
Three months ended March 31
(In millions)	2021		2020
Fixed maturity securities	$	428	$	438
Equity securities	29		(44)
Limited partnership investments	43		(70)
Mortgage loans	14		14
Short term investments	—		7
Trading portfolio	5		1
Other	2		—
Gross investment income	521		346
Investment expense	(17)		(17)
Net investment income	$	504	$	329

During the three months ended March 31, 2021 and 2020, $13 million and $(45) million of Net investment income was recognized due to the change in fair value of common stock still held as of March 31, 2021 and 2020.


Three months ended March 31
(In millions)	2021		2020
Net investment gains (losses):
Fixed maturity securities:
Gross gains	$	58	$	29
Gross losses	(20)		(104)
Net investment gains (losses) on fixed maturity securities	38		(75)
Equity securities	2		(133)
Derivatives	17		5
Mortgage loans	—		(13)
Net investment gains (losses)	$	57	$	(216)

During the three months ended March 31, 2021 and 2020, $2 million of gains and $(133) million of losses were recognized in Net investment gains (losses) due to the change in fair value of non-redeemable preferred stock still held as of March 31, 2021 and 2020.

The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (PCD) assets. Accrued interest receivable on available-for-sale fixed maturity securities totaled $389 million, $371 million and $390 million as of March 31, 2021, December 31, 2020 and March 31, 2020 and is excluded from the estimate of expected credit losses and the amortized cost basis in the tables included within this Note.



(In millions)	Corporate and other bonds		Asset-backed		Total
Allowance for credit losses:
Balance as of January 1, 2021	$	23	$	17	$	40
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded	14		—		14
Available-for-sale securities accounted for as PCD assets	2		—		2

Reductions to the allowance for credit losses:
Securities sold during the period (realized)	6		—		6
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	—		—		—
Write-offs charged against the allowance	—		—		—
Recoveries of amounts previously written off	—		—		—

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	(6)		(1)		(7)
Balance as of March 31, 2021	$	27	$	16	$	43



(In millions)	Corporate and other bonds		Asset-backed		Total
Allowance for credit losses:
Balance as of January 1, 2020	$	—	$	—	$	—
Additions to the allowance for credit losses:
Impact of adopting ASC 326	6		—		6
Securities for which credit losses were not previously recorded	48		—		48
Available-for-sale securities accounted for as PCD assets	1		—		1

Reductions to the allowance for credit losses:
Securities sold during the period (realized)	5		—		5
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	1		—		1
Write-offs charged against the allowance	—		—		—
Recoveries of amounts previously written off	—		—		—

Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	—		—		—
Balance as of March 31, 2020	$	49	$	—	$	49

The components of available-for-sale impairment losses recognized in earnings by asset type are presented in the following table. The table includes losses on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date.


Three months ended March 31
(In millions)	2021		2020
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	7	$	91
Asset-backed	(1)		1
Impairment losses recognized in earnings	$	6	$	92

There were no losses recognized on mortgage loans during the three months ended March 31, 2021. During the three months ended March 31, 2020, the Company recognized $13 million of losses related to mortgage loans due to changes in expected credit losses.


March 31, 2021	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	21,110	$	2,644	$	71	$	27	$	23,656
States, municipalities and political subdivisions	10,041		1,590		31		—		11,600
Asset-backed:
Residential mortgage-backed	3,215		108		40		—		3,283
Commercial mortgage-backed	1,952		76		24		16		1,988
Other asset-backed	2,281		71		7		—		2,345
Total asset-backed	7,448		255		71		16		7,616
U.S. Treasury and obligations of government-sponsored enterprises	138		1		7		—		132
Foreign government	508		23		2		—		529
Redeemable preferred stock	12		—		—		—		12
Total fixed maturity securities available-for-sale	39,257		4,513		182		43		43,545
Total fixed maturity securities trading	34		—		—		—		34
Total fixed maturity securities	$	39,291	$	4,513	$	182	$	43	$	43,579


December 31, 2020	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	20,792	$	3,578	$	22	$	23	$	24,325
States, municipalities and political subdivisions	9,729		1,863		—		—		11,592
Asset-backed:
Residential mortgage-backed	3,442		146		1		—		3,587
Commercial mortgage-backed	1,933		93		42		17		1,967
Other asset-backed	2,179		81		9		—		2,251
Total asset-backed	7,554		320		52		17		7,805
U.S. Treasury and obligations of government-sponsored enterprises	339		2		3		—		338
Foreign government	512		32		—		—		544
Redeemable preferred stock	—		—		—		—		—
Total fixed maturity securities available-for-sale	38,926		5,795		77		40		44,604
Total fixed maturity securities trading	27		—		—		—		27
Total fixed maturity securities	$	38,953	$	5,795	$	77	$	40	$	44,631

The net unrealized gains on investments included in the tables above are recorded as a component of Accumulated other comprehensive income (AOCI). When presented in AOCI, these amounts are net of tax and any required Shadow Adjustments. To the extent that unrealized gains on fixed income securities supporting certain products within the Life & Group segment would result in a premium deficiency if realized, a related increase in Insurance reserves is recorded, net of tax, as a reduction of net unrealized gains through Other comprehensive income (loss) (Shadow Adjustments). As of March 31, 2021 and December 31, 2020, the net unrealized gains on investments included in AOCI were correspondingly reduced by Shadow Adjustments of $2,301 million and $2,773 million.

The following tables present the estimated fair value and gross unrealized losses of fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, 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, 2021	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	$	1,868	$	66	$	82	$	5	$	1,950	$	71
States, municipalities and political subdivisions	866		31		—		—		866		31
Asset-backed:
Residential mortgage-backed	1,584		40		12		—		1,596		40
Commercial mortgage-backed	320		9		285		15		605		24
Other asset-backed	337		3		97		4		434		7
Total asset-backed	2,241		52		394		19		2,635		71
U.S. Treasury and obligations of government-sponsored enterprises	65		7		—		—		65		7
Foreign government	45		2		—		—		45		2
Total	$	5,085	$	158	$	476	$	24	$	5,561	$	182


	Less than 12 Months				12 Months or Longer				Total
December 31, 2020	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	$	609	$	21	$	12	$	1	$	621	$	22
States, municipalities and political subdivisions	33		—		—		—		33		—
Asset-backed:
Residential mortgage-backed	71		1		11		—		82		1
Commercial mortgage-backed	533		40		28		2		561		42
Other asset-backed	344		9		13		—		357		9
Total asset-backed	948		50		52		2		1,000		52
U.S. Treasury and obligations of government-sponsored enterprises	63		3		—		—		63		3
Foreign government	13		—		—		—		13		—
Total	$	1,666	$	74	$	64	$	3	$	1,730	$	77

Based on current facts and circumstances, the Company believes the unrealized losses presented in the March 31, 2021 securities in a gross unrealized loss position table above are not indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are attributable to changes in interest rates, credit spreads and other factors. The Company has no current intent to sell securities with unrealized losses, nor is it more likely than not that it will be required to sell prior to recovery of amortized cost; accordingly, the Company has determined that there are no additional impairment losses to be recorded as of March 31, 2021.


	March 31, 2021				December 31, 2020
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,468	$	1,473	$	1,456	$	1,458
Due after one year through five years	10,837		11,583		12,304		13,098
Due after five years through ten years	13,640		14,685		12,319		13,878
Due after ten years	13,312		15,804		12,847		16,170
Total	$	39,257	$	43,545	$	38,926	$	44,604

Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life.

The Company holds an embedded derivative on a funds withheld liability with a notional value of $256 million and $190 million and a fair value of $(2) million and $(19) million as of March 31, 2021 and December 31, 2020. The embedded derivative on the funds withheld liability is accounted for separately and reported with the funds withheld liability in Other liabilities on the Condensed Consolidated Balance Sheets.

As part of its overall investment strategy, the Company invests in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to private placement securities. As of March 31, 2021, the Company had commitments to purchase or fund approximately $1,365 million and sell approximately $100 million under the terms of these investments.

The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (DSCR) and loan-to-value ratios (LTV).


March 31, 2021	Mortgage Loans Amortized Cost Basis by Origination Year (1)
(In millions)	2021		2020		2019		2018		2017		Prior		Total
DSCR ≥1.6x
LTV less than 55%	$	—	$	75	$	32	$	36	$	114	$	187	$	444
LTV 55% to 65%	—		14		20		14		15		11		74
LTV greater than 65%	5		—		5		—		—		24		34
DSCR 1.2x - 1.6x
LTV less than 55%	—		—		16		—		5		77		98
LTV 55% to 65%	—		20		40		53		27		—		140
LTV greater than 65%	10		52		44		—		9		12		127
DSCR ≤1.2
LTV less than 55%	—		—		50		—		8		10		68
LTV 55% to 65%	—		—		48		—		—		—		48
LTV greater than 65%	—		—		29		—		—		7		36
Total	$	15	$	161	$	284	$	103	$	178	$	328	$	1,069

(1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index.

As of March 31, 2021, accrued interest receivable on mortgage loans totaled $4 million and is excluded from the amortized cost basis disclosed in the table above and the estimate of expected credit losses.