We reported earnings per share of $2.46 and an operating return on equity of 13.8% for the quarter.
We achieved 2.1% growth in the third quarter, which represents a significant and expected recovery from the 2.3% premium decline we reported in the second quarter normalized for one-time premium returns.
As announced last night, we entered into a $100 million accelerated share repurchase agreement, reflecting the strong excess capital we have generated so far this year from earnings.
We delivered net written premium growth of 2.3% in the third quarter compared to a decline of 5.5% in the second quarter or flat excluding premium return.
Overall, Personal Lines rate increases of 4.7% in the quarter were fairly consistent with prior trends and we are satisfied with the underlying retention when adjusted for the temporary increase in cancellations and non-renewals, following the temporary second quarter increases.
Our Personal Lines year-to-date retention of 82% is a more indicative measure of our persistency, and should move back to the mid-80s over time.
Additionally, we are encouraged by the continued success of our Prestige offering, which is adding 600 new accounts each month.
Book consolidation activity also is continuing at an accelerated pace, with $71 million signed through the first nine months of the year, exceeding our expectations for the full year.
Earlier this week, we announced the expansion of our Personal Lines business in Maryland, further diversifying our book of business and expanding our Personal Lines presence to 20 states.
Entrepreneurs throughout the country are starting home-based businesses in record numbers, yet, nearly 60% of these businesses lack adequate insurance.
As a top insurer and an industry thought leader in Michigan with 12% of our overall premiums in Michigan personal auto, we advocated for auto reform for more than a decade and it was essential that we excel in our implementation.
Our third quarter Michigan auto premium grew approximately 4%, while average net premium per customer for us remain relatively consistent.
We delivered net written premium growth of 1.9%, up from a decline of 4.6% in the second quarter.
Our management liability, healthcare, E&S and specialty property businesses have posted growth in the double-digits in the quarter, while Specialty overall growth was 5%.
Rate continues to accelerate in our core Commercial Lines book, now standing at 5.7% while Specialty rates are meaningfully higher led by management and professional liability, healthcare and specialty property.
To that end, this quarter, for example, we conducted over 50 virtual CIAB executive meetings with many of the top 100 agents around the country, during which we discussed how we can enhance our capabilities to help all of us grow and better serve our customers.
To-date, members of our senior management team have connected with over 500 of our agents, these engagements have been extremely fruitful.
For the third quarter, we reported net income of $118.9 million, or $3.13 per fully diluted share compared with net income of $118.9 million or $2.96 per fully diluted share for the same period last year.
After-tax operating income was $93.5 million or $2.46 per diluted share compared with $93.0 million or $2.31 per diluted share in the prior-year quarter.
We recorded an all-in combined ratio of 94.2% compared with 94.4% a year earlier.
Our ex-cat combined ratio was 88.4%, an excellent result compared to the 91.3% in the prior-year quarter.
Catastrophe losses at $65.9 million, or 5.8% of net earned premiums came in slightly above our expectation for the quarter, but we were much more benign than the industry experience.
In addition, in the quarter, we benefited from favorable prior year cat development of $9.6 million, which stems from a variety of events from recent accident years as well as to a much lesser extent, a small remaining favorable settlement from the 2018 wildfires.
Turning to our ex-cat prior-year development, we reported net favorable development of $2.6 million with strong favorability in workers' compensation in other Commercial Lines, partially offset by additions in home, commercial auto and CMP.
Over the past couple of years, we have consistently achieved rate increases around 10% and executed on a variety of underwriting actions to better position our portfolio.
Coincidently, this quarter, we incurred about $6.5 million of favorable development from a few large CMP property claims that stemmed from prior-year catastrophe events.
I'm pleased to report that our loss activity related to the $19 million in COVID reserves we held at the end of the second quarter remains limited.
Our expenses ticked up 10 basis points in the quarter due to the timing of certain agent and employee incentive costs.
Year-to-date, our expense ratio is consistent with our original budget of 31.5% and we have a clear line of sight to the expected 10 basis point expense ratio improvement for full-year 2020.
We expect to continue delivering a 20 basis point improvement in the expense ratio going forward.
Additionally, we recorded a non-ratio bad debt expense of approximately $3.6 million, which continues to gradually decline from the highs, we recorded in the first and second quarters.
Consolidated net premiums written grew 2.1% in the third quarter, as we continue to see increasing momentum from the low point from the second quarter.
In Personal Lines, we delivered a combined ratio, excluding catastrophes of 83.5%, representing an improvement of 6.9 points from the prior-year quarter.
Homeowners current accident year loss ratio, excluding cats was 48.2%, essentially flat from the prior-year period.
Turning to Commercial Lines, we reported a combined ratio, excluding catastrophes of 91.8%, relatively consistent with the prior-year quarter.
CMP, current accident year loss ratio, ex-cat was 59.1%, up 2.7 points from the prior-year quarter, driven by several large property losses.
Commercial auto ex-cat loss ratio improved 3.2 points to 64.4%, reflecting temporary lower frequency in physical damage claims, although, not to the extent we reported in personal auto.
Workers' comp loss ratio was flat at 61.2% with some diminishing, but still favorable frequency of losses in the quarter.
Other commercial lines improved 1.4 percentage points to 54.1% due to slightly lower losses in short-tail property lines.
Net investment income of $67.6 million was down slightly from the same period of last year as we continued to experience pressure from lower new money yields.
Our partnerships portfolio performed well, contributing $6 million to NII in the quarter.
Cash and invested assets were $9 billion at the end of the third quarter, with fixed income securities and cash representing 86% of the total.
Our fixed maturity investment portfolio has a duration of 4.7 years and is 96% investment grade.
We delivered a strong operating return on equity of 13.8% in the quarter and 12.1% on a year-to-date basis, despite elevated cash, particularly in the second quarter.
Our book value per share of $84.32 increased 4% during the quarter, driven by operating income and both realized and unrealized gains in our investment portfolio, partially offset by the payment of our regular quarterly dividend.
With this in mind and considering current market levels, we have entered into a $100 million accelerated share repurchase agreement.
We expect to receive 80% of the total shares on October 29th and anticipate receiving the final delivery of the remaining shares no later than early February 2021.
After the final delivery of all shares under the ASR agreement, we will have repurchased approximately 2.2 million shares or 6% of the outstanding shares from the beginning of 2020.
We will have approximately $122 million remaining under the existing share repurchase authorization.
In August, we issued a 10-year $300 million senior unsecured note at a very attractive annual coupon of 2.5%.
We used a portion of the proceeds to retire $175 million of subordinate debentures with a 6.35% coupon, improving our capital cost and overall capital structure.
We are increasing our full-year 2020 net investment income target to $260 million to reflect performance in the third quarter.
Our fourth quarter ex-cat combined ratio expectation has improved to around 91%.
As I mentioned earlier, we are maintaining our expectation of a 10 basis point expense ratio improvement in 2020 from full-year 2019 and then returning to 20 basis points improvement in 2021 forward.
We have a fourth quarter cat load of 3.8% of net premiums earned and assume an effective tax rate to roughly equal the statutory rate of 21%.

Summary:
We reported earnings per share of $2.46 and an operating return on equity of 13.8% for the quarter.
As announced last night, we entered into a $100 million accelerated share repurchase agreement, reflecting the strong excess capital we have generated so far this year from earnings.
To that end, this quarter, for example, we conducted over 50 virtual CIAB executive meetings with many of the top 100 agents around the country, during which we discussed how we can enhance our capabilities to help all of us grow and better serve our customers.
For the third quarter, we reported net income of $118.9 million, or $3.13 per fully diluted share compared with net income of $118.9 million or $2.96 per fully diluted share for the same period last year.
After-tax operating income was $93.5 million or $2.46 per diluted share compared with $93.0 million or $2.31 per diluted share in the prior-year quarter.
We recorded an all-in combined ratio of 94.2% compared with 94.4% a year earlier.
With this in mind and considering current market levels, we have entered into a $100 million accelerated share repurchase agreement.