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Investments (Tables)
 3 Months Ended
Mar. 31, 2018
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, 2018
 

 
 

 
 

 
 

U.S. government and agencies
$
538

 
$
31

 
$
(1
)
 
$
568

Municipal
2,033

 
234

 
(4
)
 
2,263

Corporate
18,135

 
667

 
(239
)
 
18,563

Foreign government
271

 
15

 
—

 
286

Asset-backed securities (“ABS”)
399

 
6

 
(5
)
 
400

Residential mortgage-backed securities (“RMBS”)
191

 
49

 
(1
)
 
239

Commercial mortgage-backed securities (“CMBS”)
64

 
5

 
(2
)
 
67

Redeemable preferred stock
14

 
1

 
—

 
15

Total fixed income securities
$
21,645

 
$
1,008

 
$
(252
)
 
$
22,401

 
 
 
 
 
 
 
 
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
Schedule for fixed income securities based on contractual maturities
The scheduled maturities for fixed income securities are as follows as of March 31, 2018:
($ in millions)
Amortized cost
 
Fair value
Due in one year or less
$
1,337

 
$
1,338

Due after one year through five years
8,596

 
8,781

Due after five years through ten years
7,068

 
7,089

Due after ten years
3,990

 
4,487

 
20,991

 
21,695

ABS, RMBS and CMBS
654

 
706

Total
$
21,645

 
$
22,401
Schedule of net investment income
Net investment income is as follows:
($ in millions)
Three months ended March 31,
 
2018
 
2017
Fixed income securities
$
251

 
$
268

Mortgage loans
44

 
49

Equity securities
7

 
15

Limited partnership interests (1) (2)
96

 
65

Short-term investments
4

 
1

Policy loans
7

 
8

Other
22

 
19

Investment income, before expense
431

 
425

Investment expense
(24
)
 
(21
)
Net investment income
$
407

 
$
404

_______________
 
(1) 
Due to the adoption of the recognition and measurement accounting standard, limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net investment income.
(2) 
Includes net investment income of $58 million for EMA limited partnership interests and $38 million for limited partnership interests carried at fair value for the three months ended March 31, 2018
Schedule of realized capital gains and losses by asset type
Realized capital gains and losses by asset type are as follows:
($ in millions)
Three months ended March 31,
 
2018
 
2017
Fixed income securities
$
(6
)
 
$
(7
)
Equity securities
(26
)
 
—

Limited partnership interests
3

 
13

Derivatives
(3
)
 
(5
)
Other
—

 
(2
)
Realized capital gains and losses
$
(32
)
 
$
(1
)
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,
 
2018
 
2017
Impairment write-downs (1)
$
(1
)
 
$
(21
)
Change in intent write-downs (1)
—

 
(3
)
Net OTTI losses recognized in earnings
(1
)
 
(24
)
Sales (1)
(5
)
 
28

Valuation of equity investments (1)

(23
)
 
—

Valuation and settlements of derivative instruments
(3
)
 
(5
)
Realized capital gains and losses
$
(32
)
 
$
(1
)
_______________
 
(1) 
Due to the adoption of the recognition and measurement accounting standard, equity securities are reported at fair value with changes in fair value recognized in valuation of equity investments and are no longer included in impairment write-downs, change in intent write-downs and sales.
Realized gain (loss) on investments
Valuation changes included in net income for investments still held as of March 31, 2018 are as follows:
($ in millions)
Three months ended March 31,
 
2018
Equity securities
$
(9
)
Limited partnership interests carried at fair value
38

Total valuation changes
$
29
Schedule of other-than-temporary impairment losses by asset type
OTTI losses by asset type are as follows:
($ in millions)
Three months ended March 31, 2018
 
Three months ended March 31, 2017
 
Gross
 
Included
in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Corporate
$
—

 
$
—

 
$
—

 
$
(7
)
 
$
3

 
$
(4
)
RMBS
—

 
—

 
—

 
—

 
(2
)
 
(2
)
CMBS
—

 
(1
)
 
(1
)
 
(6
)
 
3

 
(3
)
Total fixed income securities
—

 
(1
)
 
(1
)
 
(13
)
 
4

 
(9
)
Equity securities (1)
—

 
—

 
—

 
(10
)
 
—

 
(10
)
Limited partnership interests (1)
—

 
—

 
—

 
(3
)
 
—

 
(3
)
Other
—

 
—

 
—

 
(2
)
 
—

 
(2
)
OTTI losses
$
—

 
$
(1
)
 
$
(1
)
 
$
(28
)
 
$
4

 
$
(24
)
_______________
 
(1) 
Due to the adoption of the recognition and measurement accounting standard, equity securities and limited partnerships previously reported using the cost method are now reported at fair value with changes in fair value recognized in net income and are no longer included in the table above.
Schedule of other-than-temporary impairment losses on fixed income securities included in accumulated other comprehensive income
The total amount of OTTI 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 amounts exclude $111 million and $113 million as of March 31, 2018 and December 31, 2017, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
($ in millions)
March 31, 2018
 
December 31, 2017
Municipal
$
(4
)
 
$
(4
)
ABS
(6
)
 
(8
)
RMBS
(36
)
 
(37
)
CMBS
(4
)
 
(4
)
Total
$
(50
)
 
$
(53
)
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,
 
2018
 
2017
Beginning balance
$
(138
)
 
$
(176
)
Additional credit loss for securities previously other-than-temporarily impaired
(1
)
 
(4
)
Additional credit loss for securities not previously other-than-temporarily impaired
—

 
(5
)
Reduction in credit loss for securities disposed or collected
11

 
18

Ending balance
$
(128
)
 
$
(167
)
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)
March 31, 2018
 
Gains
 
Losses
 
Fixed income securities
$
22,401

 
$
1,008

 
$
(252
)
 
$
756

Short-term investments
596

 
—

 
—

 
—

Derivative instruments (1)
2

 
2

 
—

 
2

EMA limited partnerships (2)
 

 
 

 
 

 
1

Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
759

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves (3)
 

 
 

 
 

 
(119
)
DAC and DSI (4)
 

 
 

 
 

 
(106
)
Amounts recognized
 

 
 

 
 

 
(225
)
Deferred income taxes
 

 
 

 
 

 
(112
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
422

_______________
 
(1) 
Included in the fair value of derivative instruments is $2 million classified as liabilities.
(2) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable.
(3) 
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuities).
(4) 
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
($ in millions)
Fair value
 
Gross unrealized
 
Unrealized net gains (losses)
December 31, 2017
 
Gains
 
Losses
 
Fixed income securities
$
23,261

 
$
1,355

 
$
(98
)
 
$
1,257

Equity securities
1,614

 
311

 
(3
)
 
308

Short-term investments
725

 
—

 
—

 
—

Derivative instruments (1)
2

 
2

 
—

 
2

EMA limited partnerships
 

 
 

 
 

 
1

Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
1,568

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves
 

 
 

 
 

 
(315
)
DAC and DSI
 

 
 

 
 

 
(189
)
Amounts recognized
 

 
 

 
 

 
(504
)
Deferred income taxes
 

 
 

 
 

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

 
 

 
 

 
$
835

_______________
 
(1) 
Included in the fair value of derivative instruments is $2 million classified as liabilities.
Schedule of change in unrealized net capital gains and losses
The change in unrealized net capital gains and losses for the three months ended March 31, 2018 is as follows:
($ in millions)
 

Fixed income securities
$
(501
)
Equity securities (1)
—

Total
(501
)
Amounts recognized for:
 

Insurance reserves
196

DAC and DSI
83

Amounts recognized
279

Deferred income taxes
47

Decrease in unrealized net capital gains and losses, after-tax
$
(175
)
_______________
 
(1) Upon adoption of the recognition and measurement accounting standard on January 1, 2018, $308 million of pre-tax unrealized net capital gains for equity securities were reclassified from AOCI to retained income.  See Note 1 of the condensed consolidated financial statements.
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 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, 2018
 

 
 

 
 

 
 

 
 

 
 

 
 

 
Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
U.S. government and agencies
9

 
$
104

 
$
(1
)
 
1

 
$
5

 
$
—

 
$
(1
)
 
Municipal
55

 
119

 
(2
)
 
1

 
11

 
(2
)
 
(4
)
 
Corporate
1,082

 
6,649

 
(153
)
 
139

 
1,250

 
(86
)
 
(239
)
 
Foreign government
2

 
16

 
—

 
—

 
—

 
—

 
—

 
ABS
48

 
215

 
(2
)
 
6

 
10

 
(3
)
 
(5
)
 
RMBS
86

 
4

 
—

 
56

 
16

 
(1
)
 
(1
)
 
CMBS
—

 
—

 
—

 
6

 
24

 
(2
)
 
(2
)
 
Total fixed income securities
1,282

 
7,107

 
(158
)
 
209

 
1,316

 
(94
)
 
(252
)
 
Investment grade fixed income securities
960

 
$
6,028

 
$
(123
)
 
177

 
$
1,211

 
$
(79
)
 
$
(202
)
 
Below investment grade fixed income securities
322

 
1,079

 
(35
)
 
32

 
105

 
(15
)
 
(50
)
 
Total fixed income securities
1,282

 
$
7,107

 
$
(158
)
 
209

 
$
1,316

 
$
(94
)
 
$
(252
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
)
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.
($ in millions)
 
March 31, 2018
 
December 31, 2017
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
 
$
27

 
$
—

 
$
27

 
$
3

 
$
—

 
$
3

1.0 - 1.25
 
323

 
—

 
323

 
326

 
—

 
326

1.26 - 1.50
 
1,058

 
15

 
1,073

 
1,033

 
15

 
1,048

Above 1.50
 
2,519

 
42

 
2,561

 
2,482

 
13

 
2,495

Total non-impaired mortgage loans
 
$
3,927

 
$
57

 
$
3,984

 
$
3,844

 
$
28

 
$
3,872
Schedule of rollforward of the valuation allowance on impaired mortgage loans
The net carrying value of impaired mortgage loans is as follows:
($ in millions)
March 31, 2018
 
December 31, 2017
Impaired mortgage loans with a valuation allowance
$
4

 
$
4

Impaired mortgage loans without a valuation allowance
—

 
—

Total impaired mortgage loans
$
4

 
$
4

Valuation allowance on impaired mortgage loans
$
3

 
$
3
Schedule of other investments, by type
The following table summarizes other investments.
($ in millions)
 
March 31, 2018
 
December 31, 2017
Agent loans
 
$
562

 
$
538

Bank loans
 
450

 
437

Real estate
 
207

 
157

Derivatives and other
 
91

 
122

Total
 
$
1,310

 
$
1,254