We are pleased to report that AEGIS had another successful year of solid bottom line financial growth in 2013. As of year-end, surplus grew by 5%, or $56 million, to $1,156 million, a new high for AEGIS. We’ve now grown surplus by close to $400 million since 2008. Gross written premiums for the year were $1,280 million, which is $35 million over the prior year and also a record high for AEGIS. Most noteworthy, the membership universally supported a 10% rate increase across our excess liability book. Thanks very much for this needed support.
Total gross investment return for the year was 2.2% which was 160 basis points lower than our expected return for the overall portfolio. Fortunately, we had strong equity returns of 24.4% to offset our fixed income return of (0.2%), a reflection of this low interest rate environment. Nonetheless, we believe these returns will still compare favorably to our peers.
Happily, our overall combined ratio of 97% was 11 points better than in 2012. This improvement includes our London operations’ excellent 85% combined ratio. But our U.S. operations’ combined ratio also greatly improved to 111% which was 17% better than last year. This ratio would have been even better, but for further property losses from Superstorm Sandy as well as our largest risk loss ever due to a natural gas plant explosion. Most importantly, thanks largely to the 10% rate increase in 2013, our combined ratio for excess liability dropped 56% to 113%. This is a significant step towards sustainability, and the positive effects of that rate increase will continue to flow through our financials in 2014. We hope that similar rate increases for excess liability in 2014 will help bring that line of business closer to the breakeven point. These rate increases contributed greatly to surplus growth notwithstanding the low investment returns available this year.
We look forward to reporting the final audited results in our annual report, which will be published in April.