Tangible book value per common share is defined as total shareholders’ equity available to Validus, excluding the value of intangible assets and goodwill, divided by the number of common shares outstanding as at the end of the period, giving no effect to dilutive securities. Tangible book value per common share is a non-GAAP financial measure, which are described in the section entitled “Non-GAAP Financial Measures.”
Property and other reinsurance premiums have historically risen in the aftermath of significant catastrophic losses. As loss reserves are established, industry surplus is depleted and the industry’s capacity to write new business diminishes. The global property and casualty insurance and reinsurance industry has historically been highly cyclical. Since 2007, increased capital provided by new entrants or by the commitment of capital by existing insurers and reinsurers increased the supply of insurance and reinsurance which resulted in a softening of rates on most lines. From 2010 to 2012, there was an increased level of catastrophe activity, principally the Chilean earthquake, Deepwater Horizon, the Tohoku earthquake, the New Zealand earthquakes and Superstorm Sandy, but the Company continues to see increased competition and decreased premium rates in most classes of business. In the
Gross premiums written for the three months ended December 31, 2015 in the Talbot segment were $229.7 million compared to $247.4 million for the three months ended December 31, 2014, a decrease of $17.8 million or 7.2%. This decrease was primarily due to reduced premiums in the cargo line of $9.2 million, due to ongoing market conditions and economic factors which have reduced new business and renewals.
The Company acquired Western World on October 2, 2014, therefore, the results of Western World have been included in the Company's consolidated results from the date of acquisition. As a result, there is no comparative information included for the nine months ended September 30, 2014 or the year ended December 31, 2013.
an increase in notable loss events of $62.0 million; offset by,
Gross premiums written for the three months ended December 31, 2015 were $229.7 million compared to $247.4 million for the three months ended December 31, 2014, a decrease of $17.8 million, or 7.2%. Gross premiums written for the three months ended December 31, 2015 included $73.9 million of property premiums, $60.6 million of marine premiums and $95.1 million of specialty premiums compared to $76.1 million of property premiums, $72.9 million of marine premiums and $98.4 million of specialty premiums for the three months ended December 31, 2014. The decrease in the marine premiums of $12.2 million was driven by decreases in a number of classes, but primarily due to reduced premiums in the cargo line of $9.2 million, due to ongoing market conditions and economic factors which have reduced new business and renewals, together with the non-recurrence of favorable adjustments in the prior year.
The property acquisition cost ratio increased by 1.6 percentage points due to lower ceded acquisition costs on quota share premiums as a result of the Latin American business being written through Validus Re Swiss. This business was previously written through Talbot and ceded to Validus Re through the second quarter of 2014. The marine acquisition cost ratio increased by 1.9 percentage points primarily due to the reinstatement premium impact of the second quarter notable loss event, Pemex and increases in acquisition costs across a number of classes, primarily in the upstream energy class, during the year ended December 31, 2014.
The following table presents the losses and loss expense ratio, policy acquisition cost ratio, general and administrative expense ratio, expense ratio and combined ratio for the years ended December 31, 2015, 2014 and 2013.
The increase in general and administrative expenses of $2.0 million was primarily due to an increase in staff costs and professional fees during the current year. The share compensation expenses for the years ended December 31, 2015 and 2014 were comparable. The increase in finance expenses of $5.9 million was primarily due to fees incurred in relation to raising new capital.
The decrease in investment income from AlphaCat Funds and Sidecars of $2.7 million was primarily due to the reduction in related party assets under management and the change in the ratio of higher to lower risk investments during the current year. The decrease in Validus' share of PaCRe's net loss of $0.4 million was primarily due to reduced losses on the investment portfolio in PaCRe.
Corporate share compensation expenses for the year ended December 31, 2015 were $13.0 million compared to $11.4 million for the year ended December 31, 2014, an increase of $1.6 million or 14.1%.