Book value per common share is calculated using common shareholders’ equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding. See "Key Financial Measures" for additional information.
The Company assumes in its loss and LAE reserving process that, on average, the time periods between the recording of expected losses and the reporting of actual losses are predictable when measured in the aggregate and over time. The time period over which all losses are expected to be reported to the Company varies significantly by line of business. This period can range from a few quarters for some lines, such as property, to many years for some casualty lines of business. To the extent that actual reported losses are reported more quickly or more slowly than expected, the Company may adjust its estimate of ultimate loss.
Current year underwriting results have also been impacted as we have increased our initial loss ratio picks in both our Diversified Reinsurance and AmTrust Reinsurance segments factoring in both market conditions and recent loss trends and experience.
All of our Other Insurance Revenue is produced by our Diversified Reinsurance segment. Please refer to page 66 for further discussion.
For the year ended December 31, 2017, dividends paid to preference shareholders decreased by $4.6 million or 13.6% compared to the same period in 2016. The decrease is attributable to the conversion of the 7.25% Mandatory Convertible Preference Shares - Series B into the Company's common shares on September 15, 2016. This decrease in dividends paid was partially offset by the $5.0 million of dividends paid on the Preference Shares - Series D during the year ended December 31, 2017 (please see discussion below for details).
The combined ratio for the year ended December 31, 2017 decreased to 107.1% compared to 109.4% in 2016. The decrease in the combined ratio for the year ended December 31, 2017 was due to the following:
Excluding prior year loss development, the net loss and LAE ratio for 2017 would have been 69.6% compared to 65.7% for 2016, reflecting higher initial expected loss ratios for premiums earned during the year ended December 31, 2017.
The table below summarizes our operating, investing and financing cash flows for the years ended December 31, 2017, 2016 and 2015:
During the year ended December 31, 2017, the yield on the 10-year U.S. Treasury bond decreased by 5 basis points to 2.40%. The 10-year U.S. Treasury is the key risk-free determinant in the fair value of many of the securities in our AFS portfolio. After steadily falling to its yearly low of 2.05% in September 2017, the yields on the 10-year U.S. Treasury bond recovered 35 basis points in the last four months of 2017 to finish at 2.40%. The upward shift in the U.S. Treasury yield curve reflects a strengthening U.S. economy and the prospect of inflation. A strong U.S. labor market and higher government spending has encouraged central banks to move away from monetary easing policy at a gradual pace.
At December 31, 2017 and December 31, 2016, respectively, we hold the following non-U.S. dollar denominated securities:
Capital resources consist of funds deployed or available to be deployed in support of our operations. Our total capital resources decreased by $228.6 million, or 13.3% at December 31, 2017, compared to December 31, 2016. The Company’s management believes its current sources of liquidity are adequate to meet its cash requirements for the next 12 months. The following table shows the movement in total capital resources at December 31, 2017 and 2016:
Please refer to "Notes to Consolidated Financial Statements Note 13. Shareholders' Equity" included under Item 8 "Financial Statements and Supplementary Data" of this Form 10-K for a discussion of the equity instruments issued by the Company at December 31, 2017 and 2016.