Investments (Tables)

12 Months Ended

Dec. 31, 2012

Net Investment Income



Years ended December 31
(In millions)	2012			2011			2010
Fixed maturity securities	$	2,022		$	2,011		$	2,051
Short term investments	5			8			15
Limited partnership investments	251			48			249
Equity securities	12			20			32
Mortgage loans	17			9			2
Trading portfolio (a)	24			9			13
Other	7			7			8
Gross investment income	2,338			2,112			2,370
Investment expense	(56		)	(58		)	(54		)
Net investment income	$	2,282		$	2,054		$	2,316

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(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 years ended December 31, 2012, 2011 and 2010.

Net realized investment gains (losses)

Net Realized Investment Gains (Losses)



Years ended December 31
(In millions)	2012			2011			2010
Net realized investment gains (losses):
Fixed maturity securities:
Gross realized gains	$	232		$	289		$	475
Gross realized losses	(149		)	(311		)	(383		)
Net realized investment gains (losses) on fixed maturity securities	83			(22		)	92
Equity securities:
Gross realized gains	19			10			50
Gross realized losses	(42		)	(11		)	(52		)
Net realized investment gains (losses) on equity securities	(23		)	(1		)	(2		)
Derivatives	(2		)	—			(1		)
Short term investments and other (a)	5			21			(3		)
Net realized investment gains (losses), net of participating policyholders’ interests	$	63		$	(2	)	$	86

____________________


(a)	Includes net unrealized gains (losses) related to changes in the fair value of securities for which the fair value option has been elected. Net unrealized gains (losses) were $(1) million, $2 million and $(1) million for the years ended December 31, 2012, 2011 and 2010.

Net change in unrealized gains (losses) on investments

Net Change in Unrealized Gains (Losses)



Years ended December 31
(In millions)	2012			2011			2010
Net change in unrealized gains (losses) on investments:
Fixed maturity securities	$	1,871		$	1,442		$	1,140
Equity securities	5			(2		)	7
Other	(1		)	(3		)	(1		)
Total net change in unrealized gains (losses) on investments	$	1,875		$	1,437		$	1,146

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

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



Years ended December 31
(In millions)	2012		2011		2010
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	27	$	95	$	68
States, municipalities and political subdivisions	34		—		62
Asset-backed:
Residential mortgage-backed	50		105		71
Commercial mortgage-backed	—		—		3
Other asset-backed	—		6		3
Total asset-backed	50		111		77
U.S. Treasury and obligation of government-sponsored enterprises	1		—		—
Total fixed maturity securities available-for-sale	112		206		207
Equity securities available-for-sale:
Common stock	6		8		11
Preferred stock	36		1		14
Total equity securities available-for-sale	42		9		25
Short term investments	—		1		—
Net OTTI losses recognized in earnings	$	154	$	216	$	232

Summary of fixed maturity and equity securities

Summary of Fixed Maturity and Equity Securities



December 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	$	19,530	$	2,698	$	21	$	22,207	$	—
States, municipalities and political subdivisions	9,372		1,455		44		10,783		—
Asset-backed:
Residential mortgage-backed	5,745		246		71		5,920		(28		)
Commercial mortgage-backed	1,692		147		17		1,822		(3		)
Other asset-backed	929		23		—		952		—
Total asset-backed	8,366		416		88		8,694		(31		)
U.S. Treasury and obligations of government-sponsored enterprises	172		11		1		182		—
Foreign government	588		25		—		613		—
Redeemable preferred stock	113		13		1		125		—
Total fixed maturity securities available-for-sale	38,141		4,618		155		42,604		$	(31	)
Total fixed maturity securities trading	29		—		—		29
Equity securities available-for-sale:
Common stock	38		14		—		52
Preferred stock	190		7		—		197
Total equity securities available-for-sale	228		21		—		249
Total	$	38,398	$	4,639	$	155	$	42,882



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
December 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	$	846	$	13	$	108	$	8	$	954	$	21
States, municipalities and political subdivisions	254		5		165		39		419		44
Asset-backed:
Residential mortgage-backed	583		5		452		66		1,035		71
Commercial mortgage-backed	85		2		141		15		226		17
Total asset-backed	668		7		593		81		1,261		88
U.S. Treasury and obligations of government-sponsored enterprises	23		1		—		—		23		1
Redeemable preferred stock	28		1		—		—		28		1
Total	$	1,819	$	27	$	866	$	128	$	2,685	$	155



	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	$	4,275	$	211	$	1,923	$	330	$	6,198	$	541

The following table summarizes the activity for the years ended December 31, 2012, 2011 and 2010 related to the pretax credit loss component reflected in Retained earnings on fixed maturity securities still held at December 31, 2012, 2011 and 2010 for which a portion of an OTTI loss was recognized in Other comprehensive income.



Years ended December 31
(In millions)	2012			2011			2010
Beginning balance of credit losses on fixed maturity securities	$	92		$	141		$	164
Additional credit losses for securities for which an OTTI loss was previously recognized	23			39			37
Credit losses for securities for which an OTTI loss was not previously recognized	2			11			11
Reductions for securities sold during the period	(14		)	(67		)	(62		)
Reductions for securities the Company intends to sell or more likely than not will be required to sell	(8		)	(32		)	(9		)
Ending balance of credit losses on fixed maturity securities	$	95		$	92		$	141

Contractual maturity

Contractual Maturity



	December 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	$	1,648	$	1,665	$	1,802	$	1,812
Due after one year through five years	13,603		14,442		13,110		13,537
Due after five years through ten years	8,726		9,555		8,410		8,890
Due after ten years	14,164		16,942		14,017		15,692
Total	$	38,141	$	42,604	$	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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