact of earned pricing that exceeded loss cost trends in each of the Company's business segments.
The combined ratio of 92.8% in 2013 was 4.3 points lower than the combined ratio of 97.1% in 2012.
General and administrative expenses in 2014 were $977 million, $3 million or less than 1% lower than in 2013. The decrease in 2014 primarily reflected the impact of the Company's expense reduction initiatives, largely offset by higher contingent commission expenses and higher underwriting expenses resulting from higher new business levels. General and administrative expenses in 2013 were $980 million, $80 million or 9% higher than in 2012. The increase in 2013 included an increase in contingent commission expense due to an increase in the number of agents reverting from a fixed-value commission compensation program to a contingent commission compensation program and the impact of the reclassification of fee income described above. The increase in 2013 also included the impact of $12 million of restructuring charges, primarily comprised of severance costs related to the Company's announced plan to reduce certain claim and other insurance expenses in this segment. These factors were partially offset by a decline in advertising expense.
In 2014, gross and net Agency written premiums were 4% and 1% lower, respectively, than in 2013. The higher rate of decrease in gross written premiums in 2014 was primarily driven by the impact of the sale of the Company's NFIP business in 2013 described above. In 2013, gross and net Agency written premiums were both 5% lower than in 2012. Renewal rate changes exceeded expected loss cost trends in 2013 assuming weather patterns consistent with the Company's expectations.
Net asbestos paid loss and loss expenses in 2014, 2013 and 2012 were $242 million, $218 million and $236 million, respectively. Approximately 8%, 1% and 6% of total net paid losses in 2014, 2013
Consolidated Statement of Changes in Shareholders' Equity for the years ended December 31, 2014, 2013 and 2012
In addition to the stock option awards described above, certain stock option awards that were granted under legacy plans permitted an employee exercising an option to be granted a new option (a reload option) at an exercise price equal to the closing price of the Company's common stock on the date on which the original option was exercised. The reload option was permitted on certain stock option awards granted prior to January 2003 at an amount equal to the number of shares of the common stock used to satisfy both the exercise price and withholding taxes due upon exercise of an option and vest either six months or one year after the grant date and are exercisable for the remaining
A summary of stock option activity under the 2014 Incentive Plan and legacy share-based incentive compensation plans as of and for the year ended December 31, 2014 is as follows:
Future minimum annual rental payments under noncancellable operating leases for 2015, 2016, 2017, 2018 and 2019 are $160 million, $144 million, $118 million, $80 million and $61 million, respectively, and $133 million for 2020 and thereafter. Future sublease rental income aggregating approximately $6 million will partially offset these commitments.
The following consolidating financial statements of the Company have been prepared pursuant to Rule 3-10 of Regulation S-X. These consolidating financial statements have been prepared from the Company's financial information on the same basis of accounting as the consolidated financial statements. The Travelers Companies, Inc. has fully and unconditionally guaranteed certain debt obligations of TPC, which totaled $700 million at December 31, 2014.