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Investments (Tables)
3 Months Ended
Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
Summary of Net Investment Income
Net investment income is as follows:
 
Three Months Ended March 31
 
      2019      
  
      2018      
(In millions)
     
   
Fixed maturity securities
 
$
        455
  $        446 
Limited partnership investments
  
81
   48 
Short term investments
  
15
   9 
Equity securities
  
30
   10 
Income (loss) from trading portfolio (a)
  
81
   (3
Other
  
14
   11 
Total investment income
  
676
   521 
Investment expenses
  
(19
  (15
Net investment income
 
$
657
  $506 
         
Summary of Investment Gains (Losses)
Investment gains (losses) are as follows:
 
Three Months Ended March 31
 
      2019      
  
      2018      
 
(In millions)
      
   
Fixed maturity securities
 
$
(6
 $        18 
Equity securities
  
42
   (15
Derivative instruments
  
(5
  5 
Short term investments and other
      1 
Investment gains (a)
 
$
31
  $9 
         
Components of OTTI Losses Recognized in Earnings by Asset Type
The components of other-than-temporary impairment (“OTTI”) losses recognized in earnings by asset type are as follows:
 
Three Months Ended March 31
 
      2019  
  
      2018  
(In millions)
     
   
Fixed maturity securities
available-for-sale:
        
Corporate and other bonds
 
$
        6
  $        5 
Asset-backed
  
8
   1 
Net OTTI losses recognized in earnings
 
$
14
  $6 
         
Amortized Cost and Fair Values of Fixed Maturity and Equity Securities
The amortized cost and fair values of fixed maturity securities are as follows:
 
March 31, 2019
 
Cost or
Amortized
Cost
  
Gross
Unrealized
Gains
  
Gross
Unrealized
Losses
  
Estimated
Fair Value
  
Unrealized
OTTI Losses
(Gains)
(In millions)
              
      
Fixed maturity securities:
                    
Corporate and other bonds
 
$
19,296
  
$
1,269
  
$
99
  
$
20,466
     
States, municipalities and political subdivisions
  
9,279
   
1,299
       
10,578
     
Asset-backed:
                    
Residential mortgage-backed
  
4,760
   
92
   
20
   
4,832
  
$
(22
Commercial mortgage-backed
  
2,026
   
53
   
7
   
2,072
     
Other asset-backed
  
1,877
   
25
   
12
   
1,890
   
(3
Total asset-backed
  
8,663
   
170
   
39
   
8,794
   
(25
U.S. Treasury and obligations of government- sponsored enterprises
  
162
   
3
   
1
   
164
     
Foreign government
  
502
   
12
   
1
   
513
     
Redeemable preferred stock
  
10
           
10
     
Fixed maturities
available-for-sale
  
37,912
   
2,753
   
140
   
40,525
   
(25
Fixed maturities trading
  
73
   
4
       
77
     
Total fixed maturity securities
 
$
37,985
  
$
2,757
  
$
140
  
$
40,602
  
$
(25
                     
      
December 31, 2018              
      
Fixed maturity securities:
                    
Corporate and other bonds
 $18,764  $791  $395  $19,160     
States, municipalities and political subdivisions
  9,681   1,076   9   10,748     
Asset-backed:
                    
Residential mortgage-backed
  4,815   68   57   4,826  $(20
Commercial mortgage-backed
  2,200   28   32   2,196     
Other asset-backed
  1,975   11   24   1,962     
Total asset-backed
  8,990   107   113   8,984   (20
U.S. Treasury and obligations of government-sponsored enterprises
  156   3       159     
Foreign government
  480   5   4   481     
Redeemable preferred stock
  10           10     
Fixed maturities
available-for-sale
  38,081   1,982   521   39,542   (20
Fixed maturities trading
  153   4       157     
Total fixed maturities
 $38,234  $1,986  $521  $39,699  $(20
                     
Securities Available-for-Sale in Gross Unrealized Loss Position
The
available-for-sale
securities in a gross unrealized loss position are as follows:
 
  
Less than
12 Months
  
12 Months
or Longer
  
Total
 
March 31, 2019
 
Estimated
Fair Value
  
Gross
Unrealized
Losses
  
Estimated
Fair Value
  
Gross
Unrealized
Losses
  
Estimated
Fair Value
  
Gross
Unrealized
Losses
 
(In millions)
                  
       
Fixed maturity securities:
                        
Corporate and other bonds
 
$
1,656
  
$
39
  
$
1,743
  
$
60
  
$
3,399
  
$
99
 
States, municipalities and political subdivisions
  
14
       
3
       
17
     
Asset-backed:
                        
Residential mortgage-backed
  
94
       
1,494
   
20
   
1,588
   
20
 
Commercial mortgage-backed
  
184
   
2
   
236
   
5
   
420
   
7
 
Other asset-backed
  
450
   
10
   
95
   
2
   
545
   
12
 
Total asset-backed
  
728
   
12
   
1,825
   
27
   
2,553
   
39
 
U.S. Treasury and obligations of government-sponsored enterprises
  
48
   
1
   
14
       
62
   
1
 
Foreign government
  
32
   
1
   
27
       
59
   
1
 
Total fixed maturity securities
 
$
2,478
  
$
53
  
$
3,612
  
$
87
  
$
6,090
  
$
140
 
                         
       
December 31, 2018                  
       
Fixed maturity securities:
                        
Corporate and other bonds
 $8,543  $340  $825  $55  $9,368  $395 
States, municipalities and political subdivisions
  517   8   5   1   522   9 
Asset-backed:
                        
Residential mortgage-backed
  1,932   23   1,119   34   3,051   57 
Commercial mortgage-backed
  728   10   397   22   1,125   32 
Other asset-backed
  834   21   125   3   959   24 
Total asset-backed
  3,494   54   1,641   59   5,135   113 
U.S. Treasury and obligations of government-sponsored enterprises
  21       19       40     
Foreign government
  114   2   124   2   238   4 
Total fixed maturity securities
 $12,689  $404  $2,614  $117  $15,303  $521 
                         
Pretax Credit Loss Component Reflected in Retained Earnings on Fixed Maturity Securities
The following table presents the activity related to the pretax credit loss component reflected in Retained earnings on fixed maturity securities still held as of March 31, 2019 and 2018 for which a portion of an OTTI loss was recognized in OCI.
 
Three Months Ended March 31
 
      2019      
  
      
2018
      
(In millions)
     
   
Beginning balance of credit losses on fixed maturity securities
 
$
      18
  $      27 
Reductions for securities sold during the period
  
(1
  (2
Ending balance of credit losses on fixed maturity securities
 
$
17
  $25 
         
Available-for-Sale Fixed Maturity Securities by Contractual Maturity
The following table presents
available-for-sale
fixed maturity securities by contractual maturity.
 
  
March 31, 2019
    December 31, 2018   
  
Cost or
  
Estimated
  Cost or    Estimated  
  
Amortized
  
Fair
  Amortized    Fair  
  
Cost
  
Value
  Cost    Value  
(In millions)
           
     
Due in one year or less
 
$
1,144
  
$
1,155
  $1,350  $1,359 
Due after one year through five years
  
7,718
   
7,992
   7,979   8,139 
Due after five years through ten years
  
16,874
   
17,374
   16,859   16,870 
Due after ten years
  
12,176
   
14,004
   11,893   13,174 
Total
 
$
37,912
  
$
40,525
  $38,081  $39,542 
                 
Summary of Aggregate Contractual or Notional Amount and Estimated Fair Value Related to Derivative Financial Instruments Gross estimated fair values of derivative positions are currently presented in Equity securities, Receivables and Payable to brokers on the Consolidated Condensed Balance Sheets.
 
  
March 31, 2019
    December 31, 2018   
  
Contractual/
        Contractual/      
  
Notional
  
Estimated Fair Value
  Notional    Estimated Fair Value   
  
Amount
  
Asset
  
(Liability)
  Amount  Asset    (Liability)  
(In millions)
                 
       
With hedge designation:
                        
       
Interest rate swaps
 
$
540
  
$
3
  
$
(1
 $500  $11     
       
Without hedge designation:
                        
       
Equity markets:
                        
Options – purchased
  
353
   
7
       213   18     
             
 
– written
  
127
       
(6
  239      $(17
Futures – short
  
50
                     
Commodity futures – long
  
12
           32         
Embedded derivative on funds
                        
withheld liability
  
174
       
(2
  172   4