Investments (Tables)

3 Months Ended

Mar. 31, 2017

The significant components of Net investment income are presented in the following table.



Three months ended March 31
(In millions)	2017			2016
Fixed maturity securities	$	455		$	446
Equity securities	1			3
Limited partnership investments	90			(14		)
Mortgage loans	7			9
Short term investments	3			3
Trading portfolio	2			2
Other	1			—
Gross investment income	559			449
Investment expense	(14		)	(14		)
Net investment income	$	545		$	435

Net realized investment gains (losses)

Net realized investment gains (losses) are presented in the following table.



Three months ended March 31
(In millions)	2017			2016
Net realized investment gains (losses):
Fixed maturity securities:
Gross realized gains	$	49		$	45
Gross realized losses	(17		)	(62		)
Net realized investment gains (losses) on fixed maturity securities	32			(17		)
Equity securities:
Gross realized gains	—			—
Gross realized losses	—			(5		)
Net realized investment gains (losses) on equity securities	—			(5		)
Derivatives	1			(7		)
Short term investments and other	3			(7		)
Net realized investment gains (losses)	$	36		$	(36	)

Components of net other than temporary impairment losses recognized in earnings by asset type

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



Three months ended March 31
(In millions)	2017		2016
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	2	$	16
Asset-backed:
Residential mortgage-backed	—		—
Other asset-backed	—		2
Total asset-backed	—		2
Total fixed maturity securities available-for-sale	2		18
Equity securities available-for-sale -- Common stock	—		5
OTTI losses recognized in earnings	$	2	$	23

Summary of fixed maturity and equity securities

The following tables present a summary of fixed maturity and equity securities.



March 31, 2017	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	$	17,838	$	1,428	$	37	$	19,229	$	(1	)
States, municipalities and political subdivisions	12,261		1,219		31		13,449		(12		)
Asset-backed:
Residential mortgage-backed	4,672		121		50		4,743		(27		)
Commercial mortgage-backed	1,902		52		19		1,935		—
Other asset-backed	1,043		10		4		1,049		—
Total asset-backed	7,617		183		73		7,727		(27		)
U.S. Treasury and obligations of government-sponsored enterprises	95		8		—		103		—
Foreign government	419		14		1		432		—
Redeemable preferred stock	19		1		—		20		—
Total fixed maturity securities available-for-sale	38,249		2,853		142		40,960		$	(40	)
Total fixed maturity securities trading	20						20
Equity securities available-for-sale:
Common stock	20		5		—		25
Preferred stock	92		5		2		95
Total equity securities available-for-sale	112		10		2		120
Total	$	38,381	$	2,863	$	144	$	41,100



December 31, 2016	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	$	17,711	$	1,323	$	76	$	18,958	$	(1	)
States, municipalities and political subdivisions	12,060		1,213		33		13,240		(16		)
Asset-backed:
Residential mortgage-backed	5,004		120		51		5,073		(28		)
Commercial mortgage-backed	2,016		48		24		2,040		—
Other asset-backed	1,022		8		5		1,025		—
Total asset-backed	8,042		176		80		8,138		(28		)
U.S. Treasury and obligations of government-sponsored enterprises	83		10		—		93		—
Foreign government	435		13		3		445		—
Redeemable preferred stock	18		1		—		19		—
Total fixed maturity securities available-for-sale	38,349		2,736		192		40,893		$	(45	)
Total fixed maturity securities trading	12						12
Equity securities available-for-sale:
Common stock	13		6		—		19
Preferred stock	93		2		4		91
Total equity securities available-for-sale	106		8		4		110
Total	$	38,467	$	2,744	$	196	$	41,015

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
March 31, 2017	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	$	1,915	$	29	$	134	$	8	$	2,049	$	37
States, municipalities and political subdivisions	845		31		33		—		878		31
Asset-backed:
Residential mortgage-backed	2,188		44		170		6		2,358		50
Commercial mortgage-backed	590		15		139		4		729		19
Other asset-backed	256		4		28		—		284		4
Total asset-backed	3,034		63		337		10		3,371		73
U.S. Treasury and obligations of government-sponsored enterprises	31		—		—		—		31		—
Foreign government	89		1		—		—		89		1
Total fixed maturity securities available-for-sale	5,914		124		504		18		6,418		142
Equity securities available-for-sale:
Common stock	2		—		—		—		2		—
Preferred stock	15		2		—		—		15		2
Total equity securities available-for-sale	17		2		—		—		17		2
Total	$	5,931	$	126	$	504	$	18	$	6,435	$	144



	Less than 12 Months				12 Months or Longer				Total
December 31, 2016	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	$	2,615	$	61	$	254	$	15	$	2,869	$	76
States, municipalities and political subdivisions	959		32		23		1		982		33
Asset-backed:
Residential mortgage-backed	2,136		44		201		7		2,337		51
Commercial mortgage-backed	756		22		69		2		825		24
Other asset-backed	398		5		24		—		422		5
Total asset-backed	3,290		71		294		9		3,584		80
U.S. Treasury and obligations of government-sponsored enterprises	5		—		—		—		5		—
Foreign government	108		3		—		—		108		3
Total fixed maturity securities available-for-sale	6,977		167		571		25		7,548		192
Equity securities available-for-sale -- Preferred stock	12		—		13		4		25		4
Total	$	6,989	$	167	$	584	$	29	$	7,573	$	196

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 March 31, 2017 and 2016 for which a portion of an OTTI loss was recognized in Other comprehensive income (loss).



Three months ended March 31
(In millions)	2017			2016
Beginning balance of credit losses on fixed maturity securities	$	36		$	53
Reductions for securities sold during the period	(4		)	(5		)
Ending balance of credit losses on fixed maturity securities	$	32		$	48

Contractual maturity

The following table presents available-for-sale fixed maturity securities by contractual maturity.



	March 31, 2017				December 31, 2016
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,655	$	1,701	$	1,779	$	1,828
Due after one year through five years	7,539		7,918		7,566		7,955
Due after five years through ten years	15,645		16,176		15,892		16,332
Due after ten years	13,410		15,165		13,112		14,778
Total	$	38,249	$	40,960	$	38,349	$	40,893