We continued to actively manage our capital during the year by taking advantage of select opportunities to purchase our common shares in the market. We spent $223.3 million to repurchase 10.3 million shares during the year at an average price of $21.67 per share, a 16.6% discount to our December 31, 2010 diluted book value per share. As of December 31, 2011, our remaining share repurchase authorization was $104.4 million. Subsequently, on February 8, 2012, our board of directors increased our share repurchase authorization by $150.0 million. We expect to continue to consider share repurchases as an effective tool to manage capital in a soft cycle and to increase book value per share for our shareholders.
The liability for property and casualty losses is the largest and most complex estimate in our consolidated balance sheet. The liability for losses, including loss adjustment expenses, represents estimates of the ultimate cost of all losses incurred but not paid as of the balance sheet date. The reserves are estimated on an undiscounted basis. We utilize a variety of standard actuarial methods to estimate our reserves. Although these actuarial methods have been developed over time, assumptions about anticipated size of loss and loss emergence patterns are subject to fluctuations. We review our estimate of reserves on a quarterly basis and consider all significant facts and circumstances then known. Newly reported loss information from clients or insureds is the principal contributor to adjustments to our loss reserve estimates. These adjustments are recognized in the period in which they are determined, and therefore can impact that period’s results either favorably (when reserve estimates established in prior periods prove to be redundant) or adversely (when reserve estimates established in prior periods prove to be deficient).
Outstanding to IBNR Ratio Method. This method is used in selected cases typically for very mature years that still have open claims. This method assumes that the estimated future loss development is indicated by the current level of case reserves.
Net favorable development for the reinsurance segment of $80.6 million, excluding the development associated with changes in reinsurance premium estimates described below. We recorded net favorable development on long tail lines of business, including $11.6 million from workers’ compensation primarily on the 2001 year, $8.2 million on professional liability primarily on 2009 and prior years offset by unfavorable development of $7.9 million on medical malpractice primarily on 2010 and 2009 years. We recorded net favorable development on short tail lines of business, including $27.1 million on property primarily on 2010 and prior years and $11.2 million on aviation primarily on the 2008 and 2007 years;
In an effort to match the expected cash flow requirements of our long term liabilities, we invest a portion of our fixed maturity investments in long duration securities. Because we intend to hold a number of these long duration securities to maturity, we classify those securities as held to maturity in our consolidated balance sheet and record these securities at amortized cost. As a result, we do not record changes in the fair value of this portfolio, which should reduce the impact on shareholders’ equity of fluctuations in fair value of those investments.
We recognized other than temporary impairment charges through earnings of $2.9 million, $2.6 million and $3.1 during the years ended December 31, 2011, 2010 and 2009, respectively.
Additional premiums assumed and ceded, related net losses and the net impact on operating results for the years ended December 31, 2011, 2010 and 2009 are as follows:
For the year ended December 31, 2011, our results included incurred losses net of reinsurance of $269.5 million compared to $54.9 million related to significant property catastrophe events and significant per-risk losses. The significant property catastrophe event net losses for the year ended December 31, 2011 included losses resulting from the Australia floods, Cyclone Yasi, the New Zealand earthquake, the Japan earthquake and tsunami, tornadoes and flooding in the United States, Hurricane Irene and the Thailand floods. For the year ended December 31, 2010, our results included net losses of $54.9 million for property catastrophe events, including losses resulting from the Chile earthquake, Europe Windstorm Xynthia and Australia hailstorms.
Net favorable loss development of prior year reserves, excluding the effect of premium adjustments, in the year ended December 31, 2011 of $66.9 million compared to $45.2 million in the year ended December 31, 2010;
The year ended December 31, 2011 included $151.3 million in significant property catastrophe-related losses resulting from the Australia floods, Cyclone Yasi, the New Zealand earthquake, the Japan earthquake and tsunami, tornadoes and flooding in the United States, Hurricane Irene and the Thailand floods. The year ended December 31, 2010 would have included $94.8 million in significant property catastrophe-related and significant per-risk losses, principally as a result of the New Zealand earthquake, the Deepwater Horizon oil spill, the Chile earthquake, Europe Windstorm Xynthia and Australia hail storms and floods.
General and administrative expenses. General and administrative expenses for the year ended December 31, 2011 increased $8.5 million compared to the prior year. Costs associated with expanding our underwriting teams, growth in Brazil and regulatory changes in Europe contributed to the absolute increase in general and administrative expenses.
Change in fair value of other investments. Our investment in hedge funds comprises the majority of other investments. The decrease in fair value of the hedge fund portfolio was $11.8 million, or a negative 3.57% rate of return, for the year ended December 31, 2011, compared to an increase of $14.3 million, or a 4.27% rate of return, for the year ended December 31, 2010. The rate of return of negative 3.57% for the year ended December 31, 2011 compares to the HFRI Fund of Funds Composite Index returning negative 5.64% over the same period, which we believe is our most relevant benchmark.
All of our European government and financial institutions holdings are included within our review procedures for other-than-temporary impairments. A discussion of our process for estimating OTTI is included in Note 3 of our audited consolidated financial statements included herein.