Investments

The following table presents gains (losses) due to changes in fair value of investments that are measured at fair value pursuant to application of the fair value option:



	Year Ended December 31,
	2012		2011			2010
	(Amounts in thousands)
Fixed maturity securities	$	36,317	$	62,149		$	967
Equity securities	9,158		(30,879		)	45,659
Short-term investments	34		19			(46		)
Total	$	45,509	$	31,289		$	46,580

A summary of net realized investment gains is as follows:



	Year Ended December 31,
	2012			2011			2010
	(Amounts in thousands)
Net realized gains (losses) from investments and other liabilities:
Fixed maturity securities	$	47,707		$	54,112		$	5,909
Equity securities	16,679			(4,854		)	46,547
Short-term investments	(686		)	139			18
Options	2,680			9,000			4,615
Total	$	66,380		$	58,397		$	57,089

Gross gains and losses realized on the sales of investments, excluding options, are shown below:



	Year Ended December 31,
	2012								2011								2010
	(Amounts in thousands)
	Gross Realized Gains		Gross Realized Losses			Net			Gross Realized Gains		Gross Realized Losses			Net			Gross Realized Gains		Gross Realized Losses			Net
Fixed maturity securities	$	11,473	$	(83	)	$	11,390		$	2,675	$	(10,712	)	$	(8,037	)	$	8,754	$	(3,812	)	$	4,942
Equity securities	19,538		(12,017		)	7,521			41,872		(15,847		)	26,025			16,793		(15,905		)	888
Short-term investments	2		(722		)	(720		)	120		0			120			64		0			64

Contractual Maturity

At December 31, 2012, fixed maturity holdings rated below investment grade and non-rated comprised 2.8% of total investments at fair value. Additionally, the Company owns securities that are credit enhanced by financial guarantors that are subject to uncertainty related to market perception of the guarantors’ ability to perform. Determining the estimated fair value of municipal bonds could become more difficult should markets for these securities become illiquid. The estimated fair values at December 31, 2012 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Estimated Fair Value
	(Amounts in thousands)
Fixed maturity securities:
Due in one year or less	$	79,344
Due after one year through five years	332,642
Due after five years through ten years	529,997
Due after ten years	1,466,371
Total	$	2,408,354

Investment Income

A summary of net investment income is shown in the following table:



	Year Ended December 31,
	2012			2011			2010
	(Amounts in thousands)
Fixed maturity securities	$	117,557		$	130,895		$	136,345
Equity securities	15,831			10,869			8,435
Short-term investments	2,073			1,747			1,413
Total investment income	$	135,461		$	143,511		$	146,193
Less: investment expense	(3,565		)	(2,564		)	(2,379		)
Net investment income	$	131,896		$	140,947		$	143,814