Fair Value (Tables)

9 Months Ended

Sep. 30, 2021

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, 2021							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	146	$	24,195	$	877	$	25,218
States, municipalities and political subdivisions	—		11,922		57		11,979
Asset-backed	—		7,394		478		7,872
Total fixed maturity securities	146		43,511		1,412		45,069
Equity securities:
Common stock	209		—		19		228
Non-redeemable preferred stock	67		745		5		817
Total equity securities	276		745		24		1,045
Short term and other	992		—		—		992
Total assets	$	1,414	$	44,256	$	1,436	$	47,106
Liabilities
Other liabilities	$	—	$	12	$	—	$	12
Total liabilities	$	—	$	12	$	—	$	12

December 31, 2020							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	355	$	24,109	$	770	$	25,234
States, municipalities and political subdivisions	—		11,546		46		11,592
Asset-backed	—		7,497		308		7,805
Total fixed maturity securities	355		43,152		1,124		44,631
Equity securities:
Common stock	175		—		20		195
Non-redeemable preferred stock	68		722		7		797
Total equity securities	243		722		27		992
Short term and other	1,761		28		—		1,789
Total assets	$	2,359	$	43,902	$	1,151	$	47,412
Liabilities
Other liabilities	$	—	$	19	$	—	$	19
Total liabilities	$	—	$	19	$	—	$	19

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, 2021	$	883	$	57	$	410	$	25	$	1,375
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	1		—		—		(3)		(2)
Reported in Net investment income	—		—		1		1		2
Reported in Other comprehensive income (loss)	1		—		1		—		2
Total realized and unrealized investment gains (losses)	2		—		2		(2)		2
Purchases	55		—		83		1		139
Sales	—		—		(9)		(11)		(20)
Settlements	(11)		—		(11)		—		(22)
Transfers into Level 3	—		—		41		11		52
Transfers out of Level 3	(52)		—		(38)		—		(90)
Balance as of September 30, 2021	$	877	$	57	$	478	$	24	$	1,436
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Net income (loss) in the period	$	—	$	—	$	—	$	(3)	$	(3)
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Other comprehensive income (loss) in the period	2		—		—		—		2

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		States, municipalities and political subdivisions		Asset-backed		Equity securities		Total
Balance as of January 1, 2021	$	770	$	46	$	308	$	27	$	1,151
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	(9)		—		—		(2)		(11)
Reported in Net investment income	—		—		4		2		6
Reported in Other comprehensive income (loss)	(23)		—		(4)		—		(27)
Total realized and unrealized investment gains (losses)	(32)		—		—		—		(32)
Purchases	219		12		197		1		429
Sales	(3)		—		(9)		(15)		(27)
Settlements	(35)		(1)		(38)		—		(74)
Transfers into Level 3	10		—		71		11		92
Transfers out of Level 3	(52)		—		(51)		—		(103)
Balance as of September 30, 2021	$	877	$	57	$	478	$	24	$	1,436
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Net income (loss) in the period	$	—	$	—	$	—	$	(1)	$	(1)
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2021 recognized in Other comprehensive income (loss) in the period	(22)		—		(5)		—		(27)

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

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, 2021	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	1,154	Discounted cash flow	Credit spread	1% - 7% (2%)

December 31, 2020	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Fixed maturity securities	$	966	Discounted cash flow	Credit spread	1% - 8% (3%)

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, 2021	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,031	$	—	$	—	$	1,106	$	1,106
Liabilities
Long term debt	$	2,778	$	—	$	3,027	$	—	$	3,027

December 31, 2020	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,068	$	—	$	—	$	1,151	$	1,151
Liabilities
Long term debt	$	2,776	$	—	$	3,148	$	—	$	3,148