Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Financial Instruments Measured At Fair Value On A Recurring Basis

The following tables present, by valuation hierarchy, the financial instruments measured at fair value on a recurring basis: 

December 31, 2013	Level 1		Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	1,626	$	1,323	$	—	$	2,949
Foreign	223		14,324		44		14,591
Corporate securities	—		17,304		166		17,470
Mortgage-backed securities	—		10,886		8		10,894
States, municipalities, and political subdivisions	—		3,350		—		3,350
	1,849		47,187		218		49,254
Equity securities	373		460		4		837
Short-term investments	953		803		7		1,763
Other investments	305		231		2,440		2,976
Securities lending collateral	—		1,632		—		1,632
Investment derivative instruments	19		—		—		19
Other derivative instruments	—		6		—		6
Separate account assets	1,145		81		—		1,226
Total assets measured at fair value	$	4,644	$	50,400	$	2,669	$	57,713
Liabilities:
Investment derivative instruments	$	6	$	—	$	—	$	6
Other derivative instruments	60		2		—		62
GLB(1)	—		—		193		193
Total liabilities measured at fair value	$	66	$	2	$	193	$	261

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5c) for additional information.

December 31, 2012	Level 1			Level 2		Level 3		Total
(in millions of U.S. dollars)
Assets:
Fixed maturities available for sale
U.S. Treasury and agency	$	2,050		$	1,685	$	—	$	3,735
Foreign	222			13,431		60		13,713
Corporate securities	20			16,586		102		16,708
Mortgage-backed securities	—			10,460		13		10,473
States, municipalities, and political subdivisions	—			2,677		—		2,677
	2,292			44,839		175		47,306
Equity securities	253			488		3		744
Short-term investments	1,503			725		—		2,228
Other investments	268			196		2,252		2,716
Securities lending collateral	—			1,791		—		1,791
Investment derivative instruments	11			—		—		11
Other derivative instruments	(6		)	30		—		24
Separate account assets	872			71		—		943
Total assets measured at fair value	$	5,193		$	48,140	$	2,430	$	55,763
Liabilities:
GLB(1)	$	—		$	—	$	1,119	$	1,119

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5c) for additional information.

Fair Value And Maximum Future Funding Commitments Related To Investments

The following table presents, by investment category, the expected liquidation period, fair value, and maximum future funding commitments of alternative investments: 

		December 31				December 31
		2013				2012
(in millions of U.S. dollars)	Expected Liquidation Period of Underlying Assets	Fair Value		Maximum Future Funding Commitments		Fair Value		Maximum Future Funding Commitments
Financial	5 to 9 Years	$	256	$	129	$	225	$	111
Real estate	3 to 9 Years	322		92		292		62
Distressed	6 to 9 Years	180		230		192		152
Mezzanine	6 to 9 Years	276		252		284		279
Traditional	3 to 8 Years	813		456		711		587
Vintage	1 to 3 Years	13		—		14		—
Investment funds	Not Applicable	428		—		395		—
		$	2,288	$	1,159	$	2,113	$	1,191

Schedule Of Significant Unobservable Inputs Used In Level 3 Liability Valuations

The following table presents the significant unobservable inputs used in the Level 3 liability valuations. Excluded from the table below are inputs used to determine the fair value of Level 3 assets which are based on single broker quotes or net asset value and contain no quantitative unobservable inputs developed by management.

(in millions of U.S. dollars, except for percentages)	Fair Value at December 31, 2013		Valuation Technique	Significant Unobservable Inputs	Ranges
GLB(1)	$	193	Actuarial model	Lapse rate	1% – 30%
				Annuitization rate	0% – 55%

⁽¹⁾  Discussion of the most significant inputs used in the fair value measurement of GLB and the sensitivity of those assumptions is included within Note 4 a) Guaranteed living benefits.

Financial Instruments Measured At Fair Value Using Significant Unobservable Inputs

The following tables present a reconciliation of the beginning and ending balances of financial instruments measured at fair value using significant unobservable inputs (Level 3): 

	Assets																		Liabilities
	Available-for-Sale Debt Securities									Equity securities			Short-term investments			Other investments			GLB(1)
Year Ended December 31, 2013	Foreign			Corporate securities			MBS
(in millions of U.S. dollars)
Balance, beginning of year	$	60		$	102		$	13		$	3		$	—		$	2,252		$	1,119
Transfers into Level 3	36			47			—			8			8			—			—
Transfers out of Level 3	(54		)	(31		)	—			(1		)	(2		)	—			—
Change in Net Unrealized Gains (Losses) included in OCI	—			—			—			(6		)	—			45			—
Net Realized Gains/Losses	1			(2		)	—			4			—			(2		)	(926		)
Purchases	24			75			—			2			3			551			—
Sales	(21		)	(7		)	(3		)	(6		)	(1		)	(10		)	—
Settlements	(2		)	(18		)	(2		)	—			(1		)	(396		)	—
Balance, end of year	$	44		$	166		$	8		$	4		$	7		$	2,440		$	193
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	(2	)	$	—		$	—		$	—		$	(2	)	$	(926	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. Refer to Note 5c) for additional information.

	Assets																								Liabilities
	Available-for-Sale Debt Securities															Equity securities			Other investments			Other derivative instruments			GLB(1)
Year Ended December 31, 2012	U.S. Treasury and Agency			Foreign			Corporate securities			MBS			States, municipalities, and political subdivisions
(in millions of U.S. dollars)
Balance, beginning of year	$	5		$	33		$	134		$	28		$	1		$	13		$	1,877		$	3		$	1,319
Transfers into Level 3	—			49			37			22			1			2			53			—			—
Transfers out of Level 3	(4		)	(13		)	(46		)	(35		)	(1		)	(11		)	—			—			—
Change in Net Unrealized Gains (Losses) included in OCI	—			(1		)	6			—			—			—			55			—			—
Net Realized Gains/Losses	—			—			(1		)	—			—			—			(7		)	(4		)	(200		)
Purchases	—			46			24			9			—			4			520			3			—
Sales	—			(53		)	(19		)	(7		)	—			(5		)	(9		)	—			—
Settlements	(1		)	(1		)	(33		)	(4		)	(1		)	—			(237		)	(2		)	—
Balance, end of year	$	—		$	60		$	102		$	13		$	—		$	3		$	2,252		$	—		$	1,119
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—		$	—		$	—		$	—		$	—		$	—		$	(7	)	$	—		$	(200	)

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $1.4 billion at December 31, 2012 and $1.5 billion at December 31, 2011, which includes a fair value derivative adjustment of $1.1 billion and $1.3 billion, respectively. 

			Assets																					Liabilities
			Available-for-Sale Debt Securities																					GLB(1)
Year Ended December 31, 2011	U.S. Treasury and Agency		Foreign			Corporate securities			MBS			States, municipalities, and political subdivisions			Equity securities			Other investments			Other derivative instruments
(in millions of U.S. dollars)
Balance, beginning of year	$	—	$	26		$	115		$	39		$	2		$	13		$	1,432		$	4		$	507
Transfers into Level 3	—		9			42			4			—			—			—			—			—
Transfers out of Level 3	—		(18		)	(4		)	(48		)	—			—			—			—			—
Change in Net Unrealized Gains (Losses) included in OCI	—		(1		)	(2		)	—			—			(1		)	93			—			—
Net Realized Gains/Losses	—		—			(3		)	—			—			4			(3		)	2			812
Purchased	5		23			32			59			—			5			602			—			—
Sales	—		(3		)	(27		)	(17		)	—			(8		)	(55		)	—			—
Settlements	—		(3		)	(19		)	(9		)	(1		)	—			(192		)	(3		)	—
Balance, end of year	$	5	$	33		$	134		$	28		$	1		$	13		$	1,877		$	3		$	1,319
Net Realized Gains/Losses Attributable to Changes in Fair Value at the Balance Sheet Date	$	—	$	—		$	—		$	—		$	—		$	—		$	(3	)	$	(1	)	$	812

⁽¹⁾  Our GLB reinsurance product meets the definition of a derivative instrument for accounting purposes and is accordingly carried at fair value. Excluded from the table above is the portion of the GLB derivative liability classified as Future policy benefits in the consolidated balance sheets. The liability for GLB reinsurance was $1.5 billion at December 31, 2011 and $648 million at December 31, 2010, which includes a fair value derivative adjustment of $1.3 billion and $507 million, respectively. 

Carrying Values And Fair Values Of Financial Instruments Not Measured At Fair Value

December 31, 2013	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	596	$	236	$	—	$	832	$	820
Foreign	—		897		—		897		864
Corporate securities	—		1,990		15		2,005		1,922
Mortgage-backed securities	—		1,379		—		1,379		1,341
States, municipalities, and political subdivisions	—		1,150		—		1,150		1,151
	596		5,652		15		6,263		6,098
Partially-owned insurance companies	—		—		470		470		470
Total assets	$	596	$	5,652	$	485	$	6,733	$	6,568
Liabilities:
Short-term debt	$	—	$	1,913	$	—	$	1,913	$	1,901
Long-term debt	—		4,088		—		4,088		3,807
Trust preferred securities	—		438		—		438		309
Total liabilities	$	—	$	6,439	$	—	$	6,439	$	6,017

December 31, 2012	Fair Value								Carrying Value
(in millions of U.S. dollars)	Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities held to maturity
U.S. Treasury and agency	$	619	$	464	$	—	$	1,083	$	1,044
Foreign	—		964		—		964		910
Corporate securities	—		2,257		18		2,275		2,133
Mortgage-backed securities	—		2,116		—		2,116		2,028
States, municipalities, and political subdivisions	—		1,195		—		1,195		1,155
	619		6,996		18		7,633		7,270
Partially-owned insurance companies	—		—		454		454		454
Total assets	$	619	$	6,996	$	472	$	8,087	$	7,724
Liabilities:
Short-term debt	$	—	$	1,401	$	—	$	1,401	$	1,401
Long-term debt	—		3,916		—		3,916		3,360
Trust preferred securities	—		446		—		446		309
Total liabilities	$	—	$	5,763	$	—	$	5,763	$	5,070