Thank you, Eric, and good morning, everyone.
Before getting into the results for the quarter, I would like to take a moment to discuss our updated projected distributable earnings scenarios, which we published March 16th. There are three key messages to take away from these updated scenarios.
First, we have a significant level of projected total company distributable earnings, even though all the scenarios assume interest rates starting from year-end 2020, or a 10-year U.S. treasury yield of 93 basis points. The total company 10-year distributable earnings projections we published on March 16th are comparable to what we presented last year adjusted for the $1 billion capital release in 2020 related to the de-risking of the variable annuity or VA hedging strategy.
Second, VA distributable earnings were only modestly lower than what we published last year after adjusting for the $1 billion capital release associated with de-risking our hedging strategy. This illustrates that the strong market returns in 2020 were an effective offset to the negative impact from low interest rates. And third, interest rates today are substantially higher than what is reflected in the scenarios. The forward curve at year-end 2020 projected the 10-year treasury would reach today's interest rate level in mid-2025, and our current GAAP mean reversion to 3% over 10-years implies we would be at current rates at year-end 2023. Therefore, we believe that there is upside to the distributable earnings projections we published in March.
Now turning to the first quarter results we released last night. I'm very pleased with our strong financial results and robust capital position.
As Eric noted, the continuation of strong equity market performance and a rising interest rate environment was a positive backdrop for the quarter. Starting with preliminary statutory results.
Our combined statutory total adjusted capital, or TAC, was approximately $9.4 billion, up $800 million from year-end 2020. We estimate that our combined risk-based capital or RBC ratio was between 500% and 520% and we reported normalized statutory earnings of approximately $100 million. These results were driven by the increase in equity markets and interest rates in the first quarter. The positive market factors, including favorable investment performance, were partially offset by elevated mortality and a $200 million to $250 million unfavorable impact associated with the prescribed decline in the 20-year treasury yield mean reversion point for statutory calculations. In the first quarter, the mean reversion point was lowered by 25 basis points to 3.25% and the $200 million to $250 million unfavorable impact in the first quarter reflects the full-year effect of this change. The decline in the mean reversion point and future declines were factored into our distributable earnings projections published on March 16th.
Moving to the holding company. We ended the first quarter with holding company liquid assets of approximately $1.6 billion. We believe it is appropriate to keep a conservative position at the holding company and as a result of favorable market moves, positive developments in the economy and the likelihood that the worst of the pandemic is behind likelihood that the worst of the us, we continue to assess the appropriate level of conservatism. Shifting to adjusted earnings.
First quarter adjusted earnings, excluding the impact from notable items, were $428 million, which compares with adjusted earnings on the same basis, up $272 million in the fourth quarter of 2020 and $273 million in the first quarter of 2020. There were two notable items in the quarter, which lowered adjusted earnings by approximately $43 million. The notable items on an after-tax basis were: a $29 million unfavorable impact in the runoff segment related to actuarial systems conversions associated with the Company's transition to its future state platform and establishment costs of $14 million included in Corporate and Other. Adjusted earnings, less notable items, were above our quarterly run rate expectations, driven by favorable net investment income and lower corporate expenses partially offset by lower underwriting results. Net investment income was approximately $225 million higher than our average quarterly run rate on an after-tax basis.
As the alternative investment yield was 12.8% in the first quarter, driven by the favorable market performance in the fourth quarter of 2020. Performance was strong across all sectors of the private equity portfolio, particularly in venture capital. Keep in mind that we expect an annual yield of 9% to 11% over the long-term on the alternative investment portfolio. Expenses were also favorable relative to a normal quarterly run rate by approximately $10 million after tax. This favorability is typical in the first quarter due to seasonality.
As a partial offset to strong net investment income and low expenses, our underwriting margin was approximately $90 million lower than our quarterly run rate expectation on an after-tax basis. The below-normal underwriting margin was the result of COVID-19 claims and a lower-than-typical benefit from reinsurance.
Our direct claims in the quarter, excluding the impact from COVID-19, were in the normal range of $400 million to $500 million that I have discussed in the past.
Turning to adjusted earnings at the segment level. Annuities adjusted earnings, excluding notable items, were $336 million in the quarter.
As mentioned earlier, strong market performance had a favorable impact on results. Net investment income was higher sequentially, along with higher fees, partially offset by an increase in reserves. In the Life segment, adjusted earnings, excluding notable items, were $42 million in the quarter. Sequentially, results were primarily impacted by higher net investment income. The Run-off segment reported adjusted earnings, excluding notable items, of $105 million in the quarter. Sequentially, results were driven by higher net investment income and a higher underwriting margin. Corporate & Other had an adjusted loss, excluding notable items, of $55 million. Sequentially, results were driven by a higher tax benefit and lower expenses, partially offset by higher total preferred stock dividends. Overall, I’m pleased with our results this quarter. We maintained our strong capital and cash position, while continuing to return a meaningful amount of capital to shareholders. We remain committed to using a multi-scenario, multiyear framework when managing the balance sheet to ensure that we protect our distribution franchise. With that, we would like to turn the call over to the operator for your questions.