Investments

12 Months Ended

Dec. 31, 2019

The following table provides amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity securities:



(Dollars in millions)	Amortized cost		Gross unrealized				Fair value
At December 31, 2019	Amortized cost		gains		losses		Fair value
Fixed-maturity securities:
Corporate	$	6,074	$	332	$	5	$	6,401
States, municipalities and political subdivisions	4,477		252		1		4,728
Commercial mortgage-backed	290		11		—		301
Government-sponsored enterprises	137		—		1		136
United States government	102		2		—		104
Foreign government	28		—		—		28
Total	$	11,108	$	597	$	7	$	11,698
At December 31, 2018
Fixed-maturity securities:
Corporate	$	5,712	$	85	$	87	$	5,710
States, municipalities and political subdivisions	4,251		84		31		4,304
Commercial mortgage-backed	287		3		2		288
Government-sponsored enterprises	316		1		7		310
United States government	67		1		1		67
Foreign government	10		—		—		10
Total	$	10,643	$	174	$	128	$	10,689

The net unrealized investment gains in our fixed-maturity portfolio at December 31, 2019, are primarily the result of the continued low interest rate environment that increased the fair value of our fixed-maturity portfolio. Our commercial mortgage-backed securities had an average rating of Aa1/AA at December 31, 2019 and 2018.

The table below provides fair values and unrealized losses by investment category and by the duration of the securities’ continuous unrealized loss positions:



(Dollars in millions)	Less than 12 months				12 months or more				Total
At December 31, 2019	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed-maturity securities:
Corporate	$	199	$	2	$	118	$	3	$	317	$	5
States, municipalities and political subdivisions	98		1		10		—		108		1
Commercial mortgage-backed	6		—		—		—		6		—
Government-sponsored enterprises	26		1		51		—		77		1
United States government	—		—		4		—		4		—
Foreign government	11		—		—		—		11		—
Total	$	340	$	4	$	183	$	3	$	523	$	7
At December 31, 2018
Fixed-maturity securities:
Corporate	$	2,082	$	51	$	501	$	36	$	2,583	$	87
States, municipalities and political subdivisions	823		18		340		13		1,163		31
Commercial mortgage-backed	77		—		64		2		141		2
Government-sponsored enterprises	49		1		211		6		260		7
United States government	—		—		33		1		33		1
Total	$	3,031	$	70	$	1,149	$	58	$	4,180	$	128

Contractual maturity dates for fixed-maturity investments were:



(Dollars in millions)	Amortized cost		Fair value		% of fair value
At December 31, 2019	Amortized cost		Fair value		% of fair value
Maturity dates:
Due in one year or less	$	455	$	459	3.9	%
Due after one year through five years	3,180		3,302		28.2
Due after five years through ten years	3,792		4,011		34.3
Due after ten years	3,681		3,926		33.6
Total	$	11,108	$	11,698	100.0	%

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

At December 31, 2019 and 2018, the company had fixed-maturity investments with a fair value of $117 million and $112 million, respectively, on deposit with various states in compliance with regulatory requirements. In addition, cash and fixed-maturity investments deposited with third parties used as collateral to secure liabilities on behalf of insureds, cedants and other creditors had a fair value of $95 million and $75 million at December 31, 2019 and 2018, respectively.

At December 31, 2019, Apple, Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $414 million, which was 5.5% of our publicly traded common equities portfolio and 2.1% of the total investment portfolio.

In the normal course of investing activities, the company enters into investments in limited partnerships, including private equity, real estate investments and asset-backed securities issued by third-parties. The company’s maximum exposure to loss with respect to these investments is limited to the investment carrying values included in the company’s consolidated balance sheets and any unfunded commitments.

The following table provides investment income and investment gains and losses:



(Dollars in millions)	Years ended December 31,
	2019			2018			2017
Investment income:
Interest	$	446		$	445		$	445
Dividends	201			181			170
Other	12			5			4
Total	659			631			619
Less investment expenses	13			12			10
Total	$	646		$	619		$	609

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	26		$	9		$	—
Unrealized gains and losses on securities still held, net	1,626			(404		)	—
Gross realized gains	—			—			195
Gross realized losses	—			—			(72		)
Other-than-temporary impairments	—			—			(3		)
Subtotal	1,652			(395		)	120
Fixed maturities:
Gross realized gains	13			12			25
Gross realized losses	(3		)	(2		)	—
Other-than-temporary impairments	(9		)	(5		)	(6		)
Subtotal	1			5			19

Other	(3		)	(12		)	9
Total	$	1,650		$	(402	)	$	148

For the years ended December 31, 2019, 2018 and 2017, there were no credit losses on fixed-maturity securities for which a portion of OTTI has been recognized in other comprehensive income.

During 2019, we other-than-temporarily impaired three securities. At December 31, 2019, 38 fixed-maturity investments with a total unrealized loss of $3 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investments had fair values below 70% of amortized cost.

During 2018, we other-than-temporarily impaired one security. At December 31, 2018, 400 fixed-maturity investments with a total unrealized loss of $58 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investments had fair values below 70% of amortized cost.

During 2017, we other-than-temporarily impaired six securities. At December 31, 2017, 249 fixed-maturity investments with a total unrealized loss of $18 million had been in an unrealized loss position for 12 months or more. Of that total, no fixed-maturity investments had fair values below 70% of amortized cost. There were no equity security investments in an unrealized loss position for 12 months or more as of December 31, 2017.