Total related party (Anthem) revenues were $291 million, $233.1 million, and $175.6 million for 1996, 1995 and 1994, respectively.
In 1996, the percentage of the Company's commissions and fees derived from property and casualty insurance brokerage business declined primarily due to the Company's new business relationships with CIC and the assumption of the administrative operations for Anthem's Indiana HMO. The increase in the property and casualty business percentage from 1994 to 1995 was primarily attributable to acquisitions. The following table sets forth the Company's principal classes of products sold for the three years ended December 31, 1996, 1995 and 1994 as a percentage of commissions and fees:
Net realized investment gains were $0.3 million, $1.0 million, and $1.0 million in 1996, 1995, and 1994, respectively. Net investment yield was approximately 5%, 5.5%, and 5% in 1996, 1995 and 1994, respectively.
Total operating expenses for 1996 increased 19% to $573 million from $479.7 million in 1995. The majority of the increase was due to new acquisitions and the expansion of existing operations. Total operating expenses for 1995 increased 41% to $479.7 million from $340 million in 1994. The majority of the increase was due to acquisitions, primarily the BHR operations.
Reimbursements to Anthem or its affiliates pursuant to an intercompany services agreement were $95.4 million, $52.6 million, and $46.1 million for 1996, 1995 and 1994, respectively. Of the increase from 1995 to 1996, $18.9 million is due to the leasing of transition employees from Anthem. On January 1, 1997, these employees became employees of the Company and the salaries and benefits of these employees are now paid directly by the Company. Additionally, in 1996 the Company entered into a new agreement with Anthem, whereby the Company converted from a self-insured employee health plan to an insured plan where Anthem is the insurer. Premiums paid to Anthem totaled $16.1 million in 1996. The remaining increase is primarily due to expenses associated with new business relationships with Anthem or its affiliates.
During the third and fourth quarters of 1994, approximately 640 former Southeastern employees became employees of the Company. Effective January 1, 1995, these employees were transferred to Company payrolls and benefit plans. Prior to January 1, 1995, the Company reimbursed Southeastern for expenses relating to those employees who remained on Southeastern's payroll and benefit plans. Reimbursement of salaries and benefits to Southeastern in 1994 was approximately $11.8 million.
Employee compensation and benefits costs for 1996 increased 22% to $361.5 million from $296 million in 1995. New acquisitions accounted for approximately $35.9 million of the increase. The remaining increase of $29.6 was principally due to the expansion of existing operations, including the new agreements with Anthem.
Other operating expenses for 1996 increased 15% to $211.5 million from $183.6 million in 1995. New acquisitions accounted for the majority of this increase with the remaining costs associated with the expansion of existing operations, including the new business relationships with Anthem and its affiliates.
Interest expense for the years ended December 31, 1996, 1995 and 1994, was $10.4 million, $8.5 million, and $3.3 million, respectively. Interest expense increased due to additional borrowings under the Company's revolving credit agreement. These borrowings were used to finance acquisitions and the general needs of the Company.
Acquisitions during 1996 and 1995 resulted in an additional $54.4 million and $53.5 million, respectively, of goodwill and other intangible assets. Such increases caused amortization expense to increase to $25.7 million in 1996 from $23.2 million in 1995 and $17.8 million in 1994.
capital expenditure requirements of the Company. Cash generated from operating activities was $55.9 million, $23.2 million, and $37 million in 1996, 1995 and 1994, respectively.
The Company maintains a high quality investment portfolio consisting of securities which the Company believes to be readily marketable. There are no derivatives in the portfolio.
The Company maintains a $150 million revolving credit agreement with a syndicate of banks. During 1996, the Company borrowed $6 million from this credit facility, principally to finance acquisitions and for other general corporate purposes. The revolving credit agreement matures in November 1998, and with the consent of the lenders it may be extended for an additional term of one year. The revolving credit agreement requires the Company to maintain certain financial ratios and comply with certain other covenants. Additionally, the cost of funds increases and decreases with the Company's debt leverage. The covenants do not restrict the payment of dividends. On November 18, 1996, the revolving credit agreement was amended to permit an additional $30.8 million of borrowings to fund the repurchase of 1,078,500 shares of the Company's common stock. This portion of the revolving credit agreement matures in November 1997.
As of December 31, 1996, long-term debt, excluding the current portion due, totaled $136.2 million, which compares to $131.6 million at December 31, 1995. Borrowings under the revolving credit agreement were $124 million and $118 million at December 31, 1996 and 1995, respectively.
percentage of the Company's revenues derived from the sale and servicing of Anthem life and health insurance products, it is inevitable that industry forces affecting Anthem will also affect the Company. The Company is working closely with Anthem so that each company may develop a plan which accomplishes each company's strategic objectives and delivers stockholder value. The Company has established a special committee of all independent directors to evaluate any proposals made by or involving Anthem.
Beginning in October 1995, Anthem's Board of Directors authorized the purchase of up to two million shares of the Company's common stock. Purchases have been made from time to time in the open market at prevailing prices or in privately negotiated transactions. Since October 1995, Anthem has purchased 481,500 shares of the Company's common stock. Anthem has informed the Company that Anthem has suspended its Company stock purchases pending the outcome of the above referenced strategic review.
Since its inception in 1989, the Company has derived a substantial percentage of its revenues and profits from providing marketing and administrative services for or on behalf of Anthem and its affiliates. Many administrative functions are those related to claims processing. Due to market driven pressures, over time the claims processing function is expected to become more standardized and automated and be less of a differentiating, value added service for the Company's clients. In anticipation of these changes, the Company has initiated plans to improve efficiencies and consolidate certain of these functions. In February 1997, the Company and Anthem announced the planned consolidation of their claims processing sites in Indiana, Kentucky and Ohio into one central site located in Indiana.
In July 1995, the State of Kentucky legislature passed a comprehensive health care reform bill. The new legislation, which was effective January 1, 1996, created a statewide voluntary health care purchasing alliance (the "Alliance") and guaranteed that every Kentucky resident had access to health care benefits. Membership in the Alliance is mandatory for state workers, public school employees, and voluntary for employees of state universities, counties and cities. The Company is a third party administrator for Anthem products offered through the Alliance. Certain aspects of this legislation may result in increased revenue for the Company's group health self-insured products while possibly lowering the revenues generated from the sale of small group and individual health products. There can be no assurances that the legislation will not have an adverse impact on the Company's business in the State of Kentucky.
Acquisitions have been an important historical part of the Company's strategy to become a full-service insurance broker to mid-market companies in targeted areas. The Company is regularly engaged in discussions with third parties regarding potential acquisitions but has no current commitments or agreements which individually or in the aggregate would be material. No assurances can be given with respect to the likelihood or financial or business effect of any possible future acquisition.
healthcare reforms, and more are considering them. In these states and elsewhere, the Company has joined with providers and has developed information systems to manage costs and is providing clients with managed care products, services and advice.