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Investments (Tables)
 12 Months Ended
Dec. 31, 2017
Investments [Abstract]  
Schedule for fixed income securities at amortized cost, gross unrealized gains and losses and fair value
Amortized cost, gross unrealized gains and losses and fair value for fixed income securities
 
 
Amortized
cost
 
Gross unrealized
 
Fair
value
($ in millions)
 
 
Gains
 
Losses
 
December 31, 2017
 
 
 
 
 
 
 
 
U.S. government and agencies
 
$
3,580

 
$
56

 
$
(20
)
 
$
3,616

Municipal
 
8,053

 
311

 
(36
)
 
8,328

Corporate
 
42,996

 
1,234

 
(204
)
 
44,026

Foreign government
 
1,005

 
27

 
(11
)
 
1,021

ABS
 
1,266

 
13

 
(7
)
 
1,272

RMBS
 
480

 
101

 
(3
)
 
578

CMBS
 
124

 
6

 
(2
)
 
128

Redeemable preferred stock
 
21

 
2

 
—

 
23

Total fixed income securities
 
$
57,525

 
$
1,750

 
$
(283
)
 
$
58,992

 
 
 
 
 
 
 
 
 
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
Schedule for fixed income securities based on contractual maturities

Scheduled maturities for fixed Income securities
 
 
As of December 31, 2017
($ in millions)
 
Amortized
cost
 
Fair
value
Due in one year or less
 
$
4,771

 
$
4,783

Due after one year through five years
 
28,736

 
29,080

Due after five years through ten years
 
16,956

 
17,278

Due after ten years
 
5,192

 
5,873

 
 
55,655

 
57,014

ABS, RMBS and CMBS
 
1,870

 
1,978

Total
 
$
57,525

 
$
58,992
Schedule of net investment income
Net investment income
 
 
For the years ended December 31,
($ in millions)
 
2017
 
2016
 
2015
Fixed income securities
 
$
2,078

 
$
2,060

 
$
2,218

Equity securities
 
174

 
137

 
110

Mortgage loans
 
206

 
217

 
228

Limited partnership interests
 
889

 
561

 
549

Short-term investments
 
30

 
16

 
9

Other
 
236

 
222

 
192

Investment income, before expense
 
3,613

 
3,213

 
3,306

Investment expense
 
(212
)
 
(171
)
 
(150
)
Net investment income
 
$
3,401

 
$
3,042

 
$
3,156
Schedule of realized capital gains and losses by asset type

Realized capital gains and losses by asset type
 
 
For the years ended December 31,
($ in millions)
 
2017
 
2016
 
2015
Fixed income securities
 
$
94

 
$
(91
)
 
$
212

Equity securities
 
255

 
23

 
(50
)
Mortgage loans
 
1

 
—

 
6

Limited partnership interests
 
132

 
(21
)
 
(93
)
Derivatives
 
(46
)
 
3

 
(21
)
Other
 
9

 
(4
)
 
(24
)
Realized capital gains and losses
 
$
445

 
$
(90
)
 
$
30
Schedule of realized capital gains and losses by transaction type

Realized capital gains and losses by transaction type
 
 
For the years ended December 31,
($ in millions)
 
2017
 
2016
 
2015
Impairment write-downs
 
$
(102
)
 
$
(234
)
 
$
(195
)
Change in intent write-downs
 
(48
)
 
(69
)
 
(221
)
Net other-than-temporary impairment losses recognized in earnings
 
(150
)
 
(303
)
 
(416
)
Sales and other
 
641

 
213

 
470

Valuation and settlements of derivative instruments
 
(46
)
 
—

 
(24
)
Realized capital gains and losses
 
$
445

 
$
(90
)
 
$
30
Schedule of other-than-temporary impairment losses by asset type
Other-than-temporary impairment losses by asset type
 
 
 For the years ended December 31,
($ in millions)
 
2017
 
2016
 
2015
 
 
Gross
 
Included in OCI
 
Net
 
Gross
 
Included in OCI
 
Net
 
Gross
 
Included in OCI
 
Net
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Municipal
 
$
(1
)
 
$
(3
)
 
$
(4
)
 
$
—

 
$
—

 
$
—

 
$
(17
)
 
$
4

 
$
(13
)
Corporate
 
(9
)
 
3

 
(6
)
 
(33
)
 
9

 
(24
)
 
(61
)
 
11

 
(50
)
ABS
 
(1
)
 
(2
)
 
(3
)
 
(6
)
 
—

 
(6
)
 
(33
)
 
22

 
(11
)
RMBS
 
(2
)
 
(3
)
 
(5
)
 
—

 
(1
)
 
(1
)
 
1

 
(1
)
 
—

CMBS
 
(9
)
 
1

 
(8
)
 
(15
)
 
2

 
(13
)
 
(1
)
 
—

 
(1
)
Total fixed income securities
 
(22
)
 
(4
)
 
(26
)
 
(54
)
 
10

 
(44
)
 
(111
)
 
36

 
(75
)
Equity securities
 
(86
)
 
—

 
(86
)
 
(194
)
 
—

 
(194
)
 
(279
)
 
—

 
(279
)
Mortgage loans
 
(1
)
 
—

 
(1
)
 
—

 
—

 
—

 
4

 
—

 
4

Limited partnership interests
 
(32
)
 
—

 
(32
)
 
(56
)
 
—

 
(56
)
 
(51
)
 
—

 
(51
)
Other
 
(5
)
 
—

 
(5
)
 
(9
)
 
—

 
(9
)
 
(15
)
 
—

 
(15
)
Other-than-temporary impairment losses
 
$
(146
)

$
(4
)

$
(150
)

$
(313
)

$
10


$
(303
)

$
(452
)

$
36


$
(416
)
Schedule of other-than-temporary impairment losses on fixed income securities included in Accumulated Other Comprehensive Income

OTTI losses included in AOCI at the time of impairment for fixed income securities
($ in millions)
 
December 31,
2017
 
December 31,
2016
Municipal
 
$
(5
)
 
$
(8
)
Corporate
 
—

 
(7
)
ABS
 
(15
)
 
(21
)
RMBS
 
(77
)
 
(90
)
CMBS
 
(4
)
 
(7
)
Total
 
$
(101
)
 
$
(133
)
Schedule of credit losses on fixed income securities recognized in earnings
Rollforward of the cumulative credit losses recognized in earnings for fixed income securities held
 
 
As of December 31,
($ in millions)
 
2017
 
2016
 
2015
Beginning balance
 
$
(318
)
 
$
(392
)
 
$
(380
)
Additional credit loss for securities previously other-than-temporarily impaired
 
(18
)
 
(21
)
 
(30
)
Additional credit loss for securities not previously other-than-temporarily impaired
 
(8
)
 
(23
)
 
(45
)
Reduction in credit loss for securities disposed or collected
 
116

 
117

 
60

Change in credit loss due to accretion of increase in cash flows
 
2

 
1

 
3

Ending balance
 
$
(226
)

$
(318
)

$
(392
)
Schedule of unrealized net capital gains and losses
Unrealized net capital gains and losses included in AOCI
($ in millions)
 
Fair
value
 
Gross unrealized
 
Unrealized net gains (losses)
December 31, 2017
 
 
Gains
 
Losses
 
Fixed income securities
 
$
58,992

 
$
1,750

 
$
(283
)
 
$
1,467

Equity securities (1)
 
6,621

 
1,172

 
(12
)
 
1,160

Short-term investments
 
1,944

 
—

 
—

 
—

Derivative instruments (2)
 
2

 
2

 
(3
)
 
(1
)
EMA limited partnerships (3)
 
 
 
 
 
 
 
1

Unrealized net capital gains and losses, pre-tax
 
 
 
 
 
 
 
2,627

Amounts recognized for:
 
 
 
 
 
 
 
 
Insurance reserves (4)
 
 
 
 
 
 
 
(315
)
DAC and DSI (5)
 
 
 
 
 
 
 
(196
)
Amounts recognized
 
 
 
 
 
 
 
(511
)
Deferred income taxes (6)
 
 
 
 
 
 
 
(454
)
Unrealized net capital gains and losses, after-tax
 
 
 
 
 
 
 
$
1,662

(1) 
Beginning January 1, 2018, due to the adoption of the new accounting standard for the recognition and measurement of financial assets and liabilities, equity securities will be measured at fair value with changes in fair value recognized in net income. The existing unrealized net capital gains and losses, after-tax, will be reclassified to retained income through a cumulative effect adjustment. See Note 2 for additional details on the new accounting standard.
(2) 
Included in the fair value of derivative instruments is $2 million classified as liabilities.
(3) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income. Fair value and gross unrealized gains and losses are not applicable.
(4) 
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuities).
(5) 
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
(6) 
Unrealized net capital gains and losses were reduced by deferred income taxes at the newly enacted 21% U.S. corporate tax rate.
Unrealized net capital gains and losses included in AOCI
($ 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
 
 
 
 
 
 
 
(4
)
Unrealized net capital gains and losses, pre-tax
 
 
 
 
 
 
 
1,770

Amounts recognized for:
 
 
 
 
 
 
 
 
Insurance reserves
 
 
 
 
 
 
 
—

DAC and DSI
 
 
 
 
 
 
 
(146
)
Amounts recognized
 
 
 
 
 
 
 
(146
)
Deferred income taxes (2)
 
 
 
 
 
 
 
(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 were reduced by deferred income taxes at the 35% corporate tax rate.
Schedule of change in unrealized net capital gains and losses
Change in unrealized net capital gains and losses
 
 
 For the years ended December 31,
($ in millions)
 
2017
 
2016
 
2015
Fixed income securities
 
$
204

 
$
516

 
$
(2,021
)
Equity securities
 
651

 
233

 
(136
)
Derivative instruments
 
(3
)
 
(4
)
 
8

EMA limited partnerships
 
5

 
—

 
1

Total
 
857

 
745

 
(2,148
)
Amounts recognized for:
 
 
 
 
 
 
Insurance reserves
 
(315
)
 
—

 
28

DAC and DSI
 
(50
)
 
(79
)
 
112

Amounts recognized
 
(365
)
 
(79
)
 
140

Deferred income taxes
 
117

 
(233
)
 
702

Increase (decrease) in unrealized net capital gains and losses, after-tax
 
$
609


$
433


$
(1,306
)
Schedule of gross unrealized losses and fair value of available for sale securities by length of time
Gross unrealized losses and fair value by type and length of time held 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, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
 
66

 
$
2,829

 
$
(18
)
 
18

 
$
182

 
$
(2
)
 
$
(20
)
Municipal
 
1,756

 
3,143

 
(24
)
 
165

 
349

 
(12
)
 
(36
)
Corporate
 
781

 
11,616

 
(102
)
 
208

 
3,289

 
(102
)
 
(204
)
Foreign government
 
45

 
580

 
(10
)
 
5

 
44

 
(1
)
 
(11
)
ABS
 
57

 
476

 
(3
)
 
9

 
34

 
(4
)
 
(7
)
RMBS
 
118

 
35

 
(1
)
 
181

 
50

 
(2
)
 
(3
)
CMBS
 
2

 
1

 
—

 
6

 
23

 
(2
)
 
(2
)
Redeemable preferred stock
 
1

 
—

 
—

 
—

 
—

 
—

 
—

Total fixed income securities
 
2,826

 
18,680

 
(158
)
 
592

 
3,971

 
(125
)
 
(283
)
Equity securities
 
127

 
369

 
(12
)
 
2

 
—

 
—

 
(12
)
Total fixed income and equity securities
 
2,953

 
$
19,049

 
$
(170
)
 
594

 
$
3,971

 
$
(125
)
 
$
(295
)
Investment grade fixed income securities
 
2,706

 
$
17,668

 
$
(134
)
 
535

 
$
3,751

 
$
(98
)
 
$
(232
)
Below investment grade fixed income securities
 
120

 
1,012

 
(24
)
 
57

 
220

 
(27
)
 
(51
)
Total fixed income securities
 
2,826

 
$
18,680

 
$
(158
)
 
592

 
$
3,971

 
$
(125
)
 
$
(283
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
)
Principal geographic distribution of commercial real estate represented in the mortgage portfolio
Principal geographic distribution of commercial real estate exceeding 5% of the mortgage loans portfolio
 
 
As of December 31,
(% of mortgage loan portfolio carrying value)
 
2017
 
2016
California
 
19.9
%
 
19.3
%
Texas
 
13.0

 
10.5

New Jersey
 
7.6

 
8.2

Illinois
 
7.1

 
6.7

Florida
 
6.4

 
5.4

Types of properties collateralizing the mortgage loan portfolio
 
 
As of December 31,
(% of mortgage loan portfolio carrying value)
 
2017
 
2016
Apartment complex
 
30.9
%
 
27.6
%
Office buildings
 
23.8

 
23.9

Retail
 
18.0

 
20.4

Warehouse
 
15.7

 
17.0

Other
 
11.6

 
11.1

Total
 
100.0
%
 
100.0
%
Types of property collateralizing the mortgage loans
Types of properties collateralizing the mortgage loan portfolio
 
 
As of December 31,
(% of mortgage loan portfolio carrying value)
 
2017
 
2016
Apartment complex
 
30.9
%
 
27.6
%
Office buildings
 
23.8

 
23.9

Retail
 
18.0

 
20.4

Warehouse
 
15.7

 
17.0

Other
 
11.6

 
11.1

Total
 
100.0
%
 
100.0
%

Contractual maturities of the mortgage loan portfolio
 
 
As of December 31, 2017
($ in millions)
 
Number of loans
 
Carrying value
 
Percent
2018
 
17

 
$
169

 
3.7
%
2019
 
10

 
268

 
5.9

2020
 
14

 
192

 
4.2

2021
 
43

 
625

 
13.8

Thereafter
 
201

 
3,280

 
72.4

Total
 
285

 
$
4,534

 
100.0
%
Contractual maturities of the commercial mortgage loan portfolio
Contractual maturities of the mortgage loan portfolio
 
 
As of December 31, 2017
($ in millions)
 
Number of loans
 
Carrying value
 
Percent
2018
 
17

 
$
169

 
3.7
%
2019
 
10

 
268

 
5.9

2020
 
14

 
192

 
4.2

2021
 
43

 
625

 
13.8

Thereafter
 
201

 
3,280

 
72.4

Total
 
285

 
$
4,534

 
100.0
%
Carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution
Carrying value of non-impaired mortgage loans summarized by debt service coverage ratio distribution
 
 
As of December 31,
($ in millions)
 
2017
 
2016
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
 
$
3

 
$
—

 
$
3

 
$
60

 
$
—

 
$
60

1.0 - 1.25
 
345

 
—

 
345

 
324

 
—

 
324

1.26 - 1.50
 
1,141

 
30

 
1,171

 
1,293

 
—

 
1,293

Above 1.50
 
2,949

 
62

 
3,011

 
2,765

 
39

 
2,804

Total non-impaired mortgage loans
 
$
4,438

 
$
92

 
$
4,530

 
$
4,442

 
$
39

 
$
4,481
Net carrying value of impaired mortgage loans
Net carrying value of impaired mortgage loans
 
 
As of December 31,
($ in millions)
 
2017
 
2016
Impaired mortgage loans with a valuation allowance
 
$
4

 
$
5

Impaired mortgage loans without a valuation allowance
 
—

 
—

Total impaired mortgage loans
 
$
4

 
$
5

Valuation allowance on impaired mortgage loans
 
$
3

 
$
3
Valuation allowance on impaired mortgage loans
Rollforward of the valuation allowance on impaired mortgage loans
 
 
 For the years ended December 31,
($ in millions)
 
2017
 
2016
 
2015
Beginning balance
 
$
3

 
$
3

 
$
8

Net increase (decrease) in valuation allowance
 
1

 
—

 
(4
)
Charge offs
 
(1
)
 
—

 
(1
)
Ending balance
 
$
3

 
$
3

 
$
3
Principal geographic distribution of municipal bond
The Company maintains a diversified portfolio of municipal bonds.
Principal geographic distribution of municipal bond issuers exceeding 5% of the portfolio
 
 
As of December 31,
(% of municipal bond portfolio carrying value)
 
2017
 
2016
Texas
 
9.6
%
 
10.0
%
California
 
7.0

 
7.2

New York
 
6.9

 
6.8

Florida
 
6.5

 
5.7

Washington
 
5.4

 
5.6

Michigan
 
4.2

 
5.4