These events combined with unrealized capital losses
from the equity portfolio caused a significant decline in surplus.
Unrealized capital losses
were extraordinary in 2015 at $7.7 billion.
However, policyholders' sutplus remained flat from its 2014 position, due to increased stockholder divdends, other changes in surplus and unrealized capital losses
Consistent with risk-seeking investors ' preference for high-volatility stocks in the loss domain, we find that the negative relationship between idiosyncratic volatility and stock returns is concentrated in stocks with unrealized capital losses
, but is nonexistent in stocks with unrealized capital gains.
"Therefore, although the market value of insurers' fixed income holdings would decrease due to the rise in rates, likely leading to unrealized capital losses
, insurers would not need to crystallize losses to meet heightened redemptions," the report states.
Insurers' $17.2 billion in unrealized capital gains on investments through nine-months 2012 constituted a $30 billion positive swing from their $12.7 billion in unrealized capital losses
through nine-months 2011.
Third, widening credit spreads in the investment world led to significant amounts of unrealized capital losses
on older assets, even for securities without a "true" credit problem.
After two years of lower than normal capital gains and large unrealized capital losses
from investments, the capital gains in 2003 were large and supplied one half of the record $63.3 million increase in surplus achieved in 2003.
will be able to process the amount of unrealized capital losses
on its shares by the planned merger with its second-tier regional banking subsidiary Wakashio Bank.
Currently, stock market volatility is said to affect banks' capital directly because 60% of unrealized capital losses
must be charged off.
Reflecting the net loss after taxes and unrealized capital losses
on investments, the industry's surplus declined 8.7 percent to $289.6 billion at year-end 2001, from $317.4 billion at year-end 2000.