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Investment in Securities
 3 Months Ended
Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment in Securities
The cost or amortized cost and fair value of investments in securities are shown below (in thousands):
 
March 31, 2019
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
(Losses)
 
Fair Value
Fixed maturity securities, bonds held-to-maturity
 
 
 
 
 
 
 
U.S. states and political subdivisions
$
222,183

 
$
6,273

 
$
(54
)
 
$
228,402

Foreign governments
3,948

 
468

 
—

 
4,416

Corporate debt securities
7,657,374

 
144,853

 
(42,537
)
 
7,759,690

Residential mortgage-backed securities
216,260

 
6,884

 
(1,350
)
 
221,794

Collateralized debt securities
108,215

 
1,194

 
(262
)
 
109,147

Other debt securities
149

 
2

 
—

 
151

         Total bonds held-to-maturity
8,208,129

 
159,674

 
(44,203
)
 
8,323,600

Fixed maturity securities, bonds available-for-sale
 
 
 
 
 
 
 
U.S. treasury and government
28,302

 
371

 
(147
)
 
28,526

U.S. states and political subdivisions
922,081

 
28,343

 
(391
)
 
950,033

Foreign governments
5,000

 
1,290

 
—

 
6,290

Corporate debt securities
5,486,787

 
112,670

 
(34,916
)
 
5,564,541

Residential mortgage-backed securities
24,292

 
503

 
(326
)
 
24,469

Collateralized debt securities
9,822

 
718

 
(6
)
 
10,534

         Total bonds available-for-sale
6,476,284

 
143,895

 
(35,786
)
 
6,584,393

Total investments in securities
$
14,684,413

 
$
303,569

 
$
(79,989
)
 
$
14,907,993


 
December 31, 2018
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
(Losses)
 
Fair Value
Fixed maturity securities, bonds held-to-maturity
 
 
 
 
 
 
 
U.S. states and political subdivisions
$
245,360

 
$
5,840

 
$
(301
)
 
$
250,899

Foreign governments
3,961

 
469

 
—

 
4,430

Corporate debt securities
7,640,891

 
58,772

 
(150,834
)
 
7,548,829

Residential mortgage-backed securities
315,306

 
7,237

 
(2,633
)
 
319,910

Collateralized debt securities
5,214

 
71

 
—

 
5,285

Other debt securities
717

 
14

 
—

 
731

         Total bonds held-to-maturity
8,211,449

 
72,403

 
(153,768
)
 
8,130,084

Fixed maturity securities, bonds available-for-sale
 
 
 
 
 
 
 
U.S. treasury and government
28,304

 
338

 
(243
)
 
28,399

U.S. states and political subdivisions
848,228

 
16,827

 
(3,025
)
 
862,030

Foreign governments
5,000

 
1,210

 
—

 
6,210

Corporate debt securities
5,345,579

 
41,812

 
(103,573
)
 
5,283,818

Residential mortgage-backed securities
31,735

 
424

 
(497
)
 
31,662

Collateralized debt securities
2,775

 
675

 
(6
)
 
3,444

         Total bonds available-for-sale
6,261,621

 
61,286

 
(107,344
)
 
6,215,563

Total investments in securities
$
14,473,070

 
$
133,689

 
$
(261,112
)
 
$
14,345,647





The amortized cost and fair value, by contractual maturity, of fixed maturity securities are shown below (in thousands):
 
March 31, 2019
 
Bonds Held-to-Maturity
 
Bonds Available-for-Sale
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
Due in one year or less
$
497,000

 
$
501,658

 
$
138,599

 
$
140,060

Due after one year through five years
4,023,951

 
4,105,063

 
3,169,190

 
3,227,783

Due after five years through ten years
2,978,311

 
3,004,559

 
2,640,729

 
2,680,370

Due after ten years
708,867

 
712,320

 
527,766

 
536,180

  Total
$
8,208,129

 
$
8,323,600

 
$
6,476,284

 
$
6,584,393


Actual maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Residential and commercial mortgage-backed securities, which are not due at a single maturity, have been allocated to their respective categories based on the year of final contractual maturity.
Proceeds from sales of available-for-sale securities, with the related gross realized gains and losses, are shown below (in thousands):
 
 
Three months ended March 31,
 
 
2019
 
2018
Proceeds from sales of fixed maturity available-for-sale securities
 
$
285

 
$
41,316

Gross realized gains
 
—

 
369

Gross realized losses
 
(23
)
 
(555
)

Gains and losses are determined using specific identification of the securities sold. During the three months ended March 31, 2019 and 2018, bonds below investment grade with a carrying value of $157,939,000 and $34,850,000, respectively, were transferred from held-to-maturity to available-for-sale after a deterioration in the issuers’ credit worthiness. No realized loss was recorded in 2019 and 2018.
The components of the change in net unrealized gains (losses) on debt securities are shown below (in thousands):
 
Three months ended March 31,
 
2019
 
2018
Bonds available-for-sale: change in unrealized gains (losses)
$
154,167

 
$
(143,168
)
Adjustments for
 
 
 
Deferred policy acquisition costs
(38,893
)
 
20,054

Participating policyholders’ interest
(7,690
)
 
6,953

Deferred federal income tax benefit (expense)
(22,070
)
 
24,828

Change in net unrealized gains (losses) on debt securities, net of tax
$
85,514

 
$
(91,333
)
The components of the change in net gains (losses) on equity securities are shown below (in thousands):
 
Three months ended March 31,
 
2019
 
2018
Unrealized gains (losses) on equity securities
$
203,022

 
$
(34,225
)
Net gains on equity securities sold
3,355

 
1,055

Net gains (losses) on equity securities
$
206,377

 
$
(33,170
)


The gross unrealized losses and fair value of the investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are shown below (in thousands):
 
March 31, 2019
 
Less than 12 months
 
12 months or more
 
Total
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
Fixed maturity securities, bonds held-to-maturity
 
 
 
 
 
 
 
 
 
 
 
U.S. states and political subdivisions
$
—

 
$
—

 
$
(54
)
 
$
2,611

 
$
(54
)
 
$
2,611

Corporate debt securities
(7,694
)
 
202,599

 
(34,843
)
 
1,555,279

 
(42,537
)
 
1,757,878

Residential mortgage-backed securities
(52
)
 
12,038

 
(1,298
)
 
50,977

 
(1,350
)
 
63,015

Collateralized debt securities
(58
)
 
4,814

 
(204
)
 
32,706

 
(262
)
 
37,520

         Total bonds held-to-maturity
(7,804
)
 
219,451

 
(36,399
)
 
1,641,573

 
(44,203
)
 
1,861,024

Fixed maturity securities, bonds available-for-sale
 
 
 
 
 
 
 
 
 
 
 
U.S. treasury and government
—

 
—

 
(147
)
 
15,603

 
(147
)
 
15,603

U.S. states and political subdivisions
(76
)
 
58,357

 
(315
)
 
36,648

 
(391
)
 
95,005

Corporate debt securities
(2,266
)
 
135,282

 
(32,650
)
 
1,152,415

 
(34,916
)
 
1,287,697

Residential mortgage-backed securities
—

 
—

 
(326
)
 
13,593

 
(326
)
 
13,593

Collateralized debt securities
—

 
—

 
(6
)
 
258

 
(6
)
 
258

         Total bonds available-for-sale
(2,342
)
 
193,639

 
(33,444
)
 
1,218,517

 
(35,786
)
 
1,412,156

Total
$
(10,146
)
 
$
413,090

 
$
(69,843
)
 
$
2,860,090

 
$
(79,989
)
 
$
3,273,180


 
December 31, 2018
 
Less than 12 months
 
12 months or more
 
Total
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
Fixed maturity securities, bonds held-to-maturity
 
 
 
 
 
 
 
 
 
 
 
U.S. states and political subdivisions
$
(301
)
 
$
22,605

 
$
—

 
$
—

 
$
(301
)
 
$
22,605

Corporate debt securities
(90,931
)
 
2,969,461

 
(59,903
)
 
1,063,679

 
(150,834
)
 
4,033,140

Residential mortgage-backed securities
(703
)
 
58,119

 
(1,930
)
 
57,661

 
(2,633
)
 
115,780

         Total bonds held-to-maturity
(91,935
)
 
3,050,185

 
(61,833
)
 
1,121,340

 
(153,768
)
 
4,171,525

Fixed maturity securities, bonds available-for-sale
 
 
 
 
 
 
 
 
 
 
 
U.S. treasury and government
(29
)
 
9,741

 
(214
)
 
13,478

 
(243
)
 
23,219

U.S. states and political subdivisions
(1,274
)
 
119,987

 
(1,751
)
 
61,992

 
(3,025
)
 
181,979

Corporate debt securities
(65,492
)
 
2,383,548

 
(38,081
)
 
572,600

 
(103,573
)
 
2,956,148

Residential mortgage-backed securities
(54
)
 
6,034

 
(443
)
 
13,515

 
(497
)
 
19,549

Collateralized debt securities
(2
)
 
158

 
(4
)
 
100

 
(6
)
 
258

         Total bonds available-for-sale
(66,851
)
 
2,519,468

 
(40,493
)
 
661,685

 
(107,344
)
 
3,181,153

Total
$
(158,786
)
 
$
5,569,653

 
$
(102,326
)
 
$
1,783,025

 
$
(261,112
)
 
$
7,352,678


As of March 31, 2019, the securities with unrealized losses including those exceeding one year were not deemed to be other-than-temporarily impaired. American National has the ability and intent to hold those securities until a market price recovery or maturity. It is not more-likely-than-not that American National will be required to sell them prior to recovery, and recovery is expected in a reasonable period of time. It is possible an issuer’s financial circumstances may be different in the future, which may lead to a different impairment conclusion in future periods.
The following table identifies the total bonds distributed by credit quality rating (in thousands, except percentages):
 
March 31, 2019
 
December 31, 2018
 
Amortized
Cost
 
Estimated
Fair Value
 
% of Fair
Value
 
Amortized
Cost
 
Estimated
Fair Value
 
% of Fair
Value
AAA
$
706,418

 
$
725,774

 
4.9
%
 
$
690,009

 
$
702,531

 
4.9
%
AA
1,326,936

 
1,358,217

 
9.1

 
1,326,947

 
1,336,380

 
9.3

A
5,460,570

 
5,554,701

 
37.3

 
5,350,316

 
5,314,589

 
37.0

BBB
6,706,003

 
6,798,672

 
45.6

 
6,584,478

 
6,507,212

 
45.4

BB and below
484,486

 
470,629

 
3.1

 
521,320

 
484,935

 
3.4

Total
$
14,684,413

 
$
14,907,993

 
100.0
%
 
$
14,473,070

 
$
14,345,647

 
100.0
%

Equity securities by market sector distribution are shown below:
 
March 31, 2019
 
December 31, 2018
Consumer goods
19.7
%
 
21.1
%
Energy and utilities
8.9

 
8.2

Finance
18.0

 
18.1

Healthcare
13.7

 
13.5

Industrials
8.1

 
9.0

Information technology
23.7

 
22.6

Other
7.9

 
7.5

        Total
100.0
%
 
100.0
%