Travelers 2014 Annual Report Download - page 117

Table of Contents
These unrealized investment losses at December 31, 2014 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 both December 31, 2014 and 2013, below investment grade securities comprised 3.0% of the Company's fixed maturity investment portfolio.
Included in below investment grade securities at December 31, 2014 were securities in an unrealized loss position that, in the aggregate, had an
amortized cost of $645 million and a fair value of $619 million, resulting in a net pretax unrealized investment loss of $26 million. These securities in
an unrealized loss position represented approximately 1% of both the total amortized cost and the fair value of the fixed maturity portfolio at
December 31, 2014 and accounted for 22.0% of the total gross pretax unrealized investment loss in the fixed maturity portfolio at December 31, 2014.
Impairment Charges
Impairment charges included in net realized investment gains in the consolidated statement of income were as follows:
Following are the pretax realized losses on investments sold during the year ended December 31, 2014:
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
116
(for the year ended December 31, in millions)
2014
2013
2012
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
1
2
4
All other corporate bonds
15
3
4
Redeemable preferred stock
—
—
—
Total fixed maturities
16
5
8
Equity securities
Public common stock
9
5
3
Non - redeemable preferred stock
—
—
1
Total equity securities
9
5
4
Other investments
1
5
3
Total
$
26
$
15
$
15
(for the year ended December 31, 2014, in millions)
Loss
Fair Value
Fixed maturities
$
12
$
523
Equity securities
3
115
Total
$
15
$
638