Consolidated foreign currency exchange gains were $7.8 million and $1.7 million for the years ended December 31, 2014 and 2013, respectively, compared to foreign currency exchange losses of $4.3 million for the year ended December 31, 2012. The changes in the foreign currency exchange gains/losses were due to fluctuations of the U.S Dollar, on a weighted average basis, against the currencies in which we transact our business.
Included in losses and loss adjustment expense for the year ended December 31, 2014 was $2.3 million in catastrophe losses from storm activity in the United States. Included in losses and loss adjustment expense for the year ended December 31, 2014 was $5.1 million related to current accident year large property and inland marine losses. Offsetting these current accident year losses was $47.4 million of net favorable loss reserve development on prior accident years primarily due to $63.2 million of favorable development in the general and products liability lines of business. Partially offsetting this net favorable development was $12.5 million of unfavorable development in commercial automobile lines and $3.3 million in the property lines.
For the years ended December 31, 2014 and 2012, net cash used by investing activities was $121.3 million and $3.7 million, respectively, compared to net cash provided by investing activities of $120.8 million for the year ended December 31, 2013. The decrease in cash flows from investing activities from 2014 to 2103 was mainly the result of the sale of fixed maturity assets used to
The payment of dividends by Argo Re is limited under Bermuda insurance laws which require Argo Re to maintain certain measures of solvency and liquidity. As of December 31, 2014, the unaudited statutory capital and surplus of Argo Re was estimated to be $1,278.3 million and the amount required to be maintained was estimated to be $340.9 million, thereby allowing Argo Re the potential to pay dividends or capital distributions within the parameters of the solvency and liquidity margins. We believe that the dividend and capital distribution capacity of Argo Re will provide us with sufficient liquidity to meet the operating and debt service commitments, as well as other obligations.
Under certain insurance programs (i.e., large deductible programs and surety bonds) and various reinsurance agreements, collateral and LOCs are held for our benefit to secure performance of insureds and reinsurers in meeting their obligations. At December 31, 2014, the amount of such collateral and LOCs held under insurance and reinsurance agreements were $550.3 million and $359.4 million, respectively. Collateral can be provided in the form of trust accounts. As we are the beneficiary of these trust accounts only to secure future performance, these amounts are not reflected in our Consolidated Balance Sheets. Collateral provided by an insured or reinsurer may exceed or fall below their total outstanding obligation.
Argo Group has invested in multiple limited partnership agreements and can be called to fulfill the obligations at any time.
When we initially establish IBNR reserves at the beginning of an accident year for each line of business, we use the expected loss ratio method. This method is based upon our analyses of historical loss ratios incorporating adjustments for pricing changes, anticipated loss ratio trends, changes in reinsurance structure and any other factors that may impact loss ratio expectations. At the end of each