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Investments (Tables)
 3 Months Ended
Mar. 31, 2019
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, 2019
 

 
 

 
 

 
 

U.S. government and agencies
$
504

 
$
34

 
$
—

 
$
538

Municipal
1,927

 
236

 
(3
)
 
2,160

Corporate
17,465

 
673

 
(122
)
 
18,016

Foreign government
170

 
8

 
—

 
178

Asset-backed securities (“ABS”)
410

 
3

 
(3
)
 
410

Residential mortgage-backed securities (“RMBS”)
144

 
44

 
—

 
188

Commercial mortgage-backed securities (“CMBS”)
31

 
7

 
(1
)
 
37

Redeemable preferred stock
13

 
1

 
—

 
14

Total fixed income securities
$
20,664

 
$
1,006

 
$
(129
)
 
$
21,541

 
 
 
 
 
 
 
 
December 31, 2018
 

 
 

 
 

 
 

U.S. government and agencies
$
740

 
$
33

 
$
—

 
$
773

Municipal
1,997

 
202

 
(4
)
 
2,195

Corporate
17,521

 
433

 
(381
)
 
17,573

Foreign government
170

 
9

 
—

 
179

ABS
429

 
3

 
(3
)
 
429

RMBS
154

 
44

 
(1
)
 
197

CMBS
33

 
7

 
—

 
40

Redeemable preferred stock
13

 
1

 
—

 
14

Total fixed income securities
$
21,057

 
$
732

 
$
(389
)
 
$
21,400
Schedule for fixed income securities based on contractual maturities The scheduled maturities for fixed income securities are as follows as of March 31, 2019:
($ in millions)
Amortized cost
 
Fair value
Due in one year or less
$
1,241

 
$
1,256

Due after one year through five years
7,933

 
8,126

Due after five years through ten years
7,041

 
7,224

Due after ten years
3,864

 
4,300

 
20,079

 
20,906

ABS, RMBS and CMBS
585

 
635

Total
$
20,664

 
$
21,541
Schedule of net investment income Net investment income is as follows:
($ in millions)
Three months ended March 31,
 
2019
 
2018
Fixed income securities
$
245

 
$
251

Mortgage loans
46

 
44

Equity securities
6

 
7

Limited partnership interests
3

 
96

Short-term investments
8

 
4

Policy loans
8

 
7

Other
22

 
22

Investment income, before expense
338

 
431

Investment expense
(27
)
 
(24
)
Net investment income
$
311

 
$
407
Schedule of realized capital gains and losses by asset type Realized capital gains (losses) by asset type are as follows:
($ in millions)
Three months ended March 31,
 
2019
 
2018
Fixed income securities
$
(6
)
 
$
(6
)
Equity securities
146

 
(26
)
Limited partnership interests
10

 
3

Derivatives
4

 
(3
)
Other
(6
)
 
—

Realized capital gains (losses)
$
148

 
$
(32
)
Schedule of realized capital gains and losses by transaction type Realized capital gains (losses) by transaction type are as follows:
($ in millions)
Three months ended March 31,
 
2019
 
2018
Impairment write-downs
$
(7
)
 
$
(1
)
Change in intent write-downs
—

 
—

Net OTTI losses recognized in earnings
(7
)
 
(1
)
Sales
(6
)
 
(5
)
Valuation of equity investments (1)

157

 
(23
)
Valuation and settlements of derivative instruments
4

 
(3
)
Realized capital gains (losses)
$
148

 
$
(32
)
_______________
 
(1) 
Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities.
Realized gain (loss) on investments The following table presents the net pre-tax appreciation (decline) during 2019 and 2018 of equity securities and limited partnership interests carried at fair value still held as of March 31, 2019 and March 31, 2018 recognized in net income.
($ in millions)
Three months ended March 31,
 
2019
 
2018
Equity securities
$
118

 
$
(9
)
Limited partnership interests carried at fair value
(19
)
 
38

Total
$
99

 
$
29
Schedule of other-than-temporary impairment losses by asset type OTTI losses by asset type are as follows:
 
Three months ended
 
Three months ended
($ in millions)
March 31, 2019
 
March 31, 2018
 
Gross
 
Included
in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

CMBS
$
—

 
$
—

 
$
—

 
$
—

 
$
(1
)
 
$
(1
)
Total fixed income securities
—

 
—

 
—

 
—

 
(1
)
 
(1
)
Limited partnership interests
(1
)
 
—

 
(1
)
 
—

 
—

 
—

Other
(6
)
 
—

 
(6
)
 
—

 
—

 
—

OTTI losses
$
(7
)
 
$
—

 
$
(7
)
 
$
—

 
$
(1
)
 
$
(1
)
 
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 $100 million and $101 million as of March 31, 2019 and December 31, 2018, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
($ in millions)
March 31, 2019
 
December 31, 2018
Municipal
$
(4
)
 
$
(4
)
Corporate
(1
)
 
(1
)
ABS
(5
)
 
(5
)
RMBS
(31
)
 
(32
)
CMBS
(2
)
 
(2
)
Total
$
(43
)
 
$
(44
)
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,
 
2019
 
2018
Beginning balance
$
(123
)
 
$
(138
)
Additional credit loss for securities previously other-than-temporarily impaired
—

 
(1
)
Reduction in credit loss for securities disposed or collected
2

 
11

Ending balance
$
(121
)
 
$
(128
)
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, 2019
 
Gains
 
Losses
 
Fixed income securities
$
21,541

 
$
1,006

 
$
(129
)
 
$
877

Short-term investments
1,284

 
—

 
—

 
—

Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
877

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves (1)
 

 
 

 
 

 
(8
)
DAC and DSI (2)
 

 
 

 
 

 
(123
)
Amounts recognized
 

 
 

 
 

 
(131
)
Deferred income taxes
 

 
 

 
 

 
(157
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
589

_______________
(1) 
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 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).
(2) 
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, 2018
 
Gains
 
Losses
 
Fixed income securities
$
21,400

 
$
732

 
$
(389
)
 
$
343

Short-term investments
810

 
—

 
—

 
—

Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
343

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves
 

 
 

 
 

 
—

DAC and DSI
 

 
 

 
 

 
(35
)
Amounts recognized
 

 
 

 
 

 
(35
)
Deferred income taxes
 

 
 

 
 

 
(65
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
243
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, 2019 is as follows:
($ in millions)
 

Fixed income securities
$
534

Total
534

Amounts recognized for:
 

Insurance reserves
(8
)
DAC and DSI
(88
)
Amounts recognized
(96
)
Deferred income taxes
(92
)
Increase in unrealized net capital gains and losses, after-tax
$
346
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, 2019
 

 
 

 
 

 
 

 
 

 
 

 
 

 
Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
U.S. government and agencies
1

 
$
3

 
$
—

 
—

 
$
—

 
$
—

 
$
—

 
Municipal
3

 
25

 
—

 
2

 
17

 
(3
)
 
(3
)
 
Corporate
219

 
932

 
(17
)
 
521

 
3,543

 
(105
)
 
(122
)
 
ABS
12

 
58

 
(1
)
 
12

 
27

 
(2
)
 
(3
)
 
RMBS
51

 
5

 
—

 
53

 
10

 
—

 
—

 
CMBS
4

 
10

 
(1
)
 
1

 
—

 
—

 
(1
)
 
Redeemable preferred stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
Total fixed income securities
290

 
$
1,033

 
$
(19
)
 
589

 
$
3,597

 
$
(110
)
 
$
(129
)
 
Investment grade fixed income securities
175

 
$
639

 
$
(8
)
 
479

 
$
3,162

 
$
(85
)
 
$
(93
)
 
Below investment grade fixed income securities
115

 
394

 
(11
)
 
110

 
435

 
(25
)
 
(36
)
 
Total fixed income securities
290

 
$
1,033

 
$
(19
)
 
589

 
$
3,597

 
$
(110
)
 
$
(129
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 

 
 

 
 

 
 

 
 

 
 

 
 

 
Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

 
U.S. government and agencies
2

 
$
6

 
$
—

 
1

 
$
1

 
$
—

 
$
—

 
Municipal
38

 
98

 
(1
)
 
5

 
26

 
(3
)
 
(4
)
 
Corporate
1,260

 
6,799

 
(218
)
 
370

 
2,633

 
(163
)
 
(381
)
 
ABS
30

 
167

 
(1
)
 
11

 
31

 
(2
)
 
(3
)
 
RMBS
124

 
11

 
—

 
47

 
10

 
(1
)
 
(1
)
 
CMBS
3

 
7

 
—

 
2

 
—

 
—

 
—

 
Redeemable preferred stock
1

 
—

 
—

 
—

 
—

 
—

 
—

 
Total fixed income securities
1,458

 
$
7,088

 
$
(220
)
 
436

 
$
2,701

 
$
(169
)
 
$
(389
)
 
Investment grade fixed income securities
948

 
$
5,255

 
$
(121
)
 
388

 
$
2,551

 
$
(147
)
 
$
(268
)
 
Below investment grade fixed income securities
510

 
1,833

 
(99
)
 
48

 
150

 
(22
)
 
(121
)
 
Total fixed income securities
1,458

 
$
7,088

 
$
(220
)
 
436

 
$
2,701

 
$
(169
)
 
$
(389
)
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, 2019
 
December 31, 2018
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
 
$
22

 
$
16

 
$
38

 
$
6

 
$
15

 
$
21

1.0 - 1.25
 
203

 
—

 
203

 
221

 
—

 
221

1.26 - 1.50
 
1,042

 
—

 
1,042

 
1,048

 
—

 
1,048

Above 1.50
 
2,705

 
42

 
2,747

 
2,659

 
42

 
2,701

Total non-impaired mortgage loans
 
$
3,972

 
$
58

 
$
4,030

 
$
3,934

 
$
57

 
$
3,991
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, 2019
 
December 31, 2018
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 by asset type.
($ in millions)
 
March 31, 2019
 
December 31, 2018
Agent loans
 
$
639

 
$
620

Bank loans
 
394

 
422

Real estate
 
237

 
228

Derivatives and other
 
78

 
30

Total
 
$
1,348

 
$
1,300