IBNR reserves are estimated by management and our reserving actuaries on an aggregate basis for each line of business or coverage for loss and loss expense liabilities not reflected within the case reserves. The sum of the case reserves and the IBNR reserves represents our estimate of total unpaid losses and loss adjustment expenses.
Lower than expected losses within our workers’ compensation line of $46.9 million, primarily related to accident years 2005 through 2014.
marine and aviation lines of $21.3 million, primarily in the 2010 through 2012 accident years, and
It is not possible to know whether the factors that affected loss reserves in the year ended December 31, 2015 will also occur in future periods. As discussed in detail in this Form 10-K, there are inherent uncertainties in estimating reserves for losses and LAE and we encourage you to read this Form 10-K for more information about our reserving process and the judgments, uncertainties and risks associated therewith.
Gross unrealized losses on fixed maturities and equity securities increased $75.5 million compared to December 31, 2014, primarily attributable to wider credit spreads, and to a lesser extent, higher interest rates. At December 31, 2015, gross unrealized losses consisted primarily of $95.7 million of corporate fixed maturities, $7.6 million of equity securities and $4.9 million of residential mortgage-backed securities.
In August 2014, the FASB issued ASC update No. 2014-15, (Subtopic 205-40) Presentation of Financial Statements- Going Concern. This ASC update provides guidance on determining when and how to disclose going concern uncertainties in the financial statements, and requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The updated guidance is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. The Company does not expect the adoption of ASC update 2014-15 to have a material impact on its financial position or results of operations.
The carrying amount approximates fair value. Cash equivalents primarily consist of money market instruments, which are generally valued using unadjusted quoted prices in active markets that are accessible for identical assets and are classified as Level 1.
There were no realized investment gains due to changes in fair value for Level 3 assets in 2015. Net realized investment gains due to changes in fair value that were recorded in net income for Level 3 assets were $0.1 million for the year ended December 31, 2014.
Additionally, on May 20, 2014, the shareholders approved The Hanover Insurance Group 2014 Employee Stock Purchase Plan (the “ESPP Plan”) and the Chaucer Share Incentive Plan (the “SIP Plan”), authorizing the issuance of 2,500,000 and 750,000 shares, respectively, under such plans. As of December 31, 2015, 2,436,998 shares and 711,500 shares were available for grant under the ESPP Plan and the SIP Plan, respectively.
Diluted earnings per share during 2015, 2014 and 2013 excludes 0.6 million, 0.7 million and 0.1 million, respectively, of common shares issuable under the Company’s stock compensation plans, because their effect would be antidilutive.