Investments

6 Months Ended

Jun. 30, 2023

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, 2023			gains		losses
Fixed-maturity securities:
Corporate	$	7,719	$	39	$	608	$	7,150
States, municipalities and political subdivisions	4,951		23		262		4,712
Government-sponsored enterprises	582		—		8		574
Commercial mortgage-backed	227		—		17		210
United States government	209		—		5		204
Foreign government	20		—		—		20

Total	$	13,708	$	62	$	900	$	12,870






At December 31, 2022
Fixed-maturity securities:
Corporate	$	7,412	$	37	$	580	$	6,869
States, municipalities and political subdivisions	4,901		24		303		4,622
Government-sponsored enterprises	186		—		3		183
Commercial mortgage-backed	250		—		16		234
United States government	196		—		5		191
Foreign government	34		—		1		33






Total	$	12,979	$	61	$	908	$	12,132

The net unrealized investment losses in our fixed-maturity portfolio at June 30, 2023, 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- at June 30, 2023, and December 31, 2022.

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, 2023	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed-maturity securities:
Corporate	$	2,133	$	94	$	4,347	$	514	$	6,480	$	608
States, municipalities and political subdivisions	1,042		11		1,897		251		2,939		262
Government-sponsored enterprises	502		6		32		2		534		8
Commercial mortgage-backed	1		—		208		17		209		17
United States government	144		2		60		3		204		5
Foreign government	15		—		—		—		15		—
Total	$	3,837	$	113	$	6,544	$	787	$	10,381	$	900





At December 31, 2022
Fixed-maturity securities:
Corporate	$	5,651	$	412	$	661	$	168	$	6,312	$	580
States, municipalities and political subdivisions	2,600		274		77		29		2,677		303
Government-sponsored enterprises	123		3		3		—		126		3
Commercial mortgage-backed	215		13		14		3		229		16
United States government	146		3		41		2		187		5
Foreign government	25		1		4		—		29		1





Total	$	8,760	$	706	$	800	$	202	$	9,560	$	908

Contractual maturity dates for fixed-maturities securities were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At June 30, 2023
Maturity dates:
Due in one year or less	$	772	$	766	6.0	%
Due after one year through five years	4,348		4,179		32.5
Due after five years through ten years	3,508		3,312		25.7
Due after ten years	5,080		4,613		35.8
Total	$	13,708	$	12,870	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,
	2023		2022		2023		2022
Investment income:
Interest	$	147	$	124	$	287	$	247
Dividends	70		72		136		137
Other	6		2		13		3
Total	223		198		436		387
Less investment expenses	3		3		6		7
Total	$	220	$	195	$	430	$	380

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	—	$	5	$	(4)	$	37
Unrealized gains and losses on securities still held, net	459		(1,175)		568		(1,882)
Subtotal	459		(1,170)		564		(1,845)
Fixed-maturity securities:
Gross realized gains	—		2		1		6
Gross realized losses	—		(2)		(1)		(3)
Write-down of impaired securities with intent to sell	(4)		—		(4)		—

Subtotal	(4)		—		(4)		3

Other	(21)		16		(20)		22

Total	$	434	$	(1,154)	$	540	$	(1,820)

The fair value of our equity portfolio was $10.502 billion and $9.841 billion at June 30, 2023, and December 31, 2022, respectively. Apple Inc. (Nasdaq:AAPL), an equity holding, was our largest single investment holding with a fair value of $892 million and $597 million, which was 8.8% and 6.3% of our publicly traded common equities portfolio and 3.8% and 2.7% of the total investment portfolio at June 30, 2023, and December 31, 2022, respectively.

The allowance for credit losses was $4 million and $1 million at June 30, 2023, and December 31, 2022, respectively. Changes in the allowance were $3 million for both the three and six months ended June 30, 2023 and

less than $1 million for both the three and six months ended June 30, 2022.

There were 3,452 fixed-maturity securities with a total unrealized loss of $900 million, which were in an unrealized loss position at June 30, 2023. Of that total, 23 fixed-maturity securities had fair values below 70% of amortized cost. There were 3,272 fixed-maturity securities with a total unrealized loss of $908 million, which were in an unrealized loss position at December 31, 2022. Of that total, 49 fixed-maturity securities had fair values below 70% of amortized cost.