The following is a discussion and analysis of our financial condition and results of operations for the twelve months ended December 31, 2015, 2014 and 2013. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and related Notes contained in this report. This discussion contains forward-looking statements that involve risks and uncertainties and that are not historical facts, including statements about our beliefs and expectations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and particularly under the headings “Risk Factors,” “Business” and “Forward-Looking Statements” contained in Item 1A, Item 1, and Part I of this report, respectively.
Capital Management. We continue to focus on capital management and maintain our capital at an appropriate level. In 2015, we continued our strategy to return excess capital to shareholders with the repurchase of 1,790,333 ordinary shares for a total consideration of $83.7 million. On February 5, 2015, our Board authorized a new share repurchase program of $500 million to replace the existing authority. In addition, in the second quarter of 2015, we increased our quarterly dividend on our ordinary shares from $0.20 to $0.21 per ordinary share.
The following overview of our 2015, 2014 and 2013 operating results and financial condition is intended to identify important themes and should be read in conjunction with the more detailed discussion further below.
Net favorable development on prior year loss reserves of $156.5 million, or 6.3 combined ratio points, for 2015 compared with $104.1 million, or 4.3 combined ratio points, for 2014, and $107.7 million, or 5.0 combined ratio points, for 2013.
incurred but not reported (“IBNR”) reserves to cover the anticipated cost of claims incurred but not reported and potential development of reported claims; and
Investment gains. Total net realized and unrealized investment gains for the twelve months ended December 31, 2015 were $17.0 million (2014 - gains of $31.6 million; 2013 - gains of $36.4 million) comprising the amounts set out in the table below:
We do not allocate our assets by segment as we evaluate underwriting results of each segment separately from the results of our investment portfolio. Segment profit or loss for each of our operating segments is measured by underwriting profit or loss. The following tables summarize gross and net premiums written and earned, underwriting results, and combined ratios and reserves for each of our business segments for the twelve months ended December 31, 2015, 2014 and 2013.
We decided to let our interest rate swap program roll-off and not renew maturing positions. This decision was made after an extensive reassessment of the costs of maintaining an interest rate swap program in a steep yield curve environment. In addition, the continued uncertainty in the global economy, weak oil prices and low inflation make it difficult to gauge the
As at December 31, 2015, total shareholders’ equity was $3,419.9 million compared to $3,419.3 million at December 31, 2014. Our total shareholders’ equity as at December 31, 2015 includes three classes of preference shares with a total value as measured by their respective liquidation preferences of $555.8 million net of share issuance costs (December 31, 2014 - $555.8 million).
For the twelve months ended December 31, 2015, we acquired and cancelled a total of 1,790,333 ordinary shares in open market repurchases. The total consideration paid for the twelve months ended December 31, 2015 was $83.7 million with the average price for the twelve months ended December 31, 2015 being $46.74. As at December 31, 2015, we had $416.3 million remaining under our current share repurchase authorization of $500.0 million granted on February 5, 2015.
On April 29, 2009, Aspen Bermuda replaced its existing letter of credit facility with Citibank Europe plc (“Citi Europe”) dated October 29, 2008 in a maximum aggregate amount of up to $450.0 million with a new letter of credit facility in a maximum aggregate amount of up to $550.0 million. On August 12, 2011, the maximum aggregate amount was increased to $1,050.0 million. On July 30, 2012, Aspen Bermuda and Citibank replaced the existing letter of credit facility dated August 12, 2011 in a maximum aggregate amount of up to $1,050.0 million with a new letter of credit facility in a maximum aggregate amount of up to $950.0 million (the “LOC Facility”) comprised of two maturity tranches (Tranche I with a limit of $650.0 million and Tranche II with a limit of $300.0 million) which expired on its own terms on June 30, 2014.