Lloyd's turned in an excellent result at a little over $4 million.
At the consolidated level, we reported net income of $92.1 million in the second quarter or $1.70 per diluted share, driven by a gain on bargain purchase of $74.4 million related to the NORCAL acquisition, partially offset by $20.3 million of pre-tax transaction-related costs.
We reported non-GAAP operating income of $26.6 million or $0.49 per share, again, driven by strong performance from our LP and LLC investment portfolio and meaningful year-over-year improvement in our underwriting results.
Consolidated gross premiums written increased nearly 13% year-over-year, driven primarily by the addition of NORCAL's premium to our Specialty P&C results, as well as $14 million of new business written in the quarter from our core operating segments.
Our consolidated current accident year net loss ratio was 81.9%, a year-over-year improvement of 28.1 points, primarily attributable to the adverse effect of losses associated with significant events in the second quarter of last year in Specialty P&C.
We recognized net favorable development of $13.8 million in the current quarter, driven largely by the Specialty P&C segment, which included $2.1 million related to the amortization of the purchase accounting fair value adjustment on NORCAL's assumed reserve.
Our consolidated underwriting expense ratio increased in the quarter to 32.3%, driven by the pre-tax transaction costs associated with our acquisition of NORCAL.
Excluding those transaction costs, the expense ratio in the quarter was 23.8%, reflecting the continued impact of restructuring efforts, but also included the impact of certain purchase accounting adjustments.
As a result, DPAC amortization expense for NORCAL in the second quarter was only $900,000 and represented expenses capitalized and subsequently amortized since the acquisition.
This amount is approximately $6.3 million lower than would be considered normal.
From an investment perspective, our consolidated net investment result increased year-over-year to $29.3 million, driven by $11.9 million of income from our unconsolidated subsidiaries, which were driven by the results of our investments in LPs and LLCs, as previously discussed.
Consolidated net investment income was $17.4 million in the quarter, down slightly from the year ago period, primarily due to lower yields from our short-term investments in corporate debt securities, due to the current low interest rate environment.
This decrease was partially offset by $2.7 million of net investment income from additional invested assets that came over from the NORCAL acquisition.
Also contributing to profitability in the quarter was $10.5 million of net favorable reserve development spread relatively evenly across lines of business within the segment.
Gross premiums written during the second quarter increased by over 30% or approximately $35 million.
We benefited from $22.4 million delivered by the NORCAL team and growth in our legacy business of 6.9%.
Premium retention for the segment was 86% in the quarter, driven by retention rates that either improved or remained flat in all lines of business.
Furthermore, we achieved average renewal price increases of 10% in the segment this quarter, driven by 11% in Standard Physicians and 10% in Specialty Healthcare.
Our small business unit and medical technology liability business also achieved increased rate gains of 6% and 8%, respectively.
New business written in the quarter totaled $7.2 million, an increase of $2.6 million from the year ago quarter and primarily driven by $3.7 million written in our HCPL specialty business.
The Specialty Property and Casualty segment reported an expense ratio of 17.1% for the first quarter -- for the second quarter, an improvement of 2.8 points from the year ago quarter, driven by significantly higher earned premiums, the impact of transaction accounting and benefits from prior organizational restructuring efforts.
The Workers' Compensation Insurance segment produced income of $1.1 million and a combined ratio of 99.6% in the second quarter of 2021 compared to 98.7% in 2020.
During the quarter, the segment booked $57.8 million of gross premiums written, an increase of 1.1% year-over-year despite negative audit premium.
Renewal price decreases in our traditional book of business were 3% in the second quarter of 2021 and premium renewal retention was 85%.
Traditional new business writings increased by $300,000 to $6.1 million in the quarter.
Audit premium in our traditional book of business decreased $1.3 million year-over-year reflecting the economic conditions associated with the COVID-19 pandemic and its impact on final audits of policyholder payrolls.
The increase in the calendar year loss ratio to 68.3% in 2021 reflects an increase in the current accident year loss ratio, partially offset by prior year favorable development of $1.9 million in 2021 compared to $1.5 million in 2020.
We booked a current accident year loss ratio of 73% for the second quarter of 2021, which brings the ratio for the six months ended June 30th to 72%.
The claims operation closed 15.4% of 2020 and prior claims during the 2021 quarter consistent with second quarter historical trends.
The 2021 underwriting expense ratio decreased to 31.3%, primarily due to the restructuring initiatives implemented in August of 2020, partially offset by a decrease in net premiums earned.
Other underwriting and operating expenses were $8.3 million in the quarter, a decrease of 7% or approximately $700,000.
The Segregated Portfolio Cell Reinsurance segment produced income of $955,000 and a combined ratio of 84.4% for the second quarter of 2021.
The SPC Re calendar year loss ratio increased from 45.9% in 2020 to 51.9% in 2021.
The 2021 accident year loss ratio was 62.9%, up from 57% in 2020 and reflects both the continuation of intense price competition in the workers' compensation business and the impact of higher claim activity as workers return to employment.
Favorable loss reserve development was $1.8 million in the second quarter of 2021 compared to $1.9 million in 2020.
As you know, for the 2021 underwriting year, we reduced our participation in Syndicate 1729 from 29% to 5% and our participation in Syndicate 6131 from 100% to 50%.
As a result of these reductions, we received a return of capital of $24.5 million.
Despite the reduced participation, results improved meaningly meaningfully from the year ago period to $4.3 million.

Summary:
At the consolidated level, we reported net income of $92.1 million in the second quarter or $1.70 per diluted share, driven by a gain on bargain purchase of $74.4 million related to the NORCAL acquisition, partially offset by $20.3 million of pre-tax transaction-related costs.
We reported non-GAAP operating income of $26.6 million or $0.49 per share, again, driven by strong performance from our LP and LLC investment portfolio and meaningful year-over-year improvement in our underwriting results.