Net premiums written were $12.6 billion in 2014, $12.2 billion in 2013 and $11.9 billion in 2012. Net premiums written by business unit were as follows:
Net premiums written outside the United States were flat in 2013, as modest growth in our specialty insurance segment was offset by a slight decrease in our personal insurance segment, due to the negative effect of foreign currency translation. Net premiums written in our commercial insurance segment were flat. Net premiums written outside the United States excluding the effect of foreign currency translation increased by 2% in 2013, with modest growth occurring in our personal and specialty insurance segments and slight growth occurring in our commercial insurance segment.
Underwriting results for our property and casualty insurance business were profitable in each of the past three years, but less so in 2012. The combined loss and expense ratio was as follows:
The impact of catastrophes, including losses and any related reinsurance reinstatement premiums, for individually significant events and all other events was as follows:
Personal automobile net premiums written increased in both 2014 and 2013 compared with the respective prior year, but more so in 2013, driven in both years by growth in the United States. Growth in the United States in both years was attributable to higher average renewal rates, existing personal lines customers adding automobile coverage and new customers. Personal automobile net premiums written outside the United States decreased in 2014 and grew modestly in 2013 compared with the respective prior year. In both years, premium growth reflected the negative effect of foreign currency translation. Approximately 40% of our personal automobile net premiums written in 2014 were written outside the United States, with more than half of such premiums written in Brazil. Net premiums written for our homeowners business increased in 2014 and 2013 compared with the respective prior year, driven by growth in the United States. Net premiums written outside the United States for our homeowners business decreased slightly in 2014 and decreased modestly in 2013 compared with the
Our other personal business produced profitable results in each of the past three years, slightly more so in each successive year. The combined ratio was 0.8 of a percentage point lower in both 2014 and 2013 compared with the respective prior year. The lower combined ratio in both 2014 and 2013 was driven by better results in the excess liability and yacht components of this business, offset in part in 2014 by less profitable results in the accident and health component. Results for the excess liability component of this business were profitable in all three years, more so in each successive year. Results
Net premiums written in our specialty insurance segment, which represented 21% of our net premiums written in 2014, increased by 2% in 2014 and 3% in 2013 compared with the respective prior year. Net premiums written for the classes of business within the specialty insurance segment were as follows:
We also continue to assess and explore how changes in catastrophe risk, including the potential impact of global climate change, may affect our ability to manage our exposure under the insurance policies we issue, as well as how laws and regulations intended to combat climate change may affect us.
Incurred but not reported (IBNR) reserve estimates are generally calculated by first projecting the ultimate cost of all claims that have occurred and then subtracting reported losses and loss expenses. Reported losses include cumulative paid losses and loss expenses plus case reserves. The IBNR reserve includes a provision for claims that have occurred but have not yet been reported to us, some of which are not yet known to the insured, as well as a provision for future development on reported claims. A relatively large proportion of our net loss reserves, particularly for long tail liability classes, are reserves for IBNR losses. In fact, about 75% of our aggregate net loss reserves at December 31, 2014 were for IBNR losses.
Most of our loss reserves relate to long tail liability classes of business. Long tail classes include directors and officers liability, errors and omissions liability and other professional liability coverages, commercial primary and excess liability, workers’ compensation and other liability coverages. For many liability claims significant periods of time, ranging up to several years or even decades, may elapse between the occurrence of the loss, the reporting of the loss to us and the settlement of the claim. As a result, loss experience in the more recent accident years for the long tail liability classes has limited statistical credibility because a relatively small proportion of losses in these accident years are reported claims and an even smaller proportion are paid losses. An accident year is the calendar year in which a loss is incurred or, in the case of claims-made policies, the calendar year in which a loss is reported.
A number of states have implemented legislative and judicial reforms that focus the courts’ resources on the claims of the most seriously injured. Those who allege serious injury and can present credible evidence of their injuries are receiving priority trial settings in the courts, while those who have not shown any credible disease manifestation are having their hearing dates delayed or placed on an inactive docket, which preserves the right to pursue litigation in the future.
The following table presents the number of policyholders with open asbestos claims and the related net loss reserves at December 31, 2014 as well as the net losses paid during 2014 by component.
The U.S. federal Comprehensive Environmental Response Compensation and Liability Act of 1980 (Superfund) has been interpreted to impose strict, retroactive and joint and several liability on potentially responsible parties (PRPs) for the cost of remediating hazardous waste sites.
Other income and charges, which includes miscellaneous income and expenses of the property and casualty subsidiaries, were not significant in 2014, 2013 or 2012.
Credit ratings assess a company’s ability to make timely payments of interest and principal on its debt. The following table presents Chubb’s credit ratings as determined by the major independent rating organizations as of February 26, 2015.