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Investments (Tables)
 6 Months Ended
Jun. 30, 2016
Investments [Abstract]  
Schedule for fixed income securities at amortized cost, gross unrealized gains and losses and fair value
The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows:
($ in millions)
Amortized cost
 
Gross unrealized
 
Fair
value
 
 
Gains
 
Losses
 
June 30, 2016
 

 
 

 
 

 
 

U.S. government and agencies
$
3,401

 
$
122

 
$
—

 
$
3,523

Municipal
7,286

 
543

 
(11
)
 
7,818

Corporate
41,134

 
1,839

 
(273
)
 
42,700

Foreign government
1,091

 
61

 
—

 
1,152

Asset-backed securities (“ABS”)
1,737

 
11

 
(22
)
 
1,726

Residential mortgage-backed securities (“RMBS”)
748

 
81

 
(11
)
 
818

Commercial mortgage-backed securities (“CMBS”)
352

 
23

 
(7
)
 
368

Redeemable preferred stock
21

 
3

 
—

 
24

Total fixed income securities
$
55,770

 
$
2,683

 
$
(324
)
 
$
58,129

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 

 
 

 
 

 
 

U.S. government and agencies
$
3,836

 
$
90

 
$
(4
)
 
$
3,922

Municipal
7,032

 
389

 
(20
)
 
7,401

Corporate
41,674

 
1,032

 
(879
)
 
41,827

Foreign government
983

 
50

 
—

 
1,033

ABS
2,359

 
11

 
(43
)
 
2,327

RMBS
857

 
100

 
(10
)
 
947

CMBS
438

 
32

 
(4
)
 
466

Redeemable preferred stock
22

 
3

 
—

 
25

Total fixed income securities
$
57,201

 
$
1,707

 
$
(960
)
 
$
57,948
Schedule for fixed income securities based on contractual maturities
The scheduled maturities for fixed income securities are as follows as of June 30, 2016:
($ in millions)
Amortized cost
 
Fair value
Due in one year or less
$
4,394

 
$
4,423

Due after one year through five years
26,870

 
27,753

Due after five years through ten years
16,262

 
16,854

Due after ten years
5,407

 
6,187

 
52,933

 
55,217

ABS, RMBS and CMBS
2,837

 
2,912

Total
$
55,770

 
$
58,129
Schedule of net investment income
Net investment income is as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Fixed income securities
$
520

 
$
567

 
$
1,038

 
$
1,135

Equity securities
44

 
31

 
72

 
54

Mortgage loans
53

 
57

 
106

 
112

Limited partnership interests
126

 
118

 
247

 
316

Short-term investments
3

 
3

 
7

 
4

Other
57

 
49

 
108

 
94

Investment income, before expense
803

 
825

 
1,578

 
1,715

Investment expense
(41
)
 
(36
)
 
(85
)
 
(76
)
Net investment income
$
762

 
$
789

 
$
1,493

 
$
1,639
Schedule of realized capital gains and losses by asset type
Realized capital gains and losses by asset type are as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Fixed income securities
$
24

 
$
60

 
$
(47
)
 
$
140

Equity securities
11

 
48

 
(79
)
 
126

Mortgage loans
1

 
1

 
1

 
1

Limited partnership interests
(13
)
 
(3
)
 
13

 
3

Derivatives
2

 
5

 
(7
)
 
(20
)
Other
(1
)
 
(3
)
 
(6
)
 
(3
)
Realized capital gains and losses
$
24

 
$
108

 
$
(125
)
 
$
247
Schedule of realized capital gains and losses by transaction type
Realized capital gains and losses by transaction type are as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Impairment write-downs
$
(63
)
 
$
(11
)
 
$
(122
)
 
$
(30
)
Change in intent write-downs
(16
)
 
(32
)
 
(38
)
 
(62
)
Net other-than-temporary impairment losses recognized in earnings
(79
)
 
(43
)
 
(160
)
 
(92
)
Sales and other
104

 
146

 
45

 
362

Valuation and settlements of derivative instruments
(1
)
 
5

 
(10
)
 
(23
)
Realized capital gains and losses
$
24

 
$
108

 
$
(125
)
 
$
247
Schedule of other-than-temporary impairment losses by asset type
Other-than-temporary impairment losses by asset type are as follows:
($ in millions)
Three months ended June 30, 2016
 
Three months ended June 30, 2015
 
Gross
 
Included
 in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Corporate
$
(1
)
 
$
—

 
$
(1
)
 
$
(5
)
 
$
4

 
$
(1
)
ABS
—

 
(1
)
 
(1
)
 
(3
)
 
—

 
(3
)
CMBS
—

 
(1
)
 
(1
)
 
—

 
—

 
—

Total fixed income securities
(1
)
 
(2
)
 
(3
)
 
(8
)
 
4

 
(4
)
Equity securities
(51
)
 
—

 
(51
)
 
(36
)
 
—

 
(36
)
Limited partnership interests
(24
)
 
—

 
(24
)
 
—

 
—

 
—

Other
(1
)
 
—

 
(1
)
 
(3
)
 
—

 
(3
)
Other-than-temporary impairment losses
$
(77
)
 
$
(2
)
 
$
(79
)
 
$
(47
)
 
$
4

 
$
(43
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2016
 
Six months ended June 30, 2015
 
Gross
 
Included
 in OCI
 
Net
 
Gross
 
Included
in OCI
 
Net
Fixed income securities:
 

 
 

 
 

 
 

 
 

 
 

Municipal
$
—

 
$
—

 
$
—

 
$
(4
)
 
$
4

 
$
—

Corporate
(17
)
 
7

 
(10
)
 
(10
)
 
4

 
(6
)
ABS
(6
)
 
—

 
(6
)
 
(4
)
 
1

 
(3
)
RMBS
—

 
—

 
—

 
1

 
(1
)
 
—

CMBS
(4
)
 
1

 
(3
)
 
—

 
—

 
—

Total fixed income securities
(27
)
 
8

 
(19
)
 
(17
)
 
8

 
(9
)
Equity securities
(128
)
 
—

 
(128
)
 
(75
)
 
—

 
(75
)
Limited partnership interests
(11
)
 
—

 
(11
)
 
(5
)
 
—

 
(5
)
Other
(2
)
 
—

 
(2
)
 
(3
)
 
—

 
(3
)
Other-than-temporary impairment losses
$
(168
)
 
$
8

 
$
(160
)
 
$
(100
)
 
$
8

 
$
(92
)
Schedule of other-than-temporary impairment losses on fixed income securities included in Accumulated Other Comprehensive Income
The amounts exclude $215 million and $233 million as of June 30, 2016 and December 31, 2015, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
($ in millions)
June 30, 2016
 
December 31, 2015
Municipal
$
(8
)
 
$
(9
)
Corporate
(7
)
 
(7
)
ABS
(23
)
 
(23
)
RMBS
(95
)
 
(102
)
CMBS
(7
)
 
(6
)
Total
$
(140
)
 
$
(147
)
Schedule of credit losses on fixed income securities recognized in earnings
Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of the end of the period are as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Beginning balance
$
(350
)
 
$
(378
)
 
$
(392
)
 
$
(380
)
Additional credit loss for securities previously other-than-temporarily impaired
(3
)
 
(2
)
 
(11
)
 
(3
)
Additional credit loss for securities not previously other-than-temporarily impaired
—

 
(2
)
 
(8
)
 
(6
)
Reduction in credit loss for securities disposed or collected
22

 
8

 
80

 
14

Change in credit loss due to accretion of increase in cash flows
—

 
2

 
—

 
3

Ending balance
$
(331
)
 
$
(372
)
 
$
(331
)
 
$
(372
)
Schedule of unrealized net capital gains and losses
Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows:
($ in millions)
Fair
value
 
Gross unrealized
 
Unrealized net
gains (losses)
June 30, 2016
 
Gains
 
Losses
 
Fixed income securities
$
58,129

 
$
2,683

 
$
(324
)
 
$
2,359

Equity securities
5,265

 
506

 
(165
)
 
341

Short-term investments
2,850

 
—

 
—

 
—

Derivative instruments (1)
5

 
5

 
(3
)
 
2

Equity method (“EMA”) limited partnerships (2)
 

 
 

 
 

 
(5
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
2,697

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves (3)
 

 
 

 
 

 
—

DAC and DSI (4)
 

 
 

 
 

 
(195
)
Amounts recognized
 

 
 

 
 

 
(195
)
Deferred income taxes
 

 
 

 
 

 
(878
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
1,624

_______________
(1) 
Included in the fair value of derivative instruments are $2 million classified as assets and $(3) million classified as liabilities.
(2) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable.
(3) 
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment, if any, primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.
(4) 
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
($ in millions)
Fair
value
 
Gross unrealized
 
Unrealized net
gains (losses)
December 31, 2015
 
Gains
 
Losses
 
Fixed income securities
$
57,948

 
$
1,707

 
$
(960
)
 
$
747

Equity securities
5,082

 
415

 
(139
)
 
276

Short-term investments
2,122

 
—

 
—

 
—

Derivative instruments (1)
10

 
10

 
(4
)
 
6

EMA limited partnerships
 

 
 

 
 

 
(4
)
Unrealized net capital gains and losses, pre-tax
 

 
 

 
 

 
1,025

Amounts recognized for:
 

 
 

 
 

 
 

Insurance reserves
 

 
 

 
 

 
—

DAC and DSI
 

 
 

 
 

 
(67
)
Amounts recognized
 

 
 

 
 

 
(67
)
Deferred income taxes
 

 
 

 
 

 
(338
)
Unrealized net capital gains and losses, after-tax
 

 
 

 
 

 
$
620

_______________
(1) 
Included in the fair value of derivative instruments are $6 million classified as assets and $(4) million classified as liabilities.
Schedule of change in unrealized net capital gains and losses
The change in unrealized net capital gains and losses for the six months ended June 30, 2016 is as follows:
($ in millions)
 
Fixed income securities
$
1,612

Equity securities
65

Derivative instruments
(4
)
EMA limited partnerships
(1
)
Total
1,672

Amounts recognized for:
 

Insurance reserves
—

DAC and DSI
(128
)
Amounts recognized
(128
)
Deferred income taxes
(540
)
Increase in unrealized net capital gains and losses, after-tax
$
1,004
Schedule of gross unrealized losses and fair value of available for sale securities by length of time
The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position.
($ in millions)
Less than 12 months
 
12 months or more
 
Total
unrealized
losses
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
Number
of issues
 
Fair
value
 
Unrealized
losses
 
June 30, 2016
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and agencies
5

 
$
528

 
$
—

 
—

 
$
—

 
$
—

 
$
—

Municipal
32

 
76

 
—

 
9

 
28

 
(11
)
 
(11
)
Corporate
296

 
3,524

 
(112
)
 
196

 
1,958

 
(161
)
 
(273
)
Foreign government
1

 
2

 
—

 
—

 
—

 
—

 
—

ABS
40

 
371

 
(5
)
 
24

 
371

 
(17
)
 
(22
)
RMBS
78

 
39

 
(1
)
 
175

 
108

 
(10
)
 
(11
)
CMBS
14

 
78

 
(6
)
 
1

 
2

 
(1
)
 
(7
)
Total fixed income securities
466

 
4,618

 
(124
)
 
405

 
2,467

 
(200
)
 
(324
)
Equity securities
241

 
1,002

 
(130
)
 
55

 
160

 
(35
)
 
(165
)
Total fixed income and equity securities
707

 
$
5,620

 
$
(254
)
 
460

 
$
2,627

 
$
(235
)
 
$
(489
)
Investment grade fixed income securities
220

 
$
2,249

 
$
(24
)
 
256

 
$
1,331

 
$
(87
)
 
$
(111
)
Below investment grade fixed income securities
246

 
2,369

 
(100
)
 
149

 
1,136

 
(113
)
 
(213
)
Total fixed income securities
466

 
$
4,618

 
$
(124
)
 
405

 
$
2,467

 
$
(200
)
 
$
(324
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and agencies
53

 
$
1,874

 
$
(4
)
 
—

 
$
—

 
$
—

 
$
(4
)
Municipal
222

 
810

 
(6
)
 
9

 
36

 
(14
)
 
(20
)
Corporate
1,361

 
17,915

 
(696
)
 
111

 
1,024

 
(183
)
 
(879
)
Foreign government
9

 
44

 
—

 
—

 
—

 
—

 
—

ABS
133

 
1,733

 
(24
)
 
20

 
324

 
(19
)
 
(43
)
RMBS
88

 
69

 
—

 
176

 
125

 
(10
)
 
(10
)
CMBS
13

 
75

 
(2
)
 
1

 
2

 
(2
)
 
(4
)
Total fixed income securities
1,879

 
22,520

 
(732
)
 
317

 
1,511

 
(228
)
 
(960
)
Equity securities
265

 
1,397

 
(107
)
 
37

 
143

 
(32
)
 
(139
)
Total fixed income and equity securities
2,144

 
$
23,917

 
$
(839
)
 
354

 
$
1,654

 
$
(260
)
 
$
(1,099
)
Investment grade fixed income securities
1,405

 
$
17,521

 
$
(362
)
 
225

 
$
972

 
$
(105
)
 
$
(467
)
Below investment grade fixed income securities
474

 
4,999

 
(370
)
 
92

 
539

 
(123
)
 
(493
)
Total fixed income securities
1,879

 
$
22,520

 
$
(732
)
 
317

 
$
1,511

 
$
(228
)
 
$
(960
)
Carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution
The following table reflects the carrying value of non-impaired fixed rate mortgage loans summarized by debt service coverage ratio distribution.
($ in millions)
June 30, 2016
 
December 31, 2015
Below 1.0
$
43

 
$
64

1.0 - 1.25
309

 
382

1.26 - 1.50
1,221

 
1,219

Above 1.50
2,874

 
2,667

Total non-impaired mortgage loans
$
4,447

 
$
4,332
Net carrying value of impaired mortgage loans
The net carrying value of impaired mortgage loans is as follows:
($ in millions)
June 30, 2016
 
December 31, 2015
Impaired mortgage loans with a valuation allowance
$
6

 
$
6

Impaired mortgage loans without a valuation allowance
—

 
—

Total impaired mortgage loans
$
6

 
$
6

Valuation allowance on impaired mortgage loans
$
3

 
$
3
Valuation allowance on impaired mortgage loans
The rollforward of the valuation allowance on impaired mortgage loans is as follows:
($ in millions)
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Beginning balance
$
3

 
$
8

 
$
3

 
$
8

Charge offs
—

 
(1
)
 
—

 
(1
)
Ending balance
$
3

 
$
7

 
$
3

 
$
7
Past due financing receivables
The payment status of mortgage loans is as follows:
($ in millions)
June 30, 2016
 
December 31, 2015
Less than 90 days past due
$
6

 
$
—

90 days or greater past due
—

 
—

Total past due
6

 
—

Current loans
4,447

 
4,338

Total mortgage loans
$
4,453

 
$
4,338