Investments (Tables)

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Fixed Maturity Securities AFS by Sector

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

	December 31, 2019											December 31, 2018
	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:
U.S. corporate	$	27,841	$	2,815	$	65	$	—		$	30,591	$	23,902	$	816	$	659	$	—		$	24,059
Foreign corporate	9,017		736		67		—			9,686		8,044		157		306		—			7,895
RMBS	8,600		440		14		(4		)	9,030		8,309		246		122		(2		)	8,435
U.S. government and agency	5,396		1,848		—		—			7,244		7,503		1,251		110		—			8,644
CMBS	5,460		263		9		—			5,714		5,177		42		87		(1		)	5,133
State and political subdivision	3,326		687		2		—			4,011		3,202		399		15		—			3,586
ABS	1,940		21		11		—			1,950		2,120		13		22		—			2,111
Foreign government	1,503		250		2		—			1,751		1,415		101		31		—			1,485
Total fixed maturity securities	$	63,083	$	7,060	$	170	$	(4	)	$	69,977	$	59,672	$	3,025	$	1,352	$	(3	)	$	61,348

_______________

(1) Noncredit OTTI losses included in accumulated other comprehensive income (loss) (“AOCI”) in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities.

Maturities of Fixed Maturity Securities

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at December 31, 2019:

	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	$	1,682	$	6,815	$	12,485	$	26,101	$	16,000	$	63,083
Estimated fair value	$	1,691	$	7,038	$	13,343	$	31,211	$	16,694	$	69,977

Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector

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, 2019								December 31, 2018
	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	$	1,931	$	43	$	320	$	22	$	10,450	$	465	$	2,290	$	194
Foreign corporate	577		12		510		55		3,916		199		746		107
RMBS	802		6		346		4		1,550		21		2,567		99
U.S. government and agency	14		—		—		—		359		7		1,355		103
CMBS	552		7		171		2		2,264		52		800		34
State and political subdivision	120		2		8		—		346		7		158		8
ABS	358		2		676		9		1,407		21		70		1
Foreign government	65		2		—		—		520		25		132		6
Total fixed maturity securities	$	4,419	$	74	$	2,031	$	92	$	20,812	$	797	$	8,118	$	552
Total number of securities in an unrealized loss position	686				297				2,988				1,022

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	December 31,
	2019					2018
	Carrying Value			% of Total		Carrying Value			% of Total
	(Dollars in millions)
Mortgage loans:
Commercial	$	9,694		61.9	%	$	8,502		62.6	%
Agricultural	3,326			21.2		2,874			21.1
Residential	2,708			17.3		2,276			16.7
Subtotal (1)	15,728			100.4		13,652			100.4
Valuation allowances (2)	(64		)	(0.4	)	(56		)	(0.4	)
Total mortgage loans, net	$	15,664		100.0	%	$	13,596		100.0	%

_______________

(1) Purchases of mortgage loans from third parties were $962 million and $1.9 billion for the years ended December 31, 2019 and 2018, respectively, and were primarily comprised of residential mortgage loans.

(2)

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

Credit Quality of Mortgage Loans by Portfolio Segment

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, 2019
Loan-to-value ratios:
Less than 65%	$	8,300	$	272	$	158	$	8,730	90.1	%	$	9,142	90.2	%
65% to 75%	746		26		8		780		8.0		805		8.0
76% to 80%	184		—		—		184		1.9		184		1.8
Total	$	9,230	$	298	$	166	$	9,694	100.0	%	$	10,131	100.0	%
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
Total	$	8,347	$	89	$	66	$	8,502	100.0	%	$	8,584	100.0	%

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

	December 31,
	2019				2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Performance indicators:
Performing	$	2,671	98.6	%	$	2,240	98.4	%
Nonperforming	37		1.4		36		1.6
Total	$	2,708	100.0	%	$	2,276	100.0	%

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

	December 31,
	2019				2018
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(Dollars in millions)
Loan-to-value ratios:
Less than 65%	$	3,130	94.1	%	$	2,551	88.8	%
65% to 75%	196		5.9		322		11.2
76% to 80%	—		—		1		—
Total	$	3,326	100.0	%	$	2,874	100.0	%

Net Unrealized Investment Gains (Losses)

Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity securities and the effect on DAC, VOBA, DSI and future policy benefits, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI.

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

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Fixed maturity securities	$	6,894		$	1,679		$	4,724
Equity securities	—			—			39
Derivatives	232			253			231
Other	(15		)	(15		)	(8		)
Subtotal	7,111			1,917			4,986
Amounts allocated from:
Future policy benefits	(2,691		)	(885		)	(2,370		)
DAC, VOBA and DSI	(332		)	(90		)	(262		)
Subtotal	(3,023		)	(975		)	(2,632		)
Deferred income tax benefit (expense)	(859		)	(198		)	(494		)
Net unrealized investment gains (losses)	$	3,229		$	744		$	1,860

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

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Balance, December 31,	$	744		$	1,860		$	1,277
Unrealized investment gains (losses) change due to cumulative effect, net of income tax	—			(79		)	—
Balance at January 1,	744			1,781			1,277
Unrealized investment gains (losses) during the year	5,194			(2,990		)	1,939
Unrealized investment gains (losses) relating to:
Future policy benefits	(1,806		)	1,485			(1,448		)
DAC, VOBA and DSI	(242		)	172			(67		)
Deferred income tax benefit (expense)	(661		)	296			159
Balance at December 31,	$	3,229		$	744		$	1,860
Change in net unrealized investment gains (losses)	$	2,485		$	(1,037	)	$	583

Securities Lending

Elements of the securities lending program are presented below at:

	December 31,
	2019		2018
	(In millions)
Securities on loan: (1)
Amortized cost	$	2,031	$	3,056
Estimated fair value	$	2,996	$	3,628
Cash collateral received from counterparties (2)	$	3,074	$	3,646
Security collateral received from counterparties (3)	$	—	$	55
Reinvestment portfolio — estimated fair value	$	3,174	$	3,658

_______________

(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, 2019								December 31, 2018
	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	$	1,279	$	1,094	$	701	$	3,074	$	1,474	$	1,823	$	349	$	3,646

_______________

(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,
	2019		2018
	(In millions)
Invested assets on deposit (regulatory deposits) (1)	$	9,345	$	8,172
Invested assets held in trust (reinsurance agreements) (2)	4,561		3,455
Invested assets pledged as collateral (3)	3,640		3,340
Total invested assets on deposit, held in trust and pledged as collateral	$	17,546	$	14,967

_______________

(1) The Company has assets, primarily fixed maturity securities, on deposit with governmental authorities relating to certain policyholder liabilities, of which $69 million and $55 million of the assets on deposit balance represents restricted cash at December 31, 2019 and 2018, respectively.

(2) The Company has assets, primarily fixed maturity securities, held in trust relating to certain reinsurance transactions. $124 million and $87 million of the assets held in trust balance represents restricted cash at December 31, 2019 and 2018, 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).

Variable Interest Entities

The carrying amount and maximum exposure to loss related to the VIEs in which the Company concluded that it holds a variable interest, but is not the primary beneficiary, were as follows at:

	December 31,
	2019				2018
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities	$	12,959	$	12,317	$	12,848	$	12,848
Limited partnerships and LLCs	1,892		3,065		1,743		3,130
Total	$	14,851	$	15,382	$	14,591	$	15,978

Components of Net Investment Income

The components of net investment income were as follows:

	Years Ended December 31,
	2019		2018		2017
	(In millions)
Investment income:
Fixed maturity securities	$	2,627	$	2,499	$	2,347
Equity securities	8		7		9
Mortgage loans	676		538		450
Policy loans	46		62		49
Limited partnerships and LLCs (1)	220		258		235
Cash, cash equivalents and short-term investments	72		26		30
Other	38		38		28
Subtotal	3,687		3,428		3,148
Less: Investment expenses	201		193		175
Net investment income	$	3,486	$	3,235	$	2,973

_______________

(1)

Includes net investment income pertaining to other limited partnership interests of $181 million, $211 million and $182 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Components of Net Investment Gains (Losses)

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

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Fixed maturity securities	$	87		$	(178	)	$	(26	)
Equity securities	17			(16		)	22
Mortgage loans	(10		)	(13		)	(9		)
Limited partnerships and LLCs	7			40			(7		)
Other	(9		)	(37		)	(7		)
Total net investment gains (losses)	$	92		$	(204	)	$	(27	)

Sales or Disposals of Fixed Maturity Securities

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,
	2019			2018			2017
	(In millions)
Proceeds	$	8,541		$	11,159		$	11,974
Gross investment gains	$	232		$	101		$	58
Gross investment losses	(145		)	(279		)	(84		)
Net investment gains (losses)	$	87		$	(178	)	$	(26	)