Investments

6 Months Ended

Jun. 30, 2020

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 June 30, 2020					gains			losses
Fixed maturity securities:
Corporate	$	6,231	$	465		$	47		$	6,649
States, municipalities and political subdivisions	4,487		346			3			4,830
Commercial mortgage-backed	272		8			3			277
United States government	108		6			—			114
Foreign government	22		—			—			22
Government-sponsored enterprises	19		—			—			19

Total	$	11,139	$	825		$	53		$	11,911






At December 31, 2019
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
United States government	102		2			—			104
Foreign government	28		—			—			28
Government-sponsored enterprises	137		—			1			136






Total	$	11,108	$	597		$	7		$	11,698

The net unrealized investment gains in our fixed-maturity portfolio at June 30, 2020, 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 June 30, 2020 and December 31, 2019.

The table below provides fair values and gross 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 June 30, 2020	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	782	$	46	$	33	$	1	$	815	$	47
States, municipalities and political subdivisions	54		2		3		1		57		3
Commercial mortgage-backed	47		3		—		—		47		3
United States government	6		—		—		—		6		—
Foreign government	14		—		—		—		14		—
Government-sponsored enterprises	—		—		—		—		—		—
Total	$	903	$	51	$	36	$	2	$	939	$	53





At December 31, 2019
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		—
United States government	—		—		4		—		4		—
Foreign government	11		—		—		—		11		—
Government-sponsored enterprises	26		1		51		—		77		1





Total	$	340	$	4	$	183	$	3	$	523	$	7

Contractual maturity dates for fixed-maturities investments were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At June 30, 2020
Maturity dates:
Due in one year or less	$	566	$	574	4.8	%
Due after one year through five years	3,187		3,354		28.2
Due after five years through ten years	3,811		4,081		34.3
Due after ten years	3,575		3,902		32.7
Total	$	11,139	$	11,911	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.

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


(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2020		2019		2020		2019
Investment income:
Interest	$	114	$	111	$	226	$	222
Dividends	53		50		106		96
Other	2		2		5		5
Total	169		163		337		323
Less investment expenses	3		3		6		6
Total	$	166	$	160	$	331	$	317

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	24	$	11	$	17	$	23
Unrealized gains and losses on securities still held, net	1,044		355		(602)		999

Subtotal	1,068		366		(585)		1,022
Fixed maturities:
Gross realized gains	3		1		5		3
Gross realized losses	(3)		(2)		(3)		(2)
Write-down of impaired securities	—		—		(77)		—
Subtotal	—		(1)		(75)		1

Other	(8)		(1)		(5)		4

Total	$	1,060	$	364	$	(665)	$	1,027

The fair value of our common equities portfolio was $7.082 billion and $7.518 billion at June 30, 2020 and December 31, 2019, respectively. The financials, energy, industrials and consumer discretionary sectors experienced the most significant declines in fair value as our common equity portfolio has a similar sector distribution as the S&P 500 industry weightings. At June 30, 2020, Apple Inc. (Nasdaq:AAPL) was our largest single equity holding with a fair value of $514 million, which was 7.3% of our publicly traded common equities portfolio and 2.7% of the total investment portfolio.

During the three and six months ended June 30, 2020, there were no fixed-maturity securities with an allowance for credit losses. During the three months ended June 30, 2020, there were no fixed-maturity securities intended to be sold and written down to fair value and during the six months ended June 30, 2020, there were 12 fixed-maturity securities from the energy, real estate, consumer goods and technology & electronics sectors which are intended to be sold and were written down to fair value. During the three and six months ended June 30, 2019, there were no fixed-maturity securities other-than-temporarily impaired.

At June 30, 2020, 242 fixed-maturity securities with a total unrealized loss of $53 million were in an unrealized loss position. Of that total, 5 fixed-maturity securities from the leisure, retail, municipal, energy and transportation sectors had a fair value below 70% of amortized cost. At December 31, 2019, 38 fixed-maturity securities 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 securities had fair values below 70% of amortized cost.