Travelers 2011 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, 2011, in millions) Value Carrying Value
Quality Rating:
Aaa ....................................... $28,849 44.9%
Aa ........................................ 20,351 31.7
A......................................... 7,887 12.2
Baa ....................................... 5,187 8.1
Total investment grade .......................... 62,274 96.9
Below investment grade ......................... 1,958 3.1
Total fixed maturities ........................... $64,232 100.0%
Obligations of States, Municipalities and Political Subdivisions
The Company’s fixed maturity investment portfolio at December 31, 2011 and 2010 included
$39.02 billion and $39.54 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, 2011 and 2010 were $7.33 billion and
$7.29 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 negative outlooks to municipal securities in both the state
sector and local government sector within the United States.
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