The Company’s net reserve for losses and loss adjustment expenses at December 31, 2015 was $653.5 million. Of this amount, 68.0% relates to IBNR. The Company’s net reserve for losses and loss adjustment expenses by segment are summarized as follows:
We concluded that none of the equity securities in our portfolio at December 31, 2015 or 2014 had experienced an other-than-temporary impairment. We recognized an impairment loss of  $804,000 for the year ended December 31, 2013 on an equity security in our portfolio, as we had the intent to sell this security at December 31, 2013 and it was in an $804,000 unrealized loss position on that date.
In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which creates a new comprehensive revenue recognition standard that will serve as a single source of revenue guidance for all companies in all industries. The guidance applies to all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards, such as insurance contracts. Under this guidance, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under the current guidance. These may include indentifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU No. 2014-09 becomes effective for the Company during the first quarter of 2018 and must be applied retrospectively. The Company is currently evaluating ASU No. 2014-09 to determine the potential impact that adopting this standard will have on its consolidated financial statements.
Insurance premiums are earned ratably over the terms of our insurance policies, generally twelve months. Reinsurance premiums assumed are earned over the terms of the underlying policies or reinsurance contracts. Contracts and policies written on a “losses occurring” basis cover claims that may occur during the term of the contract or policy, which is typically twelve months. Contracts which are written on a “risks
For the Casualty Reinsurance segment (which represents 30.1% of our gross written premiums for the year ended December 31, 2015), gross written premiums decreased 16.5%, from $206.7 million for the year ended December 31, 2014 to $172.5 million for the year ended December 31, 2015. The Casualty Reinsurance segment generally writes large casualty-focused treaties that are expected to have lower volatility relative to property and catastrophe treaties. We rarely write stand-alone property reinsurance. When treaties that include property exposure are written, it is done with relatively low catastrophe sub-limits.
Expense Ratio. The expense ratio decreased from 28.9% in 2013 to 26.8% in 2014. The decrease in the expense ratio is primarily attributable to the increase in net earned premiums without a proportional increase in the total amount of operating expenses.
Of our total cash and invested assets of  $1,310.6 million at December 31, 2014, $73.4 million represents the cash and cash equivalents portion of the portfolio. The majority of the portfolio, or $824.9 million, is comprised of fixed maturity and equity securities that are classified as available-for-sale and carried at fair value with unrealized gains and losses on these securities reported, net of applicable taxes, as a separate component of accumulated comprehensive income or loss. Also included in our investments is $131.9 million of short-term investments, $33.6 million of other invested assets and $7.4 million of fixed maturity securities classified as trading and held at the U.S. holding company. Our trading portfolio is carried at fair value with changes to the value reported as net investment income in our condensed consolidated income statement.
In addition to the $824.9 million of available-for-sale securities, the Company holds other invested assets of  $33.6 million, $7.4 million of fixed maturity securities classified as trading (which are held at our U.S. holding company), short-term investments of  $131.9 million and $239.5 million of bank loan participations for a total invested asset balance at December 31, 2014 of  $1,237.2 million.
See “- Liquidity and Capital Resources - Sources and Uses of Funds” for information regarding our senior bank debt facility and trust preferred securities.
purchases quota share reinsurance for 50% of the first $600,000 for workers’ compensation program business;
We define net operating income as net income excluding certain non-operating expenses such as net realized investment gains and losses, expenses related to due diligence costs for various merger and acquisition activities, severance costs associated with terminated employees, and interest expenses on a leased building that we are deemed to own for accounting purposes. We use net operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Net operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and our definition of net operating income may not be comparable to that of other companies.