The fair value of our total investments increased $4.8 billion during 2010, primarily due to unrealized appreciation, the investing of operating cash flows, and the portfolios acquired in the 2010 corporate acquisitions.
The following tables show the market value of our fixed maturities and short-term investments at December 31, 2010 and 2009.
The first table lists investments according to type and the second according to S&P credit rating.
## Table 0 ##
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (continued) ACE LIMITED AND SUBSIDIARIES b) Shares issued, outstanding, authorized, and conditional The following table presents a roll-forward of changes in Common Shares issued and outstanding for the years ended December 31, 2010, 2009, and 2008.
## Table 1 ##
During December 2010, ACE repurchased 4,926,082 Common Shares in a series of open market transactions.
The cost of these shares, which were placed in treasury, totaled $303 million.
ACE repurchased these Common Shares to partially offset potential dilution from the exercise of stock options and the granting of restricted stock under share-based compensation plans.
Common Shares in treasury are used principally for issuance upon the exercise of employee stock options, for issuance of restricted stock, and for purchases under the ESPP.
At December 31, 2010 and 2009, 6,151,707 and 1,316,959 Common Shares, respectively, remain in treasury after net shares redeemed under employee share-based compensation plans.
Common Shares issued to employee trust are issued by the Company to a rabbi trust for deferred compensation obligations as discussed in Note 12 f) below.
Authorized Share Capital for General Purposes The Board has shareholder-approved authority as set forth in the Articles of Association to increase for general purposes the Company’s share capital from time to time through May 19, 2012, by the issuance of up to 140,000,000 fully paid up Common Shares, with a par value equal to the par value of ACE’s Common Shares as set forth in the Articles of Association at the time of any such issuance.
It is expected that the Company will seek shareholder approval in 2012 for a new pool of authorized share capital for general purposes to replace the existing 140,000,000 share pool when it expires.
Conditional share capital for bonds and similar debt instruments The share capital of the Company may be increased through the issuance of a maximum of 33,000,000 fully paid up Common Shares with a par value of CHF 30.57 each through the exercise of conversion and/or option or warrant rights granted in connection with bonds, notes, or similar instruments, issued or to be issued by the Company, including convertible debt instruments.
Conditional share capital for employee benefit plans The share capital of the Company may be increased through the issuance of a maximum of 27,148,782 fully paid up Common Shares with a par value of CHF 30.57 each in connection with the exercise of option rights granted to any employee of the Company, and any consultant, director, or other person providing services to the Company.
c) ACE Limited securities repurchase authorization In November 2010, the Board authorized the repurchase of up to $600 million of ACE’s Common Shares through December 31, 2012.
This authorization was granted to allow ACE to repurchase Common Shares to partially offset potential dilution from the exercise of stock options and the granting of restricted stock under share-based compensation plans.
Such repurchases may be made in the open market, in privately negotiated transactions, block trades, accelerated repurchases and/ or through option or other forward transactions.
As discussed above, $303 million of this authorization was utilized during December 2010.
The following table provides the historical cash flows under these policies for the periods indicated.
The amounts represent accrued past premium received and claims paid, split by benefit type.
## Table 2 ##
Death Benefits (GMDB) For premiums and claims from VA contracts reinsuring GMDBs, at current market levels, we expect approximately $105 million of claims and $91 million of premium on death benefits over the next 12 months.
Guaranteed Living Benefits (includes GMIB and GMAB) Premiums and claims from VA contracts reinsuring predominantly Guaranteed Minimum Income Benefits (GMIB) and Guaranteed Minimum Accumulation Benefits (GMAB) are collectively known as “Guaranteed Living Benefits (GLB)”.
Substantially all of our living benefit reinsurance clients’ policyholders are currently ineligible to trigger a claim payment.
The vast majority of these policyholders become eligible in years 2013 and beyond.
At current market levels, we expect approximately $1 million of claims and $149 million of premium on living benefits over the next 12 months.
Collateral In order for its U. S. -domiciled clients to obtain statutory reserve credit, ACE Tempest Life Re holds collateral on behalf of its clients in the form of qualified assets in trust or letters of credit, in an amount sufficient for them to obtain statutory reserve credit.
The timing of the calculation and amount of the collateral varies by client according to the particulars of the reinsurance treaty and the statutory reserve guidelines of the client’s state of domicile.
Refer to Note 4 i) to the Consolidated Financial Statements.
Goodwill Impairment Goodwill, which represents the excess of acquisition cost over the estimated fair value of net assets acquired, was $4 billion at December 31, 2010.
During 2010, our goodwill balance increased by approximately six percent, primarily due to acquisitions and foreign exchange movements at the legal entity level.
Goodwill is not amortized but is subject to a periodic evaluation for impairment at least annually, or earlier if there are any indications of possible impairment.
The impairment evaluation involves a two-step process in which an initial assessment for potential impairment is performed and, if a potential impairment is present, the amount of impairment is measured and recorded.
Impairment is tested at the reporting unit level.
Goodwill is assigned to applicable reporting units of acquired entities at acquisition.
The most significant reporting units are: ?
North American and International divisions of Combined Insurance acquired in 2008; ?
Domestic and International divisions of ACE INA acquired in 1999; and ?
ACE Tempest Re’s catastrophe businesses acquired in 1996 and 1998.
There are other reporting units that resulted from smaller acquisitions that are also assessed annually.
Based on our impairment testing for 2010, we determined that no impairment was required and that none of our reporting units were at risk for failing the initial impairment testing step.
To estimate the fair value of a reporting unit, we consistently applied a combination of the following models: an earnings multiple, a book value multiple, a discounted cash flow or an allocated market capitalization.
The earning
General experienced net favorable prior period development of $290 million, $255 million, and $304 million in 2010, 2009, and 2008, respectively.
Refer to “Prior Period Development” for more information.
The adjusted loss and loss expense ratio for 2010 decreased primarily due to improved current accident year loss experience compared with the prior year periods in our retail business, partially offset by an increase in current year accident losses in our wholesale business.
Insurance – Overseas General’s policy acquisition cost ratio increased in 2010, compared with 2009, primarily due to changes in mix of business, and the impact of catastrophe-related reinstatement premiums expensed.
Insurance – Overseas General’s administrative expense ratio increased in 2010, primarily due to the impact of reinstatement premiums expensed, and reduced wholesale earned premiums.
Insurance – Overseas General’s policy acquisition cost ratio increased in 2009, compared with 2008, primarily due to lower net premiums earned in the retail A&H business, without a commensurate reduction in advertising costs, which are generally deferred and amortized over a longer period than the related premium.
Insurance – Overseas General’s administrative expense ratio increased in 2009, primarily due to the inclusion of Combined Insurance for the full year.
Global Reinsurance The Global Reinsurance segment represents ACE’s reinsurance operations comprising ACE Tempest Re Bermuda, ACE Tempest Re USA, ACE Tempest Re International, and ACE Tempest Re Canada.
Global Reinsurance markets its reinsurance products worldwide under the ACE Tempest Re brand name and provides a broad range of coverage to a diverse array of primary P&C companies.
## Table 3 ##
Global Reinsurance reported an increase in net premiums written in 2010, compared with 2009, primarily due to a significant new workers’ compensation treaty recorded during 2010 in our U. S.  operation, partially offset by generally competitive conditions across most of Global Reinsurance’s product lines and regions of operations.
Net premiums written increased in 2009, compared with 2008, primarily due to P&C production growth in the U. S. , Canada, and Bermuda.

<table><tr><td></td><td>2010</td><td>2009</td></tr><tr><td>(in millions of U.S. dollars, except for percentages)</td><td>Market Value</td><td>Percentage of Total</td><td>Market Value</td><td>Percentageof Total</td></tr><tr><td>Treasury</td><td>$2,075</td><td>4%</td><td>$2,068</td><td>5%</td></tr><tr><td>Agency</td><td>2,015</td><td>4%</td><td>2,698</td><td>6%</td></tr><tr><td>Corporate and asset-backed securities</td><td>15,900</td><td>33%</td><td>13,537</td><td>30%</td></tr><tr><td>Mortgage-backed securities</td><td>12,362</td><td>25%</td><td>11,311</td><td>25%</td></tr><tr><td>Municipal</td><td>2,449</td><td>5%</td><td>2,300</td><td>5%</td></tr><tr><td>Non-U.S.</td><td>12,199</td><td>25%</td><td>11,172</td><td>25%</td></tr><tr><td>Short-term investments</td><td>1,983</td><td>4%</td><td>1,667</td><td>4%</td></tr><tr><td>Total</td><td>$48,983</td><td>100%</td><td>$44,753</td><td>100%</td></tr><tr><td>AAA</td><td>$23,718</td><td>48%</td><td>$22,884</td><td>51%</td></tr><tr><td>AA</td><td>4,714</td><td>10%</td><td>4,021</td><td>9%</td></tr><tr><td>A</td><td>8,482</td><td>17%</td><td>7,461</td><td>17%</td></tr><tr><td>BBB</td><td>5,487</td><td>11%</td><td>4,910</td><td>11%</td></tr><tr><td>BB</td><td>3,357</td><td>7%</td><td>2,866</td><td>6%</td></tr><tr><td>B</td><td>2,393</td><td>5%</td><td>2,029</td><td>5%</td></tr><tr><td>Other</td><td>832</td><td>2%</td><td>582</td><td>1%</td></tr><tr><td>Total</td><td>$48,983</td><td>100%</td><td>$44,753</td><td>100%</td></tr></table>
<table><tr><td></td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Shares issued, beginning of year</td><td>337,841,616</td><td>335,413,501</td><td>329,704,531</td></tr><tr><td>Shares issued, net</td><td>2,268,000</td><td>2,000,000</td><td>3,140,194</td></tr><tr><td>Exercise of stock options</td><td>984,943</td><td>168,720</td><td>2,365,401</td></tr><tr><td>Shares issued under ESPP</td><td>–</td><td>259,395</td><td>203,375</td></tr><tr><td>Shares issued, end of year</td><td>341,094,559</td><td>337,841,616</td><td>335,413,501</td></tr><tr><td>Common Shares in treasury, end of year</td><td>-6,151,707</td><td>-1,316,959</td><td>-1,768,030</td></tr><tr><td>Shares issued and outstanding, end of year</td><td>334,942,852</td><td>336,524,657</td><td>333,645,471</td></tr><tr><td> <i>Common Shares issued to employee trust</i></td><td></td><td></td><td></td></tr><tr><td>Balance, beginning of year</td><td>-101,481</td><td>-108,981</td><td>-117,231</td></tr><tr><td>Shares redeemed</td><td>–</td><td>7,500</td><td>8,250</td></tr><tr><td>Balance, end of year</td><td>-101,481</td><td>-101,481</td><td>-108,981</td></tr></table>
<table><tr><td>(in millions of U.S. dollars)</td><td>2010</td><td>2009</td></tr><tr><td> Death Benefits (GMDB)</td><td></td><td></td></tr><tr><td>Premium</td><td>$109</td><td>$108</td></tr><tr><td>Less paid claims</td><td>125</td><td>152</td></tr><tr><td>Net</td><td>$-16</td><td>$-44</td></tr><tr><td> Living Benefits (Includes GMIB and GMAB)</td><td></td><td></td></tr><tr><td>Premium</td><td>$162</td><td>$162</td></tr><tr><td>Less paid claims</td><td>4</td><td>5</td></tr><tr><td>Net</td><td>$158</td><td>$157</td></tr><tr><td> Total VA Guaranteed Benefits</td><td></td><td></td></tr><tr><td>Premium</td><td>$271</td><td>$270</td></tr><tr><td>Less paid claims</td><td>129</td><td>157</td></tr><tr><td>Net</td><td>$142</td><td>$113</td></tr></table>
<table><tr><td></td><td></td><td></td><td></td><td colspan="2">% change</td></tr><tr><td>(in millions of U.S. dollars, except for percentages)</td><td>2010</td><td>2009</td><td>2008</td><td>2010 vs.2009</td><td>2009 vs.2008</td></tr><tr><td>Net premiums written</td><td>$1,075</td><td>$1,038</td><td>$914</td><td>4%</td><td>14%</td></tr><tr><td>Net premiums earned</td><td>1,071</td><td>979</td><td>1,017</td><td>9%</td><td>-4%</td></tr><tr><td>Losses and loss expenses</td><td>518</td><td>330</td><td>524</td><td>57%</td><td>-37%</td></tr><tr><td>Policy acquisition costs</td><td>204</td><td>195</td><td>192</td><td>5%</td><td>2%</td></tr><tr><td>Administrative expenses</td><td>55</td><td>55</td><td>56</td><td>0%</td><td>-2%</td></tr><tr><td>Underwriting income</td><td>294</td><td>399</td><td>245</td><td>-26%</td><td>63%</td></tr><tr><td>Net investment income</td><td>288</td><td>278</td><td>309</td><td>4%</td><td>-10%</td></tr><tr><td>Net realized gains (losses)</td><td>93</td><td>-17</td><td>-163</td><td>NM</td><td>90%</td></tr><tr><td>Other (income) expense</td><td>-23</td><td>2</td><td>2</td><td>NM</td><td>0%</td></tr><tr><td>Income tax expense</td><td>42</td><td>46</td><td>30</td><td>-9%</td><td>53%</td></tr><tr><td>Net income</td><td>$656</td><td>$612</td><td>$359</td><td>7%</td><td>70%</td></tr><tr><td>Loss and loss expense ratio</td><td>48.4%</td><td>33.7%</td><td>51.5%</td><td></td><td></td></tr><tr><td>Policy acquisition cost ratio</td><td>19.0%</td><td>19.9%</td><td>18.8%</td><td></td><td></td></tr><tr><td>Administrative expense ratio</td><td>5.1%</td><td>5.6%</td><td>5.5%</td><td></td><td></td></tr><tr><td>Combined ratio</td><td>72.5%</td><td>59.2%</td><td>75.8%</td><td></td><td></td></tr></table>

Question: In which section the sum of Net premiums earned has the highest value?