Investments

6 Months Ended

Jun. 30, 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 June 30, 2022			gains		losses
Fixed maturity securities:
Corporate	$	7,167	$	60	$	424	$	6,803
States, municipalities and political subdivisions	4,845		38		229		4,654
Commercial mortgage-backed	256		—		7		249
United States government	146		—		2		144
Government-sponsored enterprises	60		—		—		60
Foreign government	23		—		—		23

Total	$	12,497	$	98	$	662	$	11,933






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
Government-sponsored enterprises	8		—		—		8
Foreign government	26		—		—		26






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

The net unrealized investment losses in our fixed-maturity portfolio at June 30, 2022, are 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- and Aa2/AA at June 30, 2022, and December 31, 2021, respectively.

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, 2022	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed maturity securities:
Corporate	$	4,768	$	398	$	107	$	26	$	4,875	$	424
States, municipalities and political subdivisions	2,341		223		20		6		2,361		229
Commercial mortgage-backed	237		7		10		—		247		7
United States government	85		2		11		—		96		2
Government-sponsored enterprises	36		—		3		—		39		—
Foreign government	16		—		—		—		16		—
Total	$	7,483	$	630	$	151	$	32	$	7,634	$	662





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		—
Government-sponsored enterprises	7		—		—		—		7		—
Foreign government	16		—		—		—		16		—





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 June 30, 2022
Maturity dates:
Due in one year or less	$	645	$	645	5.4	%
Due after one year through five years	3,721		3,670		30.8
Due after five years through ten years	3,519		3,416		28.6
Due after ten years	4,612		4,202		35.2
Total	$	12,497	$	11,933	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,
	2022		2021		2022		2021
Investment income:
Interest	$	124	$	117	$	247	$	235
Dividends	72		60		137		118
Other	2		1		3		3
Total	198		178		387		356
Less investment expenses	3		3		7		7
Total	$	195	$	175	$	380	$	349

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	5	$	—	$	37	$	6
Unrealized gains and losses on securities still held, net	(1,175)		489		(1,882)		974

Subtotal	(1,170)		489		(1,845)		980
Fixed maturities:
Gross realized gains	2		11		6		14
Gross realized losses	(2)		(2)		(3)		(2)

Subtotal	—		9		3		12

Other	16		22		22		32

Total	$	(1,154)	$	520	$	(1,820)	$	1,024

The fair value of our equity portfolio was $9.510 billion and $11.315 billion at June 30, 2022, and December 31, 2021, respectively. At June 30, 2022, and December 31, 2021, Apple Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $664 million and $862 million, which was 7.3% and 7.9% of our publicly traded common equities portfolio and 3.1% and 3.5% of the total investment portfolio, respectively.

At June 30, 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 and six months ended June 30, 2022, there were one and two fixed-maturity securities, respectively, that were written down to fair value due to an intention to be sold resulting in impairment charges of less than $1 million for each period. 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.

At June 30, 2022, 2,735 fixed-maturity securities with a total unrealized loss of $662 million were in an unrealized loss position. Of that total, seven 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.