Net premiums written in 1996 increased $1.012 billion or 28%, of which $1.308 billion reflects recording a full year of the operating results for the 1995 acquisitions of Frankona Re and the Aachen Re Business (the "Acquired Businesses") in 1996 compared to recording only five months of operating results in 1995. This 1996 increase in net premiums written related to the Acquired Businesses was partially offset by a decrease in domestic property and casualty net written premiums.
Net earnings in 1996 increased $130 million or 30%, including an increase in after-tax net realized gains on investments of $21 million. Excluding after-tax net realized gains on investments, 1996 net earnings increased $109 million or 35%. This 1996 increase was primarily attributable to the Acquired Businesses reflecting a full year's operating results in 1996 compared to recording only five months of operating results in 1995. The remainder of the increase was due to improvement in the domestic and international property and casualty underwriting results and growth in the investment portfolio due mostly from cash flow from international operations. These increases were partially offset by a 5% increase in the effective tax rate due to a greater proportion of earnings before taxes provided by operations that reside in higher income tax jurisdictions.
Net premiums written in 1995 increased $988 million, including $561 million related to the operations of the Acquired Businesses. The remainder of the increase primarily related to the NRG Business acquired in 1994 and an increase in premiums generated from new and existing clients in both the domestic and international property and casualty markets.
The GAAP combined ratio is an indicator of underwriting performance in property and casualty reinsurance, with a percentage lower than 100% generally indicating an underwriting profit. While underwriting results expressed as the combined ratio have been in excess of 100%, indicating an underwriting loss in all years presented, the operating results of insurance companies include investment income which generally yields an overall operating profit as reflected above in the caption "Earnings before income taxes, excluding net realized gains on investments." The 1996 and 1995 GAAP combined ratios were moderately impacted by catastrophe costs and certain significant unprofitable reinsurance contracts that management has elected not to renew. In 1994, catastrophe costs, principally from the Northridge, California earthquake, heavily impacted the GAAP combined ratio.
Earnings before income taxes, excluding net realized gains on investments, increased $17 million or 7% in 1996, primarily due to a 1.1% improvement in the GAAP combined ratio as lower catastrophe costs and the non-renewal of certain unprofitable contracts were partially offset by a slight reduction in reinsurance premium rates. Improvement in the GAAP combined ratio was partially offset by a slight decline in net investment income. Earnings before income taxes, excluding net realized gains on investments, decreased $20 million in 1995, due primarily to an increase in long-term disability losses and moderate catastrophe losses, partially offset by lower retrocession premiums and an increase in net investment income.
Revenues from the Company's life reinsurance segment include life insurance premium revenues, net investment income, net realized gains on investments and income from certain investment related products. The 1996 increase of $225 million or 34% primarily reflects a full year's operating results from the Acquired Businesses and continued expansion in the domestic and international life reinsurance business. Revenues increased $305 million or 87% in 1995, principally as a result of the Acquired Businesses.
GE Global's ability to meet its obligations, including debt service and operating expenses, and pay dividends to its shareholders depends primarily upon receiving sufficient funds from its insurance subsidiaries. The payment of dividends by ERC is subject to restrictions set forth in the insurance laws of Missouri, as well as other restrictions. Historically, the Company's liquidity requirements are met by funds provided by operations and from the maturity and sales of investments.
In 1996, GE Global executed a $1 billion shelf registration statement of senior unsecured debt securities, of which $600 million is outstanding and is rated AA by Standard & Poor's. The remaining unissued $400 million may be offered from time to time in the future, the proceeds of which will be added to the general funds of GE Global and made available to finance its operations, unless otherwise stated at the time of the offering.
In addition, the Company, as of January 1, 1997, has a one-year $600 million revolving credit agreement with GE Capital Services which enables the Company to borrow from GE Capital Services at an interest rate per annum equal to GE Capital Services' cost of funds for a one year period. The agreement shall be automatically extended for successive terms of one year each unless terminated in accordance with terms of the agreement.
The fixed maturity securities consisted of high credit quality securities. Almost all bonds are investment grade securities with a comparable average rating equal to or above a Moody's or S&P "AA" rating. Fixed maturity securities include German and Danish mortgage-backed securities, although these mortgage-backed securities have significantly less principal and interest prepayment risk than typical U.S. mortgage-backed securities, as the German and Danish tax and social environments are not conducive to risks of prepayment of interest and principal. Equity securities and other invested assets were internationally diversified with principal holdings in Germany, the United Kingdom and the United States.
SFAS No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, among other things, distinguishes transfers of financial assets that are sales from transfers that are secured borrowings, based on the control of the transferred assets. SFAS No. 125 is effective for transfers of financial assets occurring after December 31, 1996, and its adoption will not have an effect on the financial position or results of operations of the Company.