The combined loss and expense ratios for the classes of business within the commercial insurance segment were as follows:
Net premiums written from specialty insurance, which represented 22% of our premiums written in 2013, increased by 3% in 2013 and decreased by 6% in 2012 compared with the respective prior year. Net premiums written for the classes of business within the specialty insurance segment were as follows:
Net premiums written in our surety business increased in 2013 and decreased significantly in 2012 compared with the respective prior year. In 2013, net premiums written increased both inside and outside the United States. In 2012, net premiums written decreased inside the United States, due to the effects of the weak economic conditions that resulted in fewer contracts requiring a surety bond being awarded to our existing customers that operate in the construction industry, but increased outside the United States. The growth in net premiums written outside the United States in both 2013 and 2012 was driven by growth in Latin America.
Collectively, the results for the professional liability classes benefited from favorable prior year loss development in the past three years driven by positive loss experience related to accident years 2010 and prior. The current accident year combined ratio in our professional liability business was slightly below breakeven in 2013, slightly above breakeven in 2012 and near breakeven in 2011. The higher current accident year combined ratio in 2012 was attributable to adverse loss trends in certain classes within this component of our business.
The net favorable development of $614 million in 2012 was also due to various factors. The most significant factors were:
We experienced overall favorable development of about $200 million in the professional liability classes other than fidelity. This favorable development was driven by the directors and officers
On an after-tax basis, property and casualty investment income decreased by 5% in both 2013 and 2012 compared with the respective prior year. The after-tax annualized yield on our property and casualty investment portfolio was 2.88% in 2013 compared with 3.12% in 2012 and 3.25% in 2011.
Decisions to sell equity securities and fixed maturities are governed principally by considerations of investment opportunities and tax consequences. As a result, realized gains and losses on the sale of these investments may vary significantly from period to period. However, such gains and losses generally have little, if any, impact on shareholders’ equity as all of these investments are carried at fair value, with the unrealized appreciation or depreciation after tax reflected in accumulated other comprehensive income.
The net realized gains of the limited partnerships reported in 2013 primarily reflected the positive performance of the global equity and high yield investment markets in the first and third quarters of 2013 and the fourth quarter of 2012. The net realized gains of the limited partnerships reported in 2012 primarily reflected the strong performance of the U.S. equity and high yield investment markets in the first and third quarters of 2012, partially offset by the negative performance of several non-U.S. equity markets, particularly in Asia, in the fourth quarter of 2011 and the global equity markets in the second quarter of 2012. The net realized gains of the limited partnerships reported in 2011 reflected the strong performance of the equity and high yield investment markets in the fourth quarter of 2010 and in the first quarter of 2011.
payment of dividends to Chubb) by approximately $300 million. In 2013, dividends paid to Chubb by the property and casualty subsidiaries decreased by $196 million compared with 2012. In 2012, cash provided by the property and casualty subsidiaries’ operating activities increased approximately $370 million compared with 2011 primarily as a result of higher premium collections and lower loss payments. In 2012, cash provided by the property and casualty subsidiaries’ operating activities exceeded the cash used for financing activities by the property and casualty subsidiaries (primarily the payment of dividends to Chubb) by approximately $650 million. In 2012, dividends paid to Chubb by the property and casualty subsidiaries decreased by $940 million compared with 2011. In 2011, the cash used by the property and casualty subsidiaries for financing activities (primarily the payment of dividends to Chubb) exceeded the cash provided by the property and casualty subsidiaries’ operating activities by approximately $650 million.