The reinsurance segment had revenues of $2,601,937 for the year ended December 31, 2011 and $2,918,696 for the year ended December 31, 2010. Total losses and expenses for this segment were $1,379,756 for the year ended December 31, 2011 and $1,452,800 for the year ended December 31, 2010. This resulted in segment income of $1,222,181 and $1,465,896 for the years ended December 31, 2011 and 2010, respectively.
For the year ended December 31, 2011, we recorded loss and loss adjustment recoveries of $153,028 as a result of the recognition of the additional recoveries awarded to the Company following the Arbitration in the amount of $315,299, net of loss and loss adjustment expenses that resulted from reserves of $328,580 established pursuant to the Reinsurance Agreement offset by favorable development on CAMICO and PDIC. For the year ended December 31, 2010, we recorded loss and loss adjustment expenses of $26,869 that resulted from reserves of $32,000 established pursuant to the Reinsurance Agreement offset by favorable development on CAMICO and PDIC.
The decrease in total cash and investments at December 31, 2011, compared to December 31, 2010 resulted primarily from (1) net cash outflows to fund the operations of APSL, (2) $576,789 related to share repurchases during 2011, (3) dividends of $615,993 paid during 2011 and (4) the decrease in the fair value of certain equity securities as a result of adverse market conditions. These reductions were partially offset by positive cash inflows in relation to net investment income.
On July 22, 2009, the Company received a payment of $500,891 from FFG Insurance Company, formerly known as Virginia Surety Company (“VSC”), in satisfaction of certain recoveries not previously remitted by VSC under retrocession contracts between the Company and VSC for the years 1989-1993. The $500,891 payment was recorded as a decrease in losses and loss adjustment expenses for the year ended December 31, 2009. Following this payment, the Company initiated arbitration with VSC (the “Arbitration”) to seek additional recoveries in respect of unpaid losses, unpaid premiums, fees and interest. During the arbitration, VSC conceded that $25,785 in unpaid premiums was due and a payment was remitted to the Company. On October 8, 2011, the Company was formally awarded $289,514 as a result of the Arbitration’s final outcome. The award represented unpaid losses of $241,943, fees of $11,280 and interest of $36,291. The total net award of $315,299 from VSC was recorded as a decrease in losses and loss adjustment expenses in the third quarter of 2011.
In June 2011, the FASB issued new guidance revising the manner in which entities present comprehensive income in their financial statements. The option to report other comprehensive income and its components in the statement of changes in shareholders’ equity is eliminated. Components of comprehensive income may be reported in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The new requirements will become effective for the interim and annual periods beginning on or after December 15, 2011 and require retrospective application; early adoption is permitted. As the new guidance does not change the items that constitute net income and/or other comprehensive income, the timing of reclassifications from other comprehensive income to net income or the earnings per share computation, we expect that adoption of this guidance will not impact our results of operations, financial condition or liquidity.
The cost or amortized cost and estimated fair value of fixed maturity investments at December 31, 2011 and 2010 by contractual maturity are shown below. Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations without penalties.
Though current market conditions appear to have improved recently, there is still the potential for further instability which could present additional risks and uncertainties for our business and make it more difficult to value certain of our securities if trading becomes less frequent. As such, valuations may include assumptions and estimates that may have significant period-to-period changes that could have a material adverse effect on our results of operations or financial condition.