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Investments (Tables)
 12 Months Ended
Dec. 31, 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
 
December 31, 2016
 
 
 
 
 
 
 
U.S. government and agencies
$
3,572

 
$
74

 
$
(9
)
 
$
3,637

Municipal
7,116

 
304

 
(87
)
 
7,333

Corporate
42,742

 
1,178

 
(319
)
 
43,601

Foreign government
1,043

 
36

 
(4
)
 
1,075

ABS
1,169

 
13

 
(11
)
 
1,171

RMBS
651

 
85

 
(8
)
 
728

CMBS
262

 
17

 
(9
)
 
270

Redeemable preferred stock
21

 
3

 
—

 
24

Total fixed income securities
$
56,576

 
$
1,710

 
$
(447
)
 
$
57,839

 
 
 
 
 
 
 
 
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 December 31, 2016:
($ in millions)
Amortized
cost
 
Fair
value
Due in one year or less
$
4,873

 
$
4,898

Due after one year through five years
27,836

 
28,307

Due after five years through ten years
16,448

 
16,612

Due after ten years
5,337

 
5,853

 
54,494

 
55,670

ABS, RMBS and CMBS
2,082

 
2,169

Total
$
56,576

 
$
57,839
Schedule of net investment income
Net investment income for the years ended December 31 is as follows:
($ in millions)
2016
 
2015
 
2014
Fixed income securities
$
2,060

 
$
2,218

 
$
2,447

Equity securities
137

 
110

 
117

Mortgage loans
217

 
228

 
265

Limited partnership interests
561

 
549

 
614

Short-term investments
16

 
9

 
7

Other
222

 
192

 
170

Investment income, before expense
3,213

 
3,306

 
3,620

Investment expense
(171
)
 
(150
)
 
(161
)
Net investment income
$
3,042

 
$
3,156

 
$
3,459
Schedule of realized capital gains and losses by asset type
Realized capital gains and losses by asset type for the years ended December 31 are as follows:
($ in millions)
2016
 
2015
 
2014
Fixed income securities
$
(91
)
 
$
212

 
$
130

Equity securities
23

 
(50
)
 
582

Mortgage loans
—

 
6

 
2

Limited partnership interests
(21
)
 
(93
)
 
13

Derivatives
3

 
(21
)
 
(38
)
Other
(4
)
 
(24
)
 
5

Realized capital gains and losses
$
(90
)
 
$
30

 
$
694
Schedule of realized capital gains and losses by transaction type
Realized capital gains and losses by transaction type for the years ended December 31 are as follows:
($ in millions)
2016
 
2015
 
2014
Impairment write-downs
$
(234
)
 
$
(195
)
 
$
(32
)
Change in intent write-downs
(69
)
 
(221
)
 
(213
)
Net other-than-temporary impairment losses recognized in earnings
(303
)
 
(416
)
 
(245
)
Sales and other
213

 
470

 
975

Valuation and settlements of derivative instruments
—

 
(24
)
 
(36
)
Realized capital gains and losses
$
(90
)
 
$
30

 
$
694
Schedule of other-than-temporary impairment losses by asset type
Other-than-temporary impairment losses by asset type for the years ended December 31 are as follows:
($ in millions)
2016
 
2015
 
2014
 
Gross
 
Included in OCI
 
Net
 
Gross
 
Included in OCI
 
Net
 
Gross
 
Included in OCI
 
Net
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Municipal
$
—

 
$
—

 
$
—

 
$
(17
)
 
$
4

 
$
(13
)
 
$
(10
)
 
$
—

 
$
(10
)
Corporate
(33
)
 
9

 
(24
)
 
(61
)
 
11

 
(50
)
 
(7
)
 
—

 
(7
)
ABS
(6
)
 
—

 
(6
)
 
(33
)
 
22

 
(11
)
 
(12
)
 
1

 
(11
)
RMBS
—

 
(1
)
 
(1
)
 
1

 
(1
)
 
—

 
6

 
(4
)
 
2

CMBS
(15
)
 
2

 
(13
)
 
(1
)
 
—

 
(1
)
 
(1
)
 
—

 
(1
)
Total fixed income securities
(54
)
 
10

 
(44
)
 
(111
)
 
36

 
(75
)
 
(24
)
 
(3
)
 
(27
)
Equity securities
(194
)
 
—

 
(194
)
 
(279
)
 
—

 
(279
)
 
(196
)
 
—

 
(196
)
Mortgage loans
—

 
—

 
—

 
4

 
—

 
4

 
5

 
—

 
5

Limited partnership interests
(56
)
 
—

 
(56
)
 
(51
)
 
—

 
(51
)
 
(27
)
 
—

 
(27
)
Other
(9
)
 
—

 
(9
)
 
(15
)
 
—

 
(15
)
 
—

 
—

 
—

Other-than-temporary impairment losses
$
(313
)

$
10


$
(303
)

$
(452
)

$
36


$
(416
)

$
(242
)

$
(3
)

$
(245
)
Schedule of other-than-temporary impairment losses on fixed income securities included in Accumulated Other Comprehensive Income
The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table. The amount excludes $221 million and $233 million as of December 31, 2016 and 2015, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.
($ in millions)
December 31,
2016
 
December 31,
2015
Municipal
$
(8
)
 
$
(9
)
Corporate
(7
)
 
(7
)
ABS
(21
)
 
(23
)
RMBS
(90
)
 
(102
)
CMBS
(7
)
 
(6
)
Total
$
(133
)
 
$
(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 December 31 are as follows:
($ in millions)
2016
 
2015
 
2014
Beginning balance
$
(392
)
 
$
(380
)
 
$
(513
)
Additional credit loss for securities previously other-than-temporarily impaired
(21
)
 
(30
)
 
(6
)
Additional credit loss for securities not previously other-than-temporarily impaired
(23
)
 
(45
)
 
(18
)
Reduction in credit loss for securities disposed or collected
117

 
60

 
95

Change in credit loss due to accretion of increase in cash flows
1

 
3

 
3

Reduction in credit loss for securities sold in LBL disposition
—

 
—

 
59

Ending balance
$
(318
)

$
(392
)

$
(380
)
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)
December 31, 2016
 
Gains
 
Losses
 
Fixed income securities
$
57,839

 
$
1,710

 
$
(447
)
 
$
1,263

Equity securities
5,666

 
594

 
(85
)
 
509

Short-term investments
4,288

 
—

 
—

 
—

Derivative instruments (1)
5

 
5

 
(3
)
 
2

EMA limited partnerships (2)
 
 
 
 
 
 
(4
)
Unrealized net capital gains and losses, pre-tax
 
 
 
 
 
 
1,770

Amounts recognized for:
 
 
 
 
 
 
 
Insurance reserves (3)
 
 
 
 
 
 
—

DAC and DSI (4)
 
 
 
 
 
 
(146
)
Amounts recognized
 
 
 
 
 
 
(146
)
Deferred income taxes
 
 
 
 
 
 
(571
)
Unrealized net capital gains and losses, after-tax
 
 
 
 
 
 
$
1,053

______________________________
(1) 
Included in the fair value of derivative instruments is $5 million classified as assets.
(2) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable.
(3) 
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment, if any, primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.
(4) 
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
($ 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 $(4) million classified as liabilities.
Schedule of change in unrealized net capital gains and losses
The change in unrealized net capital gains and losses for the years ended December 31 is as follows:
($ in millions)
2016
 
2015
 
2014
Fixed income securities
$
516

 
$
(2,021
)
 
$
866

Equity securities
233

 
(136
)
 
(212
)
Derivative instruments
(4
)
 
8

 
16

EMA limited partnerships
—

 
1

 
(2
)
Investments classified as held for sale
—

 
—

 
(190
)
Total
745

 
(2,148
)
 
478

Amounts recognized for:
 
 
 
 
 
Insurance reserves
—

 
28

 
(28
)
DAC and DSI
(79
)
 
112

 
(21
)
Amounts recognized
(79
)
 
140

 
(49
)
Deferred income taxes
(233
)
 
702

 
(149
)
Increase (decrease) in unrealized net capital gains and losses, after-tax
$
433


$
(1,306
)

$
280
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
 
 
 
Number of issues
 
Fair value
 
Unrealized losses
 
Number of issues
 
Fair value
 
Unrealized losses
 
Total unrealized losses
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
46

 
$
943

 
$
(9
)
 
—

 
$
—

 
$
—

 
$
(9
)
Municipal
1,310

 
3,073

 
(76
)
 
8

 
29

 
(11
)
 
(87
)
Corporate
862

 
13,343

 
(256
)
 
83

 
678

 
(63
)
 
(319
)
Foreign government
41

 
225

 
(4
)
 
—

 
—

 
—

 
(4
)
ABS
31

 
222

 
(1
)
 
14

 
109

 
(10
)
 
(11
)
RMBS
89

 
53

 
(1
)
 
179

 
91

 
(7
)
 
(8
)
CMBS
15

 
59

 
(4
)
 
4

 
15

 
(5
)
 
(9
)
Redeemable preferred stock
1

 
—

 
—

 
—

 
—

 
—

 
—

Total fixed income securities
2,395

 
17,918

 
(351
)
 
288

 
922

 
(96
)
 
(447
)
Equity securities
195

 
654

 
(56
)
 
46

 
165

 
(29
)
 
(85
)
Total fixed income and equity securities
2,590

 
$
18,572

 
$
(407
)
 
334

 
$
1,087

 
$
(125
)
 
$
(532
)
Investment grade fixed income securities
2,202

 
$
15,678

 
$
(293
)
 
201

 
$
493

 
$
(51
)
 
$
(344
)
Below investment grade fixed income securities
193

 
2,240

 
(58
)
 
87

 
429

 
(45
)
 
(103
)
Total fixed income securities
2,395

 
$
17,918

 
$
(351
)
 
288

 
$
922

 
$
(96
)
 
$
(447
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
)
Principal geographic distribution of commercial real estate represented in the mortgage portfolio
The following table shows the principal geographic distribution of commercial real estate represented in the Company’s mortgage loan portfolio. No other state represented more than 5% of the portfolio as of December 31.
(% of mortgage loan portfolio carrying value)
2016
 
2015
California
19.3
%
 
21.3
%
Texas
10.5

 
9.7

New Jersey
8.2

 
8.7

Illinois
6.7

 
7.1

Florida
5.4

 
5.3
Types of property collateralizing the mortgage loans
The types of properties collateralizing the mortgage loans as of December 31 are as follows:
(% of mortgage loan portfolio carrying value)
2016
 
2015
Apartment complex
27.6
%
 
26.4
%
Office buildings
23.9

 
22.7

Retail
20.4

 
21.3

Warehouse
17.0

 
18.4

Other
11.1

 
11.2

Total
100.0
%
 
100.0
%
Contractual maturities of the commercial mortgage loan portfolio
The contractual maturities of the mortgage loan portfolio as of December 31, 2016 are as follows:
($ in millions)
Number of loans
 
Carrying value
 
Percent
2017
28

 
$
295

 
6.6
%
2018
29

 
336

 
7.5

2019
10

 
267

 
6.0

2020
14

 
190

 
4.2

Thereafter
222

 
3,398

 
75.7

Total
303

 
$
4,486

 
100.0
%
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 and variable rate mortgage loans summarized by debt service coverage ratio distribution as of December 31:
($ in millions)
2016
 
2015
Debt service coverage ratio distribution
Fixed rate mortgage loans
 
Variable rate mortgage loans
 
Total
 
Fixed rate mortgage loans
 
Variable rate mortgage loans
 
Total
Below 1.0
$
60

 
$
—

 
$
60

 
$
64

 
$
—

 
$
64

1.0 - 1.25
324

 
—

 
324

 
382

 
—

 
382

1.26 - 1.50
1,293

 
—

 
1,293

 
1,219

 
—

 
1,219

Above 1.50
2,765

 
39

 
2,804

 
2,667

 
—

 
2,667

Total non-impaired mortgage loans
$
4,442

 
$
39

 
$
4,481

 
$
4,332

 
$
—

 
$
4,332
Net carrying value of impaired mortgage loans
The net carrying value of impaired mortgage loans as of December 31 is as follows:
($ in millions)
2016
 
2015
Impaired mortgage loans with a valuation allowance
$
5

 
$
6

Impaired mortgage loans without a valuation allowance
—

 
—

Total impaired mortgage loans
$
5

 
$
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 for the years ended December 31 is as follows:
($ in millions)
2016
 
2015
 
2014
Beginning balance
$
3

 
$
8

 
$
21

Net decrease in valuation allowance
—

 
(4
)
 
(5
)
Charge offs
—

 
(1
)
 
(8
)
Ending balance
$
3

 
$
3

 
$
8
Principal geographic distribution of municipal bond
The following table shows the principal geographic distribution of municipal bond issuers represented in the Company’s portfolio as of December 31. No other state represents more than 5% of the portfolio.
(% of municipal bond portfolio carrying value)
2016
 
2015
Texas
10.0
%
 
9.2
%
California
7.2

 
6.3

New York
6.8

 
7.7

Florida
5.7

 
5.6

Washington
5.6

 
5.6

Michigan
5.4

 
3.9