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Investment Information
 6 Months Ended
Jun. 30, 2023
Disclosure Investment Information [Abstract]  
Investment
Available For Sale Investments
The following table summarizes the fair value and cost or amortized cost of the Company’s securities classified as available for sale:
Estimated
Fair
Value		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Allowance for Expected Credit Losses Cost or
Amortized
Cost
June 30, 2023
Fixed maturities:
Corporate bonds$9,977 $54 $(693)$(50)$10,666 
Residential mortgage backed securities860 3 (87)— 944 
Municipal bonds306 1 (27)— 332 
Commercial mortgage backed securities1,082 — (49)(2)1,133 
U.S. government and government agencies4,529 4 (176)— 4,701 
Non-U.S. government securities2,277 20 (204)(3)2,464 
Asset backed securities2,403 5 (95)(6)2,499 
Total21,434 87 (1,331)(61)22,739 
Short-term investments1,702 2 (1)— 1,701 
Total$23,136 $89 $(1,332)$(61)$24,440 
December 31, 2022
Fixed maturities:
Corporate bonds$8,020 $55 $(781)$(30)$8,776 
Residential mortgage backed securities795 5 (87)— 877 
Municipal bonds419 3 (33)— 449 
Commercial mortgage backed securities1,047 1 (58)(3)1,107 
U.S. government and government agencies5,162 15 (343)— 5,490 
Non-U.S. government securities2,313 9 (238)(2)2,544 
Asset backed securities1,927 1 (107)(6)2,039 
Total19,683 89 (1,647)(41)21,282 
Short-term investments1,332 1 (2)— 1,333 
Total$21,015 $90 $(1,649)$(41)$22,615 
The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position:
 Less than 12 Months12 Months or MoreTotal
Estimated
Fair
Value		Gross
Unrealized
Losses		Estimated
Fair
Value		Gross
Unrealized
Losses		Estimated
Fair
Value		Gross
Unrealized
Losses
June 30, 2023
Fixed maturities:
Corporate bonds$4,083 $(118)$5,184 $(575)$9,267 $(693)
Residential mortgage backed securities441 (24)330 (63)771 (87)
Municipal bonds126 (7)169 (20)295 (27)
Commercial mortgage backed securities127 (4)892 (45)1,019 (49)
U.S. government and government agencies3,362 (61)1,085 (115)4,447 (176)
Non-U.S. government securities1,242 (61)981 (143)2,223 (204)
Asset backed securities695 (25)1,046 (70)1,741 (95)
Total10,076 (300)9,687 (1,031)19,763 (1,331)
Short-term investments251 (1)— — 251 (1)
Total$10,327 $(301)$9,687 $(1,031)$20,014 $(1,332)
December 31, 2022
Fixed maturities:
Corporate bonds$4,823 $(393)$2,559 $(388)$7,382 $(781)
Residential mortgage backed securities546 (52)154 (35)700 (87)
Municipal bonds364 (30)16 (3)380 (33)
Commercial mortgage backed securities598 (35)445 (23)1,043 (58)
U.S. government and government agencies3,557 (197)1,443 (146)5,000 (343)
Non-U.S. government securities1,703 (154)542 (84)2,245 (238)
Asset backed securities1,148 (66)512 (41)1,660 (107)
Total12,739 (927)5,671 (720)18,410 (1,647)
Short-term investments237 (2)— — 237 (2)
Total$12,976 $(929)$5,671 $(720)$18,647 $(1,649)
At June 30, 2023, on a lot level basis, approximately 10,400 security lots out of a total of approximately 13,490 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $7 million. At December 31, 2022, on a lot level basis, approximately 9,810 security lots out of a total of approximately 12,590 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $7 million.
The contractual maturities of the Company’s fixed maturities are shown in the following table. Expected maturities, which are management’s best estimates, will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
June 30, 2023December 31, 2022
MaturityEstimated
Fair
Value		Amortized
Cost		Estimated
Fair
Value		Amortized
Cost
Due in one year or less$576 $603 $511 $537 
Due after one year through five years12,033 12,606 11,016 11,715 
Due after five years through 10 years4,449 4,889 3,984 4,527 
Due after 10 years31 65 403 480 
 17,089 18,163 15,914 17,259 
Residential mortgage backed securities860 944 795 877 
Commercial mortgage backed securities1,082 1,133 1,047 1,107 
Asset backed securities2,403 2,499 1,927 2,039 
Total$21,434 $22,739 $19,683 $21,282 
Equity Securities, at Fair Value
At June 30, 2023, the Company held $911 million of equity securities, at fair value, compared to $860 million at December 31, 2022. Such holdings include publicly traded common stocks primarily in the consumer cyclical and non-cyclical, technology, communication and financial sectors and exchange-traded funds in fixed income, equity and other sectors.
Other Investments, at Fair Value
The following table summarizes the Company’s other investments and other investable assets:
June 30,
2023		December 31,
2022
Fixed maturities$659 $554 
Other investments1,172 1,043 
Short-term investments8 33 
Equity securities7 14 
Total$1,846 $1,644 
The following table summarizes the Company’s other investments, as detailed in the previous table, by strategy:
June 30,
2023		December 31,
2022
Lending$451 $406 
Investment grade fixed income265 271 
Term loan investments228 164 
Private equity149 123 
Credit related funds60 56 
Energy19 23 
Total$1,172 $1,043 
Investments Accounted For Using the Equity Method
The following table summarizes the Company’s investments accounted for using the equity method, by strategy:
June 30,
2023		December 31,
2022
Credit related funds$1,200 $1,136 
Private equity1,028 917 
Real estate590 535 
Lending567 531 
Infrastructure280 245 
Equities168 169 
Fixed income134 130 
Energy106 111 
Total$4,073 $3,774 

Certain of the Company’s other investments are in investment funds for which the Company has the option to redeem at agreed upon values as described in each investment fund’s subscription agreement. Depending on the terms of the various subscription agreements, investments in investment funds may be redeemed daily, monthly, quarterly or on other terms. Two common redemption restrictions which may impact the Company’s ability to redeem these investment funds are gates and lockups. A gate is a suspension of redemptions which may be implemented by the general partner or investment manager of the fund in order to defer, in whole or in part, the redemption request in the event the aggregate amount of redemption requests exceeds a predetermined percentage of the investment fund’s net assets which may otherwise hinder the general partner or investment manager’s ability to liquidate holdings in an orderly fashion in order to generate the cash necessary to fund extraordinarily large redemption payouts. A lockup period is the initial amount of time an investor is contractually required to hold the security before having the ability to redeem. If the investment funds are eligible to be redeemed, the time to redeem such fund can take weeks or months following the notification.
Limited Partnership Interests
In the normal course of its activities, the Company invests in limited partnerships as part of its overall investment strategy. Such amounts are included in ‘investments accounted for using the equity method’ and ‘investments accounted for using the fair value option.’ The Company has determined that it is not required to consolidate these investments because it is not the primary beneficiary of the funds. The Company’s maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported in the Company’s consolidated balance sheet and any unfunded commitment.
The following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item:
June 30,
2023		December 31,
2022
Investments accounted for using the equity method (1)$4,073 $3,774 
Investments accounted for using the fair value option (2)127 131 
Total$4,200 $3,905 
(1)    Aggregate unfunded commitments were $2.5 billion at June 30, 2023, compared with $2.6 billion at December 31, 2022.
(2)    Aggregate unfunded commitments were $66 million at June 30, 2023, compared to $17 million at December 31, 2022.
Net Investment Income
The components of net investment income were derived from the following sources:
June 30,
 20232022
Three Months Ended
Fixed maturities$214 $105 
Equity securities6 6 
Short-term investments15 4 
Other (1)25 8 
Gross investment income260 123 
Investment expenses(18)(17)
Net investment income$242 $106 
Six Months Ended
Fixed maturities$402 $187 
Equity securities10 12 
Short-term investments29 7 
Other (1)38 20 
Gross investment income479 226 
Investment expenses(38)(40)
Net investment income$441 $186 
(1)    Amounts include dividends and other distributions on investment funds, term loan investments, funds held balances, cash balances and other items.

Net Realized Gains (Losses)
Net realized gains (losses), which include changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings were as follows:
June 30,
 20232022
Three Months Ended
Available for sale securities:  
Gross gains on investment sales$22 $15 
Gross losses on investment sales(169)(57)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities(2)(39)
Other investments5 (23)
Equity securities— (2)
Short-term investments— (2)
Equity securities, at fair value:
Net realized gains (losses) on sales during the period17 17 
Net unrealized gains (losses) on equity securities still held at reporting date25 (106)
Allowance for credit losses:
Investments related(7)(25)
Underwriting related(1)1 
Derivative instruments (1)(15)(46)
Other2 — 
Net realized gains (losses)$(123)$(267)
Six Months Ended
Available for sale securities:
Gross gains on investment sales$39 $35 
Gross losses on investment sales(280)(165)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities4 (70)
Other investments14 (19)
Equity securities1 (5)
Short-term investments— (2)
Equity securities, at fair value:
Net realized gains (losses) on sales during the period36 82 
Net unrealized gains (losses) on equity securities still held at reporting date63 (282)
Allowance for credit losses:
Investments related(23)(57)
Underwriting related(1)(3)
Derivative instruments (1)41 (70)
Other— (3)
Net realized gains (losses)$(106)$(559)
(1)    See note 9 for information on the Company’s derivative instruments.
Equity in Net Income (Loss) of Investment Funds Accounted for Using the Equity Method
The Company recorded income of $69 million related to investment funds accounted for using the equity method in the 2023 second quarter, compared to income of $58 million for the 2022 second quarter and income of $117 million for the six months ended June 30, 2023, compared to income of $94 million for six months ended June 30, 2022. In applying the equity method, investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the market value of the underlying securities in the funds). Such investments are generally recorded on a one to three month lag based on the availability of reports from the investment funds.
Investments in Operating Affiliates
Investments in which the Company has significant influence over the operating and financial policies are classified as ‘investments in operating affiliates’ on the Company’s balance sheets and are accounted for under the equity method. Such investments primarily include the Company’s investment in Coface SA (“Coface”), Greysbridge Holdings Ltd., (“Greysbridge”) and Premia Holdings Ltd. Investments in Coface and Premia Holdings Ltd. are generally recorded on a three month lag, while the Company’s investment in Greysbridge is not recorded on a lag.
As of June 30, 2023, the Company owned approximately 29.9% of the issued shares of Coface, or 30% excluding treasury shares, with a carrying value of $518 million, compared to $563 million at December 31, 2022.
As of June 30, 2023, the Company owned 40% of Greysbridge with a carrying value of $339 million, compared to $306 million at December 31, 2022.
Income from operating affiliates for the 2023 second quarter was $22 million, compared to $5 million, for the 2022 second quarter, and income of $61 million for the six months ended June 30, 2023, compared to income of $30 million for six months ended June 30, 2022.
See note 15 for information on Company’s transactions with related parties.




Allowance for Expected Credit Losses
The following table provides a roll forward of the allowance for expected credit losses of the Company’s securities classified as available for sale:
Structured Securities (1)Corporate
Bonds		Non-U.S.
Government
Securities		Total
Three Months Ended June 30, 2023
Balance at beginning of period$8 $45 $3 $56 
Additions for current-period provision for expected credit losses— — — — 
Additions (reductions) for previously recognized expected credit losses — 6 — 6 
Reductions due to disposals— (1)— (1)
Balance at end of period$8 $50 $3 $61 
Three Months Ended June 30, 2022
Balance at beginning of period$7 $27 $— $34 
Additions for current-period provision for expected credit losses5 13 — 18 
Additions (reductions) for previously recognized expected credit losses 7 — — 7 
Reductions due to disposals— — — — 
Balance at end of period$19 $40 $— $59 
Six Months Ended June 30, 2023
Balance at beginning of period$9 $30 $2 $41 
Additions for current-period provision for expected credit losses— 1 — 1 
Additions (reductions) for previously recognized expected credit losses(1)21 1 21 
Reductions due to disposals— (2)— (2)
Balance at end of period$8 $50 $3 $61 
Six Months Ended June 30, 2022
Balance at beginning of period$1 $2 $— $3 
Additions for current-period provision for expected credit losses11 38 — 49 
Additions (reductions) for previously recognized expected credit losses7 — — 7 
Reductions due to disposals— — — — 
Balance at end of period$19 $40 $— $59 
(1)    Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities.
Restricted Assets
The Company is required to maintain assets on deposit, which primarily consist of fixed maturities, with various regulatory authorities to support its underwriting operations. The Company’s subsidiaries maintain assets in trust accounts as collateral for transactions with affiliated companies and also have investments in segregated portfolios primarily to provide collateral or guarantees for letters of credit to third parties. See note 18, “Commitments and Contingencies,” of the notes to consolidated financial statements in the Company’s 2022 Form 10-K.
The following table details the value of the Company’s restricted assets:
June 30,
2023		December 31,
2022
Assets used for collateral or guarantees:  
Affiliated transactions$4,477 $4,254 
Third party agreements2,822 2,633 
Deposits with U.S. regulatory authorities797 776 
Other (1)1,217 1,038 
Total restricted assets$9,313 $8,701 
(1)    Primarily includes Funds at Lloyds, deposits with non-U.S. regulatory authorities and other restricted assets.
Reconciliation of Cash and Restricted Cash
The following table details reconciliation of cash and restricted cash within the Consolidated Balance Sheets:
June 30,
2023		December 31,
2022
Cash$904 $855 
Restricted cash (included in ‘other assets’)449 418 
Cash and restricted cash$1,353 $1,273