Investments

9 Months Ended

Sep. 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 September 30, 2020					gains			losses
Fixed maturity securities:
Corporate	$	6,264	$	532		$	27		$	6,769
States, municipalities and political subdivisions	4,579		366			3			4,942
Commercial mortgage-backed	271		13			2			282
United States government	119		5			—			124
Foreign government	27		—			—			27
Government-sponsored enterprises	13		—			—			13

Total	$	11,273	$	916		$	32		$	12,157






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 September 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 September 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 September 30, 2020	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	600	$	23	$	62	$	4	$	662	$	27
States, municipalities and political subdivisions	121		3		2		—		123		3
Commercial mortgage-backed	38		2		—		—		38		2
United States government	—		—		—		—		—		—
Foreign government	16		—		—		—		16		—
Government-sponsored enterprises	—		—		—		—		—		—
Total	$	775	$	28	$	64	$	4	$	839	$	32





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 September 30, 2020
Maturity dates:
Due in one year or less	$	600	$	608	5.0	%
Due after one year through five years	3,293		3,500		28.8
Due after five years through ten years	3,879		4,212		34.6
Due after ten years	3,501		3,837		31.6
Total	$	11,273	$	12,157	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 September 30,						Nine months ended September 30,
	2020		2019		2020		2019
Investment income:
Interest	$	113	$	110	$	339	$	332
Dividends	55		50		161		146
Other	2		5		7		10
Total	170		165		507		488
Less investment expenses	3		4		9		10
Total	$	167	$	161	$	498	$	478

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	55	$	—	$	75	$	27
Unrealized gains and losses on securities still held, net	475		89		(130)		1,084

Subtotal	530		89		(55)		1,111
Fixed maturities:
Gross realized gains	4		6		9		9
Gross realized losses	—		(1)		(3)		(3)
Write-down of impaired securities	(1)		(6)		(78)		(6)
Subtotal	3		(1)		(72)		—

Other	—		(2)		(5)		2

Total	$	533	$	86	$	(132)	$	1,113

The fair value of our common equities portfolio was $7.589 billion and $7.518 billion at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020, Apple Inc. (Nasdaq:AAPL) was our largest single equity holding with a fair value of $562 million, which was 7.4% of our publicly traded common equities portfolio and 2.8% of the total investment portfolio.

During the three and nine months ended September 30, 2020, there were no fixed-maturity securities with an allowance for credit losses. During the three months ended September 30, 2020, there were two fixed-maturity securities from the municipal sector which are intended to be sold and were written down to fair value and during the nine months ended September 30, 2020, there were 14 fixed-maturity securities from the energy, real estate, consumer goods, municipal and technology & electronics sectors which are intended to be sold and were written down to fair value. During the three and nine months ended September 30, 2019, there were two fixed-maturity securities other-than-temporarily impaired.

At September 30, 2020, 254 fixed-maturity securities with a total unrealized loss of $32 million were in an unrealized loss position. Of that total, one fixed-maturity security from the retail sector 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.