Investments

3 Months Ended

Mar. 31, 2024

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, 2024			gains		losses
Fixed-maturity securities:
Corporate	$	8,002	$	60	$	463	$	7,599
States, municipalities and political subdivisions	4,872		28		232		4,668
Government-sponsored enterprises	1,424		1		4		1,421
Asset-backed	200		—		11		189
United States government	182		—		4		178
Foreign government	29		—		—		29

Total	$	14,709	$	89	$	714	$	14,084






At December 31, 2023
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
Asset-backed	203		—		16		187
United States government	203		—		3		200
Foreign government	25		—		—		25






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

The increase in net unrealized investment losses in our fixed-maturity portfolio at March 31, 2024, is primarily due to an increase in U.S. Treasury yields that were partially offset by a tightening of corporate credit spreads. Our asset-backed securities had an average rating of Aa3/AA- at both March 31, 2024, and December 31, 2023.

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, 2024	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed-maturity securities:
Corporate	$	642	$	13	$	5,488	$	450	$	6,130	$	463
States, municipalities and political subdivisions	1,099		9		1,900		223		2,999		232
Government-sponsored enterprises	396		1		168		3		564		4
Asset-backed	30		—		133		11		163		11
United States government	74		—		105		4		179		4
Foreign government	17		—		5		—		22		—
Total	$	2,258	$	23	$	7,799	$	691	$	10,057	$	714





At December 31, 2023
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
Asset-backed	5		—		172		16		177		16
United States government	32		—		129		3		161		3
Foreign government	3		—		6		—		9		—





Total	$	1,384	$	18	$	7,912	$	669	$	9,296	$	687

Contractual maturity dates for fixed-maturities securities were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At March 31, 2024
Maturity dates:
Due in one year or less	$	971	$	963	6.8	%
Due after one year through five years	4,413		4,300		30.5
Due after five years through ten years	3,553		3,427		24.3
Due after ten years	5,772		5,394		38.4
Total	$	14,709	$	14,084	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,
		2024		2023
Investment income:
Interest		$	169	$	140
Dividends		72		66
Other		7		7
Total		248		213
Less investment expenses		3		3
Total		$	245	$	210

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net		$	(11)	$	(1)
Unrealized gains and losses on securities still held, net		613		106
Subtotal		602		105
Fixed-maturity securities:
Gross realized gains		—		1
Gross realized losses		(1)		(1)
Change in allowance for credit losses, net		(9)		—

Subtotal		(10)		—

Other		20		1

Total		$	612	$	106

The fair value of our equity portfolio was $11.557 billion and $10.989 billion at March 31, 2024, and December 31, 2023, respectively. Microsoft Corporation (Nasdaq:MSFT), an equity holding, was our largest single investment holding with a fair value of $942 million and $842 million, which was 8.4% and 7.9% of our publicly traded common equities portfolio and 3.7% and 3.4% of the total investment portfolio at March 31, 2024, and December 31, 2023, respectively.

The allowance for credit losses on fixed-maturity securities was $27 million and $18 million at March 31, 2024, and December 31, 2023, respectively.

There were 3,329 and 2,840 fixed-maturity securities in a total unrealized loss position of $714 million and $687 million at March 31, 2024, and December 31, 2023, respectively. Of those totals, 12 and 20 fixed-maturity securities had fair values below 70% of amortized cost at March 31, 2024, and December 31, 2023, respectively.