Travelers 2014 Annual Report Download - page 201

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. FAIR VALUE MEASUREMENTS (Continued)
non
- redeemable preferred stocks held by the Company, the Company receives an estimate of fair value from the pricing services. The services
utilize similar methodologies to price the non
- redeemable preferred stocks as they do for the fixed maturities. The Company includes the fair value
estimate for these non
- redeemable preferred stocks in the amount disclosed in Level 2.
Other Investments
The Company holds investments in various publicly - traded securities which are reported in other investments. These investments include
mutual funds and other small holdings. The $19 million fair value of these investments at both December 31, 2014 and 2013, respectively, was
disclosed in Level 1. At December 31, 2014 and 2013, the Company held investments in non
- public common and preferred equity securities, with fair
value estimates of $36 million and $34 million, respectively, reported in other investments, where the fair value estimate is determined either
internally or by an external fund manager based on recent filings, operating results, balance sheet stability, growth and other business and market
sector fundamentals. Due to the significant unobservable inputs in these valuations, the Company includes the total fair value estimate for all of
these investments at December 31, 2014 and 2013 in the amount disclosed in Level 3.
Derivatives
At December 31, 2014 and 2013, the Company held $4 million and $8 million, respectively, of convertible bonds containing embedded
conversion options that are valued separately from the host bond contract in the amount disclosed in Level 2—
fixed maturities.
Fair Value Hierarchy
The following tables present the level within the fair value hierarchy at which the Company's financial assets and financial liabilities are
measured on a recurring basis at December 31, 2014 and
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