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Investments (Tables)

12 Months Ended

Dec. 31, 2018

Total investments at December 31, 2018 were as follows:



In millions	Current		Long-term		Total
Debt securities available for sale	$	2,359	$	12,896	$	15,255
Mortgage loans	145		1,216		1,361
Other investments	18		1,620		1,638
Total investments	$	2,522	$	15,732	$	18,254

Schedule of Debt Securities AFS

Debt securities available for sale at December 31, 2018 were as follows:



In millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2018
Debt securities:
U.S. government securities	$	1,662	$	26	$	—		$	1,688
States, municipalities and political subdivisions	2,370		30		(1		)	2,399
U.S. corporate securities	6,444		61		(16		)	6,489
Foreign securities	2,355		31		(3		)	2,383
Residential mortgage-backed securities	567		10		—			577
Commercial mortgage-backed securities	594		11		—			605
Other asset-backed securities	1,097		3		(15		)	1,085
Redeemable preferred securities	30		—		(1		)	29
Total debt securities ⁽¹⁾	$	15,119	$	172	$	(36	)	$	15,255

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(1)

Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated results of operations. At December 31, 2018, debt securities with a fair value of $916 million, gross unrealized capital gains of $12 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products.

Investments Classified by Contractual Maturity Date

The fair value of debt securities at December 31, 2018 is shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity.



In millions	Amortized Cost		Fair Value
Due to mature:
Less than one year	$	901	$	902
One year through five years	5,489		5,521
After five years through ten years	2,973		2,999
Greater than ten years	3,498		3,566
Residential mortgage-backed securities	567		577
Commercial mortgage-backed securities	594		605
Other asset-backed securities	1,097		1,085
Total	$	15,119	$	15,255

Schedule of AFS In Unrealized Capital Loss Position

The maturity dates for debt securities in an unrealized capital loss position at December 31, 2018 were as follows:



	Supporting experience-rated products				Supporting remaining products				Total
In millions	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Due to mature:
Less than one year	$	21	$	—	$	308	$	—	$	329	$	—
One year through five years	36		2		557		5		593		7
After five years through ten years	47		—		492		9		539		9
Greater than ten years	49		—		370		5		419		5
Residential mortgage-backed securities	—		—		1		—		1		—
Other asset-backed securities	4		—		524		15		528		15
Total	$	157	$	2	$	2,252	$	34	$	2,409	$	36

Summarized below are the debt securities the Company held at December 31, 2018 that were in an unrealized capital loss position:



In millions, except number of securities	Number of Securities	Fair Value		Unrealized Losses
Debt securities:
U.S. government securities	8	$	26	$	—
States, municipalities and political subdivisions	54	86		1
U.S. corporate securities	1,399	1,431		16
Foreign securities	243	314		3
Residential mortgage-backed securities	45	1		—
Other asset-backed securities	516	528		15
Redeemable preferred securities	14	23		1
Total debt securities	2,279	$	2,409	$	36

Activity in Mortgage Loan Portfolio

The Company’s mortgage loans are collateralized by commercial real estate. From the Aetna Acquisition Date through December 31, 2018, the Company had the following activity in its mortgage loan portfolio:



In millions
New mortgage loans	$	4
Mortgage loans fully-repaid	27
Mortgage loans foreclosed	—

Based upon the most recent assessments at December 31, 2018, the Company’s mortgage loans were given the following credit quality indicators:



In millions, except credit ratings indicator
1	$	42
2 to 4	1,301
5 and 6	18
7	—
Total	$	1,361

At December 31, 2018 scheduled mortgage loan principal repayments were as follows:



In millions
2019	$	145
2020	109
2021	269
2022	228
2023	83
Thereafter	527
Total	$	1,361

Investment Income

Sources of net investment income for the year ended December 31, 2018 were as follows:



In millions
Debt securities	$	61
Mortgage loans	6
Other investments	593
Gross investment income	660
Investment expenses	(3		)
Net investment income (excluding net realized capital gains or losses)	657
Net realized capital gains	3
Net investment income ⁽¹⁾	$	660

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(1)

Net investment income in 2018 includes $4 million related to investments supporting experience-rated products.

Realized Gain (Loss) on Investments

Excluding amounts related to experience-rated products, proceeds from the sale of available for sale debt securities and the related gross realized capital gains and losses from the Aetna Acquisition Date through December 31, 2018 were as follows:⁽¹⁾



In millions
Proceeds from sales	$	389
Gross realized capital gains	2
Gross realized capital losses	(2		)

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(1)

The proceeds from sales and gross realized capital gains and losses exclude the impact of the sales of short-term debt securities which primarily relate to the Company’s investments in mutual funds. These investments were excluded from the disclosed amounts because they represent an immaterial amount of aggregate gross realized capital gains or losses and have a high volume of sales activity.