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Investments (Tables)
 6 Months Ended
Jun. 30, 2018
Investments [Abstract]  
Fixed Maturities, Available-for-sale Securities
The following tables set forth information relating to fixed maturity securities (excluding investments classified as trading), as of the dates indicated:
 
 
June 30, 2018
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
OTTI
in AOCI(4)
 
(in millions)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
22,471

 
$
2,987

 
$
613

 
$
24,845

 
$
0

Obligations of U.S. states and their political subdivisions
9,548

 
771

 
40

 
10,279

 
0

Foreign government bonds
93,464

 
15,787

 
414

 
108,837

 
0

U.S. corporate public securities
79,744

 
4,674

 
2,058

 
82,360

 
(4
)
U.S. corporate private securities(1)
32,171

 
1,269

 
556

 
32,884

 
(11
)
Foreign corporate public securities
26,949

 
2,290

 
355

 
28,884

 
(5
)
Foreign corporate private securities
24,099

 
622

 
760

 
23,961

 
0

Asset-backed securities(2)
12,860

 
195

 
24

 
13,031

 
(172
)
Commercial mortgage-backed securities
13,093

 
58

 
305

 
12,846

 
0

Residential mortgage-backed securities(3)
3,149

 
118

 
43

 
3,224

 
(1
)
       Total fixed maturities, available-for-sale(1)
$
317,548

 
$
28,771

 
$
5,168

 
$
341,151

 
$
(193
)
(1)
Excludes notes with amortized cost of $3,666 million (fair value, $3,666 million), which have been offset with the associated payables under a netting agreement.
(2)
Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3)
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
(4)
Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $409 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.
(5)
Excludes notes with amortized cost of $4,753 million (fair value, $4,754 million), which have been offset with the associated payables under a netting agreement.
(1)
Excludes notes with amortized cost of $2,660 million (fair value, $2,660 million), which have been offset with the associated payables under a netting agreement.
(2)
Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3)
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
(4)
Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $553 million of net unrealized gains on impaired available-for-sale securities and $2 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.
(5)
Excludes notes with amortized cost of $4,627 million (fair value, $4,913 million), which have been offset with the associated payables under a netting agreement.
 
December 31, 2017
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
OTTI
in AOCI(4)
 
(in millions)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
22,837

 
$
3,647

 
$
346

 
$
26,138

 
$
0

Obligations of U.S. states and their political subdivisions
9,366

 
1,111

 
6

 
10,471

 
0

Foreign government bonds
88,062

 
15,650

 
293

 
103,419

 
0

U.S. corporate public securities
81,967

 
8,671

 
414

 
90,224

 
(10
)
U.S. corporate private securities(1)
31,852

 
2,051

 
169

 
33,734

 
(13
)
Foreign corporate public securities
26,389

 
3,118

 
99

 
29,408

 
(5
)
Foreign corporate private securities
23,322

 
1,242

 
337

 
24,227

 
0

Asset-backed securities(2)
11,965

 
278

 
10

 
12,233

 
(237
)
Commercial mortgage-backed securities
13,134

 
238

 
91

 
13,281

 
0

Residential mortgage-backed securities(3)
3,491

 
165

 
11

 
3,645

 
(2
)
       Total fixed maturities, available-for-sale(1)
$
312,385

 
$
36,171

 
$
1,776

 
$
346,780

 
$
(267
)
Fixed Maturities, Held-to-maturity Securities
 
June 30, 2018
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(in millions)
Fixed maturities, held-to-maturity:
 
 
 
 
 
 
 
Foreign government bonds
$
878

 
$
271

 
$
0

 
$
1,149

Foreign corporate public securities
662

 
67

 
0

 
729

Foreign corporate private securities(5)
85

 
3

 
0

 
88

Commercial mortgage-backed securities
0

 
0

 
0

 
0

Residential mortgage-backed securities(3)
395

 
27

 
0

 
422

       Total fixed maturities, held-to-maturity(5)
$
2,020

 
$
368

 
$
0

 
$
2,388

__________
(1)
Excludes notes with amortized cost of $3,666 million (fair value, $3,666 million), which have been offset with the associated payables under a netting agreement.
(2)
Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3)
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
(4)
Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $409 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.
(5)
Excludes notes with amortized cost of $4,753 million (fair value, $4,754 million), which have been offset with the associated payables under a netting agreement.
 
December 31, 2017
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
(in millions)
Fixed maturities, held-to-maturity:
 
 
 
 
 
 
 
Foreign government bonds
$
865

 
$
265

 
$
0

 
$
1,130

Foreign corporate public securities
654

 
82

 
0

 
736

Foreign corporate private securities(5)
84

 
2

 
0

 
86

Commercial mortgage-backed securities
0

 
0

 
0

 
0

Residential mortgage-backed securities(3)
446

 
32

 
0

 
478

       Total fixed maturities, held-to-maturity(5)
$
2,049

 
$
381

 
$
0

 
$
2,430

__________
(1)
Excludes notes with amortized cost of $2,660 million (fair value, $2,660 million), which have been offset with the associated payables under a netting agreement.
(2)
Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3)
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
(4)
Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $553 million of net unrealized gains on impaired available-for-sale securities and $2 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.
(5)
Excludes notes with amortized cost of $4,627 million (fair value, $4,913 million), which have been offset with the associated payables under a netting agreement.
Duration Of Gross Unrealized Losses On Fixed Maturity Securities
The following tables set forth the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:
 
 
 
June 30, 2018
 
 
Less Than
Twelve Months
 
Twelve Months
or More
 
Total
 
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
 
(in millions)
Fixed maturities(1):
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
 
$
5,105

 
$
125

 
$
4,940

 
$
488

 
$
10,045

 
$
613

Obligations of U.S. states and their political subdivisions
 
1,514

 
25

 
252

 
15

 
1,766

 
40

Foreign government bonds
 
5,039

 
221

 
2,737

 
193

 
7,776

 
414

U.S. corporate public securities
 
36,466

 
1,451

 
5,579

 
607

 
42,045

 
2,058

U.S. corporate private securities
 
14,045

 
382

 
2,242

 
174

 
16,287

 
556

Foreign corporate public securities
 
7,626

 
242

 
1,348

 
113

 
8,974

 
355

Foreign corporate private securities
 
9,568

 
357

 
3,161

 
403

 
12,729

 
760

Asset-backed securities
 
6,825

 
19

 
285

 
5

 
7,110

 
24

Commercial mortgage-backed securities
 
6,705

 
165

 
2,057

 
140

 
8,762

 
305

Residential mortgage-backed securities
 
1,149

 
29

 
292

 
14

 
1,441

 
43

Total
 
$
94,042

 
$
3,016

 
$
22,893

 
$
2,152

 
$
116,935

 
$
5,168

__________ 
(1)
Includes $13 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of June 30, 2018.
 
 
 
December 31, 2017
 
 
Less Than
Twelve Months
 
Twelve Months
or More
 
Total
 
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
 
(in millions)
Fixed maturities(1):
 
 
U.S. Treasury securities and obligations of U.S. government authorities and agencies
 
$
3,450

 
$
28

 
$
6,391

 
$
318

 
$
9,841

 
$
346

Obligations of U.S. states and their political subdivisions
 
44

 
0

 
287

 
6

 
331

 
6

Foreign government bonds
 
4,417

 
55

 
2,937

 
238

 
7,354

 
293

U.S. corporate public securities
 
7,914

 
110

 
6,831

 
304

 
14,745

 
414

U.S. corporate private securities
 
4,596

 
76

 
2,009

 
93

 
6,605

 
169

Foreign corporate public securities
 
2,260

 
21

 
1,678

 
78

 
3,938

 
99

Foreign corporate private securities
 
1,213

 
20

 
5,339

 
317

 
6,552

 
337

Asset-backed securities
 
564

 
2

 
366

 
8

 
930

 
10

Commercial mortgage-backed securities
 
2,593

 
17

 
2,212

 
74

 
4,805

 
91

Residential mortgage-backed securities
 
584

 
4

 
286

 
7

 
870

 
11

Total
 
$
27,635

 
$
333

 
$
28,336

 
$
1,443

 
$
55,971

 
$
1,776

__________ 
(1)
Includes $12 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of December 31, 2017.
Investments Classified by Contractual Maturity Date
The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated:
 
 
June 30, 2018
 
Available-for-Sale
 
Held-to-Maturity
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
(in millions)
Fixed maturities:
 
 
 
 
 
 
 
Due in one year or less
$
10,769

 
$
11,156

 
$
7

 
$
7

Due after one year through five years
50,932

 
53,917

 
171

 
176

Due after five years through ten years
63,671

 
66,989

 
572

 
636

Due after ten years(1)
163,074

 
179,988

 
875

 
1,147

Asset-backed securities
12,860

 
13,031

 
0

 
0

Commercial mortgage-backed securities
13,093

 
12,846

 
0

 
0

Residential mortgage-backed securities
3,149

 
3,224

 
395

 
422

Total
$
317,548

 
$
341,151

 
$
2,020

 
$
2,388

__________ 
(1)
Excludes available-for-sale notes with amortized cost of $3,666 million (fair value, $3,666 million) and held-to-maturity notes with amortized cost of $4,753 million (fair value, $4,754 million), which have been offset with the associated payables under a netting agreement.
Sources of Fixed Maturity Proceeds and Related Investment Gains (Losses) as well as Losses on Impairments
The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of fixed maturities, for the periods indicated:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
(in millions)
Fixed maturities, available-for-sale:
 
 
 
 
 
 
 
Proceeds from sales(1)
$
9,489

 
$
8,157

 
$
19,074

 
$
15,887

Proceeds from maturities/prepayments
6,553

 
7,546

 
11,779

 
13,420

Gross investment gains from sales and maturities
410

 
410

 
784

 
801

Gross investment losses from sales and maturities
(187
)
 
(135
)
 
(444
)
 
(298
)
OTTI recognized in earnings(2)
(58
)
 
(46
)
 
(97
)
 
(100
)
Fixed maturities, held-to-maturity:
 
 
 
 
 
 
 
Proceeds from maturities/prepayments(3)
$
23

 
$
39

 
$
59

 
$
89

__________ 
(1)
Includes $254 million and $317 million of non-cash related proceeds due to the timing of trade settlements for the six months ended June 30, 2018 and 2017, respectively.
(2)
Excludes the portion of OTTI amounts remaining in “Other comprehensive income (loss)” (“OCI”), representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.
(3)
Includes $3 million and $0 million of non-cash related proceeds due to the timing of trade settlements for the six months ended June 30, 2018 and 2017, respectively.
Credit Losses Recognized in Earnings on Fixed Maturity Securities Held by the Company for which a Portion of the OTTI Loss was Recognized in OCI
The following table sets forth a rollforward of pre-tax amounts remaining in OCI related to fixed maturity securities with credit loss impairments recognized in earnings, for the periods indicated: 
 
Three Months Ended
June 30, 2018
 
Six Months Ended June 30, 2018
 
Three Months Ended June 30, 2017
 
Six Months Ended June 30, 2017
 
(in millions)
Credit loss impairments:
 
 
 
 
 
 
 
Balance, beginning of period
$
203

 
$
319

 
$
350

 
$
359

New credit loss impairments
0

 
0

 
7

 
7

Additional credit loss impairments on securities previously impaired
0

 
0

 
0

 
1

Increases due to the passage of time on previously recorded credit losses
4

 
6

 
4

 
7

Reductions for securities which matured, paid down, prepaid or were sold during the period
(42
)
 
(155
)
 
(7
)
 
(16
)
Reductions for securities impaired to fair value during the period(1)
0

 
(4
)
 
(11
)
 
(14
)
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected
(2
)
 
(3
)
 
(2
)
 
(3
)
       Balance, end of period
$
163

 
$
163

 
$
341

 
$
341

__________ 
(1)
Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.
Assets Supporting Experience-Rated Contractholder Liabilities
The following table sets forth the composition of “Assets supporting experience-rated contractholder liabilities,” as of the dates indicated:
 
 
 
June 30, 2018
 
December 31, 2017
 
 
Amortized
Cost or Cost
 
Fair
Value
 
Amortized
Cost or Cost
 
Fair
Value
 
 
(in millions)
Short-term investments and cash equivalents
 
$
340

 
$
340

 
$
245

 
$
245

Fixed maturities:
 
 
 
 
 
 
 
 
Corporate securities
 
13,263

 
13,140

 
13,816

 
14,073

Commercial mortgage-backed securities
 
2,390

 
2,350

 
2,294

 
2,311

Residential mortgage-backed securities(1)
 
888

 
867

 
961

 
966

Asset-backed securities(2)
 
1,470

 
1,493

 
1,363

 
1,392

Foreign government bonds
 
1,063

 
1,061

 
1,050

 
1,057

U.S. government authorities and agencies and obligations of U.S. states
 
579

 
619

 
357

 
410

Total fixed maturities
 
19,653

 
19,530

 
19,841

 
20,209

Equity securities
 
1,367

 
1,627

 
1,278

 
1,643

Total assets supporting experience-rated contractholder liabilities
 
$
21,360

 
$
21,497

 
$
21,364

 
$
22,097


__________ 
(1)
Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
(2)
Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
Securities Concentrations of Credit Risk
As of the dates indicated, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government and certain U.S. government agencies and securities guaranteed by the U.S. government, as well as the securities disclosed below:
 
 
 
June 30, 2018
 
December 31, 2017
 
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
 
(in millions)
Investments in Japanese government and government agency securities:
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale
 
$
69,248

 
$
81,731

 
$
64,628

 
$
76,311

Fixed maturities, held-to-maturity
 
857

 
1,122

 
844

 
1,103

Fixed maturities, trading
 
23

 
23

 
23

 
23

Assets supporting experience-rated contractholder liabilities
 
676

 
686

 
657

 
667

Total
 
$
70,804

 
$
83,562

 
$
66,152

 
$
78,104

 
 
 
June 30, 2018
 
December 31, 2017
 
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
 
(in millions)
Investments in South Korean government and government agency securities:
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale
 
$
9,646

 
$
10,988

 
$
9,425

 
$
10,989

Fixed maturities, held-to-maturity
 
0

 
0

 
0

 
0

Fixed maturities, trading
 
0

 
0

 
0

 
0

Assets supporting experience-rated contractholder liabilities
 
15

 
15

 
15

 
15

Total
 
$
9,661

 
$
11,003

 
$
9,440

 
$
11,004
Commercial Mortgage and Other Loans
The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:
 
 
 
June 30, 2018
 
December 31, 2017
 
 
Amount
(in millions)
 
% of
Total
 
Amount
(in millions)
 
% of
Total
Commercial mortgage and agricultural property loans by property type:
 
 
 
 
 
 
 
 
Office
 
$
13,435

 
23.2
%
 
$
12,670

 
22.9
%
Retail
 
8,707

 
15.1

 
8,543

 
15.5

Apartments/Multi-Family
 
16,194

 
28.0

 
15,465

 
28.0

Industrial
 
10,609

 
18.3

 
9,451

 
17.1

Hospitality
 
1,965

 
3.4

 
2,067

 
3.7

Other
 
3,784

 
6.5

 
3,888

 
7.0

Total commercial mortgage loans
 
54,694

 
94.5

 
52,084

 
94.2

Agricultural property loans
 
3,206

 
5.5

 
3,203

 
5.8

Total commercial mortgage and agricultural property loans by property type
 
57,900

 
100.0
%
 
55,287

 
100.0
%
Valuation allowance
 
(119
)
 
 
 
(100
)
 
 
Total net commercial mortgage and agricultural property loans by property type
 
57,781

 
 
 
55,187

 
 
Other loans:
 
 
 

 
 
 

Uncollateralized loans
 
666

 

 
663

 

Residential property loans
 
176

 

 
196

 

Other collateralized loans
 
4

 

 
5

 

Total other loans
 
846

 

 
864

 

Valuation allowance
 
(5
)
 

 
(6
)
 

Total net other loans
 
841

 

 
858

 

Total commercial mortgage and other loans(1)
 
$
58,622

 

 
$
56,045

 

__________ 
(1)
Includes loans held for sale which are carried at fair value and are collateralized primarily by apartment complexes. As of June 30, 2018 and December 31, 2017, the net carrying value of these loans was $330 million and $593 million, respectively.
Allowance for Credit Losses
The following tables set forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:
 
 
 
June 30, 2018
 
 
Commercial
Mortgage
Loans
 
Agricultural
Property
Loans
 
Residential
Property
Loans
 
Other
Collateralized
Loans
 
Uncollateralized
Loans
 
Total
 
 
(in millions)
Allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
 
$
97

 
$
3

 
$
1

 
$
0

 
$
5

 
$
106

Addition to (release of) allowance for losses
 
19

 
0

 
0

 
0

 
(1
)
 
18

Charge-offs, net of recoveries
 
0

 
0

 
0

 
0

 
0

 
0

Change in foreign exchange
 
0

 
0

 
0

 
0

 
0

 
0

       Total ending balance
 
$
116

 
$
3

 
$
1

 
$
0

 
$
4

 
$
124

 
 
 
December 31, 2017
 
 
Commercial
Mortgage
Loans
 
Agricultural
Property
Loans
 
Residential
Property
Loans
 
Other
Collateralized
Loans
 
Uncollateralized
Loans
 
Total
 
 
(in millions)
Allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
 
$
96

 
$
2

 
$
2

 
$
0

 
$
6


$
106

Addition to (release of) allowance for losses
 
2

 
1

 
(1
)
 
0

 
(1
)
 
1

Charge-offs, net of recoveries
 
(1
)
 
0

 
0

 
0

 
0

 
(1
)
Change in foreign exchange
 
0

 
0

 
0

 
0

 
0

 
0

       Total ending balance
 
$
97

 
$
3

 
$
1

 
$
0

 
$
5

 
$
106
Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans
The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans, as of the dates indicated:
 
 
 
June 30, 2018
 
 
Commercial
Mortgage
Loans
 
Agricultural
Property
Loans
 
Residential
Property
Loans
 
Other
Collateralized
Loans
 
Uncollateralized
Loans
 
Total
 
 
(in millions)
Allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
20

 
$
0

 
$
0

 
$
0

 
$
0

 
$
20

Collectively evaluated for impairment
 
96

 
3

 
1

 
0

 
4

 
104

       Total ending balance(1)
 
$
116

 
$
3

 
$
1

 
$
0

 
$
4

 
$
124

 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded investment(2):
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
70

 
$
35

 
$
0

 
$
0

 
$
2

 
$
107

Collectively evaluated for impairment
 
54,624

 
3,171

 
176

 
4

 
664

 
58,639

       Total ending balance(1)
 
$
54,694

 
$
3,206

 
$
176

 
$
4

 
$
666

 
$
58,746

__________ 
(1)
As of June 30, 2018, there were no loans acquired with deteriorated credit quality.
(2)
Recorded investment reflects the carrying value gross of related allowance.
 
 
 
December 31, 2017
 
 
Commercial
Mortgage
Loans
 
Agricultural
Property
Loans
 
Residential
Property
Loans
 
Other
Collateralized
Loans
 
Uncollateralized
Loans
 
Total
 
 
(in millions)
Allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
7

 
$
0

 
$
0

 
$
0

 
$
0

 
$
7

Collectively evaluated for impairment
 
90

 
3

 
1

 
0

 
5

 
99

       Total ending balance(1)
 
$
97

 
$
3

 
$
1

 
$
0

 
$
5

 
$
106

 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded investment(2):
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
75

 
$
39

 
$
0

 
$
0

 
$
2

 
$
116

Collectively evaluated for impairment
 
52,009

 
3,164

 
196

 
5

 
661

 
56,035

       Total ending balance(1)
 
$
52,084

 
$
3,203

 
$
196

 
$
5

 
$
663

 
$
56,151

__________
(1)
As of December 31, 2017, there were no loans acquired with deteriorated credit quality.
(2)
Recorded investment reflects the carrying value gross of related allowance.
Financing Receivable Credit Quality Indicators
The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:
 
Commercial mortgage loans 
 
 
June 30, 2018
 
 
Debt Service Coverage Ratio
 
 
 
 
>1.2X
 
1.0X to <1.2X
 
< 1.0X
 
Total
 
 
(in millions)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
 
0%-59.99%
 
$
29,292

 
$
520

 
$
281

 
$
30,093

60%-69.99%
 
16,737

 
579

 
155

 
17,471

70%-79.99%
 
6,047

 
807

 
11

 
6,865

80% or greater
 
60

 
182

 
23

 
265

       Total commercial mortgage loans
 
$
52,136

 
$
2,088

 
$
470

 
$
54,694

 
Agricultural property loans 
 
 
June 30, 2018
 
 
Debt Service Coverage Ratio
 
 
 
 
>1.2X
 
1.0X to <1.2X
 
< 1.0X
 
Total
 
 
(in millions)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
 
0%-59.99%
 
$
2,955

 
$
176

 
$
0

 
$
3,131

60%-69.99%
 
75

 
0

 
0

 
75

70%-79.99%
 
0

 
0

 
0

 
0

80% or greater
 
0

 
0

 
0

 
0

       Total agricultural property loans
 
$
3,030

 
$
176

 
$
0

 
$
3,206

 
Total commercial mortgage and agricultural property loans

 
 
June 30, 2018
 
 
Debt Service Coverage Ratio
 
 
 
 
>1.2X
 
1.0X to <1.2X
 
< 1.0X
 
Total
 
 
(in millions)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
 
0%-59.99%
 
$
32,247

 
$
696

 
$
281

 
$
33,224

60%-69.99%
 
16,812

 
579

 
155

 
17,546

70%-79.99%
 
6,047

 
807

 
11

 
6,865

80% or greater
 
60

 
182

 
23

 
265

       Total commercial mortgage and agricultural property loans
 
$
55,166

 
$
2,264

 
$
470

 
$
57,900


 
The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:

Commercial mortgage loans 
 
 
December 31, 2017
 
 
Debt Service Coverage Ratio
 
 
 
 
>1.2X
 
1.0X to <1.2X
 
< 1.0X
 
Total
 
 
(in millions)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
 
0%-59.99%
 
$
30,082

 
$
639

 
$
251

 
$
30,972

60%-69.99%
 
13,658

 
530

 
121

 
14,309

70%-79.99%
 
5,994

 
514

 
29

 
6,537

80% or greater
 
93

 
54

 
119

 
266

       Total commercial mortgage loans
 
$
49,827

 
$
1,737

 
$
520

 
$
52,084

 
Agricultural property loans
 
 
December 31, 2017
 
 
Debt Service Coverage Ratio
 
 
 
 
>1.2X
 
1.0X to <1.2X
 
< 1.0X
 
Total
 
 
(in millions)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
 
0%-59.99%
 
$
2,988

 
$
170

 
$
5

 
$
3,163

60%-69.99%
 
40

 
0

 
0

 
40

70%-79.99%
 
0

 
0

 
0

 
0

80% or greater
 
0

 
0

 
0

 
0

       Total agricultural property loans
 
$
3,028

 
$
170

 
$
5

 
$
3,203

 
Total commercial mortgage and agricultural property loans
 
 
December 31, 2017
 
 
Debt Service Coverage Ratio
 
 
 
 
>1.2X
 
1.0X to <1.2X
 
< 1.0X
 
Total
 
 
(in millions)
Loan-to-Value Ratio:
 
 
 
 
 
 
 
 
0%-59.99%
 
$
33,070

 
$
809

 
$
256

 
$
34,135

60%-69.99%
 
13,698

 
530

 
121

 
14,349

70%-79.99%
 
5,994

 
514

 
29

 
6,537

80% or greater
 
93

 
54

 
119

 
266

       Total commercial mortgage and agricultural property loans
 
$
52,855

 
$
1,907

 
$
525

 
$
55,287
Aging of Past Due Commercial Mortgage and Other Loans and Nonaccrual Status
The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:
 
 
 
June 30, 2018
 
 
Current
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days or More Past Due(1)
 
Total Past
Due
 
Total
Loans
 
Non-Accrual
Status(2)
 
 
(in millions)
Commercial mortgage loans
 
$
54,694

 
$
0

 
$
0

 
$
0

 
$
0

 
$
54,694

 
$
70

Agricultural property loans
 
3,190

 
0

 
0

 
16

 
16

 
3,206

 
23

Residential property loans
 
172

 
1

 
1

 
2

 
4

 
176

 
2

Other collateralized loans
 
4

 
0

 
0

 
0

 
0

 
4

 
0

Uncollateralized loans
 
666

 
0

 
0

 
0

 
0

 
666

 
0

Total
 
$
58,726

 
$
1

 
$
1

 
$
18

 
$
20

 
$
58,746

 
$
95

 __________
(1)
As of June 30, 2018, there were no loans in this category accruing interest.
(2)
For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
 
 
December 31, 2017
 
 
Current
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days or More Past Due(1)
 
Total Past
Due
 
Total
Loans
 
Non-Accrual
Status(2)
 
 
(in millions)
Commercial mortgage loans
 
$
52,084

 
$
0

 
$
0

 
$
0

 
$
0

 
$
52,084

 
$
71

Agricultural property loans
 
3,201

 
0

 
0

 
2

 
2

 
3,203

 
23

Residential property loans
 
191

 
3

 
0

 
2

 
5

 
196

 
2

Other collateralized loans
 
5

 
0

 
0

 
0

 
0

 
5

 
0

Uncollateralized loans
 
663

 
0

 
0

 
0

 
0

 
663

 
0

Total
 
$
56,144

 
$
3

 
$
0

 
$
4

 
$
7

 
$
56,151

 
$
96


__________
(1)
As of December 31, 2017, there were no loans in this category accruing interest.
(2)
For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
Other Invested Assets
The following table sets forth the composition of “Other invested assets,” as of the dates indicated:

 
 
June 30, 2018
 
December 31, 2017
 
 
(in millions)
LPs/LLCs:
 
 
 
 
Equity method:
 
 
 
 
Private equity
 
$
2,927

 
$
2,954

Hedge funds
 
1,021

 
803

Real estate-related
 
1,171

 
972

Subtotal equity method
 
5,119

 
4,729

Fair value:
 
 
 
 
Private equity
 
1,608

 
1,325

Hedge funds
 
2,307

 
2,419

Real estate-related
 
293
 
247
Subtotal fair value(1)
 
4,208

 
3,991

Total LPs/LLCs
 
9,327

 
8,720

Real estate held through direct ownership(2)
 
2,278

 
2,409

Derivative instruments
 
820

 
1,214
Other(3)
 
1,034

 
1,030

Total other invested assets(4)
 
$
13,459

 
$
13,373

_________ 
(1)
As of December 31, 2017, $1,572 million was accounted for using the cost method.
(2)
As of June 30, 2018 and December 31, 2017, real estate held through direct ownership had mortgage debt of $751 million and $799 million, respectively.
(3)
Primarily includes strategic investments made by investment management operations, leveraged leases and member and activity stock held in the Federal Home Loan Banks of New York and Boston. For additional information regarding the Company’s holdings in the Federal Home Loan Banks of New York and Boston, see Note 14 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
(4)
Prior period amounts have been reclassified to conform to current period presentation. For additional information, see Note 2.
Net Investment Income
The following table sets forth “Net investment income” by investment type, for the periods indicated:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(in millions)
Fixed maturities, available-for-sale(1)
$
3,001

 
$
2,856

 
$
5,955

 
$
5,651

Fixed maturities, held-to-maturity(1)
57

 
54

 
112

 
108

Fixed maturities, trading
30

 
45

 
61

 
87

Assets supporting experience-rated contractholder liabilities, at fair value
181

 
177

 
372

 
372

Equity securities, at fair value
59

 
114

 
94

 
204

Commercial mortgage and other loans
594

 
583

 
1,163

 
1,120

Policy loans
156

 
155

 
308

 
307

Other invested assets
163

 
248

 
304

 
580

Short-term investments and cash equivalents
82

 
46

 
154

 
90

Gross investment income
4,323

 
4,278

 
8,523

 
8,519

Less: investment expenses
(227
)
 
(189
)
 
(429
)
 
(369
)
Net investment income(2)
$
4,096

 
$
4,089

 
$
8,094

 
$
8,150

__________ 
(1)
Includes income on credit-linked notes which are reported on the same financial statement line item as related surplus notes, as conditions are met for right to offset.
(2)
Prior period amounts have been reclassified to conform to current period presentation.
Realized Investment Gains (Losses), Net
The following table sets forth “Realized investment gains (losses), net,” by investment type, for the periods indicated:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(in millions)
Fixed maturities(1)
$
165

 
$
229

 
$
243

 
$
403

Equity securities(2)
0

 
164

 
0

 
420

Commercial mortgage and other loans
5

 
14

 
17

 
28

Investment real estate
60

 
6

 
62

 
12

LPs/LLCs
10

 
(10
)
 
16

 
(21
)
Derivatives(3)
445

 
(1,496
)
 
773

 
(1,507
)
Other
0

 
1

 
(1
)
 
0

Realized investment gains (losses), net
$
685

 
$
(1,092
)
 
$
1,110

 
$
(665
)
__________ 
(1)
Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading.
(2)
Effective January 1, 2018, realized gains (losses) on equity securities are recorded within “Other income.”
(3)
Includes the hedged items offset in qualifying fair value hedge accounting relationships.
Net Unrealized Gains (Losses) on Investment
The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:
 
June 30,
2018
 
December 31,
2017
 
(in millions)
Fixed maturity securities, available-for-sale—with OTTI
$
216

 
$
286

Fixed maturity securities, available-for-sale—all other
23,387

 
34,109

Equity securities, available-for-sale(1)
0

 
2,027

Derivatives designated as cash flow hedges(2)
99

 
(39
)
Other investments(3)
(9
)
 
15

       Net unrealized gains (losses) on investments
$
23,693

 
$
36,398

__________ 
(1)
Effective January 1, 2018, unrealized gains (losses) on equity securities are recorded within “Other income.”
(2)
For more information on cash flow hedges, see Note 5.
(3)
As of June 30, 2018, there were no net unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”

Repurchase Agreements and Securities Lending
In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. The following table sets forth the composition of “Securities sold under agreements to repurchase,” as of the dates indicated:

 
June 30, 2018
 
December 31, 2017
 
Remaining Contractual Maturities of the Agreements
 
 
 
Remaining Contractual Maturities of the Agreements
 
 
 
 Overnight & Continuous
 
Up to 30 Days
 
Total
 
 Overnight & Continuous
 
Up to 30 Days
 
Total
 
(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
8,394

 
$
775

 
$
9,169

 
$
911

 
$
7,349

 
$
8,260

U.S. corporate public securities
20

 
0

 
20

 
1

 
0

 
1

Foreign corporate public securities
0

 
0

 
0

 
0

 
0

 
0

Residential mortgage-backed securities
351

 
0

 
351

 
0

 
139

 
139

Equity securities
0

 
0

 
0

 
0

 
0

 
0

       Total securities sold under agreements to
       repurchase(1)
$
8,765

 
$
775

 
$
9,540

 
$
912

 
$
7,488

 
$
8,400

__________ 
(1)
The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

The following table sets forth the composition of “Cash collateral for loaned securities” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:

 
June 30, 2018
 
December 31, 2017
 
Remaining Contractual Maturities of the Agreements
 
 
 
Remaining Contractual Maturities of the Agreements
 
 
 
 Overnight & Continuous
 
Up to 30 Days
 
Total
 
 Overnight & Continuous
 
Up to 30 Days
 
Total
 
(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$
142

 
$
161

 
$
303

 
$
87

 
$
35

 
$
122

Obligations of U.S. states and their political subdivisions
139

 
0

 
139

 
103

 
0

 
103

Foreign government bonds
368

 
0

 
368

 
335

 
0

 
335

U.S. corporate public securities
2,749

 
0

 
2,749

 
2,961

 
0

 
2,961

Foreign corporate public securities
612

 
0

 
612

 
655

 
0

 
655

Residential mortgage-backed securities
0

 
0

 
0

 
0

 
0

 
0

Equity securities
136

 
0

 
136

 
178

 
0

 
178

       Total cash collateral for loaned securities(1)
$
4,146

 
$
161

 
$
4,307

 
$
4,319

 
$
35

 
$
4,354


__________ 
(1)
The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.