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Investments (Tables) | 6 Months Ended
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Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract] |
Summary of Net Investment Income | Net investment income is as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  | $ | 455 |  |  | $ | 444 |  |  | $ | 910 |  |  | $ | 890 |
Limited partnership investments |  |  | 43 |  |  |  | 60 |  |  |  | 124 |  |  |  | 108 |
Short term investments |  |  | 14 |  |  |  | 11 |  |  |  | 29 |  |  |  | 20 |
Equity securities |  |  | 16 |  |  |  | 12 |  |  |  | 46 |  |  |  | 22 |
Income from trading portfolio (a) |  |  | 29 |  |  |  | 23 |  |  |  | 110 |  |  |  | 20 |
Other |  |  | 12 |  |  |  | 17 |  |  |  | 26 |  |  |  | 28 |
Total investment income |  |  | 569 |  |  |  | 567 |  |  |  | 1,245 |  |  |  | 1,088 |
Investment expenses |  |  | (18 | ) |  |  | (16 | ) |  |  | (37 | ) |  |  | (31 | )
Net investment income |  | $ | 551 |  |  | $ | 551 |  |  | $ | 1,208 |  |  | $ | 1,057 |
(a) | Net unrealized gains (losses) related to changes in fair value on securities still held were $ 8 and $(4) for the three months ended June 30, 2019 and 2018 and $ 48 and $ (25 ) for the six months ended June 30, 2019 and 2018.
Summary of Investment Gains (Losses) | Investment gains (losses) are as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  | $ | (3 | ) |  | $ | 4 |  |  | $ | (9 | ) |  | $ | 22 |
Equity securities |  |  | 11 |  |  |  | (10 | ) |  |  | 53 |  |  |  | (25 | )
Derivative instruments |  |  | (6 | ) |  |  | 4 |  |  |  | (11 | ) |  |  | 9 |
Short term investments and other |  |  |  |  |  |  | (1 | ) |  |  |  |  |  |  |  |
Investment gains (losses) (a) |  | $ | 2 |  |  | $ | (3 | ) |  | $ | 33 |  |  | $ | 6 |
(a) | Gross investment gains on available-for-sale securities were $ 28 and $ 37 for the three months ended June 30, 2019 and 2018 and $ 64 and $ 106 for the six months ended June 30, 2019 and 2018. Gross investment losses on available-for-sale securities were $ 31 and $ 33 for the three months ended June 30, 2019 and 2018 and $ 73 and $ 84 f or the six months ended June 30, 2019 and 2018. During the three and six months ended June 30, 2019, $ 11 and $ 53 of Net investment gains were recognized due to the change in fair value of non-redeemable preferred stock still held as of June 30, 2019. During the three and six months ended June 30, 2018, $ 10 and $ 25 of Net investment losses were recognized due to the change in fair value of non-redeemable preferred stock still held as of June 30, 2018.
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 June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate and other bonds |  | $ | 6 |  |  |  |  |  |  | $ | 12 |  |  | $ | 5 |
Asset-backed |  |  |  |  |  |  |  |  |  |  | 8 |  |  |  | 1 |
Net OTTI losses recognized in earnings |  | $ | 6 |  |  | $ | - |  |  | $ | 20 |  |  | $ | 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:
June 30, 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 |  | $ | 19,654 |  |  | $ | 1,880 |  |  | $ | 44 |  |  | $ | 21,490 |  |  |  |  |
States, municipalities and political subdivisions |  |  | 9,196 |  |  |  | 1,507 |  |  |  |  |  |  |  | 10,703 |  |  |  |  |
Asset-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed |  |  | 4,668 |  |  |  | 131 |  |  |  | 2 |  |  |  | 4,797 |  |  | $ | (24 | )
Commercial mortgage-backed |  |  | 2,032 |  |  |  | 93 |  |  |  | 4 |  |  |  | 2,121 |  |  |  |  |
Other asset-backed |  |  | 1,865 |  |  |  | 40 |  |  |  | 7 |  |  |  | 1,898 |  |  |  | (2 | )
Total asset-backed |  |  | 8,565 |  |  |  | 264 |  |  |  | 13 |  |  |  | 8,816 |  |  |  | (26 | )
U.S. Treasury and obligations of government-sponsored enterprises |  |  | 118 |  |  |  | 5 |  |  |  |  |  |  |  | 123 |  |  |  |  |
Foreign government |  |  | 480 |  |  |  | 17 |  |  |  |  |  |  |  | 497 |  |  |  |  |
Redeemable preferred stock |  |  | 10 |  |  |  |  |  |  |  |  |  |  |  | 10 |  |  |  |  |
Fixed maturities available-for-sale |  |  | 38,023 |  |  |  | 3,673 |  |  |  | 57 |  |  |  | 41,639 |  |  |  | (26 | )
Fixed maturities trading |  |  | 22 |  |  |  | 2 |  |  |  |  |  |  |  | 24 |  |  |  |  |
Total fixed maturity securities |  | $ | 38,045 |  |  | $ | 3,675 |  |  | $ | 57 |  |  | $ | 41,663 |  |  | $ | (26 | )
December 31, 2018 |  | Cost or Amortized Cost |  |  | Gross Unrealized Gains |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Unrealized OTTI Losses (Gains) |
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 |
June 30, 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 |  | $ | 776 |  |  | $ | 22 |  |  | $ | 498 |  |  | $ | 22 |  |  | $ | 1,274 |  |  | $ | 44 |
States, municipalities and political subdivisions |  |  | 19 |  |  |  |  |  |  |  | 2 |  |  |  |  |  |  |  | 21 |  |  |  |  |
Asset-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage-backed |  |  | 163 |  |  |  |  |  |  |  | 134 |  |  |  | 2 |  |  |  | 297 |  |  |  | 2 |
Commercial mortgage-backed |  |  | 58 |  |  |  | 2 |  |  |  | 69 |  |  |  | 2 |  |  |  | 127 |  |  |  | 4 |
Other asset-backed |  |  | 386 |  |  |  | 5 |  |  |  | 77 |  |  |  | 2 |  |  |  | 463 |  |  |  | 7 |
Total asset-backed |  |  | 607 |  |  |  | 7 |  |  |  | 280 |  |  |  | 6 |  |  |  | 887 |  |  |  | 13 |
U.S. Treasury and obligations of government-sponsored enterprises |  |  |  |  |  |  |  |  |  |  | 4 |  |  |  |  |  |  |  | 4 |  |  |  |  |
Foreign government |  |  | 3 |  |  |  |  |  |  |  | 11 |  |  |  |  |  |  |  | 14 |  |  |  |  |
Total fixed maturity securities |  | $ | 1,405 |  |  | $ | 29 |  |  | $ | 795 |  |  | $ | 28 |  |  | $ | 2,200 |  |  | $ | 57 |
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 June 30, 2019 and 2018 for which a portion of an OTTI loss was recognized in OCI.
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance of credit losses on fixed maturity securities |  | $ | 17 |  |  | $ | 25 |  |  | $ | 18 |  |  | $ | 27 |
Reductions for securities sold during the period |  |  | (1 | ) |  |  | (4 | ) |  |  | (2 | ) |  |  | (6 | )
Ending balance of credit losses on fixed maturity securities |  | $ | 16 |  |  | $ | 21 |  |  | $ | 16 |  |  | $ | 21 |
Available-for-Sale Fixed Maturity Securities by Contractual Maturity | The following table presents available-for-sale fixed maturity securities by contractual maturity.
|  | June 30, 2019 |  |  | December 31, 2018 |
|  | Cost or Amortized Cost |  |  | Estimated Fair Value |  |  | Cost or Amortized Cost |  |  | Estimated Fair Value |
(In millions) |  |  |  |  |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 1,018 |  |  | $ | 1,032 |  |  | $ | 1,350 |  |  | $ | 1,359 |
Due after one year through five years |  |  | 8,097 |  |  |  | 8,476 |  |  |  | 7,979 |  |  |  | 8,139 |
Due after five years through ten years |  |  | 16,403 |  |  |  | 17,297 |  |  |  | 16,859 |  |  |  | 16,870 |
Due after ten years |  |  | 12,505 |  |  |  | 14,834 |  |  |  | 11,893 |  |  |  | 13,174 |
Total |  | $ | 38,023 |  |  | $ | 41,639 |  |  | $ | 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.
|  | June 30, 2019 |  |  | December 31, 2018 |
|  | Contractual/ Notional |  |  | Estimated Fair Value |  |  | Contractual/ Notional |  |  | Estimated Fair Value |
|  | Amount |  |  | Asset |  |  | (Liability) |  |  | Amount |  |  | Asset |  | (Liability)
(In millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With hedge designation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | 540 |  |  |  |  |  |  | $ | (9 | ) |  | $ | 500 |  |  | $ | 11 |  |  |  |  |
Without hedge designation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity markets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options – purchased |  |  | 303 |  |  | $ | 5 |  |  |  |  |  |  |  | 213 |  |  |  | 18 |  |  |  |  |
– written |  |  | 95 |  |  |  |  |  |  |  | (3 | ) |  |  | 239 |  |  |  |  |  |  | $ | (17 | )
Futures – short |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity futures – long |  |  | 11 |  |  |  |  |  |  |  |  |  |  |  | 32 |  |  |  |  |  |  |  |  |
Embedded derivative on funds withheld liability |  |  | 172 |  |  |  |  |  |  |  | (8 | ) |  |  | 172 |  |  |  | 4 |  |  |  |  |

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