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Investments (Tables)

9 Months Ended

Sep. 30, 2019

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



Periods ended September 30	Three Months						Nine Months
(In millions)	2019			2018			2019			2018
Fixed maturity securities	$	452		$	449		$	1,362		$	1,339
Equity securities	16			10			62			32
Limited partnership investments	12			23			125			93
Mortgage loans	13			11			37			36
Short term investments	8			6			27			18
Trading portfolio	2			1			6			6
Other	—			1			2			4
Gross investment income	503			501			1,621			1,528
Investment expense	(16		)	(14		)	(48		)	(45		)
Net investment income	$	487		$	487		$	1,573		$	1,483

Net realized investment gains (losses)

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



Periods ended September 30	Three Months						Nine Months
(In millions)	2019			2018			2019			2018
Net investment gains (losses):
Fixed maturity securities:
Gross gains	$	34		$	42		$	98		$	148
Gross losses	(31		)	(32		)	(104		)	(116		)
Net investment gains (losses) on fixed maturity securities	3			10			(6		)	32
Equity securities	7			2			60			(23		)
Derivatives	(2		)	1			(13		)	10
Short term investments and other	(1		)	1			(21		)	6
Net investment gains (losses)	$	7		$	14		$	20		$	25

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.



Periods ended September 30	Three Months				Nine Months
(In millions)	2019		2018		2019		2018
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	12	$	1	$	24	$	6
Asset-backed	2		2		10		3
OTTI losses recognized in earnings	$	14	$	3	$	34	$	9

Summary of fixed maturity and equity securities

The following tables present a summary of fixed maturity securities.



September 30, 2019	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	$	19,806	$	2,263	$	42	$	22,027	$	—
States, municipalities and political subdivisions	9,154		1,641		—		10,795		—
Asset-backed:
Residential mortgage-backed	4,718		157		1		4,874		(23		)
Commercial mortgage-backed	2,066		117		3		2,180		1
Other asset-backed	1,884		46		4		1,926		(3		)
Total asset-backed	8,668		320		8		8,980		(25		)
U.S. Treasury and obligations of government-sponsored enterprises	124		7		—		131		—
Foreign government	491		20		—		511		—
Redeemable preferred stock	10		—		—		10		—
Total fixed maturity securities available-for-sale	38,253		4,251		50		42,454		$	(25	)
Total fixed maturity securities trading	5		—		—		5
Total fixed maturity securities	$	38,258	$	4,251	$	50	$	42,459



December 31, 2018	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	$	18,764	$	791	$	395	$	19,160	$	—
States, municipalities and political subdivisions	9,681		1,076		9		10,748		—
Asset-backed:
Residential mortgage-backed	4,815		68		57		4,826		(20		)
Commercial mortgage-backed	2,200		28		32		2,196		—
Other asset-backed	1,975		11		24		1,962		—
Total asset-backed	8,990		107		113		8,984		(20		)
U.S. Treasury and obligations of government-sponsored enterprises	156		3		—		159		—
Foreign government	480		5		4		481		—
Redeemable preferred stock	10		—		—		10		—
Total fixed maturity securities available-for-sale	38,081		1,982		521		39,542		$	(20	)
Total fixed maturity securities trading	4		—		—		4
Total fixed maturity securities	$	38,085	$	1,982	$	521	$	39,546

Securities in a gross unrealized loss position

The following tables present the estimated fair value and gross unrealized losses of fixed maturity 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, 2019	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	$	890	$	26	$	200	$	16	$	1,090	$	42
States, municipalities and political subdivisions	20		—		2		—		22		—
Asset-backed:
Residential mortgage-backed	150		—		38		1		188		1
Commercial mortgage-backed	83		2		26		1		109		3
Other asset-backed	416		3		6		1		422		4
Total asset-backed	649		5		70		3		719		8
U.S. Treasury and obligations of government-sponsored enterprises	14		—		4		—		18		—
Foreign government	17		—		2		—		19		—
Total	$	1,590	$	31	$	278	$	19	$	1,868	$	50



	Less than 12 Months				12 Months or Longer				Total
December 31, 2018	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	$	8,543	$	340	$	825	$	55	$	9,368	$	395
States, municipalities and political subdivisions	517		8		5		1		522		9
Asset-backed:
Residential mortgage-backed	1,932		23		1,119		34		3,051		57
Commercial mortgage-backed	728		10		397		22		1,125		32
Other asset-backed	834		21		125		3		959		24
Total asset-backed	3,494		54		1,641		59		5,135		113
U.S. Treasury and obligations of government-sponsored enterprises	21		—		19		—		40		—
Foreign government	114		2		124		2		238		4
Total	$	12,689	$	404	$	2,614	$	117	$	15,303	$	521

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, 2019 and 2018 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)	2019		2018			2019			2018
Beginning balance of credit losses on fixed maturity securities	$	16	$	21		$	18		$	27
Reductions for securities sold during the period	—		(2		)	(2		)	(8		)
Ending balance of credit losses on fixed maturity securities	$	16	$	19		$	16		$	19

Contractual maturity

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



	September 30, 2019				December 31, 2018
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,071	$	1,091	$	1,350	$	1,359
Due after one year through five years	10,992		11,470		7,979		8,139
Due after five years through ten years	13,694		14,711		16,859		16,870
Due after ten years	12,496		15,182		11,893		13,174
Total	$	38,253	$	42,454	$	38,081	$	39,542