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Investments (Tables)

9 Months Ended

Sep. 30, 2021

Investments [Abstract]

Schedule of Fixed Maturity Securities

At September 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)
September 30, 2021
Fixed maturity securities, available for sale:
United States Government full faith and credit			$	37,112					$	1,398					$	(24)					$	—					$	38,486
United States Government sponsored agencies			1,008,980						34,371						—						—						1,043,351
United States municipalities, states and territories			3,142,857						457,359						(1,188)						(2,772)						3,596,256
Foreign government obligations			177,101						18,240						—						—						195,341
Corporate securities			27,342,408						3,695,003						(14,518)						(1,006)						31,021,887
Residential mortgage backed securities			980,838						75,599						(2,158)						(296)						1,053,983
Commercial mortgage backed securities			3,963,733						197,750						(23,405)						—						4,138,078
Other asset backed securities			4,594,511						102,882						(46,678)						—						4,650,715
			$	41,247,540					$	4,582,602					$	(87,971)					$	(4,074)					$	45,738,097
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 $388.4 million and $377.5 million as of September 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 September 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			$	1,688,694					$	1,705,847
Due after one year through five years			6,932,293						7,402,594
Due after five years through ten years			6,728,152						7,453,463
Due after ten years through twenty years			9,272,871						11,196,318
Due after twenty years			7,086,448						8,137,099
			31,708,458						35,895,321
Residential mortgage backed securities			980,838						1,053,983
Commercial mortgage backed securities			3,963,733						4,138,078
Other asset backed securities			4,594,511						4,650,715
			$	41,247,540					$	45,738,097

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:

			September 30, 2021						December 31, 2020
			(Dollars in thousands)
Net unrealized gains on available for sale fixed maturity securities			$	4,494,631					$	5,297,040
Adjustments for assumed changes in amortization of deferred policy acquisition costs and deferred sales inducements and policy benefit reserves			(2,045,973)						(2,536,251)
Deferred income tax valuation allowance reversal			22,534						22,534
Deferred income tax expense			(514,218)						(579,766)
Net unrealized gains reported as accumulated other comprehensive income			$	1,956,974					$	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:

						September 30, 2021												December 31, 2020
NAIC Designation						Amortized Cost						Fair Value						Amortized Cost						Fair Value
						(Dollars in thousands)
1						$	22,823,664					$	25,508,437					$	23,330,149					$	26,564,542
2						17,170,505						18,928,256						17,312,485						19,377,013
3						1,066,599						1,107,418						1,292,124						1,299,455
4						145,455						157,196						282,049						256,651
5						17,226						15,860						29,396						16,288
6						24,091						20,930						58,533						24,944
						$	41,247,540					$	45,738,097					$	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 567 and 843 securities, respectively) have been in a continuous unrealized loss position, at September 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)
September 30, 2021
Fixed maturity securities, available for sale:
United States Government full faith and credit			$	1,019					$	(24)					$	—					$	—					$	1,019					$	(24)
United States municipalities, states and territories			40,043						(582)						23,961						(3,378)						64,004						(3,960)
Corporate securities			419,976						(6,997)						164,005						(8,527)						583,981						(15,524)
Residential mortgage backed securities			83,291						(455)						40,947						(1,999)						124,238						(2,454)
Commercial mortgage backed securities			56,781						(354)						349,533						(23,051)						406,314						(23,405)
Other asset backed securities			364,936						(1,842)						2,056,088						(44,836)						2,421,024						(46,678)
			$	966,046					$	(10,254)					$	2,634,534					$	(81,791)					$	3,600,580					$	(92,045)
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			606,277						(45,150)						154,633						(50,935)						760,910						(96,085)
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 $4.1 million and $64.8 million as of September 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 nine months ended September 30, 2021 and 2020 are as follows:

			Three Months Ended   September 30,												Nine Months Ended   September 30,
			2021						2020						2021						2020
			(Dollars in thousands)
Fixed maturity securities available for sale carried at fair value			$	(327,223)					$	800,492					$	(802,409)					$	1,285,600
Adjustment for effect on other balance sheet accounts:
Deferred policy acquisition costs, deferred sales inducements and policy benefit reserves			242,493						(377,553)						490,278						(580,197)
Deferred income tax asset/liability			17,793						(88,816)						65,548						(148,135)
			260,286						(466,369)						555,826						(728,332)
Change in net unrealized gains/losses on investments carried at fair value			$	(66,937)					$	334,123					$	(246,583)					$	557,268

Net Realized Gains (Losses) on Investments

Net realized gains (losses) on investments for the three and nine months ended September 30, 2021 and 2020, are as follows:

			Three Months Ended   September 30,												Nine Months Ended   September 30,
			2021						2020						2021						2020
			(Dollars in thousands)
Available for sale fixed maturity securities:
Gross realized gains			$	1,001					$	2,843					$	7,430					$	18,296
Gross realized losses			—						(51)						(16,147)						(1,521)
Net credit loss (provision) release			84						(25,923)						(93)						(82,335)
			1,085						(23,131)						(8,810)						(65,560)
Mortgage loans on real estate:
Decrease (increase) in allowance for credit losses			5,023						810						9,471						(3,697)
Recovery of specific allowance			—						—						—						712
Loss on sale of mortgage loans			(1,175)						—						(3,425)						—
			3,848						810						6,046						(2,985)
			$	4,933					$	(22,321)					$	(2,764)					$	(68,545)

Rollforward of Allowance for Credit Loss

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

			Three Months Ended September 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			$	3,347					$	10,723					$	—					$	120					$	—					$	14,190
Additions for credit losses not previously recorded			—						—						—						296						—						296
Change in allowance on securities with previous allowance			(575)						315						—						—						—						(260)
Reduction for securities sold during the period			—						—						—						—						—						—
Write-offs charged against the allowance			—						(10,032)						—						—						—						(10,032)
Recoveries of amounts previously written off			—						—						—						(120)						—						(120)
Ending balance			$	2,772					$	1,006					$	—					$	296					$	—					$	4,074
			Three Months Ended September 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			$	—					$	46,749					$	2,660					$	777					$	—					$	50,186
Additions for credit losses not previously recorded			—						6,296						19,183						444						—						25,923
Reduction for securities with credit losses due to intent to sell			—						—						(14,490)						—						—						(14,490)
Ending balance			$	—					$	53,045					$	7,353					$	1,221					$	—					$	61,619
			Nine Months Ended September 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						—						407						—						1,112
Change in allowance on securities with previous allowance			(72)						1,240						—						(631)						—						537
Reduction for securities sold during the period			—						(50,758)						—						—						—						(50,758)
Write-offs charged against the allowance			—						(10,032)						—						—						—						(10,032)
Recoveries of amounts previously written off			—						(342)						—						(1,214)						—						(1,556)
Ending balance			$	2,772					$	1,006					$	—					$	296					$	—					$	4,074
			Nine Months Ended September 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			—						53,045						27,521						1,221						548						82,335
Reduction for securities with credit losses due to intent to sell			—						—						(20,168)						—						(548)						(20,716)
Ending balance			$	—					$	53,045					$	7,353					$	1,221					$	—					$	61,619

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