paper loss

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Related to Unrealized Capital Losses: Unrealized Capital Gains

Paper Loss

A loss on an investment that has not yet been realized. That is, a paper loss occurs when the current price of a security which is still owned by the holder is lower than the price the holder paid for it. As a result, it is possible that the paper loss might be erased if the price increases again. A paper loss represents a decrease in one's net worth, but it may or may not affect one's lifestyle. See also: Paper profit.

paper loss

Paper profit (or loss).

If you own an asset that increases in value, any increase in value is a paper profit, or unrealized gain. If you sell the asset for more than you paid to buy it, your paper profit becomes an actual profit, or realized gain.

The same relationship applies if the asset has lost value. You have a paper loss until you sell, when it becomes a realized loss.

You owe no capital gains tax on a paper profit, though you use the paper value when calculating gains or losses in your investment portfolio, for example. The risk with a paper profit is that it may disappear before you realize it. On the other hand, you may postpone selling because you expect the value to increase further.

References in periodicals archive ?
With much lower realized capital gains and unrealized capital losses likely to exceed those experienced during 2000, the policyholders' surplus for the property/casualty industry may fall by 8 percent or more when 2001 results are finalized.
The combination of pricing competition (resulting in worsening accident year loss ratios), growing reserve deficiencies and flat or reduced investment income with growing unrealized capital losses has forced action in workers' compensation pricing and underwriting.
significant level of unrealized capital losses and reserve
Partially offsetting these positive rating factors are Cherokee's highly elevated common stock leverage, which exposes the company to the vagaries of the equity markets, as evidenced in 2008 when it reported significant realized and unrealized capital losses, as well as its business concentration in the historically competitive commercial trucking segment.
Nonreinsurance losses were largely due to a significant level of unrealized capital losses and reserve strengthening at Compagnie Nord-Africaine et Intercontinentale d'Assurances, (CNIA), ARIG's Moroccan operation.
The rating actions reflect Newport's weakened overall capitalization, poor operating performance and the combined impact of unrealized capital losses and stockholder dividends, which has reduced policyholder surplus over the recent five-year period.
Factors contributing to this result include increased frequency and severity of catastrophe losses and unrealized capital losses in recent years.
In addition, its large concentration in a single issuer (Banco Popular, which represents 10% of total invested assets and 21% of statutory capital) resulted in significant unrealized capital losses in 1999.
Additionally, LMGI's overall capitalization was strained in 2008 and early 2009, following deteriorating operating results, modest unrealized capital losses and the capital outlay for the purchase of Safeco Corporation.
6 million change in net unrealized capital losses, offset in part by $15.
The company has not experienced realized or unrealized capital losses over the past five years.
2 billion in unrealized capital losses and $647 million in realized capital losses due primarily to unfavorable equity market conditions.