As I mentioned in yesterday's release, I remain confident that our solid foundation and the strategic initiatives we have undertaken in the past 16 months will reward our customers, shareholders and employees in the quarters and years to come.
Consequently, we recorded a noncash pre-tax goodwill impairment charge of $161.1 million, which drove a net loss in the third quarter of approximately $150 million, or $2.78 per share.
Importantly, we reported non-GAAP operating income of $2.6 million in the third quarter, or $0.05 per share.
Consolidated net investment income decreased quarter-over-quarter to $16.9 million.
However, we reported $4.9 million in income from our unconsolidated subsidiaries.
For the third quarter, our consolidated current accident year net loss ratio was 80.7%, a decrease of 1.6 percentage points quarter-over-quarter as the early results of our strategic underwriting efforts of the past year are beginning to manifest in our specialty P&C business.
Each of our segments contributed to the $11.5 million of net favorable development we recognized in the third quarter.
Our consolidated underwriting expense ratio was 30.5% in the quarter, an increase of 1.8 percentage points from the year-ago period.
The increase is attributable in part to lower earned premiums, but what is most important to know is that expenses in the current quarter included $3.2 million in onetime charges associated with the restructuring that resulted in 78 position elimination through a combination of early retirement, job eliminations, reassignments and promotions that spanned our entire organization.
This restructuring is expected to result in annual savings of approximately $7.4 million in addition to other expense saving initiatives earlier this year.
This leads us to a consolidated combined ratio of 105.3% for the third quarter.
In summary, we continue to see incremental improvements in our operating results as the strategic initiatives of the past 16 months gained traction.
The specialty P&C segment recorded a third quarter loss of $12.5 million.
Gross premiums written were $158.3 million, a decrease of 4.1% percent quarter-over-quarter, reflecting our reunderwriting efforts in healthcare professional liability and timing differences in the regular renewal cycle of 24-month policies.
Notably, within our specialty book, we have reduced gross premiums written in our Senior care line by almost 82% quarter-over-quarter.
Further, the timing differences related to the 24-month policies in our standard physician line contributed $3.9 million to the reduction.
In relation to these strategic underwriting efforts, premium retention in the segment was 81% for the quarter, driven largely by a 55% retention in our specialty lines primarily related to the Senior care line of business and includes a nonrenewal of a $5.6 million policy in that line during the quarter.
In our Standard Physician line, retention was 85%, lower by two percentage points quarter-over-quarter, reflecting our state-specific pricing adjustments in challenging venues and competitive market conditions.
However, we continue to deliver strong premium retention results in our medical technology liability business and small business units, which were 85% and 92%, respectively.
The segment's lower premium retention was largely offset by renewal premium increases of 14% in specialty and 10% in Standard Physician.
New business writings in the segment were $8.7 million in the quarter compared to $9 million a year ago.
New business writings in our medical technology liability business increased to $2 million compared to $1.3 million in the third quarter last year as demand for pandemic-related products in the medical technology space continues to rise.
The current accident year net loss ratio was 89.8% in the quarter, a 4.7 percentage point improvement from the year-ago period, attributable to underwriting efforts and price strengthening.
Furthermore, the current accident year net loss ratio for the first nine months of 2020, excluding the large national healthcare account tail policy and the $10 million COVID reserve, is approximately 6.5 percentage points lower than the full-year ratio for 2019.
Despite the current loss environment, we recognized net favorable prior-year development of $2.9 million, of which $2.5 million is attributable to our medical technology liability line.
The specialty P&C segment reported an expense ratio of 23.8% in the quarter, essentially flat from the same quarter last year.
The expense ratio reflects improvements in our expense model made during the past year, offset by related onetime restructuring expenses of $1.8 million and lower net earned premium.
This restructuring is expected to result in annual savings of $3.6 million in addition to other expense savings measures we've disclosed previously.
As a result of our prior organizational structure enhancements, restructuring field offices and staff reductions, we anticipate quarterly run rate expense savings of $3 million in the segment, or $12 million annually.
However, once we receive preliminary regulatory approval of NORCAL's proposed plan of conversion, there will be a 60- to 90-day solicitation period before the deal can close, and we anticipate the deal will close in the first quarter of 2021.
Upon completion of the transaction, approximately 75% of our healthcare professional liability business will be written in the Standard Physician's line, a marketplace in which we have deep expertise and a successful history of profitability.
The workers' compensation insurance segment produced income of $1.5 million and a combined ratio of 97.4% for the third quarter of 2020.
During the quarter, the segment booked $63 million of gross premiums written, a decrease of 10% quarter-over-quarter.
Renewal price decreases were 3% for the quarter, representative of the continued competitive pressures in our underwriting territories despite COVID-19 and the associated economic conditions.
Premium renewal retention was 86% for the 2020 quarter compared to 84% in 2019 as we continued to see stronger premium retention each month during the pandemic.
New business writings decreased quarter-over-quarter to $7.4 million in 2020 compared to $11.3 million in 2019.
Audit premium for the third quarter of 2020 resulted in return premium to policyholders of $1.6 million compared to additional premium to the company of $1.8 million for 2019, a quarter-over-quarter decrease attributable to the economic impact of COVID-19 on policyholder payrolls.
The calendar year net loss ratio decreased 3.2 percentage points to 62.2% in the third quarter due to a decrease in the current accident year loss ratio and higher prior-year net favorable reserve development of $2 million in 2020 compared to $1.4 million in 2019.
The reduction in the 2020 accident year loss ratio from 70.4% at June 30, 2020 to 69.2% at September 30, 2020 was driven by our recognition of favorable claim trends in the 2020 accident year, which I'll describe in more detail momentarily.
As this reduction was fully recognized in the current quarter, the result is a third quarter current accident year loss ratio of 66.9%.
The 2020 accident year loss ratio of 69.2% at September compares to 68.2% for the same period in 2019 and reflects the impact of renewal rate decreases and negative audit premium, partially offset by the favorable claim trends in 2020.
We've seen a 36.5% decrease in reported claim frequency during the pandemic with only $1.3 million of gross undeveloped incurred losses from the currently reported 447 COVID claims.
Our claims professionals remain highly effective while working remotely, closing 47% of 2019 and prior claims during 2020, consistent with historical claim closing rates.
The underwriting expense ratio in the quarter was 35.2% compared to 30.1% in 2019, reflecting the decrease in net premiums earned and a onetime severance charge of $923,000 related to our restructuring, which I will describe in more detail shortly.
Underwriting and operating expenses were $15 million for the third quarter of 2020, essentially flat from 2019 despite the included severance charge.
Turning to the Segregated Portfolio Cell Reinsurance segment, income was approximately $1.2 million for the quarter, which represents our share of the net underwriting profit and investment results of the captive programs in which we participate.
The restructuring implementation commenced September one and is expected to result in an annual savings of approximately $3 million in addition to other expense management measures.
First, our results in the quarter were income of $3.7 million, one of the best quarters we've had since we invested in the syndicates.
Our combined ratio improved 10.5 percentage points to 89.6%, as both net losses and underwriting expenses were reduced by over 20%.
In addition, as a result of our reduced participation, in the third quarter we received a return of approximately $32 million from our funds at Lloyd's.
Lastly, Syndicate 6131 entered into a quota share reinsurance arrangement with an unaffiliated insurer, effectively reducing our net participation in the syndicate by half.
Before we open the call to questions, I want to reiterate that the changes we've implemented in the quarter and over the past 16 months have been important.
As a result of our strategic initiatives in 2020, we anticipate $17 million in annual expense savings.
This is on top of initiatives taken in 2019 that reduced annual costs by $5 million.
This brings us to estimated cumulative annual cost reductions of approximately $22 million since this leadership team was put in place over 16 months ago, which includes an overall reduction in our workforce of approximately 13%.
Thus far in 2020, we've recognized a little over $5 million in onetime charges primarily related to early retirements and job eliminations.

Summary:
Consequently, we recorded a noncash pre-tax goodwill impairment charge of $161.1 million, which drove a net loss in the third quarter of approximately $150 million, or $2.78 per share.
Importantly, we reported non-GAAP operating income of $2.6 million in the third quarter, or $0.05 per share.