Investments (Tables)

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Fixed Maturity and Equity Securities Available-for-Sale

The following table presents the fixed maturity securities AFS by sector at:

	December 31, 2018											December 31, 2017
	Amortized Cost		Gross Unrealized							Estimated Fair Value		Amortized Cost		Gross Unrealized							Estimated Fair Value
			Gains		Temporary Losses		OTTI Losses (1)							Gains		Temporary Losses		OTTI Losses (1)
										(In millions)
Fixed maturity securities: (2)
U.S. corporate	$	23,902	$	816	$	659	$	—		$	24,059	$	20,647	$	1,822	$	89	$	—		$	22,380
U.S. government and agency	7,503		1,251		110		—			8,644		14,185		1,844		116		—			15,913
RMBS	8,309		246		122		(2		)	8,435		7,588		283		57		(3		)	7,817
Foreign corporate	8,044		157		306		—			7,895		6,457		376		62		—			6,771
CMBS	5,177		42		87		(1		)	5,133		3,259		48		17		(1		)	3,291
State and political subdivision	3,202		399		15		—			3,586		3,573		532		6		1			4,098
ABS	2,120		13		22		—			2,111		1,779		19		2		—			1,796
Foreign government	1,415		101		31		—			1,485		1,111		159		3		—			1,267
Total fixed maturity securities	$	59,672	$	3,025	$	1,352	$	(3	)	$	61,348	$	58,599	$	5,083	$	352	$	(3	)	$	63,333

______________

(1) Noncredit OTTI losses included in AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).”

(2) Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities. Included within fixed maturity securities are Structured Securities.

Available-for-sale fixed maturity securities by contractual maturity date

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at December 31, 2018:

	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Securities		Total Fixed Maturity Securities
	(In millions)
Amortized cost	$	1,512	$	7,643	$	11,380	$	23,531	$	15,606	$	59,672
Estimated fair value	$	1,512	$	7,661	$	11,170	$	25,326	$	15,679	$	61,348

Continuous Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale

The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position at:

	December 31, 2018								December 31, 2017
	Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(Dollars in millions)
Fixed maturity securities:
U.S. corporate	$	10,450	$	465	$	2,290	$	194	$	1,762	$	21	$	1,413	$	68
U.S. government and agency	359		7		1,355		103		4,764		36		1,573		80
RMBS	1,550		21		2,567		99		2,308		13		1,292		41
Foreign corporate	3,916		199		746		107		636		8		559		54
CMBS	2,264		52		800		34		603		6		335		10
State and political subdivision	346		7		158		8		171		3		106		4
ABS	1,407		21		70		1		165		—		75		2
Foreign government	520		25		132		6		152		2		50		1
Total fixed maturity securities	$	20,812	$	797	$	8,118	$	552	$	10,561	$	89	$	5,403	$	260
Total number of securities in an unrealized loss position	2,988				1,022				903				619

Schedule of Accounts, Notes, Loans and Financing Receivable

Mortgage loans are summarized as follows at:

	December 31,
	2018					2017
	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Mortgage loans:
Commercial	$	8,502		62.6	%	$	7,348		69.0	%
Agricultural	2,874			21.1		2,200			20.7
Residential	2,276			16.7		1,138			10.7
Subtotal (1)	13,652			100.4		10,686			100.4
Valuation allowances (2)	(56		)	(0.4	)	(46		)	(0.4	)
Total mortgage loans, net	$	13,596		100.0	%	$	10,640		100.0	%

______________

(1) Purchases of mortgage loans from third parties were $1.9 billion and $420 million for the years ended December 31, 2018 and 2017, respectively, and were primarily comprised of residential mortgage loans.

(2) The valuation allowances were primarily from collective evaluation (non-specific loan related).

Components of net unrealized investment gains (losses) included in accumulated other comprehensive income (loss)

The components of net unrealized investment gains (losses), included in AOCI, were as follows:

	Years Ended December 31,
	2018			2017			2016
	(In millions)
Fixed maturity securities	$	1,679		$	4,724		$	2,601
Equity securities	—			39			32
Derivatives	253			231			397
Short-term investments	—			—			(42		)
Other	(15		)	(8		)	59
Subtotal	1,917			4,986			3,047
Amounts allocated from:
Future policy benefits	(885		)	(2,370		)	(922		)
DAC, VOBA and DSI	(90		)	(262		)	(195		)
Subtotal	(975		)	(2,632		)	(1,117		)
Deferred income tax benefit (expense)	(198		)	(494		)	(653		)
Net unrealized investment gains (losses)	$	744		$	1,860		$	1,277

The changes in net unrealized investment gains (losses) were as follows:

	Years Ended December 31,
	2018			2017			2016
	(In millions)
Balance, December 31,	$	1,860		$	1,277		$	1,620
Unrealized investment gains (losses) change due to cumulative effect, net of income tax (1)	(79		)	—			—
Balance at January 1,	1,781			1,277			1,620
Unrealized investment gains (losses) during the year	(2,990		)	1,939			284
Unrealized investment gains (losses) relating to:
Future policy benefits	1,485			(1,448		)	(796		)
DAC, VOBA and DSI	172			(67		)	4
Deferred income tax benefit (expense)	296			159			165
Balance at December 31,	$	744		$	1,860		$	1,277
Change in net unrealized investment gains (losses)	$	(1,037	)	$	583		$	(343	)

Securities Lending

Elements of the securities lending program are presented below at:

	December 31,
	2018		2017
	(In millions)
Securities on loan: (1)
Amortized cost	$	3,056	$	3,085
Estimated fair value	$	3,628	$	3,748
Cash collateral received from counterparties (2)	$	3,646	$	3,791
Security collateral received from counterparties (3)	$	55	$	29
Reinvestment portfolio — estimated fair value	$	3,658	$	3,823

______________

(1) Included within fixed maturity securities.

(2) Included within payables for collateral under securities loaned and other transactions.

(3) Security collateral received from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements.

The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:

	December 31, 2018								December 31, 2017
	Remaining Tenor of Securities Lending Agreements								Remaining Tenor of Securities Lending Agreements
	Open (1)		1 Month or Less		1 to 6 Months		Total		Open (1)		1 Month or Less		1 to 6 Months		Total
	(In millions)
U.S. government and agency	$	1,474	$	1,823	$	349	$	3,646	$	1,626	$	964	$	1,201	$	3,791

_____________

(1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral.

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value at:

	December 31,
	2018		2017
	(In millions)
Invested assets on deposit (regulatory deposits) (1)	$	8,172	$	8,259
Invested assets held in trust (reinsurance agreements) (2)	3,455		2,634
Invested assets pledged as collateral (3)	3,340		3,199
Total invested assets on deposit, held in trust, and pledged as collateral	$	14,967	$	14,092

__________________

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policy holder liabilities, of which $55 million and $34 million of the assets on deposit balance represents restricted cash at December 31, 2018 and 2017, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions. $87 million and $42 million of the assets held in trust balance represents restricted cash at December 31, 2018 and 2017, respectively.

(3) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4) and derivative transactions (see Note 8).

The Components of Net Investment Income

The components of net investment income were as follows:

	Years Ended December 31,
	2018		2017		2016
	(In millions)
Investment income:
Fixed maturity securities	$	2,499	$	2,347	$	2,567
Equity securities	7		9		14
Mortgage loans	538		450		405
Policy loans	62		49		54
Real estate joint ventures	47		53		32
Other limited partnership interests	211		182		163
Cash, cash equivalents and short-term investments	26		30		20
Other	38		28		29
Subtotal	3,428		3,148		3,284
Less: Investment expenses	193		175		173
Net investment income	$	3,235	$	2,973	$	3,111

The components of net investment gains (losses)

The components of net investment gains (losses) were as follows:

	Years Ended December 31,
	2018			2017			2016
	(In millions)
Total gains (losses) on fixed maturity securities:
OTTI losses on fixed maturity securities recognized in earnings	$	—		$	(1	)	$	(22	)
Fixed maturity securities — net gains (losses) on sales and disposals	(178		)	(25		)	(28		)
Total gains (losses) on fixed maturity securities	(178		)	(26		)	(50		)
Total gains (losses) on equity securities:
OTTI losses on equity securities recognized in earnings	—			(4		)	(2		)
Equity securities — Mark to market and net gains (losses) on sales and disposals	(16		)	26			10
Total gains (losses) on equity securities	(16		)	22			8
Mortgage loans	(13		)	(9		)	5
Real estate joint ventures	42			4			(34		)
Other limited partnership interests	(2		)	(11		)	(7		)
Other	(37		)	(7		)	11
Total net investment gains (losses)	$	(204	)	$	(27	)	$	(67	)

Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains and losses

Proceeds from sales or disposals of fixed maturity securities and the components of fixed maturity securities net investment gains (losses) were as shown in the table below.

	Years Ended December 31,
	2018			2017			2016
	Fixed Maturity Securities
	(In millions)
Proceeds	$	11,159		$	11,974		$	39,210
Gross investment gains	$	101		$	58		$	253
Gross investment losses	(279		)	(83		)	(281		)
OTTI losses	—			(1		)	(22		)
Net investment gains (losses)	$	(178	)	$	(26	)	$	(50	)

Financing Receivable Credit Quality Indicators

The credit quality of commercial mortgage loans was as follows at:

	Recorded Investment										Estimated Fair Value		% of Total
	Debt Service Coverage Ratios						Total		% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x
	(Dollars in millions)
December 31, 2018
Loan-to-value ratios:
Less than 65%	$	7,444	$	89	$	34	$	7,567	89.0	%	$	7,642	89.0	%
65% to 75%	762		—		24		786		9.2		797		9.3
76% to 80%	141		—		8		149		1.8		145		1.7
Greater than 80%	—		—		—		—		—		—		—
Total	$	8,347	$	89	$	66	$	8,502	100.0	%	$	8,584	100.0	%
December 31, 2017
Loan-to-value ratios:
Less than 65%	$	6,282	$	293	$	33	$	6,608	90.0	%	$	6,769	90.2	%
65% to 75%	642		—		14		656		8.9		658		8.7
76% to 80%	42		—		9		51		0.7		50		0.7
Greater than 80%	—		9		24		33		0.4		30		0.4
Total	$	6,966	$	302	$	80	$	7,348	100.0	%	$	7,507	100.0	%

The credit quality of residential mortgage loans was as follows at:

	December 31,
	2018				2017
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	2,240	98.4	%	$	1,106	97.2	%
Nonperforming	36		1.6		32		2.8
Total	$	2,276	100.0	%	$	1,138	100.0	%

The credit quality of agricultural mortgage loans was as follows at:

	December 31,
	2018				2017
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Loan-to-value ratios:
Less than 65%	$	2,551	88.8	%	$	2,039	92.7	%
65% to 75%	322		11.2		161		7.3
76% to 80%	1		—		—		—
Total	$	2,874	100.0	%	$	2,200	100.0	%

Variable Interest Entities

The Company’s maximum exposure to loss on these investments is limited to: (i) the amount invested in debt or equity of the VIE and (ii) commitments to the VIE, as described in Note 14.

	December 31,
	2018				2017
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities	$	12,848	$	12,848	$	11,637	$	11,637
Joint ventures and limited partnerships	1,743		3,130		1,580		2,539
Total	$	14,591	$	15,978	$	13,217	$	14,176