As a result of the time lag described above, we must estimate IBNR reserves, which consist of a provision for additional development in excess of the case reserves reported by ceding companies, as well as a provision for claims which have occurred but which have not yet been reported to us by ceding companies. Because of the degree of reliance that we necessarily place on ceding companies for claims reporting, the associated time lag, the low frequency/high severity nature of much of the business that we underwrite, and the varying reserving practices among ceding companies, our reserve estimates are highly dependent on management judgment and therefore uncertain. During the loss settlement period, which may be years in duration, additional facts regarding individual claims and trends often will become known, and current laws and case law may change.
The Property Catastrophe category showed a slight increase in gross premiums written during the year ended December 31, 2004 as compared to the same period in 2003 mainly due to an increase in reinstatement premiums written as a result of the catastrophes which occurred during the third quarter of 2004. Offsetting this increase was a decrease due to the reduction in premium rate levels as discussed above.
protection for our casualty book and recorded reinstatement reinsurance premiums ceded of $19.4 million related to the catastrophes which occurred during the third quarter of 2004. There was also a slight increase during 2004 in the amount of inuring reinsurance recorded as part of our reinsurance arrangements with certain ceding companies. For both the 2004 and 2003 years we have purchased reinsurance protecting ourselves against large risk losses on our direct and facultative book and small to medium-size catastrophes on our overall property writings.
Net foreign exchange gains (losses) resulted from the effect of the fluctuation in foreign currency exchange rates on the translation of foreign currency assets and liabilities combined with realized losses resulting from the receipt of premium installments and payment of claims in foreign currencies. The foreign exchange gains (losses) during the years ended December 31, 2005, 2004 and 2003 are primarily due to the weakening (strengthening) of the U.S. dollar resulting in losses on translation arising out of receipts of non-U.S. dollar premium installments. Our premiums receivable and liabilities for losses incurred in currencies other than the U.S. dollar are exposed to the risk of changes in value resulting from fluctuations in foreign exchange rates and may affect our financial results in the future. The foreign exchange loss for the year ended December 31, 2005 was as a result of an increase in foreign currency cash and fixed maturity investments held.
decrease in net premiums earned as discussed above. The 2006 expense for current and deferred incentive compensation will depend on the financial results achieved.
Other income consists of ceding commission and incentive fee income pursuant to our agreement with West End Capital Management (Bermuda) Ltd. related to our investment in Rockridge. In 2006 we expect these amounts to increase somewhat.
The table above includes the estimated timing of the payment of estimated future cash flows for gross loss and loss adjustment expenses based on our best estimate of obligations to pay policyholders at December 31, 2005. The amount and timing of the cash flows are uncertain and do not have contractual payout terms. Due to the short-tail nature of our business, we expect that gross and net loss and loss adjustment expenses generally will be settled during the time period in which they are incurred. For a discussion of these uncertainties refer to the Loss and Loss Adjustment Expense Reserves section below. These estimated obligations will be funded through existing cash and investments.
On May 26, 2004, our Board of Directors approved a plan to repurchase up to $150.0 million of our common shares from time to time depending on market conditions during a period of up to 24 months. On June 2, 2004, we repurchased 1,263,865 common shares at $34.50 per common share. The purchase price totaled $43.6 million and was funded using existing cash on hand. On August 5, 2004, we repurchased a further 625,000 common shares at $35.00 per common share. The purchase price totaled $21.9 million and was funded using existing cash on hand. No repurchases occurred during the year ended December 31, 2005.
The estimated fair value of fixed maturity, equity, other investments and cash and cash equivalents balance was $2,902.3 million as of December 31, 2005, compared to $2,598.7 million at December 31, 2004. The primary cause of this increase was the receipt of approximately $600.0 million due to the issuance of 25,850,926 common shares, the receipt of $747.5 million in premiums net of acquisition costs and net investment income of $87.0 million, offset by the payment of a special dividend of $387.7 million, the payment of regular dividends of $109.1 million, the payment of claims of $489.3 million and the increase in net unrealized losses on investments of $65.4 million. Included in cash and cash equivalents is $265.0 million related to Blue Ocean which was capitalized in late December 2005.
For the period from inception until December 31, 2005, we have had sufficient resources to meet our liquidity requirements. We have generated cash flows from operations since our inception in excess of our operating commitments. To the extent that capital is not utilized in our reinsurance or insurance operations we have used such capital to invest in new opportunities and returned capital to shareholders in the form of dividends or share repurchases under certain circumstances. As discussed above, we returned $387.7 million of capital to shareholders and warrant holders by way of a special dividend during the first quarter of 2005. We may take additional capital management measures in the future.