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Investments (Tables)
 12 Months Ended
Dec. 31, 2017
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 cost
 
Gross unrealized
 
Fair value
 
 
Gains
 
Losses
 
December 31, 2017
 

 
 

 
 

 
 

U.S. government and agencies
$
768

 
$
38

 
$
(2
)
 
$
804

Municipal
2,001

 
275

 
(3
)
 
2,273

Corporate
18,262

 
960

 
(86
)
 
19,136

Foreign government
279

 
20

 
—

 
299

ABS
383

 
6

 
(4
)
 
385

RMBS
205

 
49

 
(1
)
 
253

CMBS
93

 
6

 
(2
)
 
97

Redeemable preferred stock
13

 
1

 
—

 
14

Total fixed income securities
$
22,004

 
$
1,355

 
$
(98
)
 
$
23,261

 
 
 
 
 
 
 
 
December 31, 2016
 

 
 

 
 

 
 

U.S. government and agencies
$
968

 
$
48

 
$
(2
)
 
$
1,014

Municipal
2,017

 
264

 
(7
)
 
2,274

Corporate
18,945

 
905

 
(169
)
 
19,681

Foreign government
304

 
28

 
—

 
332

ABS
337

 
4

 
(10
)
 
331

RMBS
294

 
42

 
(3
)
 
333

CMBS
233

 
17

 
(9
)
 
241

Redeemable preferred stock
14

 
2

 
—

 
16

Total fixed income securities
$
23,112

 
$
1,310

 
$
(200
)
 
$
24,222
Schedule for fixed income securities based on contractual maturities
The scheduled maturities for fixed income securities are as follows as of December 31, 2017:
($ in millions)
Amortized
cost
 
Fair
value
Due in one year or less
$
1,392

 
$
1,399

Due after one year through five years
8,521

 
8,845

Due after five years through ten years
7,292

 
7,524

Due after ten years
4,118

 
4,758

 
21,323

 
22,526

ABS, RMBS and CMBS
681

 
735

Total
$
22,004

 
$
23,261
Schedule of net investment income
Net investment income for the years ended December 31 is as follows:
($ in millions)
2017
 
2016
 
2015
Fixed income securities
$
1,058

 
$
1,078

 
$
1,246

Mortgage loans
182

 
193

 
203

Equity securities
48

 
40

 
28

Limited partnership interests
457

 
292

 
287

Short-term investments
9

 
5

 
3

Policy loans
31

 
32

 
34

Other
79

 
90

 
75

Investment income, before expense
1,864

 
1,730

 
1,876

Investment expense
(87
)
 
(71
)
 
(57
)
Net investment income
$
1,777

 
$
1,659

 
$
1,819
Schedule of realized capital gains and losses by asset type
Realized capital gains and losses by asset type for the years ended December 31 are as follows:
($ in millions)
2017
 
2016
 
2015
Fixed income securities
$
(6
)
 
$
(59
)
 
$
309

Mortgage loans
1

 
—

 
6

Equity securities
21

 
(22
)
 
(23
)
Limited partnership interests
46

 
(5
)
 
(32
)
Derivatives
(16
)
 
8

 
13

Other
3

 
1

 
(8
)
Realized capital gains and losses
$
49

 
$
(77
)
 
$
265
Schedule of realized capital gains and losses by transaction type
Realized capital gains and losses by transaction type for the years ended December 31 are as follows:
($ in millions)
2017
 
2016
 
2015
Impairment write-downs
$
(41
)
 
$
(101
)
 
$
(63
)
Change in intent write-downs
(4
)
 
(12
)
 
(65
)
Net other-than-temporary impairment losses recognized in earnings
(45
)
 
(113
)
 
(128
)
Sales and other
110

 
31

 
383

Valuation and settlements of derivative instruments
(16
)
 
5

 
10

Realized capital gains and losses
$
49

 
$
(77
)
 
$
265
Schedule of other-than-temporary impairment losses by asset type
Other-than-temporary impairment losses by asset type for the years ended December 31 are as follows:
($ in millions)
2017
 
2016
 
2015
 
Gross
 
Included
in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Municipal
$
(1
)
 
$
—

 
$
(1
)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Corporate
(7
)
 
3

 
(4
)
 
(23
)
 
6

 
(17
)
 
(25
)
 
6

 
(19
)
ABS
(1
)
 
(1
)
 
(2
)
 
(4
)
 
—

 
(4
)
 
(16
)
 
10

 
(6
)
RMBS
—

 
(2
)
 
(2
)
 
—

 
(1
)
 
(1
)
 
—

 
—

 
—

CMBS
(9
)
 
1

 
(8
)
 
(15
)
 
2

 
(13
)
 
(1
)
 
—

 
(1
)
Total fixed income securities
(18
)
 
1

 
(17
)
 
(42
)
 
7

 
(35
)
 
(42
)
 
16

 
(26
)
Mortgage loans
(1
)
 
—

 
(1
)
 
—

 
—

 
—

 
4

 
—

 
4

Equity securities
(16
)
 
—

 
(16
)
 
(59
)
 
—

 
(59
)
 
(83
)
 
—

 
(83
)
Limited partnership interests
(9
)
 
—

 
(9
)
 
(15
)
 
—

 
(15
)
 
(17
)
 
—

 
(17
)
Other
(2
)
 
—

 
(2
)
 
(4
)
 
—

 
(4
)
 
(6
)
 
—

 
(6
)
Other-than-temporary impairment losses
$
(46
)
 
$
1

 
$
(45
)
 
$
(120
)
 
$
7

 
$
(113
)
 
$
(144
)
 
$
16

 
$
(128
)
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 AOCI at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table. The amount excludes $113 million and $131 million as of December 31, 2017 and 2016, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
($ in millions)
December 31, 2017
 
December 31, 2016
Municipal
$
(4
)
 
$
(5
)
Corporate
—

 
(5
)
ABS
(8
)
 
(11
)
RMBS
(37
)
 
(43
)
CMBS
(4
)
 
(7
)
Total
$
(53
)
 
$
(71
)
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 December 31 are as follows:
($ in millions)
2017
 
2016
 
2015
Beginning balance
$
(176
)
 
$
(200
)
 
$
(209
)
Additional credit loss for securities previously other-than-temporarily impaired
(9
)
 
(16
)
 
(8
)
Additional credit loss for securities not previously other-than-temporarily impaired
(8
)
 
(19
)
 
(18
)
Reduction in credit loss for securities disposed or collected
54

 
58

 
33

Change in credit loss due to accretion of increase in cash flows
1

 
1

 
2

Ending balance 
$
(138
)
 
$
(176
)
 
$
(200
)
Schedule of unrealized net capital gains and losses included in accumulated other comprehensive income
Unrealized net capital gains and losses included in AOCI are as follows:
($ in millions)
Fair value
 
Gross unrealized
 
Unrealized net gains (losses)
December 31, 2017
 
Gains
 
Losses
 
Fixed income securities
$
23,261

 
$
1,355

 
$
(98
)
 
$
1,257

Equity securities (1)
1,614

 
311

 
(3
)
 
308

Short-term investments 
725

 
—

 
—

 
—

Derivative instruments (2)
2

 
2

 
—

 
2

EMA limited partnerships (3)
 

 
 

 
 

 
1

Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
1,568

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves (4)
 

 
 

 
 

 
(315
)
DAC and DSI (5)
 

 
 

 
 

 
(189
)
Amounts recognized
 

 
 

 
 

 
(504
)
Deferred income taxes (6)
 

 
 

 
 

 
(229
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
835

____________
(1) 
Beginning January 1, 2018, due to the adoption of the new accounting standard for the recognition and measurement of financial assets and liabilities, equity securities will be measured at fair value with changes in fair value recognized in net income. The existing unrealized net capital gains and losses, after-tax, will be reclassified to retained income through a cumulative effect adjustment. See Note 2 for additional details on the new accounting standard.
(2) 
Included in the fair value of derivative instruments is $2 million classified as liabilities.
(3) 
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.
(4) 
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. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuities).
(5) 
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.
(6) 
Unrealized net capital gains and losses were reduced by deferred income taxes at the newly enacted 21% U.S. corporate tax rate.

($ in millions)
Fair value
 
Gross unrealized
 
Unrealized net gains (losses)
December 31, 2016
 
Gains
 
Losses
 
Fixed income securities
$
24,222

 
$
1,310

 
$
(200
)
 
$
1,110

Equity securities
1,511

 
117

 
(35
)
 
82

Short-term investments
566

 
—

 
—

 
—

Derivative instruments (1)
5

 
5

 
—

 
5

EMA limited partnerships
 

 
 

 
 

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

 
 

 
 

 
1,195

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves
 

 
 

 
 

 
—

DAC and DSI
 

 
 

 
 

 
(140
)
Amounts recognized
 

 
 

 
 

 
(140
)
Deferred income taxes
 

 
 

 
 

 
(374
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
681

____________
(1) 
Included in the fair value of derivative instruments is $5 million classified as assets
Schedule of change in unrealized net capital gains and losses
The change in unrealized net capital gains and losses for the years ended December 31 is as follows:
($ in millions)
2017
 
2016
 
2015
Fixed income securities
$
147

 
$
251

 
$
(1,436
)
Equity securities
226

 
66

 
(27
)
Derivative instruments
(3
)
 
(5
)
 
8

EMA limited partnerships
3

 
—

 
—

Total
373

 
312

 
(1,455
)
Amounts recognized for:
 

 
 

 
 

Insurance reserves
(315
)
 
—

 
28

DAC and DSI
(49
)
 
(78
)
 
114

Amounts recognized
(364
)
 
(78
)
 
142

Deferred income taxes
145

 
(81
)
 
459

Increase (decrease) in unrealized net capital gains and losses, after-tax
$
154

 
$
153

 
$
(854
)
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
 
 
 
 
 
 
 
 
December 31, 2017
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and agencies
17

 
$
443

 
$
(2
)
 
2

 
$
25

 
$
—

 
$
(2
)
Municipal
4

 
14

 
—

 
1

 
11

 
(3
)
 
(3
)
Corporate
456

 
2,899

 
(28
)
 
144

 
1,324

 
(58
)
 
(86
)
ABS
33

 
170

 
(1
)
 
8

 
24

 
(3
)
 
(4
)
RMBS
70

 
3

 
—

 
56

 
18

 
(1
)
 
(1
)
CMBS
2

 
1

 
—

 
6

 
23

 
(2
)
 
(2
)
Redeemable preferred stock
1

 
—

 
—

 
—

 
—

 
—

 
—

Total fixed income securities
583

 
3,530

 
(31
)
 
217

 
1,425

 
(67
)
 
(98
)
Equity securities
87

 
66

 
(3
)
 
1

 
—

 
—

 
(3
)
Total fixed income and equity securities
670

 
$
3,596

 
$
(34
)
 
218

 
$
1,425

 
$
(67
)
 
$
(101
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade fixed income securities
472

 
$
3,192

 
$
(22
)
 
181

 
$
1,320

 
$
(52
)
 
$
(74
)
Below investment grade fixed income securities
111

 
338

 
(9
)
 
36

 
105

 
(15
)
 
(24
)
Total fixed income securities
583

 
$
3,530

 
$
(31
)
 
217

 
$
1,425

 
$
(67
)
 
$
(98
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and agencies
6

 
$
104

 
$
(2
)
 
—

 
$
—

 
$
—

 
$
(2
)
Municipal
8

 
44

 
(1
)
 
3

 
18

 
(6
)
 
(7
)
Corporate
629

 
4,767

 
(118
)
 
56

 
414

 
(51
)
 
(169
)
ABS
18

 
95

 
(1
)
 
13

 
76

 
(9
)
 
(10
)
RMBS
47

 
3

 
—

 
50

 
38

 
(3
)
 
(3
)
CMBS
12

 
57

 
(4
)
 
4

 
15

 
(5
)
 
(9
)
Redeemable preferred stock
1

 
—

 
—

 
—

 
—

 
—

 
—

Total fixed income securities
721

 
5,070

 
(126
)
 
126

 
561

 
(74
)
 
(200
)
Equity securities
167

 
200

 
(19
)
 
62

 
80

 
(16
)
 
(35
)
Total fixed income and equity securities
888

 
$
5,270

 
$
(145
)
 
188

 
$
641

 
$
(90
)
 
$
(235
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade fixed income securities
559

 
$
4,348

 
$
(100
)
 
75

 
$
350

 
$
(47
)
 
$
(147
)
Below investment grade fixed income securities
162

 
722

 
(26
)
 
51

 
211

 
(27
)
 
(53
)
Total fixed income securities
721

 
$
5,070

 
$
(126
)
 
126

 
$
561

 
$
(74
)
 
$
(200
)
Principal geographic distribution of commercial real estate represented in the mortgage portfolio
The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31.
(% of mortgage loan portfolio carrying value)
2017
 
2016
California
19.6
%
 
19.3
%
Texas
13.0

 
11.0

Illinois
8.2

 
7.4

New Jersey
8.0

 
8.5

Florida
6.7

 
6.0
Types of property collateralizing the mortgage loans
The types of properties collateralizing the mortgage loans as of December 31 are as follows:
(% of mortgage loan portfolio carrying value)
2017
 
2016
Apartment complex
29.2
%
 
26.4
%
Office buildings
23.8

 
24.3

Retail
19.2

 
21.4

Warehouse
15.5

 
16.5

Other
12.3

 
11.4

Total
100.0
%
 
100.0
%
Contractual maturities of the commercial mortgage loan portfolio
The contractual maturities of the mortgage loan portfolio as of December 31, 2017 are as follows:
($ in millions)
Number
of loans
 
Carrying
value
 
Percent
2018
12

 
$
94

 
2.4
%
2019
7

 
204

 
5.3

2020
14

 
158

 
4.1

2021
41

 
485

 
12.5

Thereafter
186

 
2,935

 
75.7

Total
260

 
$
3,876

 
100.0
%
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 mortgage loans summarized by debt service coverage ratio distribution as of December 31.
($ in millions)
2017
 
2016
Debt service coverage ratio distribution
Fixed rate mortgage loans
 
Variable rate mortgage loans
 
Total
 
Fixed rate mortgage loans
 
Variable rate mortgage loans
 
Total
Below 1.0
$
3

 
$
—

 
$
3

 
$
52

 
$
—

 
$
52

1.0 - 1.25
326

 
—

 
326

 
321

 
—

 
321

1.26 - 1.50
1,033

 
15

 
1,048

 
1,196

 
—

 
1,196

Above 1.50
2,482

 
13

 
2,495

 
2,364

 
—

 
2,364

Total non-impaired mortgage loans
$
3,844

 
$
28

 
$
3,872

 
$
3,933

 
$
—

 
$
3,933
Schedule of net carrying value of impaired mortgage loans
The net carrying value of impaired mortgage loans as of December 31 is as follows:
($ in millions)
2017
 
2016
Impaired mortgage loans with a valuation allowance
$
4

 
$
5

Impaired mortgage loans without a valuation allowance
—

 
—

Total impaired mortgage loans
$
4

 
$
5

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 for the years ended December 31 is as follows:
($ in millions)
2017
 
2016
 
2015
Beginning balance
$
3

 
$
3

 
$
8

Net increase (decrease) in valuation allowance
1

 
—

 
(4
)
Charge offs
(1
)
 
—

 
(1
)
Ending balance
$
3

 
$
3

 
$
3
Principal geographic distribution of municipal bond
The following table shows the principal geographic distribution of municipal bond issuers represented in the Company’s portfolio as of December 31. No other state represents more than 5% of the portfolio.
(% of municipal bond portfolio carrying value)
2017
 
2016
Texas
16.9
%
 
16.9
%
California
15.1

 
14.9

Oregon
9.4

 
9.0

New York
5.2

 
5.1

Michigan
5.0

 
5.2

New Jersey
4.8

 
5.4