Investments

3 Months Ended

Mar. 31, 2023

Total investments at March 31, 2023 and December 31, 2022 were as follows:


	March 31, 2023						December 31, 2022
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	3,061	$	17,761	$	20,822	$	2,718	$	17,562	$	20,280
Mortgage loans	39		1,038		1,077		55		989		1,044
Other investments	2		2,813		2,815		5		2,562		2,567
Total investments (1)	$	3,102	$	21,612	$	24,714	$	2,778	$	21,113	$	23,891

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(1)Includes long-term investments of $17 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

Debt Securities

Debt securities available for sale at March 31, 2023 and December 31, 2022 were as follows:


In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2023
Debt securities:
U.S. government securities	$	2,071	$	—	$	2,071	$	4	$	(140)	$	1,935
States, municipalities and political subdivisions	2,322		—		2,322		18		(86)		2,254
U.S. corporate securities	9,983		(2)		9,981		48		(665)		9,364
Foreign securities	2,765		(1)		2,764		21		(193)		2,592
Residential mortgage-backed securities	881		—		881		2		(71)		812
Commercial mortgage-backed securities	1,173		—		1,173		1		(146)		1,028
Other asset-backed securities	2,901		—		2,901		7		(90)		2,818
Redeemable preferred securities	21		—		21		—		(2)		19
Total debt securities (1)	$	22,117	$	(3)	$	22,114	$	101	$	(1,393)	$	20,822

December 31, 2022
Debt securities:
U.S. government securities	$	2,074	$	—	$	2,074	$	—	$	(182)	$	1,892
States, municipalities and political subdivisions	2,393		—		2,393		8		(129)		2,272
U.S. corporate securities	9,838		(3)		9,835		26		(903)		8,958
Foreign securities	2,780		(1)		2,779		15		(244)		2,550
Residential mortgage-backed securities	845		—		845		1		(89)		757
Commercial mortgage-backed securities	1,172		—		1,172		1		(155)		1,018
Other asset-backed securities	2,940		—		2,940		6		(136)		2,810
Redeemable preferred securities	25		—		25		—		(2)		23
Total debt securities (1)	$	22,067	$	(4)	$	22,063	$	57	$	(1,840)	$	20,280

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(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At March 31, 2023, debt securities with a fair value of $620 million, gross unrealized capital gains of $5 million and gross unrealized capital losses of $40 million and at December 31, 2022, debt securities with a fair value of $609 million, gross unrealized capital gains of $3 million and gross unrealized capital losses of $59 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive loss.

The net amortized cost and fair value of debt securities at March 31, 2023 are 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	Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,412	$	1,395
One year through five years	6,823		6,510
After five years through ten years	4,627		4,299
Greater than ten years	4,297		3,960
Residential mortgage-backed securities	881		812
Commercial mortgage-backed securities	1,173		1,028
Other asset-backed securities	2,901		2,818
Total	$	22,114	$	20,822

Summarized below are the debt securities the Company held at March 31, 2023 and December 31, 2022 that were in an unrealized capital loss position, aggregated by the length of time the investments have been in that position:


	Less than 12 months					Greater than 12 months					Total
In millions, except number of securities	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
March 31, 2023
Debt securities:
U.S. government securities	153	$	473	$	20	323	$	1,143	$	120	476	$	1,616	$	140
States, municipalities and political subdivisions	301	513		12		583	897		74		884	1,410		86
U.S. corporate securities	2,675	3,640		167		3,300	4,116		498		5,975	7,756		665
Foreign securities	653	946		34		787	1,163		159		1,440	2,109		193
Residential mortgage-backed securities	350	362		12		183	361		59		533	723		71
Commercial mortgage-backed securities	131	300		18		328	632		128		459	932		146
Other asset-backed securities	527	1,126		23		726	1,257		67		1,253	2,383		90
Redeemable preferred securities	7	14		2		1	3		—		8	17		2
Total debt securities	4,797	$	7,374	$	288	6,231	$	9,572	$	1,105	11,028	$	16,946	$	1,393

December 31, 2022
Debt securities:
U.S. government securities	519	$	1,620	$	164	35	$	191	$	18	554	$	1,811	$	182
States, municipalities and political subdivisions	859	1,370		95		196	322		34		1,055	1,692		129
U.S. corporate securities	5,193	6,537		622		1,479	1,822		281		6,672	8,359		903
Foreign securities	1,168	1,715		147		403	592		97		1,571	2,307		244
Residential mortgage-backed securities	452	464		39		91	257		50		543	721		89
Commercial mortgage-backed securities	288	611		69		187	381		86		475	992		155
Other asset-backed securities	1,008	1,893		88		391	694		48		1,399	2,587		136
Redeemable preferred securities	13	18		2		2	5		—		15	23		2
Total debt securities	9,500	$	14,228	$	1,226	2,784	$	4,264	$	614	12,284	$	18,492	$	1,840

The Company reviewed the securities in the table above and concluded that they are performing assets generating investment income to support the needs of the Company’s business. In performing this review, the Company considered factors such as the quality of the investment security based on research performed by the Company’s internal credit analysts and external rating agencies and the prospects of realizing the carrying value of the security based on the investment’s current prospects for recovery. Unrealized capital losses at March 31, 2023 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of March 31, 2023, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis.

The maturity dates for debt securities in an unrealized capital loss position at March 31, 2023 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	$	22	$	—	$	1,200	$	18	$	1,222	$	18
One year through five years	125		3		5,238		330		5,363		333
After five years through ten years	120		12		3,171		346		3,291		358
Greater than ten years	197		20		2,835		357		3,032		377
Residential mortgage-backed securities	11		1		712		70		723		71
Commercial mortgage-backed securities	23		3		909		143		932		146
Other asset-backed securities	17		1		2,366		89		2,383		90
Total	$	515	$	40	$	16,431	$	1,353	$	16,946	$	1,393

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three months ended March 31, 2023 and 2022, the Company had the following activity in its mortgage loan portfolio:


	Three Months Ended March 31,
In millions	2023		2022
New mortgage loans	$	55	$	59
Mortgage loans fully repaid	14		35
Mortgage loans foreclosed	—		—

The Company assesses mortgage loans on a regular basis for credit impairments, and assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes each loan in its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, current and future property cash flow, property condition, market trends, creditworthiness of the borrower and deal structure.

•Category 1 - Represents loans of superior quality.

•Categories 2 to 4 - Represent loans where credit risk is minimal to acceptable; however, these loans may display some susceptibility to economic changes.

•Categories 5 and 6 - Represent loans where credit risk is not substantial, but these loans warrant management’s close attention.

•Category 7 - Represents loans where collections are potentially at risk; if necessary, an impairment is recorded.

Based on the Company’s assessments at March 31, 2023 and December 31, 2022, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:


	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2023		2022		2021		2020		2019		Prior		Total
March 31, 2023
1	$	—	$	—	$	—	$	—	$	—	$	14	$	14
2 to 4	44		333		248		36		11		385		1,057
5 and 6	—		—		—		—		—		6		6
7	—		—		—		—		—		—		—
Total	$	44	$	333	$	248	$	36	$	11	$	405	$	1,077

December 31, 2022
1			$	—	$	—	$	—	$	—	$	15	$	15
2 to 4			326		247		36		11		402		1,022
5 and 6			—		—		—		—		7		7
7			—		—		—		—		—		—
Total			$	326	$	247	$	36	$	11	$	424	$	1,044

Net Investment Income

Sources of net investment income for the three months ended March 31, 2023 and 2022 were as follows:


	Three Months Ended March 31,
In millions	2023		2022
Debt securities	$	191	$	164
Mortgage loans	13		11
Other investments	245		77
Gross investment income	449		252
Investment expenses	(10)		(9)
Net investment income (excluding net realized capital losses)	439		243
Net realized capital losses (1)	(105)		(75)
Net investment income (2)	$	334	$	168

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(1)Net realized capital losses include the reversal of previously recorded credit-related impairment losses on debt securities of $1 million and yield-related impairment losses on debt securities of $24 million in the three months ended March 31, 2023. Net realized capital losses include credit-related and yield-related impairment losses on debt securities of $38 million and $18 million, respectively, in the three months ended March 31, 2022.

(2)Net investment income includes $8 million and $9 million for the three months ended March 31, 2023 and 2022, respectively, related to investments supporting experience-rated products.

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 for the three months ended March 31, 2023 and 2022 were as follows:


	Three Months Ended March 31,
In millions	2023		2022
Proceeds from sales	$	1,341	$	1,911
Gross realized capital gains	3		14
Gross realized capital losses	111		35