Investments (Tables)

3 Months Ended

Mar. 31, 2017

Text Block [Abstract]

Net Investment Income and Investment Gains (Losses)

Net investment income is as follows:

Three Months Ended March 31	2017		2016
(In millions)
Fixed maturity securities	$	455	$	446
Limited partnership investments		116		(40)
Short term investments		4		3
Equity securities		1		3
Income from trading portfolio (a)		34		15
Other		8		9
Total investment income		618		436
Investment expenses		(14)		(14)
Net investment income	$	604	$	422

(a) Includes net unrealized gains related to changes in fair value on trading securities still held of $46 and $15 for the three months ended March 31, 2017 and 2016.

Investment gains (losses) are as follows:

Three Months Ended March 31	2017		2016
(In millions)
Fixed maturity securities	$	32	$	(17)
Equity securities				(5)
Derivative instruments		1		(7)
Short term investments and other		1		1
Investment gains (losses) (a)	$	34	$	(28)

(a) Includes gross realized gains of $49 and $45 and gross realized losses of $17 and $67 on available-for-sale securities for the three months ended March 31, 2017 and 2016.

Components of Other-than-Temporary Impairment Losses Recognized in Earnings by Asset Type

The components of other-than-temporary impairment (“OTTI”) losses recognized in earnings by asset type are as follows:

Three Months Ended March 31	2017		2016
(In millions)
Fixed maturity securities available-for-sale:
Corporate and other bonds	$	2	$	16
Asset-backed:
Other asset-backed				2
Total asset-backed		-		2
Total fixed maturities available-for-sale		2		18
Equity securities available-for-sale - common stock				5
Net OTTI losses recognized in earnings	$	2	$	23

Amortized Cost and Fair Values of Securities

The amortized cost and fair values of securities are as follows:

March 31, 2017	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Unrealized  OTTI Losses  (Gains)
(In millions)
Fixed maturity securities:
Corporate and other bonds		$   17,838		$ 1,428		$    37	$	19,229	$	(1)
States, municipalities and political subdivisions		12,261		1,219		31		13,449		(12)
Asset-backed:
Residential mortgage-backed		4,672		121		50		4,743		(27)
Commercial mortgage-backed		1,902		52		19		1,935
Other asset-backed		1,043		10		4		1,049
Total asset-backed		7,617		183		73		7,727		(27)
U.S. Treasury and obligations of government-sponsored enterprises		95		8				103
Foreign government		419		14		1		432
Redeemable preferred stock		19		1				20
Fixed maturities available-for-sale		38,249		2,853		142		40,960		(40)
Fixed maturities trading		494		3		1		496
Total fixed maturities		38,743		2,856		143		41,456		(40)
Equity securities:
Common stock		20		5				25
Preferred stock		92		5		2		95
Equity securities available-for-sale		112		10		2		120		-
Equity securities trading		466		79		78		467
Total equity securities		578		89		80		587		-
Total		$   39,321		$ 2,945		$  223	$	42,043	$	(40)

December 31, 2016	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Estimated  Fair Value			Unrealized OTTI Losses (Gains)
(In millions)
Fixed maturity securities:
Corporate and other bonds		$	17,711		$	1,323		$	76		$	18,958		$	(1)
States, municipalities and political subdivisions			12,060			1,213			33			13,240			(16)
Asset-backed:
Residential mortgage-backed			5,004			120			51			5,073			(28)
Commercial mortgage-backed			2,016			48			24			2,040
Other asset-backed			1,022			8			5			1,025
Total asset-backed			8,042			176			80			8,138			(28)
U.S. Treasury and obligations of government-sponsored enterprises			83			10						93
Foreign government			435			13			3			445
Redeemable preferred stock			18			1						19
Fixed maturities available-for-sale			38,349			2,736			192			40,893			(45)
Fixed maturities, trading			598			3						601
Total fixed maturities			38,947			2,739			192			41,494			(45)
Equity securities:
Common stock			13			6						19
Preferred stock			93			2			4			91
Equity securities available-for-sale			106			8			4			110			-
Equity securities trading			465			60			86			439
Total equity securities			571			68			90			549			-
Total		$	39,518		$	2,807		$	282		$	42,043		$	(45)

Securities Available-for-Sale in Gross Unrealized Loss Position

The available-for-sale securities in a gross unrealized loss position are as follows:

	Less than				12 Months
	12 Months				or Longer				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
March 31, 2017	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
(In millions)
Fixed maturity securities:
Corporate and other bonds	$	1,915	$	29	$	134	$	8	$	2,049	$	37
States, municipalities and political subdivisions		845		31		33				878		31
Asset-backed:
Residential mortgage-backed		2,188		44		170		6		2,358		50
Commercial mortgage-backed		590		15		139		4		729		19
Other asset-backed		256		4		28				284		4
Total asset-backed		3,034		63		337		10		3,371		73
U.S. Treasury and obligations of government-sponsored enterprises		31								31
Foreign government		89		1						89		1
Total fixed maturity securities		5,914		124		504		18		6,418		142
Common stock		2								2
Preferred stock		15		2						15		2
Total	$	5,931	$	126	$	504	$	18	$	6,435	$	144
	Less than				12 Months
	12 Months				or Longer				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
December 31, 2016	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
(In millions)
Fixed maturity securities:
Corporate and other bonds		$   2,615	$	61	$	254	$	15	$	2,869	$	76
States, municipalities and political subdivisions		959		32		23		1		982		33
Asset-backed:
Residential mortgage-backed		2,136		44		201		7		2,337		51
Commercial mortgage-backed		756		22		69		2		825		24
Other asset-backed		398		5		24				422		5
Total asset-backed		3,290		71		294		9		3,584		80
U.S. Treasury and obligations of government-sponsored enterprises		5								5
Foreign government		108		3						108		3
Total fixed maturity securities		6,977		167		571		25		7,548		192
Equity securities		12				13		4		25		4
Total		$   6,989	$	167	$	584	$	29	$	7,573	$	196

Pretax Credit Loss Component Reflected in Retained Earnings on Fixed Maturity Securities

The following table presents the activity related to the pretax credit loss component reflected in Retained earnings on fixed maturity securities still held as of March 31, 2017 and 2016 for which a portion of an OTTI loss was recognized in Other comprehensive income.

Three Months Ended March 31	2017			2016
(In millions)
Beginning balance of credit losses on fixed maturity securities	$	36		$	53
Reductions for securities sold during the period		(4	)		(5	)
Ending balance of credit losses on fixed maturity securities	$	32		$	48

Available-for-Sale Fixed Maturity Securities by Contractual Maturity

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

	March 31, 2017				December 31, 2016
	Cost or		Estimated		Cost or		Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(In millions)
Due in one year or less	$	1,655	$	1,701	$	1,779	$	1,828
Due after one year through five years		7,539		7,918		7,566		7,955
Due after five years through ten years		15,645		16,176		15,892		16,332
Due after ten years		13,410		15,165		13,112		14,778
Total	$	38,249	$	40,960	$	38,349	$	40,893

Summary of Aggregate Contractual or Notional Amounts and Gross Estimated Fair Values Related to Derivative Financial Instruments

A summary of the aggregate contractual or notional amounts and gross estimated fair values related to derivative financial instruments follows. The contractual or notional amounts for derivatives are used to calculate the exchange of contractual payments under the agreements and may not be representative of the potential for gain or loss on these instruments. Gross estimated fair values of derivative positions are currently presented in Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance Sheets.

	March 31, 2017						December 31, 2016
	Contractual/ Notional Amount						Contractual/ Notional Amount
			Estimated Fair Value						Estimated Fair Value
			Asset		(Liability)				Asset		(Liability)
(In millions)
Without hedge designation:
Equity markets:
Options – purchased		$        193		$        14				$  223		$    14
– written		191				$        (7)		267				$    (8)
Futures – short		237		1				225		1
Commodity futures – long		39						42
Embedded derivative on funds withheld liability		172		2				174		3