Travelers 2010 Annual Report Download - page 114

The following table sets forth the Company’s fixed maturity investment portfolio rated using
external ratings agencies or by the Company when a public rating does not exist:
Carrying Percent of Total
(at December 31, 2010, in millions) Value Carrying Value
Quality Rating:
Aaa ....................................... $29,619 47.2%
Aa ........................................ 20,499 32.6
A......................................... 6,426 10.2
Baa ....................................... 4,393 7.0
Total investment grade .......................... 60,937 97.0
Below investment grade ......................... 1,883 3.0
Total fixed maturity investments ................... $62,820 100.0%
Obligations of States, Municipalities and Political Subdivisions
The Company’s fixed maturity investment portfolio at December 31, 2010 and 2009 included
$39.54 billion and $41.33 billion, respectively, of securities which are obligations of states, municipalities
and political subdivisions (collectively referred to as the municipal bond portfolio). The municipal bond
portfolio is diversified across the United States, the District of Columbia and Puerto Rico and includes
general obligation and revenue bonds issued by states, cities, counties, school districts and similar
issuers. Included in the municipal bond portfolio at December 31, 2010 and 2009 were $7.29 billion and
$6.06 billion, respectively, of advance refunded or escrowed-to-maturity bonds (collectively referred to
as pre-refunded bonds), which are bonds for which an irrevocable trust has been established to fund
the remaining payments of principal and interest. Such escrow accounts are verified as to their
sufficiency by an external auditor and are almost exclusively comprised of U.S. Treasury securities.
Moody’s Investors Service has assigned a negative outlook to municipal securities issued by local
governments within the United States.
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