Investments | INVESTMENTS Fixed Maturity and Equity Securities Available-for-Sale The Company holds various types of fixed maturity securities available-for-sale and classifies them as corporate securities (“Corporate”), Canadian and Canadian provincial government securities (“Canadian government”), residential mortgage-backed securities (“RMBS”), asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), U.S. government and agencies (“U.S. government”), state and political subdivisions, and other foreign government, supranational and foreign government-sponsored enterprises (“Other foreign government”). The following table provides information relating to investments in fixed maturity securities by sector as of December 31, 2018 (dollars in thousands): December 31, 2018: Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value % of Total Other-than- temporary impairments in AOCI Available-for-sale: Corporate $ 24,006,407 $ 530,804 $ 555,092 $ 23,982,119 59.9 % $ — Canadian government 2,768,466 1,126,227 2,308 3,892,385 9.7 — RMBS 1,872,236 22,267 25,282 1,869,221 4.7 — ABS 2,171,254 10,779 32,829 2,149,204 5.4 275 CMBS 1,428,115 9,153 18,234 1,419,034 3.5 — U.S. government 2,233,537 10,204 57,867 2,185,874 5.5 — State and political subdivisions 721,290 39,914 9,010 752,194 1.9 — Other foreign government 3,680,863 109,320 47,868 3,742,315 9.4 — Total fixed maturity securities $ 38,882,168 $ 1,858,668 $ 748,490 $ 39,992,346 100.0 % $ 275 The following table provides information relating to investments in fixed maturity and equity securities by sector as of December 31, 2017 (dollars in thousands): December 31, 2017: Amortized Unrealized Unrealized Estimated % of Total Other-than- Available-for-sale: Corporate $ 21,966,803 $ 1,299,594 $ 55,429 $ 23,210,968 60.9 % $ — Canadian government 2,843,273 1,378,510 1,707 4,220,076 11.1 — RMBS 1,695,126 36,632 11,878 1,719,880 4.5 — ABS 1,634,758 18,798 5,194 1,648,362 4.3 275 CMBS 1,285,594 22,627 4,834 1,303,387 3.4 — U.S. government 1,953,436 12,089 21,933 1,943,592 5.1 — State and political subdivisions 647,727 59,997 4,296 703,428 1.8 — Other foreign government 3,254,695 154,507 8,075 3,401,127 8.9 — Total fixed maturity securities $ 35,281,412 $ 2,982,754 $ 113,346 $ 38,150,820 100.0 % $ 275 Non-redeemable preferred stock $ 41,553 $ 479 $ 2,226 $ 39,806 39.7 % Other equity securities 61,288 479 1,421 60,346 60.3 Total equity securities $ 102,841 $ 958 $ 3,647 $ 100,152 100.0 % The Company enters into various collateral arrangements with counterparties that require both the pledging and acceptance of fixed maturity securities as collateral. Pledged fixed maturity securities are included in fixed maturity securities, available-for-sale in the consolidated balance sheets. Fixed maturity securities received as collateral are held in separate custodial accounts and are not recorded on the Company’s consolidated balance sheets. Subject to certain constraints, the Company is permitted by contract to sell or repledge collateral it receives; however, as of December 31, 2018 and 2017 , none of the collateral received had been sold or repledged. The Company also holds assets in trust to satisfy collateral requirements under derivative transactions and certain third-party reinsurance treaties. The following table includes fixed maturity securities pledged and received as collateral and assets in trust held to satisfy collateral requirements under derivative transactions and certain third-party reinsurance treaties as of December 31, 2018 and 2017 (dollars in thousands): 2018 2017 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Fixed maturity securities pledged as collateral $ 80,891 $ 83,950 $ 72,542 $ 75,622 Fixed maturity securities received as collateral n/a 616,584 n/a 590,417 Assets in trust held to satisfy collateral requirements 20,072,735 20,366,170 15,584,296 16,715,281 The Company monitors its concentrations of financial instruments on an ongoing basis and mitigates credit risk by maintaining a diversified investment portfolio that limits exposure to any one issuer. The Company’s exposure to concentrations of credit risk from single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government and its agencies, as well as the securities disclosed below, as of December 31, 2018 and 2017 (dollars in thousands): 2018 2017 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Fixed maturity securities guaranteed or issued by: Canadian province of Quebec $ 1,091,018 $ 1,757,087 $ 1,119,337 $ 1,917,996 Canadian province of Ontario 913,642 1,187,526 939,837 1,282,944 The amortized cost and estimated fair value of fixed maturity securities classified as available-for-sale as of December 31, 2018 are shown by contractual maturity in the table below (dollars in thousands). Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset and mortgage-backed securities are shown separately in the table below, as they are not due at a single maturity date. Amortized Cost Estimated Fair Value Available-for-sale: Due in one year or less $ 1,185,868 $ 1,190,931 Due after one year through five years 8,760,200 8,851,307 Due after five years through ten years 9,060,972 9,149,497 Due after ten years 14,403,523 15,363,152 Asset and mortgage-backed securities 5,471,605 5,437,459 Total $ 38,882,168 $ 39,992,346 Corporate Fixed Maturity Securities The tables below show the major industry types of the Company’s corporate fixed maturity holdings as of December 31, 2018 and 2017 (dollars in thousands): December 31, 2018: Amortized Cost Estimated Fair Value % of Total Finance $ 8,793,742 $ 8,730,568 36.3 % Industrial 12,336,857 12,342,111 51.6 Utility 2,875,808 2,909,440 12.1 Total $ 24,006,407 $ 23,982,119 100.0 % December 31, 2017: Amortized Cost Estimated Fair Value % of Total Finance $ 7,977,885 $ 8,362,774 36.1 % Industrial 11,535,166 12,199,333 52.5 Utility 2,453,752 2,648,861 11.4 Total $ 21,966,803 $ 23,210,968 100.0 % Other-Than-Temporary Impairments—Fixed Maturity Securities As discussed in Note 2 – “Significant Accounting Policies and Pronouncements,” a portion of certain other-than-temporary impairment (“OTTI”) losses on fixed maturity securities is recognized in AOCI. For these securities, the net amount recognized in the consolidated statements of income (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in AOCI. The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in AOCI, and the corresponding changes in such amounts (dollars in thousands): 2018 2017 2016 Balance, beginning of period $ 3,677 $ 6,013 $ 7,284 Additional impairments - credit loss OTTI recognized on securities previously impaired — — 231 Credit loss impairments previously recognized on securities impaired to fair value during the period — (2,336 ) — Credit loss previously recognized on securities that matured, paid down, prepaid or were sold during the period — — (1,502 ) Balance, end of period $ 3,677 $ 3,677 $ 6,013 Unrealized Losses for Fixed Maturity and Equity Securities Available-for-Sale The following table presents the total gross unrealized losses for the 3,109 fixed maturity securities as of December 31, 2018, where the estimated fair value had declined and remained below amortized cost by the indicated amount (dollars in thousands): 2018 Gross Unrealized Losses % of Total Less than 20% $ 721,015 96.3 % 20% or more for less than six months 21,336 2.9 20% or more for six months or greater 6,139 0.8 Total $ 748,490 100.0 % The following table presents the total gross unrealized losses for the 1,116 fixed maturity and equity securities as of December 31, 2017, where the estimated fair value had declined and remained below amortized cost by the indicated amount (dollars in thousands): 2017 Gross Unrealized Losses % of Total Less than 20% $ 113,466 97.0 % 20% or more for less than six months 689 0.6 20% or more for six months or greater 2,838 2.4 Total $ 116,993 100.0 % The Company’s determination of whether a decline in value is other-than-temporary includes an analysis of the underlying credit and the extent and duration of a decline in value. The Company’s credit analysis of an investment includes determining whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment. In the Company’s impairment review process, the duration and severity of an unrealized loss position for equity securities are given greater weight and consideration given the lack of contractual cash flows or deferability features. The following table presents the estimated fair values and gross unrealized losses, including other-than-temporary impairment losses reported in AOCI, for 3,109 fixed maturity securities that have estimated fair values below amortized cost as of December 31, 2018 (dollars in thousands). These investments are presented by class and grade of security, as well as the length of time the related fair value has remained below amortized cost. Less than 12 months 12 months or greater Total December 31, 2018: Estimated Fair Value Gross Unrealized Losses Estimated Gross Estimated Gross Investment grade securities: Corporate $ 8,505,371 $ 302,604 $ 3,611,266 $ 195,082 $ 12,116,637 $ 497,686 Canadian government 25,169 419 131,806 1,612 156,975 2,031 RMBS 269,558 2,488 836,741 22,760 1,106,299 25,248 ABS 1,102,677 24,271 381,609 8,523 1,484,286 32,794 CMBS 384,259 4,304 414,719 13,930 798,978 18,234 U.S. government 8,616 80 1,086,694 57,787 1,095,310 57,867 State and political subdivisions 103,504 1,538 157,330 7,472 260,834 9,010 Other foreign government 789,859 24,509 472,934 17,446 1,262,793 41,955 Total investment grade securities 11,189,013 360,213 7,093,099 324,612 18,282,112 684,825 Below investment grade securities: Corporate 755,679 42,760 122,559 14,646 878,238 57,406 Canadian government 443 34 1,770 243 2,213 277 RMBS — — 1,026 34 1,026 34 ABS — — 1,063 35 1,063 35 Other foreign government 128,725 5,574 7,479 339 136,204 5,913 Total below investment grade securities 884,847 48,368 133,897 15,297 1,018,744 63,665 Total fixed maturity securities $ 12,073,860 $ 408,581 $ 7,226,996 $ 339,909 $ 19,300,856 $ 748,490 The following table presents the estimated fair values and gross unrealized losses, including other-than-temporary impairment losses reported in AOCI, for 1,116 fixed maturity and equity securities that have estimated fair values below amortized cost as of December 31, 2017 (dollars in thousands): Less than 12 months 12 months or greater Total December 31, 2017: Estimated Gross Estimated Gross Estimated Gross Investment grade securities: Corporate $ 1,886,212 $ 17,099 $ 1,009,750 $ 28,080 $ 2,895,962 $ 45,179 Canadian government 18,688 91 111,560 1,596 130,248 1,687 RMBS 566,699 5,852 224,439 6,004 791,138 11,856 ABS 434,274 2,707 168,524 2,434 602,798 5,141 CMBS 220,401 1,914 103,269 2,920 323,670 4,834 U.S. government 800,298 6,177 767,197 15,756 1,567,495 21,933 State and political subdivisions 43,510 242 68,666 4,054 112,176 4,296 Other foreign government 369,717 2,707 191,265 4,704 560,982 7,411 Total investment grade securities 4,339,799 36,789 2,644,670 65,548 6,984,469 102,337 Below investment grade securities: Corporate 194,879 3,317 75,731 6,933 270,610 10,250 Canadian government 1,995 20 — — 1,995 20 RMBS — — 1,369 22 1,369 22 ABS — — 1,489 53 1,489 53 Other foreign government 28,600 113 15,134 551 43,734 664 Total below investment grade securities 225,474 3,450 93,723 7,559 319,197 11,009 Total fixed maturity securities $ 4,565,273 $ 40,239 $ 2,738,393 $ 73,107 $ 7,303,666 $ 113,346 Non-redeemable preferred stock $ 82 $ 1 $ 26,471 $ 2,225 $ 26,553 $ 2,226 Other equity securities 5,820 1,023 47,251 398 53,071 1,421 Total equity securities $ 5,902 $ 1,024 $ 73,722 $ 2,623 $ 79,624 $ 3,647 The Company has no intention to sell, nor does it expect to be required to sell, the securities outlined in the table above, as of the dates indicated. However, unforeseen facts and circumstances may cause the Company to sell fixed maturity securities in the ordinary course of managing its portfolio to meet certain diversification, credit quality and liquidity guidelines. Changes in unrealized losses are primarily driven by changes in interest rates. Investment Income, Net of Related Expenses Major categories of investment income, net of related expenses, consist of the following (dollars in thousands): 2018 2017 2016 Fixed maturity securities available-for-sale $ 1,528,086 $ 1,401,585 $ 1,285,406 Equity securities 4,343 4,445 12,513 Mortgage loans on real estate 214,387 197,755 168,582 Policy loans 59,332 60,617 63,837 Funds withheld at interest 309,977 457,774 368,728 Short-term investments and cash and cash equivalents 14,349 7,171 8,051 Other invested assets 98,557 106,015 76,858 Investment income 2,229,031 2,235,362 1,983,975 Investment expense (90,506 ) (80,711 ) (72,089 ) Investment income, net of related expenses $ 2,138,525 $ 2,154,651 $ 1,911,886 Investment Related Gains (Losses), Net Investment related gains (losses), net, consist of the following (dollars in thousands): 2018 2017 2016 Fixed maturity securities available-for-sale: Other-than-temporary impairment losses $ (28,494 ) $ (42,639 ) $ (38,805 ) Portion of loss recognized in accumulated other comprehensive income — — 74 Gain on investment activity 65,211 110,546 145,172 Loss on investment activity (158,870 ) (37,328 ) (47,094 ) Equity securities: Other-than-temporary impairment losses — (1,202 ) — Gain on investment activity 4,429 23 9,198 Loss on investment activity (1,937 ) (4,351 ) (2,871 ) Change in unrealized gains (losses) recognized in earnings (23,184 ) — — Other impairment losses and change in mortgage loan provision (11,919 ) (9,497 ) (11,006 ) Derivatives and other, net (15,324 ) 152,328 39,527 Total investment related gains (losses), net $ (170,088 ) $ 167,880 $ 94,195 The other-than-temporary impairment losses on fixed maturity securities for 2018, 2017 and 2016 are primarily due to emerging market and high-yield debt exposures. The fluctuations in investment related gains (losses) for derivatives and other are primarily due to changes in the fair value of embedded derivatives related to modco and funds withheld treaties, as a result of changes in interest rates, driven primarily by credit spreads. These fluctuations were partially offset by changes in the fair value of free-standing derivatives as a result of changes in value of underlying stock indices, movements in credit and inflation spreads, and changes in interest rates. As of December 31, 2018 and 2017 , the Company held non-income producing securities with amortized costs of $41.3 million and $38.8 million , and estimated fair values of $42.7 million and $39.3 million , respectively. Generally, securities are non-income producing when principal or interest is not paid primarily as a result of bankruptcies or credit defaults, but also include securities where amortization has been discontinued. During 2018, 2017 and 2016 , the Company sold fixed maturity securities with fair values of $5,784.6 million , $2,550.1 million , and $1,055.5 million at losses of $158.9 million , $37.3 million and $47.1 million , respectively. During 2018, 2017 and 2016 , the Company sold equity securities with fair values of $32.8 million , $177.7 million , and $126.1 million at losses of $1.9 million , $4.4 million and $2.9 million , respectively. The Company generally does not engage in short-term buying and selling of securities. Securities Borrowing, Lending and Repurchase Agreements The following table includes the amount of borrowed securities, securities lent and securities collateral received as part of the securities lending program, repurchased/reverse repurchased securities pledged and received and cash received as of December 31, 2018 and 2017 (dollars in thousands): 2018 2017 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Borrowed securities $ 335,781 $ 366,663 $ 358,875 $ 377,820 Securities lending: Securities loaned 101,981 102,618 117,246 121,551 Securities received n/a 112,000 n/a 128,000 Repurchase program/reverse repurchase program: Securities pledged 554,806 554,589 413,819 428,344 Securities received n/a 530,932 n/a 417,550 The Company also held cash collateral for securities lending and the repurchase program/reverse repurchase programs of $28.6 million and $31.2 million as of December 31, 2018 and 2017 , respectively. No cash or securities have been pledged by the Company for its securities borrowing program as of December 31, 2018 and 2017 . The following tables present information on the Company’s securities lending and repurchase transactions as of December 31, 2018 and 2017 , respectively (dollars in thousands). Collateral associated with certain borrowed securities is not included within the tables as the collateral pledged to each counterparty is the right to reinsurance treaty cash flows. December 31, 2018 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater than 90 Days Total Securities lending transaction: Corporate $ — $ — $ — $ 102,618 $ 102,618 Total — — — 102,618 102,618 Repurchase transactions: Corporate — — — 254,151 254,151 U.S. government — — — 221,572 221,572 Foreign government — — — 78,866 78,866 Total — — — 554,589 554,589 Total transactions $ — $ — $ — $ 657,207 $ 657,207 Gross amount of recognized liabilities for securities lending and repurchase transactions in preceding table $ 671,492 Amounts related to agreements not included in offsetting disclosure $ 14,285 December 31, 2017 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater than 90 Days Total Securities lending transaction: Corporate $ — $ — $ — $ 121,551 $ 121,551 Total — — — 121,551 121,551 Repurchase transactions: Corporate — — 312 184,334 $ 184,646 U.S. government — — — 220,765 220,765 Foreign government — — — 21,802 21,802 Other 1,131 — — — 1,131 Total 1,131 — 312 426,901 428,344 Total transactions $ 1,131 $ — $ 312 $ 548,452 $ 549,895 Gross amount of recognized liabilities for repurchase transactions in preceding table $ 576,786 Amounts related to agreements not included in offsetting disclosure $ 26,891 The Company has elected to offset amounts recognized as receivables and payables resulting from the repurchase/reverse repurchase programs. After the effect of offsetting, the net amount presented on the consolidated balance sheets was a liability of $0.4 million and $1.1 million as of December 31, 2018 and 2017 , respectively. As of December 31, 2018 and 2017 , the Company recognized payables resulting from cash received as collateral associated with a repurchase agreement as discussed above. Amounts owed to and due from the counterparties may be settled in cash or offset, in accordance with the agreements. Mortgage Loans on Real Estate Mortgage loans represented approximately 9.1% and 8.5% of the Company’s total investments as of December 31, 2018 and 2017 , respectively. As of December 31, 2018 , mortgage loans were geographically dispersed throughout the U.S. with the largest concentrations in California ( 18.7% ), Texas ( 10.9% ) and Washington ( 7.4% ) and include loans secured by properties in Canada ( 2.7% ) and United Kingdom ( 0.1% ). The recorded investment in mortgage loans on real estate presented below is gross of unamortized deferred loan origination fees and expenses, and valuation allowances. The distribution of mortgage loans by property type is as follows as of December 31, 2018 and 2017 (dollars in thousands): 2018 2017 Carrying Value Percentage of Total Carrying Value Percentage of Total Property type: Office building $ 1,725,748 34.6 % $ 1,487,392 33.6 % Retail 1,432,394 28.7 1,270,676 28.8 Industrial 961,924 19.3 938,612 21.3 Apartment 571,291 11.5 510,052 11.6 Other commercial 291,997 5.9 206,439 4.7 Recorded investment $ 4,983,354 100.0 % $ 4,413,171 100.0 % Unamortized balance of loan origination fees and expenses (5,770 ) (3,254 ) Valuation allowances (11,286 ) (9,384 ) Total mortgage loans on real estate $ 4,966,298 $ 4,400,533 The maturities of the mortgage loans as of December 31, 2018 and 2017 are as follows (dollars in thousands): 2018 2017 Recorded Investment % of Total Recorded Investment % of Total Due within five years $ 1,425,598 28.6 % $ 1,091,066 24.8 % Due after five years through ten years 2,686,264 53.9 2,516,872 57.0 Due after ten years 871,492 17.5 805,233 18.2 Total $ 4,983,354 100.0 % $ 4,413,171 100.0 % The following tables set forth certain key credit quality indicators of the Company’s recorded investment in mortgage loans as of December 31, 2018 and 2017 (dollars in thousands): Recorded Investment Debt Service Ratios Construction loans >1.20x 1.00x - 1.20x <1.00x Total % of Total December 31, 2018: Loan-to-Value Ratio 0% - 59.99% $ 2,410,556 $ 61,246 $ 38,177 $ 13,691 $ 2,523,670 50.6 % 60% - 69.99% 1,618,374 73,908 38,120 18,929 1,749,331 35.1 70% - 79.99% 414,269 48,438 54,440 — 517,147 10.4 Greater than 80% 117,978 49,668 25,560 — 193,206 3.9 Total $ 4,561,177 $ 233,260 $ 156,297 $ 32,620 $ 4,983,354 100.0 % Recorded Investment Debt Service Ratios Construction loans >1.20x 1.00x - 1.20x <1.00x Total % of Total December 31, 2017: Loan-to-Value Ratio 0% - 59.99% $ 2,148,428 $ 53,979 $ 3,801 $ — $ 2,206,208 50.0 % 60% - 69.99% 1,517,029 47,128 43,921 — 1,608,078 36.4 70% - 79.99% 396,446 19,461 15,367 — 431,274 9.8 Greater than 80% 120,850 30,713 6,362 9,686 167,611 3.8 Total $ 4,182,753 $ 151,281 $ 69,451 $ 9,686 $ 4,413,171 100.0 % The age analysis of the Company’s past due recorded investments in mortgage loans as of December 31, 2018 and 2017 (dollars in thousands): 2018 2017 31-60 days past due $ — $ 17,100 61-90 days past due — 2,056 Total past due — 19,156 Current 4,983,354 4,394,015 Total $ 4,983,354 $ 4,413,171 The following table presents the recorded investment in mortgage loans, by method of measuring impairment, and the related valuation allowances, as of December 31, 2018 and 2017 (dollars in thousands): 2018 2017 Mortgage loans: Individually measured for impairment $ 30,635 $ 5,858 Collectively measured for impairment 4,952,719 4,407,313 Recorded investment $ 4,983,354 $ 4,413,171 Valuation allowances: Individually measured for impairment $ — $ — Collectively measured for impairment 11,286 9,384 Total valuation allowances $ 11,286 $ 9,384 Information regarding the Company’s loan valuation allowances for mortgage loans as of December 31, 2018, 2017 and 2016 are as follows (dollars in thousands): 2018 2017 2016 Balance, beginning of period $ 9,384 $ 7,685 $ 6,813 Provision 1,918 1,691 872 Translation adjustment (16 ) 8 — Balance, end of period $ 11,286 $ 9,384 $ 7,685 Information regarding the portion of the Company’s mortgage loans that were impaired as of December 31, 2018 and 2017 is as follows (dollars in thousands): Unpaid Principal Balance Recorded Investment Related Allowance Carrying Value December 31, 2018: Impaired mortgage loans with no valuation allowance recorded $ 30,660 $ 30,635 $ — $ 30,635 Impaired mortgage loans with valuation allowance recorded — — — — Total impaired mortgage loans $ 30,660 $ 30,635 $ — $ 30,635 December 31, 2017: Impaired mortgage loans with no valuation allowance recorded $ 6,427 $ 5,858 $ — $ 5,858 Impaired mortgage loans with valuation allowance recorded — — — — Total impaired mortgage loans $ 6,427 $ 5,858 $ — $ 5,858 The Company’s average investment balance of impaired mortgage loans and the related interest income are reflected in the table below for the years ended December 31, 2018, 2017 and 2016 (dollars in thousands): 2018 2017 2016 Average Investment (1) Interest Income Average Investment (1) Interest Income Average Investment (1) Interest Income Impaired mortgage loans with no valuation allowance recorded $ 24,240 $ 1,129 $ 3,621 $ 186 $ 2,249 $ 142 Impaired mortgage loans with valuation allowance recorded — — — — — — Total $ 24,240 $ 1,129 $ 3,621 $ 186 $ 2,249 $ 142 (1) Average recorded investment represents the average loan balances as of the beginning of period and all subsequent quarterly end of period balances. The Company did not acquire any impaired mortgage loans during the years ended December 31, 2018 and 2017 . The Company had no mortgage loans that were on a nonaccrual status as of December 31, 2018 and 2017 . Policy Loans Policy loans comprised approximately 2.5% and 2.6% of the Company’s total investments as of December 31, 2018 and 2017 , respectively, the majority of which are associated with one client. These policy loans present no credit risk because the amount of the loan cannot exceed the obligation due to the ceding company upon the death of the insured or surrender of the underlying policy. The provisions of the treaties in force and the underlying policies determine the policy loan interest rates. The Company earns a spread between the interest rate earned on policy loans and the interest rate credited to corresponding liabilities. Funds Withheld at Interest Funds withheld at interest comprised approximately 10.6% and 11.8% of the Company’s total investments as of December 31, 2018 and 2017 , respectively. Of the $5.8 billion funds withheld at interest balance, net of embedded derivatives, as of December 31, 2018 , $3.8 billion of the balance is associated with one client. For reinsurance agreements written on a modco basis and certain agreements written on a coinsurance funds withheld basis, assets equal to the net statutory reserves are withheld and legally owned and managed by the ceding company and are reflected as funds withheld at interest on the Company’s consolidated balance sheets. In the event of a ceding company’s insolvency, the Company would need to assert a claim on the assets supporting its reserve liabilities. However, the risk of loss to the Company is mitigated by its ability to offset amounts it owes the ceding company for claims or allowances against amounts owed to the Company from the ceding company. Other Invested Assets Other invested assets include limited partnership interests, joint ventures (other than operating joint ventures), equity release mortgages, derivative contracts and fair value option (“FVO”) contractholder-directed unit-linked investments. Other invested assets also include Federal Home Loan Bank of Des Moines (“FHLB”) common stock, which is included in Other in the table below. Other invested assets represented approximately 3.5% and 2.9% of the Company’s total investments as of December 31, 2018 and 2017 , respectively. Carrying values of these assets as of December 31, 2018 and 2017 are as follows (dollars in thousands): 2018 2017 Limited partnership interests and real estate joint ventures $ 965,094 $ 781,124 Equity release mortgages 475,905 219,940 Derivatives 180,699 137,613 FVO contractholder-directed unit-linked investments 197,770 218,541 Other 95,829 148,114 Total other invested assets $ 1,915,297 $ 1,505,332 |