Investments (Tables)

3 Months Ended

Mar. 31, 2014

Net Investment Income



Three months ended March 31
(In millions)	2014			2013
Fixed maturity securities	$	452		$	457
Short term investments	1			1
Limited partnership investments	73			131
Equity securities	2			3
Mortgage loans	6			5
Trading portfolio	3			5
Other	2			1
Gross investment income	539			603
Investment expense	(13		)	(12		)
Net investment income	$	526		$	591

Net realized investment gains (losses)

Net Realized Investment Gains (Losses)



Three months ended March 31
(In millions)	2014			2013
Net realized investment gains (losses):
Fixed maturity securities:
Gross realized gains	$	53		$	39
Gross realized losses	(15		)	(12		)
Net realized investment gains (losses) on fixed maturity securities	38			27
Equity securities:
Gross realized gains	5			2
Gross realized losses	—			(15		)
Net realized investment gains (losses) on equity securities	5			(13		)
Derivatives	—			2
Short term investments and other	3			7
Net realized investment gains (losses)	$	46		$	23

Components of net other-than-temporary impairment losses recognized in continuing 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)	2014		2013
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	1	$	3
Asset-backed - residential mortgage-backed	1		—
Total fixed maturity securities available-for-sale	2		3
Equity securities available-for-sale:
Preferred stock	—		15
Net OTTI losses recognized in continuing earnings	$	2	$	18

Summary of fixed maturity and equity securities

Summary of Fixed Maturity and Equity Securities



March 31, 2014	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	$	17,265	$	1,612	$	56	$	18,821	$	—
States, municipalities and political subdivisions	11,113		871		129		11,855		—
Asset-backed:
Residential mortgage-backed	4,854		156		66		4,944		(47		)
Commercial mortgage-backed	1,974		92		13		2,053		(3		)
Other asset-backed	966		12		2		976		—
Total asset-backed	7,794		260		81		7,973		(50		)
U.S. Treasury and obligations of government-sponsored enterprises	135		7		1		141		—
Foreign government	559		18		1		576		—
Redeemable preferred stock	32		2		—		34		—
Total fixed maturity securities available-for-sale	36,898		2,770		268		39,400		$	(50	)
Total fixed maturity securities trading	15		—		—		15
Equity securities available-for-sale:
Common stock	33		9		—		42
Preferred stock	130		2		—		132
Total equity securities available-for-sale	163		11		—		174
Total	$	37,076	$	2,781	$	268	$	39,589



December 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	$	19,352	$	1,645	$	135	$	20,862	$	—
States, municipalities and political subdivisions	11,281		548		272		11,557		—
Asset-backed:
Residential mortgage-backed	4,940		123		92		4,971		(37		)
Commercial mortgage-backed	1,995		90		22		2,063		(3		)
Other asset-backed	945		13		3		955		—
Total asset-backed	7,880		226		117		7,989		(40		)
U.S. Treasury and obligations of government-sponsored enterprises	139		6		1		144		—
Foreign government	531		15		3		543		—
Redeemable preferred stock	92		10		—		102		—
Total fixed maturity securities available-for-sale	39,275		2,450		528		41,197		$	(40	)
Total fixed maturity securities trading	36		—		—		36
Equity securities available-for-sale:
Common stock	36		9		—		45
Preferred stock	143		1		4		140
Total equity securities available-for-sale	179		10		4		185
Total	$	39,490	$	2,460	$	532	$	41,418

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, 2014	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	$	2,002	$	48	$	109	$	8	$	2,111	$	56
States, municipalities and political subdivisions	1,397		56		244		73		1,641		129
Asset-backed:
Residential mortgage-backed	739		13		347		53		1,086		66
Commercial mortgage-backed	515		12		91		1		606		13
Other asset-backed	167		2		3		—		170		2
Total asset-backed	1,421		27		441		54		1,862		81
U.S. Treasury and obligations of government-sponsored enterprises	6		1		3		—		9		1
Foreign government	61		1		4		—		65		1
Total fixed maturity securities available-for-sale	4,887		133		801		135		5,688		268
Equity securities available-for-sale:
Preferred stock	16		—		—		—		16		—
Total	$	4,903	$	133	$	801	$	135	$	5,704	$	268



	Less than 12 Months				12 Months or Longer				Total
December 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	$	3,592	$	129	$	72	$	6	$	3,664	$	135
States, municipalities and political subdivisions	3,251		197		129		75		3,380		272
Asset-backed:
Residential mortgage-backed	1,293		29		343		63		1,636		92
Commercial mortgage-backed	640		22		—		—		640		22
Other asset-backed	269		3		—		—		269		3
Total asset-backed	2,202		54		343		63		2,545		117
U.S. Treasury and obligations of government-sponsored enterprises	13		1		—		—		13		1
Foreign government	111		3		—		—		111		3
Total fixed maturity securities available-for-sale	9,169		384		544		144		9,713		528
Equity securities available-for-sale:
Preferred stock	87		4		—		—		87		4
Total	$	9,256	$	388	$	544	$	144	$	9,800	$	532

The following table summarizes the activity for the three months ended March 31, 2014 and 2013 related to the pretax credit loss component reflected in Retained earnings on fixed maturity securities still held at March 31, 2014 and 2013 for which a portion of an OTTI loss was recognized in Other comprehensive income (loss).



Three months ended March 31
(In millions)	2014			2013
Beginning balance of credit losses on fixed maturity securities	$	74		$	95
Reductions for securities sold during the period	(2		)	(3		)
Reductions for securities the Company intends to sell or more likely than not will be required to sell	(3		)	—
Ending balance of credit losses on fixed maturity securities	$	69		$	92

Contractual maturity

Contractual Maturity



	March 31, 2014				December 31, 2013
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,684	$	2,729	$	2,420	$	2,455
Due after one year through five years	8,839		9,401		9,496		10,068
Due after five years through ten years	11,455		11,876		11,667		11,954
Due after ten years	13,920		15,394		15,692		16,720
Total	$	36,898	$	39,400	$	39,275	$	41,197

- 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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