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Investments (Tables)

6 Months Ended

Jun. 30, 2021

Investments [Abstract]

Schedule of Fixed Maturity Securities

At June 30, 2021 and December 31, 2020, the amortized cost and fair value of fixed maturity securities were as follows:

			Amortized Cost (1)						Gross Unrealized Gains						Gross Unrealized Losses (2)						Allowance for Credit Losses						Fair Value
			(Dollars in thousands)
June 30, 2021
Fixed maturity securities, available for sale:
United States Government full faith and credit			$	37,274					$	1,626					$	(21)					$	—					$	38,879
United States Government sponsored agencies			1,009,042						37,144						—						—						1,046,186
United States municipalities, states and territories			3,219,847						485,025						(1,300)						(3,347)						3,700,225
Foreign government obligations			177,087						20,243						—						—						197,330
Corporate securities			27,525,768						3,957,107						(16,335)						(10,723)						31,455,817
Residential mortgage backed securities			1,106,921						88,133						(2,511)						(120)						1,192,423
Commercial mortgage backed securities			3,977,815						223,453						(25,751)						—						4,175,517
Other asset backed securities			4,798,334						104,824						(50,279)						—						4,852,879
			$	41,852,088					$	4,917,555					$	(96,197)					$	(14,190)					$	46,659,256
December 31, 2020
Fixed maturity securities, available for sale:
United States Government full faith and credit			$	37,471					$	2,300					$	—					$	—					$	39,771
United States Government sponsored agencies			995,465						44,132						(46)						—						1,039,551
United States municipalities, states and territories			3,236,767						543,252						(1,044)						(2,844)						3,776,131
Foreign government obligations			177,062						25,644						—						—						202,706
Corporate securities			26,745,196						4,507,716						(35,892)						(60,193)						31,156,827
Residential mortgage backed securities			1,399,956						117,135						(2,526)						(1,734)						1,512,831
Commercial mortgage backed securities			4,119,650						206,255						(64,678)						—						4,261,227
Other asset backed securities			5,593,169						103,320						(146,640)						—						5,549,849
			$	42,304,736					$	5,549,754					$	(250,826)					$	(64,771)					$	47,538,893

(1)Amortized cost excludes accrued interest receivable of $374.1 million and $377.5 million as of June 30, 2021 and December 31, 2020, respectively.

(2)Gross unrealized losses are net of allowance for credit losses.

Schedule of Fixed Maturity Securities by Contractual Maturity Date

The amortized cost and fair value of fixed maturity securities at June 30, 2021, by contractual maturity are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. All of our mortgage and other asset backed securities provide for periodic payments throughout their lives and are shown below as separate lines.

			Available for sale
			Amortized Cost						Fair Value
			(Dollars in thousands)
Due in one year or less			$	1,138,126					$	1,152,012
Due after one year through five years			6,954,092						7,436,430
Due after five years through ten years			7,258,590						8,067,610
Due after ten years through twenty years			9,394,292						11,392,923
Due after twenty years			7,223,918						8,389,462
			31,969,018						36,438,437
Residential mortgage backed securities			1,106,921						1,192,423
Commercial mortgage backed securities			3,977,815						4,175,517
Other asset backed securities			4,798,334						4,852,879
			$	41,852,088					$	46,659,256

Schedule of Net Unrealized Gains on Available for Sale Fixed Maturity Securities Reported as Separate Component of Stockholders' Equity

Net unrealized gains on available for sale fixed maturity securities reported as a separate component of stockholders' equity were comprised of the following:

			June 30, 2021						December 31, 2020
			(Dollars in thousands)
Net unrealized gains on available for sale fixed maturity securities			$	4,821,854					$	5,297,040
Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements and policy benefit reserves			(2,288,466)						(2,536,251)
Deferred income tax valuation allowance reversal			22,534						22,534
Deferred income tax expense			(532,011)						(579,766)
Net unrealized gains reported as accumulated other comprehensive income			$	2,023,911					$	2,203,557

Schedule of Credit Quality of Fixed Maturity Security Portfolio by NAIC Designation

The following table summarizes the credit quality, as determined by NAIC designation, of our fixed maturity portfolio as of the dates indicated:

						June 30, 2021												December 31, 2020
NAIC Designation						Amortized Cost						Fair Value						Amortized Cost						Fair Value
						(Dollars in thousands)
1						$	23,059,347					$	25,937,900					$	23,330,149					$	26,564,542
2						17,496,467						19,387,062						17,312,485						19,377,013
3						1,094,635						1,135,994						1,292,124						1,299,455
4						145,730						147,401						282,049						256,651
5						31,813						29,418						29,396						16,288
6						24,096						21,481						58,533						24,944
						$	41,852,088					$	46,659,256					$	42,304,736					$	47,538,893

Schedule of Gross Unrealized Losses on Investments, By Category and Length of Time

The following table shows our investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities (consisting of 543 and 843 securities, respectively) have been in a continuous unrealized loss position, at June 30, 2021 and December 31, 2020:

			Less than 12 months												12 months or more												Total
			Fair Value						Unrealized Losses (1)						Fair Value						Unrealized Losses (1)						Fair Value						Unrealized Losses (1)
			(Dollars in thousands)
June 30, 2021
Fixed maturity securities, available for sale:
United States Government full faith and credit			$	1,024					$	(21)					$	—					$	—					$	1,024					$	(21)
United States municipalities, states and territories			77,867						(1,294)						23,471						(3,353)						101,338						(4,647)
Corporate securities:
Finance, insurance and real estate			57,198						(3,141)						—						—						57,198						(3,141)
Manufacturing, construction and mining			36,493						(822)						19,526						(622)						56,019						(1,444)
Utilities and related sectors			95,926						(2,384)						129,273						(2,719)						225,199						(5,103)
Wholesale/retail trade			69,030						(1,243)						14,363						(598)						83,393						(1,841)
Services, media and other			51,277						(11,107)						54,762						(4,422)						106,039						(15,529)
Residential mortgage backed securities			74,538						(1,083)						46,016						(1,548)						120,554						(2,631)
Commercial mortgage backed securities			83,348						(1,537)						364,942						(24,214)						448,290						(25,751)
Other asset backed securities			243,612						(1,658)						2,067,049						(48,621)						2,310,661						(50,279)
			$	790,313					$	(24,290)					$	2,719,402					$	(86,097)					$	3,509,715					$	(110,387)
December 31, 2020
Fixed maturity securities, available for sale:
United States Government sponsored agencies			$	250,475					$	(46)					$	—					$	—					$	250,475					$	(46)
United States municipalities, states and territories			31,802						(3,887)						868						(1)						32,670						(3,888)
Corporate securities:
Finance, insurance and real estate			109,789						(1,733)						—						—						109,789						(1,733)
Manufacturing, construction and mining			—						—						19,335						(1,384)						19,335						(1,384)
Utilities and related sectors			310,823						(27,509)						35,408						(3,628)						346,231						(31,137)
Wholesale/retail trade			65,567						(4,344)						16,000						(26)						81,567						(4,370)
Services, media and other			120,098						(11,564)						83,890						(45,897)						203,988						(57,461)
Residential mortgage backed securities			156,016						(2,384)						13,599						(1,876)						169,615						(4,260)
Commercial mortgage backed securities			934,593						(54,834)						35,153						(9,844)						969,746						(64,678)
Other asset backed securities			1,013,781						(16,607)						2,567,723						(130,033)						3,581,504						(146,640)
			$	2,992,944					$	(122,908)					$	2,771,976					$	(192,689)					$	5,764,920					$	(315,597)

(1)Unrealized losses have not been reduced to reflect the allowance for credit losses of $14.2 million and $64.8 million as of June 30, 2021 and December 31, 2020, respectively.

Schedule of Changes in Net Unrealized Gains/Losses on Investments

Changes in net unrealized gains/losses on investments for the three and six months ended June 30, 2021 and 2020 are as follows:

			Three Months Ended   June 30,												Six Months Ended   June 30,
			2021						2020						2021						2020
			(Dollars in thousands)
Fixed maturity securities available for sale carried at fair value			$	1,186,175					$	3,347,516					$	(475,186)					$	485,108
Adjustment for effect on other balance sheet accounts:
Deferred policy acquisition costs, deferred sales inducements and policy benefit reserves			(529,656)						(1,599,842)						247,785						(202,644)
Deferred income tax asset/liability			(137,868)						(367,014)						47,755						(59,319)
			(667,524)						(1,966,856)						295,540						(261,963)
Change in net unrealized gains/losses on investments carried at fair value			$	518,651					$	1,380,660					$	(179,646)					$	223,145

Net Realized Gains (Losses) on Investments

Net realized losses on investments for the three and six months ended June 30, 2021 and 2020, are as follows:

			Three Months Ended   June 30,												Six Months Ended   June 30,
			2021						2020						2021						2020
			(Dollars in thousands)
Available for sale fixed maturity securities:
Gross realized gains			$	4,062					$	1,215					$	6,429					$	15,453
Gross realized losses			(7,951)						(264)						(16,147)						(1,470)
Net credit loss (provision) release			1,260						(25,041)						(177)						(56,412)
			(2,629)						(24,090)						(9,895)						(42,429)
Mortgage loans on real estate:
Decrease (increase) in allowance for credit losses			1,933						(2,510)						4,448						(4,507)
Recovery of specific allowance			—						712						—						712
Loss on sale of mortgage loans			(2,418)						—						(2,250)						—
			(485)						(1,798)						2,198						(3,795)
			$	(3,114)					$	(25,888)					$	(7,697)					$	(46,224)

Rollforward of Allowance for Credit Loss

The following table provides a rollforward of the allowance for credit loss:

			Three Months Ended June 30, 2021
			United States Municipalities, States and Territories						Corporate Securities						Commercial Mortgage Backed Securities						Residential Mortgage Backed Securities						Other Asset Backed Securities						Total
			(Dollars in thousands)
Beginning balance			$	2,791					$	55,715					$	—					$	1,192					$	—					$	59,698
Additions for credit losses not previously recorded			—						—						—						—						—						—
Change in allowance on securities with previous allowance			556						(402)						—						22						—						176
Reduction for securities sold during the period			—						(44,248)						—						—						—						(44,248)
Recoveries of amounts previously written off			—						(342)						—						(1,094)						—						(1,436)
Ending balance			$	3,347					$	10,723					$	—					$	120					$	—					$	14,190
			Three Months Ended June 30, 2020
			United States Municipalities, States and Territories						Corporate Securities						Commercial Mortgage Backed Securities						Residential Mortgage Backed Securities						Other Asset Backed Securities						Total
			(Dollars in thousands)
Beginning balance			$	—					$	28,332					$	—					$	—					$	—					$	28,332
Additions for credit losses not previously recorded			—						18,417						5,847						777						—						25,041
Reduction for securities with credit losses due to intent to sell			—						—						(3,187)						—						—						(3,187)
Ending balance			$	—					$	46,749					$	2,660					$	777					$	—					$	50,186
			Six Months Ended June 30, 2021
			United States Municipalities, States and Territories						Corporate Securities						Commercial Mortgage Backed Securities						Residential Mortgage Backed Securities						Other Asset Backed Securities						Total
			(Dollars in thousands)
Beginning balance			$	2,844					$	60,193					$	—					$	1,734					$	—					$	64,771
Additions for credit losses not previously recorded			—						705						—						111						—						816
Change in allowance on securities with previous allowance			503						925						—						(631)						—						797
Reduction for securities sold during the period			—						(50,758)						—						—						—						(50,758)
Recoveries of amounts previously written off			—						(342)						—						(1,094)						—						(1,436)
Ending balance			$	3,347					$	10,723					$	—					$	120					$	—					$	14,190
			Six Months Ended June 30, 2020
			United States Municipalities, States and Territories						Corporate Securities						Commercial Mortgage Backed Securities						Residential Mortgage Backed Securities						Other Asset Backed Securities						Total
			(Dollars in thousands)
Beginning balance			$	—					$	—					$	—					$	—					$	—					$	—
Additions for credit losses not previously recorded			—						46,749						8,338						777						548						56,412
Reduction for securities with credit losses due to intent to sell			—						—						(5,678)						—						(548)						(6,226)
Ending balance			$	—					$	46,749					$	2,660					$	777					$	—					$	50,186

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