Travelers 2013 Annual Report Download - page 126

These unrealized investment losses at December 31, 2013 represent less than 1% of the combined
fixed maturity and equity security portfolios on a pretax basis and less than 1% of shareholders’ equity
on an after-tax basis.
For fixed maturity investments where fair value is less than the carrying value and the Company
did not reach a decision to impair, the Company continues to have the intent and ability to hold such
investments to a projected recovery in value, which may not be until maturity.
At December 31, 2013 and 2012, below investment grade securities comprised 3.0% and 3.1% of
the Company’s fixed maturity investment portfolio, respectively. Included in below investment grade
securities at December 31, 2013 were securities in an unrealized loss position that, in the aggregate,
had an amortized cost of $390 million and a fair value of $373 million, resulting in a net pretax
unrealized investment loss of $17 million. These securities in an unrealized loss position represented
less than 1% of both the total amortized cost and the fair value of the fixed maturity portfolio at
December 31, 2013 and accounted for 2.4% of the total gross pretax unrealized investment loss in the
fixed maturity portfolio at December 31, 2013.
Impairment Charges
Impairment charges included in net realized investment gains in the consolidated statement of
income were as follows:
(for the year ended December 31, in millions) 2013 2012 2011
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and
government agencies and authorities ................... $— $— $—
Obligations of states, municipalities and political subdivisions . . ———
Debt securities issued by foreign governments ............. ———
Mortgage-backed securities, collateralized mortgage obligations
and pass-through securities ......................... 2413
All other corporate bonds ............................ 345
Redeemable preferred stock .......................... ———
Total fixed maturities .............................. 5818
Equity securities
Common stock .................................... 536
Non-redeemable preferred stock ....................... —1—
Total equity securities ............................. 546
Other investments ................................... 531
Total .......................................... $15 $15 $25
Following are the pretax realized losses on investments sold during the year ended December 31,
2013:
(for the year ended December 31, 2013, in millions) Loss Fair Value
Fixed maturities ...................................... $25 $688
Equity securities ...................................... 127
Total .............................................. $26 $715
Purchases and sales of investments are based on cash requirements, the characteristics of the
insurance liabilities and current market conditions. The Company identifies investments to be sold to
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