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Investments (Tables)
 9 Months Ended
Sep. 30, 2016
Investments [Abstract]  
Schedule for fixed income securities at amortized cost, gross unrealized gains and losses and fair value
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows:
($ in millions)
Amortized cost
 
Gross unrealized
 
Fair
value
 
 
Gains
 
Losses
 
September 30, 2016
 

 
 

 
 

 
 

U.S. government and agencies
$
4,199

 
$
107

 
$
(2
)
 
$
4,304

Municipal
7,432

 
483

 
(13
)
 
7,902

Corporate
42,670

 
1,925

 
(121
)
 
44,474

Foreign government
1,060

 
59

 
—

 
1,119

Asset-backed securities (“ABS”)
1,393

 
12

 
(15
)
 
1,390

Residential mortgage-backed securities (“RMBS”)
696

 
90

 
(8
)
 
778

Commercial mortgage-backed securities (“CMBS”)
304

 
20

 
(9
)
 
315

Redeemable preferred stock
21

 
3

 
—

 
24

Total fixed income securities
$
57,775

 
$
2,699

 
$
(168
)
 
$
60,306

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 

 
 

 
 

 
 

U.S. government and agencies
$
3,836

 
$
90

 
$
(4
)
 
$
3,922

Municipal
7,032

 
389

 
(20
)
 
7,401

Corporate
41,674

 
1,032

 
(879
)
 
41,827

Foreign government
983

 
50

 
—

 
1,033

ABS
2,359

 
11

 
(43
)
 
2,327

RMBS
857

 
100

 
(10
)
 
947

CMBS
438

 
32

 
(4
)
 
466

Redeemable preferred stock
22

 
3

 
—

 
25

Total fixed income securities
$
57,201

 
$
1,707

 
$
(960
)
 
$
57,948
Schedule for fixed income securities based on contractual maturities
The scheduled maturities for fixed income securities are as follows as of September 30, 2016:
($ in millions)
Amortized cost
 
Fair value
Due in one year or less
$
4,084

 
$
4,115

Due after one year through five years
29,357

 
30,222

Due after five years through ten years
16,576

 
17,315

Due after ten years
5,365

 
6,171

 
55,382

 
57,823

ABS, RMBS and CMBS
2,393

 
2,483

Total
$
57,775

 
$
60,306
Schedule of net investment income
Net investment income is as follows:
($ in millions)
Three months ended September 30,
 
Nine months ended September 30,
 
2016
 
2015
 
2016
 
2015
Fixed income securities
$
508

 
$
546

 
$
1,546

 
$
1,681

Equity securities
31

 
23

 
103

 
77

Mortgage loans
56

 
53

 
162

 
165

Limited partnership interests
136

 
167

 
383

 
483

Short-term investments
4

 
4

 
11

 
8

Other
55

 
49

 
163

 
143

Investment income, before expense
790

 
842

 
2,368

 
2,557

Investment expense
(42
)
 
(35
)
 
(127
)
 
(111
)
Net investment income
$
748

 
$
807

 
$
2,241

 
$
2,446
Schedule of realized capital gains and losses by asset type
Realized capital gains and losses by asset type are as follows:
($ in millions)
Three months ended September 30,
 
Nine months ended September 30,
 
2016
 
2015
 
2016
 
2015
Fixed income securities
$
(1
)
 
$
221

 
$
(48
)
 
$
361

Equity securities
45

 
(150
)
 
(34
)
 
(24
)
Mortgage loans
—

 
1

 
1

 
2

Limited partnership interests
12

 
(55
)
 
25

 
(52
)
Derivatives
(15
)
 
24

 
(22
)
 
4

Other
(8
)
 
(8
)
 
(14
)
 
(11
)
Realized capital gains and losses
$
33

 
$
33

 
$
(92
)
 
$
280
Schedule of realized capital gains and losses by transaction type
Realized capital gains and losses by transaction type are as follows:
($ in millions)
Three months ended September 30,
 
Nine months ended September 30,
 
2016
 
2015
 
2016
 
2015
Impairment write-downs
$
(63
)
 
$
(47
)
 
$
(185
)
 
$
(77
)
Change in intent write-downs
(10
)
 
(127
)
 
(48
)
 
(189
)
Net other-than-temporary impairment losses recognized in earnings
(73
)
 
(174
)
 
(233
)
 
(266
)
Sales and other
121

 
183

 
166

 
545

Valuation and settlements of derivative instruments
(15
)
 
24

 
(25
)
 
1

Realized capital gains and losses
$
33

 
$
33

 
$
(92
)
 
$
280
Schedule of other-than-temporary impairment losses by asset type
Other-than-temporary impairment losses by asset type are as follows:
($ in millions)
Three months ended September 30, 2016
 
Three months ended September 30, 2015
 
Gross
 
Included
 in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Municipal
$
—

 
$
—

 
$
—

 
$
(1
)
 
$
—

 
$
(1
)
Corporate
(13
)
 
—

 
(13
)
 
(9
)
 
—

 
(9
)
ABS
—

 
—

 
—

 
(16
)
 
12

 
(4
)
RMBS
(1
)
 
—

 
(1
)
 
—

 
—

 
—

CMBS
(3
)
 
—

 
(3
)
 
(1
)
 
—

 
(1
)
Total fixed income securities
(17
)
 
—

 
(17
)
 
(27
)
 
12

 
(15
)
Equity securities
(27
)
 
—

 
(27
)
 
(151
)
 
—

 
(151
)
Limited partnership interests
(22
)
 
—

 
(22
)
 
(2
)
 
—

 
(2
)
Other
(7
)
 
—

 
(7
)
 
(6
)
 
—

 
(6
)
Other-than-temporary impairment losses
$
(73
)
 
$
—

 
$
(73
)
 
$
(186
)
 
$
12

 
$
(174
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2016
 
Nine months ended September 30, 2015
 
Gross
 
Included
 in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Municipal
$
—

 
$
—

 
$
—

 
$
(5
)
 
$
4

 
$
(1
)
Corporate
(30
)
 
7

 
(23
)
 
(19
)
 
4

 
(15
)
ABS
(6
)
 
—

 
(6
)
 
(20
)
 
13

 
(7
)
RMBS
(1
)
 
—

 
(1
)
 
1

 
(1
)
 
—

CMBS
(7
)
 
1

 
(6
)
 
(1
)
 
—

 
(1
)
Total fixed income securities
(44
)
 
8

 
(36
)
 
(44
)
 
20

 
(24
)
Equity securities
(155
)
 
—

 
(155
)
 
(226
)
 
—

 
(226
)
Limited partnership interests
(33
)
 
—

 
(33
)
 
(7
)
 
—

 
(7
)
Other
(9
)
 
—

 
(9
)
 
(9
)
 
—

 
(9
)
Other-than-temporary impairment losses
$
(241
)
 
$
8

 
$
(233
)
 
$
(286
)
 
$
20

 
$
(266
)
Schedule of other-than-temporary impairment losses on fixed income securities included in Accumulated Other Comprehensive Income
The amounts exclude $223 million and $233 million as of September 30, 2016 and December 31, 2015, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
($ in millions)
September 30, 2016
 
December 31, 2015
Municipal
$
(8
)
 
$
(9
)
Corporate
(5
)
 
(7
)
ABS
(23
)
 
(23
)
RMBS
(93
)
 
(102
)
CMBS
(7
)
 
(6
)
Total
$
(136
)
 
$
(147
)
Schedule of credit losses on fixed income securities recognized in earnings
Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of the end of the period are as follows:
($ in millions)
Three months ended September 30,
 
Nine months ended September 30,
 
2016
 
2015
 
2016
 
2015
Beginning balance
$
(331
)
 
$
(372
)
 
$
(392
)
 
$
(380
)
Additional credit loss for securities previously other-than-temporarily impaired
(3
)
 
(7
)
 
(14
)
 
(10
)
Additional credit loss for securities not previously other-than-temporarily impaired
(14
)
 
(8
)
 
(22
)
 
(14
)
Reduction in credit loss for securities disposed or collected
12

 
23

 
92

 
37

Change in credit loss due to accretion of increase in cash flows
—

 
—

 
—

 
3

Ending balance
$
(336
)
 
$
(364
)
 
$
(336
)
 
$
(364
)
Schedule of unrealized net capital gains and losses
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows:
($ in millions)
Fair
value
 
Gross unrealized
 
Unrealized net
gains (losses)
September 30, 2016
 
Gains
 
Losses
 
Fixed income securities
$
60,306

 
$
2,699

 
$
(168
)
 
$
2,531

Equity securities
5,288

 
592

 
(104
)
 
488

Short-term investments
1,863

 
—

 
—

 
—

Derivative instruments (1)
4

 
4

 
(3
)
 
1

Equity method (“EMA”) limited partnerships (2)
 

 
 

 
 

 
(5
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
3,015

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves (3)
 

 
 

 
 

 
—

DAC and DSI (4)
 

 
 

 
 

 
(216
)
Amounts recognized
 

 
 

 
 

 
(216
)
Deferred income taxes
 

 
 

 
 

 
(982
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
1,817

_______________
(1) 
Included in the fair value of derivative instruments is $(4) million classified as liabilities.
(2) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable.
(3) 
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment, if any, primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.
(4) 
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
($ in millions)
Fair
value
 
Gross unrealized
 
Unrealized net
gains (losses)
December 31, 2015
 
Gains
 
Losses
 
Fixed income securities
$
57,948

 
$
1,707

 
$
(960
)
 
$
747

Equity securities
5,082

 
415

 
(139
)
 
276

Short-term investments
2,122

 
—

 
—

 
—

Derivative instruments (1)
10

 
10

 
(4
)
 
6

EMA limited partnerships
 

 
 

 
 

 
(4
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
1,025

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves
 

 
 

 
 

 
—

DAC and DSI
 

 
 

 
 

 
(67
)
Amounts recognized
 

 
 

 
 

 
(67
)
Deferred income taxes
 

 
 

 
 

 
(338
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
620

_______________
(1) 
Included in the fair value of derivative instruments are $6 million classified as assets and $(4) million classified as liabilities.
Schedule of change in unrealized net capital gains and losses
The change in unrealized net capital gains and losses for the nine months ended September 30, 2016 is as follows:
($ in millions)
 
Fixed income securities
$
1,784

Equity securities
212

Derivative instruments
(5
)
EMA limited partnerships
(1
)
Total
1,990

Amounts recognized for:
 

Insurance reserves
—

DAC and DSI
(149
)
Amounts recognized
(149
)
Deferred income taxes
(644
)
Increase in unrealized net capital gains and losses, after-tax
$
1,197
Schedule of gross unrealized losses and fair value of available for sale securities by length of time
The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position.
($ in millions)
Less than 12 months
 
12 months or more
 
Total
unrealized
losses
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
September 30, 2016
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and agencies
17

 
$
1,530

 
$
(2
)
 
—

 
$
—

 
$
—

 
$
(2
)
Municipal
302

 
785

 
(2
)
 
9

 
28

 
(11
)
 
(13
)
Corporate
226

 
3,733

 
(38
)
 
112

 
882

 
(83
)
 
(121
)
ABS
12

 
102

 
—

 
23

 
308

 
(15
)
 
(15
)
RMBS
61

 
30

 
(1
)
 
177

 
97

 
(7
)
 
(8
)
CMBS
17

 
93

 
(7
)
 
3

 
8

 
(2
)
 
(9
)
Total fixed income securities
635

 
6,273

 
(50
)
 
324

 
1,323

 
(118
)
 
(168
)
Equity securities
190

 
689

 
(82
)
 
42

 
121

 
(22
)
 
(104
)
Total fixed income and equity securities
825

 
$
6,962

 
$
(132
)
 
366

 
$
1,444

 
$
(140
)
 
$
(272
)
Investment grade fixed income securities
525

 
$
5,095

 
$
(17
)
 
220

 
$
808

 
$
(61
)
 
$
(78
)
Below investment grade fixed income securities
110

 
1,178

 
(33
)
 
104

 
515

 
(57
)
 
(90
)
Total fixed income securities
635

 
$
6,273

 
$
(50
)
 
324

 
$
1,323

 
$
(118
)
 
$
(168
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and agencies
53

 
$
1,874

 
$
(4
)
 
—

 
$
—

 
$
—

 
$
(4
)
Municipal
222

 
810

 
(6
)
 
9

 
36

 
(14
)
 
(20
)
Corporate
1,361

 
17,915

 
(696
)
 
111

 
1,024

 
(183
)
 
(879
)
Foreign government
9

 
44

 
—

 
—

 
—

 
—

 
—

ABS
133

 
1,733

 
(24
)
 
20

 
324

 
(19
)
 
(43
)
RMBS
88

 
69

 
—

 
176

 
125

 
(10
)
 
(10
)
CMBS
13

 
75

 
(2
)
 
1

 
2

 
(2
)
 
(4
)
Total fixed income securities
1,879

 
22,520

 
(732
)
 
317

 
1,511

 
(228
)
 
(960
)
Equity securities
265

 
1,397

 
(107
)
 
37

 
143

 
(32
)
 
(139
)
Total fixed income and equity securities
2,144

 
$
23,917

 
$
(839
)
 
354

 
$
1,654

 
$
(260
)
 
$
(1,099
)
Investment grade fixed income securities
1,405

 
$
17,521

 
$
(362
)
 
225

 
$
972

 
$
(105
)
 
$
(467
)
Below investment grade fixed income securities
474

 
4,999

 
(370
)
 
92

 
539

 
(123
)
 
(493
)
Total fixed income securities
1,879

 
$
22,520

 
$
(732
)
 
317

 
$
1,511

 
$
(228
)
 
$
(960
)
Carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution
The following table reflects the carrying value of non-impaired fixed rate and variable rate mortgage loans summarized by debt service coverage ratio distribution.
($ in millions)
September 30, 2016
 
December 31, 2015
 
Fixed rate
mortgage
loans
 
Variable rate
mortgage
loans
 
Total
 
Fixed rate
mortgage
loans
 
Variable rate
mortgage
loans
 
Total
Below 1.0
$
61

 
$
—

 
$
61

 
$
64

 
$
—

 
$
64

1.0 - 1.25
321

 
—

 
321

 
382

 
—

 
382

1.26 - 1.50
1,198

 
—

 
1,198

 
1,219

 
—

 
1,219

Above 1.50
2,785

 
25

 
2,810

 
2,667

 
—

 
2,667

Total non-impaired mortgage loans
$
4,365

 
$
25

 
$
4,390

 
$
4,332

 
$
—

 
$
4,332
Net carrying value of impaired mortgage loans
The net carrying value of impaired mortgage loans is as follows:
($ in millions)
September 30, 2016
 
December 31, 2015
Impaired mortgage loans with a valuation allowance
$
6

 
$
6

Impaired mortgage loans without a valuation allowance
—

 
—

Total impaired mortgage loans
$
6

 
$
6

Valuation allowance on impaired mortgage loans
$
3

 
$
3
Valuation allowance on impaired mortgage loans
The rollforward of the valuation allowance on impaired mortgage loans is as follows:
($ in millions)
Three months ended September 30,
 
Nine months ended September 30,
 
2016
 
2015
 
2016
 
2015
Beginning balance
$
3

 
$
7

 
$
3

 
$
8

Charge offs
—

 
—

 
—

 
(1
)
Ending balance
$
3

 
$
7

 
$
3

 
$
7