Fair Value (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.

September 30, 2020							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	372	$	23,459	$	694	$	24,525
States, municipalities and political subdivisions	—		11,179		45		11,224
Asset-backed	—		7,917		235		8,152
Total fixed maturity securities	372		42,555		974		43,901
Equity securities:
Common stock	157		—		16		173
Non-redeemable preferred stock	65		674		7		746
Total equity securities	222		674		23		919
Short term and other	1,301		25		—		1,326
Total assets	$	1,895	$	43,254	$	997	$	46,146
Liabilities
Other liabilities	$	—	$	16	$	—	$	16
Total liabilities	$	—	$	16	$	—	$	16

December 31, 2019							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	175	$	22,085	$	468	$	22,728
States, municipalities and political subdivisions	—		10,652		—		10,652
Asset-backed	—		8,662		165		8,827
Total fixed maturity securities	175		41,399		633		42,207
Equity securities:
Common stock	135		—		7		142
Non-redeemable preferred stock	54		658		11		723
Total equity securities	189		658		18		865
Short term and other	397		1,344		—		1,741
Total assets	$	761	$	43,401	$	651	$	44,813
Liabilities
Other liabilities	$	—	$	7	$	—	$	7
Total liabilities	$	—	$	7	$	—	$	7

Table of reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs

The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of July 1, 2020	$	555		$	—	$	222		$	11	$	788
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			—		—
Reported in Net investment income	—			—		—			—		—
Reported in Other comprehensive income (loss)	5			—		9			—		14
Total realized and unrealized investment gains (losses)	5			—		9			—		14
Purchases	129			45		20			12		206
Sales	—			—		—			—		—
Settlements	(3		)	—		(14		)	—		(17		)
Transfers into Level 3	8			—		—			—		8
Transfers out of Level 3	—			—		(2		)	—		(2		)
Balance as of September 30, 2020	$	694		$	45	$	235		$	23	$	997
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2020 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	—	$	—
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2020 recognized in Other comprehensive income (loss) in the period	5			—		8			—		13

Level 3 (In millions)	Corporate bonds and other			Asset-backed			Equity securities		Total
Balance as of July 1, 2019	$	338		$	193		$	22	$	553
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—			—		—
Reported in Net investment income	—			—			—		—
Reported in Other comprehensive income (loss)	14			1			—		15
Total realized and unrealized investment gains (losses)	14			1			—		15
Purchases	79			22			—		101
Sales	—			—			—		—
Settlements	(3		)	(4		)	—		(7		)
Transfers into Level 3	—			—			—		—
Transfers out of Level 3	—			(16		)	—		(16		)
Balance as of September 30, 2019	$	428		$	196		$	22	$	646
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Net income (loss) in the period	$	—		$	—		$	—	$	—
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Other comprehensive income (loss) in the period	14			2			—		16

Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities			Total
Balance as of January 1, 2020	$	468		$	—	$	165		$	18		$	651
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			(4		)	(4		)
Reported in Net investment income	—			—		—			(3		)	(3		)
Reported in Other comprehensive income (loss)	27			—		18			—			45
Total realized and unrealized investment gains (losses)	27			—		18			(7		)	38
Purchases	200			45		100			12			357
Sales	—			—		(9		)	—			(9		)
Settlements	(9		)	—		(22		)	—			(31		)
Transfers into Level 3	8			—		—			—			8
Transfers out of Level 3	—			—		(17		)	—			(17		)
Balance as of September 30, 2020	$	694		$	45	$	235		$	23		$	997
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2020 recognized in Net income (loss) in the period	$	—		$	—	$	—		$	(7	)	$	(7	)
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2020 recognized in Other comprehensive income (loss) in the period	29			—		19			—			48

Level 3 (In millions)	Corporate bonds and other			Asset-backed			Equity securities		Total
Balance as of January 1, 2019	$	222		$	197		$	18	$	437
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—			2		2
Reported in Net investment income	—			—			—		—
Reported in Other comprehensive income (loss)	34			8			—		42
Total realized and unrealized investment gains (losses)	34			8			2		44
Purchases	211			42			2		255
Sales	—			—			—		—
Settlements	(7		)	(12		)	—		(19		)
Transfers into Level 3	—			45			—		45
Transfers out of Level 3	(32		)	(84		)	—		(116		)
Balance as of September 30, 2019	$	428		$	196		$	22	$	646
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Net income (loss) in the period	$	—		$	—		$	2	$	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2019 recognized in Other comprehensive income (loss) in the period	29			9			—		38

Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets

The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value.

September 30, 2020	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	888	Discounted cash flow	Credit spread	1% - 10% (3%)

December 31, 2019	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	525	Discounted cash flow	Credit spread	1% - 6% (2%)

Carrying amount and estimated fair value of financial instrument assets and liabilities not measured at fair value

The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables.

September 30, 2020	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,088	$	—	$	—	$	1,159	$	1,159
Liabilities
Long term debt	$	2,776	$	—	$	3,118	$	—	$	3,118

December 31, 2019	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	994	$	—	$	—	$	1,025	$	1,025
Note receivable	21		—		—		21		21
Liabilities
Long term debt	$	2,679	$	—	$	2,906	$	—	$	2,906