and include non-redeemable preferred stocks and common stocks. The difference between cost and quoted market value, net of deferred taxes, is classified as other comprehensive income. The Corporation and the Group closely monitor their fixed maturity and equity portfolios for declines in value that are deemed to be other than temporary. The portfolios are regularly evaluated based on current economic conditions, credit loss experience and other specific developments. When a decline in value is deemed to be other than temporary, the Corporation and the Group recognize a realized loss and the security is written down to its estimated fair value.
Results in 2003 were also favorably impacted as a result of reduced costs associated with the agent relationships identifiable intangible asset. In 2003, the before-tax amortization and impairment costs were $18.7 million compared with $79.7 million in 2002 and $22.3 million in 2001. This asset represents the excess of cost over fair value of net assets for the 1998 acquisition of the GAI commercial lines division. The impairment charges occurred when estimated future cash flows of certain agents were less than the carrying value. At December 31, 2003, the largest individual agent asset carrying value is $5.9 million, which represents the maximum future impairment charge for an individual agent. Based upon historical performance of this agent, it is unlikely the agent will become impaired or cancelled in the near term. For the approximately 300 individual agents that represent the total agent relationships intangible asset, the average asset carrying value as of December 31, 2003 is $.5 million. The larger than usual impairment charge in the third quarter of 2002 was due primarily to the recognition that certain agents experienced sustained premium revenue trends that were significantly different from prior estimates, resulting in changes in estimated future cash flows for those agents. The determination of impairment involves the use of management estimates and assumptions. Due to the inherent uncertainties and judgments involved in making these assumptions and the fact that the asset cannot be increased for any agent, further reductions in the valuation of the agent relationship asset are likely to occur in the future and could be significant based on uncertainties such as changes in an agent's revenue production or profitability.
Management believes the carrying value of the asset is appropriate. The useful life of the internally developed software was determined by using certain assumptions and estimates. Inherent changes in these assumptions could result in an immediate impairment to the asset and a corresponding charge to net income. The Group periodically reviews the asset for impairment as events or circumstances arise that may affect the carrying value.
The 2002 combined ratio includes a reallocation of LAE reserve estimates related to claims adjuster salaries, benefits and similar costs from the Commercial and Specialty Lines segments to the Personal Lines segment. This increased the 2002 Personal Lines segment combined ratio by 1.5 points and decreased the Commercial and Specialty Lines segments combined ratios by .6 points and 2.4 points, respectively.
insurance and fidelity and surety insurance as its primary products. The Personal Lines operating segment sells personal automobile and homeowners insurance as its primary products. The Corporation also has an all other segment, which derives its revenue from investment income and premium financing. The following tables provide key financial measures for each of the property and casualty reportable segments:
On March 13, 2002, Moody's Investor Services (Moody's) assigned its "Baa2" rating to the Corporation's convertible notes. On November 27, 2002, Moody's downgraded the Group's "A2" financial strength rating to "A3" and placed a stable outlook on the Group's rating. Moody's also announced that it placed a "Baa3" rating on the Corporation's convertible notes. On June 16, 2003, Moody's affirmed its "Baa3" rating on the convertible notes and affirmed the "A3" insurance financial strength ratings on the Group's intercompany pool. Moody's also placed a stable outlook on its ratings. In addition, Moody's also assigned prospective ratings to the $500 million universal shelf registration filed on May 8, 2003. The prospective ratings for senior unsecured debt, subordinated debt and preferred stock were "Baa3", "Ba1" and "Ba2", respectively.
Loss and Loss Adjustment Expenses The Group's largest liabilities are reserves for losses and LAE. The accounting policies related to the loss and LAE reserves are considered critical. Loss and LAE reserves are established for all incurred claims and are carried on an undiscounted basis before any credits for reinsurance recoverable. Actual losses and LAE are adjusted upward or downward as new information is received. These reserves amounted to $2.6 billion at December 31, 2003, $2.4 billion at December 31, 2002 and $2.1 billion at December 31, 2001. As of December 31, 2003, the reserves by operating segment were as follows: $1.6 billion Commercial Lines, $.5 billion Specialty Lines and $.5 billion Personal Lines.