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Investments
 12 Months Ended
Dec. 31, 2019
Investments [Abstract]  
Investment [Text Block] Investments
A summary of current and long-term fixed maturity securities, available-for-sale, at December 31, 2019 and 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
 
 
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
United States Government securities
$
524

 
$
4

 
$
(3
)
 
$
—

 
$
525

 
$
—

Government sponsored securities
136

 
5

 
—

 
—

 
141

 
—

States, municipalities and political subdivisions, tax-exempt
4,592

 
262

 
(3
)
 
—

 
4,851

 
—

Corporate securities
8,870

 
339

 
(9
)
 
(15
)
 
9,185

 
(3
)
Residential mortgage-backed securities
3,654

 
87

 
(6
)
 
(3
)
 
3,732

 
—

Commercial mortgage-backed securities
84

 
2

 
—

 
—

 
86

 
—

Other securities
1,648

 
21

 
(3
)
 
(5
)
 
1,661

 
—

Total fixed maturity securities
$
19,508

 
$
720

 
$
(24
)
 
$
(23
)
 
$
20,181

 
$
(3
)
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, tax-exempt
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 December 31, 2019 and 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
 
Number of
Securities
 
Estimated
Fair Value
 
Gross
Unrealized
Loss
 
Number of
Securities
 
Estimated
Fair Value
 
Gross
Unrealized
Loss
(Securities are whole amounts)
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
United States Government securities
27

 
$
250

 
$
(3
)
 
2

 
$
1

 
$
—

Government sponsored securities
14

 
12

 
—

 
3

 
1

 
—

States, municipalities and political subdivisions, tax-exempt
114

 
306

 
(3
)
 
14

 
11

 
—

Corporate securities
386

 
558

 
(9
)
 
224

 
286

 
(15
)
Residential mortgage-backed securities
321

 
635

 
(6
)
 
189

 
237

 
(3
)
Commercial mortgage-backed securities
1

 
3

 
—

 
4

 
8

 
—

Other securities
166

 
415

 
(3
)
 
113

 
358

 
(5
)
Total fixed maturity securities
1,029

 
$
2,179

 
$
(24
)
 
549

 
$
902

 
$
(23
)
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, tax-exempt
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 December 31, 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
$
532

 
$
534

Due after one year through five years
5,367

 
5,503

Due after five years through ten years
5,633

 
5,864

Due after ten years
4,238

 
4,462

Mortgage-backed securities
3,738

 
3,818

Total fixed maturity securities
$
19,508

 
$
20,181


Equity Securities
A summary of current and long-term marketable equity securities at December 31, 2019 and 2018 is as follows:
 
December 31, 2019
 
December 31, 2018
Equity Securities:
 
 
 
Exchange traded funds
$
44

 
$
2

Fixed maturity mutual funds
643

 
557

Common equity securities
267

 
654

Private equity securities
85

 
313

Total
$
1,039

 
$
1,526


Investment Income
The major categories of net investment income for the years ended December 31, 2019, 2018 and 2017 are as follows:

2019

2018

2017
Fixed maturity securities
$
721


$
681


$
614

Equity securities
100


86


116

Cash equivalents
64


51


25

Other
149


193


153

Investment income
1,034


1,011


908

Investment expense
(29
)

(41
)

(41
)
Net investment income
$
1,005


$
970


$
867


Investment Gains
Net realized investment gains/losses and the net change in unrealized appreciation/depreciation on investments for the years ended December 31, 2019, 2018 and 2017 are as follows:
 
2019
 
2018
 
2017
Net realized gains (losses):
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
Gross realized gains from sales
$
125

 
$
85

 
$
137

Gross realized losses from sales
(59
)
 
(116
)
 
(55
)
Net realized gains (losses) from sales of fixed maturity securities
66

 
(31
)
 
82

Equity securities:
 
 
 
 
 
Gross realized gains
147

 
77

 
140

Gross realized losses
(84
)
 
(276
)
 
(17
)
Net realized gains (losses) on equity securities
63

 
(199
)
 
123

Other investments:
 
 
 
 
 
Gross realized gains from sales
3

 
27

 
—

Gross realized losses from sales
(1
)
 
—

 
(5
)
Net realized gains (losses) from sales of other investments
2

 
27

 
(5
)
Net realized gains (losses) on investments
131

 
(203
)
 
200

 
 
 
 
 
 
Other-than-temporary impairment losses recognized in income:
 
 
 
 
 
Fixed maturity securities
(13
)
 
(9
)
 
(4
)
Equity securities
—

 
—

 
(15
)
Other investments
(34
)
 
(17
)
 
(14
)
Other-than-temporary impairment losses recognized in income
(47
)
 
(26
)
 
(33
)
 
 
 
 
 
 
Change in net unrealized gains (losses) on investments:
 
 
 
 
 
Fixed maturity securities
874

 
(529
)
 
156

Equity securities
—

 
—

 
111

Other investments
—

 
5

 
(10
)
Total change in net unrealized gains (losses) on investments
874

 
(524
)
 
257

Deferred income tax (expense) benefit
(194
)
 
106

 
(84
)
Change in net unrealized gains (losses) on investments
680

 
(418
)
 
173

 
 
 
 
 
 
Net realized gains (losses) on investments, other-than-temporary impairment losses recognized in income and change in net unrealized gains (losses) on investments
$
764

 
$
(647
)
 
$
340


The gains and losses related to equity securities for the years ended December 31, 2019 and 2018 are as follows:
 
 
2019
 
2018
Net realized gains (losses) recognized on equity securities
 
$
63

 
$
(199
)
Less: Net realized (gains) losses recognized on equity securities sold during the period
 
(39
)
 
57

Unrealized gains (losses) recognized in income on equity securities still held at December 31
 
$
24

 
$
(142
)

A primary objective in the management of our fixed maturity and equity portfolios is to maximize total return relative to underlying liabilities and respective liquidity needs. In achieving this goal, assets may be sold to take advantage of market conditions or other investment opportunities as well as tax considerations. Sales will generally produce realized gains and losses. 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) expectations 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.
Proceeds from sales, maturities, calls or redemptions of fixed maturity securities and the related gross realized gains and gross realized losses for the years ended December 31 are as follows:
 
2019
 
2018
 
2017
Proceeds
$
8,351

 
$
8,380

 
$
9,780

Gross realized gains
125

 
85

 
137

Gross realized losses
(59
)
 
(116
)
 
(55
)

A significant judgment in the valuation of investments is the determination of when an other-than-temporary decline in value has occurred. We follow a consistent and systematic process for recognizing impairments on securities that sustain other-than-temporary declines in value. We have established a committee responsible for the impairment review process. The decision to impair a security incorporates both quantitative criteria and qualitative information. The impairment review process considers a number of factors including, but not limited to: (i) the extent to which the fair value is less than book value, (ii) the financial condition and near term prospects of the issuer, (iii) our intent and ability to retain impaired investments for a period of time sufficient to allow for any anticipated recovery in fair value, (iv) our intent to sell or the likelihood that we will need to sell a fixed maturity security before recovery of its amortized cost basis, (v) whether the debtor is current on interest and principal payments, (vi) the reasons for the decline in value (i.e., credit event compared to liquidity, general credit spread widening, currency exchange rate or interest rate factors) and (vii) general market conditions and industry or sector specific factors. For securities that are deemed to be other-than-temporarily impaired, the security is adjusted to fair value and the resulting losses are recognized in the consolidated statements of income. The new cost basis of the impaired security is not increased for future recoveries in fair value.
Other-than-temporary impairments recorded in 2019, 2018 and 2017 were primarily the result of the continued credit deterioration on specific issuers in the bond markets. There were no individually material OTTI losses on investments by issuer during 2019, 2018 or 2017.
Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is possible that changes in these risk factors in the near term could have a material adverse impact on our results of operations or shareholders’ equity.
The changes in the amount of the credit component of OTTI losses on fixed maturity securities recognized in income, for which a portion of the OTTI losses was recognized in other comprehensive income, was not material for the years ended December 31, 2019, 2018 or 2017.
At December 31, 2019 and 2018, there were no investments that exceeded 10% of shareholders’ equity and no fixed maturity investments that did not produce income during the years then ended.
As of December 31, 2019 and 2018, we had committed approximately $999 and $873, respectively, to future capital calls from various third-party investments in exchange for an ownership interest in the related entities.
At December 31, 2019 and 2018, securities with carrying values of approximately $505 and $487, respectively, were deposited by our insurance subsidiaries under requirements of regulatory authorities.
Securities Lending Programs
The fair value of the collateral received at the time of the securities lending transactions amounted to $351 and $604 at December 31, 2019 and 2018, respectively. The value of the collateral represented 103% and 102% of the market value of the securities on loan at December 31, 2019 and 2018, respectively.
The remaining contractual maturities of our securities lending transactions at December 31, 2019 is as follows:
 
Overnight and Continuous
Securities lending transactions
 
Cash
$
291

United States Government securities
59

Other securities
1

Total
$
351