Investments

9 Months Ended

Sep. 30, 2024

Investments

The following table provides amortized cost, gross unrealized gains, gross unrealized losses and fair value for our fixed-maturity securities:


(Dollars in millions)	Amortized cost		Gross unrealized				Fair value
At September 30, 2024			gains		losses
Fixed-maturity securities:
Corporate	$	8,407	$	150	$	218	$	8,339
States, municipalities and political subdivisions	4,944		41		176		4,809
Government-sponsored enterprises	2,147		5		1		2,151
Asset-backed	317		4		7		314
United States government	228		1		2		227
Foreign government	31		—		—		31

Total	$	16,074	$	201	$	404	$	15,871






At December 31, 2023
Fixed-maturity securities:
Corporate	$	7,836	$	70	$	454	$	7,452
States, municipalities and political subdivisions	4,867		44		208		4,703
Government-sponsored enterprises	1,227		3		6		1,224
Asset-backed	203		—		16		187
United States government	203		—		3		200
Foreign government	25		—		—		25






Total	$	14,361	$	117	$	687	$	13,791

The decrease in net unrealized investment losses in our fixed-maturity portfolio at September 30, 2024, is primarily due to a decrease in U.S. Treasury yields and a tightening of corporate credit spreads as well as realized losses on sales of some lower-yielding fixed maturities. Our asset-backed securities had an average rating of Aa2/AA- and Aa3/AA- at September 30, 2024, and December 31, 2023, respectively.

The table below provides fair values and gross unrealized losses by investment category and by the duration of the securities' continuous unrealized loss positions:


(Dollars in millions)	Less than 12 months				12 months or more				Total
At September 30, 2024	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed-maturity securities:
Corporate	$	402	$	5	$	3,937	$	213	$	4,339	$	218
States, municipalities and political subdivisions	287		4		2,000		172		2,287		176
Government-sponsored enterprises	715		1		128		—		843		1
Asset-backed	48		—		99		7		147		7
United States government	—		—		103		2		103		2
Foreign government	—		—		5		—		5		—
Total	$	1,452	$	10	$	6,272	$	394	$	7,724	$	404





At December 31, 2023
Fixed-maturity securities:
Corporate	$	379	$	13	$	5,560	$	441	$	5,939	$	454
States, municipalities and political subdivisions	313		2		1,932		206		2,245		208
Government-sponsored enterprises	652		3		113		3		765		6
Asset-backed	5		—		172		16		177		16
United States government	32		—		129		3		161		3
Foreign government	3		—		6		—		9		—





Total	$	1,384	$	18	$	7,912	$	669	$	9,296	$	687

Contractual maturity dates for fixed-maturities securities were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At September 30, 2024
Maturity dates:
Due in one year or less	$	1,198	$	1,194	7.5	%
Due after one year through five years	4,011		3,993		25.2
Due after five years through ten years	3,554		3,542		22.3
Due after ten years	7,311		7,142		45.0
Total	$	16,074	$	15,871	100.0	%

Actual maturities may differ from contractual maturities when there is a right to call or prepay obligations with or without call or prepayment penalties.

The following table provides investment income and investment gains and losses, net:


(Dollars in millions)	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Investment income:
Interest	$	187	$	154	$	529	$	441
Dividends	68		69		209		205
Other	7		5		18		18
Total	262		228		756		664
Less investment expenses	4		3		11		9
Total	$	258	$	225	$	745	$	655

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	24	$	(5)	$	146	$	2
Unrealized gains and losses on securities still held, net	817		(458)		1,446		99
Subtotal	841		(463)		1,592		101
Fixed-maturity securities:
Gross realized gains	1		1		5		2
Gross realized losses	(87)		(1)		(94)		(2)
Change in allowance for credit losses, net	—		1		(25)		(2)
Write-down of impaired securities with intent to sell	—		—		—		(4)
Subtotal	(86)		1		(114)		(6)

Other	3		6		29		(11)

Total	$	758	$	(456)	$	1,507	$	84

The fair value of our equity portfolio was $11.570 billion and $10.989 billion at September 30, 2024, and December 31, 2023, respectively. Apple, Inc. (Nasdaq:AAPL) and Microsoft Corporation (Nasdaq:MSFT), equity holdings, were our largest single investment holdings with a fair value of $885 million and $842 million, which was 7.9% and 7.9% of our publicly traded common equities portfolio and 3.2% and 3.4% of the total investment portfolio at September 30, 2024, and December 31, 2023, respectively.

The allowance for credit losses on fixed-maturity securities was $39 million and $18 million at September 30, 2024, and December 31, 2023, respectively.

There were 2,495 and 2,840 fixed-maturity securities in a total unrealized loss position of $404 million and $687 million at September 30, 2024, and December 31, 2023, respectively. Of those totals, 5 and 20 fixed-maturity securities had fair values below 70% of amortized cost at September 30, 2024, and December 31, 2023, respectively.