We reported a consecutive quarterly record underwriting profit in the second quarter of 2021 along with strong net investment income, resulting in an annualized return on beginning of year equity of 15%.
The company reported net income of $237 million, or $1.27 per share.
The components include operating income of $219 million, or $1.17 per share and after-tax net investment gains of $18 million or $0.10 per share.
Drilling down into our quarterly underwriting performance, you will note that gross premiums written grew by $529 million, or 24.8%, almost $2.7 billion.
Net premiums written grew $472 million, or 27.2% to more than $2.2 billion, recognizing an increase in both segments.
Moving into segment production of net premiums written, the insurance segment grew 29.2% to almost $2 billion, with an increase in all lines of business.
Professional liability led this growth with 64.8%, followed by commercial auto with 31%, other liability of 28.7%, short tail lines of 21.2% and workers' compensation of 15.6%.
The reinsurance and Monoline Excess segment grew about 11% to $218 million, with an increase in Monoline Excess of 20.9% and casualty reinsurance of 17.5%, partially offset by a decrease in property reinsurance of 13.8%.
In addition, our current accident year, catastrophe losses decreased significantly quarter-over-quarter from $146 million, or 8.7 loss ratio points in the prior year to $44 million or 2.2 loss ratio points in the current quarter.
As a result, quarterly underwriting income increased almost 800% to a record $202 million.
The reported loss ratio was 61% in the current quarter, compared with 67.7% in 2020.
Prior-year loss reserves developed favorably by about $0.5 million in the current quarter.
Accordingly, our current accident year loss ratio, excluding catastrophes was 58.8% compared with 59.2% for the prior year's quarter.
The continued growth in net premiums earned has benefited the expense ratio, which was 28.7% in the current quarter compared with 31% a year ago.
Net premiums earned outpaced underwriting expenses by a margin of more than 8.5%.
On the underwriting side, our current accident year combined ratio, excluding catastrophes, was 87.5% for the quarter compared with 90.2% for the prior year quarter.
On the investment front, net investment income increased 96.9% to $168 million, driven by strong results in investment funds.
Our duration remains flat at 2.4 years, while maintaining a high credit quality of AA minus.
Pre-tax net investment gains in the quarter of $24 million is primarily comprised of realized gains on investments of $39 million, a reduction in unrealized gains on equity securities of $18 million, and a decrease in the allowance for expected credit losses of $3 million.
The realized gain was largely driven by the sale of two real estate properties, which also resulted in the reduction in our debt that was supporting one of the real estate properties of approximately $102 million.
Corporate expenses increased approximately $13 million due to debt extinguishment costs of $8 million relating to the redemption of hybrid securities on June 1st, and higher incentive compensation costs as well.
Stockholders' equity increased by $164 million to approximately $6.6 billion in the quarter after regular and special dividends of $112 million.
Book value per share increased 2.5% in the quarter and book value per share before dividends increased 4.3%.
And finally, cash flow from operations continue to be strong with approximately $700 million on a year-to-date basis.
Rich walked you through the top line, obviously, the 27% growth plus is pretty healthy.
If you unpack the 27% growth overall, give or take about a third of it is coming from rate, the balance of it is coming from exposure as you would have gathered from the rate increase coming in ex-comp at just shy of 10%.
On the expense front, coming in at a 28.7% from our perspective is a pretty good place with opportunity to improve from here.
Certainly some if not all of the approximately 50 basis point benefit that we've been getting as far as expenses due to COVID, that is likely to erode and disappear.
Loss ratio pretty good at a 61%.
The ex-cat accident year, as Rich mentioned, was a 58.8% [Phonetic].
Another data point on the loss ratio front, the paid loss ratio came in at a very attractive 44.3 [Phonetic].
Again, Rich, commented on the duration of the 2.4 years, the book yield is running coincidentally at about 2.4 as well.
But even if you saw inflation return to 2.5% or 3% level, we continue to believe that a 10-year at 130 [Phonetic] or less doesn't make a whole lot of sense for the long run.

Summary:
The company reported net income of $237 million, or $1.27 per share.