Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Assets and liabilities measured at fair value

Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions):


	Level 1		Level 2		Level 3		Total
June 30, 2022
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	215	$	1	$	—	$	216
States, municipalities and political subdivisions	—		1,401		1		1,402
Foreign government	—		246		—		246
Residential MBS	—		1,547		8		1,555
Commercial MBS	—		92		—		92
Collateralized loan obligations	—		1,605		2		1,607
Other asset-backed securities	—		1,945		313		2,258
Corporate and other	10		2,138		269		2,417
Total AFS fixed maturities	225		8,975		593		9,793
Trading fixed maturities	—		29		—		29
Equity securities	609		42		378		1,029
Assets of managed investment entities (“MIE”)	344		4,862		12		5,218
Other assets — derivatives	—		1		—		1
Total assets accounted for at fair value	$	1,178	$	13,909	$	983	$	16,070
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	23	$	23
Liabilities of managed investment entities	339		4,783		11		5,133
Other liabilities — derivatives	—		13		—		13
Total liabilities accounted for at fair value	$	339	$	4,796	$	34	$	5,169

December 31, 2021
Assets:
Available for sale fixed maturities:
U.S. Government and government agencies	$	215	$	1	$	—	$	216
States, municipalities and political subdivisions	—		1,791		41		1,832
Foreign government	—		246		—		246
Residential MBS	—		946		14		960
Commercial MBS	—		104		—		104
Collateralized loan obligations	—		1,643		—		1,643
Other asset-backed securities	—		2,398		278		2,676
Corporate and other	11		2,402		267		2,680
Total AFS fixed maturities	226		9,531		600		10,357
Trading fixed maturities	—		28		—		28
Equity securities	679		50		313		1,042
Assets of managed investment entities	390		4,893		13		5,296

Total assets accounted for at fair value	$	1,295	$	14,502	$	926	$	16,723
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	23	$	23
Liabilities of managed investment entities	384		4,823		13		5,220

Total liabilities accounted for at fair value	$	384	$	4,823	$	36	$	5,243

Changes in balances of Level 3 financial assets

Changes in balances of Level 3 financial assets and liabilities carried at fair value during the first six months of 2022 and 2021 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period.


			Total realized/unrealized gains (losses) included in
	Balance at March 31, 2022		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	33		—		(1)		—		—		—		(31)		1
Residential MBS	11		—		—		—		—		—		(3)		8
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		2		—		2
Other asset-backed securities	337		—		(7)		10		(27)		—		—		313
Corporate and other	244		—		(4)		32		(3)		—		—		269
Total AFS fixed maturities	625		—		(12)		42		(30)		2		(34)		593
Equity securities	361		—		—		21		(2)		—		(2)		378
Assets of MIE	12		(1)		—		1		—		—		—		12
Total Level 3 assets	$	998	$	(1)	$	(12)	$	64	$	(32)	$	2	$	(36)	$	983

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)


			Total realized/unrealized gains (losses) included in
	Balance at March 31, 2021		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Sale of Annuity Business		Balance at June 30, 2021
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	39		—		—		—		(3)		—		—		—		36
Residential MBS	27		—		—		—		(1)		3		(1)		—		28
Commercial MBS	—		—		—		—		—		—		—		—		—
Collateralized loan obligations	6		—		—		—		—		—		—		—		6
Other asset-backed securities	326		—		1		38		(49)		—		(1)		—		315
Corporate and other	204		(2)		—		22		(2)		1		(3)		—		220
Total AFS fixed maturities	602		(2)		1		60		(55)		4		(5)		—		605
Equity securities	227		18		—		12		(5)		—		(7)		—		245
Assets of MIE	14		(1)		—		1		—		1		—		—		15
Assets of discontinued annuity operations	2,806		15		21		13		(136)		—		—		(2,719)		—
Total Level 3 assets	$	3,649	$	30	$	22	$	86	$	(196)	$	5	$	(12)	$	(2,719)	$	865

Liabilities of discontinued annuity operations	$	(3,954)	$	(183)	$	—	$	(72)	$	66	$	—	$	—	$	4,143	$	—
Total Level 3 liabilities	$	(3,954)	$	(183)	$	—	$	(72)	$	66	$	—	$	—	$	4,143	$	—


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2021		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	41		—		(3)		—		(1)		—		(36)		1
Residential MBS	14		—		—		—		(1)		—		(5)		8
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		2		—		2
Other asset-backed securities	278		2		(16)		57		(42)		34		—		313
Corporate and other	267		—		(14)		60		(10)		—		(34)		269
Total AFS fixed maturities	600		2		(33)		117		(54)		36		(75)		593
Equity securities	313		22		—		51		(5)		3		(6)		378
Assets of MIE	13		(2)		—		1		—		—		—		12
Total Level 3 assets	$	926	$	22	$	(33)	$	169	$	(59)	$	39	$	(81)	$	983

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2020		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Sale of Annuity Business		Balance at June 30, 2021
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	39		—		—		—		(3)		—		—		—		36
Residential MBS	38		(3)		—		6		(1)		6		(18)		—		28
Commercial MBS	2		—		—		—		—		—		(2)		—		—
Collateralized loan obligations	16		1		(1)		—		(1)		—		(9)		—		6
Other asset-backed securities	305		—		1		90		(72)		14		(23)		—		315
Corporate and other	138		(1)		(1)		106		(20)		3		(5)		—		220
Total AFS fixed maturities	538		(3)		(1)		202		(97)		23		(57)		—		605
Equity securities	176		71		—		24		(19)		—		(7)		—		245
Assets of MIE	21		3		—		2		—		1		(12)		—		15
Assets of discontinued annuity operations	2,971		85		(21)		209		(328)		32		(229)		(2,719)		—
Total Level 3 assets	$	3,706	$	156	$	(22)	$	437	$	(444)	$	56	$	(305)	$	(2,719)	$	865

Liabilities of discontinued annuity operations	$	(3,933)	$	(222)	$	—	$	(146)	$	158	$	—	$	—	$	4,143	$	—
Total Level 3 liabilities	$	(3,933)	$	(222)	$	—	$	(146)	$	158	$	—	$	—	$	4,143	$	—

Changes in balances of Level 3 financial liabilities


			Total realized/unrealized gains (losses) included in
	Balance at March 31, 2022		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	33		—		(1)		—		—		—		(31)		1
Residential MBS	11		—		—		—		—		—		(3)		8
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		2		—		2
Other asset-backed securities	337		—		(7)		10		(27)		—		—		313
Corporate and other	244		—		(4)		32		(3)		—		—		269
Total AFS fixed maturities	625		—		(12)		42		(30)		2		(34)		593
Equity securities	361		—		—		21		(2)		—		(2)		378
Assets of MIE	12		(1)		—		1		—		—		—		12
Total Level 3 assets	$	998	$	(1)	$	(12)	$	64	$	(32)	$	2	$	(36)	$	983

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)


			Total realized/unrealized gains (losses) included in
	Balance at March 31, 2021		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Sale of Annuity Business		Balance at June 30, 2021
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	39		—		—		—		(3)		—		—		—		36
Residential MBS	27		—		—		—		(1)		3		(1)		—		28
Commercial MBS	—		—		—		—		—		—		—		—		—
Collateralized loan obligations	6		—		—		—		—		—		—		—		6
Other asset-backed securities	326		—		1		38		(49)		—		(1)		—		315
Corporate and other	204		(2)		—		22		(2)		1		(3)		—		220
Total AFS fixed maturities	602		(2)		1		60		(55)		4		(5)		—		605
Equity securities	227		18		—		12		(5)		—		(7)		—		245
Assets of MIE	14		(1)		—		1		—		1		—		—		15
Assets of discontinued annuity operations	2,806		15		21		13		(136)		—		—		(2,719)		—
Total Level 3 assets	$	3,649	$	30	$	22	$	86	$	(196)	$	5	$	(12)	$	(2,719)	$	865

Liabilities of discontinued annuity operations	$	(3,954)	$	(183)	$	—	$	(72)	$	66	$	—	$	—	$	4,143	$	—
Total Level 3 liabilities	$	(3,954)	$	(183)	$	—	$	(72)	$	66	$	—	$	—	$	4,143	$	—


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2021		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	41		—		(3)		—		(1)		—		(36)		1
Residential MBS	14		—		—		—		(1)		—		(5)		8
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		2		—		2
Other asset-backed securities	278		2		(16)		57		(42)		34		—		313
Corporate and other	267		—		(14)		60		(10)		—		(34)		269
Total AFS fixed maturities	600		2		(33)		117		(54)		36		(75)		593
Equity securities	313		22		—		51		(5)		3		(6)		378
Assets of MIE	13		(2)		—		1		—		—		—		12
Total Level 3 assets	$	926	$	22	$	(33)	$	169	$	(59)	$	39	$	(81)	$	983

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2020		Net earnings (loss)		OCI		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Sale of Annuity Business		Balance at June 30, 2021
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	39		—		—		—		(3)		—		—		—		36
Residential MBS	38		(3)		—		6		(1)		6		(18)		—		28
Commercial MBS	2		—		—		—		—		—		(2)		—		—
Collateralized loan obligations	16		1		(1)		—		(1)		—		(9)		—		6
Other asset-backed securities	305		—		1		90		(72)		14		(23)		—		315
Corporate and other	138		(1)		(1)		106		(20)		3		(5)		—		220
Total AFS fixed maturities	538		(3)		(1)		202		(97)		23		(57)		—		605
Equity securities	176		71		—		24		(19)		—		(7)		—		245
Assets of MIE	21		3		—		2		—		1		(12)		—		15
Assets of discontinued annuity operations	2,971		85		(21)		209		(328)		32		(229)		(2,719)		—
Total Level 3 assets	$	3,706	$	156	$	(22)	$	437	$	(444)	$	56	$	(305)	$	(2,719)	$	865

Liabilities of discontinued annuity operations	$	(3,933)	$	(222)	$	—	$	(146)	$	158	$	—	$	—	$	4,143	$	—
Total Level 3 liabilities	$	(3,933)	$	(222)	$	—	$	(146)	$	158	$	—	$	—	$	4,143	$	—

Fair value of financial instruments

The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions):


	Carrying		Fair Value
	Value		Total		Level 1		Level 2		Level 3
June 30, 2022
Financial assets:
Cash and cash equivalents	$	967	$	967	$	967	$	—	$	—
Mortgage loans	692		650		—		—		650
Total financial assets not accounted for at fair value	$	1,659	$	1,617	$	967	$	—	$	650

Long-term debt	$	1,542	$	1,396	$	—	$	1,393	$	3
Total financial liabilities not accounted for at fair value	$	1,542	$	1,396	$	—	$	1,393	$	3

December 31, 2021
Financial assets:
Cash and cash equivalents	$	2,131	$	2,131	$	2,131	$	—	$	—
Mortgage loans	520		533		—		—		533
Total financial assets not accounted for at fair value	$	2,651	$	2,664	$	2,131	$	—	$	533

Long-term debt	$	1,964	$	2,261	$	—	$	2,258	$	3
Total financial liabilities not accounted for at fair value	$	1,964	$	2,261	$	—	$	2,258	$	3