Net Realized Capital Gains (Losses). Net realized capital gains were $6.9 million in 2011 compared to $101.9 million in 2010 and net realized capital losses of $2.3 million in 2009. The $6.9 million was comprised of $27.5 million of net realized capital gains from sales on our fixed maturity and equity securities which was partially offset by $4.4 million of losses from fair value re-measurements and $16.2 million of other-than-temporary impairments. The net realized capital gains of $101.9 million in 2010 were the result of $70.4 million of gains in fair value re-measurements and $34.5 million from net realized capital gains from sales on our fixed maturity and equity securities, which were partially offset by $3.0 million of other-than-temporary impairments. The net realized capital losses of $2.3 million in 2009 were the result of $29.3 million of net realized capital losses from sales and $13.2 million in other-than-temporary impairments on our available for sale fixed maturity securities, partially offset by a $40.2 million gain in fair value re-measurements.
Incurred losses were $162.8 million (11.7 points) higher at $900.9 million in 2010 compared to $738.1 million in 2009, primarily as a result of the $85.6 million (6.0 points) increase in current year attritional losses, reflective of current competitive market conditions, $36.7 million (2.7 points) increase in prior years attritional losses, and a $40.8 million (3.0 points) increase in catastrophe losses, largely due to the Chilean earthquake and the New Zealand earthquake. The increase in prior years’ attritional losses was primarily driven by reserve strengthening in casualty lines for construction liability claims.
valuation losses on our fixed income portfolio if interest rates rise. The composition of the index is also different from our portfolio as we hold foreign securities to match our foreign liabilities, while the index is comprised of only U.S. securities.
With respect to asbestos only, at December 31, 2011, we had gross asbestos loss reserves of $479.7 million, or 96.0%, of total A&E reserves, of which $382.3 million was for assumed business and $97.4 million was for direct business.
Shareholders’ Equity. Our shareholders’ equity decreased to $6,071.4 million as of December 31, 2011 from $6,283.5 million as of December 31, 2010. This decrease was the result of $103.8 million of shareholder dividends, repurchases of 1.1 million common shares for $92.5 million, $80.5 million of net loss, $29.5 million of net benefit plan obligation adjustments and $16.0 million of net foreign currency translation adjustments, partially offset by $80.1 million of unrealized appreciation on investments, net of tax, and share-based compensation transactions of $30.0 million.
Management expects annual positive cash flow from operations, which in general reflects the strength of overall pricing, to persist over the near term, absent any unusual catastrophe activity. Due to the significant catastrophe losses in 2011, cash flow from operations may be impacted in the near term as these losses are paid. In the intermediate and long term, our cash flow from operations will be impacted to the extent by which competitive pressures affect overall pricing in our markets and by which our premium receipts are impacted from our strategy of emphasizing underwriting profitability over premium volume.
From an enterprise risk management perspective, management sets limits on the levels of catastrophe loss exposure we may underwrite. The limits are revised periodically based on a variety of factors, including but not limited to our financial resources and expected earnings and risk/reward analyses of the business being underwritten.
Subsequent Events. In May 2009, the FASB issued authoritative guidance for subsequent events, which was later modified in February 2010, that addresses the accounting for and disclosure of subsequent events not addressed in other applicable U.S. GAAP. The Company implemented the new disclosure requirement beginning with the second quarter of 2009 and included it in the Notes to Consolidated Interim Financial Statements.