| Investments |
INVESTMENTS Fixed Maturities The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Amortized Cost | | Allowance for Expected Credit Losses | | Gross Unrealized | | Fair Value | | (at June 30, 2024, in millions) | | | | Gains | | Losses | | U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | | $ | 6,183 | | | $ | — | | | $ | — | | | $ | 243 | | | $ | 5,940 | | | Obligations of U.S. states, municipalities and political subdivisions: | | | | | | | | | | | | Local general obligation | | 18,280 | | | — | | | 29 | | | 1,619 | | | 16,690 | | | Revenue | | 9,216 | | | — | | | 21 | | | 736 | | | 8,501 | | | State general obligation | | 1,166 | | | — | | | 2 | | | 78 | | | 1,090 | | | Pre-refunded | | 977 | | | — | | | 2 | | | 4 | | | 975 | | | Total obligations of U.S. states, municipalities and political subdivisions | | 29,639 | | | — | | | 54 | | | 2,437 | | | 27,256 | | | Debt securities issued by foreign governments | | 907 | | | — | | | — | | | 27 | | | 880 | | Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | | 10,412 | | | — | | | 51 | | | 262 | | | 10,201 | | | Corporate and all other bonds | | 37,090 | | | 1 | | | 76 | | | 2,254 | | | 34,911 | | | Total | | $ | 84,231 | | | $ | 1 | | | $ | 181 | | | $ | 5,223 | | | $ | 79,188 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Amortized Cost | | Allowance for Expected Credit Losses | | Gross Unrealized | | Fair Value | | (at December 31, 2023, in millions) | | | | Gains | | Losses | | U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | | $ | 6,591 | | | $ | — | | | $ | 8 | | | $ | 231 | | | $ | 6,368 | | | Obligations of U.S. states, municipalities and political subdivisions: | | | | | | | | | | | | Local general obligation | | 18,374 | | | — | | | 90 | | | 1,265 | | | 17,199 | | | Revenue | | 9,748 | | | — | | | 52 | | | 616 | | | 9,184 | | | State general obligation | | 1,209 | | | — | | | 7 | | | 59 | | | 1,157 | | | Pre-refunded | | 963 | | | — | | | 5 | | | 2 | | | 966 | | | Total obligations of U.S. states, municipalities and political subdivisions | | 30,294 | | | — | | | 154 | | | 1,942 | | | 28,506 | | | Debt securities issued by foreign governments | | 1,035 | | | — | | | 2 | | | 31 | | | 1,006 | | Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | | 7,874 | | | — | | | 120 | | | 176 | | | 7,818 | | | Corporate and all other bonds | | 35,987 | | | 5 | | | 187 | | | 2,060 | | | 34,109 | | | Total | | $ | 81,781 | | | $ | 5 | | | $ | 471 | | | $ | 4,440 | | | $ | 77,807 | |
Pre-refunded bonds of $975 million and $966 million at June 30, 2024 and December 31, 2023, respectively, were bonds for which U.S. states or municipalities have established irrevocable trusts that are almost exclusively comprised of U.S. Treasury securities and obligations of U.S. government and government agencies and authorities. These trusts were created to fund the payment of principal and interest due under the bonds. Proceeds from the sales of fixed maturities classified as available for sale were $1.25 billion and $3.12 billion during the six months ended June 30, 2024 and 2023, respectively. Gross gains of $2 million and $19 million and gross losses of $41 million and $51 million were realized on those sales during the six months ended June 30, 2024 and 2023, respectively. Included in realized losses for the six months ended June 30, 2024 and 2023, are $33 million and $0 million, respectively, of losses resulting from the early redemption of fixed maturities by the issuer prior to the bonds’ maturity date. Equity Securities The cost and fair value of investments in equity securities were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (at June 30, 2024, in millions) | | Cost | | Gross Gains | | Gross Losses | | Fair Value | | Common stock | | $ | 493 | | | $ | 115 | | | $ | 14 | | | $ | 594 | | | Non-redeemable preferred stock | | 46 | | | 4 | | | — | | | 50 | | | Total | | $ | 539 | | | $ | 119 | | | $ | 14 | | | $ | 644 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (at December 31, 2023, in millions) | | Cost | | Gross Gains | | Gross Losses | | Fair Value | | Common stock | | $ | 508 | | | $ | 93 | | | $ | 41 | | | $ | 560 | | | Non-redeemable preferred stock | | 45 | | | 3 | | | — | | | 48 | | | Total | | $ | 553 | | | $ | 96 | | | $ | 41 | | | $ | 608 | |
For the six months ended June 30, 2024 and 2023, the Company recognized $51 million and $3 million of net gains on equity securities still held as of June 30, 2024 and 2023, respectively. Unrealized Investment Losses The following tables summarize, for all fixed maturities classified as available for sale in an unrealized loss position at June 30, 2024 and December 31, 2023, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of the notes to the consolidated financial statements in the Company’s 2023 Annual Report. The Company also relies upon estimates of several factors in its review and evaluation of individual investments, using the process described in note 1 of the notes to the consolidated financial statements in the Company’s 2023 Annual Report to determine whether a credit loss impairment exists. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 months | | 12 months or longer | | Total | | (at June 30, 2024, in millions) | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | | Fixed maturities | | | | | | | | | | | | | U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | | $ | 1,695 | | | $ | 8 | | | $ | 4,048 | | | $ | 235 | | | $ | 5,743 | | | $ | 243 | | | Obligations of U.S. states, municipalities and political subdivisions | | 7,190 | | | 92 | | | 16,298 | | | 2,345 | | | 23,488 | | | 2,437 | | Debt securities issued by foreign governments | | 193 | | | 1 | | | 590 | | | 26 | | | 783 | | | 27 | | Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | | 4,009 | | | 43 | | | 2,332 | | | 219 | | | 6,341 | | | 262 | | | Corporate and all other bonds | | 4,390 | | | 45 | | | 25,047 | | | 2,209 | | | 29,437 | | | 2,254 | | | Total | | $ | 17,477 | | | $ | 189 | | | $ | 48,315 | | | $ | 5,034 | | | $ | 65,792 | | | $ | 5,223 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 months | | 12 months or longer | | Total | | (at December 31, 2023, in millions) | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | | Fixed maturities | | | | | | | | | | | | | U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | | $ | 1,864 | | | $ | 7 | | | $ | 2,985 | | | $ | 224 | | | $ | 4,849 | | | $ | 231 | | | Obligations of U.S. states, municipalities and political subdivisions | | 3,868 | | | 31 | | | 14,351 | | | 1,911 | | | 18,219 | | | 1,942 | | Debt securities issued by foreign governments | | 30 | | | — | | | 763 | | | 31 | | | 793 | | | 31 | | Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | | 1,215 | | | 9 | | | 1,433 | | | 167 | | | 2,648 | | | 176 | | | Corporate and all other bonds | | 1,016 | | | 9 | | | 26,444 | | | 2,051 | | | 27,460 | | | 2,060 | | | Total | | $ | 7,993 | | | $ | 56 | | | $ | 45,976 | | | $ | 4,384 | | | $ | 53,969 | | | $ | 4,440 | |
The following tables summarize, for all fixed maturities reported at fair value for which fair value was less than 80% of amortized cost at June 30, 2024 and December 31, 2023, the gross unrealized investment loss by length of time those securities have continuously been in an unrealized loss position of greater than 20% of amortized cost: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Period For Which Fair Value is Less Than 80% of Amortized Cost | | (at June 30, 2024, in millions) | | 3 months or less | | Greater than 3 months, 6 months or less | | Greater than 6 months, 12 months or less | | Greater than 12 months | | Total | | Fixed maturities | | | | | | | | | | | U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Obligations of U.S. states, municipalities and political subdivisions | | 139 | | | 234 | | | — | | | 744 | | | 1,117 | | Debt securities issued by foreign governments | | — | | | — | | | — | | | — | | | — | | Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | | 18 | | | 44 | | | — | | | — | | | 62 | | | Corporate and all other bonds | | 13 | | | 29 | | | 3 | | | 18 | | | 63 | | | Total | | $ | 170 | | | $ | 307 | | | $ | 3 | | | $ | 762 | | | $ | 1,242 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Period For Which Fair Value is Less Than 80% of Amortized Cost | | (at December 31, 2023, in millions) | | 3 months or less | | Greater than 3 months, 6 months or less | | Greater than 6 months, 12 months or less | | Greater than 12 months | | Total | | Fixed maturities | | | | | | | | | | | U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Obligations of U.S. states, municipalities and political subdivisions | | — | | | 2 | | | 31 | | | 642 | | | 675 | | Debt securities issued by foreign governments | | — | | | — | | | — | | | — | | | — | | Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | | — | | | — | | | — | | | — | | | — | | | Corporate and all other bonds | | 1 | | | 3 | | | 22 | | | 25 | | | 51 | | | Total | | $ | 1 | | | $ | 5 | | | $ | 53 | | | $ | 667 | | | $ | 726 | |
Increases in interest rates resulted in the gross unrealized investment losses disclosed in the tables above; however, the net unrealized loss is considered temporary in nature as the decrease in value is not due to credit impairments and there is no impact on expected contractual cash flows from fixed maturities. Impairment Charges The following tables present changes in the allowance for expected credit losses on fixed maturities classified as available for sale for the category of Corporate and All Other Bonds (no other categories of fixed maturities currently have an allowance for expected credit losses): | | | | | | | | | | | | | | | | | | | | | Fixed Maturities | | | Corporate and All Other Bonds | | | At and For the Three Months Ended | | | | (in millions) | | June 30, 2024 | | | | June 30, 2023 | | | | | | | | | | | Balance, beginning of period | | $ | 3 | | | | | $ | 4 | | | | | Additions for expected credit losses on securities where no credit losses were previously recognized | | — | | | | | — | | | | | Additions for expected credit losses on securities where credit losses were previously recognized | | — | | | | | — | | | | | Reductions due to sales/defaults of credit-impaired securities | | (2) | | | | | — | | | | | Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell | | — | | | | | — | | | | | Balance, end of period | | $ | 1 | | | | | $ | 4 | | | |
| | | | | | | | | | | | | | | | | | | Fixed Maturities | | | Corporate and All Other Bonds | | | At and For the Six Months Ended | | (in millions) | | June 30, 2024 | | June 30, 2023 | | | | | | | | | Balance, beginning of period | | $ | 5 | | | | | $ | 3 | | | Additions for expected credit losses on securities where no credit losses were previously recognized | | 3 | | | | | — | | | Additions for expected credit losses on securities where credit losses were previously recognized | | — | | | | | 1 | | | Reductions due to sales/defaults of credit-impaired securities | | (7) | | | | | — | | | Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell | | — | | | | | — | | | Balance, end of period | | $ | 1 | | | | | $ | 4 | |
Total net impairment charges, including credit impairments, reported in net realized investment losses in the consolidated statement of income (loss) were $0 million for both the three months ended June 30, 2024 and 2023 and $3 million and $1 million for the six months ended June 30, 2024 and 2023, respectively. Credit losses related to the fixed maturity portfolio for both the three and six months ended June 30, 2024 and 2023 represented less than 1% of the fixed maturity portfolio on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis. Other Investments Included in other investments are private equity, hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period. Accordingly, net investment income from these other investments is generally reflected in the Company’s financial statements on a quarter lag basis.
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