Average large fire losses contributed 5.2 percentage points to the 2023 loss ratio down compared to 6.5 percentage points for 2022. Net favorable development of reserves for losses incurred in prior accident years reduced the 2023 loss ratio by 1.9 percentage points compared to a 5.4 percentage point reduction in the 2022 loss ratio for the full year of 2023. The core loss ratio decreased by 2.3 percentage points with a 4.6 percentage point improvement in the commercial lines core loss ratio offset partially by a 1.3 percentage point increase in the Personal Lines core loss ratio. The expense ratio was 34.7% for the full year of 2023 compared to 34.1% for the full year 2022. An increase in technology systems related expenses was partially offset by decreased underwriting based incentive costs for our employees for 2023 compared to 2022 in an effort to offset the higher costs related to our technology and data related investments.
We have launched an expense reduction initiative that we expect will reduce our expense ratio in the future. Dan will provide more details related to this initiative in a moment. The modest increases in our loss and expense ratios contributed to a combined ratio of 104.4% for 2023 compared to 103.3% for 2022. While we saw measurable improvement in our commercial lines results for 2023, our personal lines results demonstrated the need for additional rate increases to offset higher impacts of weather as well as higher average severity of liability claims. While economic inflation trends appear to be moderating, loss costs remain elevated due to labor shortages and increased prices to repair and replace damaged autos and properties. We are also monitoring social inflation trends and their industry-wide impact on liability loss settlements.
While we believe we have made significant strides in addressing those trends, we will remain vigilant as we continue to refine and execute strategies we expect will yield improved results in future periods. To provide more details about our commercial and personal lines segment results and an update on rate activity and other profit improvement initiatives. I will turn the call over to our Chief Underwriting Officer, Jeff hay.
Jeffery Hay: Thank you, Jeff. While we’ve seen some stabilization in the macroeconomic environment. Loss trends remain elevated, and we’re actively driving improvements on our underlying loss ratio by diligently executing on a number of initiatives to enhance our underwriting risk selection and pricing. We’ve continued to execute our initiative to non-renew and exit commercial lines in Georgia and Alabama due to profit concerns. In addition to targeted nonrenewals and select classes in other states that planned attrition more than offset growth from new business and strong rate increases and led to an overall commercial lines. Net premium decrease of 1% in the fourth quarter. We continue to make data-driven decisions with respect to individual risks and classes, utilizing analytics to inform us of risk characteristics that are more susceptible to loss.
We’re also providing detailed renewal pricing guidance to our underwriters and taking actions to increase margins on the business we wish to stay on. For example, we’re intentionally increasing both property values and deductible levels in reaction to recent economic trends that have driven increases in repair costs. Our commercial premium retention has remained strong despite these intentional actions, largely due to overall rate and exposure increases of 12.7% for the quarter and 11% for the full year. Excluding workers’ compensation, we continue to emphasize higher rate increases in the areas where the intersections of class line of business and geography are the most challenged for commercial lines. We saw a 37% reduction in large fire losses from the prior year quarter and as I have discussed in previous quarters, we believe the specific underwriting actions we’ve been executing to reduce the likelihood and frequency of these events are now beginning to show in our results.
Weather related loss activity was also down in the quarter compared to the prior year period, with particular favorable impact within our commercial property line of business compared to the fourth quarter of 2022, where we experienced winter storm Elliot freeze losses. In spite of the absence of any major event in the fourth quarter of 2023, weather related losses remained elevated compared to our five year fourth quarter average. For the full year 2023 weather-related losses were 15% higher than the full year 2022. We’re proactively diversifying the geographic footprint of our property book to optimize our mix of business and reduce the overall risk of losses from severe weather events. And we’ll continue to expand those diversification efforts throughout 2024.
Moving on to other lines of business, we saw commercial auto claim frequency beginning to show signs of a declining trend, but liability loss severity continues to be volatile increases in commercial auto liability reserves on a handful of claims in the quarter resulted in a lower level of net favorable prior year loss reserve development compared to the prior year quarter. In light of ongoing social inflation trends, we’ve maintained a relatively conservative reserving posture. We’re closely monitoring and continuing to take appropriate rate actions to mitigate potential impacts of these trends on our business, workers’ compensation continue to perform favorably with declining claim frequency. Now turning to personal lines, we’ve continued to limit exposure growth and have taken aggressive rate increases on our premium renewals.
Net premiums written for the fourth quarter of 2023 increased 18.1% compared to the prior year period, entirely driven by rate increases the average 13.1% for personal auto and 20.5% for homeowners. For the full year, net premiums written increased 17.5% from 2022 with policies in force down 1% at year end 2023 compared to year end 2022. Premium retention continued to remain very strong across our 10 state Personal Lines footprint at 106.2% for the fourth quarter. Our real retention rate, excluding rate and exposure change, was also strong at 88%, which suggests that most customers are accepting the higher renewal premiums. In addition to higher renewal rates, we are ensuring property values are accurately reflected and inclusive of inflationary impact in the homeowners line for the fourth quarter.
