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Investments and Cash (Tables)
 9 Months Ended
Sep. 30, 2016
Investments, Debt and Equity Securities [Abstract]  
Net Investment Income
Net Investment Income
 
 
Third Quarter
 
Nine Months
 
2016
 
2015
 
2016
 
2015
 
(in millions)
Income from fixed-maturity securities managed by third parties
$
75

 
$
85

 
$
231

 
$
252

Income from internally managed securities:
 
 
 
 
 
 
 
Fixed maturities
19

 
15

 
58

 
44

Other
2

 
14

 
8

 
21

Gross investment income
96

 
114

 
297

 
317

Investment expenses
(2
)
 
(2
)
 
(6
)
 
(6
)
Net investment income
$
94

 
$
112

 
$
291

 
$
311
Net Realized Investment Gains (Losses)
Net Realized Investment Gains (Losses)
 
 
Third Quarter
 
Nine Months
 
2016
 
2015
 
2016
 
2015
 
(in millions)
Gross realized gains on available-for-sale securities
$
4

 
$
3

 
$
24

 
$
35

Gross realized losses on available-for-sale securities
(1
)
 
(3
)
 
(3
)
 
(10
)
Net realized gains (losses) on other invested assets
0

 
(9
)
 
0

 
(8
)
Other-than-temporary impairment
(5
)
 
(18
)
 
(26
)
 
(37
)
Net realized investment gains (losses)
$
(2
)
 
$
(27
)
 
$
(5
)
 
$
(20
)
Roll Forward of Credit Losses in the Investment Portfolio
The following table presents the roll-forward of the credit losses of fixed-maturity securities for which the Company has recognized an other-than-temporary-impairment and where the portion of the fair value adjustment related to other factors was recognized in other comprehensive income ("OCI").
 
Roll Forward of Credit Losses
in the Investment Portfolio

 
Third Quarter
 
Nine Months
 
2016
 
2015
 
2016
 
2015
 
(in millions)
Balance, beginning of period
$
108

 
$
104

 
$
108

 
$
124

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

 
2

 
3

 
2

Reductions for securities sold and other settlement during the period
—

 
—

 
(4
)
 
(28
)
Additions for credit losses on securities for which an other-than-temporary-impairment was previously recognized
1

 
0

 
3

 
8

Balance, end of period
$
110

 
$
106

 
$
110

 
$
106
Fixed Maturity Securities and Short Term Investments by Security Type
Fixed-Maturity Securities and Short-Term Investments
by Security Type 
As of September 30, 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
 
49
%
 
$
5,272

 
$
398

 
$
(1
)
 
$
5,669

 
$
16

 
AA-
U.S. government and agencies
 
3

 
381

 
24

 
0

 
405

 
—

 
AA+
Corporate securities
 
16

 
1,733

 
82

 
(40
)
 
1,775

 
(29
)
 
A-
Mortgage-backed securities(4):
 
0

 
 
 
 
 
 

 
 
 
 

 
 
RMBS
 
10

 
1,082

 
39

 
(16
)
 
1,105

 
(7
)
 
A-
CMBS
 
6

 
618

 
32

 
(1
)
 
649

 
—

 
AAA
Asset-backed securities
 
8

 
860

 
42

 
(10
)
 
892

 
9

 
B+
Foreign government securities
 
3

 
273

 
6

 
(22
)
 
257

 
—

 
AA
Total fixed-maturity securities
 
95

 
10,219

 
623

 
(90
)
 
10,752

 
(11
)
 
A+
Short-term investments
 
5

 
528

 
0

 
0

 
528

 
—

 
AA+
Total investment portfolio
 
100
%
 
$
10,747

 
$
623

 
$
(90
)
 
$
11,280

 
$
(11
)
 
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 for additional information as applicable.
 
(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 44% of mortgage backed securities as of September 30, 2016 and 54% as of December 31, 2015 based on fair value.

Fixed Maturity Securities Gross Unrealized Loss by Length of Time
The following tables summarize, for all fixed-maturity securities in an unrealized loss position, the aggregate fair value and gross unrealized loss by length of time the amounts have continuously been in an unrealized loss position.
 
Fixed-Maturity Securities
Gross Unrealized Loss by Length of Time
As of September 30, 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
$
180

 
$
(1
)
 
$
7

 
$
0

 
$
187

 
$
(1
)
U.S. government and agencies
52

 
0

 
—

 
—

 
52

 
0

Corporate securities
237

 
(6
)
 
85

 
(34
)
 
322

 
(40
)
Mortgage-backed securities:
 
 
 
 
 
 
 

 


 


RMBS
64

 
(2
)
 
149

 
(14
)
 
213

 
(16
)
CMBS
102

 
(1
)
 
—

 
—

 
102

 
(1
)
Asset-backed securities
28

 
0

 
210

 
(10
)
 
238

 
(10
)
Foreign government securities
98

 
(7
)
 
74

 
(15
)
 
172

 
(22
)
Total
$
761

 
$
(17
)
 
$
525

 
$
(73
)
 
$
1,286

 
$
(90
)
Number of securities (1)
 

 
219

 
 

 
52

 
 

 
263

Number of securities with other-than-temporary impairment
 

 
5

 
 

 
12

 
 

 
17

 
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 consisting 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
The amortized cost and estimated fair value of available-for-sale fixed maturity securities by contractual maturity as of September 30, 2016 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
Distribution of Fixed-Maturity Securities
by Contractual Maturity
As of September 30, 2016
 
 
Amortized
Cost
 
Estimated
Fair Value
 
(in millions)
Due within one year
$
416

 
$
436

Due after one year through five years
1,928

 
1,974

Due after five years through 10 years
2,110

 
2,216

Due after 10 years
4,065

 
4,372

Mortgage-backed securities:
 

 
 

RMBS
1,082

 
1,105

CMBS
618

 
649

Total
$
10,219

 
$
10,752
Internally Managed Investment Portfolio
Internally Managed Portfolio
Carrying Value

 
As of
September 30, 2016
 
As of
December 31, 2015
 
(in millions)
Assets purchased for loss mitigation and other risk management purposes:
 
 
 
Fixed-maturity securities, at fair value
$
1,414

 
$
1,266

Other invested assets
110

 
114

Other
55

 
55

Total
$
1,579

 
$
1,435