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Investments (Tables)
 3 Months Ended
Mar. 31, 2016
Investments [Abstract]  
Schedule for fixed income securities at amortized cost, gross unrealized gains and losses and fair value
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows:
($ in millions)
Amortized
 
Gross unrealized
 
Fair
 
cost
 
Gains
 
Losses
 
value
March 31, 2016
 

 
 

 
 

 
 

U.S. government and agencies
$
856

 
$
68

 
$
—

 
$
924

Municipal
2,138

 
342

 
(9
)
 
2,471

Corporate
17,581

 
1,091

 
(261
)
 
18,411

Foreign government
338

 
41

 
—

 
379

Asset-backed securities (“ABS”)
1,432

 
5

 
(26
)
 
1,411

Residential mortgage-backed securities (“RMBS”)
379

 
41

 
(5
)
 
415

Commercial mortgage-backed securities (“CMBS”)
398

 
26

 
(7
)
 
417

Redeemable preferred stock
13

 
2

 
—

 
15

Total fixed income securities
$
23,135

 
$
1,616

 
$
(308
)
 
$
24,443

 
 
 
 
 
 
 
 
December 31, 2015
 

 
 

 
 

 
 

U.S. government and agencies
$
920

 
$
57

 
$
—

 
$
977

Municipal
2,162

 
292

 
(12
)
 
2,442

Corporate
18,069

 
849

 
(414
)
 
18,504

Foreign government
348

 
36

 
—

 
384

ABS
1,443

 
5

 
(28
)
 
1,420

RMBS
406

 
49

 
(4
)
 
451

CMBS
409

 
31

 
(4
)
 
436

Redeemable preferred stock
13

 
2

 
—

 
15

Total fixed income securities
$
23,770

 
$
1,321

 
$
(462
)
 
$
24,629
Schedule for fixed income securities based on contractual maturities
The scheduled maturities for fixed income securities are as follows as of March 31, 2016:
($ in millions)
Amortized
cost
 
Fair
value
Due in one year or less
$
977

 
$
984

Due after one year through five years
7,487

 
7,872

Due after five years through ten years
7,710

 
8,016

Due after ten years
4,752

 
5,328

 
20,926

 
22,200

ABS, RMBS and CMBS
2,209

 
2,243

Total
$
23,135

 
$
24,443
Schedule of net investment income
Net investment income is as follows:
($ in millions)
Three months ended March 31,
 
2016
 
2015
Fixed income securities
$
270

 
$
334

Mortgage loans
47

 
49

Equity securities
7

 
5

Limited partnership interests
63

 
72

Short-term investments
2

 
—

Policy loans
8

 
9

Other
21

 
18

Investment income, before expense
418

 
487

Investment expense
(18
)
 
(16
)
Net investment income
$
400

 
$
471
Schedule of realized capital gains and losses by asset type
Realized capital gains and losses by asset type are as follows:
($ in millions)
Three months ended March 31,
 
2016
 
2015
Fixed income securities
$
(23
)
 
$
68

Equity securities
(30
)
 
32

Limited partnership interests
13

 
4

Derivatives
(5
)
 
7

Other
(1
)
 
—

Realized capital gains and losses
$
(46
)
 
$
111
Schedule of realized capital gains and losses by transaction type
Realized capital gains and losses by transaction type are as follows:
($ in millions)
Three months ended March 31,
 
2016
 
2015
Impairment write-downs
$
(24
)
 
$
(7
)
Change in intent write-downs
(3
)
 
(3
)
Net other-than-temporary impairment losses recognized in earnings
(27
)
 
(10
)
Sales and other
(14
)
 
117

Valuation and settlements of derivative instruments
(5
)
 
4

Realized capital gains and losses
$
(46
)
 
$
111
Schedule of other-than-temporary impairment losses by asset type
Other-than-temporary impairment losses by asset type are as follows:
($ in millions)
Three months ended March 31, 2016
 
Three months ended March 31, 2015
 
Gross
 
Included
in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Corporate
$
(11
)
 
$
6

 
$
(5
)
 
$
(3
)
 
$
—

 
$
(3
)
ABS
(3
)
 
—

 
(3
)
 
—

 
—

 
—

CMBS
(4
)
 
2

 
(2
)
 
—

 
—

 
—

Total fixed income securities
(18
)
 
8

 
(10
)
 
(3
)
 
—

 
(3
)
Equity securities
(25
)
 
—

 
(25
)
 
(5
)
 
—

 
(5
)
Limited partnership interests
9

 
—

 
9

 
(2
)
 
—

 
(2
)
Other
(1
)
 
—

 
(1
)
 
—

 
—

 
—

Other-than-temporary impairment losses
$
(35
)
 
$
8

 
$
(27
)
 
$
(10
)
 
$
—

 
$
(10
)
Schedule of other-than-temporary impairment losses on fixed income securities included in accumulated other comprehensive income
The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table. The amounts exclude $120 million and $138 million as of March 31, 2016 and December 31, 2015, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
($ in millions)
March 31, 2016
 
December 31, 2015
Municipal
$
(5
)
 
$
(5
)
Corporate
(8
)
 
(2
)
ABS
(12
)
 
(12
)
RMBS
(48
)
 
(49
)
CMBS
(8
)
 
(6
)
Total
$
(81
)
 
$
(74
)
Schedule of rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held
Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of the end of the period are as follows:
($ in millions)
Three months ended March 31,
 
2016
 
2015
Beginning balance
$
(200
)
 
$
(209
)
Additional credit loss for securities previously other-than-temporarily impaired
(4
)
 
(1
)
Additional credit loss for securities not previously other-than-temporarily impaired
(6
)
 
(2
)
Reduction in credit loss for securities disposed or collected
35

 
4

Change in credit loss due to accretion of increase in cash flows
—

 
1

Ending balance
$
(175
)
 
$
(207
)
Schedule of unrealized net capital gains and losses included in accumulated other comprehensive income
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows:
($ in millions)
Fair value
 
Gross unrealized
 
Unrealized net gains (losses)
March 31, 2016
 
Gains
 
Losses
 
Fixed income securities
$
24,443

 
$
1,616

 
$
(308
)
 
$
1,308

Equity securities
1,344

 
78

 
(64
)
 
14

Short-term investments
1,545

 
—

 
—

 
—

Derivative instruments (1)
7

 
7

 
—

 
7

Equity method (“EMA”) limited partnerships (2)
 

 
 

 
 

 
(3
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
1,326

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves (3)
 

 
 

 
 

 
—

DAC and DSI (4)
 

 
 

 
 

 
(135
)
Amounts recognized
 

 
 

 
 

 
(135
)
Deferred income taxes
 

 
 

 
 

 
(422
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
769

_______________
 
(1) 
Included in the fair value of derivative instruments are $3 million classified as assets and $(4) million classified as liabilities.
(2) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable.
(3) 
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment, if any, primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.
(4) 
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
($ in millions)
Fair value
 
Gross unrealized
 
Unrealized net gains (losses)
December 31, 2015
 
Gains
 
Losses
 
Fixed income securities
$
24,629

 
$
1,321

 
$
(462
)
 
$
859

Equity securities
1,542

 
76

 
(60
)
 
16

Short-term investments
816

 
—

 
—

 
—

Derivative instruments (1)
10

 
10

 
—

 
10

EMA limited partnerships
 

 
 

 
 

 
(2
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
883

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves
 

 
 

 
 

 
—

DAC and DSI
 

 
 

 
 

 
(62
)
Amounts recognized
 

 
 

 
 

 
(62
)
Deferred income taxes
 

 
 

 
 

 
(293
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
528

_______________
 
(1) 
Included in the fair value of derivative instruments are $6 million classified as assets and $(4) million classified as liabilities.
Schedule of change in unrealized net capital gains and losses
The change in unrealized net capital gains and losses for the three months ended March 31, 2016 is as follows:
($ in millions)
 

Fixed income securities
$
449

Equity securities
(2
)
Derivative instruments
(3
)
EMA limited partnerships
(1
)
Total
443

Amounts recognized for:
 

Insurance reserves
—

DAC and DSI
(73
)
Amounts recognized
(73
)
Deferred income taxes
(129
)
Increase in unrealized net capital gains and losses, after-tax
$
241
Summary of gross unrealized losses and fair value of fixed income and equity securities by length of time
The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position.
 
($ in millions)
Less than 12 months
 
12 months or more
 
Total
unrealized
losses
 
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
 
 
March 31, 2016
 

 
 

 
 

 
 

 
 

 
 

 
 

 
Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
U.S. government and agencies
2

 
$
230

 
$
—

 
—

 
$
—

 
$
—

 
$
—

 
Municipal
8

 
30

 
(1
)
 
5

 
25

 
(8
)
 
(9
)
 
Corporate
424

 
2,132

 
(126
)
 
88

 
595

 
(135
)
 
(261
)
 
ABS
53

 
502

 
(7
)
 
18

 
152

 
(19
)
 
(26
)
 
RMBS
42

 
27

 
(1
)
 
41

 
49

 
(4
)
 
(5
)
 
CMBS
13

 
120

 
(5
)
 
1

 
2

 
(2
)
 
(7
)
 
Total fixed income securities
542

 
3,041

 
(140
)
 
153

 
823

 
(168
)
 
(308
)
 
Equity securities
260

 
456

 
(51
)
 
52

 
72

 
(13
)
 
(64
)
 
Total fixed income and equity securities
802

 
$
3,497

 
$
(191
)
 
205

 
$
895

 
$
(181
)
 
$
(372
)
 
Investment grade fixed income securities
314

 
$
2,049

 
$
(61
)
 
78

 
$
489

 
$
(84
)
 
$
(145
)
 
Below investment grade fixed income securities
228

 
992

 
(79
)
 
75

 
334

 
(84
)
 
(163
)
 
Total fixed income securities
542

 
$
3,041

 
$
(140
)
 
153

 
$
823

 
$
(168
)
 
$
(308
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 

 
 

 
 

 
 

 
 

 
 

 
 

 
Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
U.S. government and agencies
6

 
$
91

 
$
—

 
—

 
$
—

 
$
—

 
$
—

 
Municipal
15

 
125

 
(3
)
 
5

 
25

 
(9
)
 
(12
)
 
Corporate
953

 
5,315

 
(281
)
 
78

 
568

 
(133
)
 
(414
)
 
Foreign government
1

 
2

 
—

 
—

 
—

 
—

 
—

 
ABS
81

 
1,152

 
(11
)
 
16

 
154

 
(17
)
 
(28
)
 
RMBS
38

 
7

 
—

 
40

 
53

 
(4
)
 
(4
)
 
CMBS
12

 
75

 
(2
)
 
1

 
2

 
(2
)
 
(4
)
 
Total fixed income securities
1,106

 
6,767

 
(297
)
 
140

 
802

 
(165
)
 
(462
)
 
Equity securities
279

 
543

 
(49
)
 
32

 
56

 
(11
)
 
(60
)
 
Total fixed income and equity securities
1,385

 
$
7,310

 
$
(346
)
 
172

 
$
858

 
$
(176
)
 
$
(522
)
 
Investment grade fixed income securities
780

 
$
5,429

 
$
(175
)
 
82

 
$
503

 
$
(90
)
 
$
(265
)
 
Below investment grade fixed income securities
326

 
1,338

 
(122
)
 
58

 
299

 
(75
)
 
(197
)
 
Total fixed income securities
1,106

 
$
6,767

 
$
(297
)
 
140

 
$
802

 
$
(165
)
 
$
(462
)
Summary of carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution
The following table reflects the carrying value of non-impaired fixed rate mortgage loans summarized by debt service coverage ratio distribution.
($ in millions)
March 31, 2016
 
December 31, 2015
Below 1.0
$
54

 
$
55

1.0 - 1.25
320

 
357

1.26 - 1.50
1,123

 
1,120

Above 1.50
2,246

 
2,243

Total non-impaired mortgage loans
$
3,743

 
$
3,775
Schedule of net carrying value of impaired mortgage loans
The net carrying value of impaired mortgage loans is as follows:
($ in millions)
March 31, 2016
 
December 31, 2015
Impaired mortgage loans with a valuation allowance
$
6

 
$
6

Impaired mortgage loans without a valuation allowance
—

 
—

Total impaired mortgage loans
$
6

 
$
6

Valuation allowance on impaired mortgage loans
$
3

 
$
3
Schedule of rollforward of the valuation allowance on impaired mortgage loans
The rollforward of the valuation allowance on impaired mortgage loans is as follows:
($ in millions)
Three months ended March 31,
 
2016
 
2015
Beginning balance
$
3

 
$
8

Net decrease in valuation allowance
—

 
—

Charge offs
—

 
—

Ending balance
$
3

 
$
8