We produced total revenue of $2.7 billion, of which 88% related to net earned premium and 8% related to net investment income.
In 2014, we recognized no losses for major catastrophic events. During the prior two years, we recognized the following pretax net losses, including reinstatement premium, for major catastrophic events: 1) 2013 - European floods ($15.0 million) and German hail storms ($13.0 million) and 2) 2012 - Superstorm Sandy ($30.8 million). In all years, the remaining catastrophes, which we refer to as “small catastrophes” and that primarily impacted our property treaty line of business, were not individually significant events to us. We reinsure a portion of our exposure to catastrophic events, although we incur some additional cost for reinstatement premium to continue our reinsurance coverage for future loss events. The following table summarizes our accident year catastrophe losses, as well as the impact on key metrics.
We recognized net favorable loss development of $56.4 million in 2014, $73.7 million in 2013 and $70.0 million in 2012, which included, in the respective periods, $5.9 million, $7.3 million and $21.4 million of net favorable development related to prior year catastrophes. The total net favorable development also included adverse development of $43.5 million in 2014, $70.3 million in 2013 and $48.9 million in 2012 related to a specific class of Spanish surety bonds. See the “Loss and Loss Adjustment Expense” and “Segment Operations” sections below for discussion of our loss activity and the “Critical Accounting Policies” section below for discussion of our policies and procedures related to establishing and reviewing loss reserves.
Our net paid loss ratio is the percentage of losses paid, net of reinsurance, divided by net earned premium for the year. Our net paid loss ratio was 58.7% in 2014, 56.5% in 2013 and 56.7% in 2012. The amount of claims paid fluctuates year-over-year due to the timing of claims settlement, the occurrence of catastrophic events and commutations, and the mix of our business. Our net paid loss ratio increased in 2014 primarily due to higher payments to settle claims related to Spanish surety bonds. In 2014 and 2013, we paid $243.3 million and $153.9 million, respectively, to settle these claims, of which approximately 60% was reinsured.
The net favorable development of $12.9 million in the Other category related to reserve reductions for various 2011 catastrophic events.
At December 31, 2014, we held a commercial mortgage-backed securities portfolio with a fair value of $611.6 million, an average rating of AA+ and an average loan-to-value ratio of 63%. We owned no collateralized debt obligations (CDOs) and we are not counterparty to any credit default swap transactions.
Net earned premium declined as we exited the HMO and medical excess reinsurance products in late 2012. Premium related to the other products included in Exited Lines was insignificant in all years. The loss and loss adjustment expense in 2013 and 2012 related to the HMO and medical excess reinsurance products. The Exited Lines recognized net favorable loss development of $5.1 million and $0.5 million in 2014 and 2012, respectively, and net adverse loss development of $4.1 million in 2013. The Exited Lines incur operating costs primarily for claims personnel and facilities.
HCC’s obligations include servicing outstanding debt and interest, paying dividends to shareholders, purchasing HCC’s common stock, and paying corporate expenses. The principal assets of HCC are the shares of capital stock of its insurance company subsidiaries. A significant percentage of HCC’s profit is earned in our insurance companies, which has generated available capital in these companies. As a result, HCC receives dividends paid by our insurance companies. HCC can utilize these dividends for any purpose, including paying down debt, paying dividends to shareholders, funding acquisitions, purchasing our common stock and paying operating expenses.