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Investments (Tables) | 9 Months Ended
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Sep. 30, 2019
Investments [Abstract] |
Total Investments | Total investments at September 30, 2019 and December 31, 2018 were as follows:
| September 30, 2019 |  | December 31, 2018
In millions | Current |  | Long-term |  | Total |  | Current |  | Long-term |  | Total
Debt securities available for sale | $ | 2,175 |  |  | $ | 14,583 |  |  | $ | 16,758 |  |  | $ | 2,359 |  |  | $ | 12,896 |  |  | $ | 15,255 |
Mortgage loans | 159 |  |  | 1,131 |  |  | 1,290 |  |  | 145 |  |  | 1,216 |  |  | 1,361 |
Other investments | — |  |  | 1,628 |  |  | 1,628 |  |  | 18 |  |  | 1,620 |  |  | 1,638 |
Total investments | $ | 2,334 |  |  | $ | 17,342 |  |  | $ | 19,676 |  |  | $ | 2,522 |  |  | $ | 15,732 |  |  | $ | 18,254 |
Debt Securities Available For Sale | Debt securities available for sale at September 30, 2019 and December 31, 2018 were as follows:
In millions | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
September 30, 2019 |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |
U.S. government securities | $ | 1,743 |  |  | $ | 83 |  |  | $ | — |  |  | $ | 1,826 |
States, municipalities and political subdivisions | 2,240 |  |  | 114 |  |  | (1 | ) |  | 2,353 |
U.S. corporate securities | 7,076 |  |  | 568 |  |  | (7 | ) |  | 7,637 |
Foreign securities | 2,095 |  |  | 194 |  |  | — |  |  | 2,289 |
Residential mortgage-backed securities | 529 |  |  | 25 |  |  | — |  |  | 554 |
Commercial mortgage-backed securities | 645 |  |  | 56 |  |  | — |  |  | 701 |
Other asset-backed securities | 1,348 |  |  | 15 |  |  | (5 | ) |  | 1,358 |
Redeemable preferred securities | 32 |  |  | 8 |  |  | — |  |  | 40 |
Total debt securities (1) | $ | 15,708 |  |  | $ | 1,063 |  |  | $ | (13 | ) |  | $ | 16,758 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |
U.S. government securities | $ | 1,662 |  |  | $ | 26 |  |  | $ | — |  |  | $ | 1,688 |
States, municipalities and political subdivisions | 2,370 |  |  | 30 |  |  | (1 | ) |  | 2,399 |
U.S. corporate securities | 6,444 |  |  | 61 |  |  | (16 | ) |  | 6,489 |
Foreign securities | 2,355 |  |  | 31 |  |  | (3 | ) |  | 2,383 |
Residential mortgage-backed securities | 567 |  |  | 10 |  |  | — |  |  | 577 |
Commercial mortgage-backed securities | 594 |  |  | 11 |  |  | — |  |  | 605 |
Other asset-backed securities | 1,097 |  |  | 3 |  |  | (15 | ) |  | 1,085 |
Redeemable preferred securities | 30 |  |  | — |  |  | (1 | ) |  | 29 |
Total debt securities (1) | $ | 15,119 |  |  | $ | 172 |  |  | $ | (36 | ) |  | $ | 15,255 |
_____________________________________________
(1) | Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2019, debt securities with a fair value of $973 million, gross unrealized capital gains of $85 million and no gross unrealized capital losses and at December 31, 2018, debt securities with a fair value of $916 million, gross unrealized capital gains of $12 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income.
Fair Value of Debt Securities by Contractual Maturity | The fair value of debt securities at September 30, 2019 is shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity.
In millions | Amortized Cost |  | Fair Value
Due to mature: |  |  |
Less than one year | $ | 1,017 |  |  | $ | 1,022 |
One year through five years | 5,378 |  |  | 5,568 |
After five years through ten years | 3,098 |  |  | 3,316 |
Greater than ten years | 3,693 |  |  | 4,239 |
Residential mortgage-backed securities | 529 |  |  | 554 |
Commercial mortgage-backed securities | 645 |  |  | 701 |
Other asset-backed securities | 1,348 |  |  | 1,358 |
Total | $ | 15,708 |  |  | $ | 16,758 |
Debt Securities In An Unrealized Capital Loss Position | Summarized below are the debt securities the Company held at September 30, 2019 and December 31, 2018 that were in an unrealized capital loss position:
In millions, except number of securities | Number of Securities |  | Fair Value |  | Unrealized Losses
September 30, 2019 |  |  |  |  |
Debt securities: |  |  |  |  |
U.S. government securities | 8 |  |  | $ | 41 |  |  | $ | — |
States, municipalities and political subdivisions | 38 |  |  | 53 |  |  | 1 |
U.S. corporate securities | 217 |  |  | 254 |  |  | 7 |
Foreign securities | 27 |  |  | 39 |  |  | — |
Residential mortgage-backed securities | 31 |  |  | 17 |  |  | — |
Other asset-backed securities | 327 |  |  | 386 |  |  | 5 |
Total debt securities | 648 |  |  | $ | 790 |  |  | $ | 13 |
December 31, 2018 |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |
U.S. government securities | 8 |  |  | $ | 26 |  |  | $ | — |
States, municipalities and political subdivisions | 54 |  |  | 86 |  |  | 1 |
U.S. corporate securities | 1,399 |  |  | 1,431 |  |  | 16 |
Foreign securities | 243 |  |  | 314 |  |  | 3 |
Residential mortgage-backed securities | 45 |  |  | 1 |  |  | — |
Other asset-backed securities | 516 |  |  | 528 |  |  | 15 |
Redeemable preferred securities | 14 |  |  | 23 |  |  | 1 |
Total debt securities | 2,279 |  |  | $ | 2,409 |  |  | $ | 36 |
The maturity dates for debt securities in an unrealized capital loss position at September 30, 2019 were as follows:
| Supporting experience-rated products |  | Supporting remaining products |  | Total
In millions | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Due to mature: |  |  |  |  |  |  |  |  |  |  |
Less than one year | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |
One year through five years | 1 |  |  | — |  |  | 137 |  |  | 2 |  |  | 138 |  |  | 2 |
After five years through ten years | 8 |  |  | — |  |  | 128 |  |  | 4 |  |  | 136 |  |  | 4 |
Greater than ten years | 11 |  |  | — |  |  | 99 |  |  | 2 |  |  | 110 |  |  | 2 |
Residential mortgage-backed securities | — |  |  | — |  |  | 17 |  |  | — |  |  | 17 |  |  | — |
Other asset-backed securities | 10 |  |  | — |  |  | 376 |  |  | 5 |  |  | 386 |  |  | 5 |
Total | $ | 30 |  |  | $ | — |  |  | $ | 760 |  |  | $ | 13 |  |  | $ | 790 |  |  | $ | 13 |
Activity in Mortgage Loan Portfolio | During the three and nine months ended September 30, 2019, the Company had the following activity in its mortgage loan portfolio:
In millions | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
New mortgage loans | $ | 12 |  |  | $ | 90 |
Mortgage loans fully repaid | 56 |  |  | 127 |
Mortgage loans foreclosed | — |  |  | — |
Mortgage Loan Internal Credit Rating | Based upon the Company’s assessments at September 30, 2019 and December 31, 2018, the Company’s mortgage loans were given the following credit quality indicators:
In millions, except credit ratings indicator | September 30, 2019 |  | December 31, 2018
1 | $ | 44 |  |  | $ | 42 |
2 to 4 | 1,234 |  |  | 1,301 |
5 and 6 | 12 |  |  | 18 |
7 | — |  |  | — |
Total | $ | 1,290 |  |  | $ | 1,361 |
Net Investment Income | Sources of net investment income for the three and nine months ended September 30, 2019 and 2018 were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
In millions | 2019 |  | 2018 |  | 2019 |  | 2018
Debt securities | $ | 145 |  |  | $ | 2 |  |  | $ | 437 |  |  | $ | 5 |
Mortgage loans | 19 |  |  | — |  |  | 54 |  |  | — |
Other investments | 60 |  |  | 219 |  |  | 163 |  |  | 480 |
Gross investment income | 224 |  |  | 221 |  |  | 654 |  |  | 485 |
Investment expenses | (10 | ) |  | — |  |  | (28 | ) |  | — |
Net investment income (excluding net realized capital gains or losses) | 214 |  |  | 221 |  |  | 626 |  |  | 485 |
Net realized capital gains (1) | 49 |  |  | — |  |  | 179 |  |  | — |
Net investment income (2) | $ | 263 |  |  | $ | 221 |  |  | $ | 805 |  |  | $ | 485 |
_____________________________________________
(1) | Other-than-temporary impairment (“OTTI”) losses on debt securities recognized in the unaudited condensed consolidated statements of operations were $9 million and $22 million, respectively, for the three and nine months ended September 30, 2019. There were no OTTI losses on debt securities for the three and nine months ended September 30, 2018.
(2) | Net investment income includes $10 million and $33 million for the three and nine months ended September 30, 2019, respectively, related to investments supporting experience-rated products. The Company had no investments supporting experience-rated products during the three and nine months ended September 30, 2018.
Proceeds and Related Gross Realized Capital Gains and Losses From the Sale of Debt Securities | Excluding amounts related to experience-rated products, proceeds from the sale of available for sale debt securities and the related gross realized capital gains and losses for the three and nine months ended September 30, 2019 were as follows:
In millions | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Proceeds from sales | $ | 1,325 |  |  | $ | 4,087 |
Gross realized capital gains | 55 |  |  | 127 |
Gross realized capital losses | 9 |  |  | 13 |

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