Net Investment Income. Net investment income increased 5.5% to $375.9 million in 2020 compared with net investment income of $356.2 million in 2019. Net pre-tax investment income as a percentage of average invested assets was 2.8% in 2020 and 3.2% in 2019. The increase in income was primarily the result of higher income from our growing fixed maturity portfolio, offsetting the impact from the lower interest rate environment, and from our limited partnerships.
Net Realized Capital Gains (Losses). 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.
Other Income (Expense). We recorded other expense of $14.6 million $1.6 million and $9.6 million in 2020, 2019 and 2018, respectively. The changes were primarily the result of fluctuations in foreign currency exchange rates.
Incurred losses and LAE increased by 20.3% to $4,608.1 million in 2020 compared to $3,829.1 million in 2019, primarily due to an increase of $725.8 million in current year attritional losses, related to $154.8 million of losses from the COVID-19 pandemic and the impact of the increase in premiums earned and $229.5 million increase in development on prior years attritional losses in 2020 compared to 2019. The increase in incurred losses was partially offset by a decrease of $102.7 million in current year catastrophe losses and a $73.5 million improvement in development on prior years catastrophe losses. The current year catastrophe losses of $410.6 million in 2020 related to Hurricane Laura ($115.0 million), the Northern California wildfires ($44.1 million), Hurricane Zeta ($36.5 million), Hurricane Sally ($31.4 million), the California Glass wildfire ($29.5 million), the Nashville tornadoes ($22.8 million), the Derecho storms ($20.5 million), Hurricane Isaias ($20.0 million), Hurricane Delta ($18.5 million), the Calgary storms in Canada ($17.4 million), Oregon wildfires ($17.0 million), the U.S. Civil Unrest ($14.5 million) the Queensland hailstorm ($10.0 million), the Australia East Coast storm ($6.8 million) and the 2020 Australia fires ($6.5 million). The current year catastrophe losses of $513.3 million in 2019 related to Typhoon Hagibis ($184.0 million), Hurricane Dorian ($161.0 million), Typhoon Faxai ($119.3 million), the Dallas tornadoes ($25.0 million), and the Townsville Monsoon in Australia ($24.0 million).
Incurred losses and LAE decreased by 20.4% to $3,829.1 million in 2019 compared to $4,811.0 million in 2018, primarily due to a decrease in current year catastrophe losses of $646.3 million and a decrease in unfavorable development on prior year catastrophe losses of $492.7 million mainly related to the development on Hurricanes Harvey, Irma and Maria and the California wildfires in 2018. The decrease in losses was partially offset by an increase of $178.8 million on current year attritional losses mainly due to the increase in premiums earned. The current year catastrophe losses of $513.3 million in 2019 are outlined above. The
current year catastrophe losses of $1,159.6 million in 2018 related to Hurricane Michael ($443.5 million), Camp wildfire ($297.0 million), Woolsey wildfire (151.0 million), Typhoon Jebi ($66.6 million), Hurricane Florence ($60.8 million), Cyclone Mekunu ($43.7 million), Typhoon Trami ($25.0 million), other 2018 California wildfires ($24.6 million), Australian hailstorm ($24.0 million), Japan Floods ($15.0 million) and the U.S. winter storms ($8.4 million).
Our combined ratio increased by 0.3 points to 99.6% in 2020 compared to 99.3% in 2019. The loss ratio component increased by 2.1 points in 2020 over the same period last year mainly due to $229.5 million increase in development on prior years attritional losses and $154.8 million of losses related to the Covid-19 pandemic in 2020. The commission and brokerage ratio component decreased to 21.4% in 2020 compared to 23.1% in 2019, reflecting changes in affiliated reinsurance agreements and changes in the mix of business. The other underwriting expense ratio decreased slightly to 6.3% in 2020 from 6.4% in 2019.
Our combined ratio decreased by 29.8 points to 99.3% in 2019 compared to 129.1% in 2018. The loss ratio component decreased by 29.6 points in 2019 over the same period last year mainly due to a lower loss ratio on current year catastrophe losses and less unfavorable development on prior years catastrophe losses in 2019 compared to 2018. The commission and brokerage ratio component decreased slightly to 23.1% in 2019 compared to 23.6% in 2018, reflecting changes in affiliated reinsurance agreements and changes in the mix of business. The other underwriting expense ratio increased slightly to 6.4% in 2019 from 6.1% in 2018.
Net investment income increased by 5.5% to $375.9 million in 2020 compared to $356.2 million in 2019. The increase in 2020 was primarily due to higher income from our growing fixed maturity portfolio, offsetting the impact of the lower interest rate environment, and from our limited partnerships.
Net investment income increased by 13.3% to $356.2 million in 2019 compared to $314.4 million in 2018. The increase in 2019 was primarily due to 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.
Our loss and LAE reserves are management’s 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.
Premiums. Gross written premiums increased by 14.5% to $5,265.7 million in 2020 from $4,600.4 million in 2019, primarily due to increases in property pro rata business, casualty excess of loss writings and property catastrophe excess of loss business. Net written premiums increased by 18.1% to $4,632.3 million in 2020 compared to $3,923,8 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 18.1% to $4,484.7 million in 2020 compared to $3,796.2 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.
Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Reinsurance segment for the periods indicated.
Segment Expenses. Commission and brokerage increased to $1,120.0 million in 2020 compared to $1,027.3 million in 2019. 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 $119.3 million in 2020 from $110.0 million in 2019, mainly due to the impact of the increase in premiums earned.
Commission and brokerage increased to $242.8 million in 2019 compared to $217.8 million in 2018. 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 $240.9 million in 2019 compared to $195.4 million in 2018. 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.
This report contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the federal securities laws. In some cases, these statements can be identified by the use of forward-looking words such as “may”, “will”, “should”, “could”, “anticipate”, “estimate”, “expect”, “plan”, “believe”, “predict”, “potential” and “intend”. Forward-looking statements contained in this report include information regarding our reserves for losses and LAE, the impact of the TCJA, the adequacy of our provision for uncollectible balances, estimates of our catastrophe exposure, the effects of catastrophic and pandemic events on our financial statements and the ability of our subsidiaries to pay dividends. Forward-looking statements only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause our actual events or results to be materially different from our expectations include those discussed under the caption ITEM 1A, “Risk Factors”. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.