The majority of the investment portfolio comprises investment grade fixed-maturity securities managed by three outside managers. The Company has established investment guidelines for these investment managers regarding credit quality, exposure to a particular sector and exposure to a particular obligor within a sector.

The remainder of the investment portfolio primarily consists of (i) Loss Mitigation Securities; (ii) CVIs received in connection with the 2022 Puerto Rico Resolutions; (iii) equity method investments; and (iv) short-term investments. Equity method investments primarily consist of the investment in Sound Point and fund investments across a variety of strategies.


	As of
	June 30, 2024		December 31, 2023
	(in millions)
Fixed-maturity securities, available-for-sale (1):
Externally managed	$	5,298	$	5,372
Loss Mitigation Securities	465		459
Other	243		476
Fixed-maturity securities, trading - Puerto Rico, CVIs (2)	221		318
Short-term investments	1,717		1,661
Other invested assets:
Equity method investments:
Sound Point	413		429
Alternative investments (3)	462		394
Other	7		6
Total (4)	$	8,826	$	9,115

(1) 9.4% and 9.2% of fixed-maturity securities, available for sale, were rated BIG or not rated as of June 30, 2024 and December 31, 2023, respectively. BIG rated securities consisted primarily of Loss Mitigation Securities.

(3) Excludes certain investments in funds that are consolidated and accounted for as CIVs. See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

(4) The aggregate carrying value of the Company’s investments in Sound Point and Sound Point managed funds was $641 million and $631 million as of June 30, 2024 and December 31, 2023, respectively.

The Company’s alternative investment commitments as of June 30, 2024 include $734 million in unfunded commitments, and funded investments with a fair value of $810 million, for a total of $1.5 billion, including a $1 billion commitment to invest in Sound Point managed alternative investments. Capital allocated to alternative investments was committed to several funds pursuing various strategies, including CLOs, middle market senior lending, asset-based/specialty finance and private healthcare investing. See Note 1, Business and Basis of Presentation, for a description of the Sound Point Transaction. As of June 30, 2024, three funds in which the Company invests are accounted for as CIVs. See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.


Security Type	Percent of Total (1)		Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(dollars in millions)
Obligations of state and political subdivisions	35	%	$	2,239	$	(14)	$	25	$	(105)	$	2,145
U.S. government and agencies	1		77		—		1		(6)		72
Corporate securities (2)	37		2,358		(6)		8		(214)		2,146
Mortgage-backed securities (3):
RMBS	9		565		(21)		2		(69)		477
Commercial mortgage-backed securities (CMBS)	3		204		—		—		(6)		198
Asset-backed securities:
CLOs	6		412		—		1		(2)		411
Other	8		538		(28)		1		(24)		487
Non-U.S. government securities	1		85		—		—		(15)		70
Total available-for-sale fixed-maturity securities	100	%	$	6,478	$	(69)	$	38	$	(441)	$	6,006


Security Type	Percent of Total (1)		Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(dollars in millions)
Obligations of state and political subdivisions	41	%	$	2,733	$	(13)	$	33	$	(92)	$	2,661
U.S. government and agencies	1		65		—		1		(6)		60
Corporate securities (2)	34		2,327		(6)		17		(197)		2,141
Mortgage-backed securities (3):
RMBS	6		428		(21)		3		(68)		342
CMBS	2		157		—		—		(6)		151
Asset-backed securities:
CLOs	7		456		—		1		(7)		450
Other	7		465		(37)		—		(26)		402
Non-U.S. government securities	2		115		—		—		(15)		100
Total available-for-sale fixed-maturity securities	100	%	$	6,746	$	(77)	$	55	$	(417)	$	6,307

(3)U.S. government-agency obligations were approximately 61% and 42% of mortgage-backed securities as of June 30, 2024 and December 31, 2023, respectively, based on fair value.


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(dollars in millions)
Obligations of state and political subdivisions	$	572	$	(4)	$	1,231	$	(100)	$	1,803	$	(104)
U.S. government and agencies	28		—		33		(6)		61		(6)
Corporate securities	332		(3)		1,316		(170)		1,648		(173)
Mortgage-backed securities:
RMBS	147		(1)		141		(12)		288		(13)
CMBS	28		—		116		(6)		144		(6)
Asset-backed securities:
CLOs	32		—		178		(1)		210		(1)
Other	66		(1)		23		(1)		89		(2)
Non-U.S. government securities	—		—		66		(15)		66		(15)
Total	$	1,205	$	(9)	$	3,104	$	(311)	$	4,309	$	(320)
Number of securities (1)			395				1,291				1,668


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(dollars in millions)
Obligations of state and political subdivisions	$	641	$	(4)	$	931	$	(87)	$	1,572	$	(91)
U.S. government and agencies	—		—		33		(6)		33		(6)
Corporate securities	72		(1)		1,426		(152)		1,498		(153)
Mortgage-backed securities:
RMBS	27		(1)		124		(8)		151		(9)
CMBS	3		—		148		(6)		151		(6)
Asset-backed securities:
CLOs	22		(1)		379		(6)		401		(7)
Other	1		—		26		(1)		27		(1)
Non-U.S. government securities	—		—		95		(15)		95		(15)
Total	$	766	$	(7)	$	3,162	$	(281)	$	3,928	$	(288)
Number of securities (1)			274				1,266				1,525

(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.

The Company considered the credit quality, cash flows, interest rate movements, ability to hold a security to recovery and intent to sell a security in determining whether a security had a credit loss. The Company has determined that the unrealized losses recorded as of June 30, 2024 and December 31, 2023 were primarily related to higher interest rates rather than credit quality. As of June 30, 2024, the Company did not intend to and was not required to sell investments in an unrealized loss position prior to expected recovery in value. As of June 30, 2024, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 478 securities had unrealized losses in excess of 10% of their carrying value,

whereas as of December 31, 2023, 409 securities had unrealized losses in excess of 10% of their carrying value. The total unrealized loss for these securities was $234 million as of June 30, 2024 and $200 million as of December 31, 2023.

The amortized cost and estimated fair value of available-for-sale fixed-maturity securities by contractual maturity as of June 30, 2024 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.


	Amortized Cost		Estimated Fair Value
	(in millions)
Due within one year	$	248	$	243
Due after one year through five years	1,347		1,281
Due after five years through 10 years	1,656		1,573
Due after 10 years	2,458		2,234
Mortgage-backed securities:
RMBS	565		477
CMBS	204		198
Total	$	6,478	$	6,006

Based on fair value, fixed-maturity securities, short-term investments and cash that are either held in trust for the benefit of third-party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements or otherwise pledged or restricted, totaled $74 million as of June 30, 2024 and $234 million as of December 31, 2023. The investment portfolio also contains securities that are held in trust by certain AGL subsidiaries or are otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements with a fair value of $1,152 million and $1,154 million as of June 30, 2024 and December 31, 2023, respectively.


	Second Quarter				Six Months
	2024		2023		2024		2023
	(in millions)
Investment income:
Fixed-maturity securities, available-for-sale:
Externally managed	$	51	$	53	$	102	$	105
Loss Mitigation Securities	7		12		14		22
Puerto Rico, New Recovery Bonds	—		1		—		4
Other	2		4		6		7
Short-term investments	22		18		45		32
Other invested assets	—		2		—		2
Investment income	82		90		167		172
Investment expenses	(1)		(1)		(2)		(2)
Net investment income	$	81	$	89	$	165	$	170

Fair value gains (losses) on trading securities (1)	$	17	$	40	$	43	$	38

Equity in earnings (losses) of investees:
Sound Point (2)	$	(3)	$	—	$	1	$	—
Funds (3)	5		—		19		—
Other	3		5		9		7
Equity in earnings (losses) of investees	$	5	$	5	$	29	$	7

(1) Fair value gains on trading securities pertaining to securities still held as of June 30, 2024 were $14 million for second quarter 2024 and $31 million for six months 2024, respectively. Fair value gains on trading securities pertaining to securities still held as of June 30, 2023 were $40 million for second quarter 2023 and $38 million for six months 2023, respectively.

(2) Beginning in the fourth quarter of 2023, equity in earnings (losses) includes the Company’s share of the earnings of Sound Point, which is reported on a one-quarter lag.

The table below presents the components of net realized investment gains (losses). Realized gains and losses on sales of investments are determined using the specific identification method.


	Second Quarter				Six Months
	2024		2023		2024		2023
	(in millions)
Gross realized gains on sales of available-for-sale securities (1)	$	1	$	7	$	2	$	19
Gross realized losses on sales of available-for-sale securities	(4)		(6)		(7)		(15)
Net foreign currency gains (losses)	(2)		—		(2)		—
Change in the allowance for credit losses and intent to sell (2)	(2)		(10)		8		(15)
Other net realized gains (losses)	1		—		1		—
Net realized investment gains (losses)	$	(6)	$	(9)	$	2	$	(11)

The proceeds from sales of fixed-maturity securities classified as available-for-sale were $129 million in second quarter 2024, $239 million in second quarter 2023, $488 million in six months 2024 and $694 million in six months 2023.


	Second Quarter				Six Months
	2024		2023		2024		2023
	(in millions)
Balance, beginning of period	$	67	$	69	$	77	$	65
Additions (reductions) for securities for which credit losses were previously recognized	2		10		(8)		14
Balance, end of period	$	69	$	79	$	69	$	79