The table below shows our reserves as of December 31, 2012 and 2011 by type and by segment.
Our other investments comprise our investments in hedge funds, investments in structured deposits and various derivative instruments, all of which are recorded at fair value.
We accrue for reinstatement premiums resulting from losses recorded. Such accruals are based upon contractual terms and the only element of management judgment involved is with respect to the amount of losses recorded. Changes in estimates of losses recorded on contracts with reinstatement premium features will result in changes in reinstatement premiums based on contractual terms. Reinstatement premiums are recognized at the time we record losses and are earned on a pro-rata basis over the coverage period. Reinstatement premiums assumed and ceded for the year ended December 31, 2012 were $17.5 million and $24.7 million, respectively. Reinstatement premiums assumed and ceded for the year ended December 31, 2011 were $36.9 million and $6.3 million, respectively. Reinstatement premiums assumed and ceded were not material for the year ended December 31, 2010.
Global insurance - We offer property and casualty excess of loss capacity from our offices in Bermuda, Dublin and London primarily to U.S. and international Fortune 1000 companies. Insurance offered from our U.S. offices is included within our U.S. insurance segment. Principal lines of business include aviation, excess liability, professional lines and property.
Net investment income and net realized and unrealized gains (losses) on investments are discussed within the investing activities section of this report and not within the segment sections of this report. See “Investing Activities.”
The following is a discussion and analysis of our consolidated results of operations for the years ended December 31, 2012, 2011 and 2010, which are summarized below:
The prior year loss reserve development reduced the loss ratio by 23.9% percentage points for the year ended December 31, 2012, compared to 34.6% percentage points for the year ended December 31, 2011. Excluding the impact of net favorable loss development, the loss ratio was 84.2% for the year ended December 31, 2012 compared to 83.2% for the year ended December 31, 2011; and
Net losses and loss expenses. The loss ratio for the year ended December 31, 2012 increased 37.4 percentage points compared to the prior year. The net favorable and (unfavorable) development of prior year reserves in the year ended December 31, 2012, 2011 and 2010 by line of business was as follows:
2012 earns commission income compared to no such commission income in the prior year when an excess of loss reinsurance program was in place. Finally, the year ended December 31, 2012 benefited from commission income on the contract binding business that was 100% ceded.
The property line of business was impacted by reinstatement premiums primarily on catastrophe exposed contracts. The reinstatement premiums were $20.1 million for the year ended December 31, 2011 compared to $2.3 million for the year ended December 31, 2010;
An increase of $26.4 million in our international casualty line of business for the year ended December 31, 2011. We began underwriting this business in the quarter ended March 31, 2010 and the increase reflects the expansion of our client base as well as favorable market conditions;
Net premiums earned is a function of the earning of gross premiums written and reinsurance premiums ceded over the last several quarters and, therefore, changes in net premiums earned generally lag quarterly increases and decreases in gross premiums written and reinsurance premiums ceded.
Losses and benefits recoverable from reinsurers. Losses and benefits recoverable from reinsurers totaled $1,289.6 million as of December 31, 2012 compared to $1,068.1 million as of December 31, 2011, an increase of 20.7%. This increase resulted
We may repurchase our securities from time to time through the open market, privately negotiated transactions or Rule 10b5-1 stock trading plans. During the quarter ended December 31, 2012, we repurchased 1,354 common shares for $0.03 million. As of December 31, 2012, the aggregate amount available under our Board approved share repurchase plan was $301.7 million.
value in the statement of financial position but for which the fair value is required to be disclosed. ASU 2011-04 was effective