Primerica 2010 Annual Report - Direct Selling News

The composition of our invested asset portfoliowas as follows:December 31,2010 2009$ % $ %(Dollars in thousands)Fixed-maturity securities, at fair value $ 2,081,361 97% $ 6,378,179 99%Equity securities, at fair value 23,213 1 49,326 *Trading securities, at fair value 22,767 1 16,996 *Policy loans and other invested assets 26,243 1 26,947 *Total investments (1) $2,153,584 100% $6,471,448 100%* Less than 1%(1) Totals may not add due to rounding.The average rating of our fixed-maturityportfolio is single A, with an average durationof approximately 3.6 years. The compositionand duration of our portfolio will varydepending on several factors, including theyield curve and our opinion of the relative valueamong various asset classes. The distribution ofour investments in fixed-maturity securities byrating follows:December 31,2010 2009AAA 27% 28%AA 9 10A 22 23BBB 36 32Below investment grade 7 7Not rated * *Total fixed-maturitysecurities (1) 100% 100%Fixed-Maturity Securities and Equity SecuritiesAvailable for Sale. The types of assets in ourportfolio are influenced byvarious state and Canadianlaws that prescribe qualifiedinvested assets. We invest inassets giving consideration tosuch factors as liquidity andcapital needs, investmentquality, investment return,matching of assets andliabilities, and the overallcomposition of the investedasset portfolio by asset typeand creditexposure.The fair value of invested assets, and thereforethe unrealized gains and losses of the assets,are subject to rapidly changing conditions,including volatility of financial markets andchanges in interest rates. Managementconsiders a number of factors in determining ifan unrealized loss is other-than-temporary,including our intent to sell or whether it ismore-likely-than-not we would be required tosell the investment before the expectedrecovery of the cost or amortized cost basis.Net unrealized gains were $157.4 million as ofDecember 31, 2010, compared with $243.5million as of December 31, 2009. The decline innet unrealized gains was primarily due to thesmaller invested asset portfolio resulting fromthe Citi reinsurance transactions and ourcorporate reorganization.* Less than 1%(1) Totals may not add due to rounding.Primerica 2010 Annual Report 99