The expense ratio is calculated by combining the policy acquisition costs ratio and the general and administrative expenses ratio.
An increase in income attributable to operating affiliate investors of $68.8 million.
The loss ratio for the three months ended December 31, 2014 was (7.4)% compared to 1.7% for the three months ended December 31, 2013, a decrease of 9.1 percentage points.
The decrease in gross premiums written in the property lines of $11.8 million was as a result of AlphaCat 2014 having a smaller capital base than AlphaCat 2013. Partially offsetting this was an increase in the capital base of the AlphaCat ILS funds for the year ended December 31, 2014 compared to the year ended December 31, 2013. Business written into the AlphaCat ILS funds typically has a lower rate on line than business written into AlphaCat 2014 or AlphaCat 2013. As a result, the impact on gross premiums written from a change in capital base between AlphaCat 2014 and AlphaCat 2013 will be proportionately higher than from a change in the capital base of the AlphaCat ILS funds.
The property lines current year loss ratio, excluding the impact of notable and non-notable loss events, increased by 9.2 percentage points as a result of higher attritional losses in the current year. The favorable development of $53.8 million, on prior accident years for the year ended December 31, 2014, primarily relates to favorable development on attritional losses, better experience on known events and lower emergence of events.
General and administrative and share compensation expenses for the year ended December 31, 2014 were $11.1 million and $0.1 million, respectively.
The favorable movement on fixed maturity and short term investments was primarily as a result of a shift in the yield curve and a tightening of corporate bond spreads. The unfavorable movement on other investments was primarily due to the net realized and change in net unrealized (losses) gains of ($45.0) million on the Paulson hedge funds held by PaCRe. This is offset by a 90% noncontrolling interest of $40.5 million.
Other loss for the years ended December 31, 2014 and 2013 resulted primarily from adjustments related to assets acquired from Flagstone.
The Company also has an allocation to other investments, primarily hedge funds, investment funds and private equity funds. At December 31, 2014, these other investments, excluding noncontrolling interests, totaled $382.5 million, or 5.5% of total investments, excluding noncontrolling interest (December 31, 2013: $214.7 million or 3.3%). For further details related to our investment portfolio, including the extent of investments with fair values measured using unobservable inputs, see Notes 7 and 8 to the Consolidated Financial Statements in Part II, Item 8.
Net cash used in financing activities during the year ended December 31, 2014 was $489.5 million compared to $264.0 million during the year ended December 31, 2013, an unfavorable movement of $225.5 million. This unfavorable movement was driven primarily by a decrease in dividends paid of $243.0 million as a result of the special dividend that was paid in the first quarter of 2013, with no comparative dividend in 2014, and an increase in the issuance of notes payable to operating affiliates of $237.6 million; offset by, an increase in the repayment of notes payable to operating affiliates of $613.5 million.
The 2006 Junior Subordinated Deferrable Debentures (the "2006 JSDs") mature on June 15, 2036, are redeemable at the Company’s option at par beginning June 15, 2011, and require quarterly interest payments by the Company to the holders of the 2006 Junior Subordinated Deferrable Debentures. Interest is payable at a floating rate of three-month LIBOR plus 355 basis points, reset quarterly. The Company has entered into an interest rate swap which fixed the rate of interest on the 2006 JSDs at 5.83125%. The term of the swap is matched to the maturity date of the 2006 JSDs. The interest payments in the table above reflect the Company's contractual obligations with respect to the swap.
Loss emergence patterns for the business written by Talbot and Western World are generally derived from its own historic loss development triangulations and in some instances, the business written by Talbot is also supplemented by Lloyd’s market data. For the business written by Validus Re and AlphaCat, where its own historic loss development triangulations are currently more limited, greater use is made of market data including reinsurance industry data available from organizations such as statistical bureaus and consulting firms, where appropriate. Expected loss ratios are estimated in a variety of ways, largely dependent upon the data available. Wherever it deems appropriate, management incorporates the Company’s own loss experience in establishing initial expected loss ratios and reserves. This is particularly true for the business written by Talbot and Western World where a
Credit risk: Management includes an assessment of the creditworthiness of cedants in the review process above, primarily based on market knowledge, reports from rating agencies, the timeliness of cedants’ payments and the status of current balances owing. Based on this assessment, management believes that as at December 31, 2014 no provision for doubtful accounts is necessary for receivables from cedants.