Incurred losses and LAE increased by 26.5% to $3,726.2 million for the year ended December 31, 2011 compared to $2,945.7 million in 2010. Of the $780.5 million increase, current year catastrophe losses represented $713.9 million, or 16.8 points, period over period, primarily due to the 2011 catastrophe losses discussed above. The $586.5 million of current year catastrophe losses for 2010 related primarily to the Chile earthquake ($416.2 million), the 2010 New Zealand earthquake ($90.0 million), the 2010 Australia hailstorms and floods ($65.3 million) and the Canadian hailstorm ($15.0 million). In addition, the overall attritional losses increased $50.3 million due, in part, to higher earned premium in the current year, which generated higher attritional losses for the current year, as well as the impact of favorable development in 2010 without comparable favorable development in 2011.
Commission and brokerage expenses decreased by 6.7% to $327.8 million in 2011 compared to $351.6 million in 2010, primarily due to the decline in premiums earned and a shift in the mix of business. Segment other underwriting expenses in 2011 decreased slightly to $39.3 million from $42.5 million in 2010.
Premiums. Gross written premiums decreased by 3.7% to $1,192.3 million in 2012 compared to $1,238.4 million in 2011, primarily due to a shift in the mix of business towards excess of loss business, which generates a lower premium rate commensurate with lower loss exposure, a $25.0 million decline due to the impact of foreign exchange rate movement and a lower level of reinstatement premiums in 2012. Net written premiums decreased by 2.4% to $1,188.7 million in 2012 compared to $1,218.6 million in 2011, principally as a result of the decrease in gross written premiums. Premiums earned decreased 2.4% to $1,214.8 million 2012 compared to $1,244.5 million in 2011. The change in premiums earned is comparable to the change in net written premiums.
There can be no assurance that reserves for, and losses from, claim obligations will not increase in the future, possibly by a material amount. However, we believe that our existing reserves and reserving methodologies lessen the probability that any such increase would have a material adverse effect on our financial condition, results of operations or cash flows. In this context, we note that over the past 10 years, our calendar year operations have been affected by effects from prior period reserve re-estimates, ranging from a favorable $30.9 million in 2010, representing 0.4% of the net prior period reserves for the year in which the adjustment was made, to an unfavorable $249.4 million in 2004, representing 4.8% of the net prior period reserves for the year in which the adjustment was made.
With respect to asbestos only, at December 31, 2012, we had gross asbestos loss reserves of $422.8 million, or 95.5%, of total A&E reserves, of which $339.6 million was for assumed business and $83.2 million was for direct business.
The table below displays the potential impact of market value fluctuations and after-tax unrealized appreciation on our fixed maturity portfolio (including $860.4 million of short-term investments) for the period indicated based on upward and downward parallel and immediate 100 and 200 basis point shifts in interest rates. For legal entities with a U.S. dollar functional currency, this modeling was performed on each security individually. To generate appropriate price estimates on mortgage-backed securities, changes in prepayment expectations under different interest rate environments were taken into account. For legal entities with a non-U.S. dollar functional currency, the effective duration of the involved portfolio of securities was used as a proxy for the market value change under the various interest rate change scenarios.