Commercial Lines underwriting profit for the year ended December 31, 2018 was $85.0 million, compared to $12.2 million for the year ended December 31, 2017, a change of $72.8 million. Catastrophe-related losses for the year ended December 31, 2018 were $142.3 million, compared to $170.6 million for the year ended December 31, 2017, a decrease of $28.3 million. Favorable development on prior years’ loss reserves for the year ended December 31, 2018 was $34.1 million, compared to $9.4 million for the year ended December 31, 2017, a favorable change of $24.7 million.
Our investment portfolio primarily consists of fixed maturity securities whose fair value is susceptible to market risk, including interest rate changes. See also “Quantitative and Qualitative Disclosures about Market Risk”. Duration is a measurement used to quantify our inherent interest rate risk and analyze invested assets relative to our reserve liabilities.
The amortized cost and fair value by maturity periods for fixed maturities are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers.
The methodology and significant inputs used to measure the amount of credit losses on fixed maturities in 2019, 2018 and 2017, were as follows:
Interest expense was $37.5 million, $45.1 million, and $45.2 million in 2019, 2018 and 2017, respectively. At December 31, 2019, the Company was in compliance with the covenants associated with all of its debt indentures and credit arrangements.
Prior to 2005, THG provided retirement benefits to substantially all of its employees under defined benefit pension plans. These plans were based on a defined benefit cash balance formula, whereby the Company annually provided an allocation to each covered employee based on a percentage of that employee’s eligible salary, similar to a defined contribution plan arrangement. In addition to the cash balance allocation, certain transition group employees who had met specified age and service requirements as of December 31, 1994 were eligible for a grandfathered benefit based primarily on each employee’s years of service and compensation during their highest five consecutive plan years of employment. The Company’s policy for the plans is to fund at least the minimum amount required by the Employee Retirement Income Security Act of 1974 (“ERISA”).
The unrecognized net actuarial gains (losses) which exceed 10% of the greater of the projected benefit obligation or the fair value of plan assets are amortized as a component of net periodic pension cost over the next five years. The total estimated amount of actuarial losses that will be amortized from accumulated other comprehensive income into net periodic pension cost in 2019 is $5.1 million.
In accordance with ERISA guidelines, the Company is not required to fund its qualified benefit plan in 2020. The Company expects to contribute $2.9 million to its non-qualified pension plan to fund 2020 benefit payments. During 2019 and 2018, the Company made a discretionary contribution of $10.0 million and $40.0 million, respectively, to its qualified benefit plan. At this time, no additional discretionary contributions are expected to be made into any of the plans during 2020, and the Company does not expect that any funds will be returned from the plans to the Company during 2020.
In addition to the defined benefit plans, THG provides a qualified defined contribution 401(k) plan for all of its employees, whereby the Company matches employee elective 401(k) contributions, up to a maximum of 6% of eligible compensation in 2019, 2018 and 2017. The Company’s expense for this matching provision was $22.2 million, $21.7 million and $21.3 million for 2019, 2018 and 2017, respectively. In addition to this matching provision, the Company can elect to make an annual contribution to employees’ accounts. Additional contributions totaling $2.2 million were contributed to the plan during 2017.