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Fair Value (Tables)

9 Months Ended

Sep. 30, 2024

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 United States of America (U.S.) Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.


September 30, 2024							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	225	$	25,289	$	1,237	$	26,751
States, municipalities and political subdivisions	—		7,103		45		7,148
Asset-backed	—		7,765		915		8,680
Total fixed maturity securities	225		40,157		2,197		42,579
Equity securities:
Common stock	171		—		12		183
Non-redeemable preferred stock	47		436		2		485
Total equity securities	218		436		14		668
Short-term and other	1,691		30		—		1,721
Total assets	$	2,134	$	40,623	$	2,211	$	44,968
Liabilities
Other liabilities	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	—	$	—


December 31, 2023							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate bonds and other	$	161	$	23,926	$	1,045	$	25,132
States, municipalities and political subdivisions	—		7,348		44		7,392
Asset-backed	—		7,000		901		7,901
Total fixed maturity securities	161		38,274		1,990		40,425
Equity securities:
Common stock	167		—		24		191
Non-redeemable preferred stock	52		440		—		492
Total equity securities	219		440		24		683
Short-term and other	1,976		32		—		2,008
Total assets	$	2,356	$	38,746	$	2,014	$	43,116
Liabilities
Other liabilities	$	—	$	1	$	—	$	1
Total liabilities	$	—	$	1	$	—	$	1

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, 2024	$	1,129	$	43	$	887	$	14	$	2,073
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—		—		(3)		—		(3)
Reported in Net investment income	—		—		4		—		4
Reported in Other comprehensive income (loss)	59		2		30		—		91
Total realized and unrealized investment gains (losses)	59		2		31		—		92
Purchases	83		—		38		—		121
Sales	(10)		—		—		—		(10)
Settlements	(24)		—		(23)		—		(47)
Transfers into Level 3	—		—		—		—		—
Transfers out of Level 3	—		—		(18)		—		(18)
Balance as of September 30, 2024	$	1,237	$	45	$	915	$	14	$	2,211
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2024 recognized in Net income (loss) in the period	$	—	$	—	$	—	$	—	$	—
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2024 recognized in Other comprehensive income (loss) in the period	57		2		30		—		89


Level 3 (In millions)	Corporate bonds and other		States, municipalities and political subdivisions		Asset-backed		Equity securities		Total
Balance as of July 1, 2023	$	971	$	43	$	883	$	26	$	1,923
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—		—		(4)		—		(4)
Reported in Net investment income	—		—		5		(1)		4
Reported in Other comprehensive income (loss)	(36)		(2)		(28)		—		(66)
Total realized and unrealized investment gains (losses)	(36)		(2)		(27)		(1)		(66)
Purchases	29		—		61		—		90
Sales	—		—		—		(2)		(2)
Settlements	(19)		—		(13)		—		(32)
Transfers into Level 3	—		—		—		—		—
Transfers out of Level 3	—		—		(7)		—		(7)
Balance as of September 30, 2023	$	945	$	41	$	897	$	23	$	1,906
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2023 recognized in Net income (loss) in the period	$	—	$	—	$	—	$	(1)	$	(1)
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2023 recognized in Other comprehensive income (loss) in the period	(36)		(2)		(28)		—		(66)


Level 3 (In millions)	Corporate bonds and other		States, municipalities and political subdivisions		Asset-backed		Equity securities		Total
Balance as of January 1, 2024	$	1,045	$	44	$	901	$	24	$	2,014
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—		—		(10)		—		(10)
Reported in Net investment income	—		—		15		6		21
Reported in Other comprehensive income (loss)	39		1		14		—		54
Total realized and unrealized investment gains (losses)	39		1		19		6		65
Purchases	229		—		111		3		343
Sales	(10)		—		(14)		(19)		(43)
Settlements	(77)		—		(65)		—		(142)
Transfers into Level 3	11		—		—		—		11
Transfers out of Level 3	—		—		(37)		—		(37)
Balance as of September 30, 2024	$	1,237	$	45	$	915	$	14	$	2,211
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2024 recognized in Net income (loss) in the period	$	—	$	—	$	—	$	2	$	2
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2024 recognized in Other comprehensive income (loss) in the period	34		1		14		—		49


Level 3 (In millions)	Corporate bonds and other		States, municipalities and political subdivisions		Asset-backed		Equity securities		Total
Balance as of January 1, 2023	$	810	$	43	$	788	$	35	$	1,676
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—		—		(5)		—		(5)
Reported in Net investment income	—		—		15		(8)		7
Reported in Other comprehensive income (loss)	(27)		(2)		(28)		—		(57)
Total realized and unrealized investment gains (losses)	(27)		(2)		(18)		(8)		(55)
Purchases	178		—		203		—		381
Sales	—		—		—		(4)		(4)
Settlements	(27)		—		(39)		—		(66)
Transfers into Level 3	11		—		23		—		34
Transfers out of Level 3	—		—		(60)		—		(60)
Balance as of September 30, 2023	$	945	$	41	$	897	$	23	$	1,906
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2023 recognized in Net income (loss) in the period	$	—	$	—	$	—	$	(8)	$	(8)
Unrealized gains (losses) on Level 3 assets and liabilities held as of September 30, 2023 recognized in Other comprehensive income (loss) in the period	(27)		(2)		(28)		—		(57)

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, 2024

Estimated Fair Value
(In millions)

Valuation Technique(s)

Unobservable Input(s)

Range
(Weighted Average)

Fixed maturity securities

1,713

Discounted cash flow

Credit spread

1% - 6% (2%)

December 31, 2023

Estimated Fair Value
(In millions)

Valuation Technique(s)

Unobservable Input(s)

Range
(Weighted Average)

Fixed maturity securities

1,495

Discounted cash flow

Credit spread

1% - 7% (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, 2024	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,003	$	—	$	—	$	988	$	988
Liabilities
Short-term debt	$	—	$	—	$	—	$	—	$	—
Long-term debt	2,972		—		2,952		—		2,952


December 31, 2023	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	1,035	$	—	$	—	$	997	$	997

Liabilities
Short-term debt	$	550	$	—	$	546	$	—	$	546
Long-term debt	2,481		—		2,385		—		2,385

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details