Results of Operations for the Years Ended December 31, 2018 and 2017 Business Segment Results Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of net premiums earned), expense ratios (underwriting expenses expressed as a percentage of net premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the years ended December 31, 2018 and 2017. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.  Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the years ended December 31, 2018 and 2017. The Company reported net income of $641 million in 2018 compared to $549 million in 2017. The 17% increase in net income was primarily due to an after-tax increase in net investment income of $79 million, mainly driven by growth in the fixed maturity security portfolio, higher interest rates and an increase in investment funds, an after-tax increase in underwriting income of $72 million, a $34 million increase in after-tax foreign currency gains, an after-tax increase in non-insurance businesses of $6 million, and a $60 million decrease in tax expense primarily due to the reduction of the federal corporate tax rate from 35% to 21%, partially offset by a decrease in after-tax net investment gains of $145 million, an after-tax increase in interest expense of $8 million, an after-tax reduction in insurance service fee income of $4 million, and an after-tax increase in corporate expenses of $2 million. The number of weighted average diluted shares decreased slightly primarily due to share repurchases. Premiums. Gross premiums written were $7,702 million in 2018, an increase of 3% from $7,477 million in 2017. The increase was due to an increase in the Insurance segment of $287 million, partially offset by a decrease in the Reinsurance segment of $62 million. Approximately 78% of policies expiring in 2018 were renewed and 79% of policies expiring in 2017 were renewed. Average renewal premium rates (adjusted for change in exposures) increased 2.5% in 2018, 0.9% in 2017 and 0.3% in 2016. 40 (In thousands, except per share data) 2018 2017 Net income to common stockholders $ 640,749 $ 549,094 Weighted average diluted shares 128,264 129,018 Net income per diluted share $ 5.00 $ 4.26 (In thousands) 2018 2017 Insurance Gross premiums written $ 7,157,370 $ 6,869,831 Net premiums written 5,952,861 5,715,871 Net premiums earned 5,864,981 5,706,443 Loss ratio 61.8 % 61.6 % Expense ratio 32.5 32.9 GAAP combined ratio 94.3 94.5 Reinsurance Gross premiums written $ 545,124 $ 607,132 Net premiums written 480,366 544,637 Net premiums earned 506,524 604,976 Loss ratio 68.7% 80.2% Expense ratio 37.7 37.4 GAAP combined ratio 106.4 117.6 Consolidated Gross premiums written $ 7,702,494 $ 7,476,963 Net premiums written 6,433,227 6,260,508 Net premiums earned 6,371,505 6,311,419 Loss ratio 62.4 % 63.4 % Expense ratio 32.9 33.3 GAAP combined ratio 95.3 96.7