Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

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
June 30, 2024
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. government and government agencies	$	176	$	—	$	—	$	176
States, municipalities and political subdivisions	—		866		2		868
Foreign government	—		231		—		231
Residential MBS	—		1,661		2		1,663
Commercial MBS	—		70		—		70
Collateralized loan obligations	—		1,458		1		1,459
Other asset-backed securities	—		2,023		340		2,363
Corporate and other	11		2,944		411		3,366
Total AFS fixed maturities	187		9,253		756		10,196
Trading fixed maturities	—		53		12		65
Equity securities	435		40		602		1,077
Assets of managed investment entities (“MIE”)	558		4,125		12		4,695
Other assets — derivatives	—		1		—		1
Total assets accounted for at fair value	$	1,180	$	13,472	$	1,382	$	16,034
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	2	$	2
Liabilities of managed investment entities	539		3,985		12		4,536
Other liabilities — derivatives	—		26		—		26
Total liabilities accounted for at fair value	$	539	$	4,011	$	14	$	4,564

December 31, 2023
Assets:
Available for sale fixed maturities:
U.S. government and government agencies	$	235	$	1	$	—	$	236
States, municipalities and political subdivisions	—		982		2		984
Foreign government	—		230		—		230
Residential MBS	—		1,656		2		1,658
Commercial MBS	—		74		—		74
Collateralized loan obligations	—		1,686		1		1,687
Other asset-backed securities	—		2,011		351		2,362
Corporate and other	9		2,757		380		3,146
Total AFS fixed maturities	244		9,397		736		10,377
Trading fixed maturities	—		57		—		57
Equity securities	500		33		485		1,018
Assets of managed investment entities	335		4,140		9		4,484
Other assets — derivatives	—		6		—		6
Total assets accounted for at fair value	$	1,079	$	13,633	$	1,230	$	15,942
Liabilities:
Contingent consideration — acquisitions	$	—	$	—	$	2	$	2
Liabilities of managed investment entities	322		3,976		9		4,307
Other liabilities — derivatives	—		22		—		22
Total liabilities accounted for at fair value	$	322	$	3,998	$	11	$	4,331

Changes in balances of Level 3 financial assets

Changes in balances of Level 3 financial assets and liabilities carried at fair value during the second quarter and first six months of 2024 and 2023 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 March 31, 2024		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2024
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	2		—		—		—		—		—		—		2
Residential MBS	2		—		—		—		—		—		—		2
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	1		—		—		—		—		—		—		1
Other asset-backed securities	335		(1)		4		9		(7)		—		—		340
Corporate and other	402		—		1		15		(6)		—		(1)		411
Total AFS fixed maturities	742		(1)		5		24		(13)		—		(1)		756
Trading fixed maturities	—		—		—		12		—		—		—		12
Equity securities	545		15		—		48		(6)		—		—		602
Assets of MIE	10		(1)		—		3		—		—		—		12
Total Level 3 assets	$	1,297	$	13	$	5	$	87	$	(19)	$	—	$	(1)	$	1,382

Contingent consideration — acquisitions	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)
Total Level 3 liabilities	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)


			Total realized/unrealized gains (losses) included in
	Balance at March 31, 2023		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2023
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	5		—		—		—		—		—		—		5
Residential MBS	5		—		—		—		—		—		—		5
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	1		—		—		—		—		—		—		1
Other asset-backed securities	335		(2)		—		3		(26)		31		(20)		321
Corporate and other	359		(4)		8		12		(2)		2		(6)		369
Total AFS fixed maturities	705		(6)		8		15		(28)		33		(26)		701
Equity securities	411		10		—		30		(3)		—		—		448
Assets of MIE	12		(1)		—		—		—		—		—		11
Total Level 3 assets	$	1,128	$	3	$	8	$	45	$	(31)	$	33	$	(26)	$	1,160

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


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2023		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2024
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	2		—		—		—		—		—		—		2
Residential MBS	2		—		—		—		—		—		—		2
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	1		—		—		—		—		—		—		1
Other asset-backed securities	351		(1)		4		24		(12)		—		(26)		340
Corporate and other	380		(1)		1		48		(12)		—		(5)		411
Total AFS fixed maturities	736		(2)		5		72		(24)		—		(31)		756
Trading fixed maturities	—		—		—		12		—		—		—		12
Equity securities	485		35		—		90		(8)		—		—		602
Assets of MIE	9		(2)		—		5		—		—		—		12
Total Level 3 assets	$	1,230	$	31	$	5	$	179	$	(32)	$	—	$	(31)	$	1,382

Contingent consideration — acquisitions	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)
Total Level 3 liabilities	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)


			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 June 30, 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		(2)		4		10		(31)		31		(20)		321
Corporate and other	319		1		10		56		(13)		2		(6)		369
Total AFS fixed maturities	664		(1)		14		66		(47)		37		(32)		701
Equity securities	427		7		—		61		(25)		—		(22)		448
Assets of MIE	11		(2)		—		2		—		—		—		11
Total Level 3 assets	$	1,102	$	4	$	14	$	129	$	(72)	$	37	$	(54)	$	1,160

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

Changes in balances of Level 3 financial liabilities


			Total realized/unrealized gains (losses) included in
	Balance at March 31, 2024		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2024
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	2		—		—		—		—		—		—		2
Residential MBS	2		—		—		—		—		—		—		2
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	1		—		—		—		—		—		—		1
Other asset-backed securities	335		(1)		4		9		(7)		—		—		340
Corporate and other	402		—		1		15		(6)		—		(1)		411
Total AFS fixed maturities	742		(1)		5		24		(13)		—		(1)		756
Trading fixed maturities	—		—		—		12		—		—		—		12
Equity securities	545		15		—		48		(6)		—		—		602
Assets of MIE	10		(1)		—		3		—		—		—		12
Total Level 3 assets	$	1,297	$	13	$	5	$	87	$	(19)	$	—	$	(1)	$	1,382

Contingent consideration — acquisitions	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)
Total Level 3 liabilities	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)


			Total realized/unrealized gains (losses) included in
	Balance at March 31, 2023		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2023
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	5		—		—		—		—		—		—		5
Residential MBS	5		—		—		—		—		—		—		5
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	1		—		—		—		—		—		—		1
Other asset-backed securities	335		(2)		—		3		(26)		31		(20)		321
Corporate and other	359		(4)		8		12		(2)		2		(6)		369
Total AFS fixed maturities	705		(6)		8		15		(28)		33		(26)		701
Equity securities	411		10		—		30		(3)		—		—		448
Assets of MIE	12		(1)		—		—		—		—		—		11
Total Level 3 assets	$	1,128	$	3	$	8	$	45	$	(31)	$	33	$	(26)	$	1,160

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


			Total realized/unrealized gains (losses) included in
	Balance at December 31, 2023		Net earnings (loss)		Other comprehensive income (loss)		Purchases and issuances		Sales and settlements		Transfer into Level 3		Transfer out of Level 3		Balance at June 30, 2024
AFS fixed maturities:
U.S. government agency	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
State and municipal	2		—		—		—		—		—		—		2
Residential MBS	2		—		—		—		—		—		—		2
Commercial MBS	—		—		—		—		—		—		—		—
Collateralized loan obligations	1		—		—		—		—		—		—		1
Other asset-backed securities	351		(1)		4		24		(12)		—		(26)		340
Corporate and other	380		(1)		1		48		(12)		—		(5)		411
Total AFS fixed maturities	736		(2)		5		72		(24)		—		(31)		756
Trading fixed maturities	—		—		—		12		—		—		—		12
Equity securities	485		35		—		90		(8)		—		—		602
Assets of MIE	9		(2)		—		5		—		—		—		12
Total Level 3 assets	$	1,230	$	31	$	5	$	179	$	(32)	$	—	$	(31)	$	1,382

Contingent consideration — acquisitions	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)
Total Level 3 liabilities	$	(2)	$	—	$	—	$	—	$	—	$	—	$	—	$	(2)


			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 June 30, 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		(2)		4		10		(31)		31		(20)		321
Corporate and other	319		1		10		56		(13)		2		(6)		369
Total AFS fixed maturities	664		(1)		14		66		(47)		37		(32)		701
Equity securities	427		7		—		61		(25)		—		(22)		448
Assets of MIE	11		(2)		—		2		—		—		—		11
Total Level 3 assets	$	1,102	$	4	$	14	$	129	$	(72)	$	37	$	(54)	$	1,160

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

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 Value		Fair Value
			Total		Level 1		Level 2		Level 3
June 30, 2024
Financial assets:
Cash and cash equivalents	$	1,121	$	1,121	$	1,121	$	—	$	—
Mortgage loans	773		726		—		—		726
Total financial assets not accounted for at fair value	$	1,894	$	1,847	$	1,121	$	—	$	726

Long-term debt	$	1,475	$	1,324	$	—	$	1,321	$	3
Total financial liabilities not accounted for at fair value	$	1,475	$	1,324	$	—	$	1,321	$	3

December 31, 2023
Financial assets:
Cash and cash equivalents	$	1,225	$	1,225	$	1,225	$	—	$	—
Mortgage loans	643		596		—		—		596
Total financial assets not accounted for at fair value	$	1,868	$	1,821	$	1,225	$	—	$	596

Long-term debt	$	1,475	$	1,345	$	—	$	1,342	$	3
Total financial liabilities not accounted for at fair value	$	1,475	$	1,345	$	—	$	1,342	$	3

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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