Insurance company Travelers Cos. (TRV) announced the largest quarterly decline in five years during the reporting of its second-quarter results.

Traveler's book value, a measure of a business' assets minus the liabilities, dropped from USD 68 per share to USD 66.65 in three months. The decline was a result of the USD 1.77 billion drop in unrealized gains in its portfolio of fixed-maturity securities worth USD 62.8 billion.

Jay Benet, Chief Financial Officer commented on the decline in a conference call, saying, "the impact of higher interest rates more than offset the very positive impact on book value per share of our strong earnings."

"The rise in interest rates does have a positive side. Going forward, if interest rates stay at their current levels, we'd be able to reinvest proceeds from maturing bonds at higher yields than we were previously assuming," added Benet.

Fixed-income securities started to decline the quarter after Ben S. Bernanke, Federal Reserve Chairman, stated that a portion of the central bank's initiative efforts could desist by 2014. The announcement resulted to a halt in the rallying of bond rates that was fueled by the Federal Reserve's efforts to revive the economy after the financial crisis in 2008.