Investments (Tables)

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Investments Classified by Contractual Maturity Date

Available-for-sale and fair value option ("FVO") fixed maturities were as follows as of June 30, 2020:

	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Embedded Derivatives(2)		Fair Value		Allowance for credit losses
Fixed maturities:
U.S. Treasuries	$	537	$	213	$	—	$	—	$	750	$	—
U.S. Government agencies and authorities	18		1		—		—		19		—
State, municipalities and political subdivisions	734		106		—		—		840		—
U.S. corporate public securities	6,941		1,227		38		—		8,130		—
U.S. corporate private securities	3,774		458		31		—		4,201		—
Foreign corporate public securities and foreign governments(1)	2,412		311		11		—		2,712		—
Foreign corporate private securities(1)	3,078		224		29		—		3,272		1
Residential mortgage-backed securities	4,320		188		36		15		4,486		1
Commercial mortgage-backed securities	2,650		178		116		—		2,712		—
Other asset-backed securities	1,493		18		38		—		1,470		3
Total fixed maturities, including securities pledged	25,957		2,924		299		15		28,592		5
Less: Securities pledged	556		98		6		—		648		—
Total fixed maturities	$	25,401	$	2,826	$	293	$	15	$	27,944	$	5

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

Available-for-sale and FVO fixed maturities were as follows as of December 31, 2019:

	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Embedded Derivatives(2)		Fair Value		OTTI(3)(4)
Fixed maturities:
U.S. Treasuries	$	565	$	129	$	3	$	—	$	691	$	—
U.S. Government agencies and authorities	19		—		—		—		19		—
State, municipalities and political subdivisions	747		68		—		—		815		—
U.S. corporate public securities	7,103		941		13		—		8,031		—
U.S. corporate private securities	3,776		306		16		—		4,066		—
Foreign corporate public securities and foreign governments(1)	2,417		265		3		—		2,679		—
Foreign corporate private securities(1)	3,171		205		1		—		3,375		—
Residential mortgage-backed securities	3,685		125		11		11		3,810		2
Commercial mortgage-backed securities	2,381		122		3		—		2,500		—
Other asset-backed securities	1,472		15		13		—		1,474		1
Total fixed maturities, including securities pledged	25,336		2,176		63		11		27,460		3
Less: Securities pledged	749		85		6		—		828		—
Total fixed maturities	$	24,587	$	2,091	$	57	$	11	$	26,632	$	3

⁽¹⁾ Primarily U.S. dollar denominated.

⁽²⁾ Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations.

⁽³⁾ Represents OTTI reported as a component of Other comprehensive income (loss).

⁽⁴⁾ Amount excludes $137 of net unrealized gains on impaired available-for-sale securities.

The amortized cost and fair value of fixed maturities, including securities pledged, as of June 30, 2020, are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. Mortgage-backed securities ("MBS") and Other asset-backed securities ("ABS") are shown separately because they are not due at a single maturity date.

	Amortized Cost		Fair Value
Due to mature:
One year or less	$	824	$	832
After one year through five years	3,324		3,501
After five years through ten years	5,528		6,080
After ten years	7,818		9,511
Mortgage-backed securities	6,970		7,198
Other asset-backed securities	1,493		1,470
Fixed maturities, including securities pledged	$	25,957	$	28,592

U.S. and Foreign Corporate Securities by Industry

The following tables present the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated:

	Amortized Cost		Gross Unrealized Capital Gains		Gross Unrealized Capital Losses		Fair Value
June 30, 2020
Communications	$	983	$	201	$	1	$	1,183
Financial	2,560		389		7		2,942
Industrial and other companies	6,956		896		35		7,817
Energy	1,562		178		41		1,699
Utilities	2,968		433		2		3,399
Transportation	852		80		19		913
Total	$	15,881	$	2,177	$	105	$	17,953
December 31, 2019
Communications	$	1,002	$	156	$	—	$	1,158
Financial	2,650		302		—		2,952
Industrial and other companies	7,053		667		11		7,709
Energy	1,675		185		18		1,842
Utilities	2,913		294		1		3,206
Transportation	856		78		2		932
Total	$	16,149	$	1,682	$	32	$	17,799

Schedule of Securities Borrowed Under Securities Lending Transactions

The following table presents borrowings under securities lending transactions by asset class pledged as of the dates indicated:

	June 30, 2020 (1)(2)		December 31, 2019 (1)(2)
U.S. Treasuries	$	101	$	109
U.S. Government agencies and authorities	4		—
U.S. corporate public securities	272		447
Foreign corporate public securities and foreign governments	190		185
Equity Securities	1		—
Payables under securities loan agreements	$	568	$	741

(1) As of June 30, 2020 and December 31, 2019, borrowings under securities lending transactions include cash collateral of $489 and $650, respectively.

Financing Receivable, Allowance for Credit Loss

The following table presents a rollforward of the allowance for credit losses on available-for-sale fixed maturity securities for the period presented:

	Six Months Ended June 30, 2020
	Residential mortgage-backed securities		Commercial mortgage-backed securities		Foreign corporate private securities		Other asset-backed securities		Total
Balance as of January 1, 2020	$	—	$	—	$	—	$	—	$	—
Credit losses on securities for which credit losses were not previously recorded	1		—		1		3		5
Initial allowance for credit losses recognized on financial assets accounted for as PCD	—		—		—		—		—
Reductions for securities sold during the period	—		—		—		—		—
Reductions for intent to sell or more likely than not will be required to sell securities prior to recovery of amortized cost	—		—		—		—		—
Increase (decrease) on securities with allowance recorded in previous period	—		—		—		—		—
Write-offs	—		—		—		—		—
Recoveries of amounts previously written off	—		—		—		—		—
Balance at June 30, 2020	$	1	$	—	$	1	$	3	$	5

Schedule of Unrealized Loss on Investments

The following table presents available-for-sale fixed maturities, including securities pledged, for which an allowance for credit losses has not been recorded by market sector and duration as of the date indicated:

	Twelve Months or Less Below Amortized Cost					More Than Twelve Months Below Amortized Cost					Total
June 30, 2020	Fair Value		Unrealized Capital  Losses		Number of securities	Fair Value		Unrealized Capital  Losses		Number of securities	Fair Value		Unrealized Capital  Losses		Number of securities
U.S. Treasuries	$	—	$	—	—	$	—	$	—	—	$	—	$	—	—
State, municipalities and political subdivisions	21		—		10	—		—		—	21		—		10
U.S. corporate public securities	478		29		90	41		9		12	519		38		102
U.S. corporate private securities	297		10		31	79		21		9	376		31		40
Foreign corporate public securities and foreign governments	135		8		38	17		3		6	152		11		44
Foreign corporate private securities	314		28		31	46		1		6	360		29		37
Residential mortgage-backed	711		28		142	135		8		54	846		36		196
Commercial mortgage-backed	1,119		115		224	9		1		1	1,128		116		225
Other asset-backed	764		21		183	278		17		102	1,042		38		285
Total	$	3,839	$	239	749	$	605	$	60	190	$	4,444	$	299	939

The Company concluded that an allowance for credit losses was unnecessary for these securities because the unrealized losses are not credit related.

Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2019:

	Twelve Months or Less Below Amortized Cost				More Than Twelve Months Below Amortized Cost					Total
	Fair Value		Unrealized Capital Losses		Fair Value		Unrealized Capital Losses			Fair Value		Unrealized Capital Losses
U.S. Treasuries	$	68	$	3	$	12	$	—	*	$	80	$	3
State, municipalities and political subdivisions	21		—		—		—			21		—
U.S. corporate public securities	97		3		131		10			228		13
U.S. corporate private securities	75		—		134		16			209		16
Foreign corporate public securities and foreign governments	6		—		53		3			59		3
Foreign corporate private securities	21		—		56		1			77		1
Residential mortgage-backed	535		6		139		5			674		11
Commercial mortgage-backed	331		3		18		—			349		3
Other asset-backed	217		2		500		11			717		13
Total	$	1,389	$	17	$	1,043	$	46		$	2,432	$	63
Total number of securities in an unrealized loss position	289				278					567

*Less than $1.

Other than Temporary Impairment, Credit Losses Recognized in Earnings

The following tables identify the Company's impairments included in the Condensed Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated:

	Three Months Ended June 30,
	2020			2019
	Impairment		No. of Securities	Impairment			No. of Securities
State, municipalities, and political subdivisions	$	—	5	$	—		—
U.S. corporate public securities	5		36	—			—
U.S. corporate private securities	—		1	—			—
Foreign corporate public securities and foreign governments(1)	1		20	1			1
Foreign corporate private securities(1)	—		7	—			—
Residential mortgage-backed	1		27	—		*	7
Commercial mortgage-backed	16		94	—			—
Other asset-backed	1		60	—		*	1
Limited partnerships	—		—	—			—
Total	$	24	250	$	1		9
Credit Impairments	$	—		$	—
Intent Impairments	$	24		$	1
(1) Primarily U.S. dollar denominated.
*Less than $1.
	Six Months Ended June 30,
	2020			2019
	Impairment		No. of Securities	Impairment			No. of Securities
State, municipalities, and political subdivisions	$	—	5	$	—		—
U.S. corporate public securities	11		38	—			—
U.S. corporate private securities	—		1	—			—
Foreign corporate public securities and foreign governments(1)	1		20	1			1
Foreign corporate private securities(1)	—		7	18			3
Residential mortgage-backed	2		32	—		*	13
Commercial mortgage-backed	16		95	—			—
Other asset-backed	1		60	—		*	3
Limited partnerships	—		—	—			—
Total	$	31	258	$	19		20
Credit Impairments	$	—		$	18
Intent Impairments	$	31		$	1
(1) Primarily U.S. dollar denominated.
*Less than $1.

Mortgage Loans by Loan to Value Ratio

The following tables present commercial mortgage loans by year of origination and LTV ratio as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

	As of June 30, 2020
	Loan-to-Value Ratios
Year of Origination	0% - 50%		>50% - 60%		>60% - 70%		>70% - 80%		>80% and above		Total
2020	$	98	$	131	$	28	$	—	$	—	$	257
2019	253		158		87		15		—		513
2018	115		100		90		—		—		305
2017	518		360		17		—		—		895
2016	397		285		6		—		—		688
2015	393		90		—		—		—		483
2014 and prior	1,222		344		24		—		—		1,590
Total	$	2,996	$	1,468	$	252	$	15	$	—	$	4,731

	As of December 31, 2019
	Loan-to-Value Ratios
Year of Origination	0% - 50%		>50% - 60%		>60% - 70%		>70% - 80%		>80% and above		Total
2020	$	—	$	—	$	—	$	—	$	—	$	—
2019	85		96		145		170		26		522
2018	4		88		110		133		14		349
2017	101		244		566		13		10		934
2016	46		150		470		31		—		697
2015	10		343		168		8		—		529
2014 and prior	134		252		1,093		154		—		1,633
Total	$	380	$	1,173	$	2,552	$	509	$	50	$	4,664

Mortgage Loans by Debt Service Coverage Ratio

The following tables present commercial mortgage loans by year of origination and DSC ratio as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

	As of June 30, 2020
	Debt Service Coverage Ratios
Year of Origination	>1.5x		>1.25x - 1.5x		>1.0x - 1.25x		<1.0x		Commercial mortgage loans secured by land or construction loans		Total
2020	$	217	$	30	$	10	$	—	$	—	$	257
2019	393		78		42		—		—		513
2018	194		17		63		31		—		305
2017	466		222		140		67		—		895
2016	603		62		23		—		—		688
2015	451		30		2		—		—		483
2014 and prior	1,335		135		74		46		—		1,590
Total	$	3,659	$	574	$	354	$	144	$	—	$	4,731

	As of December 31, 2019
	Debt Service Coverage Ratios
Year of Origination	>1.5x		>1.25x - 1.5x		>1.0x - 1.25x		<1.0x		Commercial mortgage loans secured by land or construction loans		Total
2020	$	—	$	—	$	—	$	—	$	—	$	—
2019	353		127		42		—		—		522
2018	236		3		60		50		—		349
2017	481		238		133		82		—		934
2016	615		59		23		—		—		697
2015	492		32		—		5		—		529
2014 and prior	1,358		128		88		59		—		1,633
Total	$	3,535	$	587	$	346	$	196	$	—	$	4,664

Mortgage Loans by Geographic Location of Collateral

The following tables present the commercial mortgage loans by year of origination and U.S. region as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

	As of June 30, 2020
	U.S. Region
Year of Origination	Pacific		South Atlantic		Middle Atlantic		West South Central		Mountain		East North Central		New England		West North Central		East South Central		Total
2020	$	56	$	121	$	17	$	23	$	14	$	8	$	—	$	—	$	18	$	257
2019	64		129		11		156		54		44		18		11		26		513
2018	49		112		59		35		26		11		—		13		—		305
2017	101		98		362		150		76		60		5		43		—		895
2016	157		131		183		32		73		77		8		21		6		688
2015	111		135		101		31		42		48		10		5		—		483
2014 and prior	431		308		244		116		166		137		41		117		30		1590
Total	$	969	$	1,034	$	977	$	543	$	451	$	385	$	82	$	210	$	80	$	4,731

	As of December 31, 2019
	U.S. Region
Year of Origination	Pacific		South Atlantic		Middle Atlantic		West South Central		Mountain		East North Central		New England		West North Central		East South Central		Total
2020	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2019	63		127		26		155		53		43		18		11		26		522
2018	50		132		60		43		26		11		—		12		15		349
2017	103		99		396		151		77		60		5		43		—		934
2016	158		132		187		32		75		77		9		21		6		697
2015	125		160		103		34		43		50		10		4		—		529
2014 and prior	445		316		247		122		168		142		42		121		30		1633
Total	$	944	$	966	$	1,019	$	537	$	442	$	383	$	84	$	212	$	77	$	4,664

Mortgage Loans by Property Type of Collateral

The following tables present the commercial mortgage loans by year of origination and property type as of the dates indicated. The information is updated as of June 30, 2020 and December 31, 2019, respectively.

	As of June 30, 2020
	Property Type
Year of Origination	Retail		Industrial		Apartments		Office		Hotel/Motel		Other		Mixed Use		Total
2020	$	44	$	8	$	98	$	107	$	—	$	—	$	—	$	257
2019	33		89		290		81		20		—		—		513
2018	50		79		137		17		4		18		—		305
2017	102		427		217		145		4		—		—		895
2016	130		249		146		144		8		7		4		688
2015	122		182		67		51		19		42		—		483
2014 and prior	711		133		289		223		67		127		40		1590
Total	$	1,192	$	1,167	$	1,244	$	768	$	122	$	194	$	44	$	4,731

	As of December 31, 2019
	Property Type
Year of Origination	Retail		Industrial		Apartments		Office		Hotel/Motel		Other		Mixed Use		Total
2020	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2019	33		90		299		81		19		—		—		522
2018	52		91		152		32		4		18		—		349
2017	104		461		218		147		4		—		—		934
2016	131		254		147		146		8		7		4		697
2015	148		185		69		62		23		42		—		529
2014 and prior	730		135		300		229		69		130		40		1633
Total	$	1,198	$	1,216	$	1,185	$	697	$	127	$	197	$	44	$	4,664

Allowance for Credit Losses on Financing Receivables

The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated:

	June 30, 2020
Allowance for credit losses, balance at January 1	$	12
Credit losses on mortgage loans for which credit losses were not previously recorded	3
Initial allowance for credit losses recognized on financial assets accounted for as PCD	—
Increase (decrease) on mortgage loans with allowance recorded in previous period	40
Provision for expected credit losses	55
Writeoffs	—
Recoveries of amounts previously written off	—
Allowance for credit losses, end of period	$	55

Financing Receivable, Past Due

The following table presents past due commercial mortgage loans as of the dates indicated:

	June 30, 2020		December 31, 2019
Delinquency:
Current	$	4,726	$	4,664
30-59 days past due	—		—
60-89 days past due	—		—
Greater than 90 days past due	5		—
Total	$	4,731	$	4,664

Net Investment Income

Net Investment Income

The following table summarizes Net investment income for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Fixed maturities	$	398	$	354	$	771	$	706
Equity securities	2		1		4		3
Mortgage loans on real estate	50		55		100		109
Policy loans	4		2		6		4
Short-term investments and cash equivalents	—		1		1		2
Other	(51)		32		(21)		33
Gross investment income	403		445		861		857
Less: Investment expenses	18		17		37		35
Net investment income	$	385	$	428	$	824	$	822

Realized Gain (Loss) on Investments

Net realized capital gains (losses) were as follows for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Fixed maturities, available-for-sale, including securities pledged	$	(3)	$	3	$	(21)	$	(13)
Fixed maturities, at fair value option	(39)		53		16		77
Equity securities	6		3		1		4
Derivatives	6		(50)		52		(82)
Embedded derivatives - fixed maturities	—		1		4		2
Guaranteed benefit derivatives	39		(13)		(130)		(13)
Other investments	(38)		1		(43)		(1)
Net realized capital gains (losses)	$	(29)	$	(2)	$	(121)	$	(26)

Gain (Loss) on Securities

Proceeds from the sale of fixed maturities, available-for-sale, and equity securities and the related gross realized gains and losses, before tax, were as follows for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Proceeds on sales	$	583	$	352	$	860	$	1,575
Gross gains	56		7		61		19
Gross losses	39		3		52		14

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The location and effect of derivatives qualifying for hedge accounting on the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income are as follows for the periods indicated:

	Three Months Ended June 30,
	2020				2019
	Interest Rate Contracts		Foreign Exchange Contracts		Interest Rate Contracts		Foreign Exchange Contracts
Derivatives: Qualifying for hedge accounting
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Net Investment Income		Net Investment Income		Net Investment Income		Net Investment Income
Amount of Gain or (Loss) Recognized in Other Comprehensive Income	$	1	$	(16)	$	1	$	16
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income	—		$	2	$	—	$	3
	Six Months Ended June 30,
	2020				2019
	Interest Rate Contracts		Foreign Exchange Contracts		Interest Rate Contracts		Foreign Exchange Contracts
Derivatives: Qualifying for hedge accounting
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Net Investment Income		Net Investment Income		Net Investment Income		Net Investment Income
Amount of Gain or (Loss) Recognized in Other Comprehensive Income	$	2	$	61	$	2	$	8
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income	—		5		—		5

The location and amount of gain (loss) recognized in the Consolidated Statements of Operations for derivatives qualifying for hedge accounting are as follows for the periods indicated:

	Three Months Ended June 30,
	2020				2019
	Net Investment Income		Other net realized capital gains/(losses)		Net Investment Income		Other net realized capital gains/(losses)
Total amounts of line items presented in the statement of operations in which the effects of cash flow hedges are recorded	$	385	$	(5)	$	428	$	(1)
Derivatives: Qualifying for hedge accounting
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from accumulated other comprehensive income into income	2		—		3		—

	Six Months Ended June 30,
	2020				2019
	Net Investment Income		Other net realized capital gains/(losses)		Net Investment Income		Other net realized capital gains/(losses)
Total amounts of line items presented in the statement of operations in which the effects of cash flow hedges are recorded	$	824	$	(90)	$	822	$	(5)
Derivatives: Qualifying for hedge accounting
Cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from accumulated other comprehensive income into income	5		—		5		—

The location and effect of derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations are as follows for the periods indicated:

	Location of Gain or (Loss) Recognized in Income on Derivative	Three Months Ended June 30,
		2020		2019
Derivatives: Non-qualifying for hedge accounting
Interest rate contracts	Other net realized capital gains (losses)	$	3	$	(50)
Foreign exchange contracts	Other net realized capital gains (losses)	$	—	$	1
Equity contracts	Other net realized capital gains (losses)	$	1	—
Credit contracts	Other net realized capital gains (losses)	$	2	—
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments	Other net realized capital gains (losses)	$	—	$	1
Within products	Other net realized capital gains (losses)	$	30	$	(13)
Within reinsurance agreements	Policyholder benefits	$	—	$	(39)
Managed custody guarantees	Other net realized capital gains (losses)	9		—
Total		$	45	$	(100)

	Location of Gain or (Loss) Recognized in Income on Derivative	Six Months Ended June 30,
		2020		2019
Derivatives: Non-qualifying for hedge accounting
Interest rate contracts	Other net realized capital gains (losses)	$	45	$	(86)
Foreign exchange contracts	Other net realized capital gains (losses)	4		2
Equity contracts	Other net realized capital gains (losses)	—		1
Credit contracts	Other net realized capital gains (losses)	3		1
Embedded derivatives and Managed custody guarantees:
Within fixed maturity investments	Other net realized capital gains (losses)	4		2
Within products	Other net realized capital gains (losses)	(113)		(13)
Within reinsurance agreements	Policyholder benefits	23		(77)
Managed custody guarantees	Other net realized capital gains (losses)	(17)		—
Total		$	(51)	$	(170)