Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at December 31, 2017 and 2016. We do not have any liabilities carried at fair value. There were no transfers between Level 1 and Level 2.

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)				Significant  unobservable  inputs (Level 3)
At December 31, 2017			Significant other observable inputs (Level 2)				Total
Fixed maturities, available for sale:
Corporate	$	—	$	5,652	$	1	$	5,653
States, municipalities and political subdivisions	—		4,460		5		4,465
Commercial mortgage-backed	—		286		—		286
Government-sponsored enterprises	—		254		—		254
United States Government	31		—		—		31
Foreign government	—		10		—		10
Subtotal	31		10,662		6		10,699
Common equities, available for sale	6,039		—		—		6,039
Nonredeemable preferred equities,   available for sale	—		210		—		210
Separate accounts taxable fixed maturities	—		795		—		795
Top Hat savings plan mutual funds and common   equity (included in Other assets)	31		—		—		31
Total	$	6,101	$	11,667	$	6	$	17,774
At December 31, 2016
Fixed maturities, available for sale:
Corporate	$	—	$	5,703	$	78	$	5,781
States, municipalities and political subdivisions	—		3,828		—		3,828
Commercial mortgage-backed	—		287		—		287
Government-sponsored enterprises	—		164		—		164
United States Government	10		—		—		10
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
Subtotal	10		9,997		78		10,085
Common equities, available for sale	5,123		—		—		5,123
Nonredeemable preferred equities,   available for sale	—		211		—		211
Separate accounts taxable fixed maturities	—		750		—		750
Top Hat savings plan mutual funds and common   equity (included in Other assets)	24		—		—		24
Total	$	5,157	$	10,958	$	78	$	16,193

Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following table provides the change in Level 3 assets during 2017 and 2016:

(Dollars in millions)	Asset fair value measurements using significant unobservable input
		Corporate fixed maturities			Separate accounts taxable fixed maturities			States, municipalities and political subdivisions fixed maturities		Nonredeemable preferred equities			Total
Beginning balance, January 1, 2017		$	78		$	—		$	—	$	—		$	78
Total gains or losses (realized/unrealized):
Included in net income		—			—			—		—			—
Included in other comprehensive income		—			—			—		—			—
Purchases		—			—			5		—			5
Sales		—			—			—		—			—
Transfers into Level 3		—			—			—		—			—
Transfers out of Level 3		(77		)	—			—		—			(77		)
Ending balance, December 31, 2017		$	1		$	—		$	5	$	—		$	6
Beginning balance, January 1, 2016		$	51		$	1		$	—	$	3		$	55
Total gains or losses (realized/unrealized):
Included in net income		—			—			—		—			—
Included in other comprehensive income		—			—			—		(1		)	(1		)
Purchases		57			—			—		—			57
Sales		(1		)	—			—		(2		)	(3		)
Transfers into Level 3		13			—			—		—			13
Transfers out of Level 3		(42		)	(1		)	—		—			(43		)
Ending balance, December 31, 2016		$	78		$	—		$	—	$	—		$	78

Fair Value of Life Policy Loans

The following table shows the fair value of our life policy loans, included in other invested assets:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs  (Level 2)		Significant  unobservable  inputs (Level 3)		Total
At December 31, 2017
Life policy loans	$	—	$	—	$	41	$	41
At December 31, 2016
Life policy loans	$	—	$	—	$	40	$	40

Debt

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our note payable and long-term debt:

(Dollars in millions)	Quoted prices in active markets for  identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At December 31, 2017
Note payable	$	—	$	24	$	—	$	24
6.900% senior debentures, due 2028	—		34		—		34
6.920% senior debentures, due 2028	—		505		—		505
6.125% senior notes, due 2034	—		477		—		477
Total	$	—	$	1,040	$	—	$	1,040
At December 31, 2016
Note payable	$	—	$	20	$	—	$	20
6.900% senior debentures, due 2028	—		33		—		33
6.920% senior debentures, due 2028	—		488		—		488
6.125% senior notes, due 2034	—		435		—		435
Total	$	—	$	976	$	—	$	976

Deferred Annuities and Structured Settlements

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair value of our deferred annuities and structured settlements included in life policy and investment contract reserves:

(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs (Level 3)		Total
At December 31, 2017
Deferred annuities	$	—	$	—	$	834	$	834
Structured settlements	—		210		—		210
Total	$	—	$	210	$	834	$	1,044
At December 31, 2016
Deferred annuities	$	—	$	—	$	839	$	839
Structured settlements	—		206		—		206
Total	$	—	$	206	$	839	$	1,045