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Investments and Cash (Tables)
 3 Months Ended
Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Net Investment Income
Net Investment Income
 
 
First Quarter
 
2016
 
2015
 
(in millions)
Income from fixed-maturity securities managed by third parties
$
79

 
$
82

Income from internally managed securities:
 
 
 
Fixed maturities
17

 
15

Other
5

 
6

Gross investment income
101

 
103

Investment expenses
(2
)
 
(2
)
Net investment income
$
99

 
$
101
Net Realized Investment Gains (Losses)
Net Realized Investment Gains (Losses)
 
 
First Quarter
 
2016
 
2015
 
(in millions)
Gross realized gains on available-for-sale securities
$
6

 
$
24

Gross realized gains on other assets in investment portfolio
—

 
1

Gross realized losses on available-for-sale securities
(2
)
 
(1
)
Gross realized losses on other assets in investment portfolio
(1
)
 
(1
)
Other-than-temporary impairment
(16
)
 
(7
)
Net realized investment gains (losses)
$
(13
)
 
$
16
Roll Forward of Credit Losses in the Investment Portfolio
Roll Forward of Credit Losses
in the Investment Portfolio

 
First Quarter
 
2016
 
2015
 
(in millions)
Balance, beginning of period
$
108

 
$
124

Additions for credit losses on securities for which an other-than-temporary-impairment was not previously recognized
1

 
—

Reductions for securities sold and other settlement during the period
(2
)
 
(21
)
Additions for credit losses on securities for which an other-than-temporary-impairment was previously recognized
0

 
3

Balance, end of period
$
107

 
$
106
Fixed Maturity Securities and Short Term Investments by Security Type
Fixed-Maturity Securities and Short-Term Investments
by Security Type 
As of March 31, 2016

Investment Category
 
Percent
of
Total(1)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
AOCI(2)
Gain
(Loss) on
Securities
with
Other-Than-Temporary Impairment
 
Weighted
Average
Credit
Rating
 (3)
 
 
(dollars in millions)
Fixed-maturity securities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 
Obligations of state and political subdivisions
 
51
%
 
$
5,417

 
$
360

 
$
(1
)
 
$
5,776

 
$
3

 
AA
U.S. government and agencies
 
4

 
379

 
26

 
0

 
405

 
—

 
AA+
Corporate securities
 
14

 
1,473

 
69

 
(17
)
 
1,525

 
(11
)
 
A-
Mortgage-backed securities(4):
 
0

 
 
 
 
 
 

 
 
 
 

 
 
RMBS
 
11

 
1,222

 
37

 
(20
)
 
1,239

 
(13
)
 
A
CMBS
 
5

 
531

 
25

 
0

 
556

 
—

 
AAA
Asset-backed securities
 
8

 
821

 
3

 
(13
)
 
811

 
(11
)
 
B+
Foreign government securities
 
3

 
280

 
5

 
(9
)
 
276

 
—

 
AA+
Total fixed-maturity securities
 
96

 
10,123

 
525

 
(60
)
 
10,588

 
(32
)
 
A+
Short-term investments
 
4

 
459

 
0

 
0

 
459

 
—

 
AAA
Total investment portfolio
 
100
%
 
$
10,582

 
$
525

 
$
(60
)
 
$
11,047

 
$
(32
)
 
A+

Fixed-Maturity Securities and Short-Term Investments
by Security Type 
As of December 31, 2015 

Investment Category
 
Percent
of
Total(1)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
AOCI
Gain
(Loss) on
Securities
with
Other-Than-Temporary Impairment
 
Weighted
Average
Credit
Rating
 (3)
 
 
(dollars in millions)
Fixed-maturity securities:
 
 

 
 

 
 

 
 

 
 

 
 

 
 
Obligations of state and political subdivisions
 
52
%
 
$
5,528

 
$
323

 
$
(10
)
 
$
5,841

 
$
5

 
AA
U.S. government and agencies
 
3

 
377

 
23

 
0

 
400

 
—

 
AA+
Corporate securities
 
14

 
1,505

 
38

 
(23
)
 
1,520

 
(13
)
 
A-
Mortgage-backed securities(4):
 
 

 
 

 
 

 
 

 
 

 
 

 
 
RMBS
 
11

 
1,238

 
29

 
(22
)
 
1,245

 
(7
)
 
A
CMBS
 
5

 
506

 
9

 
(2
)
 
513

 
—

 
AAA
Asset-backed securities
 
8

 
831

 
4

 
(10
)
 
825

 
(6
)
 
B+
Foreign government securities
 
3

 
290

 
4

 
(11
)
 
283

 
—

 
AA+
Total fixed-maturity securities
 
96

 
10,275

 
430

 
(78
)
 
10,627

 
(21
)
 
A+
Short-term investments
 
4

 
396

 
0

 
0

 
396

 
—

 
AA-
Total investment portfolio
 
100
%
 
$
10,671

 
$
430

 
$
(78
)
 
$
11,023

 
$
(21
)
 
A+
____________________
(1)
Based on amortized cost.
 
(2)
Accumulated OCI. See also Note 17, Shareholders' Equity.
 
(3)
Ratings in the tables above represent the lower of the Moody’s and S&P classifications except for bonds purchased for loss mitigation or risk management strategies, which use internal ratings classifications. The Company’s portfolio consists primarily of high-quality, liquid instruments.
 
(4)
Government-agency obligations were approximately 52% of mortgage backed securities as of March 31, 2016 and 54% as of December 31, 2015 based on fair value.

Fixed Maturity Securities Gross Unrealized Loss by Length of Time
Fixed-Maturity Securities
Gross Unrealized Loss by Length of Time
As of March 31, 2016
 
 
Less than 12 months
 
12 months or more
 
Total
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
(dollars in millions)
Obligations of state and political subdivisions
$
58

 
$
0

 
$
87

 
$
(1
)
 
$
145

 
$
(1
)
U.S. government and agencies
7

 
0

 
—

 
—

 
7

 
0

Corporate securities
78

 
(2
)
 
122

 
(15
)
 
200

 
(17
)
Mortgage-backed securities:
 
 
 
 
 
 
 

 


 


RMBS
123

 
(5
)
 
182

 
(15
)
 
305

 
(20
)
CMBS
7

 
0

 
5

 
0

 
12

 
0

Asset-backed securities
456

 
(13
)
 
—

 
—

 
456

 
(13
)
Foreign government securities
91

 
(4
)
 
53

 
(5
)
 
144

 
(9
)
Total
$
820

 
$
(24
)
 
$
449

 
$
(36
)
 
$
1,269

 
$
(60
)
Number of securities (1)
 

 
110

 
 

 
82

 
 

 
185

Number of securities with other-than-temporary impairment
 

 
12

 
 

 
6

 
 

 
18

 
Fixed-Maturity Securities
Gross Unrealized Loss by Length of Time
As of December 31, 2015

 
Less than 12 months
 
12 months or more
 
Total
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
Fair
Value
 
Unrealized
Loss
 
(dollars in millions)
Obligations of state and political subdivisions
$
316

 
$
(10
)
 
$
7

 
$
0

 
$
323

 
$
(10
)
U.S. government and agencies
77

 
0

 
—

 
—

 
77

 
0

Corporate securities
381

 
(8
)
 
95

 
(15
)
 
476

 
(23
)
Mortgage-backed securities:
 

 
 

 
 

 
 

 


 


RMBS
438

 
(8
)
 
90

 
(14
)
 
528

 
(22
)
CMBS
140

 
(2
)
 
2

 
0

 
142

 
(2
)
Asset-backed securities
517

 
(10
)
 
—

 
—

 
517

 
(10
)
Foreign government securities
97

 
(4
)
 
82

 
(7
)
 
179

 
(11
)
Total
$
1,966

 
$
(42
)
 
$
276

 
$
(36
)
 
$
2,242

 
$
(78
)
Number of securities (1)
 

 
335

 
 

 
71

 
 

 
396

Number of securities with other-than-temporary impairment
 

 
9

 
 

 
4

 
 

 
13


___________________
(1)
The number of securities does not add across because lots of the same securities have been purchased at different times and appear in both categories above (i.e. Less than 12 months and 12 months or more). If a security appears in both categories, it is counted only once in the total column.
Distribution of Fixed Maturity Securities by Contractual Maturity
Distribution of Fixed-Maturity Securities
by Contractual Maturity
As of March 31, 2016
 
 
Amortized
Cost
 
Estimated
Fair Value
 
(in millions)
Due within one year
$
469

 
$
470

Due after one year through five years
1,654

 
1,719

Due after five years through 10 years
2,195

 
2,320

Due after 10 years
4,052

 
4,284

Mortgage-backed securities:
 

 
 

RMBS
1,222

 
1,239

CMBS
531

 
556

Total
$
10,123

 
$
10,588
Internally Managed Investment Portfolio
Internally Managed Portfolio
Carrying Value

 
As of
March 31, 2016
 
As of
December 31, 2015
 
(in millions)
Assets purchased for loss mitigation and other risk management purposes:
 
 
 
Fixed-maturity securities, at fair value
$
1,264

 
$
1,266

Other invested assets
112

 
114

Other
55

 
55

Total
$
1,431

 
$
1,435