Investments (Tables)

3 Months Ended

Mar. 31, 2013

Net Investment Income



Three months ended March 31
(In millions)	2013			2012
Fixed maturity securities	$	499		$	516
Short term investments	1			1
Limited partnership investments	131			130
Equity securities	3			4
Mortgage loans	5			3
Trading portfolio (a)	5			7
Other	1			1
Gross investment income	645			662
Investment expense	(12		)	(14		)
Net investment income	$	633		$	648

___________________


(a)	There were $1 million of net unrealized gains for the three months ended March 31, 2013 and no net unrealized gains (losses) for the three months ended March 31, 2012 related to changes in fair value of trading securities still held included in net investment income.

Net realized investment gains (losses)

Net Realized Investment Gains (Losses)



Three months ended March 31
(In millions)	2013			2012
Net realized investment gains (losses):
Fixed maturity securities:
Gross realized gains	$	44		$	69
Gross realized losses	(12		)	(39		)
Net realized investment gains (losses) on fixed maturity securities	32			30
Equity securities:
Gross realized gains	2			3
Gross realized losses	(15		)	(2		)
Net realized investment gains (losses) on equity securities	(13		)	1
Derivatives	2			(1		)
Short term investments and other	7			6
Net realized investment gains (losses)	$	28		$	36

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)	2013		2012
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	3	$	10
Asset-backed - residential mortgage-backed	—		14
U.S. Treasury and obligations of government-sponsored enterprises	—		1
Total fixed maturity securities available-for-sale	3		25
Equity securities available-for-sale:
Common stock	—		2
Preferred stock	15		—
Total equity securities available-for-sale	15		2
Net OTTI losses recognized in earnings	$	18	$	27

Summary of fixed maturity and equity securities

Summary of Fixed Maturity and Equity Securities



March 31, 2013	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	$	19,747	$	2,562	$	18	$	22,291	$	—
States, municipalities and political subdivisions	9,599		1,408		59		10,948		—
Asset-backed:
Residential mortgage-backed	5,518		235		70		5,683		(49		)
Commercial mortgage-backed	1,853		147		10		1,990		(3		)
Other asset-backed	932		23		—		955		—
Total asset-backed	8,303		405		80		8,628		(52		)
U.S. Treasury and obligations of government-sponsored enterprises	170		11		—		181		—
Foreign government	528		24		—		552		—
Redeemable preferred stock	123		14		1		136		—
Total fixed maturity securities available-for-sale	38,470		4,424		158		42,736		$	(52	)
Total fixed maturity securities trading	63		—		—		63
Equity securities available-for-sale:
Common stock	38		17		—		55
Preferred stock	139		7		—		146
Total equity securities available-for-sale	177		24		—		201
Total	$	38,710	$	4,448	$	158	$	43,000



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

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, 2013	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	$	951	$	13	$	50	$	5	$	1,001	$	18
States, municipalities and political subdivisions	683		16		121		43		804		59
Asset-backed:
Residential mortgage-backed	920		19		347		51		1,267		70
Commercial mortgage-backed	155		2		141		8		296		10
Total asset-backed	1,075		21		488		59		1,563		80
Redeemable preferred stock	34		1		—		—		34		1
Total	$	2,743	$	51	$	659	$	107	$	3,402	$	158



	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



Three months ended March 31
(In millions)	2013			2012
Beginning balance of credit losses on fixed maturity securities	$	95		$	92
Additional credit losses for securities for which an OTTI loss was previously recognized	—			11
Credit losses for securities for which an OTTI loss was not previously recognized	—			1
Reductions for securities sold during the period	(3		)	(4		)
Ending balance of credit losses on fixed maturity securities	$	92		$	100

Contractual maturity

Contractual Maturity



	March 31, 2013				December 31, 2012
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,783	$	1,819	$	1,648	$	1,665
Due after one year through five years	12,916		13,731		13,603		14,442
Due after five years through ten years	9,430		10,267		8,726		9,555
Due after ten years	14,341		16,919		14,164		16,942
Total	$	38,470	$	42,736	$	38,141	$	42,604

- 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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