Driven by our highest first quarter new business production in U.S. public finance since we acquired AGM in 2009, Assured Guaranty generated $86 million of PVP, 69% above last year's first quarter PVP and more than in all but one first quarter since 2009.
Key shareholder value measures also reached new highs at quarter end of $79.44 for adjusted operating shareholder's equity per share and $116.56 for adjusted book value per share, as we continued our successful capital management program.
Additionally, adjusted operating income per share of $0.55 was 53% higher than in the first quarter of 2020.
Par volume sold in the primary U.S. municipal bond market reached its highest first quarter level since the Great Recession, $104.5 billion, which industry insured par neared $8.5 billion, setting a 12-year record for first quarter insured volume.
Strong demand for bond insurance led to a 76% more insured par sold than in the last year's first quarter, significantly outperforming the 19% increase in total municipal issuance.
The insurance penetration rate of 8.1% during the first quarter of 2021 was higher than the 2020 full year rate of 7.6% and higher than every first quarter and annual penetration rate since 2009.
Our 65% share of insured market municipal -- insured municipal par sold was better than our market share in any quarter since 2014.
The $5.5 billion of new issue par sold with our insurance in the quarter was the highest amount we insured in any first quarter since 2010.
It was almost 2.5 times our insured par in last year's first quarter and our primary market transaction count of 252 was up 57%.
These year-over-year quarterly comparisons were influenced by the pandemic-related market disruption in the first quarter of 2020; but it would be -- but what may be a more meaningful comparison, our first quarter insured par sold was almost 20% higher than in the fourth quarter of 2020.
During this year's first quarter, we insured $100 million or more on eight different transactions, with aggregate insured par totaling $2.25 billion.
We believe those concerns combined within a appreciation of our overall value proposition were behind our ability in the first quarter to ensure $1.5 billion of par on 27 transactions we signed AA underlying ratings by at least one of the two leading rating agencies.
Additionally, we made progress on important new transactions, two of which have already closed since quarter-end, generating over $23 million of international PVP in the second quarter.
Importantly, and relates to our financial strength and stability, our disciplined and diversified approach to writing new business along with our loss mitigation activities has helped to reduce the below investment grade percentage of our insured portfolio to just 3.2% of net par outstanding.
But with these settlements, we have agreed to terms on over 93% of our Puerto Rico net par exposure.
Outside of these agreements, the Company has only $241 million of additional Puerto Rico net par exposure, almost all of which relates to credits that have not missed any principal or interest payments.
Lastly, once again, we reassess the potential impact of COVID-19 on our insured portfolio, especially in light of the $1.9 trillion federal stimulus package enacted during the first quarter.
The CLO market blossomed during the first quarter with total supply, including new issues, revise, resets and reissues setting quarterly records of $106.3 billion in the United States and EUR26 billion in Europe.
AssuredIM issued one CLO in each of those markets during the period, we also reset a CLO which extended its life, and therefore it's fees, and we sold 71 million of CLO equity from our legacy funds.
We reduced our total non-fee earning CLO AUM to $2.4 billion from the $3.6 billion three months earlier, while increasing total CLO AUM by almost $0.5 billion to $14.3 billion.
Looking toward the rest of the year, we expect strong investor demand for municipal bonds, exemplified by the approximate $30 billion of inflows that municipal bond mutual funds and ETFs took in during the first quarter.
We've been through a lot in the last -- past 14 months.
As Dominic mentioned, first quarter U.S. public finance PVP was our strongest first quarter since 2009 and was the largest component of our $86 million first quarter PVP.
Strong PVP results over the last several quarters have helped us maintain our deferred premium revenues, our storehouse or future premium earnings at approximately $3.8 billion since the end of 2019.
In the Asset Management segment, total third-party inflows of $873 million was primarily driven by CLO issuance, which helped to increase our fee earning AUM by 11% in the first quarter of 2021 from $12.9 billion to $14.4 billion.
In terms of adjusted operating income, we earned $43 million or $0.55 per share in the first quarter of 2021 compared with $33 million or $0.36 per share in the first quarter of 2020.
While this represents a 30% increase year-over-year, I want to highlight that our first quarter 2021 results include a one-time $13 million after-tax write-off of an intangible asset attributable to the insurance licenses of MAC, or Municipal Assurance Corp.
Excluding this write-off, first quarter 2021 adjusted operating income would have been $56 million, representing an increase of 70% over first quarter 2020.
The Insurance segment's first quarter contribution to adjusted operating income was $79 million compared with $85 million in the first quarter of 2020.
Excluding the MAC license write-off, adjusted operating income would have been $92 million or an increase of $7 million.
Within the Insurance segment, total income from investment portfolio increased by $18 million or 24%.
Our fixed maturity and short-term investments account for the largest portion of the portfolio, generating net investment income of $73 million in first quarter 2021 compared with $83 million in first quarter 2020.
The AssuredIM Funds, primarily the CLOs and asset-based funds, generated a gain of $10 million in first quarter 2021 compared with a loss of $10 million in the first quarter of 2020.
Alternative investments, managed by the third parties, generated gains of $9 million in the first quarter 2021.
However, over the long term, we expect the enhanced returns on the alternative investment portfolio to be over 10%, which exceeds the returns on the fixed maturity portfolio.
Scheduled net earned premiums weren't consistent -- were consistent at $107 million year-over-year as recent new business production substantially offset the decline in earnings on Structured Finance transactions.
First quarter 2021 refundings resulted in accelerations of $16 [Phonetic] million compared with $50 million in the first quarter 2020.
Loss expense was $30 million in first quarter 2021 compared with $18 million in first quarter 2020.
Net economic loss development of $13 million in the first quarter of 2021, primarily consists of $11 million in loss development on U.S. RMBS, which was mainly attributable to lower excess spread offset by benefits due to changes in discount rates and improved performance and recoveries on previously charged off loans in certain second lien transactions.
The economic loss -- the economic development attributable to change in discount rates for all transactions was a benefit of $48 million for first quarter 2021.
These agreements, in addition to our previous PREPA agreement represent over 93% of our net Puerto Rico par outstanding or 46% of total below investment grade net par outstanding.
Adjusted operating income was a loss of $7 million in the first quarter 2021 compared with a loss of $9 million in first quarter 2020.
Adjusted operating loss for the Corporate division was $29 million in first quarter 2021 compared with $39 million in the first quarter of 2020.
In first quarter 2021, the effective tax rate was $15 million -- I'm sorry, 15% compared with 24.7% in first quarter 2020.
Turning to our capital management strategy, in the first quarter of 2021, we repurchased 2 million shares for $77 million at an average price of $38.83 per share.
Since then, we have continued the program and repurchased an additional 600,000 shares for $28 million.
Since the beginning of our repurchase program in January of 2013, we returned $3.8 billion to shareholders, resulting in 64% reduction in total shares outstanding.
Accumulative effect of these repurchases was a benefit of approximately $30 in adjusted operating shareholder's equity and $53 in adjusted book value per share, which helped drive these metrics to new record highs of over $79 in adjusted operating shareholder's equity and over $116 million in adjusted book value per share.
From a liquidity standpoint, the holding companies currently have cash and investments of approximately $218 [Phonetic] million, of which $60 million resides in AGL.

Summary:
Additionally, adjusted operating income per share of $0.55 was 53% higher than in the first quarter of 2020.
In terms of adjusted operating income, we earned $43 million or $0.55 per share in the first quarter of 2021 compared with $33 million or $0.36 per share in the first quarter of 2020.