Investments (Tables)
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12 Months Ended |
Dec. 31, 2023 |
Investments, Debt and Equity Securities [Abstract] |
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Net Investment Income |
Net investment income is as follows:
| | | | | | | | | | | | | | | | | | Year Ended December 31 | 2023 | | 2022 | | 2021 | (In millions) | | | | | | | | | | | | Fixed maturity securities | $ | 1,941 | | | $ | 1,787 | | | $ | 1,707 | | Limited partnership investments | 177 | | | (6) | | | 375 | | Short-term investments | 78 | | | 17 | | | 2 | | Equity securities (a) | 63 | | | 23 | | | 83 | | Income from trading portfolio (a) | 125 | | | | | 106 | | Other | 105 | | | 65 | | | 61 | | Total investment income | 2,489 | | | 1,886 | | | 2,334 | | Investment expenses | (94) | | | (84) | | | (75) | | Net investment income | $ | 2,395 | | | $ | 1,802 | | | $ | 2,259 | | (a) Net investment income recognized due to the change in fair value of equity and trading portfolio securities held as of December 31, 2023, 2022 and 2021 | $ | 38 | | | $ | 3 | | | $ | 23 | |
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Investment Gains (Losses) |
Investment gains (losses) are as follows:
| | | | | | | | | | | | | | | | | | Year Ended December 31 | 2023 | | 2022 | | 2021 | (In millions) | | | | | | | | | | | | Fixed maturity securities: | | | | | | Gross gains | $ | 75 | | | $ | 120 | | | $ | 186 | | Gross losses | (166) | | | (261) | | | (90) | | Investment gains (losses) on fixed maturity securities | (91) | | | (141) | | | 96 | | Equity securities (a) | 4 | | | (116) | | | 4 | | Derivative instruments | (1) | | | 64 | | | 6 | | Short-term investments and other | (11) | | | (6) | | | (1) | | Gain on acquisition of a joint venture (see Note 2) | 46 | | | | | | Altium Packaging (see Note 2) | | | | | 555 | | | | | | | | Investment gains (losses) | $ | (53) | | | $ | (199) | | | $ | 660 | | (a) Investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock included within equity securities held as of December 31, 2023, 2022, and 2021 | $ | 14 | | | $ | (75) | | | $ | 2 | |
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Available-for-Sale Impairment Losses (Gains) Recognized in Earnings |
The available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table. 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:
| | | | | | | | | | | | | | | | | | Year Ended December 31 | 2023 | | 2022 | | 2021 | (In millions) | | | | | | | | | | | | Fixed maturity securities available-for-sale: | | | | | | Corporate and other bonds | $ | 33 | | | $ | 62 | | | $ | 11 | | Asset-backed | 11 | | | | | 20 | | Impairment losses recognized in earnings | $ | 44 | | | $ | 62 | | | $ | 31 | |
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Amortized Cost and Fair Values of Fixed Maturity Securities |
The amortized cost and fair values of fixed maturity securities are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2023 | Cost or Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Allowance for Credit Losses | | Estimated Fair Value | (In millions) | | | | | | | | | | | | | | | | | | | | Fixed maturity securities: | | | | | | | | | | Corporate and other bonds | $ | 25,020 | | | $ | 597 | | | $ | 1,345 | | | $ | 4 | | | $ | 24,268 | | States, municipalities and political subdivisions | 7,713 | | | 382 | | | 703 | | | | | 7,392 | | Asset-backed: | | | | | | | | | | Residential mortgage-backed | 3,411 | | | 16 | | | 425 | | | | | 3,002 | | Commercial mortgage-backed | 1,862 | | | 7 | | | 230 | | | 8 | | | 1,631 | | Other asset-backed | 3,515 | | | 13 | | | 256 | | | 4 | | | 3,268 | | Total asset-backed | 8,788 | | | 36 | | | 911 | | | 12 | | | 7,901 | | U.S. Treasury and obligations of government sponsored enterprises | 152 | | | 1 | | | 2 | | | | | 151 | | Foreign government | 741 | | | 6 | | | 34 | | | | | 713 | | | | | | | | | | | | Fixed maturities available-for-sale | 42,414 | | | 1,022 | | | 2,995 | | | 16 | | | 40,425 | | Fixed maturities trading | 201 | | | | | | | | | 201 | | Total fixed maturity securities | $ | 42,615 | | | $ | 1,022 | | | $ | 2,995 | | | $ | 16 | | | $ | 40,626 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2022 | | | | | | | | | | | | | | | | | | | | Fixed maturity securities: | | | | | | | | | | Corporate and other bonds | $ | 23,137 | | | $ | 301 | | | $ | 2,009 | | | | | $ | 21,429 | | States, municipalities and political subdivisions | 8,918 | | | 338 | | | 939 | | | | | 8,317 | | Asset-backed: | | | | | | | | | | Residential mortgage-backed | 3,073 | | | 5 | | | 447 | | | | | 2,631 | | Commercial mortgage-backed | 1,886 | | | 4 | | | 255 | | | | | 1,635 | | Other asset-backed | 3,287 | | | 2 | | | 361 | | | $ | 1 | | | 2,927 | | Total asset-backed | 8,246 | | | 11 | | | 1,063 | | | 1 | | | 7,193 | | U.S. Treasury and obligations of government sponsored enterprises | 111 | | | 1 | | | 2 | | | | | 110 | | Foreign government | 617 | | | 1 | | | 43 | | | | | 575 | | Redeemable preferred stock | 3 | | | | | | | | | 3 | | Fixed maturities available-for-sale | 41,032 | | | 652 | | | 4,056 | | | 1 | | | 37,627 | | Fixed maturities trading | 70 | | | | | | | | | 70 | | Total fixed maturity securities | $ | 41,102 | | | $ | 652 | | | $ | 4,056 | | | $ | 1 | | | $ | 37,697 | |
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Available-for-sale Securities in Gross Unrealized Loss Position |
The available-for-sale fixed maturities securities in a gross unrealized loss position for which an allowance for credit losses has not been recorded are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 Months | | 12 Months or Longer | | Total | December 31, 2023 | Estimated Fair Value | | Gross Unrealized Losses | | Estimated Fair Value | | Gross Unrealized Losses | | Estimated Fair Value | | Gross Unrealized Losses | (In millions) | | | | | | | | | | | | | | | | | | | | | | | | Fixed maturity securities: | | | | | | | | | | | | Corporate and other bonds | $ | 1,943 | | | $ | 37 | | | $ | 13,406 | | | $ | 1,308 | | | $ | 15,349 | | | $ | 1,345 | | States, municipalities and political subdivisions | 598 | | | 18 | | | 3,104 | | | 685 | | | 3,702 | | | 703 | | Asset-backed: | | | | | | | | | | | | Residential mortgage-backed | 233 | | | 4 | | | 2,212 | | | 421 | | | 2,445 | | | 425 | | Commercial mortgage-backed | 200 | | | 5 | | | 1,184 | | | 225 | | | 1,384 | | | 230 | | Other asset-backed | 392 | | | 8 | | | 1,869 | | | 248 | | | 2,261 | | | 256 | | Total asset-backed | 825 | | | 17 | | | 5,265 | | | 894 | | | 6,090 | | | 911 | | U.S. Treasury and obligations of government-sponsored enterprises | 65 | | | 1 | | | 23 | | | 1 | | | 88 | | | 2 | | Foreign government | 52 | | | 1 | | | 450 | | | 33 | | | 502 | | | 34 | | Total fixed maturity securities | $ | 3,483 | | | $ | 74 | | | $ | 22,248 | | | $ | 2,921 | | | $ | 25,731 | | | $ | 2,995 | | | | | | | | | | | | | | December 31, 2022 | | | | | | | | | | | | | | | | | | | | | | | | Fixed maturity securities: | | | | | | | | | | | | Corporate and other bonds | $ | 15,946 | | | $ | 1,585 | | | $ | 1,634 | | | $ | 424 | | | $ | 17,580 | | | $ | 2,009 | | States, municipalities and political subdivisions | 4,079 | | | 769 | | | 456 | | | 170 | | | 4,535 | | | 939 | | Asset-backed: | | | | | | | | | | | | Residential mortgage-backed | 1,406 | | | 144 | | | 1,143 | | | 303 | | | 2,549 | | | 447 | | Commercial mortgage-backed | 1,167 | | | 159 | | | 408 | | | 96 | | | 1,575 | | | 255 | | Other asset-backed | 2,087 | | | 262 | | | 542 | | | 99 | | | 2,629 | | | 361 | | Total asset-backed | 4,660 | | | 565 | | | 2,093 | | | 498 | | | 6,753 | | | 1,063 | | U.S. Treasury and obligations of government-sponsored enterprises | 76 | | | 1 | | | 16 | | | 1 | | | 92 | | | 2 | | Foreign government | 473 | | | 26 | | | 78 | | | 17 | | | 551 | | | 43 | | Total fixed maturity securities | $ | 25,234 | | | $ | 2,946 | | | $ | 4,277 | | | $ | 1,110 | | | $ | 29,511 | | | $ | 4,056 | |
The following table presents the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution.
| | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2023 | | December 31, 2022 | | Estimated Fair Value | | Gross Unrealized Losses | | Estimated Fair Value | | Gross Unrealized Losses | (In millions) | | | | | | | | | | | | | | | | U.S. Government, Government agencies and Government-sponsored enterprises | $ | 2,273 | | | $ | 309 | | | $ | 2,355 | | | $ | 337 | | AAA | 1,524 | | | 261 | | | 1,559 | | | 298 | | AA | 3,817 | | | 658 | | | 4,327 | | | 817 | | A | 5,652 | | | 517 | | | 6,615 | | | 749 | | BBB | 11,523 | | | 1,095 | | | 13,226 | | | 1,621 | | Non-investment grade | 942 | | | 155 | | | 1,429 | | | 234 | | Total | $ | 25,731 | | | $ | 2,995 | | | $ | 29,511 | | | $ | 4,056 | |
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Activity of Allowance on Available-for-Sale Securities |
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 receivables on available-for-sale fixed maturity securities totaled $435 million and $394 million as of December 31, 2023 and 2022 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.
| | | | | | | | | | | | | | | | | | Year Ended December 31, 2023 | Corporate and Other Bonds | | Asset-backed | | Total | (In millions) | | | | | | | | | | | | Allowance for credit losses: | | | | | | Balance as of January 1, 2023 | $ | — | | | $ | 1 | | | $ | 1 | | Additions to the allowance for credit losses: | | | | | | Securities for which credit losses were not previously recorded | 10 | | | 7 | | | 17 | | Available-for-sale securities accounted for as PCD assets | 22 | | | | | 22 | | | | | | | | 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 | 8 | | | | | 8 | | Write-offs charged against the allowance | 15 | | | | | 15 | | | | | | | | Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period | 1 | | | 4 | | | 5 | | Total allowance for credit losses | $ | 4 | | | $ | 12 | | | $ | 16 | |
| | | | | | | | | | | | | | | | | | Year Ended December 31, 2022 | Corporate and Other Bonds | | Asset-backed | | Total | (In millions) | | | | | | | | | | | | 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 | | | (9) | | | (8) | | Total allowance for credit losses | $ | — | | | $ | 1 | | | $ | 1 | | | | | | | |
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Available-for-sale Fixed Maturity Securities by Contractual Maturity |
The following table presents available-for-sale fixed maturity securities by contractual maturity.
| | | | | | | | | | | | | | | | | | | | | | | | December 31 | 2023 | | 2022 | | Cost or Amortized Cost | | Estimated Fair Value | | Cost or Amortized Cost | | Estimated Fair Value | (In millions) | | | | | | | | | | | | | | | | Due in one year or less | $ | 1,121 | | | $ | 1,091 | | | $ | 1,012 | | | $ | 1,001 | | Due after one year through five years | 11,563 | | | 11,180 | | | 9,880 | | | 9,399 | | Due after five years through ten years | 13,359 | | | 12,573 | | | 13,788 | | | 12,453 | | Due after ten years | 16,371 | | | 15,581 | | | 16,352 | | | 14,774 | | Total | $ | 42,414 | | | $ | 40,425 | | | $ | 41,032 | | | $ | 37,627 | |
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Amortized Cost Basis of Mortgage Loans for Each Credit Quality Indicator by Year of Origination |
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 (“LTV”) ratios.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mortgage Loans Amortized Cost Basis by Origination Year (a) | As of December 31, 2023 | 2023 | | 2022 | | 2021 | | 2020 | | 2019 | | Prior | | Total | (In millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | DSCR ≥1.6x | | | | | | | | | | | | | | LTV less than 55% | $ | 33 | | | $ | 9 | | | $ | 8 | | | $ | 98 | | | $ | 60 | | | $ | 238 | | | $ | 446 | | LTV 55% to 65% | | | | | 5 | | | | | 8 | | | | | 13 | | LTV greater than 65% | | | 31 | | | 11 | | | | | | | | | 42 | | DSCR 1.2x - 1.6x | | | | | | | | | | | | | | LTV less than 55% | 28 | | | 5 | | | | | 14 | | | 29 | | | 21 | | | 97 | | LTV 55% to 65% | 34 | | | 36 | | | 36 | | | 23 | | | | | 32 | | | 161 | | LTV greater than 65% | | | 65 | | | | | | | | | | | 65 | | DSCR ≤1.2x | | | | | | | | | | | | | | LTV less than 55% | 6 | | | 34 | | | | | | | | | | | 40 | | LTV 55% to 65% | 26 | | | 40 | | | | | | | 43 | | | | | 109 | | LTV greater than 65% | | | 28 | | | 21 | | | | | 41 | | | 7 | | | 97 | | Total | $ | 127 | | | $ | 248 | | | $ | 81 | | | $ | 135 | | | $ | 181 | | | $ | 298 | | | $ | 1,070 | |
| | | | | | (a) | The values in the table above reflect DSCR on a standardized amortization period and LTV ratios based on the most recent appraised values trended forward using changes in a commercial real estate price index. |
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Aggregate Contractual or Notional Amounts and Estimated Fair Values Related to Derivative Financial Instruments |
The following tables present the aggregate contractual or notional amount and estimated fair value related to derivative financial instruments.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31 | 2023 | | 2022 | | Contractual/Notional Amount | | Estimated Fair Value | | Contractual/Notional Amount | | Estimated Fair Value | | | Asset | | (Liability) | | | Asset | | (Liability) | (In millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Without hedge designation: | | | | | | | | | | | | | | | | | | | | | | | | Equity markets: | | | | | | | | | | | | Options - purchased | $ | 202 | | | $ | 1 | | | | | | | | | | Futures - short | 116 | | | | | | | $ | 169 | | | | | | Warrants | 84 | | | 3 | | | | | 117 | | | $ | 6 | | | | Interest rate swaps | 300 | | | 13 | | | | | 240 | | | 19 | | | | Currency forwards | 13 | | | | | $ | (1) | | | 12 | | | | | $ | (1) | | | | | | | | | | | | | |
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