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Fair Value of Assets and Liabilities (Tables)
 12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Schedule of assets and liabilities that are measured at fair value on a recurring and non-recurring basis
Assets and liabilities measured at fair value
 
 
As of December 31, 2018
($ in millions)
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
(Level 3)
 
Counterparty and cash collateral netting
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
 
$
5,085

 
$
432

 
$
—

 
 
 
$
5,517

Municipal
 
—

 
9,099

 
70

 
 
 
9,169

Corporate - public
 
—

 
29,200

 
70

 
 
 
29,270

Corporate - privately placed
 
—

 
10,776

 
90

 
 
 
10,866

Foreign government
 
—

 
747

 
—

 
 
 
747

ABS - CDO
 
—

 
263

 
6

 
 
 
269

ABS - consumer and other
 
—

 
713

 
63

 
 
 
776

RMBS
 
—

 
464

 
—

 
 
 
464

CMBS
 
—

 
44

 
26

 
 
 
70

Redeemable preferred stock
 
—

 
22

 
—

 
 
 
22

Total fixed income securities
 
5,085

 
51,760

 
325

 
 
 
57,170

Equity securities
 
4,364

 
331

 
341

 
 
 
5,036

Short-term investments
 
1,338

 
1,659

 
30

 
 
 
3,027

Other investments: Free-standing derivatives
 
—

 
139

 
1

 
(23
)
 
117

Separate account assets
 
2,805

 
—

 
—

 
 
 
2,805

Other assets
 
2

 
—

 
—

 
 
 
2

Total recurring basis assets
 
$
13,594

 
$
53,889

 
$
697

 
$
(23
)
 
$
68,157

% of total assets at fair value
 
19.9
%
 
79.1
%
 
1.0
%
 
—
 %
 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
Investments reported at NAV
 
 
 
 
 
 
 
 
 
1,779

Total
 
 
 
 
 
 
 
 
 
$
69,936

 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
—

 
$
—

 
$
(224
)
 
 
 
$
(224
)
Other liabilities: Free-standing derivatives
 
(1
)
 
(62
)
 
—

 
$
6

 
(57
)
Total recurring basis liabilities
 
$
(1
)
 
$
(62
)
 
$
(224
)
 
$
6

 
$
(281
)
% of total liabilities at fair value
 
0.3
%
 
22.1
%
 
79.7
%
 
(2.1
)%
 
100.0
%



Assets and liabilities measured at fair value
 
 
As of December 31, 2017
($ in millions)
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
(Level 3)
 
Counterparty and cash collateral netting
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
 
$
3,079

 
$
537

 
$
—

 
 
 
$
3,616

Municipal
 
—

 
8,227

 
101

 
 
 
8,328

Corporate - public
 
—

 
31,963

 
108

 
 
 
32,071

Corporate - privately placed
 
—

 
11,731

 
224

 
 
 
11,955

Foreign government
 
—

 
1,021

 
—

 
 
 
1,021

ABS - CDO
 
—

 
480

 
99

 
 
 
579

ABS - consumer and other
 
—

 
645

 
48

 
 
 
693

RMBS
 
—

 
578

 
—

 
 
 
578

CMBS
 
—

 
102

 
26

 
 
 
128

Redeemable preferred stock
 
—

 
23

 
—

 
 
 
23

Total fixed income securities
 
3,079

 
55,307

 
606

 
 
 
58,992

Equity securities
 
6,032

 
379

 
210

 
 
 
6,621

Short-term investments
 
264

 
1,660

 
20

 
 
 
1,944

Other investments: Free-standing derivatives
 
—

 
132

 
1

 
(6
)
 
127

Separate account assets
 
3,444

 
—

 
—

 
 
 
3,444

Total recurring basis assets
 
12,819


57,478


837


(6
)

71,128

Non-recurring basis (1)
 
—

 
—

 
3

 
 
 
3

Total assets at fair value
 
$
12,819


$
57,478


$
840


$
(6
)

$
71,131

% of total assets at fair value
 
18.0
%
 
80.8
%
 
1.2
%
 
—
 %
 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
—

 
$
—

 
$
(286
)
 
 
 
$
(286
)
Other liabilities: Free-standing derivatives
 
(1
)
 
(83
)
 
—

 
$
14

 
(70
)
Total recurring basis liabilities
 
$
(1
)
 
$
(83
)
 
$
(286
)
 
$
14

 
$
(356
)
% of total liabilities at fair value
 
0.3
%
 
23.3
%
 
80.3
%
 
(3.9
)%
 
100.0
%
(1) 
Includes $3 million of limited partnership interests written-down to fair value in connection with recognizing OTTI losses.
Summary of quantitative information about the significant unobservable inputs
Quantitative information about the significant unobservable inputs used in Level 3 fair value measurements
($ in millions)
 
Fair value
 
Valuation
technique
 
Unobservable
input
 
Range
 
Weighted
average
December 31, 2018
 
 
 
 
 
 
 
 
 
 
Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options
 
$
(185
)
 
Stochastic cash flow model
 
Projected option cost
 
1.0 - 2.2%
 
1.74%
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options
 
$
(252
)
 
Stochastic cash flow model
 
Projected option cost
 
1.0 - 2.2%
 
1.74%
Schedule of the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis
Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2018
 
 
Balance as of December 31, 2017
 
Total gains (losses) included in:
 
Transfers into Level 3
 
Transfers out of Level 3
 
($ in millions)
 
 
Net income (1)
 
OCI
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
Municipal
 
$
101

 
$
1

 
$
(2
)
 
$
—

 
$
(26
)
 
Corporate - public
 
108

 
—

 
(3
)
 
17

 
(21
)
 
Corporate - privately placed
 
224

 
(1
)
 
(3
)
 
20

 
(119
)
 
ABS - CDO
 
99

 
—

 
1

 
20

 
(109
)
 
ABS - consumer and other
 
48

 
—

 
1

 
22

 
(50
)
 
CMBS
 
26

 
—

 
—

 
—

 
—

 
Total fixed income securities
 
606

 
—

 
(6
)
 
79

 
(325
)
 
Equity securities
 
210

 
37

 
—

 
—

 
—

 
Short-term investments
 
20

 
—

 
—

 
—

 
—

 
Free-standing derivatives, net
 
1

 
—

 
—

 
—

 
—

 
Total recurring Level 3 assets
 
$
837


$
37


$
(6
)

$
79


$
(325
)
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
(286
)
 
$
58

 
$
—

 
$
—

 
$
—

 
Total recurring Level 3 liabilities
 
$
(286
)

$
58


$
—


$
—


$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases
 
Sales
 
Issues
 
Settlements
 
Balance as of December 31, 2018
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
Municipal
 
$
10

 
$
(8
)
 
$
—

 
$
(6
)
 
$
70

 
Corporate - public
 
10

 
(38
)
 
—

 
(3
)
 
70

 
Corporate - privately placed
 
22

 
(5
)
 
—

 
(48
)
 
90

 
ABS - CDO
 
—

 
—

 
—

 
(5
)
 
6

 
ABS - consumer and other
 
160

 
(97
)
 
—

 
(21
)
 
63

 
CMBS
 
1

 
—

 
—

 
(1
)
 
26

 
Total fixed income securities
 
203

 
(148
)
 
—

 
(84
)
 
325

 
Equity securities
 
109

 
(15
)
 
—

 
—

 
341

 
Short-term investments
 
55

 
(45
)
 
—

 
—

 
30

 
Free-standing derivatives, net
 
—

 
—

 
—

 
—

 
1

(2 
) 
Total recurring Level 3 assets
 
$
367

 
$
(208
)
 
$
—

 
$
(84
)
 
$
697

 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
—

 
$
—

 
$
(2
)
 
$
6

 
$
(224
)
 
Total recurring Level 3 liabilities
 
$
—

 
$
—

 
$
(2
)
 
$
6

 
$
(224
)
 
(1) 
The effect to net income totals $95 million and is reported in the Consolidated Statements of Operations as follows: $37 million in realized capital gains and losses, $63 million in interest credited to contractholder funds and $(5) million in life contract benefits.
(2) 
Comprises $1 million of assets.

Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2017
 
 
Balance as of December 31, 2016
 
Total gains (losses) included in:
 
Transfers into Level 3
 
Transfers out of Level 3
 
($ in millions)
 
 
Net income (1)
 
OCI
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
Municipal
 
125

 
(1
)
 
7

 
—

 
(6
)
 
Corporate - public
 
78

 
—

 
—

 
4

 
(30
)
 
Corporate - privately placed
 
263

 
8

 
(2
)
 
30

 
(49
)
 
ABS - CDO
 
27

 
—

 
6

 
60

 
(190
)
 
ABS - consumer and other
 
42

 
—

 
—

 
—

 
(90
)
 
RMBS
 
1

 
—

 
—

 
—

 
—

 
CMBS
 
22

 
—

 
—

 
—

 
—

 
Total fixed income securities
 
558


7


11


94


(365
)
 
Equity securities
 
163

 
13

 
4

 
—

 
(4
)
 
Short-term investments
 
15

 
—

 
—

 
—

 
—

 
Free-standing derivatives, net
 
(2
)
 
3

 
—

 
—

 
—

 
Other assets
 
1

 
(1
)
 
—

 
—

 
—

 
Total recurring Level 3 assets
 
$
735


$
22


$
15


$
94


$
(369
)
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
(290
)
 
$
—

 
$
—

 
$
—

 
$
—

 
Total recurring Level 3 liabilities
 
$
(290
)

$
—


$
—


$
—


$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases
 
Sales
 
Issues
 
Settlements
 
Balance as of December 31, 2017
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
Municipal
 
8

 
(29
)
 
—

 
(3
)
 
101

 
Corporate - public
 
60

 
—

 
—

 
(4
)
 
108

 
Corporate - privately placed
 
44

 
(30
)
 
—

 
(40
)
 
224

 
ABS - CDO
 
219

 
—

 
—

 
(23
)
 
99

 
ABS - consumer and other
 
103

 
—

 
—

 
(7
)
 
48

 
RMBS
 
—

 
—

 
—

 
(1
)
 
—

 
CMBS
 
6

 
—

 
—

 
(2
)
 
26

 
Total fixed income securities
 
440

 
(59
)
 
—

 
(80
)
 
606

 
Equity securities
 
48

 
(14
)
 
—

 
—

 
210

 
Short-term investments
 
45

 
(40
)
 
—

 
—

 
20

 
Free-standing derivatives, net
 
—

 
—

 
—

 
—

 
1

(2) 
Other assets
 
—

 
—

 
—

 
—

 
—

 
Total recurring Level 3 assets
 
$
533

 
$
(113
)
 
$
—

 
$
(80
)
 
$
837

 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
—

 
$
—

 
$
(2
)
 
$
6

 
$
(286
)
 
Total recurring Level 3 liabilities
 
$
—

 
$
—

 
$
(2
)
 
$
6

 
$
(286
)
 
(1) 
The effect to net income totals $22 million and is reported in the Consolidated Statements of Operations as follows: $4 million in realized capital gains and losses, $19 million in net investment income, $(10) million in interest credited to contractholder funds and $9 million in life contract benefits.
(2) 
Comprises $1 million of assets.
Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2016
 
 
 
 
Total gains (losses) included in:
 
 
 
 
 
($ in millions)
 
Balance as of December 31, 2015
 
Net income (1)
 
OCI
 
Transfers into Level 3
 
Transfers out of Level 3
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
 
$
5

 
$
—

 
$
—

 
$
—

 
$
(4
)
 
Municipal
 
161

 
12

 
(10
)
 
6

 
(23
)
 
Corporate - public
 
46

 
—

 
—

 
41

 
(43
)
 
Corporate - privately placed
 
502

 
15

 
18

 
16

 
(398
)
 
ABS - CDO
 
61

 
1

 
6

 
10

 
(43
)
 
ABS - consumer and other
 
50

 
—

 
(3
)
 
3

 
(35
)
 
RMBS
 
1

 
1

 
—

 
—

 
—

 
CMBS
 
20

 
—

 
—

 
—

 
(1
)
 
Total fixed income securities
 
846


29


11


76


(547
)
 
Equity securities
 
133

 
(32
)
 
12

 
—

 
(12
)
 
Short-term investments
 
—

 
—

 
—

 
—

 
—

 
Free-standing derivatives, net
 
(7
)
 
6

 
—

 
—

 
—

 
Other assets
 
1

 
—

 
—

 
—

 
—

 
Total recurring Level 3 assets
 
$
973


$
3


$
23


$
76


$
(559
)
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
(299
)
 
$
5

 
$
—

 
$
—

 
$
—

 
Total recurring Level 3 liabilities
 
$
(299
)

$
5


$
—


$
—


$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchases
 
Sales
 
Issues
 
Settlements
 
Balance as of December 31, 2016
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
 
$
—

 
$
—

 
$
—

 
$
(1
)
 
$
—

 
Municipal
 
22

 
(40
)
 
—

 
(3
)
 
125

 
Corporate - public
 
47

 
(11
)
 
—

 
(2
)
 
78

 
Corporate - privately placed
 
181

 
(15
)
 
—

 
(56
)
 
263

 
ABS - CDO
 
40

 
(3
)
 
—

 
(45
)
 
27

 
ABS - consumer and other
 
35

 
(5
)
 
—

 
(3
)
 
42

 
RMBS
 
—

 
(1
)
 
—

 
—

 
1

 
CMBS
 
5

 
—

 
—

 
(2
)
 
22

 
Total fixed income securities
 
330

 
(75
)
 
—

 
(112
)
 
558

 
Equity securities
 
65

 
(4
)
 
—

 
1

 
163

 
Short-term investments
 
15

 
—

 
—

 
—

 
15

 
Free-standing derivatives, net
 
—

 
—

 
—

 
(1
)
 
(2
)
(2) 
Other assets
 
—

 
—

 
—

 
—

 
1

 
Total recurring Level 3 assets
 
$
410

 
$
(79
)
 
$
—

 
$
(112
)
 
$
735

 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
—

 
$
—

 
$
(3
)
 
$
7

 
$
(290
)
 
Total recurring Level 3 liabilities
 
$
—

 
$
—

 
$
(3
)
 
$
7

 
$
(290
)
 
(1) 
The effect to net income totals $8 million and is reported in the Consolidated Statements of Operations as follows: $(9) million in realized capital gains and losses, $12 million in net investment income, $(4) million in interest credited to contractholder funds and $9 million in life contract benefits.
(2) 
Comprises $1 million of assets and $3 million of liabilities.
Schedule of gains and losses included in net income for Level 3 assets and liabilities still held at the balance sheet date
Valuation changes included in net income for Level 3 assets and liabilities held as of
 
 
December 31,
($ in millions)
 
2018
 
2017
 
2016
Assets
 
 
 
 
 
 
Fixed income securities:
 
 
 
 
 
 
Municipal
 
$
—

 
$
(3
)
 
$
2

Corporate
 
—

 
1

 
2

Total fixed income securities
 
—


(2
)

4

Equity securities
 
36

 
13

 
(32
)
Free-standing derivatives, net
 
—

 
—

 
5

Other assets
 
—

 
(1
)
 
—

Total recurring Level 3 assets
 
$
36


$
10


$
(23
)
Liabilities
 
 
 
 
 
 
Contractholder funds: Derivatives embedded in life and annuity contracts
 
$
58

 
$
—

 
$
5

Total recurring Level 3 liabilities
 
$
58


$
—


$
5
Schedule of carrying values and fair value estimates of financial instruments not carried at fair value
Carrying values and fair value estimates of financial instruments not carried at fair value
 
 
 
 
December 31, 2018
 
December 31, 2017
($ in millions)
 
Fair value level
 
Carrying
value
 
Fair
value
 
Carrying
value
 
Fair
value
Mortgage loans
 
Level 3
 
$
4,670

 
$
4,703

 
$
4,534

 
$
4,732

Bank loans
 
Level 3
 
1,350

 
1,298

 
1,702

 
1,704

Agent loans
 
Level 3
 
620

 
617

 
538

 
536

Carrying values and fair value estimates of financial instruments not carried at fair value
 
 
 
 
December 31, 2018
 
December 31, 2017
($ in millions)
 
Fair value level
 
Carrying
value
 
Fair
value
 
Carrying
value
 
Fair
value
Contractholder funds on investment contracts
 
Level 3
 
$
9,250

 
$
9,665

 
$
10,367

 
$
11,071

Long-term debt
 
Level 2
 
6,451

 
6,708

 
6,350

 
7,199

Liability for collateral
 
Level 2
 
1,458

 
1,458

 
1,124

 
1,124