Net realized investment gains totaled $669,000 in 2011 compared to $1,879,000 in 2010; a decrease of 64.4%. Negatively impacting realized investment gains was $398,000 in other-than-temporary impairments recognized in the bond portfolio. However, these impairments were offset by realized gains stemming from recoveries of previously recognized other-than-temporary impairments totaling $384,000. The primary reason for the decline in net realized investment income in 2011 compared to 2010 was management's decision to sell fewer securities due to market conditions.
In addition to the incurred losses and LAE from cat events, we also incurred significant losses and adjustment expenses from our automobile program. The automobile program added an additional $4,226,000 to claims during 2011 and $5,327,000 during 2010. This program had loss ratios of 141.2% and 118.8%, respectively for the year ended December 31, 2011 and 2010. When coupled with commission and general expenses, the pre-tax underwriting losses were in excess of $2,000,000 for both years. The Company discontinued the automobile program in the fourth quarter of 2011. The discontinuance of the automobile program is expected to positively impact overall underwriting results provided we do not experience any further adverse development on reported claims, many of which are liability coverage claims which tend to take longer to settle.
Amortization of deferred policy acquisition costs (DAC) and commissions totaled $12,168,000 compared to $11,815,000 for the same period last year; an increase of $353,000. DAC and commission expenses were 21.6% of premium revenue (before cat reinstatement premium) in 2011 compared to 19.3% for the same period last year. The primary reason for the increase was a higher contingent commission accrual in the current year compared to the prior year.
The property and casualty segment composed 87.8% of total premium revenue in 2011 compared to 88.5% in 2010. The P&C segment is primarily composed of dwelling fire, allied lines and homeowners lines of business. The life segment composed 12.2% of premium revenue in 2011 compared to 11.5% in 2010 with revenue produced primarily from life, accident and supplemental health insurance products.
NSIC premium accounted for 12.2% of total consolidated premium revenue for 2011. As mentioned above, NSIC operates using two primary methods of distribution: home service employee agents and independent agents. While the Company has used the traditional home service distribution method since its founding in 1947, the independent agent distribution method has become the largest source of renewal business and new business production over the past decade. For 2011, the home service and independent agent distribution methods accounted for 32.3% and 63.8%, respectively of NSIC premium revenue.
Cash flow provided by investing activities was $9,888,000 in 2011 compared to cash used of $4,931,000 in the prior year. Normally, our investment process allows for cash received from premiums, selling investments, principal receipts and funds received from calls to be reinvested. However, due to the increased frequency of storm losses, primarily in the second quarter of 2011, more proceeds from investments were used to cover increased operating cash flow
The ratios of Total Adjusted Capital to Authorized Control Level RBC for The National Security Group's life/health and property/casualty insurance subsidiaries are all in excess of 3.8 to 1 at December 31, 2011.
At December 31, 2011, the estimated reinsurance recoverable recorded was $2,778,000 compared to $1,699,000 for the same period last year. The Company does not anticipate any issues with collection of the recorded amount. In 2011, catastrophe reinsurance premiums totaled $5,629,000 ceded compared to $5,876,000 in 2010. Catastrophe reinsurance premiums are based on a premium calculation applying the agreed upon rate to the earned premium of the covered lines of business. The decrease in ceded premium in 2011 is attributable to a 2.6% decline in the premium base and a 1.67% decline in the rate applied.
Certain 2010 amounts have been reclassified from the prior year notes to the consolidated financial statements to conform to the 2011 presentation.