Includes after-tax investment and derivative gains/losses of $57.4 billion in 2019, $(17.7) billion in 2018, $1.4 billion in 2017, $6.5 billion in 2016 and $6.7 billion in 2015. Beginning in 2018, investment gains/losses include the changes in fair values of equity securities during the period. Previously, investment gains/losses of equity securities were recognized in earnings when securities were sold or were other-than-temporarily impaired. Net earnings in 2017 includes a one-time net benefit of $29.1 billion attributable to the enactment of the Tax Cuts and Jobs Act of 2017.
Our insurance businesses generated after-tax earnings from underwriting of $325 million in 2019 compared to earnings of $1.6 billion in 2018 and after-tax losses of approximately $2.2 billion in 2017. Insurance underwriting results included after-tax losses from significant catastrophe events of approximately $800 million in 2019, $1.3 billion in 2018 and $1.95 billion in 2017. Earnings from primary insurance operations were lower in 2019 and losses from reinsurance were higher than in 2018. After-tax underwriting earnings in 2019 included lower earnings from reductions of estimated ultimate liabilities for prior years’ property/casualty loss events as compared to 2018 and losses of $92 million from foreign currency exchange rate changes on certain non-U.S. Dollar denominated liabilities of U.S. subsidiaries. Underwriting results included after-tax foreign currency exchange rate gains of $207 million in 2018 and losses of $295 million in 2017.
Net earnings after income taxes decreased $24 million (3.1%) in 2018 as compared to 2017. The change in after-tax earnings reflected the unfavorable utility margin and higher operating expenses, partly offset by higher other income. Utility margin in 2018 was $3.3 billion, a decrease of $198 million (6%) versus 2017. The decrease was primarily due to a $197 million decline in retail revenues from the effects of lower average rates of $180 million (including the impact of the TCJA of $152 million) and a reduction in volumes (0.2%), largely attributable to the impacts of weather.
Net earnings after income taxes increased 7.1% in 2019 compared to 2018, reflecting higher distribution revenues and lower operating expenses, which were largely from lower pension settlement losses in 2019, partially offset by the unfavorable foreign currency translation effects of a strong average U.S. Dollar ($10 million). Distribution revenues increased $18 million, attributable to higher tariff rates, partly offset by lower distributed units.
Net earnings after income taxes were $239 million in 2018, a decrease of $12 million (4.8%) compared to 2017, reflecting higher distribution revenues, increased depreciation and operating expenses, including higher pension settlement losses, and a $9 million increase from the effects of a weaker U.S. Dollar.
Net earnings after income taxes increased 10.3% in 2019 compared to 2018. The increase was primarily due to higher after-tax earnings at existing mortgage businesses due to increased refinance activity and earnings attributable to recent business acquisitions, partially offset by lower after-tax earnings at existing brokerage businesses, primarily from lower units and margins.
Revenues from industrial products businesses were approximately $30.7 billion in 2018, an increase of approximately $2.1 billion (7.4%) compared to 2017. Pre-tax earnings of the industrial products group were approximately $5.8 billion in 2018, an increase of $757 million (14.9%) compared to 2017. Pre-tax earnings as a percentage of revenues were 19.0% in 2018 and 17.7% in 2017. The comparative earnings increase was partially attributable to certain one-time charges at PCC and Lubrizol in 2017.
Marmon’s revenues in 2018 were $8.2 billion, an increase of 5.5% as compared to 2017. The revenue increase was primarily attributable to volume increases in the Transportation Products sector, higher average metals prices, and the effects of business acquisitions. These increases were partially offset by revenue decreases in the Beverage Technologies and Rail Products and Services sectors. Rail Products and Services sector revenues also decreased due to lower railcar lease revenues, partly offset by increased railcar equipment sales and repair services. Throughout 2018, the railcar leasing business experienced the negative effects of lower lease renewal rates for railcars versus the rates on expiring leases.
Clayton Homes’ revenues were $6.0 billion in 2018, an increase of 20.7% over 2017. The increase was driven by an increase in revenues from home sales of $971 million (28.2%), primarily due to a 105% increase in unit sales of site-built homes attributable to businesses acquired over the last two years. Unit sales of manufactured homes in 2018 also increased 4.9% compared to 2017. Average unit prices of site-built homes are considerably higher than traditional manufactured homes. In addition, interest income from lending activities increased 4% in 2018 compared to 2017, primarily due to increased average outstanding loan balances.
Pre-tax investment gains included net unrealized gains of approximately $69.6 billion in 2019 attributable to equity securities we held at December 31, 2019. By comparison, we recorded pre-tax investment losses of approximately $22.7 billion in 2018 attributable to unrealized losses with respect to the equity securities we held at December 31, 2018. Pre-tax net unrealized gains on equity securities of approximately $29 billion in 2017 was recorded in other comprehensive income.
Prior to 2018, investment gains/losses on equity securities were recorded when securities were sold based on the cost of the disposed securities. Taxable investment gains on equity securities sold during the year, which is the difference between sales proceeds and the original cost basis of the securities sold, were $3.2 billion in 2019 and $3.3 billion in 2018.
Our claim liability estimates recorded at the end of 2018 increased $42 million during 2019, which produced a corresponding decrease to pre-tax earnings. The assumptions used to estimate liabilities at December 31, 2019 reflect the most recent frequency and severity results. Future development of recorded liabilities will depend on whether actual frequency and severity are more or less than anticipated.
Establishing claim liability estimates for reinsurance requires evaluation of loss information received from our clients. We generally rely on the ceding companies reported case loss estimates. We independently evaluate certain reported case losses and if appropriate, we use our own case liability estimate. For instance, as of December 31, 2019, our case loss estimates exceeded ceding company estimates by approximately $2.0 billion for certain legacy workers’ compensation claims occurring over 10 years ago. We also periodically conduct detailed reviews of individual client claims, which may cause us to adjust our case estimates.
We also reduced estimated ultimate losses for prior years’ events for other casualty losses, excluding asbestos, environmental, and other latent injury claims, by $23 million, reflecting lower than expected reported losses. For certain significant casualty and general liability portfolios, we estimate that increases of five percent in the claim-tails of the expected loss emergence patterns and in the expected loss ratios would produce a net increase in our nominal IBNR liabilities and a corresponding reduction in pre-tax earnings of approximately $850 million, although outcomes of less than $850 million are quite possible given the diversification in worldwide business.
We increased estimated ultimate liabilities for prior years’ retroactive reinsurance contracts by $378 million in 2019, which after the changes in related deferred charge assets, resulted in pre-tax losses of $125 million. In 2019, we paid losses and loss adjustment expenses of $909 million with respect to these contracts.
The following table summarizes our equity securities and derivative contract liabilities with significant equity price risk as of December 31, 2019 and 2018 and the estimated effects of a hypothetical 30% increase and a 30% decrease in market prices as of those dates. The selected 30% hypothetical increase and decrease does not reflect the best or worst case scenario. Indeed, results from declines could be far worse due both to the nature of equity markets and the aforementioned concentrations existing in our equity investment portfolio. Dollar amounts are in millions.
The Company’s evaluation of goodwill and indefinite-lived intangible assets for impairment involves the comparison of the fair value of each reporting unit or asset to its carrying value. The Company evaluates goodwill and indefinite-lived intangible assets for impairment at least annually. When evaluating goodwill and indefinite-lived intangible assets for impairment, the fair value of each reporting unit or asset is estimated. Significant judgment is required in estimating fair values and performing impairment tests. The Company primarily uses discounted projected future earnings or cash flow methods to estimate fair value, which requires management to make significant estimates and assumptions related to forecasts of future revenue, earnings before interest and taxes (“EBIT”), and discount rate. Changes in these assumptions could have a significant impact on the fair value of reporting units and indefinite-lived intangible assets.
In each of the past three years, we also completed several smaller-sized business acquisitions, which we consider as “bolt-ons” to several of our existing business operations. Aggregate consideration paid for bolt-on acquisitions, net of cash acquired was approximately $1.7 billion in 2019, $1.0 billion in 2018 and $2.7 billion in 2017. We do not believe that these acquisitions are material, individually or in the aggregate to our Consolidated Financial Statements.
Investments in fixed maturity securities as of December 31, 2019 and 2018 are summarized by type below (in millions).
Other receivables of insurance and other businesses are comprised of the following (in millions).
Our other intangible assets and related accumulated amortization are summarized as follows (in millions).
Notional value represents the aggregate undiscounted amounts payable assuming that the value of each index is zero at each contract’s expiration date. Certain of these contracts are denominated in foreign currencies. Notional amounts are based on the foreign currency exchange rates as of each balance sheet date.
We use a variety of methodologies to establish BHRG’s estimates for property and casualty claims liabilities. We use certain methodologies, such as paid and incurred loss development techniques, incurred and paid loss Bornhuetter-Ferguson techniques and frequency and severity techniques, as well as ground-up techniques when appropriate.
Reconciliations of the changes in plan assets and PBOs related to BHE’s pension plans and all other pension plans for each of the two years ending December 31, 2019 are in the following tables (in millions). The costs of pension plans covering employees of certain regulated subsidiaries of BHE are generally recoverable through the regulated rate making process.