Travelers 2012 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, 2012, in millions) Value Carrying Value
Quality Rating:
Aaa ....................................... $28,108 43.0%
Aa ........................................ 20,768 31.8
A......................................... 8,354 12.8
Baa ....................................... 6,111 9.3
Total investment grade .......................... 63,341 96.9
Below investment grade ......................... 2,052 3.1
Total fixed maturities ........................... $65,393 100.0%
Obligations of States, Municipalities and Political Subdivisions
The Company’s fixed maturity investment portfolio at December 31, 2012 and 2011 included
$38.68 billion and $39.02 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, 2012 and 2011 were $9.03 billion and
$7.33 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 independent verification agent of the underwriter, issuer or trustee 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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