(a) During 2013 we experienced $49.2 million in net realized and unrealized investment losses. The net investment losses we experienced in 2013, versus the net gains we experienced in all other years presented, muted our total revenues in that year.
We ended 2013 with a FCBVPCS of $29.42, an increase of 14.3% for the year after taking into account dividends declared on Common Shares during the period. The increase in our FCBVPCS during 2013 was primarily the result of strong underwriting results. Our comprehensive income available to the Company for 2013 was $205.4 million and our GAAP combined ratio was 56.1%.
Net premiums written and earned by Montpelier at Lloyd’s in 2014, 2013 and 2012 include net increases (reductions) due to reinstatements of $2.0 million, $(3.4) million and $2.6 million, respectively. The negative reinstatement premiums recognized during 2013 resulted from an increase in reinsurance recoveries associated with the 2012 Costa Concordia accident (which resulted in ceded reinstatement premiums). The level of reinstatement premiums that Montpelier at Lloyd’s may realize in future periods will be dependent upon the occurrence of future losses.
Net premiums earned by Montpelier at Lloyd’s in 2014, 2013 and 2012 were $244.8 million, $213.7 million and $217.3 million, respectively. Net premiums earned are primarily a function of the amount and timing of net premiums previously written.
Our best estimates of Montpelier at Lloyd’s ending gross loss and LAE reserves at December 31, 2014 and 2013 were $349.8 and $337.3 million, respectively. Montpelier at Lloyd’s gross IBNR reserves, as a percentage of its total gross reserves, amounted to 56% and 59% as of December 31, 2014 and 2013, respectively.
We estimated Montpelier at Lloyd’s loss and LAE reserves using the methodology outlined in our “Summary of Critical Accounting Policies and Estimates” contained in Item 7 herein. We did not make any significant changes in the assumptions or methodology used in Montpelier at Lloyd’s reserving process during each of the years ended December 31, 2014 and 2013.
Since a significant portion of Montpelier at Lloyd’s loss and LAE reserves are denominated in U.S. dollars, changes in the value of the British pound (Montpelier at Lloyd’s functional currency) relative to the U.S. dollar generate foreign currency transaction gains or losses within its losses and LAE incurred upon the conversion of these U.S. dollar-denominated liabilities to British pounds. However, the subsequent translation of these liabilities back into U.S. dollars in consolidation generates substantially offsetting foreign currency translation gains and losses, which are recorded as part of comprehensive income. Therefore, in periods in which there are meaningful movements in the relative value of the British pound versus the U.S. dollar, which was the case in 2014 and 2012, the resulting impact to Montpelier at Lloyd’s losses and LAE incurred (as well as its loss and LAE and combined ratios) can significantly impact its reported underwriting performance without necessarily impacting the Company’s comprehensive income or shareholders’ equity.
Montpelier at Lloyd’s operating expenses incurred during 2014 were largely consistent with those of 2013. Montpelier at Lloyd’s operating expenses incurred during 2013 decreased, versus those incurred during 2012, due primarily to a non-recurring third-party management fee recorded in 2012.
Net premiums earned at the Collateralized Reinsurance segment during the years ended December 31, 2014, 2013 and 2012 were $84.6 million, $26.2 million and $2.4 million, respectively. Premiums earned are primarily a function of the amount and timing of net premiums previously written.
Operating expenses recorded within Corporate and Other include salaries and benefits, information technology costs, director fees, legal and consulting expenses, corporate insurance premiums, audit fees and fees associated with MRH and BCRH being publicly traded companies.
In connection with the BCRH IPO, in 2013 we: (i) reimbursed BCRH for the underwriting discount it incurred, which was equal to 5% of the gross proceeds it received from third parties ($6.2 million); and (ii) paid a structuring fee to a third-party equal to 1% of the gross proceeds BCRH received from third parties ($1.3 million).
During 2014 we released our remaining U.K. deferred tax asset valuation allowance in light of: (i) the expected future taxable earnings of our U.K. entities; and (ii) the fact that our U.K. net operating loss carryforwards do not expire. The release of these U.K. deferred tax valuation allowances resulted in the recognition of a $2.9 million income tax benefit during 2014.
The nature and extent of loss information provided under many facultative and per occurrence excess-of-loss contracts, where our personnel work closely with the ceding company in settling individual claims, may not differ significantly from the information received under a primary insurance contract. Loss information from aggregate excess-of-loss contracts, including catastrophe losses and proportional treaties, will often be less detailed. Occasionally, such information is reported in summary format rather than on an individual claim basis.
As of December 31, 2014 and 2013, we had no ongoing material reinsurance contract disputes.
For the 2013-2016 Variable RSU award cycle, the targeted performance metric was based on a 2013 increase in FCBVPCS of 9.76%, which would have generated a grant of approximately 500,000 Variable RSUs to participants. The payout range for that year was from a threshold of 2.76% (generating no RSUs) to a maximum of 16.76% (generating approximately 1,000,000 Variable RSUs). Throughout the Initial RSU Period for this cycle, our quarterly Variable RSU accrual for this cycle varied in response to actual year-to-date results achieved and ranged from as many as 900,800 RSUs (as recorded at December 31, 2013) to as few as 498,954 RSUs (as recorded at March 31, 2013). Because we determined our achieved increase in FCBVPCS for 2013 to be 14.3%, the preliminary number of Variable RSUs expected to be granted for the 2013-2016 Variable RSU award cycle was determined to be 900,800 at December 31, 2013. The final number of Variable RSUs granted for the 2013-2016 Variable RSU award cycle was formally determined to be 883,537 RSUs (or 166% of the in force target RSUs for that cycle at that time) by the Compensation Committee in February 2014.