Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Assets and liabilities measured at fair value

Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions):


	Level 1		Level 2		Level 3		Total
March 31, 2023
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. government and government agencies	$	225	$	—	$	—	$	225
States, municipalities and political subdivisions	—		988		5		993
Foreign government	—		226		—		226
Residential MBS	—		1,584		5		1,589
Commercial MBS	—		78		—		78
Collateralized loan obligations	—		1,898		1		1,899
Other asset-backed securities	—		1,906		335		2,241
Corporate and other	8		2,426		359		2,793
Total AFS fixed maturities	233		9,106		705		10,044
Trading fixed maturities	—		36		—		36
Equity securities	568		29		411		1,008
Assets of managed investment entities (“MIE”)	477		4,902		12		5,391
Other assets — derivatives	—		4		—		4
Total assets accounted for at fair value	$	1,278	$	14,077	$	1,128	$	16,483
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	25	$	25
Liabilities of managed investment entities	465		4,781		12		5,258
Other liabilities — derivatives	—		28		—		28
Total liabilities accounted for at fair value	$	465	$	4,809	$	37	$	5,311

December 31, 2022
Assets:
Available for sale fixed maturities:
U.S. government and government agencies	$	219	$	—	$	—	$	219
States, municipalities and political subdivisions	—		1,181		5		1,186
Foreign government	—		226		—		226
Residential MBS	—		1,589		9		1,598
Commercial MBS	—		85		—		85
Collateralized loan obligations	—		1,919		2		1,921
Other asset-backed securities	—		1,916		329		2,245
Corporate and other	8		2,288		319		2,615
Total AFS fixed maturities	227		9,204		664		10,095
Trading fixed maturities	—		32		—		32
Equity securities	556		27		427		1,010
Assets of managed investment entities	659		4,777		11		5,447

Total assets accounted for at fair value	$	1,442	$	14,040	$	1,102	$	16,584
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	25	$	25
Liabilities of managed investment entities	645		4,676		11		5,332
Other liabilities — derivatives	—		42		—		42
Total liabilities accounted for at fair value	$	645	$	4,718	$	36	$	5,399

Changes in balances of Level 3 financial assets

Changes in balances of Level 3 financial assets and liabilities carried at fair value during the first three months of 2023 and 2022 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period.


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2022		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2023
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	5		—		—		—		—		—		—		5
Residential MBS	9		—		—		—		(3)		4		(5)		5
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	2		—		—		—		—		—		(1)		1
Other asset-backed securities	329		—		4		7		(5)		—		—		335
Corporate and other	319		5		2		44		(11)		—		—		359
Total AFS fixed maturities	664		5		6		51		(19)		4		(6)		705
Equity securities	427		(3)		—		31		(22)		—		(22)		411
Assets of MIE	11		(1)		—		2		—		—		—		12
Total Level 3 assets	$	1,102	$	1	$	6	$	84	$	(41)	$	4	$	(28)	$	1,128

Contingent consideration — acquisitions	$	(25)	$	—	$	—	$	—	$	—	$	—	$	—	$	(25)
Total Level 3 liabilities	$	(25)	$	—	$	—	$	—	$	—	$	—	$	—	$	(25)


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2021		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	41		—		(2)		—		(1)		—		(5)		33
Residential MBS	14		—		—		—		(1)		—		(2)		11
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		—		—		—
Other asset-backed securities	278		2		(9)		47		(15)		34		—		337
Corporate and other	267		—		(10)		28		(7)		—		(34)		244
Total AFS fixed maturities	600		2		(21)		75		(24)		34		(41)		625
Equity securities	313		22		—		30		(3)		3		(4)		361
Assets of MIE	13		(1)		—		—		—		—		—		12
Total Level 3 assets	$	926	$	23	$	(21)	$	105	$	(27)	$	37	$	(45)	$	998

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)

Changes in balances of Level 3 financial liabilities


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2022		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2023
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	5		—		—		—		—		—		—		5
Residential MBS	9		—		—		—		(3)		4		(5)		5
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	2		—		—		—		—		—		(1)		1
Other asset-backed securities	329		—		4		7		(5)		—		—		335
Corporate and other	319		5		2		44		(11)		—		—		359
Total AFS fixed maturities	664		5		6		51		(19)		4		(6)		705
Equity securities	427		(3)		—		31		(22)		—		(22)		411
Assets of MIE	11		(1)		—		2		—		—		—		12
Total Level 3 assets	$	1,102	$	1	$	6	$	84	$	(41)	$	4	$	(28)	$	1,128

Contingent consideration — acquisitions	$	(25)	$	—	$	—	$	—	$	—	$	—	$	—	$	(25)
Total Level 3 liabilities	$	(25)	$	—	$	—	$	—	$	—	$	—	$	—	$	(25)


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2021		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at March 31, 2022
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	41		—		(2)		—		(1)		—		(5)		33
Residential MBS	14		—		—		—		(1)		—		(2)		11
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	—		—		—		—		—		—		—		—
Other asset-backed securities	278		2		(9)		47		(15)		34		—		337
Corporate and other	267		—		(10)		28		(7)		—		(34)		244
Total AFS fixed maturities	600		2		(21)		75		(24)		34		(41)		625
Equity securities	313		22		—		30		(3)		3		(4)		361
Assets of MIE	13		(1)		—		—		—		—		—		12
Total Level 3 assets	$	926	$	23	$	(21)	$	105	$	(27)	$	37	$	(45)	$	998

Contingent consideration — acquisitions	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)
Total Level 3 liabilities	$	(23)	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)

Fair value of financial instruments

The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions):


	Carrying		Fair Value
	Value		Total		Level 1		Level 2		Level 3
March 31, 2023
Financial assets:
Cash and cash equivalents	$	857	$	857	$	857	$	—	$	—
Mortgage loans	646		600		—		—		600
Total financial assets not accounted for at fair value	$	1,503	$	1,457	$	857	$	—	$	600

Long-term debt	$	1,478	$	1,286	$	—	$	1,283	$	3
Total financial liabilities not accounted for at fair value	$	1,478	$	1,286	$	—	$	1,283	$	3

December 31, 2022
Financial assets:
Cash and cash equivalents	$	872	$	872	$	872	$	—	$	—
Mortgage loans	676		626		—		—		626
Total financial assets not accounted for at fair value	$	1,548	$	1,498	$	872	$	—	$	626

Long-term debt	$	1,496	$	1,302	$	—	$	1,299	$	3
Total financial liabilities not accounted for at fair value	$	1,496	$	1,302	$	—	$	1,299	$	3