As of December 2020, Everest Re has relocated its corporate offices to Warren, NJ with approximately 321,500 square feet of leased office space. The Company’s other 18 locations occupy a total of approximately 219,950 square feet, all of which are leased.
We compete in the U.S. and international reinsurance and insurance markets with numerous global competitors. Our competitors include independent reinsurance and insurance companies, subsidiaries or affiliates of established worldwide insurance companies, reinsurance departments of certain insurance companies, domestic and international underwriting operations, and certain government sponsored risk transfer vehicles. Some of these competitors have greater financial resources than we do and have established long term and continuing business relationships, which can be a significant competitive advantage. In addition, the lack of strong barriers to entry into the reinsurance business and recently, the securitization of reinsurance and insurance risks through capital markets provide additional sources of potential reinsurance and insurance capacity and competition.
Worldwide insurance and reinsurance market conditions historically have been competitive. Generally, there was ample insurance and reinsurance capacity relative to demand, as well as, additional capital from the capital markets through insurance linked financial instruments. These financial instruments such as side cars, catastrophe bonds and collateralized reinsurance funds, provided capital markets with access to insurance and reinsurance risk exposure. The capital markets demand for these products was being primarily driven by a low interest environment and the desire to achieve greater risk diversification and potentially higher returns on their investments. This increased competition was generally having a negative impact on rates, terms and conditions; however, the impact varies widely by market and coverage.
There will also be a negative impact on future industry underwriting results. With the closing of non-essential businesses, there has been a significant decline in business activity. To the extent that premiums are based on business activity, there will be a decline in premium volume. Incurred losses from the pandemic will be impacted by the duration of the event and will vary by line of business and geographical location. For the full year 2020, our underwriting results include $154.8 million of estimated losses related to the pandemic.
While we are unable to predict the full impact the pandemic will have on the insurance industry as it continues to have a negative impact on the global economy, we are well positioned to continue to service our clients. Our capital position remains a source of strength, with high quality invested assets, significant liquidity and a low operating expense ratio. Our diversified global platform with its broad mix of products, distribution and geography is resilient.
Premiums. Gross written premiums increased by 12.8% to $7,957.0 million in 2020, compared to $7,053.1 million in 2019, reflecting a $665.3 million, or 14.5%, increase in our reinsurance business and a $238.6 million, or 9.7%, increase in our insurance business. The rise in reinsurance premiums was mainly due to increases in property pro rata business, casualty excess of loss writings and property catastrophe excess of loss business. The rise in insurance premiums was mainly due to increases in specialty casualty business, property business and professional liability business. Net written premiums increased by 15.0% to $6,638.7 million in 2020, compared to $5,774.9 million in 2019. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the impact of changes in affiliated reinsurance contracts. Premiums earned increased by 16.7% to $6,406.6 million in 2020, compared to $5,489.0 million in 2019. 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 7.3% to $7,053.1 million in 2019, compared to $6,573.7 million in 2018, reflecting a $445.7 million, or 22.2%, increase in our insurance business and a $33.7 million, or 0.7%, increase in our reinsurance business. The rise in insurance premiums was primarily due to increases in many lines of business, including casualty, energy and accident and health. The increase in reinsurance premiums was mainly due to the increase in treaty casualty writings, partially offset by a decline in treaty property business. Net written premiums increased by 14.8% to $5,774.9 million in 2019, compared to $5,031.9 million in 2018. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the impact of changes in affiliated reinsurance contracts. Premiums ceded to Bermuda Re in 2019 were $100.1 million compared with $572.6 million in 2018. Premiums earned increased by 13.4% to $5,489.0 million in 2019, compared to $4,839.1 million in 2018. 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.
Net investment income increased 13.3% to $356.2 million in 2019 compared with net investment income of $314.4 million in 2018. Net pre-tax investment income as a percentage of average invested assets was 3.2% in both 2019 and 2018. The increase in income was primarily the result of higher income from our growing fixed maturity portfolio, partially offset by lower income from our limited partnerships and lower dividend income from our equity portfolio.
Incurred Losses and Loss Adjustment Expenses. The following table presents our incurred losses and loss adjustment expenses (“LAE”) for the periods indicated.
Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees increased to $1,373.4 million in 2020 compared to $1,270.1 million in 2019. The increase was mainly due to increases in premiums earned and changes in the mix of business.
Commission, brokerage, taxes and fees increased to $1,270.1 million in 2019 compared to $1,141.7 million in 2018. The increase was mainly due to changes in affiliated reinsurance agreements, increases in premiums earned and changes in the mix of business toward additional pro rata business.
Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense were $35.7 million, $34.9 million and $30.6 million in 2020, 2019 and 2018, respectively. The changes in expense were primarily due to the movements in the floating interest rate related to the long term subordinated notes, which is reset quarterly per the note agreement. The floating rate was 2.6% as of December 31, 2020. The increase from 2019 to 2020 was also related to the interest expense incurred on the $1,000.0 million senior note issuance in October 2020.
Income Tax Expense (Benefit). The Company had an income tax expense of $31.7 million in 2020, an income tax expense of $135.2 million in 2019, and an income tax benefit of $367.0 million in 2018. The TCJA impact was an income tax benefit of $28.4 million in 2018. Variations in income taxes generally result from changes in the relative levels of pre-tax income, including the impact of catastrophe losses and net capital gains (losses) as well as changes in tax exempt investment income and creditable foreign taxes. The change in income tax expense was primarily due to the increase in incurred losses, including from COVID 19 reserves and a reserve charge from 2019 to 2020.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, enacted on March 27, 2020, provided that U.S. companies could carryback for five years net operating losses incurred in 2018, 2019 and/or 2020. This beneficial tax provision in the CARES Act enabled the Company to carryback its significant 2018 net operating losses to prior tax years with higher effective tax rates of 35% versus 21% in 2018 and later years. As a result, the Company was able to record a net income tax benefit from the five-year carryback of $32.5 million and obtain federal income tax cash refunds of $182.5 million including interest in 2020.
Our net income was $351.9 million and $629.7 million in 2020 and 2019, respectively and our net loss was $962.2 million in 2018. The changes were primarily driven by the financial component fluctuations explained above.
Stockholder’s equity increased by $556.9 million to $6,414.3 million at December 31, 2020 from $5,857.4 million at December 31, 2019, principally as a result of $351.9 million of net income, $188.5 million of net unrealized appreciation on investments, net of tax, $14.5 million of net foreign currency translation adjustments, $0.9 million of cumulative adjustment from the adoption of ASU 2016-13, $0.7 million of net benefit plan obligation adjustments and $0.4 million of capital contributions
Net realized capital gains were $49.8 million in 2020 and $419.4 million in 2019 and net realized capital losses were $185.4 million in 2018. The net realized capital gains of $49.8 million in 2020, were comprised of $91.9 million of gains from fair value re-measurements, partially offset by $40.6 million of losses from sales of investments and $1.6 million increase in allowances for credit loss. The net realized capital gains of $419.4 million in 2019, were comprised of $420.8 million of gains from fair value re-measurements, $18.2 million of gains from sales of investments, partially offset by $19.6 million of other-than-temporary impairments. The net realized capital losses of $185.4 million in 2018 were comprised of $148.0 million of losses from fair value re-measurements, $31.2 million of losses from sales of investments and $6.2 million of other-than-temporary impairments.
The Reinsurance operation writes property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is primarily written in the U.S. as well as through branches in Canada and Singapore. The Insurance operation writes property and casualty insurance directly, through brokers, surplus lines brokers and general agents mainly within the U.S.
The following table presents the underwriting results and ratios for the Reinsurance segment for the periods indicated.
Incurred losses increased by 19.2% to $3,209.2 million in 2020 compared to $2,692.7 million in 2019. The increase was primarily due to an increase of $552.1 million in current year attritional losses, primarily related to $116.4 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned, as well as a $202.7 million increase in development on prior years attritional losses in 2020 compared to 2019. The increase in incurred losses was partially offset by a decline of $166.8 million in current year catastrophe losses and $71.5 million of improvement in development on prior years catastrophe losses in 2020 compared to 2019. The current year catastrophe losses of $342.5 million in 2020 primarily related to Hurricane Laura ($96.5 million), the Northern California wildfires ($44.1 million), the California Glass wildfire ($29.5 million), Hurricane Zeta ($28.5 million), Hurricane Isaias ($17.8 million), the Derecho storms ($17.5 million), the Nashville tornadoes ($17.3 million), Oregon wildfires ($17.0 million), Hurricane Delta ($16.5 million), Hurricane Sally ($15.5 million), the Calgary storms in Canada ($14.9 million), the Queensland hailstorm ($10.0 million), the Australia East Coast storm ($6.8 million), the 2020 Australia fires ($6.5 million), and the U.S. Civil Unrest ($4.1 million). The current year catastrophe losses of $509.3 million in 2019 primarily related to Typhoon Hagibis ($184.0 million), Hurricane Dorian ($157.0 million), Typhoon Faxai ($119.3 million), the Dallas tornadoes ($25.0 million), and the Townsville Monsoon in Australia ($24.1 million).
in loss estimates in 2018 for Hurricane Harvey, Irma and Maria were mostly driven by re-opened claims reported in the second quarter of 2018 and loss inflation from higher than expected loss adjustment expenses and in particular, their impact on aggregate covers. The current year catastrophe losses of $509.3 million in 2019 are outlined above. The current year catastrophe losses of $1,117.5 million in 2018 primarily related to Hurricane Michael ($419.5 million), Camp wildfire ($297.0 million), Woolsey wildfire ($151.0 million), Typhoon Jebi ($66.6 million), Hurricane Florence ($51.3 million), Cyclone Mekunu ($43.7 million), Typhoon Trami ($25.0 million), Australia hailstorm ($24.0 million), other 2018 California wildfires ($23.1 million), Japan Floods ($5.5 million), and the U.S. winter storms ($1.3 million).
Commission and brokerage increased to $1,027.3 million in 2019 compared to $923.9 million in 2018. The increase was mainly due to changes in affiliated reinsurance agreements, the impact of the increase in premiums earned and changes in the mix of business. Segment other underwriting expenses increased to $110.0 million in 2019 from $97.9 million in 2018, mainly due to the impact of changes in affiliated reinsurance contracts and the impact of the increases in premiums earned.
Premiums. Gross written premiums increased by 9.7% to $2,691.3 million in 2020 compared to $2,452.7 million in 2019. This increase was related to increases in specialty casualty business, property business and professional liability business. Net written premiums increased by 8.4% to $2,006.4 million in 2020 compared to $1,851.2 million in 2019 which is consistent with the change in gross written premiums. Premiums earned increased 13.5% to $1,921.9 million in 2020 compared to $1,692.9 million in 2019. The change in premiums earned 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 22.4% to $2,452.7 million in 2019 compared to $2,004.1 million in 2018. This increase was related to most lines of business including casualty, energy and accident and health. Net written premiums increased by 22.4% to $1,851.2 million in 2019 compared to $1,512.2 million in 2018 which is consistent with the change in gross written premiums. Premiums earned increased 16.5% to $1,692.9 million in 2019 compared to $1,452.7 million in 2018. The change in premiums earned 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 23.1% to $1,399.0 million in 2020 compared to $1,136.4 million in 2019, mainly due to an increase of $173.8 million in current year attritional losses, resulting from $38.4 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned, an increase of $64.0 million in current year catastrophe losses and a $26.8 million increase in development on prior years attritional losses in 2020 compared to 2019. The $68.0 million of current year catastrophe losses in 2020, primarily related to Hurricane Laura ($18.5 million), Hurricane Sally ($15.9 million), the U.S. Civil Unrest ($10.4 million), Hurricane Zeta ($8.0 million), the Nashville tornadoes ($5.5 million), the Derecho storms ($3.0 million), the Calgary storms in Canada ($2.5 million), Hurricane Isaias ($2.2 million), and Hurricane Delta ($2.0 million).The current year catastrophe losses of $4.0 million in 2019 primarily related to Hurricane Dorian ($4.0 million).
Incurred losses and LAE increased by 13.7% to $1,136.4 million in 2019 compared to $999.3 million in 2018, mainly due to an increase of $168.7 million in current year attritional losses, resulting from the impact of the increase in premiums earned, partially offset by a decrease of $38.1 million in current year catastrophe losses. The current year catastrophe losses of $4.0 million in 2019 primarily related to Hurricane Dorian ($4.0 million). The current year catastrophe losses of $42.1 million in 2018 primarily related to Hurricane Michael ($24.0 million), Hurricane Florence ($9.5 million), the U.S. winter storms ($7.1 million) and other 2018 California wildfires ($1.5 million).
Segment Expenses. Commission and brokerage increased to $253.4 million in 2020 compared to $242.8 million in 2019. The increase was mainly due to changes in affiliated reinsurance agreements and the impact of increases in premiums earned. Segment other underwriting expenses increased to $281.7 million in 2020 compared to $240.9 million in 2019. The increases were mainly due to the impact of the increases in premiums earned and expenses related to the continued build out of the insurance business.