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Available-For-Sale Fixed Maturity Securities
 9 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Available-For-Sale Fixed Maturity Securities
3. Available-For-Sale Fixed Maturity Securities
The amortized cost and fair value of fixed maturity securities are shown below:
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance for Credit LossesFair Value
(Dollars in millions)
September 30, 2024
Fixed maturity, available-for-sale:
U.S. treasury and government$78 $1 $(1)$— $78 
U.S. states and political subdivisions3,184 212 (13)— 3,383 
Foreign governments398 31 — — 429 
Corporate debt securities30,183 1,492 (182)(20)31,473 
Residential mortgage-backed securities1,067 57 (3)(1)1,120 
Commercial mortgage-backed securities2,710 94 (12)— 2,792 
Collateralized debt securities6,329 96 (16)(1)6,408 
Total fixed maturity securities$43,949 $1,983 $(227)$(22)$45,683 
December 31, 2023
Fixed maturity, available-for-sale:
U.S. treasury and government$63 $— $(1)$— $62 
U.S. states and political subdivisions594 1 (17)— 578 
Foreign governments9 — — — 9 
Corporate debt securities11,144 79 (420)(19)10,784 
Residential mortgage-backed securities131 — (4)(1)126 
Commercial mortgage-backed securities— — — — — 
Collateralized debt securities1,340 9 (27)(4)1,318 
Total fixed maturity securities$13,281 $89 $(469)$(24)$12,877 
The amortized cost and fair value of fixed maturity securities at September 30, 2024, by contractual maturity are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our mortgage and collateralized debt securities provide for periodic payments throughout their lives and are shown below as separate lines.
September 30, 2024
Amortized CostFair Value
(Dollars in millions)
Due in one year or less$1,371 $1,376 
Due after one year through five years11,414 11,637 
Due after five years through ten years6,985 7,246 
Due after ten years14,073 15,104 
33,843 35,363 
Residential mortgage-backed securities1,067 1,120 
Commercial mortgage-backed securities2,710 2,792 
Collateralized debt securities6,329 6,408 
$43,949 $45,683 
Proceeds from sales of available-for-sale fixed maturity securities, with the related gross realized gains and losses, are shown below:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
(Dollars in millions)
Proceeds from sales and maturities of investments - Fixed maturity, available-for-sale$1,071 $2,931 $3,484 $11,317 
Gross realized gains2 2 6 3 
Gross realized (losses)(97)(4)(120)(53)
The Company has pledged bonds in connection with certain agreements and transactions, such as financing and reinsurance agreements. The carrying value of bonds pledged was $10.6 billion and $39 million as of September 30, 2024 and December 31, 2023, respectively.
In accordance with various regulations, the Company has securities on deposit with regulating authorities with a carrying value of $65 million and $54 million as of September 30, 2024 and December 31, 2023, respectively.
As of September 30, 2024 and December 31, 2023, amounts loaned under reverse repurchase agreements were $400 million and $0 million, respectively, and the fair value of the collateral received was $817 million and $0 million, respectively.
The gross unrealized losses and fair value of available-for-sale fixed maturity securities, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position due to market factors are shown below:
Less than 12 months12 months or moreTotal
Number of IssuesGross Unrealized Losses (1)Fair ValueNumber of IssuesGross Unrealized Losses (1)Fair ValueNumber of IssuesGross Unrealized Losses (1)Fair Value
(Dollars in millions)
September 30, 2024
Fixed maturity, available-for-sale:
U.S. treasury and government19 $(1)$17 8 $— $36 27 $(1)$53 
U.S. states and political subdivisions92 (6)178 166 (7)309 258 (13)487 
Foreign governments— — — 1 — 5 1 — 5 
Corporate debt securities248 (67)2,732 777 (115)5,287 1,025 (182)8,019 
Residential mortgage-backed securities15 (1)30 33 (2)73 48 (3)103 
Commercial mortgage-backed securities115 (12)589 — — — 115 (12)589 
Collateralized debt securities266 (13)1,520 22 (3)165 288 (16)1,685 
Total755 $(100)$5,066 1,007 $(127)$5,875 1,762 $(227)$10,941 
December 31, 2023
Fixed maturity, available-for-sale:
U.S. treasury and government17 $(1)$27 35 $— $25 52 $(1)$52 
U.S. states and political subdivisions214 (3)219 142 (14)285 356 (17)504 
Foreign governments— — — 2 — 9 2 — 9 
Corporate debt securities1,343 (141)2,941 1,906 (279)6,475 3,249 (420)9,416 
Residential mortgage-backed securities6 (1)39 39 (3)64 45 (4)103 
Commercial mortgage-backed securities— — — — — — — — — 
Collateralized debt securities102 (4)258 201 (23)782 303 (27)1,040 
Total1,682 $(150)$3,484 2,325 $(319)$7,640 4,007 $(469)$11,124 
(1)Unrealized losses have been reduced to reflect the allowance for credit losses of $22 million and $24 million as of September 30, 2024 and December 31, 2023, respectively.
The unrealized losses at September 30, 2024 are principally related to the timing of the purchases of certain securities, which carry less yield than those available at September 30, 2024. Approximately 81% and 87% of the unrealized losses on fixed maturity securities shown in the above table for September 30, 2024 and December 31, 2023, respectively, are on securities that are rated investment grade, defined as being the highest two NAIC designations.
We expect to recover our amortized cost on all securities except for those securities on which we recognized an allowance for credit loss. In addition, because we did not have the intent to sell fixed maturity securities with unrealized losses and it was not more likely than not that we would be required to sell these securities prior to recovery of the amortized cost, which may be maturity, we did not write down these investments to fair value through the Consolidated Statements of Operations.
Allowance for Credit Losses
Several assumptions and underlying estimates are made in the evaluation of allowance for credit loss. Examples include financial condition, near term and long-term prospects of the issue or issuer, including relevant industry conditions and trends and implications of rating agency actions and offering prices. Based on this evaluation, unrealized losses on available-for-sale securities where an allowance for credit loss was not recorded were concentrated within the financials sector as of September 30, 2024 and the transportation sector as of September 30, 2023.
The rollforward of the allowance for credit losses for available-for-sale fixed maturity securities is shown below for the three and nine months ended September 30, 2024 and 2023.
Three Months Ended September 30, 2024
Corporate SecuritiesResidential Mortgage Backed SecuritiesCommercial Mortgage Backed SecuritiesCollateralized Debt SecuritiesTotal
(Dollars in millions)
Beginning balance$(34)$(1)$— $(2)$(37)
Credit losses recognized on securities for which credit losses were not previously recorded(3)— — — (3)
Reductions for securities sold during the period2 — — — 2 
Allowance on securities that had an allowance recorded in a previous period15 — — 1 16 
Balance as of September 30, 2024
$(20)$(1)$— $(1)$(22)
Three Months Ended September 30, 2023
Corporate SecuritiesResidential Mortgage Backed SecuritiesCommercial Mortgage Backed SecuritiesCollateralized Debt SecuritiesTotal
(Dollars in millions)
Beginning balance$(22)$(1)$— $(9)$(32)
Credit losses recognized on securities for which credit losses were not previously recorded(6)— — — (6)
Reductions for securities sold during the period2 — — — 2 
Allowance on securities that had an allowance recorded in a previous period16 — — 4 20 
Balance as of September 30, 2023
$(10)$(1)$— $(5)$(16)
Nine Months Ended September 30, 2024
Corporate SecuritiesResidential Mortgage Backed SecuritiesCommercial Mortgage Backed SecuritiesCollateralized Debt SecuritiesTotal
(Dollars in millions)
Beginning balance$(19)$(1)$— $(4)$(24)
Credit losses recognized on securities for which credit losses were not previously recorded(36)— — — (36)
Reductions for securities sold during the period3 — — — 3 
Allowance on securities that had an allowance recorded in a previous period32 — — 3 35 
Balance as of September 30, 2024
$(20)$(1)$— $(1)$(22)
Nine Months Ended September 30, 2023
Corporate SecuritiesResidential Mortgage Backed SecuritiesCommercial Mortgage Backed SecuritiesCollateralized Debt SecuritiesTotal
(Dollars in millions)
Beginning balance$(24)$— $— $(5)$(29)
Credit losses recognized on securities for which credit losses were not previously recorded(24)(1)— (6)(31)
Reductions for securities sold during the period4 — — — 4 
Allowance on securities that had an allowance recorded in a previous period34 — — 6 40 
Balance as of September 30, 2023
$(10)$(1)$— $(5)$(16)
4. Equity Securities
The net gains (losses) on equity securities recognized in “Investment related gains (losses)” on the Consolidated Statements of Operations are shown below:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
(Dollars in millions)
Unrealized gains (losses) on equity securities$21 $(9)$43 $33 
Net gains (losses) on equity securities sold2 (1)4 — 
Net gains (losses) on equity securities$23 $(10)$47 $33 
Equity securities by market sector distribution are shown below, based on carrying value:
September 30, 2024December 31, 2023
Energy and utilities30 %30 %
Finance17 %24 %
Healthcare6 %9 %
Industrials9 %3 %
Information technology20 %18 %
Education11 %— %
Other7 %16 %
Total100 %100 %