due to the growth in California workers’ compensation, crop and non-standard auto business. Net written premiums increased by 25.2% to $2,117.4 million in 2013 compared to $1,691.6 million in 2012, which is consistent with the increase in gross written premiums. Premiums earned increased by 13.1% to $2,006.4 million in 2013, compared to $1,773.9 million in 2012. Unlike written premiums, premiums earned were minimally impacted by the Florida quota share reinsurance contract. The change in premiums earned was comparable to net written premiums, excluding the impact of the Florida quota share reinsurance contract.
Gross written premiums increased by 0.3% to $3,569.4 million in 2012 compared to $3,558.5 million in 2011, reflecting an $80.1 million increase in our insurance business, partially offset by a $69.2 million decrease in our reinsurance business. The increase in insurance premiums was primarily due to the growth in crop and primary A&H medical stop loss insurance, partially offset by the termination and runoff of several large casualty programs. The decreases in reinsurance premiums was primarily due to the non-renewal of a large Florida quota share reinsurance contract and a $27.7 million decline due to movement in foreign exchange rates, partially offset by increases in new business and rate increases on renewals, particularly for catastrophe exposed contracts. Net written premiums decreased by 3.6% to $1,691.6 million in 2012 compared to $1,754.0 million in 2011. The variance between the changes in gross and net written premiums was primarily attributable to the growth in the crop business, for which the Company uses a higher level of reinsurance. Premiums earned decreased by 1.1% to $1,773.9 million in 2012 compared to $1,793.9 million in 2011. The fluctuations in premiums earned in comparison to net written premiums were primarily attributable to changes in the mix of business, particularly crop insurance which has a different premiums earning pattern.
Other Income (Expense). We recorded other expense of $7.7 million, other income of $12.1 million and other expense of $11.7 million in 2013, 2012 and 2011, respectively. The changes were primarily due to fluctuations in currency exchange rates for the corresponding periods and fluctuations in the amortization of deferred gains on retroactive reinsurance agreements with affiliates.
Incurred losses and LAE increased by 1.8% to $1,272.2 million for the year ended December 31, 2013 compared to $1,249.7 million for the year ended December 31, 2012, primarily due to increases in current year attritional losses and unfavorable development on prior year catastrophe losses in 2013 compared to 2012, partially offset by the decline in current year catastrophe losses. The increase in current year attritional losses of $176.0 million is primarily due to the impact of the increase in premiums earned. Unfavorable development on prior years catastrophe losses of $16.7 million related mainly to Superstorm Sandy ($13.4 million). Current year catastrophe losses for the year ended December 31, 2013 were $59.9 million, or 3.0 points, due to U.S. storms ($22.4 million), Canadian floods ($20.4 million), Typhoon Fitow ($14.6 million) and European floods ($2.5 million). The $245.9 million of current year catastrophe losses for 2012 represented 13.9 points and related to Superstorm Sandy ($203.4 million), U.S. storms ($30.0 million) and Hurricane Isaac ($12.6 million).
Incurred losses and LAE decreased by 33.4% to $1,249.7 million for the year ended December 31, 2012 compared to $1,877.6 million in 2011, representing 34.2 loss ratio points. Current year 2012 catastrophe losses (discussed above) were lower by $543.0 million, or 30.1 points, period over period. The $788.9 million of current year catastrophe losses for 2011 related primarily to the Japanese earthquake and tsunami ($344.1 million), the 2011 New Zealand earthquake ($166.8 million), the Thailand floods ($131.2 million), U.S. storms ($40.3 million), the 2011 Australian floods ($37.1 million) and Hurricane Irene ($22.4 million) as well as $33.4 million of IBNR reserves for these 2011 catastrophe events collectively, which were not allocated to a specific event. During 2012 and 2013, $27.4 million and $2.6 million, respectively, of the IBNR reserve was allocated to specific 2011 catastrophes, leaving $3.4 million of unallocated IBNR reserves at December 31, 2013. Current year attritional losses decreased $82.3 million, representing 4.0 loss ratio points, due to a shift in mix of business towards excess of loss business, which generally has lower attritional losses, and the impact of year over year cessions under our affiliated quota share agreements resulting from changes in ceding percentages.
Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees decreased by 5.4% to $293.9 million in 2013 compared to $310.7 million in 2012. The 2013 decline was primarily due to the impact from the Florida quota share reinsurance contract and an increase in excess of loss business in 2013 which carries a lower commission rate than pro rata business, partially offset by the impact of the increase in premiums earned.
Net investment income decreased 3.0% to $297.0 million in 2013 compared to $306.1 million in 2012. The decreases were primarily due to declines in income from our fixed maturities, reflective of declining reinvestment rates and from our limited partnership investments, partially offset by an increase in dividends from parent’s shares.
Net realized capital gains were $723.1 million and $391.7 million and net realized capital losses were $41.1 million in 2013, 2012 and 2011, respectively. In 2013, we recorded $687.6 million of gains due to fair value re-measurements on fixed maturity, equity securities and other invested assets and $35.6 million of net realized capital gains from sales of fixed maturity and equity securities. The fixed maturity and equity sales in 2013 related primarily to adjusting the portfolios for overall market changes and individual credit shifts. In 2012, we recorded $364.5 million of gains due to fair value re-measurements on fixed maturity,
Our loss and LAE reserves are our best estimate of our ultimate liability for unpaid claims. We re-evaluate our estimates on an ongoing basis, including all prior period reserves, taking into consideration all available information and, in particular, recently reported loss claim experience and trends related to prior periods. Such re-evaluations are recorded in incurred losses in the period in which the re-evaluation is made.
Gross written premiums decreased by 2.7% to $1,310.7 million in 2012 from $1,346.8 million in 2011, primarily due to the non-renewal of a large Florida quota share reinsurance contract, partially offset by increased new business and higher premium rates on renewals, particularly for contracts with catastrophe exposed risks. Net written premiums decreased 4.2% to $659.7 million in 2012 compared to $688.5 million in 2011, which is in line with the decrease in gross written premiums. Premiums earned increased 3.5% to $722.4 million in 2012 compared to $697.7 million in 2011. The variance difference between premiums earned and net written premiums is primarily attributable to the non-renewal of the large Florida quota share reinsurance contract, which had a larger negative impact on gross and net written premiums, increases in new business, rate increases on renewals, particularly for catastrophe exposed contracts and changes in the mix of business.
Incurred losses decreased by 27.2% to $424.2 million in 2013 compared to $582.4 million in 2012, primarily due to the decrease in current year catastrophe losses, partially offset by an increase of $50.9 million in current year attritional losses due to the impact of the increase in premiums earned. Current year catastrophe losses for 2013, were $25.9 million, mainly due to U.S. Storms ($22.4 million), the European floods ($2.5 million) and the Canadian Floods ($1.0 million), compared to $235.3 million of current year catastrophe losses for 2012, which related to Superstorm Sandy ($193.5 million), U.S. storms ($29.9 million) and Hurricane Isaac ($11.9 million). Despite the increase in current year attritional losses, the current year attritional loss ratio decreased 0.8 points due to the continued shift in business to excess of loss contracts which generally have lower attritional losses than pro rata contracts.
Segment Expenses. Commission and brokerage decreased 5.3% to $159.7 million in 2013 compared to $168.6 million in 2012. The year over year change was primarily due to the impact from the large Florida quota share reinsurance contract as well as the adoption of new accounting standards concerning the accounting for acquisition costs, which increased expenses in 2012, partially offset by the impact of the increase in premiums earned. Segment other underwriting expenses increased to $47.2 million in 2013 from $44.8 million in 2012, primarily due to increased compensation expenses and higher premiums earned.
Commission and brokerage expenses increased 8.1% to $168.6 million in 2012 compared to $156.0 million in 2011. These variances were primarily due to the increase in premiums earned and the effect resulting from commissions of the non-renewed Florida quota share contract. Segment other underwriting expenses increased to $44.8 million in 2012 compared to $39.3 million for the same period in 2011. These increases were primarily due to higher share-based compensation and employee benefit plan expenses.
Gross written premiums decreased by 2.7% to $1,209.5 million in 2012 compared to $1,242.6 million in 2011, primarily due to a shift in the mix of business towards excess of loss business, which generates a lower premium rate commensurate with lower loss exposure, a $25.0 million decline due to the impact of foreign exchange rate movement and a lower level of reinstatement premiums in 2012. Net written premiums decreased by 10.5% to $550.7 million in 2012 compared to $615.1 million in 2011, primarily due to the decline in gross written premiums and the impact of changes in our affiliated quota share agreements. Premiums earned decreased by 10.1% to $572.5 million in 2012 compared to $636.7 million in 2011. The change in premiums earned is comparable to the change in net written premiums.
Gross written premiums increased by 8.3% to $1,049.2 million in 2012 compared to $969.1 million in 2011. This increase was primarily driven by crop and primary A&H medical stop loss business, partially offset by the termination and runoff of several large casualty programs. Net written premiums increased 6.8% to $481.2 million in 2012 compared to $450.4 million for 2011. The lower increase in net written premiums in comparison to gross written premiums is primarily attributable to a higher level of reinsurance employed for the crop business. Premiums earned increased 4.3% to $479.0 million in 2012 compared to $459.4 million in 2011. The change in premiums earned is relatively consistent with the increase in net written premiums.
Commission and brokerage expenses decreased 56.5% to $17.5 million in 2012 compared to $40.4 million in 2011, driven by growth in direct distribution business, which has lower acquisition costs and changes in our affiliated quota share agreements. Segment other underwriting expenses in 2012 increased to $96.5
million from $87.7 million in 2011. These increases are primarily the result of increased personnel benefit costs.