The property and casualty segment's largest expenditures are for losses and loss adjustment expenses. These costs increased by $6,554,000 in 1999, or 4 percent. Without the American Indemnity purchase, losses and loss adjustment expenses would have decreased by $8,032,000. Subsequent to the purchase of American Indemnity, the Company's management reviewed and increased that subsidiary's direct case loss reserves to a level that was in accordance with the reserving philosophy of the Company.
The largest storms affecting the Company occurred between May 30 and June 1, 1998, in Iowa, Minnesota, South Dakota and Wisconsin. These storms, although individually not large enough to penetrate our catastrophe reinsurance cover of $5,000,000, generated net incurred losses of $4,711,000. Other storms in Iowa and Minnesota, on May 15 and 16, resulted in net incurred losses in excess of $3,647,000. Severe storms occurring in several Midwestern states between June 24 and 30 resulted in additional catastrophe net incurred losses of $3,620,000. Hurricane Georges hit Louisiana and Mississippi September 21 through September 28, causing over $4,000,000 in net incurred losses for the Company. Finally, storms occurring November 9 through November 11 in several Midwestern states resulted in over $1,200,000 in net incurred losses.
Deferred acquisition costs constitute the Company's second largest asset, after investments, and represent underwriting and acquisition expenses associated with writing insurance policies. These expenses are capitalized and are amortized over the life of the policies written to attain a matching of revenue to expenses. The Company's life segment had an increase in deferred acquisition costs of $18,288,000 due principally to its growth in statutory premium volume. Deferred acquisition costs of the property and casualty segment increased in 1999 by $4,194,000, with $2,830,000 arising from the deferred acquisition costs of American Indemnity.
An allowance for doubtful accounts of $899,000 has been established at December 31, 1999, compared to $731,000 at December 31, 1998. The Company did not experience difficulties in collecting balances from its agents in 1999 or 1998.
Effective January 1, 1999, the Company adopted SOP 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use". SOP 98-1 requires that certain costs related to the development or purchase of internal- use software be capitalized and amortized over the estimated useful life of the software. The SOP also requires that costs related to the preliminary project stage and the post-implementation and operations stage of an internal-use computer software development project be expensed as incurred. SOP 98-1 changed the timing of the Company's software development expenses and the impact did not have a material effect on the Company's Consolidated Financial Statements.
The amortized cost and fair value of held-to-maturity and available-for-sale fixed maturities at December 31, 1999, by contractual maturity, are shown below. 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.
The following table provides the components of net periodic benefit cost for the plans for 1999, 1998 and 1997.