December 31, 2003. The Program unit had gross premiums written of $274.4 million for the year ended December 31, 2004, an increase of $51.2 million, or 22.9%, compared to $223.2 million for the year ended December 31, 2003. New professional liability and personal automobile programs contributed to the increase in gr oss premiums written. Our Healthcare unit, which writes physicians medical malpractice insurance and hospital professional liability business, had $137.7 million of premiums written for the year ended December 31, 2004, an increase of $27.1 million, or 24.5%, compared to $110.6 million for the year ended December 31, 2003. Ceded Premiums Written.  Ceded premiums written for the year ended December 31, 2004 decreased by $110.7 million, or 27.4%, to $293.9 million from $404.6 million for the year ended December 31, 2003. The decrease in ceded premiums written relates to decreases in cessions to Odyssey America’ whole account aggregate excess of loss cover of $71.6 million; the cancellation of certain affiliated business of $36.7 million; decr eases in the Latin America facultative cessions of $14.3 million, as well as reductions in the cessions of our Newline Syndicate of $15.8 million. These reductions were offset by increased cessions in our catastrophe program for reinstatement premiums of $20.8 million primarily associated with the four hurricanes and an increase in the U.S. Insurance division cessions due to increases in the gross premium volume. Net Premiums Written. Net premiums written for the year ended December 31, 2004 increased by $209.0 million, or 9.7%, to $2.4 billion from $2.2 billion for the year ended December 31, 2003. Net premiums written represents gross premiums written less ceded premiums written. The percentage increase in net premiums written is greater than the gross premiums written as a result of the reduction in ceded premiums written as discussed above. Net Premiums Earned. Net premiums earned for the year ended December 31, 2004 increased by $366.0 million, or 18.6%, to $2.3 billion from $2.0 billion for the year ended December 31, 2003. The earned premium increased in each of the Company’s divisions. The America’s division increased by $58.7 million, or 5%, reflecting the growth in volume over the past two years, offset by a slight decline in net premiums written in the current year . The EuroAsia division increased by $117.6 million, or 32.2%, reflecting the continued premium growth in the current year The London Market division increased by $87.0 million, or 26%, reflecting the prior period growth in premium volume, and the U.S. Insurance division increased by $102.7 million, or 107.4%, representing the growth in net premiums written in 2004. Net Investment Income. Net investment income for the year ended December 31, 2004 increased by $30.6 million, or 22.8%, to $164.7 million from $134.1 million for the year ended December 31, 2003. This increase is mainly attributable to the reinvestment in 2004 of the significant cash balances maintained during 2003 into asset classes with investment yields substantially greater than the amount earned on the cash balances. As disclosed in note 4 of the consolidated financial statements, net investment income is comprised of gross investment income of $196.6 million less investment expenses of $31.9 million for the year ended December 31, 2004, compared to gross investment income of $170.2 million less investment expenses of $36.1 million for the year ended December 31, 2003. The increase in gross investment income is due to an increase on interest on fixed income securities of $31.9 million, dividends on equity securities of $14.6 million, interest on cash and short term investments of $3.6 million, offset by a decrease in other investments of $23.7 million. Investment expenses decreased by $4.2 million, primarily related to the decrease in the interest on funds held associated with the aggregate excess of loss cover. The direct investment yield was 4.2% and 4.9% for the years ended December 31, 2004 and 2003, respectively. Net Realized Investment Gains. Net realized investment gains for the year ended December 31, 2004 decreased by $89.2 million to $113.5 million from a gain of $202.7 million for the year ended December 31, 2003. The decrease in net realized gains is comprised of increases in net gains related to equity securities of $57.3 million and an increase in net gains related to other investments of $3.5 million, offset by decreases in net gains related to fixed income securities, short-term investments, cash and cash equivalents of $100.6 million. Additionally during 2004, we entered into short sale transactions and Standard & Poor’s index call options, and Standard & Poor’s total retur swaps, in each case to provide an economic hedge against a decline in the equity markets. Our derivative and short sale investments resulted in an increase in net realized investment losses for the year ended December 31, 2004 of $49.6 million, principally resulting fr om a decrease in the fair value of these investments, which is recorded as a net realized investment gain or loss. During 2004, we did not recognize any other than temporary impairment losses on our investment portfolio. Included in net realized investment gains, discussed above, for the year ended December 31, 2003 are $58.8 million of realized losses on the other than temporary write-down of certain fixed income and equity securities. 29