The following selected consolidated GAAP financial data of the Company as of and for the years ended December 31, 2016, 2015, 2014, 2013 and 2012, were derived from the audited consolidated financial statements of the Company. The following financial data should be read in conjunction with the Consolidated Financial Statements and accompanying notes.
Based on weighted average basic common shares outstanding of 41.3 million, 43.4 million, 45.4 million, 48.6 million, and 51.9 million for 2016, 2015, 2014, 2013, and 2012, respectively.
Based on 40.9 million, 42.7 million, 44.7 million, 47.5 million, and 51.4 million common shares outstanding for December 31, 2016, 2015, 2014, 2013, and 2012, respectively.
The worldwide reinsurance and insurance businesses are highly competitive, as well as cyclical by product and market. As such, financial results tend to fluctuate with periods of constrained availability, higher rates and stronger profits followed by periods of abundant capacity, lower rates and constrained profitability. Competition in the types of reinsurance and insurance business that we underwrite is based on many factors, including the perceived overall financial strength of the reinsurer or insurer, ratings of the reinsurer or insurer by A.M. Best and/or Standard & Poor's, underwriting expertise, the jurisdictions where the reinsurer or insurer is licensed or otherwise authorized, capacity and coverages offered, premiums charged, other terms and conditions of the reinsurance and insurance business offered, services offered, speed of claims payment and reputation and experience in lines written. Furthermore, the market impact from these competitive factors related to reinsurance and insurance is generally not consistent across lines of business, domestic and international geographical areas and distribution channels.
Commencing in 2015, we initiated a strategic build out of our insurance platform through the investment in key leadership hires which in turn has brought significant underwriting talent and stronger direction in achieving our insurance program strategic goals of increased premium volume and improved underwriting results. Recent growth is coming from highly diversified areas including newly launched lines of business, as well as, product and geographic expansion in existing lines of business. We are building a world-class insurance platform capable of offering products across lines and geographies, complementing our leading global reinsurance franchise. As part of this initiative, we received approval from Lloyd's of London to launch
a new syndicate in 2016 which provided us access to additional international business and new product opportunities to further diversify and broaden our insurance portfolio.
Premiums. Gross written premiums increased by 2.4% to $6,033.9 million in 2016, compared to $5,891.7 million in 2015, reflecting a $254.7 million, or 16.6%, increase in our insurance business, partially offset by a $112.6 million, or 2.6%, decrease in our reinsurance business. The rise in insurance premiums was primarily due to increases in most lines of business, as we have focused on expanding the insurance operations. The decline in reinsurance premiums was mainly due to a decrease in treaty property business, a decline in international premiums related to quota share agreements and a negative impact of $74.0 million from the year over year movement in foreign exchange rates. Net written premiums increased by 1.7% to $5,270.9 million in 2016, compared to $5,182.3 million in 2015. The changes are consistent with the changes in gross written premiums. Premiums earned increased by 0.5% to $5,320.5 million in 2016, compared to $5,292.8 million in 2015. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Gross written premiums increased by 2.2% to $5,891.7 million in 2015, compared to $5,762.9 million in 2014, reflecting a $313.9 million, or 25.8%, increase in our insurance business, partially offset by a $185.1 million, or 4.1%, decrease in our reinsurance business. The rise in insurance premiums was primarily due to increases in most lines of business, as we have focused on expanding the insurance operations. The decline in reinsurance premiums was due mainly to decreases in treaty casualty business, reductions in the quota share agreements and a negative impact of $136.0 million from the year over year movement in foreign exchange rates. Net written premiums increased by 1.0% to $5,182.3 million in 2015 compared to $5,132.4 million in 2014. The increase is consistent with the increase in gross written premiums. Premiums earned increased by 4.9% to $5,292.8 million in 2015, compared to $5,043.7 million in 2014. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Other Income (Expense). We recorded other expense of $10.6 million in 2016 and we recorded other income of $88.3 million and $32.3 million in 2015 and 2014, respectively. The changes were primarily the result of fluctuations in foreign currency exchange rates for the corresponding periods. The foreign exchange losses in 2016 were primarily generated from our United Kingdom operations as a result of the decline in the Great British Pound (Sterling) in relation to other major currencies resulting from the United Kingdom vote to leave the European Union.
Incurred losses and LAE increased by 2.4% to $3,139.6 million for the year ended December 31, 2016, compared to $3,064.7 million for the year ended December 31, 2015, primarily due to an increase of $300.7 million in current year catastrophe losses, partially offset by higher favorable prior years attritional development of $177.1 million and prior years catastrophe development of $53.2 million in 2016 compared to 2015. The $208.7 million of favorable prior years attritional loss development in 2016 was comprised of $382.4 million of favorable development on reinsurance business mainly related in the reinsurance segments, partially offset by $173.6 million in the insurance segment. The favorable development in the reinsurance segments is primarily due to property and short-tail business in the U.S., as well as, property business in Canada, Latin America, the Middle East and Africa, partially offset by $53.9 million of adverse development on A&E. Part of the favorable development in the reinsurance segments related to the 2015 loss from the explosion at the Chinese port of Tianjin. In 2015, this loss was originally estimated to be $60.0 million. At December 31, 2016, this loss was projected to be $16.7 million resulting in $43.3 million of favorable development. The adverse development in the insurance segment is primarily attributable to run-off construction liability and umbrella program business. The $86.6 million of prior years' catastrophe
Interest, fees and other bond amortization expense was $36.2 million and $38.5 million in 2015 and 2014, respectively. The decrease was primarily due to the combination of the maturity of $250.0 million of senior notes in October 2014, and the issuance of $400.0 million of senior notes in June 2014.
Income Tax Expense (Benefit). We had income tax expenses of $103.5 million, $134.0 million and $187.7 million in 2016, 2015 and 2014, respectively. Income tax expense is primarily a function of the geographic location of the Company's pre-tax income and the statutory tax rates in those jurisdictions, as affected by tax-exempt investment income and foreign tax credits.
Our combined ratio increased by 1.9 points to 87.0% in 2016, compared to 85.1% in 2015. The loss ratio components increased 1.1 points in 2016 over the same periods last year. The change was mainly due to the increase in current year catastrophes in 2016 compared to 2015, partially offset by more favorable development on prior years attritional losses year over year. The commission and brokerage ratio components were comparable at 22.3% in 2016 and 22.4% in 2015. The other underwriting expense ratio components increased by 0.9 points in 2016 over the same periods last year due primarily to the increased focus on the expansion of the insurance business.
Our combined ratio increased by 1.2 points to 85.1% in 2015, compared to 83.9% in 2014. The loss ratio components increased 0.9 points in 2015 over the same periods last year primarily due to $60.0 million of losses from the explosion at the Chinese port of Tianjin and numerous weather-related losses that did not meet our $10.0 million catastrophe threshold. The commission and brokerage ratio components were comparable at 22.4% in 2015 and 22.2% in 2014. The other underwriting expense ratio components were comparable at 4.8% in 2015 and 4.7% in 2014.
Net investment income decreased by 10.7% to $473.5 million in 2015 compared to $530.5 million in 2014, primarily due to a decline in income from our fixed maturities, reflective of lower reinvestment rates, and a decrease in limited partnership income.
Net realized capital losses were $7.2 million and $184.1 million in 2016 and 2015, respectively, and net realized capital gains were $84.0 million in 2014. In 2016, we recorded $31.6 million of other-than-temporary impairments, $28.0 million of realized capital loss from the sale of our Heartland subsidiary and $6.7 million of net realized capital losses from sales on our fixed maturity and equity securities, partially offset by $59.1 million of net gains from fair value re-measurements. In 2015, we recorded $102.2 million of other-than-temporary impairments, $45.6 million of net losses from fair value re-measurements and $36.3 million of net realized capital losses from sales on our fixed maturity and equity securities. The fixed maturity and equity sales for 2016 and 2015 related primarily to adjusting the portfolios for overall market changes and individual credit shifts. In 2014, we recorded $121.7 million of net realized capital gains due to fair value re-measurements on fixed maturity and equity securities and $1.9 million of net realized capital gains from sales of fixed maturity and equity securities, partially offset by $39.5 million of other-than-temporary impairments. The fixed maturity and equity sales in 2014 related primarily to adjusting the portfolios for overall market changes and individual credit shifts along with maintaining a balanced foreign currency exposure.
The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and Accident and Health ("A&H") business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S. The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada and Singapore and through offices in Brazil, Miami and New Jersey. The Bermuda operation provides reinsurance and insurance to worldwide property and casualty markets through brokers and directly with ceding companies from its Bermuda office and reinsurance to the United Kingdom and European markets through its UK branch and Ireland Re. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents within the U.S. and Canada.
These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations. Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.
Incurred losses decreased by 13.6% to $825.1 million in 2015 compared to $954.5 million in 2014, primarily due to an increase in favorable development of $147.6 million on prior year attritional losses in 2015 compared to 2014 related to treaty property, treaty casualty, marine lines of business and less year over year development on A&E reserves. This favorable development was partially offset by the increase in current year attritional losses of $7.3 million resulting primarily from $14.2 million related to the explosion at the Chinese port of Tianjin. Current year catastrophe losses for 2015 are outlined above. The $12.5 million of current year catastrophe losses in 2014 related to the Japan snowstorm ($7.8 million) and Hurricane Odile ($4.7 million).
Gross written premiums decreased by 16.8% to $1,334.2 million in 2015 compared to $1,603.6 million in 2014, primarily due to declines in Latin American and Asian business, reductions in premiums related to quota share agreements and the negative impact of $86.8 million from the movement of foreign exchange rates. Net written premiums decreased by 9.6% to $1,209.0 million in 2015 compared to $1,336.6 million in 2014. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance related to the quota share contracts. Premiums earned decreased 4.6% to $1,251.1 million in 2015 compared to $1,310.9 million in 2014. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Segment Expenses. Commission and brokerage decreased by 4.9% to $283.4 million in 2016 compared to $298.2 million in 2015. The year over year decrease was mainly due to the impact of the decrease in premiums earned. Segment other underwriting expenses increased slightly to $35.5 million in 2016 compared to $34.3 million in 2015.
Gross written premiums increased by 11.6% to $877.3 million in 2015 compared to $786.4 million in 2014, primarily due to increased property and casualty writings through the Bermuda, Ireland and UK offices, partially offset by the negative impact of $44.1 million from the movement of foreign exchange rates. Net written premiums increased by 6.3% to $791.6 million in 2015 compared to $744.7 million in 2014. The difference between the change in gross written premiums compared to the change in net written premiums was due to a higher utilization of reinsurance. Premiums earned increased 14.9% to $822.4 million in 2015 compared to $715.7 million in 2014. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Incurred losses and LAE increased by 1.2% to $461.9 million in 2016 compared to $456.4 million in 2015, primarily due to an increase of $25.5 million in current year catastrophe losses, partially offset by a decrease of $24.3 million in current year attritional losses mainly related to changes in the mix of business and the higher losses in 2015 due to the explosion at the Chinese port of Tianjin. The $25.5 million of current year catastrophe losses in 2016 were due to Hurricane Matthew ($10.3 million), the Fort McMurray Canada wildfire ($10.0 million) and the 2016 New Zealand earthquake ($5.0 million). There were no current year catastrophe losses in 2015.
Premiums. Gross written premiums increased by 16.6% to $1,787.0 million in 2016 compared to $1,532.3 million in 2015. This increase was primarily driven by expansion of various insurance lines of business, increases in accident and health business and premium from the start-up of the Lloyd's Syndicate. Net written premiums increased by 4.5% to $1,385.7 million in 2016 compared to $1,325.9 million in 2015. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the transfer of the crop business to the U.S. Reinsurance segment as a result of the Heartland sale. Premiums earned increased 1.9% to $1,291.2 million in 2016 compared to $1,266.7 million in 2015. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Gross written premiums increased by 25.8% to $1,532.3 million in 2015 compared to $1,218.4 million in 2014. This increase was primarily driven by an increase in various lines of business, as the Company looked to expand its insurance operations. Net written premiums increased by 24.2% to $1,325.9 million in 2015 compared to $1,067.3 million in 2014, which is consistent with the change in gross written premiums. Premiums earned increased 22.9% to $1,266.7 million in 2015 compared to $1,030.3 million in 2014. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Segment Expenses. Commission and brokerage increased by 16.5% to $205.3 million in 2016 compared to $176.2 million in 2015. The increase was mainly due to the impact of the increase in premiums earned and changes in the mix of business. Segment other underwriting expenses increased to $176.8 million in 2016 compared to $136.7 million in 2015. The increase was primarily due to increased expenses due to the build out of our insurance platform.
It is more difficult to accurately estimate loss reserves for reinsurance liabilities than for insurance liabilities. At December 31, 2016, we had reinsurance reserves of $7,295.7 million and insurance loss reserves of $3,016.6 million, of which $331.9 million and $109.2 million, respectively, were loss reserves for A&E liabilities. A detailed discussion of additional considerations related to A&E exposures follows later in this section.
properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure.
Due to the uncertainties discussed above, the ultimate losses attributable to A&E, and particularly asbestos, may be subject to more variability than are non-A&E reserves and such variation could have a material adverse effect on our financial condition, results of operations and/or cash flows. See also ITEM 8, "Financial Statements and Supplementary Data" - Notes 1 and 3 of Notes to the Consolidated Financial Statements.
Premiums Written and Earned. Premiums written by us are earned ratably over the coverage periods of the related insurance and reinsurance contracts. We establish unearned premium reserves to cover the unexpired portion of each contract. Such reserves, for assumed reinsurance, are computed using pro rata methods based on statistical data received from ceding companies. Premiums earned, and the related costs, which have not yet been reported to us, are estimated and accrued. Because of the inherent lag in the reporting of written and earned premiums by our ceding companies, we use standard accepted actuarial methodologies to estimate earned but not reported premium at each financial reporting date. These earned but not reported premiums are combined with reported earned premiums to comprise our total premiums earned for determination of our incurred losses and loss and LAE reserves. Commission expense and incurred losses related to the change in earned but not reported premium are included in current period company and segment financial results. See also ITEM 8, "Financial Statements and Supplementary Data" - Note 1 of Notes to the Consolidated Financial Statements.
Over the past several years, we have expanded the allocation of our investments funded by shareholders' equity to include: 1) a greater percentage of publicly traded equity securities, 2) emerging market fixed maturities through mutual fund structures, as well as individual holdings, 3) high yield fixed maturities, 4) bank loan securities and 5) private equity limited partnership investments. The objective of this portfolio diversification is to enhance the risk-adjusted total return of the investment portfolio by allocating a prudent portion of the portfolio to higher return asset classes, which are also less subject to changes in value with movements in interest rates. We limit our allocation to these asset classes because of 1) the potential for volatility in their values and 2) the impact of these investments on regulatory and rating agency capital adequacy models. We use investment managers experienced in these markets and adjust our allocation to these investments based upon market conditions. At December 31, 2016, the market value of investments in these investment market sectors, carried at both market and fair value, approximated 50% of shareholders' equity.
The Company's limited partnership investments are comprised of limited partnerships that invest in private equities. Generally, the limited partnerships are reported on a quarter lag. We receive annual audited financial statements for all of the limited partnerships which are prepared using fair value accounting in accordance with FASB guidance. For the quarterly reports, the Company's staff performs reviews of the financial reports for any unusual changes in carrying value. If the Company becomes aware of a significant decline in value during the lag reporting period, the loss will be recorded in the period in which the Company identifies the decline.
Our loss and LAE reserves represent management's best estimate of our ultimate liability for unpaid claims. We continuously re-evaluate our reserves, including re-estimates of prior period reserves, taking into consideration all available information and, in particular, newly reported loss and claim experience. Changes in reserves resulting from such re-evaluations are reflected in incurred losses in the period when the re-evaluation is made. Our analytical methods and processes operate at multiple levels including individual contracts, groupings of like contracts, classes and lines of business, internal business units, segments, legal entities, and in the aggregate. In order to set appropriate reserves, we make qualitative and quantitative analyses and judgments at these various levels. Additionally, the attribution of reserves, changes in reserves and incurred losses among accident years requires qualitative and quantitative adjustments and allocations at these various levels. We utilize actuarial science, business expertise and management judgment in a manner intended to ensure the accuracy and consistency of our reserving practices. Nevertheless, our reserves are estimates, which are subject to variation, which may be significant.
Industry analysts use the "survival ratio" to compare the A&E reserves among companies with such liabilities. The survival ratio is typically calculated by dividing a company's current net reserves by the three year average of annual paid losses. Hence, the survival ratio equals the number of years that it would take to exhaust the current reserves if future loss payments were to continue at historical levels. Using this measurement, our net three year asbestos survival ratio was 5.4 years at December 31, 2016. These metrics can be skewed by individual large settlements occurring in the prior three years and therefore, may not be indicative of the timing of future payments.
Shareholders' Equity. Our shareholders' equity increased to $8,075.4 million as of December 31, 2016 from $7,608.6 million as of December 31, 2015. This increase was the result of $996.3 million of net income, $72.7 million of unrealized appreciation on investments, net of tax and $37.1 million of share-based compensation transactions, partially offset by repurchases of 2.1 million common shares for $386.3 million, $195.4 million of shareholder dividends, $55.3 million of net foreign currency translation adjustments and $2.4 million of net benefit plan obligation adjustments.
Capital. Shareholders' equity at December 31, 2016 and December 31, 2015 was $8,075.4 million and $7,608.6 million, respectively. Management's objective in managing capital is to ensure its overall capital level, as well as the capital levels of its operating subsidiaries, exceed the amounts required by regulators, the amount needed to support our current financial strength ratings from rating agencies and our own economic capital models. The Company's capital has historically exceeded these benchmark levels.
effect on cash flow from insurance operations would be partially offset by cash flow from investment income. Additionally, cash inflows from investment maturities and dispositions, both short-term investments and longer term maturities are available to supplement other operating cash flows.
As the timing of payments for claims and benefits cannot be predicted with certainty, we maintain portfolios of long term invested assets with varying maturities, along with short-term investments that provide additional liquidity for payment of claims. At December 31, 2016 and December 31, 2015, we held cash and short-term investments of $913.4 million and $1,083.3 million, respectively. All of our short-term investments are readily marketable and can be converted to cash. Starting in the first quarter of 2016, we implemented a new liquidity sweep facility with investments in short maturity, investment grade, U.S. dollar denominated fixed income securities. The facility is structured as a limited liability corporation so it is classified on our balance sheet as part of other invested assets. This facility had $378.9 million of available liquidity at December 31, 2016. In addition to these cash and short-term investments, at December 31, 2016, we had $967.0 million of available for sale fixed maturity securities maturing within one year or less, $6,870.1 million maturing within one to five years and $3,068.7 million maturing after five years. Our $1,129.2 million of equity securities are comprised primarily of publicly traded securities that can be easily liquidated. We believe that these fixed maturity and equity securities, in conjunction with the short-term investments and positive cash flow from operations, provide ample sources of liquidity for the expected payment of losses in the near future. We do not anticipate selling securities or using available credit facilities to pay losses and LAE but have the ability to do so. Sales of securities might result in realized capital gains or losses. At December 31, 2016 we had $164.3 million of net pre-tax unrealized appreciation, comprised of $384.9 million of pre-tax unrealized appreciation and $220.6 million of pre-tax unrealized depreciation.
In addition to our cash flows from operations and liquid investments, we also have multiple credit facilities that provide up to $200.0 million of unsecured revolving credit for liquidity but more importantly provide for up to $600.0 million and £140.0 million of collateralized standby letters of credit to support business written by our Bermuda operating subsidiaries.
Effective November 9, 2016, Everest International renewed its credit facility with Lloyd's of London Bank ("Everest International Credit Facility"). The Everest International Credit Facility has a four year term and provides up to £140.0 million for the issuance of standby letters of credit on a collateralized basis. The Company pays a commitment fee of 0.1% per annum on the average daily amount of the remainder of (1) the aggregate amount available under the facility and (2) the aggregate amount of drawings outstanding under the facility. The Company pays a credit commission fee of 0.35% per annum on drawings outstanding under the facility.
The Everest International Credit Facility requires Group to maintain a debt to capital ratio of not greater than 0.35 to 1 and to maintain a minimum net worth. Minimum net worth is an amount equal to the sum of $5,326.0 million (70% of consolidated net worth as of December 31, 2015), plus 25% of consolidated net income for each of Group's fiscal quarters, for which statements are available ending on or after January 1, 2015 and for which net income is positive, plus 25% of any increase in consolidated net worth of Group during such period attributable to the issuance of ordinary and preferred shares, which at December 31, 2016, was $5,584.4 million. As of December 31, 2016, the Company was in compliance with all Everest International Credit Facility requirements.
Costs incurred in connection with the Group Credit Facility and Everest International Credit Facility were $0.8 million for December 31, 2016 and 2015.
We believe that our greatest worldwide 1 in 100 year exposure to a single catastrophic event is to a hurricane affecting the U.S. southeast coast, where we estimate we have a PML exposure, net of third party reinsurance, of $1,544.0 million. See also table under ITEM 1, "Business - Risk Management of Underwriting and Retrocession Arrangements".
If such a single catastrophe loss were to occur, management estimates that the economic loss to us would be approximately $921.0 million. The estimate involves multiple variables, including which Everest entity would experience the loss, and as a result there can be no assurance that this amount would not be exceeded.
Information Technology. Our information technology is a key component of our business operations and is supported by a team of knowledgeable professionals. The majority of our information technology platform is located at our service processing center in New Jersey but processing is performed at the office locations of our operating subsidiaries and branches. In addition, our main-frame processing is performed by a third party vendor at a separate location. We have implemented procedures that ensures that our key business systems are protected (or secured) and data is backed up and stored at off-site locations so that they can be restored promptly if necessary. We have documented business continuity plans and disaster recovery plans to provide uninterrupted technology services for major systems outages with alternative secure data centers available in case of broader outages.
Our business operations depend on the proper functioning and availability of our information technology platform, which includes data processing and related electronic communications. We communicate
During 2016, 2015 and 2014, we declared and paid common shareholder dividends of $195.4 million, $175.1 million and $145.9 million, respectively. As an insurance holding company, we are partially dependent on dividends and other permitted payments from our subsidiaries to pay cash dividends to our shareholders. The payment of dividends to Group by Holdings Ireland and Everest Dublin Holdings is subject to Irish corporate and regulatory restrictions; the payment of dividends to Holdings Ireland by Holdings and to Holdings by Everest Re is subject to Delaware regulatory restrictions; and the payment of dividends to Group by either Bermuda Re or Everest International is subject to Bermuda insurance regulatory restrictions. Management expects that, absent extraordinary catastrophe losses, such restrictions should not affect Everest Re's ability to declare and pay dividends sufficient to support Holdings' general corporate needs and that Holdings Ireland, Everest Dublin Holdings, Bermuda Re and Everest International will have the ability to declare and pay dividends sufficient to support Group's general corporate needs. For the years ended December 31, 2016, 2015, and 2014, Everest Re paid dividends to Holdings of $0 million, $0 million and $155.0 million, respectively. For the years ended December 31, 2016, 2015 and 2014, Bermuda Re paid dividends to Group of $650.0 million, $575.0 million and $645.0 million, respectively, and Everest International paid dividends to Group of $40.0 million, $15.0 million and $45.0 million, respectively. See ITEM 1, "Business - Regulatory Matters - Dividends" and ITEM 8, "Financial Statements and Supplementary Data" - Note 14 of Notes to Consolidated Financial Statements.
Accounting for Share-Based Compensation. In March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09, authoritative guidance regarding the accounting for share-based compensation. This guidance requires that the income tax effects resulting from the change in the value of share-based compensation awards between grant and settlement will be recorded as part of the Consolidated Statements of Operations and Comprehensive Income/(Loss). Previously, excess tax benefits have been recorded as part of the additional paid in capital within the Consolidated Balance Sheets. The guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that annual reporting period. The Company has chosen not to early adopt and will implement this guidance as of January 1, 2017.
Interest rate risk is the potential change in value of the fixed maturity securities portfolio, including short-term investments, from a change in market interest rates. In a declining interest rate environment, it includes prepayment risk on the $2,713.0 million of mortgage-backed securities in the $14,107.4 million fixed maturity portfolio. Prepayment risk results from potential accelerated principal payments that shorten the average life and thus the expected yield of the security.
Foreign Currency Risk. Foreign currency risk is the potential change in value, income and cash flow arising from adverse changes in foreign currency exchange rates. Each of our non-U.S./Bermuda ("foreign") operations maintains capital in the currency of the country of its geographic location consistent with local regulatory guidelines. Each foreign operation may conduct business in its local currency, as well as the currency of other countries in which it operates. The primary foreign currency exposures for these foreign operations are the Canadian Dollar, the Singapore Dollar, the British Pound Sterling and the Euro. We mitigate foreign exchange exposure by generally matching the currency and duration of our assets to our corresponding operating liabilities. In accordance with FASB guidance, the impact on the market value of available for sale fixed maturities due to changes in foreign currency exchange rates, in relation to functional currency, is reflected as part of other comprehensive income. Conversely, the impact of changes in foreign currency exchange rates, in relation to functional currency, on other assets and liabilities is reflected through net income as a component of other income (expense). In addition, we translate the assets, liabilities and income of non-U.S. dollar functional currency legal entities to the U.S. dollar. This translation amount is reported as a component of other comprehensive income.