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Investments (Tables)
9 Months Ended
Sep. 30, 2016
Investments [Abstract]  
Net investment income
The significant components of Net investment income are presented in the following table.
Periods ended September 30
Three Months
 
Nine Months
(In millions)
2016
 
2015
 
2016
 
2015
Fixed maturity securities
$
457

 
$
449

 
$
1,352

 
$
1,344

Equity securities
1

 
3

 
8

 
9

Limited partnership investments
65

 
(93
)
 
97

 
69

Mortgage loans
8

 
8

 
30

 
25

Short term investments
2

 
2

 
6

 
4

Trading portfolio
1

 
1

 
7

 
6

Other
4

 
1

 
4

 
1

Gross investment income
538

 
371

 
1,504

 
1,458

Investment expense
(14
)
 
(17
)
 
(43
)
 
(46
)
Net investment income
$
524

 
$
354

 
$
1,461

 
$
1,412

Net realized investment gains (losses)
Net realized investment gains (losses) are presented in the following table.
Periods ended September 30
Three Months
 
Nine Months
(In millions)
2016
 
2015
 
2016
 
2015
Net realized investment gains (losses):
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Gross realized gains
$
67

 
$
22

 
$
152

 
$
91

Gross realized losses
(20
)
 
(51
)
 
(106
)
 
(120
)
Net realized investment gains (losses) on fixed maturity securities
47

 
(29
)
 
46

 
(29
)
Equity securities:
 
 
 

 
 
 
 
Gross realized gains
1

 
1

 
5

 
2

Gross realized losses
(4
)
 
(19
)
 
(10
)
 
(21
)
Net realized investment gains (losses) on equity securities
(3
)
 
(18
)
 
(5
)
 
(19
)
Derivative financial instruments
1

 
(1
)
 
(12
)
 
9

Short term investments and other
1

 
(1
)
 
(3
)
 

Net realized investment gains (losses)
$
46

 
$
(49
)
 
$
26

 
$
(39
)
Components of net other than temporary impairment losses recognized in earnings by asset type
The components of Net other-than-temporary impairment (OTTI) losses recognized in earnings by asset type are presented in the following table.
Periods ended September 30
Three Months
 
Nine Months
(In millions)
2016
 
2015
 
2016
 
2015
Fixed maturity securities available-for-sale:

 
 
 
 
 
 
Corporate and other bonds
$
14

 
$
36

 
$
43

 
$
52

States, municipalities and political subdivisions

 

 

 
18

Asset-backed:
 
 
 

 
 
 
 
Residential mortgage-backed

 
1

 
1

 
7

Other asset-backed

 

 
3

 
1

Total asset-backed

 
1

 
4

 
8

Total fixed maturity securities available-for-sale
14

 
37

 
47

 
78

Equity securities available-for-sale -- Common stock
4

 
19

 
9

 
20

Short term investments

 

 

 
1

OTTI losses recognized in earnings
$
18

 
$
56

 
$
56

 
$
99

Summary of fixed maturity and equity securities
The following tables present a summary of fixed maturity and equity securities.
September 30, 2016
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
OTTI
Losses (Gains)
(In millions)
 
 
 
 
Fixed maturity securities available-for-sale:
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
17,985

 
$
1,867

 
$
36

 
$
19,816

 
$
(1
)
States, municipalities and political subdivisions
11,566

 
1,937

 
2

 
13,501

 
(27
)
Asset-backed:
 
 
 
 
 
 
 
 
 
Residential mortgage-backed
5,174

 
206

 
15

 
5,365

 
(24
)
Commercial mortgage-backed
2,064

 
88

 
8

 
2,144

 

Other asset-backed
948

 
12

 
1

 
959

 

Total asset-backed
8,186

 
306

 
24

 
8,468

 
(24
)
U.S. Treasury and obligations of government-sponsored enterprises
68

 
8

 

 
76

 

Foreign government
415

 
23

 

 
438

 

Redeemable preferred stock
18

 
2

 

 
20

 

Total fixed maturity securities available-for-sale
38,238

 
4,143

 
62

 
42,319

 
$
(52
)
Total fixed maturity securities trading
2

 


 


 
2

 
 
Equity securities available-for-sale:
 
 
 
 
 
 
 
 
 
Common stock
15

 
6

 
1

 
20

 
 
Preferred stock
93

 
5

 
2

 
96

 
 
Total equity securities available-for-sale
108

 
11

 
3

 
116

 
 
Total
$
38,348

 
$
4,154

 
$
65

 
$
42,437

 



December 31, 2015
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
OTTI
Losses (Gains)
(In millions)
 
 
 
 
Fixed maturity securities available-for-sale:
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
17,080

 
$
1,019

 
$
342

 
$
17,757

 
$

States, municipalities and political subdivisions
11,729

 
1,453

 
8

 
13,174

 
(4
)
Asset-backed:
 
 
 
 
 
 
 
 
 
Residential mortgage-backed
4,935

 
154

 
17

 
5,072

 
(37
)
Commercial mortgage-backed
2,154

 
55

 
12

 
2,197

 

Other asset-backed
923

 
6

 
8

 
921

 

Total asset-backed
8,012

 
215

 
37

 
8,190

 
(37
)
U.S. Treasury and obligations of government-sponsored enterprises
62

 
5

 

 
67

 

Foreign government
334

 
13

 
1

 
346

 

Redeemable preferred stock
33

 
2

 

 
35

 

Total fixed maturity securities available-for-sale
37,250

 
2,707

 
388

 
39,569

 
$
(41
)
Total fixed maturity securities trading
3

 


 


 
3

 
 
Equity securities available-for-sale:
 
 
 
 
 
 
 
 
 
Common stock
46

 
3

 
1

 
48

 
 
Preferred stock
145

 
7

 
3

 
149

 
 
Total equity securities available-for-sale
191

 
10

 
4

 
197

 
 
Total
$
37,444

 
$
2,717

 
$
392

 
$
39,769

 
 
Securities in a gross unrealized loss position
The following tables present the estimated fair value and gross unrealized losses of fixed maturity and equity securities in a gross unrealized loss position by the length of time in which the securities have continuously been in that position.
 
Less than 12 Months
 
12 Months or Longer
 
Total
September 30, 2016
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
(In millions)
 
 
 
 
 
Fixed maturity securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
617

 
$
10

 
$
338

 
$
26

 
$
955

 
$
36

States, municipalities and political subdivisions
163

 
2

 
9

 

 
172

 
2

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed
273

 
6

 
212

 
9

 
485

 
15

Commercial mortgage-backed
391

 
7

 
96

 
1

 
487

 
8

Other asset-backed
153

 
1

 
17

 

 
170

 
1

Total asset-backed
817

 
14

 
325

 
10

 
1,142

 
24

U.S. Treasury and obligations of government-sponsored enterprises
2

 

 

 

 
2

 

Foreign government
16

 

 

 

 
16

 

Total fixed maturity securities available-for-sale
1,615

 
26

 
672

 
36

 
2,287

 
62

Equity securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
Common stock

 
1

 

 

 

 
1

Preferred stock
15

 
2

 

 

 
15

 
2

Total equity securities available-for-sale
15

 
3

 

 

 
15

 
3

Total
$
1,630

 
$
29

 
$
672

 
$
36

 
$
2,302

 
$
65


 
Less than 12 Months
 
12 Months or Longer
 
Total
December 31, 2015
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
 
Gross
Unrealized
Losses
(In millions)
 
 
 
 
 
Fixed maturity securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
4,882

 
$
302

 
$
162

 
$
40

 
$
5,044

 
$
342

States, municipalities and political subdivisions
338

 
8

 
75

 

 
413

 
8

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed
963

 
9

 
164

 
8

 
1,127

 
17

Commercial mortgage-backed
652

 
10

 
96

 
2

 
748

 
12

Other asset-backed
552

 
8

 
5

 

 
557

 
8

Total asset-backed
2,167

 
27

 
265

 
10

 
2,432

 
37

U.S. Treasury and obligations of government-sponsored enterprises
4

 

 

 

 
4

 

   Foreign government
54

 
1

 

 

 
54

 
1

Redeemable preferred stock
3

 

 

 

 
3

 

Total fixed maturity securities available-for-sale
7,448

 
338

 
502

 
50

 
7,950

 
388

Equity securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
Common stock
3

 
1

 

 

 
3

 
1

   Preferred stock
13

 
3

 

 

 
13

 
3

Total equity securities available-for-sale
16

 
4

 

 

 
16

 
4

Total
$
7,464

 
$
342

 
$
502

 
$
50

 
$
7,966

 
$
392

Activity related to the pretax fixed maturity credit loss component reflected within retained earnings for securities still held for which a portion of an OTTI loss was recognized in OCI
The following table presents the activity related to the pretax credit loss component reflected in Retained earnings on fixed maturity securities still held as of September 30, 2016 and 2015 for which a portion of an OTTI loss was recognized in Other comprehensive income (loss).
Periods ended September 30
Three Months
 
Nine Months
(In millions)
2016
 
2015
 
2016
 
2015
Beginning balance of credit losses on fixed maturity securities
$
41

 
$
59

 
$
53

 
$
62

Reductions for securities sold during the period
(2
)
 
(2
)
 
(14
)
 
(5
)
Reductions for securities the Company intends to sell or more likely than not will be required to sell
(1
)
 

 
(1
)
 

Ending balance of credit losses on fixed maturity securities
$
38

 
$
57

 
$
38

 
$
57

Contractual maturity
The following table presents available-for-sale fixed maturity securities by contractual maturity.
 
September 30, 2016
 
December 31, 2015
(In millions)
Amortized
Cost
 
Estimated
Fair
Value
 
Amortized
Cost
 
Estimated
Fair
Value
Due in one year or less
$
1,665

 
$
1,710

 
$
1,574

 
$
1,595

Due after one year through five years
9,052

 
9,584

 
7,721

 
8,070

Due after five years through ten years
14,659

 
15,625

 
14,652

 
14,915

Due after ten years
12,862

 
15,400

 
13,303

 
14,989

Total
$
38,238

 
$
42,319

 
$
37,250

 
$
39,569