The Company holds various types of fixed maturity securities available-for-sale and classifies them as corporate securities (“Corporate”), Canadian and Canadian provincial government securities (“Canadian government”), residential mortgage-backed securities (“RMBS”), asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), U.S. government and agencies (“U.S. government”), state and political subdivisions, and other foreign government, supranational and foreign government-sponsored enterprises (“Other foreign government”). RMBS, ABS and CMBS are collectively “structured securities.”


June 30, 2021:	Amortized Cost		Allowance for Credit Losses		Unrealized Gains		Unrealized Losses		Estimated Fair Value		% of Total
Available-for-sale:
Corporate	$	33,687	$	11	$	3,465	$	137	$	37,004	63.4	%
Canadian government	3,303		—		1,602		2		4,903		8.4
RMBS	1,323		—		60		6		1,377		2.4
ABS	3,467		—		36		21		3,482		6.0
CMBS	1,774		1		102		6		1,869		3.2
U.S. government	1,295		—		47		24		1,318		2.3
State and political subdivisions	1,206		—		144		6		1,344		2.3
Other foreign government	6,742		4		317		65		6,990		12.0
Total fixed maturity securities	$	52,797	$	16	$	5,773	$	267	$	58,287	100.0	%


December 31, 2020:	Amortized Cost		Allowance for Credit Losses		Unrealized Gains		Unrealized Losses		Estimated Fair Value		% of Total
Available-for-sale:
Corporate	$	31,963	$	17	$	4,356	$	94	$	36,208	63.9	%
Canadian government	3,145		—		1,995		—		5,140		9.1
RMBS	1,735		—		84		2		1,817		3.2
ABS	3,099		—		35		42		3,092		5.4
CMBS	1,790		3		102		21		1,868		3.3
U.S. government	1,242		—		196		1		1,437		2.5
State and political subdivisions	1,237		—		157		4		1,390		2.4
Other foreign government	5,337		—		479		33		5,783		10.2
Total fixed maturity securities	$	49,548	$	20	$	7,404	$	197	$	56,735	100.0	%

The Company enters into various collateral arrangements with counterparties that require both the pledging and acceptance of fixed maturity securities as collateral. Pledged fixed maturity securities are included in fixed maturity securities, available-for-sale in the condensed consolidated balance sheets. Fixed maturity securities received as collateral are held in separate custodial accounts and are not recorded on the Company’s condensed consolidated balance sheets. Subject to certain constraints, the Company is permitted by contract to sell or repledge collateral it receives; however, as of June 30, 2021 and December 31, 2020, none of the collateral received had been sold or repledged. The Company also holds assets in trust to satisfy collateral requirements under derivative transactions and certain third-party reinsurance treaties. The following table includes fixed maturity securities pledged and received as collateral and assets in trust held to satisfy collateral requirements under derivative transactions and certain third-party reinsurance treaties as of June 30, 2021 and December 31, 2020 (dollars in millions):


	June 30, 2021				December 31, 2020
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Fixed maturity securities pledged as collateral	$	125	$	135	$	148	$	162
Fixed maturity securities received as collateral	n/a		1,881		n/a		1,784
Assets in trust held to satisfy collateral requirements	27,929		30,749		27,675		31,179

The Company monitors its concentrations of financial instruments on an ongoing basis and mitigates credit risk by maintaining a diversified investment portfolio that limits exposure to any one issuer. The Company’s exposure to concentrations of credit risk from single issuers greater than 10% of the Company’s stockholders’ equity included the securities disclosed below, as of

June 30, 2021. The Company’s exposure to concentrations of credit risk from single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government and its agencies as well as the securities disclosed below as of December 31, 2020 (dollars in millions).


	June 30, 2021				December 31, 2020
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Fixed maturity securities guaranteed or issued by:
Government of Japan	$	2,890	$	2,879	$	1,493	$	1,491
Canadian province of Quebec	1,372		2,315		1,303		2,474
Canadian province of Ontario	1,097		1,477		1,054		1,528

The amortized cost and estimated fair value of fixed maturity securities classified as available-for-sale as of June 30, 2021, are shown by contractual maturity in the table below (dollars in millions). Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Structured securities are shown separately in the table below, as they are not due at a single maturity date.


	Amortized Cost		Estimated Fair Value
Available-for-sale:
Due in one year or less	$	1,143	$	1,150
Due after one year through five years	8,350		8,887
Due after five years through ten years	10,565		11,518
Due after ten years	26,175		30,004
Structured securities	6,564		6,728
Total	$	52,797	$	58,287


June 30, 2021:			Estimated
	Amortized Cost		Fair Value		% of Total
Finance	$	12,479	$	13,627	36.8	%
Industrial	17,032		18,749		50.7
Utility	4,176		4,628		12.5

Total	$	33,687	$	37,004	100.0	%

December 31, 2020:			Estimated
	Amortized Cost		Fair Value		% of Total
Finance	$	11,785	$	13,236	36.6	%
Industrial	16,274		18,435		50.9
Utility	3,904		4,537		12.5
Total	$	31,963	$	36,208	100.0	%

As discussed in Note 2 – “Significant Accounting Policies and Pronouncements” of the Company’s 2020 Annual Report, allowances for credit losses on fixed maturity securities are recognized in investment related gains (losses), net on the condensed consolidated statements of income. For these securities, the net amount recognized represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the fixed maturity security prior to the allowance for credit losses. Any remaining difference between the fair value and amortized cost is recognized in AOCI.


	Six months ended June 30, 2021
	Corporate		CMBS		Other Foreign Government		Total
Balance, beginning of period	$	17	$	3	$	—	$	20
Credit losses recognized on securities for which credit losses were not previously recorded	2		1		4		7

Reductions for securities sold during the period	(8)		(2)		—		(10)
Additional increases or decreases for credit losses on securities that had an allowance recorded in a previous period	—		(1)		—		(1)

Balance, end of period	$	11	$	1	$	4	$	16


	Six months ended June 30, 2020
	Corporate		CMBS		Other Foreign Government		Total
Balance, beginning of period	$	—	$	—	$	—	$	—
Credit losses recognized on securities for which credit losses were not previously recorded	40		—		2		42
Reductions for securities sold during the period	(8)		—		(1)		(9)
Balance, end of period	$	32	$	—	$	1	$	33

The following table presents the total gross unrealized losses for the 1,223 and 877 fixed maturity securities as of June 30, 2021 and December 31, 2020, where the estimated fair value had declined and remained below amortized cost by the indicated amount (dollars in millions):


	June 30, 2021				December 31, 2020
	Gross Unrealized Losses		% of Total		Gross Unrealized Losses		% of Total
Less than 20%	$	213	79.8	%	$	133	67.5	%
20% or more for less than six months	2		0.7		42		21.3
20% or more for six months or greater	52		19.5		22		11.2
Total	$	267	100.0	%	$	197	100.0	%

The Company’s determination of whether a decline in value necessitates the recording of an allowance for credit losses includes an analysis of whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment.

The following tables present the estimated fair values and gross unrealized losses for fixed maturity securities that have estimated fair values below amortized cost as of June 30, 2021 and December 31, 2020 (dollars in millions). These investments are presented by class and grade of security, as well as the length of time the related fair value has remained below amortized cost.


	Less than 12 months				12 months or greater				Total
			Gross				Gross				Gross
June 30, 2021:	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Investment grade securities:
Corporate	$	2,596	$	79	$	168	$	6	$	2,764	$	85
Canadian government	24		2		—		—		24		2
RMBS	261		5		21		1		282		6
ABS	800		4		754		5		1,554		9
CMBS	—		—		24		1		24		1
U.S. government	364		24		—		—		364		24
State and political subdivisions	95		2		29		4		124		6
Other foreign government	1,630		37		561		23		2,191		60
Total investment grade securities	5,770		153		1,557		40		7,327		193
Below investment grade securities:
Corporate	258		42		168		10		426		52


ABS	24		1		15		11		39		12
CMBS	—		—		43		5		43		5

Other foreign government	66		3		16		2		82		5
Total below investment grade securities	348		46		242		28		590		74
Total fixed maturity securities	$	6,118	$	199	$	1,799	$	68	$	7,917	$	267


	Less than 12 months				12 months or greater				Total
			Gross				Gross				Gross
December 31, 2020:	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Investment grade securities:
Corporate	$	930	$	29	$	70	$	5	$	1,000	$	34
Canadian government	—		—		—		—		—		—
RMBS	294		2		—		—		294		2
ABS	1,096		17		570		11		1,666		28
CMBS	160		6		—		—		160		6
U.S. government	27		1		—		—		27		1
State and political subdivisions	66		1		16		3		82		4
Other foreign government	973		27		—		—		973		27
Total investment grade securities	3,546		83		656		19		4,202		102
Below investment grade securities:
Corporate	375		49		81		11		456		60


ABS	20		13		4		1		24		14
CMBS	91		15		—		—		91		15

Other foreign government	36		3		28		3		64		6
Total below investment grade securities	522		80		113		15		635		95
Total fixed maturity securities	$	4,068	$	163	$	769	$	34	$	4,837	$	197

The Company has no intention to sell, nor does it expect to be required to sell, the securities outlined in the tables above, as of the dates indicated. However, unforeseen facts and circumstances may cause the Company to sell fixed maturity securities in the ordinary course of managing its portfolio to meet certain diversification, credit quality and liquidity guidelines. Changes in unrealized losses are primarily driven by changes in interest rates.

During the first quarter of 2021, the Company reclassified approximately $92 million of pre-tax unrealized gains from AOCI to investment income, net of related expenses associated with investments in limited partnerships and private equity funds for which it utilizes the equity method of accounting. The unrealized gains should have been recognized directly in investment income in the same prior periods they were reported by the investees. In addition, the Company recorded approximately $70 million of pre-tax gains in investment related gains (losses), net, associated with investments in limited partnerships considered to be investment companies in order to adjust the carrying value from cost less impairments to a fair value approach, using the net asset value (“NAV”) per share or its equivalent. Had the adjustments been recorded in the years they were reported by the investees, the Company estimates it would have recognized approximately $102 million, $(2) million, $1 million and $10 million of pre-tax income (loss) in the years ended December 31, 2020, 2019, 2018 and 2017, respectively.


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Fixed maturity securities available-for-sale	$	516	$	474	$	1,011	$	954
Equity securities	1		1		3		3
Mortgage loans on real estate	73		66		139		133
Policy loans	13		14		27		29
Funds withheld at interest	95		69		179		122
Short-term investments and cash and cash equivalents	—		2		1		6
Other invested assets	87		41		261		36
Investment income	785		667		1,621		1,283
Investment expense	(26)		(22)		(50)		(44)
Investment income, net of related expenses	$	759	$	645	$	1,571	$	1,239


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Fixed maturity securities available-for-sale:
Impairments and change in allowance for credit losses	$	5	$	—	$	3	$	(34)
Gain on investment activity	53		46		220		73
Loss on investment activity	(30)		(46)		(43)		(54)
Net gains (losses) on equity securities	20		8		23		(15)
Other impairment losses and change in mortgage loan allowance for credit losses	3		(22)		21		(35)
Change in fair value of certain limited partnership investments and other, net	32		8		143		17
Net gains (losses) on derivatives	29		87		47		(156)
Total investment related gains (losses), net	$	112	$	81	$	414	$	(204)

The following table includes the amount of borrowed securities, loaned securities and securities received as collateral as part of the securities lending program and repurchased/reverse repurchased securities pledged, securities received and cash received as of June 30, 2021 and December 31, 2020 (dollars in millions).


	June 30, 2021				December 31, 2020
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Borrowed securities	$	318	$	360	$	118	$	161
Securities lending:
Securities loaned	94		103		94		105
Securities received	n/a		102		n/a		102
Repurchase program/reverse repurchase program:
Securities pledged	877		919		653		711
Securities received	n/a		670		n/a		669
Cash received	n/a		207		n/a		—

The following tables present information on the Company’s securities lending and repurchase/reverse repurchase transactions as of June 30, 2021 and December 31, 2020, respectively (dollars in millions). Collateral associated with certain borrowed securities is not included within the tables, as the collateral pledged to each counterparty is the right to reinsurance treaty cash flows.


	June 30, 2021
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 – 90 Days		Greater than 90 Days		Total
Securities lending transactions:
Corporate	$	—	$	—	$	—	$	103	$	103
Total	—		—		—		103		103
Repurchase/reverse repurchase transactions:
Corporate	—		—		—		411		411





Other foreign government	—		—		220		288		508


Total	—		—		220		699		919
Total transactions	$	—	$	—	$	220	$	802	$	1,022

Gross amount of recognized liabilities for securities lending and repurchase/reverse repurchase transactions in preceding table									$	979
Amounts related to agreements not included in offsetting disclosure									$	43


	December 31, 2020
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 – 90 Days		Greater than 90 Days		Total
Securities lending transactions:
Corporate	$	—	$	—	$	—	$	105	$	105
Total	—		—		—		105		105
Repurchase/reverse repurchase transactions:
Corporate	—		—		—		417		417


Other foreign government	—		—		—		294		294

Total	—		—		—		711		711
Total transactions	$	—	$	—	$	—	$	816	$	816

Gross amount of recognized liabilities for securities lending and repurchase/reverse repurchase transactions in preceding table									$	771
Amounts related to agreements not included in offsetting disclosure									$	45

The Company has elected to offset amounts recognized as receivables and payables resulting from the repurchase/reverse repurchase programs excluding any cash received or paid. After the effect of offsetting, there was no liability presented on the consolidated balance sheet as of June 30, 2021 and December 31, 2020. As of June 30, 2021, the Company recognized payables resulting from cash received as collateral associated with a repurchase/reverse repurchase agreement. As of December 31, 2020, the Company did not have payables resulting from cash received as collateral associated with repurchase/reverse repurchase agreements. Amounts owed to and due from the counterparties may be settled in cash or offset, in accordance with the agreements.

As of June 30, 2021, mortgage loans were geographically dispersed throughout the U.S. with the largest concentrations in Texas (13.5%), California (13.4%) and Washington (8.1%), in addition to loans secured by properties in Canada (3.2%) and United Kingdom (1.8%). The recorded investment in mortgage loans on real estate presented below is gross of unamortized deferred loan origination fees and expenses and allowance for credit losses.


	June 30, 2021				December 31, 2020
Property type:	Carrying Value		% of Total		Carrying Value		% of Total
Office	$	1,733	26.5	%	$	1,702	29.0	%
Retail	2,036		31.2		1,711		29.3
Industrial	1,388		21.2		1,210		20.6
Apartment	897		13.7		808		13.8
Other commercial	483		7.4		430		7.3
Recorded investment	6,537		100.0	%	5,861		100.0	%
Unamortized balance of loan origination fees and expenses	(11)				(10)
Allowance for credit losses	(45)				(64)
Total mortgage loans on real estate	$	6,481			$	5,787


	June 30, 2021				December 31, 2020
	Recorded Investment		% of Total		Recorded Investment		% of Total
Due within five years	$	2,585	39.6	%	$	2,276	38.8	%
Due after five years through ten years	2,845		43.5		2,768		47.3
Due after ten years	1,107		16.9		817		13.9
Total	$	6,537	100.0	%	$	5,861	100.0	%


	Recorded Investment
	Debt Service Ratios						Construction Loans
	>1.20x		1.00x – 1.20x		<1.00x				Total		% of Total
June 30, 2021:
Loan-to-Value Ratio
0% – 59.99%	$	3,053	$	274	$	65	$	24	$	3,416	52.2	%
60% – 69.99%	2,110		200		42		—		2,352		36.0
70% – 79.99%	503		36		16		—		555		8.5
80% or greater	193		—		21		—		214		3.3
Total	$	5,859	$	510	$	144	$	24	$	6,537	100.0	%


	Recorded Investment
	Debt Service Ratios						Construction Loans
	>1.20x		1.00x – 1.20x		<1.00x				Total		% of Total
December 31, 2020:
Loan-to-Value Ratio
0% – 59.99%	$	2,774	$	106	$	17	$	12	$	2,909	49.6	%
60% – 69.99%	2,013		62		33		—		2,108		36.0
70% – 79.99%	555		49		13		—		617		10.5
80% or greater	189		21		17		—		227		3.9
Total	$	5,531	$	238	$	80	$	12	$	5,861	100.0	%


	Recorded Investment
	Year of Origination
	2021		2020		2019		2018		2017		Prior		Total
June 30, 2021:
Internal credit quality grade:
High investment grade	$	491	$	406	$	569	$	468	$	304	$	1,686	$	3,924
Investment grade	263		366		474		371		399		580		2,453
Average	6		—		—		39		18		57		120
Watch list	—		—		—		—		—		4		4
In or near default	—		—		—		—		—		36		36
Total	$	760	$	772	$	1,043	$	878	$	721	$	2,363	$	6,537


	Recorded Investment
	Year of Origination
	2020		2019		2018		2017		2016		Prior		Total
December 31, 2020:
Internal credit quality grade:
High investment grade	$	411	$	616	$	493	$	336	$	574	$	1,008	$	3,438
Investment grade	352		496		399		407		249		368		2,271
Average	—		—		—		19		37		55		111
Watch list	—		—		—		—		—		4		4
In or near default	—		—		—		—		—		37		37
Total	$	763	$	1,112	$	892	$	762	$	860	$	1,472	$	5,861


	June 30, 2021		December 31, 2020
Mortgage loans:
Individually measured for impairment	$	36	$	37
Collectively measured for impairment	6,501		5,824
Recorded investment	$	6,537	$	5,861
Allowance for credit losses:
Individually measured for impairment	$	—	$	—
Collectively measured for impairment	45		64
Total allowance for credit losses	$	45	$	64


	Unpaid Principal Balance		Recorded Investment		Related Allowance		Carrying Value
June 30, 2021:
Impaired mortgage loans with no allowance for credit losses recorded	$	36	$	36	$	—	$	36
Impaired mortgage loans with allowance for credit losses recorded	—		—		—		—
Total impaired mortgage loans	$	36	$	36	$	—	$	36
December 31, 2020:
Impaired mortgage loans with no allowance for credit losses recorded	$	37	$	37	$	—	$	37
Impaired mortgage loans with allowance for credit losses recorded	—		—		—		—
Total impaired mortgage loans	$	37	$	37	$	—	$	37

The Company’s average investment balance of impaired mortgage loans and the related interest income are reflected in the table below for the periods indicated (dollars in millions):
	Three months ended June 30,
	2021				2020
	Average Recorded Investment(1)		Interest Income		Average Recorded Investment(1)		Interest Income
Impaired mortgage loans with no allowance for credit losses recorded	$	36	$	1	$	17	$	—

Total impaired mortgage loans	$	36	$	1	$	17	$	—

	Six months ended June 30,
	2021				2020
	Average Recorded Investment(1)		Interest Income		Average Recorded Investment(1)		Interest Income
Impaired mortgage loans with no allowance for credit losses recorded	$	36	$	1	$	17	$	—

Total impaired mortgage loans	$	36	$	1	$	17	$	—

The Company did not acquire any impaired mortgage loans during the six months ended June 30, 2021 and 2020. The Company had no mortgage loans that were on a nonaccrual status as of June 30, 2021 and December 31, 2020. During the six months ended June 30, 2021, the Company modified the payment terms of one commercial mortgage loan, with a carrying value of approximately $10 million in response to COVID-19. During the year ended December 31, 2020, the Company modified the payment terms of 52 commercial mortgage loans, with a carrying value of approximately $660 million in response to COVID-19. These loans met the criteria established in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and were not considered a troubled debt restructuring. In accordance with the CARES Act criteria, these loans were not more than 30 days past due at December 31, 2019, and the modifications included deferral or delayed payments of principal or interest on the loan.

The majority of policy loans are associated with one client. These policy loans present no credit risk as the amount of the loan cannot exceed the obligation due to the ceding company upon the death of the insured or surrender of the underlying policy. The provisions of the treaties in force and the underlying policies determine the policy loan interest rates. The Company earns a spread between the interest rate earned on policy loans and the interest rate credited to corresponding liabilities.

As of June 30, 2021, $4.7 billion of the funds withheld at interest balance is associated with two clients. For reinsurance agreements written on modco basis and certain agreements written on a coinsurance funds withheld basis, assets equal to the net statutory reserves are withheld and legally owned and managed by the ceding company and are reflected as funds withheld at interest. In the event of a ceding company’s insolvency, the Company would need to assert a claim on the assets supporting its reserve liabilities. However, the risk of loss to the Company is mitigated by its ability to offset amounts it owes the ceding company for claims or allowances against amounts owed to the Company from the ceding company.

Other invested assets include limited partnership interests, joint ventures (other than operating joint ventures), lifetime mortgages, derivative contracts and fair value option (“FVO”) contractholder-directed unit-linked investments. Other invested assets also include FHLB common stock, which is included in Other in the table below. The allowance for credit losses for lifetime mortgages as of June 30, 2021 and December 31, 2020, was $1 million and $2 million, respectively. Carrying values of these assets as of June 30, 2021 and December 31, 2020 are as follows (dollars in millions):


	June 30, 2021		December 31, 2020
Limited partnership interests and real estate joint ventures	$	1,611	$	1,367
Lifetime mortgages	958		935
Derivatives	146		140
FVO contractholder-directed unit-linked investments	54		289
Other	155		98
Total other invested assets	$	2,924	$	2,829