Investments

3 Months Ended

Mar. 31, 2022

Investments

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, 2022			gains		losses
Fixed maturity securities:
Corporate	$	7,131	$	184	$	166	$	7,149
States, municipalities and political subdivisions	4,780		106		76		4,810
Commercial mortgage-backed	267		1		2		266
United States government	113		—		1		112
Foreign government	25		—		—		25
Government-sponsored enterprises	14		—		—		14

Total	$	12,330	$	291	$	245	$	12,376






At December 31, 2021
Fixed maturity securities:
Corporate	$	7,043	$	467	$	13	$	7,497
States, municipalities and political subdivisions	4,768		330		3		5,095
Commercial mortgage-backed	264		9		—		273
United States government	121		2		—		123
Foreign government	26		—		—		26
Government-sponsored enterprises	8		—		—		8






Total	$	12,230	$	808	$	16	$	13,022

The decrease in net unrealized investment gains in our fixed-maturity portfolio at March 31, 2022, is primarily due to an increase in U.S. Treasury yields and a widening of corporate credit spreads. Our commercial mortgage-backed securities had an average rating of Aa2/AA at March 31, 2022, and December 31, 2021.

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, 2022	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	2,603	$	157	$	78	$	9	$	2,681	$	166
States, municipalities and political subdivisions	977		72		21		4		998		76
Commercial mortgage-backed	128		2		10		—		138		2
United States government	72		1		—		—		72		1
Foreign government	7		—		—		—		7		—
Government-sponsored enterprises	10		—		3		—		13		—
Total	$	3,797	$	232	$	112	$	13	$	3,909	$	245





At December 31, 2021
Fixed maturity securities:
Corporate	$	861	$	13	$	15	$	—	$	876	$	13
States, municipalities and political subdivisions	105		2		2		1		107		3
Commercial mortgage-backed	10		—		11		—		21		—
United States government	48		—		—		—		48		—
Foreign government	16		—		—		—		16		—
Government-sponsored enterprises	7		—		—		—		7		—





Total	$	1,047	$	15	$	28	$	1	$	1,075	$	16

Contractual maturity dates for fixed-maturities securities were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At March 31, 2022
Maturity dates:
Due in one year or less	$	686	$	690	5.6	%
Due after one year through five years	3,636		3,690		29.8
Due after five years through ten years	3,460		3,525		28.5
Due after ten years	4,548		4,471		36.1
Total	$	12,330	$	12,376	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,
		2022		2021
Investment income:
Interest		$	123	$	118
Dividends		65		58
Other		1		2
Total		189		178
Less investment expenses		4		4
Total		$	185	$	174

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net		$	8	$	4
Unrealized gains and losses on securities still held, net		(683)		487

Subtotal		(675)		491
Fixed maturities:
Gross realized gains		4		3
Gross realized losses		(1)		—

Subtotal		3		3

Other		6		10

Total		$	(666)	$	504

The fair value of our equity portfolio was $10.675 billion and $11.315 billion at March 31, 2022, and December 31, 2021, respectively. At March 31, 2022, and December 31, 2021, Apple Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $848 million and $862 million, which was 8.3% and 7.9% of our publicly traded common equities portfolio and 3.7% and 3.5% of the total investment portfolio, respectively.

At March 31, 2022, and December 31, 2021, the allowance for credit losses, including changes in the amount during each period, was less than $1 million. During the three months ended March 31, 2022, there was one fixed-maturity security that was written down to fair value due to an intention to be sold resulting in an impairment charge of less than $1 million. 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.

At March 31, 2022, 1,377 fixed-maturity securities with a total unrealized loss of $245 million were in an unrealized loss position. Of that total, no fixed-maturity securities had fair values below 70% of amortized cost. At December 31, 2021, 278 fixed-maturity securities with a total unrealized loss of $16 million were in an unrealized loss position. Of that total, no fixed-maturity securities had fair values below 70% of amortized cost.