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Investments (Tables)
 3 Months Ended
Mar. 31, 2020
Investments [Abstract]  
Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination [Table Text Block]
Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination
($ in millions)
 
March 31, 2020
 
December 31, 2019
 
 
2015 and prior
 
2016
 
2017
 
2018
 
2019
 
Current
 
Total
 
Total
Below 1.0
 
$
15

 
$
—

 
$
32

 
$
—

 
$
—

 
$
—

 
$
47

 
$
56

1.0 - 1.25
 
66

 
14

 
32

 
—

 
91

 
30

 
233

 
225

1.26 - 1.50
 
535

 
14

 
97

 
318

 
238

 
—

 
1,202

 
1,237

Above 1.50
 
1,416

 
522

 
393

 
369

 
555

 
107

 
3,362

 
3,302

Amortized cost before allowance
 
$
2,032

 
$
550

 
$
554

 
$
687

 
$
884

 
$
137

 
$
4,844

 
$
4,820

Allowance (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
(85
)
 
(3
)
Amortized cost, net
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,759

 
$
4,817

(1) 
Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses.
Portfolio composition
Portfolio composition
 
 
 
 
 
($ in millions)
 
March 31, 2020
 
December 31, 2019
Fixed income securities, at fair value
 
$
59,857

 
$
59,044

Equity securities, at fair value
 
3,701

 
8,162

Mortgage loans, net
 
4,759

 
4,817

Limited partnership interests
 
7,087

 
8,078

Short-term investments, at fair value
 
5,671

 
4,256

Other, net
 
3,767

 
4,005

Total
 
$
84,842

 
$
88,362
Schedule for fixed income securities at amortized cost, gross unrealized gains and losses and fair value
Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities
($ in millions)
 
Amortized cost, net
 
Gross unrealized
 
Fair
value
 
 
Gains
 
Losses
 
March 31, 2020
 
 

 
 

 
 

 
 

U.S. government and agencies
 
$
5,104

 
$
295

 
$
—

 
$
5,399

Municipal
 
8,182

 
555

 
(28
)
 
8,709

Corporate
 
43,624

 
1,242

 
(1,231
)
 
43,635

Foreign government
 
884

 
30

 
(3
)
 
911

ABS
 
852

 
3

 
(19
)
 
836

MBS
 
299

 
71

 
(3
)
 
367

Total fixed income securities
 
$
58,945

 
$
2,196

 
$
(1,284
)
 
$
59,857

 
 
 
 
 
 
 
 
 
 
 
Amortized cost
 
Gross unrealized
 
Fair
value
 
 
 
Gains
 
Losses
 
December 31, 2019
 
 

 
 

 
 

 
 

U.S. government and agencies
 
$
4,971

 
$
141

 
$
(26
)
 
$
5,086

Municipal
 
8,080

 
551

 
(11
)
 
8,620

Corporate
 
41,090

 
2,035

 
(47
)
 
43,078

Foreign government
 
968

 
16

 
(5
)
 
979

ABS
 
860

 
8

 
(6
)
 
862

MBS
 
324

 
96

 
(1
)
 
419

Total fixed income securities
 
$
56,293

 
$
2,847

 
$
(96
)
 
$
59,044
Schedule for fixed income securities based on contractual maturities
Scheduled maturities for fixed income securities
($ in millions)
 
March 31, 2020
 
Amortized cost, net
 
Fair value
Due in one year or less
 
$
2,920

 
$
2,927

Due after one year through five years
 
24,825

 
24,849

Due after five years through ten years
 
20,360

 
20,451

Due after ten years
 
9,689

 
10,427

 
 
57,794

 
58,654

ABS and MBS
 
1,151

 
1,203

Total
 
$
58,945

 
$
59,857
Schedule of net investment income
Net investment income
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Fixed income securities
 
$
525

 
$
538

Equity securities
 
6

 
30

Mortgage loans
 
60

 
53

Limited partnership interests (1)
 
(192
)
 
9

Short-term investments
 
17

 
26

Other
 
63

 
63

Investment income, before expense
 
479

 
719

Investment expense
 
(58
)
 
(71
)
Net investment income 
 
$
421

 
$
648

(1) 
The Company typically employs a lag in recording and recognizing changes in valuations of limited partnership interests due to the availability of financial statements. In consideration of intervening events during the three months ended March 31, 2020, where information was available to enable updated estimates, the Company recognized current period declines in the value of limited partnership interests. This included updating publicly traded investments held within limited partnerships to their March 31, 2020 values, which reduced income by $52 million. Additionally, $195 million of valuation increases reported in the fourth quarter 2019 partnership financial statements were excluded from income considering the equity market decline in March 2020.
Realized capital gains (losses) by asset type
 
 
 
 
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Fixed income securities
 
$
375

 
$
64

Equity securities
 
(750
)
 
553

Mortgage loans
 
(41
)
 
—

Limited partnership interests
 
(116
)
 
72

Derivatives
 
88

 
(46
)
Other
 
(18
)
 
19

Realized capital gains (losses)
 
$
(462
)
 
$
662
Schedule of realized capital gains and losses by asset type
Realized capital gains (losses) by asset type
 
 
 
 
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Fixed income securities
 
$
375

 
$
64

Equity securities
 
(750
)
 
553

Mortgage loans
 
(41
)
 
—

Limited partnership interests
 
(116
)
 
72

Derivatives
 
88

 
(46
)
Other
 
(18
)
 
19

Realized capital gains (losses)
 
$
(462
)
 
$
662


Realized capital gains (losses) by transaction type
 
 
 
 
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Sales
 
$
388

 
$
95

Credit losses (1)
 
(79
)
 
(14
)
Valuation of equity investments (2)
 
(859
)
 
627

Valuation and settlements of derivative instruments
 
88

 
(46
)
Realized capital gains (losses)
 
$
(462
)
 
$
662
Schedule of realized capital gains and losses by transaction type
Realized capital gains (losses) by transaction type
 
 
 
 
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Sales
 
$
388

 
$
95

Credit losses (1)
 
(79
)
 
(14
)
Valuation of equity investments (2)
 
(859
)
 
627

Valuation and settlements of derivative instruments
 
88

 
(46
)
Realized capital gains (losses)
 
$
(462
)
 
$
662


(1) 
Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior period OTTI impairment write-downs are now presented as credit losses.
(2) 
Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities.
Valuation changes included in net income for investments
The following table presents the net pre-tax appreciation (decline) recognized in net income of equity securities and limited partnership interests carried at fair value that are still held as of March 31, 2020 and 2019, respectively.
Net appreciation (decline) recognized in net income
 
 
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Equity securities
 
$
(560
)
 
$
496

Limited partnership interests carried at fair value 
 
(55
)
 
(33
)
Total
 
$
(615
)
 
$
463


Credit losses recognized in net income (1)
 
 
 
 
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Assets
 
 
 
 
Fixed income securities:
 
 

 
 

Corporate
 
$
(1
)
 
$
—

ABS
 
—

 
(1
)
MBS
 
(3
)
 
(1
)
Total fixed income securities
 
(4
)
 
(2
)
Mortgage loans
 
(40
)
 
—

Limited partnership interests
 
(7
)
 
(1
)
Other investments
 
 
 
 
Bank loans
 
(27
)
 
(11
)
Total credit losses by asset type
 
$
(78
)
 
$
(14
)
 
 
 
 
 
Liabilities
 
 
 
 
Commitments to fund commercial mortgage loans, bank loans and agent loans
 
(1
)
 
—

Total
 
$
(79
)
 
$
(14
)
Schedule of credit losses on fixed income securities recognized in earnings
Credit losses recognized in net income (1)
 
 
 
 
($ in millions)
 
Three months ended March 31,
 
2020
 
2019
Assets
 
 
 
 
Fixed income securities:
 
 

 
 

Corporate
 
$
(1
)
 
$
—

ABS
 
—

 
(1
)
MBS
 
(3
)
 
(1
)
Total fixed income securities
 
(4
)
 
(2
)
Mortgage loans
 
(40
)
 
—

Limited partnership interests
 
(7
)
 
(1
)
Other investments
 
 
 
 
Bank loans
 
(27
)
 
(11
)
Total credit losses by asset type
 
$
(78
)
 
$
(14
)
 
 
 
 
 
Liabilities
 
 
 
 
Commitments to fund commercial mortgage loans, bank loans and agent loans
 
(1
)
 
—

Total
 
$
(79
)
 
$
(14
)

(1) 
Due to the adoption of the measurement of credit losses on financial instruments accounting standard, realized capital losses previously reported as OTTI impairment write-downs are now presented as credit losses.
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)
March 31, 2020
 
 
Gains
 
Losses
 
Fixed income securities
 
$
59,857

 
$
2,196

 
$
(1,284
)
 
$
912

Short-term investments
 
5,671

 
—

 
—

 
—

Derivative instruments
 
—

 
—

 
(3
)
 
(3
)
Equity method of accounting (“EMA”) limited partnerships (1)
 
 

 
 

 
 

 
(2
)
Unrealized net capital gains and losses, pre-tax
 
 

 
 

 
 

 
907

Amounts recognized for:
 
 

 
 

 
 

 
 

Insurance reserves (2)
 
 

 
 

 
 

 
(105
)
DAC and DSI (3)
 
 

 
 

 
 

 
(128
)
Amounts recognized
 
 

 
 

 
 

 
(233
)
Deferred income taxes
 
 

 
 

 
 

 
(144
)
Unrealized net capital gains and losses, after-tax
 
 

 
 

 
 

 
$
530

 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
 
Fixed income securities
 
$
59,044

 
$
2,847

 
$
(96
)
 
$
2,751

Short-term investments
 
4,256

 
—

 
—

 
—

Derivative instruments
 
—

 
—

 
(3
)
 
(3
)
EMA limited partnerships
 
 

 
 

 
 

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

 
 

 
 

 
2,744

Amounts recognized for:
 
 

 
 

 
 

 
 

Insurance reserves
 
 

 
 

 
 

 
(126
)
DAC and DSI
 
 

 
 

 
 

 
(224
)
Amounts recognized
 
 

 
 

 
 

 
(350
)
Deferred income taxes
 
 

 
 

 
 

 
(507
)
Unrealized net capital gains and losses, after-tax
 
 

 
 

 
 

 
$
1,887


(1) 
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. Fair value and gross unrealized gains and losses are not applicable.
(2) 
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 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).
(3) 
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.
Schedule of change in unrealized net capital gains and losses
Change in unrealized net capital gains (losses)
($ in millions)
 
Three months ended March 31, 2020
Fixed income securities
 
$
(1,839
)
Short-term investments
 
—

Derivative instruments
 
—

EMA limited partnerships
 
2

Total
 
(1,837
)
Amounts recognized for:
 
 

Insurance reserves
 
21

DAC and DSI
 
96

Amounts recognized
 
117

Deferred income taxes
 
363

Decrease in unrealized net capital gains and losses, after-tax
 
$
(1,357
)
Carrying value for limited partnership interests
Carrying value for limited partnership interests
($ in millions)
 
March 31, 2020
 
December 31, 2019
 
EMA
 
Fair Value
 
Total
 
EMA
 
Fair Value
 
Total
Private equity
 
$
4,204

 
$
1,577

 
$
5,781

 
$
4,463

 
$
1,668

 
$
6,131

Real estate
 
954

 
136

 
1,090

 
899

 
142

 
1,041

Other (1)
 
212

 
4

 
216

 
902

 
4

 
906

Total
 
$
5,370

 
$
1,717

 
$
7,087

 
$
6,264

 
$
1,814

 
$
8,078

(1) 
Other consists of certain limited partnership interests where the underlying assets are predominately public equity securities.
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
 
Total
unrealized
losses
 
Number
of 
issues
 
Fair
value
 
Unrealized
losses
 
Number
of 
issues
 
Fair
value
 
Unrealized
losses
 
March 31, 2020
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Municipal
 
470

 
$
1,029

 
$
(28
)
 
—

 
$
—

 
$
—

 
$
(28
)
Corporate
 
1,838

 
18,525

 
(1,161
)
 
31

 
187

 
(70
)
 
(1,231
)
Foreign government
 
25

 
85

 
(3
)
 
1

 
6

 
—

 
(3
)
ABS
 
63

 
383

 
(13
)
 
13

 
61

 
(6
)
 
(19
)
MBS
 
35

 
33

 
(3
)
 
101

 
7

 
—

 
(3
)
Total fixed income securities
 
2,431

 
$
20,055

 
$
(1,208
)
 
146

 
$
261

 
$
(76
)
 
$
(1,284
)
Investment grade fixed income securities
 
1,816

 
$
15,130

 
$
(689
)
 
116

 
$
130

 
$
(27
)
 
$
(716
)
Below investment grade fixed income securities
 
615

 
4,925

 
(519
)
 
30

 
131

 
(49
)
 
(568
)
Total fixed income securities
 
2,431

 
$
20,055

 
$
(1,208
)
 
146

 
$
261

 
$
(76
)
 
$
(1,284
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Fixed income securities
 
 

 
 

 
 

 
 

 
 

 
 

 
 

U.S. government and agencies
 
31

 
$
1,713

 
$
(26
)
 
10

 
$
26

 
$
—

 
$
(26
)
Municipal
 
307

 
576

 
(9
)
 
1

 
14

 
(2
)
 
(11
)
Corporate
 
186

 
1,392

 
(20
)
 
65

 
485

 
(27
)
 
(47
)
Foreign government
 
55

 
412

 
(4
)
 
6

 
102

 
(1
)
 
(5
)
ABS
 
36

 
193

 
(2
)
 
23

 
160

 
(4
)
 
(6
)
MBS
 
27

 
15

 
—

 
123

 
14

 
(1
)
 
(1
)
Total fixed income securities
 
642

 
$
4,301

 
$
(61
)
 
228

 
$
801

 
$
(35
)
 
$
(96
)
Investment grade fixed income securities
 
581

 
$
3,878

 
$
(41
)
 
185

 
$
594

 
$
(20
)
 
$
(61
)
Below investment grade fixed income securities
 
61

 
423

 
(20
)
 
43

 
207

 
(15
)
 
(35
)
Total fixed income securities
 
642

 
$
4,301

 
$
(61
)
 
228

 
$
801

 
$
(35
)
 
$
(96
)
Carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution
Gross unrealized losses by unrealized loss position and credit quality as of March 31, 2020
($ in millions)
 
Investment
grade
 
Below investment grade
 
Total
Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2)
 
$
(579
)
 
$
(311
)
 
$
(890
)
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4)
 
(137
)
 
(257
)
 
(394
)
Total unrealized losses
 
$
(716
)
 
$
(568
)
 
$
(1,284
)
(1) 
Below investment grade fixed income securities include $304 million that have been in an unrealized loss position for less than twelve months.
(2) 
Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses.
(3) 
No below investment grade fixed income securities have been in an unrealized loss position for a period of twelve or more consecutive months.
(4) 
Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.
Schedule of other investments by type
Other investments by asset type
($ in millions)
 
March 31, 2020
 
December 31, 2019
Bank loans, net
 
$
1,117

 
$
1,204

Real estate
 
970

 
1,005

Policy loans
 
882

 
894

Agent loans, net
 
671

 
666

Derivatives and other
 
127

 
236

Total
 
$
3,767

 
$
4,005
Allowance for credit loss
Allowance for credit losses
 
 
 
 
($ in millions)
 
March 31, 2020
 
January 1, 2020
Fixed income securities
 
$
4

 
$
—

Mortgage loans
 
85

 
45

Other investments
 
 
 
 
Bank loans
 
79

 
53

Agent loans
 
5

 
5

Investments
 
173

 
103

Premium installment receivables
 
96

 
91

Reinsurance recoverables
 
74

 
74

Other assets
 
18

 
18

Assets
 
361

 
286

 
 
 
 
 
Commitments to fund mortgage loans, bank loans and agent loans
 
4

 
3

Liabilities
 
4

 
3

Total
 
$
365

 
$
289


Rollforward of credit loss allowance for mortgage loans
 
 
($ in millions)
 
Three months ended March 31, 2020
Beginning balance
 
$
(3
)
Cumulative effect of change in accounting principle
 
(42
)
Net (increases) decreases related to credit losses
 
(40
)
Ending balance
 
$
(85
)

Rollforward of credit loss allowance for bank loans
 
 
($ in millions)
 
Three months ended March 31, 2020
Beginning balance
 
$
—

Cumulative effect of change in accounting principle
 
(53
)
Net (increases) decreases related to credit losses
 
(27
)
Reduction of allowance related to sales
 
1

Ending balance
 
$
(79
)

Rollforward of credit loss allowance for fixed income securities
($ in millions)
 
Three months ended
March 31, 2020
Beginning balance
 
$
—

Credit losses on securities for which credit losses not previously reported
 
(4
)
Ending balance (1)
 
$
(4
)
(1) 
Allowance for fixed income securities as of March 31, 2020 comprised $1 million and $3 million of corporate bonds and MBS, respectively.
Bank loans amortized cost by credit quality and year of origination
Bank loans amortized cost by credit rating and year of origination
 
 
($ in millions)
 
March 31, 2020
 
 
 
 
2015 and prior
 
2016
 
2017
 
2018
 
2019
 
Current
 
Total
BBB
 
$
—

 
$
—

 
$
10

 
$
18

 
$
9

 
$
4

 
$
41

BB
 
31

 
4

 
43

 
70

 
67

 
21

 
236

B
 
12

 
38

 
155

 
237

 
185

 
84

 
711

CCC and below
 
9

 
40

 
40

 
53

 
59

 
7

 
208

Amortized cost before allowance
 
52

 
82

 
248

 
378

 
320

 
116

 
1,196

Allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
(79
)
Amortized cost, net
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,117