The following selected financial data should be read in conjunction with the Consolidated Financial Statements, including the related Notes, and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Balance sheet data reflect the acquisition of World-Wide Holdings on December 31, 2001, but consolidated statements of income data do not reflect the results of World-Wide Holdings as the transaction was completed at the close of business on the last day of the year.
In connection with reinsurance of annuity and annuity-type products, we record a liability for interest sensitive contract liabilities, which represents the amount ultimately due to the policyholder. We credit interest to these contracts each period at the rates determined in the underlying contract, and the amount is reported as interest credited to interest sensitive contract liabilities on our consolidated statements of income.
Premiums earned in 2001 increased 84% to $68.3 million and were from 38 life reinsurance clients. Premiums earned in 2000 of $37.1 million were from 12 life reinsurance clients. Premiums earned in 1999 are in relation to the accident & health business in existence when we acquired Scottish Re (U.S.), Inc. Premiums earned have increased due to the increase in the number of clients and the increase in business from those clients.
As of December 31, 2001, we reinsured approximately $34.9 billion of life coverage on 993,000 lives. The average benefit coverage per life is $35,000 and our targeted maximum corporate retention on any one life is $500,000. As of December 31, 2000, we reinsured approximately $11.4 billion of life coverage on 248,000 lives. The average benefit coverage per life was $45,800.
At December 31, 2001, the portfolio controlled by us consisted of $678.5 million of fixed income securities and cash. Of this total, $581.1 million represented the fixed income portfolio managed by NEAM, $93.4 million represented investments of World-Wide Holdings, which have historically been managed internally and $4.0 million represented other cash balances. At December 31, 2001, the portion of the portfolio managed by NEAM had an average Standard & Poor's rating of "A+," an average duration of 3.5 years, and an average book yield of 6.14%, as compared with an average rating of "AA-," an average duration of 2.6 years and an average book yield of 7.24% at December 31, 2000 and an average rating of "AA," an average duration of 2.9 years and an average book yield of 6.75% at December 31, 1999. At December 31, 2001, the portion of the investment portfolio managed by World-Wide Holdings had an average rating of "AA-," an average duration of 1.9 years and an average book yield of 5.22%. At December 31, 2001, the unrealized depreciation on investments, net of tax was $3.6 million as compared to $3.8 million at December 31, 2000 and $15.7 million at December 31, 1999. These amounts are included on our consolidated balance sheets as part of shareholders' equity.
In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, "Business Combinations," and No. 142, "Goodwill and Other Intangible Assets," effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives.
Some of the statements contained in this report are not historical facts and are forward-looking within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results to differ materially from the forward-looking statements. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," "continue," "project" and similar expressions, as well as statements in the future tense, identify forward-looking statements.
- uncertainties relating to the ratings accorded to our insurance subsidiaries;