Investments

6 Months Ended

Jun. 30, 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 June 30, 2021			gains		losses
Fixed maturity securities:
Corporate	$	6,775	$	581	$	2	$	7,354
States, municipalities and political subdivisions	4,632		367		2		4,997
Commercial mortgage-backed	268		14		—		282
United States government	122		4		—		126
Foreign government	23		—		—		23
Government-sponsored enterprises	7		—		—		7

Total	$	11,827	$	966	$	4	$	12,789






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 June 30, 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 June 30, 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 June 30, 2021	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	207	$	1	$	27	$	1	$	234	$	2
States, municipalities and political subdivisions	46		1		7		1		53		2
Commercial mortgage-backed	4		—		9		—		13		—
United States government	9		—		—		—		9		—
Foreign government	5		—		—		—		5		—
Government-sponsored enterprises	5		—		—		—		5		—
Total	$	276	$	2	$	43	$	2	$	319	$	4





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 June 30, 2021
Maturity dates:
Due in one year or less	$	516	$	524	4.1	%
Due after one year through five years	3,669		3,924		30.7
Due after five years through ten years	3,574		3,904		30.5
Due after ten years	4,068		4,437		34.7
Total	$	11,827	$	12,789	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,
	2021		2020		2021		2020
Investment income:
Interest	$	117	$	114	$	235	$	226
Dividends	60		53		118		106
Other	1		2		3		5
Total	178		169		356		337
Less investment expenses	3		3		7		6
Total	$	175	$	166	$	349	$	331

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	—	$	24	$	6	$	17
Unrealized gains and losses on securities still held, net	489		1,044		974		(602)

Subtotal	489		1,068		980		(585)
Fixed maturities:
Gross realized gains	11		3		14		5
Gross realized losses	(2)		(3)		(2)		(3)
Write-down of impaired securities	—		—		—		(77)
Subtotal	9		—		12		(75)

Other	22		(8)		32		(5)

Total	$	520	$	1,060	$	1,024	$	(665)

The fair value of our equity portfolio was $9.897 billion and $8.856 billion at June 30, 2021 and December 31, 2020, respectively. At June 30, 2021 and December 31, 2020, Apple Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $665 million and $644 million, which was 7.0% and 7.5% of our publicly traded common equities portfolio and 2.9% and 3.0% of the total investment portfolio, respectively.

At June 30, 2021 and December 31, 2020, there were no fixed-maturity securities with an allowance for credit losses. During the three and six months ended June 30, 2021, there were no fixed-maturity securities that were written down to fair value due to an intention to be sold. During the three months ended June 30, 2020, there were no fixed-maturity securities that were written down to fair value due to an intention to be sold 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 that were written down to fair value due to an intention to be sold.

At June 30, 2021, 108 fixed-maturity securities with a total unrealized loss of $4 million were in an unrealized loss position. Of that total, two fixed-maturity securities had fair values 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.