Investments

12 Months Ended

Dec. 31, 2023

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 December 31, 2023			gains		losses
Fixed-maturity securities:
Corporate	$	7,836	$	70	$	454	$	7,452
States, municipalities and political subdivisions	4,867		44		208		4,703
Government-sponsored enterprises	1,227		3		6		1,224
United States government	203		—		3		200
Mortgage-backed	203		—		16		187
Foreign government	25		—		—		25

Total	$	14,361	$	117	$	687	$	13,791






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
United States government	196		—		5		191
Mortgage-backed	250		—		16		234
Foreign government	34		—		1		33

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

The decrease in net unrealized investment losses in our fixed-maturity portfolio at December 31, 2023, is primarily due to lower short-term interest rates in addition to a tightening of corporate credit spreads. Our mortgage-backed securities had an average rating of Aa3/AA- and Aa2/AA- at December 31, 2023 and 2022, respectively.

The table below provides fair values and 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 December 31, 2023	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed-maturity securities:
Corporate	$	379	$	13	$	5,560	$	441	$	5,939	$	454
States, municipalities and political subdivisions	313		2		1,932		206		2,245		208
Government-sponsored enterprises	652		3		113		3		765		6
United States government	32		—		129		3		161		3
Mortgage-backed	5		—		172		16		177		16
Foreign government	3		—		6		—		9		—
Total	$	1,384	$	18	$	7,912	$	669	$	9,296	$	687





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
United States government	146		3		41		2		187		5
Mortgage-backed	215		13		14		3		229		16
Foreign government	25		1		4		—		29		1
Total	$	8,760	$	706	$	800	$	202	$	9,560	$	908

Contractual maturity dates for fixed-maturity securities were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At December 31, 2023
Maturity dates:
Due in one year or less	$	973	$	964	7.0	%
Due after one year through five years	4,407		4,304		31.2
Due after five years through ten years	3,592		3,474		25.2
Due after ten years	5,389		5,049		36.6
Total	$	14,361	$	13,791	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 company had fixed-maturity securities with a fair value of $108 million and $107 million, on deposit with various states in compliance with regulatory requirements at December 31, 2023 and 2022, respectively. In addition, cash and fixed-maturity securities deposited with third parties used as collateral to secure liabilities on behalf of insureds, cedants and other creditors had a fair value of $125 million and $135 million at December 31, 2023 and 2022, respectively. The company had common equities with a fair value of $107 million and $101 million, at December 31, 2023 and 2022, respectively, held in Lloyd's trust accounts to provide a portion of the capital needed to support Cincinnati Global's operations.

In the normal course of investing activities, the company enters into investments in limited partnerships, including private equity, real estate investments and asset-backed securities issued by third-parties. The company’s maximum exposure to loss with respect to these investments is limited to the investment carrying values included in the company’s consolidated balance sheets and any unfunded commitments.

The following table provides investment income and investment gains and losses:


(Dollars in millions)	Years ended December 31,
	2023		2022		2021
Investment income:
Interest	$	600	$	510	$	477
Dividends	282		275		246
Other	25		11		5
Total	907		796		728
Less investment expenses	13		15		14
Total	$	894	$	781	$	714

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	(17)	$	16	$	4
Unrealized gains and losses on securities still held, net	1,168		(1,526)		2,278



Subtotal	1,151		(1,510)		2,282
Fixed-maturity securities:
Gross realized gains	4		6		36
Gross realized losses	(5)		(4)		(5)
Change in allowance for credit losses, net	(17)		—		—
Write-down of impaired securities with intent to sell	(4)		(5)		(1)
Subtotal	(22)		(3)		30

Other	(2)		46		97
Total	$	1,127	$	(1,467)	$	2,409

The fair value of our equity portfolio was $10.989 billion and $9.841 billion at December 31, 2023 and 2022, respectively. At December 31, 2023 and 2022, Microsoft Corporation (Nasdaq:MSFT) and Apple, Inc. (Nasdaq:AAPL), equity holdings, were our largest single investment holdings with a fair value of $842 million and $597 million, which was 7.9% and 6.3% of our publicly traded common equities portfolio and 3.4% and 2.7% of the total investment portfolio, respectively.

The allowance for credit losses on fixed-maturity securities was $18 million, $1 million and less than $1 million at December 31, 2023, 2022 and 2021, respectively.

There were 2,840, 3,272 and 278 fixed-maturity securities in a total unrealized loss position of $687 million, $908 million and $16 million at December 31, 2023, 2022 and 2021, respectively. Of those totals, 20, 49 and no fixed-maturity securities had fair values below 70% of amortized cost at December 31, 2023, 2022 and 2021, respectively.