Investments (Tables)

3 Months Ended

Mar. 31, 2012

Net Investment Income



Three months ended March 31
(In millions)	2012			2011
Fixed maturity securities	$	516		$	506
Short term investments	1			2
Limited partnership investments	130			114
Equity securities	4			6
Mortgage loans	3			2
Trading portfolio (a)	7			3
Other	1			2
Gross investment income	662			635
Investment expense	(14		)	(15		)
Net investment income	$	648		$	620

___________________


(a)	There were no net unrealized gains (losses) related to changes in fair value of trading securities still held included in net investment income for the three months ended March 31, 2012 or 2011.

Net realized investment gains (losses)

Net Realized Investment Gains (Losses)



Three months ended March 31
(In millions)	2012			2011
Net realized investment gains (losses):
Fixed maturity securities:
Gross realized gains	$	69		$	88
Gross realized losses	(39		)	(68		)
Net realized investment gains (losses) on fixed maturity securities	30			20
Equity securities:
Gross realized gains	3			5
Gross realized losses	(2		)	(5		)
Net realized investment gains (losses) on equity securities	1			—
Derivatives	(1		)	(1		)
Short term investments and other (a) (b)	6			(6		)
Net realized investment gains (losses), net of participating policyholders’ interests	$	36		$	13

____________________


(a)	There were no net unrealized gains (losses) included in the three months ended March 31, 2012 and $1 million of net unrealized gains included in the three months ended March 31, 2011 related to changes in fair value of securities for which the fair value option has been elected.


(b)	The three months ended March 31, 2011 includes a $9 million loss related to the early extinguishment of $400 million of senior notes originally due August 15, 2011.

Components of other-than-temporary impairment losses recognized in earnings

The components of net other-than-temporary impairment (OTTI) losses recognized in earnings by asset type are summarized in the following table.



Three months ended March 31
(In millions)	2012		2011
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	10	$	9
Asset-backed:
Residential mortgage-backed	14		28
Total asset-backed	14		28
U.S. Treasury and obligation of government-sponsored enterprises	1		—
Total fixed maturity securities available-for-sale	25		37
Equity securities available-for-sale:
Common stock	2		3
Preferred stock	—		1
Total equity securities available-for-sale	2		4
Net OTTI losses recognized in earnings	$	27	$	41

Summary of fixed maturity and equity securities

Summary of Fixed Maturity and Equity Securities



March 31, 2012	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized OTTI Losses (Gains)
(In millions)	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized OTTI Losses (Gains)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	19,324	$	2,013	$	61	$	21,276	$	—
States, municipalities and political subdivisions	9,234		1,042		93		10,183		—
Asset-backed:
Residential mortgage-backed	5,958		175		139		5,994		37
Commercial mortgage-backed	1,297		68		36		1,329		(2		)
Other asset-backed	1,022		18		1		1,039		—
Total asset-backed	8,277		261		176		8,362		35
U.S. Treasury and obligations of government-sponsored enterprises	224		12		—		236		—
Foreign government	634		21		—		655		—
Redeemable preferred stock	105		8		—		113		—
Total fixed maturity securities available-for-sale	37,798		3,357		330		40,825		$	35
Total fixed maturity securities trading	12		—		—		12
Equity securities available-for-sale:
Common stock	32		17		1		48
Preferred stock	246		4		—		250
Total equity securities available-for-sale	278		21		1		298
Total	$	38,088	$	3,378	$	331	$	41,135



December 31, 2011	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized OTTI Losses (Gains)
(In millions)	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized OTTI Losses (Gains)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	19,086	$	1,946	$	154	$	20,878	$	—
States, municipalities and political subdivisions	9,018		900		136		9,782		—
Asset-backed:
Residential mortgage-backed	5,786		172		183		5,775		99
Commercial mortgage-backed	1,365		48		59		1,354		(2		)
Other asset-backed	946		13		4		955		—
Total asset-backed	8,097		233		246		8,084		97
U.S. Treasury and obligations of government-sponsored enterprises	479		14		—		493		—
Foreign government	608		28		—		636		—
Redeemable preferred stock	51		7		—		58		—
Total fixed maturity securities available-for-sale	37,339		3,128		536		39,931		$	97
Total fixed maturity securities trading	6		—		—		6
Equity securities available-for-sale:
Common stock	30		17		—		47
Preferred stock	258		4		5		257
Total equity securities available-for-sale	288		21		5		304
Total	$	37,633	$	3,149	$	541	$	40,241

Securities in a gross unrealized loss position

Securities in a Gross Unrealized Loss Position



	Less than 12 Months				12 Months or Longer				Total
March 31, 2012	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	1,635	$	43	$	124	$	18	$	1,759	$	61
States, municipalities and political subdivisions	385		8		460		85		845		93
Asset-backed:
Residential mortgage-backed	882		39		1,026		100		1,908		139
Commercial mortgage-backed	219		18		122		18		341		36
Other asset-backed	297		1		—		—		297		1
Total asset-backed	1,398		58		1,148		118		2,546		176
Total fixed maturity securities available-for-sale	3,418		109		1,732		221		5,150		330
Equity securities available-for-sale:
Common stock	4		1		—		—		4		1
Total equity securities available-for-sale	4		1		—		—		4		1
Total	$	3,422	$	110	$	1,732	$	221	$	5,154	$	331



	Less than 12 Months				12 Months or Longer				Total
December 31, 2011	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	2,552	$	126	$	159	$	28	$	2,711	$	154
States, municipalities and political subdivisions	67		1		721		135		788		136
Asset-backed:
Residential mortgage-backed	719		36		874		147		1,593		183
Commercial mortgage-backed	431		39		169		20		600		59
Other asset-backed	389		4		—		—		389		4
Total asset-backed	1,539		79		1,043		167		2,582		246
Total fixed maturity securities available-for-sale	4,158		206		1,923		330		6,081		536
Equity securities available-for-sale:
Preferred stock	117		5		—		—		117		5
Total equity securities available-for-sale	117		5		—		—		117		5
Total	$	4,275	$	211	$	1,923	$	330	$	6,198	$	541

The following table summarizes the activity for the three months ended March 31, 2012 and 2011 related to the pretax credit loss component reflected in Retained earnings on fixed maturity securities still held at March 31, 2012 and 2011 for which a portion of an OTTI loss was recognized in Other comprehensive income (loss).



(In millions)	2012			2011
Beginning balance of credit losses on fixed maturity securities	$	92		$	141
Additional credit losses for securities for which an OTTI loss was previously recognized	11			10
Credit losses for securities for which an OTTI loss was not previously recognized	1			1
Reductions for securities sold during the period	(4		)	(25		)
Reductions for securities the Company intends to sell or more likely than not will be required to sell	—			(14		)
Ending balance of credit losses on fixed maturity securities	$	100		$	113

Ratings distribution of asset-backed securities in a gross unrealized loss position

Gross Unrealized Losses by Ratings Distribution



March 31, 2012	Amortized Cost		Estimated Fair Value		Gross Unrealized Losses
(In millions)	Amortized Cost		Estimated Fair Value		Gross Unrealized Losses
U.S. Government, Government Agencies, and Government-Sponsored Enterprises	$	852	$	810	$	42
AAA	246		239		7
AA	226		215		11
A	294		286		8
BBB	209		193		16
Non-investment grade	895		803		92
Total	$	2,722	$	2,546	$	176

Contractual maturity

Contractual Maturity



	March 31, 2012				December 31, 2011
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,842	$	1,855	$	1,802	$	1,812
Due after one year through five years	13,003		13,573		13,110		13,537
Due after five years through ten years	8,713		9,326		8,410		8,890
Due after ten years	14,240		16,071		14,017		15,692
Total	$	37,798	$	40,825	$	37,339	$	39,931

- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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