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) trading securities consisting primarily of 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
	September 30, 2024		December 31, 2023
	(in millions)
Fixed-maturity securities, available-for-sale (1):
Externally managed	$	5,554	$	5,372
Loss Mitigation Securities	468		459
Other	262		476
Fixed-maturity securities, trading (2)	163		318
Short-term investments	1,487		1,661
Other invested assets:
Equity method investments:
Sound Point	417		429
Alternative investments (3)	487		394
Other	8		6
Total (4)	$	8,846	$	9,115

(1) 9.1% and 9.2% of fixed-maturity securities, available-for-sale, were rated BIG or not rated as of September 30, 2024 and December 31, 2023, respectively. BIG rated securities consisted primarily of Loss Mitigation Securities.

(3) Excludes certain investments in funds of $278 million and $305 million as of September 30, 2024 and December 31, 2023, respectively, 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 managed funds, excluding the investment in Sound Point of $417 million and $429 million as of September 30, 2024 and December 31, 2023, respectively, and excluding certain investments in funds that are consolidated and accounted for as CIVs, was $288 million and $202 million as of September 30, 2024 and December 31, 2023, respectively.

The Company’s alternative investment commitments as of September 30, 2024 include $690 million in unfunded commitments and funded investments with a fair value of $848 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 direct 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 September 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.

In addition to the commitments above, the Company has agreed to subscribe for liquidity bonds to be issued by a U.K. regulated utility to which it has insured exposure. At this time, it has committed to provide £80 million in capacity.


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	33	%	$	2,171	$	(14)	$	33	$	(71)	$	2,119
U.S. government and agencies	1		75		—		1		(5)		71
Corporate securities (2)	38		2,503		(6)		43		(136)		2,404
Mortgage-backed securities (3):
RMBS	10		613		(20)		11		(60)		544
Commercial mortgage-backed securities (CMBS)	3		180		—		3		(3)		180
Asset-backed securities:
CLOs	6		384		—		1		(2)		383
Other	8		556		(26)		3		(25)		508
Non-U.S. government securities	1		83		—		1		(9)		75
Total available-for-sale fixed-maturity securities	100	%	$	6,565	$	(66)	$	96	$	(311)	$	6,284


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 67% and 42% of mortgage-backed securities as of September 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	$	177	$	—	$	1,032	$	(71)	$	1,209	$	(71)
U.S. government and agencies	—		—		31		(5)		31		(5)
Corporate securities	68		—		1,117		(107)		1,185		(107)
Mortgage-backed securities:
RMBS	19		—		138		(7)		157		(7)
CMBS	—		—		105		(3)		105		(3)
Asset-backed securities:
CLOs	59		(1)		150		(1)		209		(2)
Other	—		—		19		—		19		—
Non-U.S. government securities	20		—		33		(9)		53		(9)
Total	$	343	$	(1)	$	2,625	$	(203)	$	2,968	$	(204)
Number of securities (1)			103				1,105				1,203


	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 September 30, 2024 and December 31, 2023 were primarily related to higher interest rates rather than credit quality. As of September 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 September 30, 2024, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 317 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 $149 million as of September 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 September 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	$	305	$	307
Due after one year through five years	1,256		1,244
Due after five years through 10 years	1,835		1,801
Due after 10 years	2,376		2,208
Mortgage-backed securities:
RMBS	613		544
CMBS	180		180
Total	$	6,565	$	6,284

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 $77 million as of September 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 $1,176 million and $1,154 million as of September 30, 2024 and December 31, 2023, respectively.


	Third Quarter				Nine Months
	2024		2023		2024		2023
	(in millions)
Investment income:
Fixed-maturity securities, available-for-sale:
Externally managed	$	52	$	51	$	154	$	156
Loss Mitigation Securities	7		24		21		46
Puerto Rico, New Recovery Bonds	—		1		—		5
Other	3		5		9		12
Short-term investments	21		21		66		53
Other invested assets	—		—		—		2
Investment income	83		102		250		274
Investment expenses	(1)		(2)		(3)		(4)
Net investment income	$	82	$	100	$	247	$	270

Fair value gains (losses) on trading securities (1)	$	9	$	4	$	52	$	42

Equity in earnings (losses) of investees:
Sound Point (2)	$	4	$	—	$	5	$	—
Funds (3)	8		12		27		12
Other	6		6		15		13
Equity in earnings (losses) of investees	$	18	$	18	$	47	$	25

(1) Fair value gains on trading securities pertaining to securities still held as of September 30, 2024 were $7 million for third quarter 2024 and $26 million for nine months 2024. Fair value gains on trading securities pertaining to securities still held as of September 30, 2023 were $4 million for third quarter 2023 and $42 million for nine months 2023.

(2) Beginning in the fourth quarter of 2023, equity in earnings (losses) of investees 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.


	Third Quarter				Nine Months
	2024		2023		2024		2023
	(in millions)
Gross realized gains on sales of available-for-sale securities (1)	$	—	$	2	$	2	$	21
Gross realized losses on sales of available-for-sale securities	(4)		(1)		(11)		(16)
Net foreign currency gains (losses)	—		(1)		(2)		(1)
Change in the allowance for credit losses and intent to sell (2)	3		(8)		11		(23)
Other net realized gains (losses)	1		(1)		2		(1)
Net realized investment gains (losses)	$	—	$	(9)	$	2	$	(20)

The proceeds from sales of fixed-maturity securities classified as available-for-sale were $87 million in third quarter 2024, $73 million in third quarter 2023, $575 million in nine months 2024 and $767 million in nine months 2023.


	Third Quarter				Nine Months
	2024		2023		2024		2023
	(in millions)
Balance, beginning of period	$	69	$	79	$	77	$	65
Additions for securities for which credit losses were not previously recognized	2		—		2		—
Additions (reductions) for securities for which credit losses were previously recognized	(5)		7		(13)		21
Balance, end of period	$	66	$	86	$	66	$	86