The property and casualty segment can be impacted by severe storm activity resulting in incurred losses and loss adjustment expenses primarily from tornado, wind and hail related damage. These storm systems or other natural disasters are classified as catastrophes (referred to as "cat events" or "catastrophe events" throughout the remainder of this document) by Property Claim Service (PCS) when these events cause $25 million or more in industry wide direct insured losses and affect a significant number of policyholders and insurers.
Overview-Year Ended December 31, 2015 compared to Year Ended December 31, 2014
For the year ended December 31, 2015, net premiums earned were up $2,809,000 at $59,462,000 compared to $56,653,000 in 2014. The primary reasons for the increase were a 12.2% reduction in catastrophe reinsurance costs coupled with increases in gross earned premium. The increase in gross earned premium was due to growth in P&C segment premium revenue of 3.6% in 2015 compared to 2014.
Total debt at December 31, 2015 was $18,215,000 compared to $19,572,000 at December 31, 2014. Debt was reduced $1,357,000 during 2015 with the primary reason being the reduction of long term debt. The reduction of debt continues to be a primary focus of management.
Net earned premium revenue in the life segment was $6,300,000 at December 31, 2015 compared to $6,374,000 at December 31, 2014; a decrease of 1.2%. The $74,000 decrease in net earned premium revenue was primarily due to a decline in new business production in both the traditional life and supplemental accident and health insurance products offered in NSIC.
Property and casualty segment net premium earned for 2015 was $53,162,000 compared to $50,279,000 for the same period in 2014. The primary reason for the increase in 2015 compared to 2014 was a 5.7% increase in gross premium revenue in our dwelling fire program as well as a 0.6% increase in gross premium revenue in our homeowners program.
The primary source of premium revenue growth in the P&C segment was in our non-coastal states; primarily the states of Oklahoma and Georgia. Premium revenue in Oklahoma increased 19.9% in 2015 with policy counts up 12.2%. An increase in new business production coupled with the implementation of increased rates during 2015 were the primary reasons for the increase in premium revenue in Oklahoma in 2015 compared to the same period last year. In addition, Georgia revenue increased 12.3% in 2015 with policy counts up 10.9% compared to December 31, 2014. Increased marketing efforts contributed to the increase in premium revenue in Georgia in 2015 compared to 2014. We expect to continue to look for opportunities to increase premium revenue in non-coastal regions of the states in which we operate in order to create more geographic diversification.
Under the catastrophe reinsurance program in 2015, the Company retained the first $4,000,000 in losses from each event. Reinsurance coverage for 2015 was maintained in three layers as follows:
General and administrative expenses in the property and casualty segment totaled $6,735,000 in 2015 compared to $6,966,000 in 2014; a decrease of $231,000 or 3.3%. The primary reason for the decrease was a significant reduction in underwriting service related fees as well as a moderate decline in fees paid to actuarial consultants.
A downside of investing in longer duration securities in the life segment is that the portfolio is exposed to more significant price volatility as market interest rates change. This exposure to sudden interest rate changes can lead to declines in market value of fixed income securities in a rising interest rate environment. Management currently maintains the life insurance portfolio in the intermediate range of 6.0 to guard against the adverse impact of rising rates. However, due to the necessity of matching the duration of liabilities as closely as possible in order to pass regulatory testing, some volatility in market value of the portfolio in a rising rate environment cannot be avoided.
The amortized cost and aggregate fair value of debt securities at December 31, 2015, by contractual maturity, are as follows (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Investment returns with respect to the investment portfolio for the years ended December 31, 2015 and 2014 follows: