For the year ended December 31, 2010, we reported net income of $82.6 million, or $2.76 per fully diluted share. For the year ended December 31, 2009, we reported net income of $117.5 million, or $3.81 per fully diluted share. For the year ended December 31, 2008, we reported net income of $62.9 million, or $2.05 per fully diluted share. In May 2008, we completed the acquisition of Argo International. Included in our consolidated results of operations for the year ended December 31, 2008, is seven months of activity specifically attributable to Argo International.
Index to Financial Statements The following table summarizes the above referenced loss reserve development as respects to prior year loss reserves by line of business for the year ended December 31, 2010:
When determining reserve levels, we recognize that there are several factors that present challenges and uncertainties to the estimation of loss reserves. Examples of these uncertainties include growth in loss reserves over the last several years in both the Excess and Surplus Lines and Commercial Specialty segments, changes to the reinsurance structure and potential increases in inflation. Our net retained losses vary by product and they have generally increased over time. To properly recognize these uncertainties, actuarial reviews have given significant consideration to the paid and incurred Bornhuetter-Ferguson (“BF”) methodologies. Compared with other actuarial methodologies, the paid and incurred BF methods assign smaller weight to actual reported loss experience, with the greatest weight assigned to an expected or planned loss ratio. The expected or planned loss ratio has typically been determined using various assumptions pertaining to prospective loss frequency and loss severity. In setting reserves at December 31, 2010, we continued to consider the paid and incurred BF methods for recent years.
We are primarily engaged in writing property and casualty insurance and reinsurance. We have four ongoing reporting segments: Excess and Surplus Lines, Commercial Specialty, Reinsurance and International Specialty. Additionally, we have a Run-off Lines segment for products that we no longer underwrite.
Included in losses and loss adjustment expenses for the year ended December 31, 2010 was $19.0 million in favorable loss reserve development on prior accident years within the casualty, professional liability and property lines. Included in losses and loss adjustment expenses was $4.5 million of storm losses for the 2010 accident year.
Index to Financial Statements The decrease in the loss ratio in 2009 compared to 2008 was primarily attributable to the absence of hurricane activity in 2009, $2.0 million lower storm related activity and $9.5 million decrease in non-catastrophe property and casualty lines losses. Additionally, the Commercial Specialty segment recognized $3.7 million of favorable development on prior accident year’s loss reserves in 2009. This favorable development was comprised primarily of $6.2 million of favorable development in workers compensation, $3.5 million of favorable development in short tail lines, $2.5 million of adverse development in other liability, and $3.5 million of adverse development in commercial auto liability.
Index to Financial Statements Earned premiums for the year ended December 31, 2010 increased in comparison to 2009 as a result of continued growth in the primary excess casualty and professional lines unit. Earned premiums for property catastrophe lines increased to $83.7 million for the year ended December 31, 2010 compared to $71.3 million for the same period in 2009. The primary excess casualty and professional lines unit contributed earned premiums of $13.7 million for the year ended December 31, 2010 compared with $4.1 million for the year ended December 31, 2009. Gross written and earned premiums for the year ended December 31, 2009 increased as compared to the same period in 2008 as a result of an improved property catastrophe rate environment, a greater use of outward reinsurance and third party quota shares to increase premium production, and the introduction of a primary excess casualty and professional lines unit.