Investments

9 Months Ended

Sep. 30, 2025

Investments

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


(Dollars in millions)	Amortized cost		Gross unrealized				Fair value
At September 30, 2025			gains		losses
Fixed-maturity:
Corporate	$	9,385	$	171	$	193	$	9,363
States, municipalities and political subdivisions	5,043		24		221		4,846
Government-sponsored enterprises	2,348		3		5		2,346
Asset-backed	776		11		9		778
United States government	272		3		1		274
Foreign government	23		—		—		23

Total fixed-maturity	17,847		212		429		17,630




Short-term	149		—		—		149
Total fixed-maturity and short-term investments	$	17,996	$	212	$	429	$	17,779
At December 31, 2024
Fixed-maturity:
Corporate	$	8,652	$	61	$	333	$	8,380
States, municipalities and political subdivisions	4,976		15		270		4,721
Government-sponsored enterprises	2,282		1		9		2,274
Asset-backed	567		1		17		551
United States government	228		—		2		226
Foreign government	30		—		—		30

Total fixed-maturity	16,735		78		631		16,182
Short-term	298		—		—		298




Total fixed-maturity and short-term investments	$	17,033	$	78	$	631	$	16,480

The decrease in net unrealized investment losses in our fixed-maturity portfolio at September 30, 2025, is primarily due to a decrease in U.S. Treasury yields and a slight tightening of corporate credit spreads. Our asset-backed securities had an average rating of Aa2/AA and Aa1/AA at September 30, 2025 and December 31, 2024, respectively.

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


(Dollars in millions)	Less than 12 months				12 months or more				Total
At September 30, 2025	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Fixed-maturity:
Corporate	$	793	$	14	$	2,887	$	179	$	3,680	$	193
States, municipalities and political subdivisions	873		20		2,019		201		2,892		221
Government-sponsored enterprises	922		3		488		2		1,410		5
Asset-backed	173		4		91		5		264		9
United States government	—		—		27		1		27		1
Foreign government	1		—		—		—		1		—
Total fixed-maturity	$	2,762	$	41	$	5,512	$	388	$	8,274	$	429







At December 31, 2024
Fixed-maturity:
Corporate	$	2,815	$	78	$	3,634	$	255	$	6,449	$	333
States, municipalities and political subdivisions	1,513		25		1,898		245		3,411		270
Government-sponsored enterprises	1,876		8		92		1		1,968		9
Asset-backed	331		10		96		7		427		17
United States government	48		—		100		2		148		2
Foreign government	—		—		3		—		3		—
Total fixed-maturity	6,583		121		5,823		510		12,406		631
Short-term	100		—		—		—		100		—




Total fixed-maturity and short-term investments	$	6,683	$	121	$	5,823	$	510	$	12,506	$	631

Contractual maturity dates for our fixed-maturity and short-term investments were:


(Dollars in millions)	Amortized cost		Fair value		% of fair value
At September 30, 2025
Maturity dates:
Due in one year or less	$	1,008	$	1,001	5.6	%
Due after one year through five years	3,667		3,679		20.7
Due after five years through ten years	4,084		4,109		23.1
Due after ten years	9,237		8,990		50.6
Total	$	17,996	$	17,779	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,
	2025		2024		2025		2024
Investment income:
Interest	$	227	$	187	$	651	$	529
Dividends	69		68		206		209
Other	4		7		16		18
Total	300		262		873		756
Less investment expenses	5		4		13		11
Total	$	295	$	258	$	860	$	745

Investment gains and losses, net:
Equity securities:
Investment gains and losses on securities sold, net	$	(9)	$	24	$	(5)	$	146
Unrealized gains and losses on securities still held, net	855		817		1,259		1,446
Subtotal	846		841		1,254		1,592
Fixed-maturity securities:
Gross realized gains	2		1		3		5
Gross realized losses	(1)		(87)		(1)		(94)
Change in allowance for credit losses, net	—		—		(15)		(25)

Subtotal	1		(86)		(13)		(114)

Other	6		3		18		29

Total	$	853	$	758	$	1,259	$	1,507

The fair value of our equity portfolio was $12.547 billion and $11.185 billion at September 30, 2025, and December 31, 2024, respectively. Microsoft Corporation (Nasdaq:MSFT) and Apple Inc. (Nasdaq:AAPL), equity holdings, were our largest single investment holdings with fair values of $940 million and $891 million, which were 7.7% and 8.2% of our publicly traded common equities portfolio and 3.1% and 3.2% of the total investment portfolio at September 30, 2025, and December 31, 2024, respectively.

The allowance for credit losses on fixed-maturity securities was $41 million and $33 million at September 30, 2025, and December 31, 2024, respectively. Reductions in the allowance for credit losses for securities sold were $6 million and $7 million for the three and nine months ended September 30, 2025.

There were 2,831 and 3,723 fixed-maturity and short-term investments in a total unrealized loss position of $429 million and $631 million at September 30, 2025, and December 31, 2024, respectively. Of those totals, 17 and 19 fixed-maturity securities had fair values below 70% of amortized cost at September 30, 2025, and December 31, 2024, respectively.