Investments Fixed Income and Short-Term Investments The Company's investment portfolio is notionally divided between (1) funds which are considered necessary to support insurance underwriting activities and (2) excess capital funds. Management believes the funds invested in fixed income and short-term securities are more than sufficient to cover underwriting operations while equity securities and limited partnerships are utilized to invest excess capital funds to achieve higher long- term returns. The following discussion will concentrate on the different investment strategies for these two major categories. At December 31, 2018, the market value of the Company's consolidated investment portfolio was approximately $878.6 million, consisting of fixed income securities, equity securities, investments in limited partnerships, commercial mortgage loans and short-term and other investments and includes $156.9 million of short-term funds classified as cash equivalents. A comparison of the allocation of assets within the Company's consolidated investment portfolio, using market value as a basis, is as follows as of December 31: Fixed income and short-term securities comprised 85.4% of the market value of the Company's consolidated investment portfolio of $878.6 million at December 31, 2018. The fixed income portfolio is widely diversified with no concentrations in any single industry, geographic location or municipality. The largest amount invested in any single issuer was $3.5 million (0.4% of the Company's consolidated investment portfolio). The Company's fixed income portfolio has a short duration compared to the duration of its insurance liabilities and, accordingly, the Company does not actively trade fixed income securities but typically holds such investments until maturity. Exceptions exist in instances where the underlying credit for a specific issue is deemed to be diminished. In such cases, the security will be considered for disposal prior to maturity. In addition, fixed income securities may be sold when realignment of the portfolio is considered beneficial (e.g., moving from taxable to non-taxable issues) or when valuations are considered excessive compared to alternative investments. Approximately $54.2 million of the Company's fixed income investments (6.2% of the Company's consolidated investment portfolio) consisted of non-rated bonds and bonds rated as less than investment grade by the National Association of Insurance Commissioners ("NAIC") at year-end.  These investments included a diversified portfolio of over 40 issuers and had a $5.2 million aggregate net unrealized loss position at December 31, 2018. The market value of the consolidated fixed income portfolio included $7.9 million of net unrealized losses at December 31, 2018 compared to $0.8 million of net unrealized gains at December 31, 2017. The Company analyzes fixed income securities for other-than-temporary impairment ("OTTI") in accordance with the Financial Accounting Standards Board OTTI guidance. As has been the Company's consistent policy, OTTI is considered for any individual issue which has sustained a decline in current market value of at least 20% below original or adjusted cost, and the decline is ongoing for more than six months, regardless of the evaluation of the creditworthiness of the issuer or the specific issue. Additionally, the Company takes into account any known subjective information in evaluating for impairment without consideration of the Company's 20% threshold. The current net unrealized loss on fixed income securities consists of $10.8 million of gross unrealized losses and $2.9 million of gross unrealized gains. The gross unrealized losses equal approximately 1.8% of the cost of all fixed income securities. See also " Critical Accounting Policies"  in Part II, Item 7 of this Annual Report on Form 10-K for additional details of the Company's investment valuation. - 10 - 2018 2017 Fixed income securities 67.5 % 61.1 % Short-term 0.1 0.1 Cash equivalents 17.8 6.9 Total fixed income securities and short-term 85.4 68.1 Limited partnerships (equity basis) 6.3 8.3 Commercial mortgage loans (amortized cost basis) 0.8 0.0 Equity securities 7.5 23.6 100.0 % 100.0 %