Investments

3 Months Ended

Mar. 31, 2021

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 March 31, 2021			gains		losses
Fixed maturity securities:
Corporate	$	6,426	$	505	$	11	$	6,920
States, municipalities and political subdivisions	4,641		326		7		4,960
Commercial mortgage-backed	272		14		1		285
United States government	109		4		—		113
Foreign government	24		—		—		24
Government-sponsored enterprises	6		—		—		6

Total	$	11,478	$	849	$	19	$	12,308






At December 31, 2020
Fixed maturity securities:
Corporate	$	6,281	$	621	$	7	$	6,895
States, municipalities and political subdivisions	4,604		395		2		4,997
Commercial mortgage-backed	271		15		1		285
United States government	115		5		—		120
Foreign government	29		—		—		29
Government-sponsored enterprises	12		—		—		12






Total	$	11,312	$	1,036	$	10	$	12,338

The net unrealized investment gains in our fixed-maturity portfolio at March 31, 2021, 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 March 31, 2021 and December 31, 2020.

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 March 31, 2021	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	316	$	8	$	67	$	3	$	383	$	11
States, municipalities and political subdivisions	206		6		14		1		220		7
Commercial mortgage-backed	4		—		14		1		18		1
United States government	2		—		—		—		2		—
Foreign government	1		—		—		—		1		—
Government-sponsored enterprises	4		—		—		—		4		—
Total	$	533	$	14	$	95	$	5	$	628	$	19





At December 31, 2020
Fixed maturity securities:
Corporate	$	330	$	5	$	46	$	2	$	376	$	7
States, municipalities and political subdivisions	31		2		2		—		33		2
Commercial mortgage-backed	23		1		6		—		29		1
United States government	12		—		—		—		12		—
Foreign government	10		—		—		—		10		—






Total	$	406	$	8	$	54	$	2	$	460	$	10

Contractual maturity dates for fixed-maturities securities were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At March 31, 2021
Maturity dates:
Due in one year or less	$	585	$	593	4.8	%
Due after one year through five years	3,563		3,799		30.9
Due after five years through ten years	3,688		3,987		32.4
Due after ten years	3,642		3,929		31.9
Total	$	11,478	$	12,308	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 March 31,
		2021		2020
Investment income:
Interest		$	118	$	112
Dividends		58		53
Other		2		3
Total		178		168
Less investment expenses		4		3
Total		$	174	$	165

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net		$	4	$	(4)
Unrealized gains and losses on securities still held, net		487		(1,649)

Subtotal		491		(1,653)
Fixed maturities:
Gross realized gains		3		2

Write-down of impaired securities		—		(77)
Subtotal		3		(75)

Other		10		3

Total		$	504	$	(1,725)

The fair value of our equity portfolio was $9.360 billion and $8.856 billion at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 and December 31, 2020, Apple Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $593 million and $644 million, which was 6.6% and 7.5% of our publicly traded common equities portfolio and 2.7% and 3.0% of the total investment portfolio, respectively.

At March 31, 2021 and December 31, 2020, there were no fixed-maturity securities with an allowance for credit losses. During the three months ended March 31, 2021, there were no fixed-maturity securities that were written down to fair value due to an intention to be sold and during the three months ended March 31, 2020, there were 12 fixed-maturity securities from the energy, real estate, consumer goods and technology & electronics sectors that were written down to fair value due to an intention to be sold.

At March 31, 2021, 296 fixed-maturity securities with a total unrealized loss of $19 million were in an unrealized loss position. Of that total, one fixed-maturity security had a fair value below 70% of amortized cost. At December 31, 2020, 128 fixed-maturity securities with a total unrealized loss of $10 million were in an unrealized loss position. Of that total, no fixed-maturity securities had fair values below 70% of amortized cost.