The balance of the liability claims have been segregated into “litigated” versus “non-litigated.” Separate claim handling teams have been created, with the required skill sets, to appropriately handle these two types of claims.
Operating ROE in 2015 and 2014 was negatively impacted by a decline in investment leverage as a result of overall stockholders' equity growth outpacing investment income growth. This was, in part, due to strong growth in our underwriting operations coupled with declining portfolio yields. In 2015, the lower yields were driven by the fixed income securities portfolio, and lower returns on our energy-related limited partnerships within our other investments portfolio due to declining oil prices.
In all three years, the combined ratio was positively impacted by earned rate that has exceeded our expected claim inflation.
Reducing workers compensation medical costs through more favorable PPO contracts and greater PPO penetration;
NPW in this segment decreased over the three-year period as shown in the table above. As illustrated in the table below, these decreases were driven by lower new business and retention in 2015 and 2014 due to competition in this segment. The decrease in retention in 2014 was also impacted by targeted non-renewals of less profitable accounts. These strategic non-renewals impacted our dwelling fire business, underperforming accounts within our personal automobile business, and our mono-line homeowners business.
The GAAP loss and loss expense ratio increased 3.1 points in 2015 compared to 2014, primarily driven by: (i) favorable prior year casualty reserve development that was lower than last year by 2.2 points; and (ii) property losses that were higher than last year by 0.9 points.
Our E&S business is comprised of risks that are similar in nature to our Standard Commercial Lines, with smaller-sized insureds and lower policy limits. Approximately 90% of the business that we write in this segment have policy limits of less than $1 million. We will continue to deploy our corporate claims practices into the E&S operation in 2016, including the use of more robust monitoring tools. We believe these actions will allow us to better assess the associated liability for these claims and will ultimately result in improved outcomes. For more information, refer to the E&S Lines discussion within the Reserves for Losses and Loss Expenses section of "Critical Accounting Policies and Estimates" in this MD&A.
1 CMBS includes government guaranteed agency securities with a fair value of $4.5 million at December 31, 2015 and $13.2 million at December 31, 2014.
There were no changes in the fair value of securities measured using Level 3 prices during 2014. The following table provides a summary of these changes during 2015:
The Pension Plan’s equity investments may not contain investments in any one security greater than 8% of the portfolio value without notification to our management investment committee, nor have more than 5% of the outstanding shares of any one corporation or other entity. The use of derivative instruments is permitted under certain circumstances, but shall not be used for unrelated speculative hedging or to apply leverage to portfolio positions. Within the alternative investments portfolio, some leverage is permitted as defined and limited by the partnership agreements.
1 Awards outstanding under the 2005 Stock Plan consisted of 732,058 RSUs and 493,428 stock options.