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Investments (Tables)

12 Months Ended

Dec. 31, 2019

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



Years ended December 31
(In millions)	2019			2018			2017
Fixed maturity securities	$	1,817		$	1,795		$	1,812
Equity securities	85			18			12
Limited partnership investments	180			(22		)	207
Mortgage loans	51			50			34
Short term investments	34			26			15
Trading portfolio	9			7			12
Other	5			4			1
Gross investment income	2,181			1,878			2,093
Investment expense	(63		)	(61		)	(59		)
Net investment income	$	2,118		$	1,817		$	2,034

Net realized investment gains (losses)

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



Years ended December 31
(In millions)	2019			2018			2017
Net investment gains (losses):
Fixed maturity securities:
Gross gains	$	125		$	168		$	186
Gross losses	(131		)	(164		)	(64		)
Net investment gains (losses) on fixed maturity securities	(6		)	4			122
Equity securities	66			(74		)	—
Derivatives	(11		)	9			(4		)
Short term investments and other	(20		)	9			(25		)
Net investment gains (losses)	$	29		$	(52	)	$	93

Net change in unrealized gains (losses) on investments

Net change in unrealized gains on investments is presented in the following table.



Years ended December 31
(In millions)	2019		2018			2017
Net change in unrealized gains on investments:
Fixed maturity securities	$	2,620	$	(1,811	)	$	728
Equity securities ⁽¹⁾	—		—			32
Other	—		—			(2		)
Total net change in unrealized gains on investments	$	2,620	$	(1,811	)	$	758

(1)

As of January 1, 2018, the Company adopted ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The change in fair value of equity securities is now recognized through the income statement. See Note A to the Consolidated Financial Statements for additional information.

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

The components of OTTI losses recognized in earnings by asset type are presented in the following table.



Years ended December 31
(In millions)	2019		2018		2017
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	33	$	12	$	12
Asset-backed	11		9		1
Total fixed maturity securities available-for-sale	44		21		13
Equity securities available-for-sale	—		—		1
OTTI losses recognized in earnings	$	44	$	21	$	14

Summary of fixed maturity and equity securities

The following tables present a summary of fixed maturity securities.



December 31, 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	$	19,789	$	2,292	$	32	$	22,049	$	—
States, municipalities and political subdivisions	9,093		1,559		—		10,652		—
Asset-backed:
Residential mortgage-backed	4,387		133		1		4,519		(17		)
Commercial mortgage-backed	2,265		86		5		2,346		1
Other asset-backed	1,925		41		4		1,962		(3		)
Total asset-backed	8,577		260		10		8,827		(19		)
U.S. Treasury and obligations of government-sponsored enterprises	146		1		2		145		—
Foreign government	491		14		1		504		—
Redeemable preferred stock	10		—		—		10		—
Total fixed maturity securities available-for-sale	38,106		4,126		45		42,187		$	(19	)
Total fixed maturity securities trading	20		—		—		20
Total fixed maturity securities	$	38,126	$	4,126	$	45	$	42,207



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
December 31, 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	$	914	$	21	$	186	$	11	$	1,100	$	32
States, municipalities and political subdivisions	34		—		—		—		34		—
Asset-backed:
Residential mortgage-backed	249		1		30		—		279		1
Commercial mortgage-backed	381		3		20		2		401		5
Other asset-backed	449		3		33		1		482		4
Total asset-backed	1,079		7		83		3		1,162		10
U.S. Treasury and obligations of government-sponsored enterprises	62		2		2		—		64		2
Foreign government	59		1		1		—		60		1
Total	$	2,148	$	31	$	272	$	14	$	2,420	$	45



	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 December 31, 2019, 2018 and 2017 for which a portion of an OTTI loss was recognized in Other comprehensive income (loss).



Years ended December 31
(In millions)	2019			2018			2017
Beginning balance of credit losses on fixed maturity securities	$	18		$	27		$	36
Reductions for securities sold during the period	(8		)	(9		)	(9		)
Ending balance of credit losses on fixed maturity securities	$	10		$	18		$	27

Contractual maturity

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



December 31	2019				2018
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,334	$	1,356	$	1,350	$	1,359
Due after one year through five years	9,746		10,186		7,979		8,139
Due after five years through ten years	14,892		15,931		16,859		16,870
Due after ten years	12,134		14,714		11,893		13,174
Total	$	38,106	$	42,187	$	38,081	$	39,542