Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2020

Accumulated Other Comprehensive Income [Abstract]

Accumulated other comprehensive income (AOCI) includes changes in unrealized gains and losses on investments, changes in pension obligations and changes in life deferred acquisition costs, life policy reserves and other as follows:


(Dollars in millions)	Three months ended September 30,
	2020										2019
	Before tax		Income tax		Net		Before tax		Income tax		Net
Investments:
AOCI, beginning of period	$	772	$	162	$	610	$	488	$	102	$	386


OCI before investment gains and losses, net, recognized in net income	115		23		92		99		21		78
Investment gains and losses, net, recognized in net income	(3)		—		(3)		1		—		1
OCI	112		23		89		100		21		79
AOCI, end of period	$	884	$	185	$	699	$	588	$	123	$	465

Pension obligations:
AOCI, beginning of period	$	(7)	$	—	$	(7)	$	(15)	$	(2)	$	(13)
OCI excluding amortization recognized in net income	—		—		—		—		—		—
Amortization recognized in net income	—		—		—		—		—		—
OCI	—		—		—		—		—		—
AOCI, end of period	$	(7)	$	—	$	(7)	$	(15)	$	(2)	$	(13)

Life deferred acquisition costs, life policy reserves and other:
AOCI, beginning of period	$	(8)	$	(2)	$	(6)	$	(11)	$	(2)	$	(9)
OCI before investment gains and losses, net, recognized in net income	—		—		—		(3)		—		(3)
Investment gains and losses, net, recognized in net income	—		—		—		2		—		2
OCI	—		—		—		(1)		—		(1)
AOCI, end of period	$	(8)	$	(2)	$	(6)	$	(12)	$	(2)	$	(10)

Summary of AOCI:
AOCI, beginning of period	$	757	$	160	$	597	$	462	$	98	$	364


Investments OCI	112		23		89		100		21		79
Pension obligations OCI	—		—		—		—		—		—
Life deferred acquisition costs, life policy reserves and other OCI	—		—		—		(1)		—		(1)
Total OCI	112		23		89		99		21		78
AOCI, end of period	$	869	$	183	$	686	$	561	$	119	$	442


(Dollars in millions)	Nine months ended September 30,
	2020										2019
	Before tax		Income tax		Net		Before tax		Income tax		Net
Investments:
AOCI, beginning of period	$	590	$	123	$	467	$	46	$	9	$	37


OCI before investment gains and losses, net, recognized in net income	222		46		176		542		114		428
Investment gains and losses, net, recognized in net income	72		16		56		—		—		—
OCI	294		62		232		542		114		428
AOCI, end of period	$	884	$	185	$	699	$	588	$	123	$	465

Pension obligations:
AOCI, beginning of period	$	(9)	$	—	$	(9)	$	(16)	$	(2)	$	(14)
OCI excluding amortization recognized in net income	—		—		—		—		—		—
Amortization recognized in net income	2		—		2		1		—		1
OCI	2		—		2		1		—		1
AOCI, end of period	$	(7)	$	—	$	(7)	$	(15)	$	(2)	$	(13)

Life deferred acquisition costs, life policy reserves and other:
AOCI, beginning of period	$	(13)	$	(3)	$	(10)	$	(1)	$	—	$	(1)
OCI before investment gains and losses, net, recognized in net income	5		1		4		(9)		(2)		(7)
Investment gains and losses, net, recognized in net income	—		—		—		(2)		—		(2)
OCI	5		1		4		(11)		(2)		(9)
AOCI, end of period	$	(8)	$	(2)	$	(6)	$	(12)	$	(2)	$	(10)

Summary of AOCI:
AOCI, beginning of period	$	568	$	120	$	448	$	29	$	7	$	22


Investments OCI	294		62		232		542		114		428
Pension obligations OCI	2		—		2		1		—		1
Life deferred acquisition costs, life policy reserves and other OCI	5		1		4		(11)		(2)		(9)
Total OCI	301		63		238		532		112		420
AOCI, end of period	$	869	$	183	$	686	$	561	$	119	$	442

Investment gains and losses, net, and life deferred acquisition costs, life policy reserves and other investment gains and losses, net, are recorded in the investment gains and losses, net, line item in the condensed consolidated statements of income. Amortization on pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses line items in the condensed consolidated statements of income.