Investments (Tables)

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Fixed Maturity Securities AFS by Sector

The following table presents the fixed maturity securities AFS by sector at:

	December 31, 2019											December 31, 2018
	Amortized Cost		Gross Unrealized							Estimated Fair Value		Amortized Cost		Gross Unrealized							Estimated Fair Value
			Gains		Temporary Losses		OTTI Losses (1)							Gains		Temporary Losses		OTTI Losses (1)
	(In millions)
Fixed maturity securities:
U.S. corporate	$	28,375	$	2,852	$	67	$	—		$	31,160	$	24,312	$	830	$	669	$	—		$	24,473
Foreign corporate	9,177		741		74		—			9,844		8,183		159		316		—			8,026
RMBS	8,692		438		16		(4		)	9,118		8,428		246		129		(2		)	8,547
U.S. government and agency	5,529		1,869		2		—			7,396		7,944		1,263		112		—			9,095
CMBS	5,500		264		9		—			5,755		5,292		43		88		(1		)	5,248
State and political subdivision	3,358		701		2		—			4,057		3,200		412		15		—			3,597
ABS	1,945		21		11		—			1,955		2,135		13		22		—			2,126
Foreign government	1,503		250		2		—			1,751		1,426		102		32		—			1,496
Total fixed maturity securities	$	64,079	$	7,136	$	183	$	(4	)	$	71,036	$	60,920	$	3,068	$	1,383	$	(3	)	$	62,608

_______________

(1)

Noncredit OTTI losses included AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities.

Maturities of Fixed Maturity Securities

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at December 31, 2019:

	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Securities		Total Fixed Maturity Securities
	(In millions)
Amortized cost	$	1,747	$	6,943	$	12,694	$	26,558	$	16,137	$	64,079
Estimated fair value	$	1,757	$	7,169	$	13,564	$	31,718	$	16,828	$	71,036

Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position at:

	December 31, 2019								December 31, 2018
	Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(Dollars in millions)
Fixed maturity securities:
U.S. corporate	$	2,017	$	44	$	326	$	23	$	10,584	$	470	$	2,328	$	199
Foreign corporate	576		12		561		62		3,982		203		774		113
RMBS	857		8		386		4		1,627		26		2,611		101
U.S. government and agency	40		2		—		—		412		8		1,543		104
CMBS	559		7		171		2		2,317		53		803		34
State and political subdivision	143		2		8		—		346		7		158		8
ABS	362		2		676		9		1,422		21		70		1
Foreign government	65		2		—		—		521		26		132		6
Total fixed maturity securities	$	4,619	$	79	$	2,128	$	100	$	21,211	$	814	$	8,419	$	566
Total number of securities in an unrealized loss position	720				302				3,027				1,028

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	December 31,
	2019					2018
	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Mortgage loans:
Commercial	$	9,721		61.7	%	$	8,529		62.3	%
Agricultural	3,388			21.5		2,946			21.5
Residential	2,708			17.2		2,276			16.6
Subtotal (1)	15,817			100.4		13,751			100.4
Valuation allowances (2)	(64		)	(0.4	)	(57		)	(0.4	)
Total mortgage loans, net	$	15,753		100.0	%	$	13,694		100.0	%

_______________

(1) Purchases of mortgage loans from third parties were $962 million and $1.9 billion for the years ended December 31, 2019 and 2018, respectively, and were primarily comprised of residential mortgage loans.

(2)

The valuation allowances were primarily from collective evaluation (non-specific loan related).

Credit Quality of Mortgage Loans by Portfolio Segment

The credit quality of residential mortgage loans was as follows at:

	December 31,
	2019				2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	2,671	98.6	%	$	2,240	98.4	%
Nonperforming	37		1.4		36		1.6
Total	$	2,708	100.0	%	$	2,276	100.0	%

The credit quality of agricultural mortgage loans was as follows at:

	December 31,
	2019				2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Loan-to-value ratios:
Less than 65%	$	3,192	94.2	%	$	2,623	89.0	%
65% to 75%	195		5.7		322		10.9
76% to 80%	1		0.1		1		0.1
Total	$	3,388	100.0	%	$	2,946	100.0	%

The credit quality of commercial mortgage loans was as follows at:

	Recorded Investment										Estimated Fair Value		% of Total
	Debt-Service Coverage Ratios						Total		% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x
	(Dollars in millions)
December 31, 2019
Loan-to-value ratios:
Less than 65%	$	8,326	$	272	$	158	$	8,756	90.1	%	$	9,170	90.3	%
65% to 75%	746		26		8		780		8.0		805		7.9
76% to 80%	185		—		—		185		1.9		184		1.8
Total	$	9,257	$	298	$	166	$	9,721	100.0	%	$	10,159	100.0	%
December 31, 2018
Loan-to-value ratios:
Less than 65%	$	7,470	$	89	$	34	$	7,593	89.0	%	$	7,668	89.0	%
65% to 75%	762		—		24		786		9.2		798		9.3
76% to 80%	141		—		9		150		1.8		145		1.7
Total	$	8,373	$	89	$	67	$	8,529	100.0	%	$	8,611	100.0	%

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses), included in AOCI, were as follows:

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Fixed maturity securities	$	6,957		$	1,691		$	4,808
Equity securities	—			—			39
Derivatives	245			264			239
Other	(13		)	(13		)	(8		)
Subtotal	7,189			1,942			5,078
Amounts allocated from:
Future policy benefits	(2,692		)	(886		)	(2,626		)
DAC, VOBA and DSI	(341		)	(90		)	(267		)
Subtotal	(3,033		)	(976		)	(2,893		)
Deferred income tax benefit (expense)	(873		)	(203		)	(459		)
Net unrealized investment gains (losses)	$	3,283		$	763		$	1,726

The changes in net unrealized investment gains (losses) were as follows:

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Balance, December 31,	$	763		$	1,726		$	1,312
Unrealized investment gains (losses) change due to cumulative effect, net of income tax	—			(79		)	—
Balance at January 1,	763			1,647			1,312
Unrealized investment gains (losses) during the year	5,247			(3,057		)	2,036
Unrealized investment gains (losses) relating to:
Future policy benefits	(1,806		)	1,740			(1,824		)
DAC, VOBA and DSI	(251		)	177			(51		)
Deferred income tax benefit (expense)	(670		)	256			253
Balance at December 31,	$	3,283		$	763		$	1,726
Change in net unrealized investment gains (losses)	$	2,520		$	(884	)	$	414

Securities Lending

Elements of the securities lending program are presented below at:

	December 31,
	2019		2018
	(In millions)
Securities on loan: (1)
Amortized cost	$	2,031	$	3,056
Estimated fair value	$	2,996	$	3,628
Cash collateral received from counterparties (2)	$	3,074	$	3,646
Security collateral received from counterparties (3)	$	—	$	55
Reinvestment portfolio — estimated fair value	$	3,174	$	3,658

_______________

(1) Included within fixed maturity securities.

(2) Included within payables for collateral under securities loaned and other transactions.

(3) Security collateral received from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements.

The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:

	December 31, 2019								December 31, 2018
	Remaining Tenor of Securities Lending Agreements								Remaining Tenor of Securities Lending Agreements
	Open (1)		1 Month or Less		1 to 6 Months		Total		Open (1)		1 Month or Less		1 to 6 Months		Total
	(In millions)
U.S. government and agency	$	1,279	$	1,094	$	701	$	3,074	$	1,474	$	1,823	$	349	$	3,646

_______________

(1)

The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral.

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value at:

	December 31,
	2019		2018
	(In millions)
Invested assets on deposit (regulatory deposits) (1)	$	9,349	$	8,176
Invested assets held in trust (reinsurance agreements) (2)	4,561		3,455
Invested assets pledged as collateral (3)	3,641		3,341
Total invested assets on deposit, held in trust and pledged as collateral	$	17,551	$	14,972

_______________

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $69 million and $55 million of the assets on deposit balance represents restricted cash at December 31, 2019 and 2018, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions. $124 million and $87 million of the assets held in trust balance represents restricted cash at December 31, 2019 and 2018, respectively.

(3)

The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 3) and derivative transactions (see Note 7).

Variable Interest Entities

The carrying amount and maximum exposure to loss related to the VIEs in which the Company concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at:

	December 31,
	2019				2018
	Carrying Amount		Maximum Exposure to Loss		Carrying Amount		Maximum Exposure to Loss
	(In millions)
Fixed maturity securities	$	13,094	$	12,454	$	13,099	$	13,099
Limited partnerships and LLCs	1,907		3,080		1,756		3,145
Total	$	15,001	$	15,534	$	14,855	$	16,244

Components of Net Investment Income

The components of net investment income were as follows:

	Years Ended December 31,
	2019		2018		2017
	(In millions)
Investment income:
Fixed maturity securities	$	2,673	$	2,565	$	2,420
Equity securities	8		7		9
Mortgage loans	680		543		454
Policy loans	67		85		73
Limited partnerships and LLCs (1)	220		258		237
Cash, cash equivalents and short-term investments	93		35		35
Other	41		41		28
Subtotal	3,782		3,534		3,256
Less: Investment expenses	203		196		178
Net investment income	$	3,579	$	3,338	$	3,078

_______________

(1)

Includes net investment income pertaining to other limited partnership interests of $181 million, $211 million and $184 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Components of Net Investment Gains (Losses)

The components of net investment gains (losses) were as follows:

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Fixed maturity securities	$	106		$	(180	)	$	(26	)
Equity securities	17			(16		)	22
Mortgage loans	(10		)	(13		)	(9		)
Limited partnerships and LLCs	7			40			(7		)
Other	(8		)	(38		)	(8		)
Total net investment gains (losses)	$	112		$	(207	)	$	(28	)

Sales or Disposals of Fixed Maturity Securities

Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as shown in the table below.

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Proceeds	$	9,259		$	11,251		$	12,665
Gross investment gains	$	257		$	102		$	59
Gross investment losses	(151		)	(282		)	(85		)
Net investment gains (losses)	$	106		$	(180	)	$	(26	)