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Investments
 6 Months Ended
Jun. 30, 2019
Investments [Abstract]  
Investments
Investments
Fixed Maturity Securities
We evaluate our available-for-sale fixed maturity securities for other-than-temporary declines based on qualitative and quantitative factors. There were no individually significant other-than-temporary impairment losses on investments during the three and six months ended June 30, 2019 and 2018. We continue to review our investment portfolios under our impairment review policy. Given the inherent uncertainty of changes in market conditions and the significant judgments involved, there is a continuing risk that declines in fair value may occur and additional material other-than-temporary impairment, or OTTI, losses on investments may be recorded in future periods.
A summary of current and long-term fixed maturity securities, available-for-sale, at June 30, 2019 and December 31, 2018 is as follows:
 
 
 
 
 
 
 
 
 
Non-Credit
Component of
OTTIs
Recognized in
Accumulated
Other
Comprehensive
Loss
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross Unrealized Losses
 
Estimated
Fair Value
 
 
 
 
Less than
12 Months
 
12 Months
or Greater
 
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
United States Government securities
$
409

 
$
8

 
$
—

 
$
—

 
$
417

 
$
—

Government sponsored securities
171

 
6

 
—

 
—

 
177

 
—

States, municipalities and political subdivisions
4,400

 
237

 
—

 
(1
)
 
4,636

 
—

Corporate securities
8,712

 
263

 
(15
)
 
(31
)
 
8,929

 
(4
)
Residential mortgage-backed securities
3,646

 
86

 
(2
)
 
(8
)
 
3,722

 
—

Commercial mortgage-backed securities
87

 
3

 
—

 
(1
)
 
89

 
—

Other securities
1,645

 
23

 
(2
)
 
(4
)
 
1,662

 
—

Total fixed maturity securities
$
19,070

 
$
626

 
$
(19
)
 
$
(45
)
 
$
19,632

 
$
(4
)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
United States Government securities
$
414

 
$
3

 
$
—

 
$
(1
)
 
$
416

 
$
—

Government sponsored securities
108

 
1

 
—

 
(1
)
 
108

 
—

States, municipalities and political subdivisions
4,716

 
91

 
(3
)
 
(19
)
 
4,785

 
—

Corporate securities
8,189

 
33

 
(170
)
 
(115
)
 
7,937

 
(3
)
Residential mortgage-backed securities
2,769

 
31

 
(3
)
 
(47
)
 
2,750

 
—

Commercial mortgage-backed securities
69

 
—

 
—

 
(2
)
 
67

 
—

Other securities
1,115

 
14

 
(8
)
 
(5
)
 
1,116

 
—

Total fixed maturity securities
$
17,380

 
$
173

 
$
(184
)
 
$
(190
)
 
$
17,179

 
$
(3
)


For fixed maturity securities in an unrealized loss position at June 30, 2019 and December 31, 2018, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position: 
 
Less than 12 Months
 
12 Months or Greater
(Securities are whole amounts)
Number of
Securities
 
Estimated
Fair Value
 
Gross
Unrealized
Loss
 
Number of
Securities
 
Estimated
Fair Value
 
Gross
Unrealized
Loss
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
United States Government securities
4

 
$
55

 
$
—

 
8

 
$
20

 
$
—

Government sponsored securities
—

 
—

 
—

 
13

 
7

 
—

States, municipalities and political subdivisions
7

 
8

 
—

 
48

 
60

 
(1
)
Corporate securities
406

 
642

 
(15
)
 
564

 
934

 
(31
)
Residential mortgage-backed securities
87

 
227

 
(2
)
 
420

 
668

 
(8
)
Commercial mortgage-backed securities
—

 
—

 
—

 
4

 
8

 
(1
)
Other securities
131

 
468

 
(2
)
 
116

 
345

 
(4
)
Total fixed maturity securities
635

 
$
1,400

 
$
(19
)
 
1,173

 
$
2,042

 
$
(45
)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
United States Government securities
5

 
$
47

 
$
—

 
25

 
$
79

 
$
(1
)
Government sponsored securities
8

 
11

 
—

 
24

 
31

 
(1
)
States, municipalities and political subdivisions
177

 
295

 
(3
)
 
604

 
1,032

 
(19
)
Corporate securities
2,185

 
4,503

 
(170
)
 
1,220

 
2,072

 
(115
)
Residential mortgage-backed securities
259

 
383

 
(3
)
 
816

 
1,458

 
(47
)
Commercial mortgage-backed securities
6

 
11

 
—

 
19

 
37

 
(2
)
Other securities
193

 
599

 
(8
)
 
93

 
237

 
(5
)
Total fixed maturity securities
2,833

 
$
5,849

 
$
(184
)
 
2,801

 
$
4,946

 
$
(190
)

The amortized cost and fair value of fixed maturity securities at June 30, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.
 
Amortized
Cost
 
Estimated
Fair Value
Due in one year or less
$
605

 
$
604

Due after one year through five years
5,548

 
5,647

Due after five years through ten years
5,179

 
5,364

Due after ten years
4,005

 
4,206

Mortgage-backed securities
3,733

 
3,811

Total fixed maturity securities
$
19,070

 
$
19,632


Proceeds from sales, maturities, calls or redemptions of fixed maturity securities and the related gross realized gains and gross realized losses for the three and six months ended June 30, 2019 and 2018 are as follows:
 
Three Months Ended 
 June 30
 
Six Months Ended 
 June 30
 
2019
 
2018
 
2019
 
2018
Proceeds
$
1,986

 
$
2,654

 
$
3,454

 
$
4,881

Gross realized gains
22

 
31

 
40

 
61

Gross realized losses
(17
)
 
(33
)
 
(34
)
 
(69
)

In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to: (i) changes in the investment environment; (ii) expectation that the fair value could deteriorate further; (iii) desire to reduce exposure to an issuer or an industry; (iv) changes in credit quality; or (v) changes in expected cash flow.
All securities sold resulting in investment gains and losses are recorded on the trade date. Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold.
Equity Securities
A summary of current and long-term marketable equity securities at June 30, 2019 and December 31, 2018 is as follows:
 
June 30, 2019
 
December 31, 2018
Equity securities:
 
 
 
Exchange traded funds
$
510

 
$
2

Fixed maturity mutual funds
633

 
557

Common equity securities
77

 
654

Private equity securities
305

 
313

Total
$
1,525

 
$
1,526


The gains and losses related to equity securities for the three and six months ended June 30, 2019 and 2018 are as follows:
 
Three Months Ended June 30
 
Six Months Ended June 30
 
2019
 
2018
 
2019
 
2018
Net realized gains (losses) recognized on equity securities
$
13

 
$
(17
)
 
$
92

 
$
(60
)
Less: Net realized gains recognized on equity securities sold during the period
(29
)
 
(24
)
 
(50
)
 
(197
)
Unrealized (losses) gains recognized on equity securities still held at June 30, 2019
$
(16
)
 
$
(41
)
 
$
42

 
$
(257
)

Securities Lending Programs
We participate in securities lending programs whereby marketable securities in our investment portfolio are transferred to independent brokers or dealers in exchange for cash and securities collateral. The fair value of the collateral received at the time of the transactions amounted to $564 and $604 at June 30, 2019 and December 31, 2018, respectively. The value of the collateral represented 103% and 102% of the market value of the securities on loan at June 30, 2019 and December 31, 2018, respectively. We recognize the collateral as an asset under the caption “Securities lending collateral” on our consolidated balance sheets and we recognize a corresponding liability for the obligation to return the collateral to the borrower under the caption “Securities lending payable.” The securities on loan are reported in the applicable investment category on our consolidated balance sheets.
The remaining contractual maturity of our securities lending agreements at June 30, 2019 is as follows:
 
Overnight and Continuous
Securities lending transactions
 
United States Government securities
$
42

Corporate securities
474

Equity securities
48

Total
$
564


The market value of loaned securities and that of the collateral pledged can fluctuate in non-synchronized fashions. To the extent the loaned securities’ value appreciates faster or depreciates slower than the value of the collateral pledged, we are exposed to the risk of the shortfall. As a primary mitigating mechanism, the loaned securities and collateral pledged are marked to market on a daily basis and the shortfall, if any, is collected accordingly. Secondarily, the minimum collateral level is set at 102% of the value of the loaned securities, which provides a cushion before any shortfall arises. The investment of the cash collateral is subject to market risk, which is managed by limiting the investments to higher quality and shorter duration instruments.