Investments

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Net investment income is as follows:





Three Months Ended March 31	2024		2023
(In millions)

Fixed maturity securities	$	502	$	470
Limited partnership investments	54		27
Short-term investments	29		16
Equity securities (a)	22		12
Income from trading portfolio (a)	58		45
Other	28		20
Total investment income	693		590
Investment expenses	(24)		(21)
Net investment income	$	669	$	569
(a) Net investment income recognized due to the change in fair value of equity and trading portfolio securities held as of March 31, 2024 and 2023	$	48	$	11

Investment gains (losses) are as follows:





Three Months Ended March 31	2024		2023
(In millions)

Fixed maturity securities:
Gross gains	$	14	$	35
Gross losses	(46)		(57)
Investment losses on fixed maturity securities	(32)		(22)
Equity securities (a)	11		(14)

Short-term investments and other	(1)		1


Investment losses	$	(22)	$	(35)
(a) Investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock included within equity securities held as of March 31, 2024 and 2023	$	11	$	(2)

The available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table. The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date:





Three Months Ended March 31	2024		2023
(In millions)

Fixed maturity securities available-for-sale:
Corporate and other bonds	$	9	$	8
Asset-backed	5
Impairment losses recognized in earnings	$	14	$	8

There were no losses recognized on mortgage loans during the three months ended March 31, 2024 or 2023.

The following tables present a summary of fixed maturity securities:


March 31, 2024	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	25,221	$	485	$	1,374	$	3	$	24,329
States, municipalities and political subdivisions	7,726		318		756				7,288
Asset-backed:
Residential mortgage-backed	3,563		10		483				3,090
Commercial mortgage-backed	1,838		8		193		8		1,645
Other asset-backed	3,586		19		251		9		3,345
Total asset-backed	8,987		37		927		17		8,080
U.S. Treasury and obligations of government sponsored enterprises	181				2				179
Foreign government	763		3		37				729

Fixed maturities available-for-sale	$	42,878	$	843	$	3,096	$	20	$	40,605
Fixed maturities trading	235								235
Total fixed maturity securities	$	43,113	$	843	$	3,096	$	20	$	40,840


December 31, 2023


Fixed maturity securities:
Corporate and other bonds	$	25,020	$	597	$	1,345	$	4	$	24,268
States, municipalities and political subdivisions	7,713		382		703				7,392
Asset-backed:
Residential mortgage-backed	3,411		16		425				3,002
Commercial mortgage-backed	1,862		7		230		8		1,631
Other asset-backed	3,515		13		256		4		3,268
Total asset-backed	8,788		36		911		12		7,901
U.S. Treasury and obligations of government sponsored enterprises	152		1		2				151
Foreign government	741		6		34				713

Fixed maturities available-for-sale	$	42,414	$	1,022	$	2,995	$	16	$	40,425
Fixed maturities trading	201								201
Total fixed maturity securities	$	42,615	$	1,022	$	2,995	$	16	$	40,626

The available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit losses has not been recorded are as follows:


	Less than 12 Months				12 Months or Longer				Total
March 31, 2024	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)

Fixed maturity securities:
Corporate and other bonds	$	2,578	$	48	$	13,459	$	1,326	$	16,037	$	1,374
States, municipalities and political subdivisions	686		17		3,266		739		3,952		756
Asset-backed:
Residential mortgage-backed	434		8		2,159		475		2,593		483
Commercial mortgage-backed	131		2		1,162		191		1,293		193
Other asset-backed	588		9		1,833		242		2,421		251
Total asset-backed	1,153		19		5,154		908		6,307		927
U.S. Treasury and obligations of government-sponsored enterprises	100		1		28		1		128		2
Foreign government	136		2		452		35		588		37
Total fixed maturity securities	$	4,653	$	87	$	22,359	$	3,009	$	27,012	$	3,096

December 31, 2023

Fixed maturity securities:
Corporate and other bonds	$	1,943	$	37	$	13,406	$	1,308	$	15,349	$	1,345
States, municipalities and political subdivisions	598		18		3,104		685		3,702		703
Asset-backed:
Residential mortgage-backed	233		4		2,212		421		2,445		425
Commercial mortgage-backed	200		5		1,184		225		1,384		230
Other asset-backed	392		8		1,869		248		2,261		256
Total asset-backed	825		17		5,265		894		6,090		911
U.S. Treasury and obligations of government-sponsored enterprises	65		1		23		1		88		2
Foreign government	52		1		450		33		502		34
Total fixed maturity securities	$	3,483	$	74	$	22,248	$	2,921	$	25,731	$	2,995

The following table presents the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution.


	March 31, 2024				December 31, 2023
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
(In millions)

U.S. Government, Government agencies and Government-sponsored enterprises	$	2,426	$	361	$	2,273	$	309
AAA	1,661		280		1,524		261
AA	4,109		690		3,817		658
A	6,324		570		5,652		517
BBB	11,672		1,083		11,523		1,095
Non-investment grade	820		112		942		155
Total	$	27,012	$	3,096	$	25,731	$	2,995

Based on current facts and circumstances, the unrealized losses presented in the March 31, 2024 securities in the gross unrealized loss position table above are not believed to be indicative of the ultimate collectibility of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates. In reaching this determination, the volatility in risk-free rates and credit spreads, as well as the fact that the unrealized losses are concentrated in investment grade issuers, were considered. Additionally, there is no current intent to sell securities with unrealized losses, nor is it more likely than not that sale will be required prior to recovery of amortized cost; accordingly, it was determined that there are no additional impairment losses to be recorded as of March 31, 2024.

The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (“PCD”) assets. Accrued interest receivables on available-for-sale fixed maturity securities totaled $437 million, $435 million and $407 million as of March 31, 2024, December 31, 2023 and March 31, 2023 and are excluded from the estimate of expected credit losses and the amortized cost basis in the tables within this Note.


Three months ended March 31, 2024	Corporate and Other Bonds		Asset-backed		Total
(In millions)

Allowance for credit losses:
Balance as of January 1, 2024	$	4	$	12	$	16
Additions to the allowance for credit losses:

Available-for-sale securities accounted for as PCD assets					—

Reductions to the allowance for credit losses:
Securities sold during the period (realized)					—
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	1				1


Additional increases to the allowance for credit losses on securities that had an allowance recorded in a previous period			5		5
Total allowance for credit losses	$	3	$	17	$	20


Three months ended March 31, 2023	Corporate and Other Bonds		Asset-backed		Total
(In millions)

Allowance for credit losses:
Balance as of January 1, 2023	$	—	$	1	$	1
Additions to the allowance for credit losses:


Available-for-sale securities accounted for as PCD assets	9				9

Reductions to the allowance for credit losses:
Securities sold during the period (realized)	6				6
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis	3				3

Additional increases to the allowance for credit losses on securities that had an allowance recorded in a previous period	1				1
Total allowance for credit losses	$	1	$	1	$	2

Contractual Maturity

The following table presents available-for-sale fixed maturity securities by contractual maturity.


	March 31, 2024				December 31, 2023
	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value
(In millions)

Due in one year or less	$	1,238	$	1,207	$	1,121	$	1,091
Due after one year through five years	11,680		11,308		11,563		11,180
Due after five years through ten years	13,283		12,461		13,359		12,573
Due after ten years	16,677		15,629		16,371		15,581
Total	$	42,878	$	40,605	$	42,414	$	40,425

Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life.

Mortgage Loans

The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (“DSCR”) and loan-to-value (“LTV”) ratios.


	Mortgage Loans Amortized Cost Basis by Origination Year (a)
As of March 31, 2024	2024		2023		2022		2021		2020		Prior		Total
(In millions)

DSCR ≥1.6x
LTV less than 55%			$	33	$	9	$	2	$	97	$	283	$	424
LTV 55% to 65%							5						5
LTV greater than 65%					30		12						42
DSCR 1.2x - 1.6x
LTV less than 55%			28		5				13		63		109
LTV 55% to 65%	$	12	21		36		36		24		31		160
LTV greater than 65%			12		65								77
DSCR ≤1.2x
LTV less than 55%													—
LTV 55% to 65%			32		75						43		150
LTV greater than 65%					28		21				48		97
Total	$	12	$	126	$	248	$	76	$	134	$	468	$	1,064


(a)			The values in the table above reflect DSCR on a standardized amortization period and LTV ratios based on the most recent appraised values trended forward using changes in a commercial real estate price index.

Derivative Financial Instruments

A summary of the aggregate contractual or notional amounts and gross estimated fair values related to derivative financial instruments follows. The contractual or notional amounts for derivatives are used to calculate the exchange of contractual payments under related agreements and may not be representative of the potential for gain or loss on these instruments. Gross estimated fair values of derivative positions are currently presented in Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance Sheets.


	March 31, 2024					December 31, 2023
	Contractual/Notional Amount		Estimated Fair Value			Contractual/Notional Amount		Estimated Fair Value
			Asset		(Liability)			Asset		(Liability)
(In millions)

Without hedge designation:
Equity markets:
Options – purchased	$	235	$	1		$	202	$	1
Futures – short	127					116
Warrants	84		3			84		3
Interest rate swaps	300		12			300		13

Currency forwards						13				$	(1)

Investment Commitments

As part of the overall investment strategy, investments are made in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications and obligations related to private placement securities. As of March 31, 2024, commitments to purchase or fund were approximately $1.6 billion and to sell were approximately $25 million under the terms of these investments.