The following table shows the impact of catastrophe losses and related reinstatement premiums and the impact of prior period development on our consolidated loss and loss expense ratio for the periods indicated.
## Table 0 ##
We recorded net pre-tax catastrophe losses of $366 million in 2010 compared with net pre-tax catastrophe losses of $137 million and $567 million in 2009 and 2008, respectively.
The catastrophe losses for 2010 were primarily related to weatherrelated events in the U. S. , earthquakes in Chile, Mexico, and New Zealand, and storms in Australia and Europe.
The catastrophe losses for 2009 were primarily related to an earthquake in Asia, floods in Europe, several weather-related events in the U. S. , and a European windstorm.
For 2008, the catastrophe losses were primarily related to Hurricanes Gustav and Ike.
Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves first reported in previous calendar years and excludes the effect of losses from the development of earned premium from previous accident years.
We experienced $503 million of net favorable prior period development in our P&C segments in 2010.
This compares with net favorable prior period development in our P&C segments of $576 million and $814 million in 2009 and 2008, respectively.
Refer to “Prior Period Development” for more information.
The adjusted loss and loss expense ratio declined in 2010, compared with 2009, primarily due to the impact of the crop settlements, non-recurring premium adjustment and the reduction in assumed loss portfolio business, which is written at higher loss ratios than other types of business.
Our policy acquisition costs include commissions, premium taxes, underwriting, and other costs that vary with, and are primarily related to, the production of premium.
Administrative expenses include all other operating costs.
Our policy acquisition cost ratio increased in 2010, compared with 2009.
The increase was primarily related to the impact of crop settlements, which generated higher profit-share commissions and a lower adjustment to net premiums earned, as well as the impact of reinstatement premiums expensed in connection with catastrophe activity and changes in business mix.
Our administrative expense ratio increased in 2010, primarily due to the impact of the crop settlements, reinstatement premiums expensed, and increased costs in our international operations.
Although the crop settlements generate minimal administrative expenses, they resulted in lower adjustment to net premiums earned in 2010, compared with 2009.
Administrative expenses in 2010, were partially offset by higher net results generated by our third party claims administration business, ESIS, the results of which are included within our administrative expenses.
ESIS generated $85 million in net results in 2010, compared with $26 million in 2009.
The increase is primarily from non-recurring sources.
Our policy acquisition cost ratio was stable in 2009, compared with 2008, as increases in our Combined Insurance operations were offset by more favorable final crop year settlement of profit share commissions.
Administrative expenses increased in 2009, primarily due to the inclusion of administrative expenses related to Combined Insurance for the full year and costs associated with new product expansion in our domestic retail operation and in our personal lines business.
Our effective income tax rate, which we calculate as income tax expense divided by income before income tax, is dependent upon the mix of earnings from different jurisdictions with various tax rates.
A change in the geographic mix of earnings would change the effective income tax rate.
Our effective income tax rate was 15 percent in 2010, compared with 17 percent and 24 percent in 2009 and 2008, respectively.
The decrease in our effective income tax rate in 2010, was primarily due to a change in the mix of earnings to lower tax-paying jurisdictions, a decrease in the amount of unrecognized tax benefits which was the result of a settlement with the U. S.  Internal Revenue Service Appeals Division regarding federal tax returns for the years 2002-2004, and the recognition of a non-taxable gain related to the acquisition of Rain and Hail.
The 2009 year included a reduction of a deferred tax valuation allowance related to investments.
For 2008, our effective income tax rate was adversely impacted by a change in mix of earnings due to the impact of catastrophe losses in lower tax-paying jurisdictions.
Prior Period Development The favorable prior period development, inclusive of the Life segment, of $512 million during 2010 was the net result of several underlying favorable and adverse movements.
With respect to ACE’s crop business, ACE regularly receives reports from its managing general agent (MGA) relating to the previous crop year(s) in subsequent calendar quarters and this typically results
Investment Strategy for Non-U.
S.  Pension Plans Approximately 50 percent of our international subsidiaries’ pension plan assets are invested in mutual, pooled and commingled funds.
As of December 31, 2010, mutual, pooled and commingled funds were composed of approximately 51 percent pooled equity securities, 28 percent pooled fixed income securities and 21 percent mutual and commingled funds.
The investment strategies of our international subsidiaries differ greatly, and in some instances are influenced by local law.
None of our pension plans outside the United States is individually significant for separate disclosure.
Other Postretirement Benefit Plan Assets Plan assets associated with other benefits represent funding of the primary U. S.  postretirement benefit plan through a U. S.  Voluntary Employee Beneficiary Association (‘‘VEBA’’), a tax-qualified trust.
The VEBA assets remain segregated from the primary U. S.  pension master trust and are primarily invested in liquid assets due to the level of expected future benefit payments.
The following table presents total assets for our other postretirement benefit plans (in millions)
## Table 1 ##
1 Fair value disclosures related to our other postretirement assets are included in Note 16.
Fair value disclosures include, but are not limited to, the level within the fair value hierarchy on which the fair value measurements in their entirety fall, a reconciliation of the beginning and ending balances of Level 3 assets and information about the valuation techniques and inputs used to measure the fair value of our pension and other postretirement assets.
Components of Net Periodic Benefit Cost Net periodic benefit cost for our pension and other postretirement benefit plans consisted of the following (in millions):
## Table 2 ##
1 The special termination benefits primarily relate to the Company’s productivity, restructuring and integration initiatives.
Refer to Note 18 for additional information related to our productivity, restructuring and integration initiatives.
The following table summarizes the balance of accrued expenses related to these integration initiatives and the changes in the accrued amounts since the commencement of the plan (in millions):
## Table 3 ##
1 Primarily relates to expenses in connection with legal, outplacement and consulting activities.
Integration of Our German Bottling and Distribution Operations In 2008, the Company began an integration initiative related to the 18 German bottling and distribution operations acquired in 2007.
The Company incurred $94 million, $110 million and $21 million of expenses related to this initiative in 2010, 2009 and 2008, respectively.
The Company has incurred total pretax expenses of $225 million related to this initiative since it commenced, which were recorded in the line item other operating charges and impacted the Bottling Investments operating segment.
The expenses recorded in connection with these integration activities have been primarily due to involuntary terminations.
The Company had $34 million and $46 million accrued related to these integration costs as of December 31, 2010 and 2009, respectively.
The Company is currently reviewing other integration and restructuring opportunities within the German bottling and distribution operations, which if implemented will result in additional charges in future periods.
However, as of December 31, 2010, the Company has not finalized any additional plans.
Restructuring Initiatives Streamlining During 2007, the Company took steps to streamline and simplify its operations globally.
In North America, the Company reorganized its operations around three main business units: Sparkling Beverages, Still Beverages and Emerging Brands.
In Ireland, the Company announced a plan to close its beverage concentrate manufacturing and distribution plant in Drogheda, which was closed during the third quarter of 2008.
The plant closure is expected to improve operating productivity and enhance capacity utilization.
The costs associated with this plant closure are included in the Corporate operating segment.
Selected other operations also took steps to streamline their operations to improve overall efficiency and effectiveness.
The Company incurred total pretax expenses of $415 million related to these streamlining initiatives from the time they commenced until the plan was completed in 2009, which included charges of $5 million and $173 million in 2009 and 2008, respectively.
Expenses recognized in conjunction with this plan were recorded in the line item other operating charges in our consolidated statements of income.
The Company did not have an accrual related to this initiative as of December 31, 2010, and our accrual was immaterial as of December 31, 2009.
Other Restructuring Initiatives The Company incurred $59 million and $51 million of charges related to other restructuring initiatives during 2010 and 2009, respectively.
These other restructuring initiatives were outside the scope of the productivity, integration and streamlining initiatives discussed above.
These other restructuring charges were related to individually insignificant activities throughout many of our business units.
None of these activities is expected to be individually significant.
These charges were recorded in the line item other operating charges.
Refer to Note 19 for the impact these charges had on our operating segments.
Selling, General and Administrative Expenses The following table sets forth the significant components of selling, general and administrative expenses (in millions):

<table><tr><td></td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Loss and loss expense ratio, as reported</td><td>59.2%</td><td>58.8%</td><td>60.6%</td></tr><tr><td>Catastrophe losses and related reinstatement premiums</td><td>-3.2%</td><td>-1.2%</td><td>-4.7%</td></tr><tr><td>Prior period development</td><td>4.6%</td><td>4.9%</td><td>6.8%</td></tr><tr><td>Large assumed loss portfolio transfers</td><td>-0.3%</td><td>-0.8%</td><td>0.0%</td></tr><tr><td>Loss and loss expense ratio, adjusted</td><td>60.3%</td><td>61.7%</td><td>62.7%</td></tr></table>
<table><tr><td>December 31,</td><td> 2010</td><td>2009</td></tr><tr><td>Cash and cash equivalents</td><td> $ 84</td><td>$ 86</td></tr><tr><td>Equity securities:</td><td></td><td></td></tr><tr><td>U.S.-based companies</td><td> 75</td><td>62</td></tr><tr><td>International-based companies</td><td> 14</td><td>13</td></tr><tr><td>Fixed income securities:</td><td></td><td></td></tr><tr><td>Government bonds</td><td> 1</td><td>1</td></tr><tr><td>Corporate bonds and debt securities</td><td> 6</td><td>5</td></tr><tr><td>Mutual, pooled and commingled funds</td><td> 3</td><td>2</td></tr><tr><td>Hedge funds/limited partnerships</td><td> 1</td><td>1</td></tr><tr><td>Real estate</td><td> 2</td><td>2</td></tr><tr><td>Other</td><td> 1</td><td>1</td></tr><tr><td>Total other postretirement benefit plan assets<sup>1</sup></td><td> $ 187</td><td>$ 173</td></tr></table>
<table><tr><td></td><td colspan="3">Pension Benefits</td><td colspan="3">Other Benefits</td></tr><tr><td>Year Ended December 31,</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Service cost</td><td>$ 143</td><td>$ 113</td><td>$ 114</td><td>$ 24</td><td>$ 21</td><td>$ 20</td></tr><tr><td>Interest cost</td><td>260</td><td>213</td><td>205</td><td>30</td><td>29</td><td>26</td></tr><tr><td>Expected return on plan assets</td><td>-295</td><td>-214</td><td>-249</td><td>-8</td><td>-8</td><td>-20</td></tr><tr><td>Amortization of prior service cost (credit)</td><td>5</td><td>5</td><td>10</td><td>-61</td><td>-61</td><td>-61</td></tr><tr><td>Amortization of actuarial loss</td><td>57</td><td>86</td><td>10</td><td>3</td><td>—</td><td>—</td></tr><tr><td>Net periodic benefit cost (credit)</td><td>170</td><td>203</td><td>90</td><td>-12</td><td>-19</td><td>-35</td></tr><tr><td>Settlement charge</td><td>6</td><td>5</td><td>14</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Curtailment charge</td><td>—</td><td>1</td><td>—</td><td>—</td><td>—</td><td>-6</td></tr><tr><td>Special termination benefits<sup>1</sup></td><td>—</td><td>9</td><td>11</td><td>1</td><td>4</td><td>—</td></tr><tr><td>Total cost (credit) recognized in the statements of income</td><td>$ 176</td><td>$ 218</td><td>$ 115</td><td>$ -11</td><td>$ -15</td><td>$ -41</td></tr></table>
<table><tr><td></td><td>Severance pay and benefits</td><td>Outside services1</td><td>Other direct costs</td><td>Total</td></tr><tr><td> 2010</td><td></td><td></td><td></td><td></td></tr><tr><td>Costs incurred</td><td>$ 45</td><td>$ 42</td><td>$ 48</td><td>$ 135</td></tr><tr><td>Payments</td><td>-1</td><td>-33</td><td>-34</td><td>-68</td></tr><tr><td>Noncash and exchange</td><td>4</td><td>—</td><td>-2</td><td>2</td></tr><tr><td>Accrued balance as of December 31</td><td>$ 48</td><td>$ 9</td><td>$ 12</td><td>$ 69</td></tr></table>

Question: by what amount have catastrophic losses in 2010 surpass the catastrophic losses of 2009 , ( in millions ) ?
Answer: 229