More On InsurerAM’s Monthly Headlines

It comes as no surprise that the month of December headlines contain an above-average number of personnel announcements as companies gear up for the New Year. Here’s our People Headlines section assembled more than a week before Dec. 31, and you can bet there will be more.

 December 2016 Appointments

–Chris Bires Joins 50 South Capital To Head Product Strategy and Investor Relations
Advent Capital Hires Michael Cavanaugh For Institutional Business Marketing
Allstate Names John Dugenske Chief Investment Officer
–Claude LeBlanc Named President & CEO Of Ambac
–Gary Parr Joins Apollo From Lazard As Senior Managing Director
–Conrad D. Brooks To Succeed Richard T. Gieryn Jr. As AXIS General Counsel
–Chris Henson Appointed BB&T President
Calamos Hands Out Portfolio Responsibilities To Newcomer Matt Freund
Delaware Investments Appoints John Leonard Head Of Equities
Employers Hires Michael S. Paquette As CFO
–Tom Rogers Joins Farmers Group As Chief Investment Officer
Goldman Sachs Announces Five Top Appointments
–CEO Bart Hedges Resigns From Greenlight Re
–Sarah Doran Joining James River As CFO
–Michael Consedine Appointed NAIC CEO
Northern Trust AM Expands UK Team With Rosina Barnett Hire
Och-Ziff Names Alesia J. Haas CFO And David Levine CLO
PIMCO Hires Jeffrey Thompson For Real Estate Team
–Pat Halter Named COO Of Principal Global Investors
–Kris L. Hill Appointed CFO For QBE N. America
–Anna Manning To Take Over As RGA CEO
–Archie Struthers Joining Standard Life From Aberdeen As Head Of Investments
–Vijay Advani Joins TIAA Global AM From Franklin Templeton

InsurerAM’s Monthly News Headlines

Another of our important routines here at InsurerAM News is to publish our headlines once a month, in order to provide a useful, quickly-available, checklist for members. We archive the headlines and make all of them readily accessible (for members only) by providing direct links. To retrieve a previous article from the list of headlines (see November list below), simple enter a key word in the search box. Simple as that! But if questions, don’t hesitate to ask Alex McCallum, InsurerAM News Editor, via alex@insureram.com

Q&A Interviews Dig Deep Into Insurance Asset Management

One of our regular activities at InsurerAM News is publishing exclusives interviews with leading firms in the insurance asset management field. Like this one with Conning (see below) , they are frequently presented in Question & Answer format. If you belong to an insurance company, feel free to complete the application and become a lifetime member by clicking Complimentary on the Register & Sign Up page. Link
Questions? Ask Alex McCallum, InsurerAM News Editor, via alex@insureram.com

 

3Q 2016 Insurer Investment Performances

Every day during the quarterly rush to publish, InsurerAM News takes the important insurer investment information from the results and puts it all onto a single page — an integral part of our free service for insurance companies, and a genuine time-saver.

If you belong to an insurance company, feel free to complete the application and become a lifetime member by clicking Complimentary. Questions? Ask Alex McCallum, InsurerAM News Editor, via alex@insureram.com.

Third Quarter Insurer Investment Commentaries

Allstate Corp.
–Net investment income of $748 million declined by $59 million in the third quarter of 2016 from the prior year. This decline reflects lower interest income on market-based investments, driven by the Allstate Financial annuity portfolio repositioning. Solid performance-based results were lower compared to a strong prior year quarter.
–Net realized capital gains were $33 million in the third quarter of 2016, consistent with the prior year quarter. Net realized gains on sales totaled $121 million, primarily related to ongoing portfolio management. Impairment writedowns were $63 million, including $23 million related to energy investments.
–Investments carrying value of $81.1 billion was $3.3 billion above carrying value of $77.8 billion at year-end 2015 and included an increase in unrealized net capital gains of $2.0 billion, primarily reflecting increased bond valuations. The portfolio is managed to deliver attractive risk adjusted. Results

American Equity Investment Life Holding Company
–American Equity’s investment spread was 2.57% for the third quarter of 2016 compared to 2.62% for the second quarter of 2016 and 2.83% for the third quarter of 2015. On a sequential basis, the average yield on invested assets declined eight basis points while the cost of money declined three basis points.
–Average yield on invested assets continued to be unfavorably impacted by the investment of new premiums and portfolio cash flows at rates below the portfolio rate and high cash balances. The average yield on fixed income securities purchased and commercial mortgage loans funded in the third quarter of 2016 was 3.31% compared to 3.95% and 4.14%, respectively, in the second and first quarters of 2016. The average balance for cash and short-term investments was $1.2 billion during the third quarter, compared to $1.1 billion in the second quarter of 2016 and $807 million in the first quarter of 2016. The unfavorable impact from the aforementioned items was partially offset by fee income from bond transactions and prepayment income which added four basis points to both third quarter 2016 and second quarter 2016 average yield on invested assets.
–The aggregate cost of money for annuity liabilities decreased by three basis points to 1.89% in the third quarter of 2016 compared to 1.92% in the second quarter of 2016. This decrease reflected continued reductions in crediting rates. The benefit from over hedging the obligations for index linked interest was two basis points in the third quarter of 2016 compared to a nominal benefit in the second quarter of 2016.
–Commenting on investment spread, John Matovina said: “We saw continued spread compression in the third quarter. Similar to the first two quarters of the year, the decrease in the cost of money from reductions in rates on our policy liabilities was less than the decrease in the average yield on investments that resulted from the investment of new premiums and portfolio cash flows in high quality investments with yields below our portfolio rate and the increase in average cash and short-term investment balances during the quarter.”
–Turning to the outlook for investment spread, Matovina added: “We expect investment spread in the fourth quarter to benefit from the substantial reinvestment of cash and short-term investments into higher yielding securities. As of September 30, 2016, cash and short-term investment balances had fallen to $652 million from $1.6 billion at the beginning of the quarter and decreased to $308 million by the end of October. On September 1, 2016, we began implementing renewal adjustments covering $16 – $17 billion of policyholder account values that should lower the overall cost of money by eight basis points when fully implemented. On December 6, 2016, we will begin applying renewal adjustments on $7.4 billion of additional policyholder account values. These adjustments will be implemented over the next 12 – 15 months on policy anniversary dates and are expected to reduce the 0.54% cost of money differential between existing rates and the guaranteed minimums we had at September 30, 2016.” Results

AMERISAFE, Inc.
Net investment income for the quarter ending September 30, 2016, increased 15.6% to $8.0 million from $6.9 million in the third quarter of 2015, largely due to the increase in value of an investment in a limited partnership hedge fund where the change in value is recorded in investment income each quarter. As of September 30, 2016, the carrying and fair value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.2 billion.  Results

AmTrust Financial Services, Inc.
–3Q. Net investment income, excluding net realized gains and losses, totaled $59.9 million, an increase of 48% from $40.4 million in the third quarter 2015. The significant growth in investment income during the third quarter was primarily due to the increase in invested assets. Total cash and invested assets increased 38% to $9.07 billion as of September 30, 2016 compared to $6.55 billion as of September 30, 2015. In addition, third quarter 2016 results included net realized investment gains of $8.2 million, or $5.3 million after-tax, on fixed income and equity investments compared with net realized investment gains of $17.7 million, or $11.5 million after-tax, in the third quarter of 2015.
–9M.Investment income, excluding net realized gains and losses, totaled $160.1 million, an increase of 44% from $111.3 million YTD 2015. The significant growth in investment income during the first nine months was primarily due to the increase in invested assets. Total cash and invested assets increased 38% to $9.07 billion as of September 30, 2016 compared to $6.55 billion as of September 30, 2015. In addition, YTD 2016 results included net realized investment gains of $31.3 million, or $20.3 million after-tax, on certain fixed income and equity investments compared with net realized investment gains of $30.7 million, or $20.0 million after-tax, in the same period in 2015. Results

Anthem, Inc.
–During the third quarter of 2016, Anthem  recorded net realized gains on financial instruments totaling $88.8 million and other-than-temporary impairment losses totaling $11.0 million. During the third quarter of 2015, the Company recorded net realized losses of $11.9 million and other-than-temporary impairment losses totaling $19.1 million.
–As of September 30, 2016, the company’s net unrealized gain position in the investment portfolio was $982.6 million, consisting of net unrealized gains on fixed maturity and equity securities totaling $641.0 million and $341.6 million, respectively. As of September 30, 2016, cash and investments at the parent company totaled approximately $2.1 billion. Results

Arch Capital Group Ltd.
Net investment income for the 2016 third quarter was $0.53 per share, or $66.3 million, compared to $0.54 per share, or $67.3 million, for the 2015 third quarter, and $0.57 per share, or $70.4 million, for the 2016 second quarter. The 2016 third quarter net investment income reflected lower fixed income returns, as well as lower reinvestment rates available in the market, along with a lower benefit from inflation adjustments on U.S. Treasury Inflation-Protected Securities than in the 2016 second quarter. The annualized pre-tax investment income yield was 1.81% for the 2016 third quarter, compared to 2.04% for the 2015 third quarter and 2.08% for the 2016 second quarter. Results

Argo Group International Holdings, Ltd.
Net investment income was $32.7 million, compared to $18.4 million for the 2015 third quarter. Net Investment Income  was $89.6 million,  compared to $68.5 million for the first nine  months of 2015.  Results

Aspen Insurance Holdings Ltd.
Investment income of $46.4 million in the third quarter of 2016 increased by 3.1% compared to $45.0 million in the third quarter of 2015. Aspen’s investment portfolio continues to be comprised primarily of high quality fixed income securities with an average credit quality of “AA-”. The average duration of the fixed income portfolio was 3.64 years as at September 30, 2016. The total return on Aspen’s aggregate investment portfolio was 0.50% for the three months ended September 30, 2016 and reflects gains in the fixed income and equity portfolios. In the first nine months of 2016, Aspen’s aggregate investment portfolio had a total return of 3.98%. Results

AXIS Capital Holdings Ltd.
Net investment income of $117 million for the quarter represents a $25 million increase from the second quarter of 2016, and a $71 million increase from the third quarter of 2015, with the variances primarily driven by changes in the fair value of our alternative investments (“other investments”). These investments generated a gain of $38 million in the current quarter, compared to $14 million in the second quarter of 2016 and a loss of $27 million in the third quarter of 2015. Net realized investment gains for the quarter were $5 million, compared to net realized investment gains of $21 million last quarter and net realized investment losses of $70 million in the third quarter of 2015. Results

Baldwin & Lyons, Inc.
Net investment income of $3.5 million, reflected an increase of 17% compared to the third quarter of 2015 due to higher average bond yields and increases in average funds invested resulting from positive cash flow. For the nine months ended September 30, 2016, net investment income was $10.5 million, reflecting an increase of 20% compared to the prior year period. Results

Chubb Corp.
Adjusted net investment income, which excludes a purchase accounting adjustment not included in operating income, was $830 million. Net realized and unrealized gains pre-tax totaled $264 million, including unrealized gains of $95 million and net realized gains of $169 million. Net unrealized pre-tax gains comprised primarily unrealized gains of $214 million in the investment portfolio offset by unrealized foreign exchange losses of $124 million. Adjusted net realized gains included investment portfolio gains of $93 million, realized foreign exchange gains of $29 million and $44 million from derivative accounting related to the company’s variable annuity business. Results

Cincinnati Financial Corp.
–3 percent or $5 million increase in third-quarter 2016 pretax investment income, including 5 percent growth for stock portfolio dividends and 3 percent growth for bond interest income. Three-month increase of 1 percent in fair value of total investments at September 30, 2016, including a 1 percent increase for both the stock portfolio and the bond portfolio. $2.128 billion parent company cash and marketable securities at September 30, 2016, up 22 percent from year-end 2015.
–Steven J. Johnston, president and chief executive officer, commented: “Net income for both the third quarter and the first nine months of 2016 increased 3 percent. Steady cash flow from our insurance operations allowed us to purchase additional securities. Those additional purchases contributed to a 5 percent third-quarter increase in dividend income from our high-quality stock investments and a 3 percent increase in interest income from our bond portfolio.” Results

CNA Financial Corp.
Net investment income, after tax, was $371 million as compared with $265 million in the prior year quarter.  The increase was driven by limited partnerships, which returned 2.6% as compared with (3.2)% in the prior year period. Results

Echelon Financial Holdings Inc.
–3Q. Investment income was $4.5 million compared to a loss of $2.6 million in the third quarter of 2015 due to improved results on the Canadian preferred shares portfolio.  There was a total pre-tax return on invested assets of $3.7 million in the quarter compared to a pre-tax loss of $5.5 million in the third quarter of 2015, primarily due to stronger performance of the preferred share portfolio. The fair value of Echelon’s investment portfolio, including finance receivables, was $411 million.
–9M. Investment income was $13.3 million compared to $6.3 million in 2015, primarily due to strong performance of the preferred share portfolio compared to the prior period.  Total pre-tax return on invested assets was $8.2 million compared to $0.2 million in the same period of 2015. Results

Employers Holdings Ltd.
Net investment income of $17.9 million pre-tax decreased relative to the third quarter of last year ($18.5 million). Net realized gains on investments were $1.6 million in the third quarter compared with $2.0 million in the third quarter of last year. Results

Everest Re Group, Ltd.
Net investment income for the quarter was $122.7 million, including income of $17.1 million on limited partnership investments, versus $115,403 a year earlier. Nine months $357,918 versus 362,959   President and CEO Dominic J. Addesso: “We are very pleased with this quarter’s results. These earnings reflect strong underwriting margins, with a combined ratio of 85.6%, and a well-balanced investment portfolio that is providing solid investment income returns. Results

FBL Financial Group, Inc.
Net investment income in the third quarter of 2016 totaled $103.5 million, compared to $95.9 million in the third quarter of 2015. The increase is due to an increase in average invested assets, partially offset by lower investment yields. The annualized yield earned on average invested assets, with securities at amortized cost, was 5.43 percent for the nine months ended September 30, 2016, compared to 5.58 percent for the nine months ended September 30, 2015. At September 30, 2016, 96 percent of the fixed maturity securities in FBL Financial Group’s investment portfolio were investment grade debt securities. Results

Fidelity & Guaranty Life
Net investment income was $238 million for the quarter, an increase of 7% compared to $223 million for the same period last year. This growth was driven by increases in average assets under management (“AAUM”), which grew $1.0 billion or 6% over the prior year from sales and stable policy owner retention trends. The average earned yield on the total portfolio in the quarter was 4.90%, down 2 basis points from 4.92% in the prior year quarter which benefited from higher bond prepayment income. Asset purchases during the quarter were $0.8 billion at an average yield of 4.83%. Asset purchases during the current quarter were primarily in investment grade corporate bonds and structured securities and high grade preferred stocks. The average NAIC rating for the portfolio remains approximately 1.5. Net investment spread across all product lines increased 7 basis points compared to fiscal fourth quarter 2015. Net investment spread in the current quarter for fixed indexed annuities was consistent with recent performance at 298 basis points. Current period results also included net realized losses on available-for-sale investments of $8 million before DAC amortization and taxes. Results

First American Financial Corp.
Investment income was $29.0 million in the third quarter, up $3.6 million, or 14 percent, from the third quarter of 2015. The increase was the result of higher interest income driven by growth in the size of the investment portfolio. Net realized investment gains totaled $8.4 million in the current quarter, compared with losses of $3.1 million in the third quarter of 2015. Results

Greenlight  Capital  Re,  Ltd.
A net investment gain of 3.1% on Greenlight Re’s investment portfolio, compared to a net investment loss of 14.2% in the third quarter of 2015. For the first nine months of 2016 net investment income was $23.3 million, representing a gain of 2.1%, compared to a net investment loss of $236.5 million during the comparable period in 2015 when Greenlight Re reported a 16.9% loss. Results

Hartford Financial Services Group, Inc.
Total investments decreased 1% to $73.7 billion at Sept. 30, 2016 compared with $74.4 billion at Sept. 30, 2015. The decrease in total investments reflects the continued runoff of Talcott Resolution and the transfer of investments to assets held for sale related to the pending sale of Hartford Financial Products International Limited (HFPI), partially offset by an increase in fair value of fixed maturities due to the significant decline in interest rates and tightening of credit spreads compared with Sept. 30, 2015. Third quarter 2016 net investment income totaled $772 million, before tax, a 6% increase from third quarter 2015, principally due to higher investment income from LPs. Investment income from LPs totaled $93 million, before tax, in third quarter 2016 compared with $22 million, before tax, in third quarter 2015. The increase was largely due to improved hedge fund results compared with losses in third quarter 2015, as well as an increase in private equity funds. Excluding the impact of LPs, net investment income was down 4% compared with third quarter 2015. Third quarter 2016 annualized investment yield increased to 4.5%, before tax, from 4.1%, before tax, in third quarter 2015 primarily due to higher investment income from LPs. Third quarter 2016 annualized investment returns from LPs was 15.2%, before tax, compared with 2.9%, before tax, in third quarter 2015. Third quarter 2016 annualized investment yield, excluding LPs was 4.1%, before tax, slightly lower than 4.2% in third quarter 2015 as low reinvestment rates and lower non-routine income impacted the total annualized investment yield. The credit performance of the investment portfolio remained strong in third quarter 2016, with net impairment losses including mortgage loan loss reserves totaling $14 million, before tax, compared with $39 million, before tax, in third quarter 2015. Results

Kemper Corp.
Net investment income increased $1.8 million to $77.7 million in the third quarter of 2016, driven by higher interest income on fixed maturities, partially offset by lower returns on the alternative investments portfolio and lower dividends on equity securities excluding alternative investments. The investment portfolio in total generated a pre-tax equivalent annualized book yield of 5.3 percent for the third quarter of 2016, compared to 5.2 percent in 2015. Results

Maiden Holdings, Ltd.
Net investment income of $35.7 million in the third quarter of 2016 increased 8.6% compared to the third quarter of 2015.  As of September 30, 2016, the average yield on the fixed income portfolio (excluding cash) is 3.20% with an average duration of 4.49 years. Cash and cash equivalents were $434.0 million at September 30, 2016 or $101.5 million higher than at year-end 2015. Net investment income of $107.3 million in the first three quarters of 2016 increased 11.5% compared to the first three quarters of 2015. Results

MetLife, Inc.
Net investment income was $5.2 billion, up 6 percent. Variable investment income was $409 million ($266 million, after tax and DAC), driven by strong performance of private equity and the sale of a real estate joint venture interest. This compares with $267 million ($174 million, after tax and DAC) in the third quarter of 2015. Changes in interest rates and equity markets drove derivative net losses of $834 million, after tax and other adjustments. Derivative net gains in the third quarter of 2015 were $169 million, after tax. Results

Munich Re
With a carrying amount of €241.8bn, total investments (excluding insurance-related investments) as at 30 September 2016 were up on the year-end 2015 figure of €230.5bn. For the period from July to September 2016, the Group’s investment result (excluding insurance-related investments) improved year on year by 5.7% to €1,619m (1,532m). Changes in the value of derivatives had an adverse impact of €446m, mainly on account of equity derivatives. The balance of gains and losses on disposals excluding derivatives came to €696m. The investment result represents an overall return of 2.7%. Munich Re’s equity-backing ratio (including equity-linked derivatives) at 30 September 2016 fell marginally to 4.4% (31 December 2015: 4.8%). Fixed-interest securities, loans and short-term fixed-interest investments continued to make up the largest portion of Munich Re’s holdings, with a share of around 89% at market value. CFO Jörg Schneider commented as follows on the investment result: “Although volatility in the capital markets eased off somewhat in the third quarter, our investment strategy remains geared to being as well prepared as possible for many different scenarios, given the many existing hotspots. In view of the low-interest-rate environment, we are very satisfied with the 3.4% return on our investments for the first nine months of the year.” The Group’s asset manager is MEAG, whose assets under management as at 30 September 2016 included not only Group investments, but also third-party investments totaling €18.7bn (14.1bn). Results

National Interstate Corp.
Net investment income of $10.6 million for the 2016 third quarter and $31.8 million for the 2016 first nine months were 7.2% and 8.2% respectively, greater than the same periods last year reflecting an increase in average cash and invested assets. The Company had net realized gains from investments of $1.9 million for the 2016 third quarter and $0.9 million year-to-date reflecting gains from other invested assets and gains from sales which were offset by other-than-temporary impairments. Net realized losses for the 2015 third quarter and first nine months of $3.8 million and $2.3 million, respectively, were driven by other-than-temporary impairments. Results

Navigators Group, Inc.
Net investment income for the three and nine months ended September 30, 2016 was $19.9 million and $59.3 million, respectively, increases of 14.4% and 18.2% as compared to the same periods in 2015. The annualized pre-tax investment yield, excluding net realized gains and losses and other-than-temporary impairment losses recognized in earnings, was 2.5% and 2.6% for the three and nine months ended September 30, 2016, compared to 2.5% and 2.4%, respectively, for the comparable periods in 2015. Our company’s investment portfolio mainly consists of fixed income securities with an average quality rating of “AA-/Aa3” as defined by S&P and Moody’s, respectively, with an average effective duration of 3.9 years as of September 30, 2016.  As of September 30, 2016, Net unrealized gains within our investment portfolio were $106.1 million, an increase of $68.8 million compared to December 31, 2015. We recognized $1.6 million of net realized gains (losses) for the three months ended September 30, 2016, compared to ($0.8) million of net realized losses for the same period in 2015.  For the nine months ended September 30, 2016, we recognized $5.0 million of net realized gains, compared to $8.8 million for the same period in 2015. Results

Old Republic International Corp.
As of September 30, 2016, the consolidated investment portfolio reflected an allocation of approximately 78 percent to fixed-maturity and short-term investments, and 22 percent to equities. Investments in high quality, dividend-paying equity securities have been singularly emphasized since 2013, and the asset quality of the fixed maturity portfolio has remained at high levels. Results

PartnerRe Ltd.
Total investment return in the third quarter was 0.9%, for a total net contribution of $161 million, of which $105 million was generated by fixed income securities (government bonds and investment grade credit) and $56 million was generated by other securities (mainly principal finance and third party private equity funds).
–The positive total net contribution generated by fixed income securities, notwithstanding the increase in risk-free rates in the U.S., highlights the diversified nature of our standard fixed income portfolio with corporate credit and government agency mortgage backed securities complementing government bonds.
–Net investment income of $102 million was down 13%. This decrease mainly reflects the impact of the reduction in risk within the investment portfolio, the increased allocation to U.S. government fixed income securities, the change in asset mix with a lower amount of high yield fixed income securities and dividend yielding equity securities, and lower reinvestment rates. These decreases were partially offset by lower investment expenses following the reorganization of the company’s investment operations. Results

Prudential Financial, Inc.
Current quarter net income includes $649 million of pre-tax net realized investment gains and related charges and adjustments. The foregoing net gains include net pre-tax gains of $553 million from products that contain embedded derivatives and associated derivative portfolios that are part of a hedging program related to the risks of these products, and $250 million from general portfolio and related activities. The foregoing gains were partially offset by pre-tax losses of $114 million related to derivatives used in risk management activities including asset and liability duration management and $40 million from impairments and sales of credit-impaired investments. Results

RenaissanceRe Holdings Ltd.
The company’s total investment result, which includes the sum of net investment income and net realized and unrealized gains on investments, was $111.2 million in the third quarter of 2016, compared to a loss of $13.0 million in the third quarter of 2015, an increase of $124.2 million. The total investment result during the third quarter of 2016 was primarily driven by net unrealized gains on equity investments trading as a result of the strong performance of a number of the company’s equity positions during the quarter as well as net realized gains on the company’s fixed maturity investment portfolio. Partially offsetting these items was a modest level of net unrealized losses in the company’s portfolio of fixed maturity investments trading, principally the result of an upward shift of the yield curve. Results

RLI Corp.
RLI’s net investment income for the quarter fell 3.3% to $13.5 million, compared to the same period in 2015. For the nine-month period ended September 30, 2016, investment income was $39.9 million versus $40.9 million for the same period in 2015. The investment portfolio’s total return was 0.8% for the quarter. The bond portfolio’s return was 0.6% in the quarter, while the equity portfolio’s return was 1.4%. Through nine months, the investment portfolio’s total return was 6.9% with the bond portfolio returning 5.7% and equities returning 11.9%. Results

Safety Insurance Group, Inc.
Net investment income for the quarter ended September 30, 2016 decreased by $1.0 million, or 9.9%, to $9.0 million from $10.0 million for the comparable 2015 period. Net investment income for the nine months ended September 30, 2016 decreased by $2.6 million, or 8.4%, to $28.2 million from $30.8 million for the comparable 2015 period. The decrease is a result of changes in the average invested asset balance as a result of investment proceeds used in the payment of claims resulting from the 2015 winter events and increases in fixed maturity amortization. Net effective annualized yield on the investment portfolio for the quarter ended September 30, 2016 was 2.9% compared to 3.3% for the comparable 2015 period. Net effective annualized yield on the investment portfolio for the nine months ended September 30, 2016 was 3.1% compared to 3.4% for the comparable 2015 period. Our duration was 4.0 years at September 30, 2016 and 4.1 at December 31, 2015, respectively. Results

Selective Insurance Group, Inc.
After-tax investment income in the third quarter was $25 million, up 1% compared to a year ago.  Pre-tax income increased 6% on our fixed income securities, which represent 92% of our portfolio, as a higher asset base and modestly increased allocation to high yield securities more than offset lower rates. Results

Third Point Reinsurance Ltd.
For the three months ended September 30, 2016, we generated positive performance in each of our investment strategies.  Within equities, we generated positive returns within each long equity sub-sector/strategy, with consumer and technology, media and telecommunications being notable performers.  The gains in our long equity portfolio were partially offset by losses in our short equity positions, including equity hedges.  Within our credit strategy, performing credit was the primary contributor to the positive returns for the quarter.  The macro and other strategy also contributed modestly to returns. For the nine months ended September 30, 2016, we generated positive results despite a volatile market environment. Within equities, positive performance within our long equity portfolio was reduced by losses from one long equity healthcare position. The net gains in our long equity portfolio were partially offset by losses in our short equity positions, including equity hedges.  Within credit, our sovereign and performing credit portfolios contributed positive performance with positions traded within the energy sector driving performing credit and one sovereign position contributing significantly to returns for the year to date period.  The macro and other category reduced returns for the nine months ended September 30, 2016 primarily due to negative performance from several currency and portfolio macroeconomic hedges. Results

Torchmark Corp.
The market value of Torchmark’s fixed maturity portfolio was $15.8 billion, $1.9 billion higher than amortized cost of $13.9 billion. The $1.9 billion of net unrealized gains compares to $1.7 billion at June 30, 2016. Net unrealized gains were comprised of gross unrealized gains of $2.0 billion and gross unrealized losses of $120 million. Results

Travelers Corp.
Net investment income of $582 million pre-tax ($472 million after-tax) decreased due to lower returns in the fixed income portfolio, while returns in the non-fixed income portfolio were comparable to the prior year quarter and improved from recent periods. Fixed income returns declined in line with our expectations due to lower reinvestment rates available in the market. Results

United Fire Group, Inc.
–Consolidated net investment income was $26.7 million for the third quarter, an increase of 11.0 percent, as compared to net investment income of $24.1 million for the same period in 2015. Year-to-date, consolidated net investment income was $73.4 million, a slight decrease compared to net investment income of $74.2 million for the same period in 2015. The increase in net investment income for the quarter was primarily driven by the change in value of our investments in limited liability partnerships and not due to a change in our investment philosophy. The valuation of these investments in limited liability partnerships varies from period to period due to current equity market conditions, specifically related to financial institutions. The decrease in the nine-month period ended September 30, 2016 is primarily due to a decrease in reinvestment interest rates on our life segment portfolio.
–Consolidated net unrealized investment gains, net of tax, totaled $179.8 million as of September 30, 2016, an increase of $51.4 million or 40.1 percent from December 31, 2015. The increase in net unrealized investment gains is primarily the result of a decrease in interest rates, which positively impacted the valuation of our fixed maturity security portfolio during 2016 and, to a lesser extent, an increase in the fair value of our equity security portfolio. Results

Validus Holdings, Ltd.
Net investment income for the three months ended September 30, 2016 was $41.1 million compared to $30.0 million for the three months ended September 30, 2015, an increase of $11.1 million, or 36.9%. The increase was primarily due to strong performance on the company’s portfolio of structured securities, including $9.5 million of returns generated from a single fixed income fund. Results

Voya Financial, Inc.
Investment Management operating earnings in 3Q 2016 benefited from a gain resulting from a Lehman Brothers bankruptcy settlement, which is not reflected in Investment Management adjusted operating earnings. The following items primarily accounted for the change in Investment Management operating earnings (in addition to the gain resulting from a Lehman Brothers bankruptcy settlement) and adjusted operating earnings:
–Higher investment capital and other investment income ($4 million positive variance) due to income earned on alternative investments;
–Higher fee-based margin ($4 million positive variance) primarily due to higher performance fees and higher average AUM due to Investment Management sourced net cash flows and market improvements; and
–Higher administrative expenses ($5 million negative variance) primarily due to higher compensation-related expenses associated with sales and due, in part, to timing of expenses.
–Alternative investment income was in line with long-term expectations before the impact of income taxes. Results

XL Group Ltd.
Net investment income for the quarter was $209.8 million, compared to $225.1 million in the prior year quarter and $215.4 million in the second quarter of 2016. Net investment income excluding the Life Funds Withheld Assets for the quarter was $170.8 million, compared to $178.6 million in the prior year quarter and $176.2 million in the second quarter of 2016. Results