We retrospectively adopted ASU 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, as of December 31, 2015. All prior year information has been restated.
Total investments rose by less than 1 percent during 2015 on a fair value basis, with a net decline in our securities portfolio valuation that nearly offset the 6 percent increase in its cost basis. Entering 2016, we believe the portfolio continues to be well diversified and is well positioned to withstand short-term fluctuations. We discuss our investment strategy in Item 1, Investments Segment, and results for the segment in Investments Results. Total assets also rose less than 1 percent. Shareholders’ equity and book value per share each decreased by 2 percent, for reasons discussed in the preceding Executive Summary.
Dividend income rose 9 percent in 2015 while interest income rose 3 percent, driving a net increase in pretax investment income of $23 million, or 4 percent. In addition to a larger common stock portfolio generating more dividend income in recent years, higher average dividend payment rates also contributed to income growth. Our investment operation’s performance is discussed further in Investments Results.
Workers’ compensation net written premiums and earned premiums decreased in 2015, largely due to a small decrease in average renewal pricing. In 2014, net written premiums decreased, while earned premiums rose slightly. Both increased in 2013. Average renewal pricing rose in 2014, but an $18 million decrease in new business written premiums in 2014 offset the effect of price increases, netting to the decrease in net written premiums.
A.M. Best projections for 2016 indicate personal lines written premiums for the U.S. property casualty industry may grow approximately 3 percent, with an industry statutory combined ratio estimated at approximately 100 percent. We believe our growth rate will likely be higher than the industry projection for 2016, driven by our rate increases, stable policy retention rate, accelerated pace of new agency appointments in recent years and increased focus on the high net worth personal lines market. Our high net worth initiative, along with various other actions to improve performance in our personal lines insurance segment, is discussed in greater detail in Item 1, Our Business and Our Strategy, Strategic Initiatives and Personal Lines Insurance Results. Our personal lines pricing trends need to exceed loss trends to improve personal lines profitability, thereby helping to achieve our corporate financial targets. We discuss our overall outlook for our property casualty insurance operations in the Executive Summary.
Underwriting expenses incurred, net of deferred acquisition costs, accounted for 21.9 percent of 2015 total benefits and expenses compared with 21.6 percent in 2014 and 22.7 percent in 2013. Expenses in 2015 increased 5 percent, slightly less than the 6 percent in earned premiums. In 2014, the percentage increase for expenses matched earned premiums.
On the regulatory front, we expect the implementation of principle-based statutory reserves to be a long-term positive development, granting us greater flexibility with capital management. Recent legislative action indicates that we will likely be able to start using the new rules for new business by January 1, 2017. Term insurance remains our core product and stands to benefit the most under the new reserving rules.
Total investment return of 0.1 percent in 2015 was significantly less than in 2014, despite the 4 percent increase in investment income described above. The contribution from 2015 investment income and realized investment gains, in aggregate, was nearly offset by a negative contribution from the net change in unrealized gains and losses. The base component of the return calculation, annual average invested assets, was up 7 percent in 2015. For 2014 compared with 2013, total investment return declined 0.6 percentage points. The return contribution from the combination of 2014 investment income and net investment gains, both realized and the change in unrealized, at $1.073 billion, essentially matched 2013. The base component of the return calculation, annual average invested assets, was up 8 percent.
Other loss in the table below represents losses before income taxes. For 2015 and each prior year shown, Other loss was largely driven by interest expense from debt of the parent company. The net result of our 2015 reinsurance assumed operations was a small profit.
Reserving data for asbestos and environmental claims has characteristics that limit the usefulness of the methods and models used to analyze loss and loss expense reserves for other claims. Specifically, asbestos and environmental loss and loss expenses for different accident years do not emerge independently of one another as loss development and Bornhuetter-Ferguson methods assume. In addition, asbestos and environmental loss and loss expense data available to date did not reflect a well-defined tail, greatly complicating the identification of an appropriate probabilistic trend family model. At year-end 2015, we used a weighted average of a paid survival ratio method and report year method to estimate reserves for IBNR asbestos and environmental claims. Our exposure to such claims is limited; we believe a weighted average of both methods produces a sufficient level of reserves.
The company established a reasonably likely range for net loss and loss expense reserves of $4.125 billion to $4.507 billion at year-end 2015, with the company carrying net reserves of $4.379 billion. The likely range was $3.922 billion to $4.296 billion at year-end 2014, with the company carrying net reserves of $4.156 billion. Our loss and loss expense reserves are not discounted for the time-value of money, but we have reduced the reserves by an estimate of the amount of salvage and subrogation payments we expect to recover.
A single large loss or an unexpected rise in claims severity or frequency due to a catastrophic event is a risk to the company's liquidity and financial strength. In an effort to control such losses, we avoid marketing property casualty insurance in specific geographic areas and monitor our exposure in certain coastal regions. An example of this is the reduction in recent years of our homeowner policies in the southeastern U.S. coastal region. Loss exposures in that area had been identified as a major contributor to our catastrophe probable maximum loss estimates shown in the table below. Those estimates were subsequently reduced, in large part due to less exposure from southeastern U.S. homeowner policies. We also continually review aggregate exposures to huge disasters and purchase reinsurance protection to cover these exposures. We use the Risk Management Solutions (RMS) and Applied Insurance Research (AIR) models to evaluate exposures to a once-in-a-100-year and a once-in-a-250-year event to help determine appropriate reinsurance coverage programs. In conjunction with these activities, we also continue to evaluate information provided by our reinsurance broker. These various sources explore and analyze credible scientific evidence, including the impact of global climate change, which may affect our exposure under insurance policies.
Primary components of the 2016 property and casualty reinsurance program are summarized below. The premium estimates below occurred near the beginning of each respective year, when direct written premiums that were subject to applicable reinsurance treaties were also estimated.
Our portfolio investments are primarily in publicly traded fixed-maturity, equity and short-term investments. Fixed-maturity investments (taxable bonds, tax-exempt bonds, redeemable preferred equities and commercial mortgage- backed securities) and equity investments (common and nonredeemable preferred equities) are classified as available for sale and recorded at fair value in the consolidated financial statements. The number of fixed-maturity securities with fair value below 100 percent of amortized cost can be expected to fluctuate as interest rates rise or fall. Because of our strong capital and long-term investment horizon, our general intent is to hold fixed-maturity investments until maturity, regardless of short-term fluctuations in fair values.
In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis. ASU 2015-02 makes amendments to the current consolidation guidance, focusing mainly on the investment management industry; however entities across all industries could be impacted. The effective date of ASU 2015-02 is for interim and annual reporting periods beginning after December 15, 2015. The ASU has not yet been adopted; however, there is not expected to be a material impact on our company’s consolidated financial position, cash flows or results of operations.
The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at December 31, 2015 and 2014. We do not have any liabilities carried at fair value. There were no transfers between Level 1 and Level 2.
We have one line of credit in 2015 and 2014 through multiple commercial banks with a borrowing capacity of
$225 million and an additional $50 million accordion feature. Our unsecured revolving credit facility has a term of five years that expires May 13, 2019. We had no compensating balance requirements on short-term debt for either 2015 or 2014. At December 31, 2015, $35 million was drawn on the line of credit. At December 31, 2014,
Other revenues are primarily finance income and, for 2015, earned premiums of Cincinnati Re.