Accumulated Other Comprehensive Income (Loss) ("AOCI")

12 Months Ended

Dec. 31, 2022

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss) ("AOCI")

NOTE 20. Accumulated Other Comprehensive Income (Loss) (“AOCI”):

The following table presents a summary of the changes in each component of AOCI for the years ended December 31, 2022, 2021 and 2020:

	First American Financial Corporation
(in millions)	Unrealized gains (losses) on debt securities			Foreign currency translation adjustment			Pension benefit adjustment			Accumulated other comprehensive income (loss)
Balance at December 31, 2019	$	84		$	(52	)	$	(73	)	$	(41	)
Change in unrealized gains (losses) on debt securities		116			—			—			116
Change in unrealized gains (losses) on debt securities for    which credit-related portion was recognized in earnings		1			—			—			1
Change in foreign currency translation adjustment		—			14			—			14
Net actuarial loss		—			—			(31	)		(31	)
Amortization of net actuarial loss		—			—			5			5
Amortization of prior service credit		—			—			(3	)		(3	)
Tax effect		(29	)		—			8			(21	)
Balance at December 31, 2020		172			(38	)		(94	)		40
Change in unrealized gains (losses) on debt securities		(189	)		—			—			(189	)
Change in foreign currency translation adjustment		—			(2	)		—			(2	)
Net actuarial gain		—			—			11			11
Amortization of net actuarial loss		—			—			7			7
Amortization of prior service credit		—			—			(1	)		(1	)
Tax effect		46			1			(5	)		42
Balance at December 31, 2021		29			(39	)		(82	)		(92	)
Change in unrealized gains (losses) on debt securities		(1,045	)		—			—			(1,045	)
Change in foreign currency translation adjustment		—			(43	)		—			(43	)
Net actuarial gain		—			—			57			57
Amortization of net actuarial loss		—			—			6			6
Tax effect		264			1			(16	)		249
Balance at December 31, 2022	$	(752	)	$	(81	)	$	(35	)	$	(868	)

The following table presents the other comprehensive income (loss) reclassification adjustments for the years ended December 31, 2022, 2021 and 2020:

	Unrealized gains (losses) on debt securities			Foreign currency translation adjustment			Pension benefit adjustment			Total other comprehensive income (loss)
	(in millions)
Year ended December 31, 2022
Pretax change before reclassifications	$	(1,182	)	$	(43	)	$	57		$	(1,168	)
Reclassifications out of AOCI		137			—			6			143
Tax effect		264			1			(16	)		249
Total other comprehensive income (loss), net of tax	$	(781	)	$	(42	)	$	47		$	(776	)
Year ended December 31, 2021
Pretax change before reclassifications	$	(169	)	$	(2	)	$	11		$	(160	)
Reclassifications out of AOCI		(20	)		—			6			(14	)
Tax effect		46			1			(5	)		42
Total other comprehensive income (loss), net of tax	$	(143	)	$	(1	)	$	12		$	(132	)
Year ended December 31, 2020
Pretax change before reclassifications	$	125		$	14		$	(31	)	$	108
Reclassifications out of AOCI		(8	)		—			2			(6	)
Tax effect		(29	)		—			8			(21	)
Total other comprehensive income (loss), net of tax	$	88		$	14		$	(21	)	$	81

The following table presents the effects of the reclassifications out of AOCI on the respective line items in the consolidated statements of income:

	Year ended December 31,
(in millions)	2022			2021			2020			Affected line items
Unrealized gains (losses) on debt securities:
Net realized (losses) gains on sales of debt      securities	$	(137	)	$	20		$	15		Net investment (losses) gains
Credit losses recognized on debt securities		—			—			(7	)	Net investment (losses) gains
Pretax total	$	(137	)	$	20		$	8
Tax effect	$	35		$	(5	)	$	(2	)
Pension benefit adjustment (1):
Amortization of net actuarial loss	$	(6	)	$	(7	)	$	(5	)	Other operating expenses
Amortization of prior service credit		—			1			3		Other operating expenses
Pretax total	$	(6	)	$	(6	)	$	(2	)
Tax effect	$	2		$	2		$	1

(1)Amounts are components of net periodic cost. See Note 16 Employee Benefit Plans for additional details.