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Available-For-Sale Fixed Maturity Securities

9 Months Ended

Sep. 30, 2025

Investments, Debt and Equity Securities [Abstract]

Available-For-Sale Fixed Maturity Securities

3. Available-For-Sale Fixed Maturity Securities

The total amortized cost, fair value, allowance for credit losses, and gross unrealized gains and losses of available-for-sale fixed maturity securities are shown below:

			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Allowance for Credit Losses						Fair Value
			(Dollars in millions)
September 30, 2025
U.S. treasury and government			$	92					$	1					$	—					$	—					$	93
U.S. state and municipal			3,043						115						(21)						(3)						3,134
Foreign governments			1,199						45						(4)						—						1,240
Corporate debt securities			40,596						1,089						(104)						—						41,581
Residential mortgage-backed securities			953						41						(2)						—						992
Commercial mortgage-backed securities			3,219						104						(32)						—						3,291
Collateralized debt securities			5,002						114						(39)						—						5,077
Total fixed maturity securities			$	54,104					$	1,509					$	(202)					$	(3)					$	55,408
December 31, 2024
U.S. treasury and government			$	87					$	—					$	(1)					$	—					$	86
U.S. state and municipal			3,200						37						(30)						—						3,207
Foreign governments			1,568						6						(33)						—						1,541
Corporate debt securities			32,770						454						(350)						(26)						32,848
Residential mortgage-backed securities			1,086						25						(4)						(1)						1,106
Commercial mortgage-backed securities			2,755						65						(24)						—						2,796
Collateralized debt securities			5,661						77						(30)						—						5,708
Total fixed maturity securities			$	47,127					$	664					$	(472)					$	(27)					$	47,292

The amortized cost and fair value of available-for-sale fixed maturity securities at September 30, 2025, by contractual maturity are shown below. Actual maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Residential and commercial mortgage-backed securities and collateralized debt securities, which are not due at a single maturity, have been separately presented below.

			Available-For-Sale
			Amortized Cost						Fair Value
			(Dollars in millions)
Due in one year or less			$	1,888					$	1,894
Due after one year through five years			20,040						20,434
Due after five years through ten years			7,854						8,052
Due after ten years			15,148						15,668
			44,930						46,048
Residential mortgage-backed securities			953						992
Commercial mortgage-backed securities			3,219						3,291
Collateralized debt securities			5,002						5,077
Total			$	54,104					$	55,408

Proceeds from sales of available-for-sale fixed maturity securities, with the related gross realized gains and losses, are shown below:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2025						2024						2025						2024
			(Dollars in millions)
Proceeds from sales of available-for-sale fixed maturity securities			$	1,868					$	1,071					$	6,749					$	3,484
Gross realized gains			46						2						56						6
Gross realized (losses)			(6)						(97)						(68)						(120)

The Company has pledged bonds in connection with certain agreements and transactions, such as financing and reinsurance agreements. The carrying value of bonds pledged was $10.1 billion and $8.8 billion as of September 30, 2025 and December 31, 2024, respectively.

In accordance with various regulations, the Company has securities on deposit with regulating authorities with a carrying value of $66 million and $65 million as of September 30, 2025 and December 31, 2024, respectively. There are no restrictions on these assets.

As of September 30, 2025 and December 31, 2024, amounts loaned under reverse repurchase agreements were $400 million and $400 million, respectively, and the fair value of the collateral, comprised of equity securities, was $815 million and $783 million, respectively.

The gross unrealized losses and fair value of available-for-sale fixed maturity securities, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position due to market factors are shown below:

			Less than 12 months																		12 months or more																		Total
			Number of Issues						Gross Unrealized Losses (1)						Fair Value						Number of Issues						Gross Unrealized Losses (1)						Fair Value						Number of Issues						Gross Unrealized Losses (1)						Fair Value
			(Dollars in millions)
September 30, 2025
U.S. treasury and government			1						$	—					$	3					3						$	—					$	55					4						$	—					$	58
U.S. state and municipal			77						(4)						277						84						(17)						243						161						(21)						520
Foreign governments			5						(4)						191						2						—						14						7						(4)						205
Corporate debt securities			560						(29)						3,230						241						(75)						2,548						801						(104)						5,778
Residential mortgage-backed securities			22						—						50						16						(2)						97						38						(2)						147
Commercial mortgage-backed securities			34						(15)						352						29						(17)						245						63						(32)						597
Collateralized debt securities			97						(16)						922						20						(23)						297						117						(39)						1,219
Total			796						$	(68)					$	5,025					395						$	(134)					$	3,499					1,191						$	(202)					$	8,524
December 31, 2024
U.S. treasury and government			3						$	—					$	29					1						$	(1)					$	36					4						$	(1)					$	65
U.S. state and municipal			174						(20)						851						190						(10)						280						364						(30)						1,131
Foreign governments			8						(33)						1,206						—						—						—						8						(33)						1,206
Corporate debt securities			1,514						(165)						6,615						384						(185)						4,015						1,898						(350)						10,630
Residential mortgage-backed securities			47						(3)						178						16						(1)						61						63						(4)						239
Commercial mortgage-backed securities			104						(24)						667						—						—						—						104						(24)						667
Collateralized debt securities			178						(29)						1,182						5						(1)						22						183						(30)						1,204
Total			2,028						$	(274)					$	10,728					596						$	(198)					$	4,414					2,624						$	(472)					$	15,142

(1)Unrealized losses have been reduced to exclude the allowance for credit losses of $3 million and $27 million as of September 30, 2025 and December 31, 2024, respectively.

The unrealized losses as of September 30, 2025 and December 31, 2024 are principally related to the timing of the purchases of certain securities, which carry less yield than those available as of those dates. Approximately 94% and 89% of the unrealized losses on fixed maturity securities shown in the above table for September 30, 2025 and December 31, 2024, respectively, are on securities that are rated investment grade, defined as being the highest two National Association of Insurance Commissioners (“NAIC”) designations.

The Company expects to recover the amortized cost on all securities except for those securities on which it recognized an allowance for credit loss. In addition, as the Company did not have the intent to sell fixed maturity securities with unrealized losses and it was not more likely than not that the Company would be required to sell these securities prior to recovery of the amortized cost, which may be maturity, the Company did not write down these investments to fair value through the Condensed Consolidated Statements of Operations.

Allowance for Credit Losses

Several assumptions and underlying estimates are made in the evaluation of allowance for credit loss. Examples include financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry conditions and trends and implications of rating agency actions and offering prices. Based on this evaluation, unrealized losses on available-for-sale securities where an allowance for credit loss was not recorded were concentrated within the financials sector as of September 30, 2025 and December 31, 2024.

The rollforward of the allowance for credit losses for available-for-sale fixed maturity securities is shown below:

			Three Months Ended September 30, 2025
			U.S. State and Political Subdivisions						Corporate Securities						Residential Mortgage Backed Securities												Collateralized Debt Securities						Total
			(Dollars in millions)
Beginning balance			$	—					$	(1)					$	—											$	(1)					$	(2)
Credit losses recognized on securities for which credit losses were not previously recorded			(3)						—						—												—						(3)
Allowance on securities that had an allowance recorded in a previous period			—						1						—												1						2
Balance as of September 30, 2025			$	(3)					$	—					$	—											$	—					$	(3)
			Three Months Ended September 30, 2024
			U.S. State and Political Subdivisions						Corporate Securities						Residential Mortgage Backed Securities												Collateralized Debt Securities						Total
			(Dollars in millions)
Beginning balance			$	—					$	(34)					$	(1)											$	(2)					$	(37)
Credit losses recognized on securities for which credit losses were not previously recorded			—						(3)						—												—						(3)
Reductions for securities sold during the period			—						2						—												—						2
Allowance on securities that had an allowance recorded in a previous period			—						15						—												1						16
Balance as of September 30, 2024			$	—					$	(20)					$	(1)											$	(1)					$	(22)
			Nine Months Ended September 30, 2025
			U.S. State and Political Subdivisions						Corporate Securities						Residential Mortgage Backed Securities												Collateralized Debt Securities						Total
			(Dollars in millions)
Beginning balance			$	—					$	(26)					$	(1)											$	—					$	(27)
Credit losses recognized on securities for which credit losses were not previously recorded			(3)						(10)						—												(2)						(15)
Reductions for securities sold during the period			—						16						—												—						16
Allowance on securities that had an allowance recorded in a previous period			—						20						1												2						23
Balance as of September 30, 2025			$	(3)					$	—					$	—											$	—					$	(3)
			Nine Months Ended September 30, 2024
			U.S. State and Political Subdivisions						Corporate Securities						Residential Mortgage Backed Securities												Collateralized Debt Securities						Total
			(Dollars in millions)
Beginning balance			$	—					$	(19)					$	(1)											$	(4)					$	(24)
Credit losses recognized on securities for which credit losses were not previously recorded			—						(36)						—												—						(36)
Reductions for securities sold during the period			—						3						—												—						3
Allowance on securities that had an allowance recorded in a previous period			—						32						—												3						35
Balance as of September 30, 2024			$	—					$	(20)					$	(1)											$	(1)					$	(22)

4. Equity Securities

The net gains on equity securities recognized in “Investment related gains (losses)” on the Condensed Consolidated Statements of Operations are shown below:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2025						2024						2025						2024
			(Dollars in millions)
Unrealized gains on equity securities			$	47					$	21					$	144					$	43
Net gains on equity securities sold			13						2						14						4
Net gains on equity securities			$	60					$	23					$	158					$	47

Equity securities by market sector distribution are shown below, based on carrying value:

			September 30, 2025						December 31, 2024
Consumer goods			8		%				5		%
Education			21		%				20		%
Energy and utilities			38		%				10		%
Finance			4		%				48		%
Healthcare			3		%				2		%
Industrials			19		%				12		%
Information technology			1		%				—		%
Other			6		%				3		%
Total			100		%				100		%

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- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 940
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-Name Accounting Standards Codification
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
-Number 229
-Section 1403
-Paragraph b
-Publisher SEC

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