THG 2018 Annual Report

asbestos, environmental and toxic tort liability reserves could be revised, and any such revisions could have a material adverse effect on our results of operations for a particular quarterly or annual period or on our financial position. Reinsurance 6HH ³5HLQVXUDQFH´ LQ ,WHP 1 ± Business for information on our reinsurance programs. INVESTMENTS The investments discussion below excludes amounts relating to the operations of Chaucer. INVESTMENT RESULTS Net investment income before income taxes was as follows: DECEMBER 31 2018 2017 2016 (dollars in millions) Fixed maturities $ 217.7 $ 205.8 $ 202.1 Limited partnerships 24.1 15.3 8.0 Equity securities 17.0 18.0 18.6 Mortgage loans 14.0 11.4 9.1 Other investments 4.8 3.4 3.4 Investment expenses (10.2) (10.0) (9.6) Net investment income $ 267.4 $ 243.9 $ 231.6 Earned yield, fixed maturities 3.62% 3.75% 3.99% Earned yield, total portfolio 3.74% 3.75% 3.85% The increase in net investment income in both 2018 and 2017 was primarily due to the investment of higher operational cash flows, partially offset by the impact of lower fixed income new money yields that, while increasing from recent lower levels, were below that of average embedded investments. Also, net investment income included higher limited partnership and commercial mortgage loan income in both years. INVESTMENT PORTFOLIO We held cash and investment assets diversified across several asset classes, as follows: DECEMBER 31 2018 2017 (dollars in millions) Carrying Value % of Total Carrying Value Carrying Value % of Total Carrying Value Fixed maturities, at fair value $ 6,161.5 74.1% $ 5,749.3 80.0% Equity securities, at fair value 464.4 5.6 576.2 8.0 Mortgage and other loans 405.7 4.9 365.8 5.1 Other investments 255.8 3.1 196.9 2.7 Cash and cash equivalents 1,020.7 12.3 297.9 4.2 Total cash and investments, excluding Chaucer $ 8,308.1 100.0% $ 7,186.1 100.0% 55 2018 ANNUAL REPORT | THE HANOVER INSURANCE GROUP