Investments

9 Months Ended

Sep. 30, 2024

Total investments at September 30, 2024 and December 31, 2023 were as follows:


	September 30, 2024						December 31, 2023
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,633	$	23,857	$	26,490	$	3,131	$	18,582	$	21,713
Mortgage loans	172		1,315		1,487		128		1,183		1,311
Other investments	—		3,767		3,767		—		3,254		3,254
Total investments	$	2,805	$	28,939	$	31,744	$	3,259	$	23,019	$	26,278

Debt Securities

Debt securities available for sale at September 30, 2024 and December 31, 2023 were as follows:


In millions	Amortized Cost (1)		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2024
Debt securities:
U.S. government securities	$	2,755	$	52	$	(23)	$	2,784
States, municipalities and political subdivisions	738		11		(11)		738
U.S. corporate securities	13,086		283		(254)		13,115
Foreign securities	2,645		68		(69)		2,644
Residential mortgage-backed securities	815		13		(33)		795
Commercial mortgage-backed securities	1,609		32		(58)		1,583
Other asset-backed securities	4,767		51		(5)		4,813
Redeemable preferred securities	18		—		—		18
Total debt securities (2)	$	26,433	$	510	$	(453)	$	26,490

December 31, 2023
Debt securities:
U.S. government securities	$	2,071	$	19	$	(54)	$	2,036
States, municipalities and political subdivisions	2,219		31		(35)		2,215
U.S. corporate securities	10,156		133		(446)		9,843
Foreign securities	2,593		41		(122)		2,512
Residential mortgage-backed securities	862		8		(60)		810
Commercial mortgage-backed securities	1,066		9		(100)		975
Other asset-backed securities	3,294		26		(18)		3,302
Redeemable preferred securities	21		—		(1)		20
Total debt securities (2)	$	22,282	$	267	$	(836)	$	21,713

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(1)There was no allowance for expected credit losses recorded on available-for-sale debt securities at September 30, 2024 or December 31, 2023.

(2)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2024, debt securities with a fair value of $548 million, gross unrealized capital gains of $14 million and gross unrealized capital losses of $16 million, and at December 31, 2023, debt securities with a fair value of $592 million, gross unrealized capital gains of $10 million and gross unrealized capital losses of $28 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income (loss).

The amortized cost and fair value of debt securities at September 30, 2024 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity.


In millions	Amortized Cost		Fair Value
Due to mature:
Less than one year	$	819	$	816
One year through five years	10,469		10,529
After five years through ten years	4,827		4,890
Greater than ten years	3,127		3,064
Residential mortgage-backed securities	815		795
Commercial mortgage-backed securities	1,609		1,583
Other asset-backed securities	4,767		4,813
Total	$	26,433	$	26,490

Summarized below are the debt securities the Company held at September 30, 2024 and December 31, 2023 that were in an unrealized capital loss position, aggregated by the length of time the investments have been in that position:


	Less than 12 months					Greater than 12 months					Total
In millions, except number of securities	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
September 30, 2024
Debt securities:
U.S. government securities	13	$	41	$	1	203	$	620	$	22	216	$	661	$	23
States, municipalities and political subdivisions	30	46		—		159	235		11		189	281		11
U.S. corporate securities	267	366		2		2,798	3,727		252		3,065	4,093		254
Foreign securities	44	45		1		678	984		68		722	1,029		69
Residential mortgage-backed securities	6	27		—		365	370		33		371	397		33
Commercial mortgage-backed securities	28	110		—		261	528		58		289	638		58
Other asset-backed securities	105	236		3		86	114		2		191	350		5
Redeemable preferred securities	—	—		—		4	6		—		4	6		—
Total debt securities	493	$	871	$	7	4,554	$	6,584	$	446	5,047	$	7,455	$	453

December 31, 2023
Debt securities:
U.S. government securities	74	$	194	$	2	280	$	891	$	52	354	$	1,085	$	54
States, municipalities and political subdivisions	95	181		1		455	733		34		550	914		35
U.S. corporate securities	576	672		14		4,120	5,602		432		4,696	6,274		446
Foreign securities	160	243		4		964	1,407		118		1,124	1,650		122
Residential mortgage-backed securities	33	97		1		461	517		59		494	614		60
Commercial mortgage-backed securities	44	94		2		287	581		98		331	675		100
Other asset-backed securities	196	449		4		443	867		14		639	1,316		18
Redeemable preferred securities	4	2		—		8	18		1		12	20		1
Total debt securities	1,182	$	1,932	$	28	7,018	$	10,616	$	808	8,200	$	12,548	$	836

The Company reviewed the securities in the table above and concluded that they are performing assets generating investment income to support the needs of the Company’s business. In performing this review, the Company considered factors such as the quality of the investment security based on research performed by the Company’s internal credit analysts and external rating agencies and the prospects of realizing the carrying value of the security based on the investment’s current prospects for recovery. Unrealized capital losses at September 30, 2024 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of September 30, 2024, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis.

The maturity dates for debt securities in an unrealized capital loss position at September 30, 2024 were as follows:


	Supporting experience-rated products				Supporting remaining products				Total
In millions	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Due to mature:
Less than one year	$	1	$	—	$	477	$	5	$	478	$	5
One year through five years	65		2		2,931		107		2,996		109
After five years through ten years	48		4		1,064		86		1,112		90
Greater than ten years	106		9		1,378		144		1,484		153
Residential mortgage-backed securities	6		—		391		33		397		33
Commercial mortgage-backed securities	10		1		628		57		638		58
Other asset-backed securities	10		—		340		5		350		5
Total	$	246	$	16	$	7,209	$	437	$	7,455	$	453

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three and nine months ended September 30, 2024 and 2023, the Company had the following activity in its mortgage loan portfolio:


	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2024		2023		2024		2023
New mortgage loans	$	125	$	63	$	262	$	286
Mortgage loans fully repaid	33		17		67		34
Mortgage loans foreclosed	—		—		—		—

The Company assesses mortgage loans on a regular basis for credit impairments, and assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes each loan in its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, current and future property cash flow, property condition, market trends, creditworthiness of the borrower and deal structure.

•Category 1 - Represents loans of superior quality.

•Categories 2 to 4 - Represent loans where credit risk is minimal to acceptable; however, these loans may display some susceptibility to economic changes.

•Categories 5 and 6 - Represent loans where credit risk is not substantial, but these loans warrant management’s close attention.

•Category 7 - Represents loans where collections are potentially at risk; if necessary, an impairment is recorded.

Based on the Company’s assessments at September 30, 2024 and December 31, 2023, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:


	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2024		2023		2022		2021		2020		Prior		Total
September 30, 2024
1	$	—	$	—	$	—	$	—	$	—	$	8	$	8
2 to 4	255		301		334		206		35		288		1,419
5 and 6	—		—		5		13		—		42		60
7	—		—		—		—		—		—		—
Total	$	255	$	301	$	339	$	219	$	35	$	338	$	1,487

December 31, 2023
1			$	—	$	—	$	—	$	—	$	11	$	11
2 to 4			302		346		225		35		354		1,262
5 and 6			—		—		13		—		19		32
7			—		—		6		—		—		6
Total			$	302	$	346	$	244	$	35	$	384	$	1,311

Net Investment Income

Sources of net investment income for the three and nine months ended September 30, 2024 and 2023 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2024		2023		2024		2023
Debt securities	$	307	$	217	$	816	$	612
Mortgage loans	20		16		56		43
Other investments	230		199		665		609
Gross investment income	557		432		1,537		1,264
Investment expenses	(26)		(13)		(50)		(34)
Net investment income (excluding net realized capital gains or losses)	531		419		1,487		1,230
Net realized capital gains (losses) (1)	19		(142)		(89)		(345)
Net investment income (2)	$	550	$	277	$	1,398	$	885

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(1)Net realized capital gains are net of yield-related impairment losses on debt securities of $12 million in the three months ended September 30, 2024. Net realized capital losses include yield-related impairment losses on debt securities of $51 million in the nine months ended September 30, 2024. There were no credit-related impairment losses on debt securities in the three and nine months ended September 30, 2024. Net realized capital losses include yield-related impairment losses on debt securities of $47 million in the three months ended September 30, 2023. There were no credit-related impairment losses on debt securities in the three months ended September 30, 2023. Net realized capital losses include yield-related impairment losses on debt securities of $108 million and are net of the reversal of previously recorded credit-related impairment losses on debt securities of $3 million in the nine months ended September 30, 2023.

(2)Net investment income includes $8 million and $24 million for the three and nine months ended September 30, 2024, respectively, and $8 million and $25 million for the three and nine months ended September 30, 2023, respectively, related to investments supporting experience-rated products.

Excluding amounts related to experience-rated products, proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three and nine months ended September 30, 2024 and 2023 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2024		2023		2024		2023
Proceeds from sales	$	2,322	$	1,171	$	5,203	$	3,503
Gross realized capital gains	16		2		30		7
Gross realized capital losses	39		110		162		294