Investments (Tables)

9 Months Ended

Sep. 30, 2022

Investments [Abstract]

Net investment income

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

Periods ended September 30	Three Months				Nine Months
(In millions)	2022		2021		2022		2021
Fixed maturity securities	$	454	$	425	$	1,324	$	1,278
Equity securities	2		4		(7)		53
Limited partnership investments	(35)		85		(11)		274
Mortgage loans	13		13		40		42
Short term investments	4		1		6		1
Trading portfolio	1		1		2		8
Other	1		(1)		1		—
Gross investment income	440		528		1,355		1,656
Investment expense	(18)		(15)		(53)		(48)
Net investment income	$	422	$	513	$	1,302	$	1,608
Net investment income (loss) recognized due to the change in fair value of common stock held as of September 30, 2022 and 2021	$	(18)	$	(7)	$	(38)	$	11

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)	2022		2021		2022		2021
Net investment gains (losses):
Fixed maturity securities:
Gross gains	$	23	$	50	$	94	$	159
Gross losses	(134)		(28)		(222)		(68)
Net investment gains (losses) on fixed maturity securities	(111)		22		(128)		91
Equity securities	(2)		(2)		(111)		17
Derivatives	24		2		79		7
Mortgage loans	(8)		—		(8)		—
Short term investments and other	1		—		2		2
Net investment gains (losses)	$	(96)	$	22	$	(166)	$	117
Net investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock held as of September 30, 2022 and 2021	$	(2)	$	(2)	$	(109)	$	15

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

The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date.

Periods ended September 30	Three Months				Nine Months
(In millions)	2022		2021		2022		2021
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	24	$	—	$	53	$	5
Asset-backed	1		11		2		11
Impairment losses (gains) recognized in earnings	$	25	$	11	$	55	$	16

Summary of fixed maturity securities

The following tables present a summary of fixed maturity securities.

September 30, 2022	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	$	23,082	$	231	$	2,398	$	—	$	20,915
States, municipalities and political subdivisions	9,244		259		1,080		—		8,423
Asset-backed:
Residential mortgage-backed	3,153		6		470		—		2,689
Commercial mortgage-backed	1,921		4		237		—		1,688
Other asset-backed	3,264		2		349		3		2,914
Total asset-backed	8,338		12		1,056		3		7,291
U.S. Treasury and obligations of government-sponsored enterprises	107		3		1		—		109
Foreign government	544		2		48		—		498
Redeemable preferred stock	3		—		—		—		3
Total fixed maturity securities available-for-sale	41,318		507		4,583		3		37,239
Total fixed maturity securities trading	12		—		—		—		12
Total fixed maturity securities	$	41,330	$	507	$	4,583	$	3	$	37,251

December 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	$	21,444	$	2,755	$	56	$	11	$	24,132
States, municipalities and political subdivisions	10,358		1,599		14		—		11,943
Asset-backed:
Residential mortgage-backed	2,893		71		8		—		2,956
Commercial mortgage-backed	1,987		63		19		—		2,031
Other asset-backed	2,561		54		10		7		2,598
Total asset-backed	7,441		188		37		7		7,585
U.S. Treasury and obligations of government-sponsored enterprises	132		1		3		—		130
Foreign government	570		15		2		—		583
Redeemable preferred stock	—		—		—		—		—
Total fixed maturity securities available-for-sale	39,945		4,558		112		18		44,373
Total fixed maturity securities trading	7		—		—		—		7
Total fixed maturity securities	$	39,952	$	4,558	$	112	$	18	$	44,380

Debt securities, available-for-sale, unrealized loss position, fair value

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
September 30, 2022	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	$	16,707	$	2,117	$	914	$	281	$	17,621	$	2,398
States, municipalities and political subdivisions	4,793		1,029		128		51		4,921		1,080
Asset-backed:
Residential mortgage-backed	2,582		462		17		8		2,599		470
Commercial mortgage-backed	1,372		194		233		43		1,605		237
Other asset-backed	2,433		307		233		42		2,666		349
Total asset-backed	6,387		963		483		93		6,870		1,056
U.S. Treasury and obligations of government-sponsored enterprises	61		1		—		—		61		1
Foreign government	446		42		25		6		471		48
Total	$	28,394	$	4,152	$	1,550	$	431	$	29,944	$	4,583

	Less than 12 Months				12 Months or Longer				Total
December 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	$	2,389	$	48	$	136	$	8	$	2,525	$	56
States, municipalities and political subdivisions	730		14		—		—		730		14
Asset-backed:
Residential mortgage-backed	1,043		8		—		—		1,043		8
Commercial mortgage-backed	527		7		167		12		694		19
Other asset-backed	840		10		62		—		902		10
Total asset-backed	2,410		25		229		12		2,639		37
U.S. Treasury and obligations of government-sponsored enterprises	69		3		5		—		74		3
Foreign government	97		2		—		—		97		2
Total	$	5,695	$	92	$	370	$	20	$	6,065	$	112

The following table presents 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 ratings distribution.

	September 30, 2022				December 31, 2021
(In millions)	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
U.S. Government, Government agencies and Government-sponsored enterprises	$	2,360	$	360	$	898	$	8
AAA	1,566		318		368		6
AA	4,430		917		875		17
A	6,548		838		1,516		23
BBB	13,394		1,902		1,812		42
Non-investment grade	1,646		248		596		16
Total	$	29,944	$	4,583	$	6,065	$	112

Debt securities, available-for-sale, allowance for credit loss

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 $401 million, $369 million and $387 million as of September 30, 2022, December 31, 2021 and September 30, 2021 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 July 1, 2022	$	—	$	5	$	5
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded	—		—		—
Available-for-sale securities accounted for as PCD assets	—		—		—
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	—		—		—
Write-offs charged against the allowance	—		—		—
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	—		(2)		(2)
Balance as of September 30, 2022	$	—	$	3	$	3

(In millions)	Corporate and other bonds		Asset-backed		Total
Allowance for credit losses:
Balance as of July 1, 2021	$	24	$	21	$	45
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded	—		—		—
Available-for-sale securities accounted for as PCD assets	2		—		2
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	—		—		—
Write-offs charged against the allowance	16		—		16
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	—		—		—
Balance as of September 30, 2021	$	10	$	21	$	31

(In millions)	Corporate and other bonds		Asset-backed		Total
Allowance for credit losses:
Balance as of January 1, 2022	$	11	$	7	$	18
Additions to the allowance for credit losses:
Securities for which credit losses were not previously recorded	—		—		—
Available-for-sale securities accounted for as PCD assets	—		3		3
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	—		—		—
Write-offs charged against the allowance	12		—		12
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	1		(7)		(6)
Balance as of September 30, 2022	$	—	$	3	$	3

(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	4		4		8
Reductions to the allowance for credit losses:
Securities sold during the period (realized)	6		—		6
Write-offs charged against the allowance	16		—		16
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period	(9)		—		(9)
Balance as of September 30, 2021	$	10	$	21	$	31

Contractual maturity

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

	September 30, 2022				December 31, 2021
(In millions)	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
Due in one year or less	$	952	$	948	$	1,603	$	1,624
Due after one year through five years	9,487		9,000		10,637		11,229
Due after five years through ten years	14,323		12,765		13,294		14,338
Due after ten years	16,556		14,526		14,411		17,182
Total	$	41,318	$	37,239	$	39,945	$	44,373

Financing receivable credit quality indicators

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).

September 30, 2022	Mortgage Loans Amortized Cost Basis by Origination Year (1)
(In millions)	2022		2021		2020		2019		2018		Prior		Total
DSCR ≥1.6x
LTV less than 55%	$	9	$	13	$	112	$	29	$	54	$	275	$	492
LTV 55% to 65%	—		—		—		—		—		—		—
LTV greater than 65%	18		11		—		—		—		—		29
DSCR 1.2x - 1.6x
LTV less than 55%	5		49		18		56		10		42		180
LTV 55% to 65%	87		—		20		—		—		8		115
LTV greater than 65%	—		—		—		—		—		—		—
DSCR ≤1.2
LTV less than 55%	—		—		—		57		—		—		57
LTV 55% to 65%	—		21		—		44		—		—		65
LTV greater than 65%	10		—		—		22		—		7		39
Total	$	129	$	94	$	150	$	208	$	64	$	332	$	977

(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.