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INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Cost, Allowance for Credit Losses, Gross Unrealized Appreciation/(Depreciation) and Fair Value of Fixed Maturity Securities

The tables below present the amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) and fair value of fixed maturity securities - available for sale for the periods indicated:


	At June 30, 2023
(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	475	$	—	$	—	$	(37)	$	439
Obligations of U.S. states and political subdivisions	424		—		1		(30)		395
Corporate securities	4,552		(55)		21		(309)		4,209
Asset-backed securities	4,783		—		5		(111)		4,676
Mortgage-backed securities
Commercial	567		—		—		(63)		503
Agency residential	1,817		—		3		(166)		1,654
Non-agency residential	60		—		—		(1)		59
Foreign government securities	735		—		3		(53)		684
Foreign corporate securities	1,729		(1)		5		(149)		1,583
Total fixed maturity securities - available for sale	$	15,141	$	(57)	$	37	$	(919)	$	14,202

(Some amounts may not reconcile due to rounding.)


	At December 31, 2022
(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	575	$	—	$	—	$	(40)	$	535
Obligations of U.S. states and political subdivisions	444		—		2		(32)		413
Corporate securities	3,913		(45)		14		(322)		3,561
Asset-backed securities	4,111		—		5		(165)		3,951
Mortgage-backed securities
Commercial	569		—		—		(59)		509
Agency residential	1,792		—		3		(167)		1,628
Non-agency residential	3		—		—		—		3
Foreign government securities	696		—		2		(61)		637
Foreign corporate securities	1,597		(1)		4		(167)		1,433
Total fixed maturity securities - available for sale	$	13,699	$	(46)	$	30	$	(1,013)	$	12,671

(Some amounts may not reconcile due to rounding.)

The following tables show amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) and fair value of fixed maturity securities - held to maturity for the periods indicated:


	At June 30, 2023
(Dollars in millions)	Amortized Cost		Allowances for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – held to maturity
Corporate securities	$	152	$	(2)	$	—	$	(6)	$	144
Asset-backed securities	603		(6)		2		(15)		585
Mortgage-backed securities
Commercial	14		—		—		—		13
Foreign corporate securities	28		(1)		2		—		29
Total fixed maturity securities - held to maturity	$	796	$	(8)	$	4	$	(21)	$	771

(Some amounts may not reconcile due to rounding.)


	At December 31, 2022
(Dollars in millions)	Amortized Cost		Allowances for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – held to maturity
Corporate securities	$	152	$	(2)	$	—	$	(6)	$	144
Asset-backed securities	634		(6)		2		(15)		614
Mortgage-backed securities
Commercial	7		—		—		—		7
Foreign corporate securities	28		(1)		2		—		28
Total fixed maturity securities - held to maturity	$	820	$	(9)	$	3	$	(22)	$	793

(Some amounts may not reconcile due to rounding.)

Summary of Amortized Cost and Market Value of Fixed Maturity Securities, by Contractual Maturity

The amortized cost and fair value of fixed maturity securities - available for sale are shown in the following table by contractual maturity. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.


	At June 30, 2023				At December 31, 2022
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Fixed maturity securities – available for sale
Due in one year or less	$	830	$	799	$	581	$	563
Due after one year through five years	3,673		3,429		3,684		3,429
Due after five years through ten years	2,007		1,809		2,003		1,760
Due after ten years	1,404		1,273		958		827
Asset-backed securities	4,783		4,676		4,111		3,951
Mortgage-backed securities
Commercial	567		503		569		509
Agency residential	1,817		1,654		1,792		1,628
Non-agency residential	60		59		3		3
Total fixed maturity securities - available for sale	$	15,141	$	14,202	$	13,699	$	12,671

(Some amounts may not reconcile due to rounding.)

The amortized cost and fair value of fixed maturity securities held to maturity - are shown in the following table by contractual maturity. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.


	At June 30, 2023				At December 31, 2022
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Fixed maturity securities – held to maturity
Due in one year or less	$	5	$	5	$	5	$	5
Due after one year through five years	64		61		63		61
Due after five years through ten years	44		41		43		41
Due after ten years	68		65		68		65
Asset-backed securities	603		585		634		614
Mortgage-backed securities
Commercial	14		13		7		7
Total fixed maturity securities - held to maturity	$	796	$	771	$	820	$	793

(Some amounts may not reconcile due to rounding.)

Summary of Changes in Net Unrealized Appreciation (Depreciation) for the Company's Investments

The changes in net unrealized appreciation (depreciation) for the Company’s investments are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2023		2022		2023		2022
Increase (decrease) during the period between the fair value and cost of investments carried at fair value, and deferred taxes thereon:
Fixed maturity securities - available for sale and short-term investments	$	(49)	$	(512)	$	105	$	(1,008)
Change in unrealized appreciation (depreciation), pre-tax	(49)		(512)		105		(1,008)
Deferred tax benefit (expense)	10		107		(22)		211
Change in unrealized appreciation (depreciation), net of deferred taxes, included in stockholder's equity	$	(38)	$	(405)	$	83	$	(797)

(Some amounts may not reconcile due to rounding.)

Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value

The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:


	Duration of Unrealized Loss at June 30, 2023 By Security Type
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	30	$	(1)	$	408	$	(36)	$	438	$	(37)
Obligations of U.S. states and political subdivisions	77		(1)		199		(29)		276		(30)
Corporate securities	1,135		(84)		2,128		(224)		3,263		(308)
Asset-backed securities	1,058		(23)		2,426		(88)		3,484		(111)
Mortgage-backed securities
Commercial	17		(1)		480		(62)		497		(63)
Agency residential	319		(5)		1,166		(160)		1,485		(166)
Non-agency residential	57		(1)		3		—		59		(1)
Foreign government securities	108		(2)		484		(51)		591		(53)
Foreign corporate securities	293		(9)		1,112		(140)		1,405		(149)
Total	3,092		(126)		8,406		(792)		11,498		(918)
Securities where an allowance for credit loss was recorded	—		—		—		(1)		1		(1)
Total fixed maturity securities - available for sale	$	3,093	$	(127)	$	8,406	$	(792)	$	11,499	$	(919)

(Some amounts may not reconcile due to rounding.)


	Duration of Unrealized Loss at December 31, 2022 By Security Type
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations	$	290	$	(14)	$	245	$	(26)	$	535	$	(40)
Obligations of U.S. states and political subdivisions	235		(23)		27		(9)		261		(32)
Corporate securities	2,138		(175)		841		(146)		2,979		(321)
Asset-backed securities	3,120		(138)		436		(27)		3,556		(165)
Mortgage-backed securities
Commercial	464		(50)		36		(9)		500		(59)
Agency residential	852		(54)		605		(113)		1,456		(167)
Non-agency residential	2		—		1		—		3		—
Foreign government securities	455		(36)		144		(25)		599		(61)
Foreign corporate securities	967		(100)		365		(67)		1,332		(167)
Total	$	8,522	$	(591)	$	2,698	$	(421)	$	11,220	$	(1,012)
Securities where an allowance for credit loss was recorded	2		(1)		—		—		2		(1)
Total fixed maturity securities - available for sale	$	8,524	$	(591)	$	2,698	$	(421)	$	11,222	$	(1,013)

(Some amounts may not reconcile due to rounding.)

Debt Securities, Available-for-Sale


	Duration of Unrealized Loss at June 30, 2023 By Maturity
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
Due in one year or less	$	214	$	(3)	$	473	$	(15)	$	687	$	(18)
Due in one year through five years	533		(16)		2,413		(228)		2,946		(244)
Due in five years through ten years	405		(16)		1,140		(186)		1,545		(203)
Due after ten years	491		(60)		304		(52)		795		(112)
Asset-backed securities	1,058		(23)		2,426		(88)		3,484		(111)
Mortgage-backed securities	393		(7)		1,649		(223)		2,041		(230)
Total	3,092		(126)		8,406		(792)		11,498		(918)
Securities where an allowance for credit loss was recorded	—		—		—		(1)		1		(1)
Total fixed maturity securities - available for sale	$	3,093	$	(127)	$	8,406	$	(792)	$	11,499	$	(919)

(Some amounts may not reconcile due to rounding.)


	Duration of Unrealized Loss at December 31, 2022 By Maturity
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
Due in one year or less	$	463	$	(8)	$	29	$	(4)	$	491	$	(11)
Due in one year through five years	2,020		(143)		936		(107)		2,956		(250)
Due in five years through ten years	1,162		(148)		395		(98)		1,557		(246)
Due after ten years	439		(50)		262		(64)		701		(114)
Asset-backed securities	3,120		(138)		436		(27)		3,556		(165)
Mortgage-backed securities	1,318		(105)		641		(122)		1,959		(226)
Total	$	8,522	$	(591)	$	2,698	$	(421)	$	11,220	$	(1,012)
Securities where an allowance for credit loss was recorded	2		(1)		—		—		2		(1)
Total fixed maturity securities - available for sale	$	8,524	$	(591)	$	2,698	$	(421)	$	11,222	$	(1,013)

(Some amounts may not reconcile due to rounding.)

Summary of Components of Net Investment Income

The components of net investment income are presented in the table below for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2023		2022		2023		2022
Fixed maturities	$	199	$	116	$	374	$	210
Equity securities	1		5		2		9
Short-term investments and cash	16		1		27		1
Other invested assets
Limited partnerships	22		45		(1)		89
Dividends from preferred shares of affiliate	8		8		16		16
Other	6		14		27		26
Gross investment income before adjustments	252		188		444		350
Funds held interest income (expense)	(1)		1		1		3
Interest income from Group	3		2		7		4
Gross investment income	253		190		453		357
Investment expenses	(11)		(14)		(21)		(24)
Net investment income	$	242	$	176	$	432	$	333

(Some amounts may not reconcile due to rounding.)

Summary of Components of Net Realized Capital Gains (Losses)

The components of net gains (losses) on investments are presented in the table below for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2023		2022		2023		2022
Fixed maturity securities
Allowances for credit losses	$	—	$	2	$	(10)	$	—
Net realized gains (losses) from dispositions	(7)		(10)		(9)		(15)
Equity securities, fair value
Net realized gains (losses) from dispositions	—		(30)		7		(38)
Gains (losses) from fair value adjustments	8		(186)		11		(317)
Other invested assets	—		1		—		5
Other invested assets, fair value
Gains (losses) from fair value adjustments	(23)		(155)		1		(239)

Total net gains (losses) on investments	$	(22)	$	(378)	$	—	$	(605)

(Some amounts may not reconcile due to rounding.)

Debt Securities, Available-for-Sale, Allowance for Credit Loss

The following tables provide a roll forward of the Company’s beginning and ending balance of allowance for credit losses for the periods indicated:


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale
	Three Months Ended June 30, 2023								Six Months Ended June 30, 2023
	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
(Dollars in millions)
Beginning balance	$	(55)	$	—	$	(1)	$	(56)	$	(45)	$	—	$	(1)	$	(46)
Credit losses on securities where credit losses were not previously recorded	(2)		—		—		(2)		(14)		—		—		(14)
Increases in allowance on previously impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	1		—		—		1		4		—		—		4
Balance, end of period	$	(55)	$	—	$	(1)	$	(57)	$	(55)	$	—	$	(1)	$	(57)

(Some amounts may not reconcile due to rounding.)


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale
	Three Months Ended June 30, 2022								Six Months Ended June 30, 2022
(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
Beginning balance	$	(20)	$	(8)	$	(1)	$	(29)	$	(19)	$	(8)	$	—	$	(27)
Credit losses on securities where credit losses were not previously recorded	(5)		—		—		(5)		(7)		—		(1)		(8)
Increases in allowance on previously impaired securities	(1)		—		—		(1)		(1)		—		—		(1)
Decreases in allowance on previously impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	—		8		—		8		1		8		—		9
Balance, end of period	$	(26)	$	—	$	(2)	$	(27)	$	(26)	$	—	$	(2)	$	(27)

(Some amounts may not reconcile due to rounding.)

Debt Securities, Held-to-Maturity, Allowance for Credit Loss


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Held to Maturity
	Three Months Ended June 30, 2023								Six Months Ended June 30, 2023
	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
(Dollars in millions)
Beginning balance	$	(2)	$	(6)	$	(1)	$	(9)	$	(2)	$	(6)	$	(1)	$	(9)
Credit losses on securities where credit losses were not previously recorded	—		—		—		—		—		—		—		—
Increases in allowance on previously impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	—		—		—		—		—		—		—		—
Balance, end of period	$	(2)	$	(6)	$	(1)	$	(8)	$	(2)	$	(6)	$	(1)	$	(8)

(Some amounts may not reconcile due to rounding.)

Summary of Gross Gains (Losses) from Sales of Fixed Maturity and Equity Securities

The proceeds and split between gross gains and losses from dispositions of fixed maturity and equity securities are presented in the table below for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2023		2022		2023		2022
Proceeds from sales of fixed maturity securities - available for sale	$	59	$	245	$	109	$	511
Gross gains from dispositions	1		3		4		6
Gross losses from dispositions	(8)		(13)		(12)		(21)

Proceeds from sales of equity securities	$	—	$	343	$	46	$	425
Gross gains from dispositions	—		4		7		8
Gross losses from dispositions	—		(34)		—		(46)

(Some amounts may not reconcile due to rounding.)