Delaware | 36-3871531 | |||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbols | Name of each exchange on which registered | ||||||
Common Stock, par value $.01 per share | ALL | New York Stock Exchange Chicago Stock Exchange | ||||||
5.100% Fixed-to-Floating Rate Subordinated Debentures due 2053 | ALL.PR.B | New York Stock Exchange | ||||||
Depositary Shares represent 1/1,000th of a share of 5.100% Noncumulative Preferred Stock, Series H | ALL PR H | New York Stock Exchange | ||||||
Depositary Shares represent 1/1,000th of a share of 4.750% Noncumulative Preferred Stock, Series I | ALL PR I | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ |
Part I Financial Information | Page | |||||||
Item 1. Financial Statements (unaudited) as of March 31, 2023 and December 31, 2022 and for the Three Month Periods Ended March 31, 2023 and 2022 | ||||||||
Property-Liability Operations | ||||||||
Segment results | ||||||||
Part II Other Information | ||||||||
($ in millions, except per share data) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Revenues | ||||||||||||||
Property and casualty insurance premiums | $ | 12,173 | $ | 10,981 | ||||||||||
Accident and health insurance premiums and contract charges | 463 | 468 | ||||||||||||
Other revenue | 561 | 560 | ||||||||||||
Net investment income | 575 | 594 | ||||||||||||
Net gains (losses) on investments and derivatives | 14 | (267) | ||||||||||||
Total revenues | 13,786 | 12,336 | ||||||||||||
Costs and expenses | ||||||||||||||
Property and casualty insurance claims and claims expense | 10,326 | 7,822 | ||||||||||||
Accident, health and other policy benefits | 265 | 268 | ||||||||||||
Amortization of deferred policy acquisition costs | 1,744 | 1,608 | ||||||||||||
Operating costs and expenses | 1,716 | 1,902 | ||||||||||||
Pension and other postretirement remeasurement (gains) losses | (53) | (247) | ||||||||||||
Restructuring and related charges | 27 | 12 | ||||||||||||
Amortization of purchased intangibles | 81 | 87 | ||||||||||||
Interest expense | 86 | 83 | ||||||||||||
Total costs and expenses | 14,192 | 11,535 | ||||||||||||
(Loss) income from operations before income tax expense | (406) | 801 | ||||||||||||
Income tax (benefit) expense | (85) | 151 | ||||||||||||
Net (loss) income | (321) | 650 | ||||||||||||
Less: Net loss attributable to noncontrolling interest | (1) | (10) | ||||||||||||
Net (loss) income attributable to Allstate | (320) | 660 | ||||||||||||
Less: Preferred stock dividends | 26 | 26 | ||||||||||||
Net (loss) income applicable to common shareholders | $ | (346) | $ | 634 | ||||||||||
Earnings per common share: | ||||||||||||||
Net (loss) income applicable to common shareholders per common share - Basic | $ | (1.31) | $ | 2.28 | ||||||||||
Weighted average common shares - Basic | 263.5 | 278.1 | ||||||||||||
Net (loss) income applicable to common shareholders per common share - Diluted | $ | (1.31) | $ | 2.25 | ||||||||||
Weighted average common shares - Diluted | 263.5 | 281.8 | ||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Net (loss) income | $ | (321) | $ | 650 | ||||||||||
Other comprehensive income (loss), after-tax | ||||||||||||||
Changes in: | ||||||||||||||
Unrealized net capital gains and losses | 682 | (1,594) | ||||||||||||
Unrealized foreign currency translation adjustments | 50 | — | ||||||||||||
Unamortized pension and other postretirement prior service credit | (4) | (15) | ||||||||||||
Discount rate for reserve for future policy benefits | (9) | 95 | ||||||||||||
Other comprehensive income (loss), after-tax | 719 | (1,514) | ||||||||||||
Comprehensive income (loss) | 398 | (864) | ||||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interest | 4 | (22) | ||||||||||||
Comprehensive income (loss) attributable to Allstate | $ | 394 | $ | (842) |
($ in millions, except par value data) | March 31, 2023 | December 31, 2022 | ||||||||||||
Assets | ||||||||||||||
Investments | ||||||||||||||
Fixed income securities, at fair value (amortized cost, net $46,120 and $45,370) | $ | 44,103 | $ | 42,485 | ||||||||||
Equity securities, at fair value (cost $2,147 and $4,253) | 2,174 | 4,567 | ||||||||||||
Mortgage loans, net | 781 | 762 | ||||||||||||
Limited partnership interests | 7,971 | 8,114 | ||||||||||||
Short-term, at fair value (amortized cost $6,722 and $4,174) | 6,722 | 4,173 | ||||||||||||
Other investments, net | 1,724 | 1,728 | ||||||||||||
Total investments | 63,475 | 61,829 | ||||||||||||
Cash | 662 | 736 | ||||||||||||
Premium installment receivables, net | 9,483 | 9,165 | ||||||||||||
Deferred policy acquisition costs | 5,471 | 5,442 | ||||||||||||
Reinsurance and indemnification recoverables, net | 9,528 | 9,619 | ||||||||||||
Accrued investment income | 436 | 423 | ||||||||||||
Deferred income taxes | 345 | 382 | ||||||||||||
Property and equipment, net | 971 | 987 | ||||||||||||
Goodwill | 3,502 | 3,502 | ||||||||||||
Other assets, net | 5,758 | 5,904 | ||||||||||||
Total assets | 99,631 | 97,989 | ||||||||||||
Liabilities | ||||||||||||||
Reserve for property and casualty insurance claims and claims expense | 38,644 | 37,541 | ||||||||||||
Reserve for future policy benefits | 1,338 | 1,322 | ||||||||||||
Contractholder funds | 878 | 879 | ||||||||||||
Unearned premiums | 22,499 | 22,299 | ||||||||||||
Claim payments outstanding | 1,333 | 1,268 | ||||||||||||
Other liabilities and accrued expenses | 9,114 | 9,353 | ||||||||||||
Debt | 8,452 | 7,964 | ||||||||||||
Total liabilities | 82,258 | 80,626 | ||||||||||||
Commitments and Contingent Liabilities (Note 14) | ||||||||||||||
Equity | ||||||||||||||
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 81.0 thousand shares issued and outstanding, $2,025 aggregate liquidation preference | 1,970 | 1,970 | ||||||||||||
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 263 million and 263 million shares outstanding | 9 | 9 | ||||||||||||
Additional capital paid-in | 3,780 | 3,788 | ||||||||||||
Retained income | 50,388 | 50,970 | ||||||||||||
Treasury stock, at cost (637 million and 637 million shares) | (36,980) | (36,857) | ||||||||||||
Accumulated other comprehensive income: | ||||||||||||||
Unrealized net capital gains and losses | (1,573) | (2,255) | ||||||||||||
Unrealized foreign currency translation adjustments | (115) | (165) | ||||||||||||
Unamortized pension and other postretirement prior service credit | 25 | 29 | ||||||||||||
Discount rate for reserve for future policy benefits | (10) | (1) | ||||||||||||
Total accumulated other comprehensive income | (1,673) | (2,392) | ||||||||||||
Total Allstate shareholders’ equity | 17,494 | 17,488 | ||||||||||||
Noncontrolling interest | (121) | (125) | ||||||||||||
Total equity | 17,373 | 17,363 | ||||||||||||
Total liabilities and equity | $ | 99,631 | $ | 97,989 |
($ in millions, except per share data) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Preferred stock par value | $ | — | $ | — | ||||||||||
Preferred stock additional capital paid-in | 1,970 | 1,970 | ||||||||||||
Common stock par value | 9 | 9 | ||||||||||||
Common stock additional capital paid-in | ||||||||||||||
Balance, beginning of period | 3,788 | 3,722 | ||||||||||||
Equity incentive plans activity | (8) | (16) | ||||||||||||
Balance, end of period | 3,780 | 3,706 | ||||||||||||
Retained income | ||||||||||||||
Balance, beginning of period | 50,970 | 53,288 | ||||||||||||
Net (loss) income | (320) | 660 | ||||||||||||
Dividends on common stock (declared per share of $0.89 and $0.85) | (236) | (236) | ||||||||||||
Dividends on preferred stock | (26) | (26) | ||||||||||||
Balance, end of period | 50,388 | 53,686 | ||||||||||||
Treasury stock | ||||||||||||||
Balance, beginning of period | (36,857) | (34,471) | ||||||||||||
Shares acquired | (153) | (794) | ||||||||||||
Shares reissued under equity incentive plans, net | 30 | 57 | ||||||||||||
Balance, end of period | (36,980) | (35,208) | ||||||||||||
Accumulated other comprehensive income | ||||||||||||||
Balance, beginning of period | (2,392) | 426 | ||||||||||||
Change in unrealized net capital gains and losses | 682 | (1,594) | ||||||||||||
Change in unrealized foreign currency translation adjustments | 50 | — | ||||||||||||
Change in unamortized pension and other postretirement prior service credit | (4) | (15) | ||||||||||||
Change in discount rate for reserve for future policy benefits | (9) | 95 | ||||||||||||
Balance, end of period | (1,673) | (1,088) | ||||||||||||
Total Allstate shareholders’ equity | 17,494 | 23,075 | ||||||||||||
Noncontrolling interest | ||||||||||||||
Balance, beginning of period | (125) | (52) | ||||||||||||
Change in unrealized net capital gains and losses | 5 | (12) | ||||||||||||
Noncontrolling loss | (1) | (10) | ||||||||||||
Balance, end of period | (121) | (74) | ||||||||||||
Total equity | $ | 17,373 | $ | 23,001 |
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net (loss) income | $ | (321) | $ | 650 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||
Depreciation, amortization and other non-cash items | 177 | 236 | ||||||||||||
Net (gains) losses on investments and derivatives | (14) | 267 | ||||||||||||
Pension and other postretirement remeasurement (gains) losses | (53) | (247) | ||||||||||||
Changes in: | ||||||||||||||
Policy benefits and other insurance reserves | 1,080 | (111) | ||||||||||||
Unearned premiums | 199 | 390 | ||||||||||||
Deferred policy acquisition costs | (29) | (103) | ||||||||||||
Premium installment receivables, net | (317) | (502) | ||||||||||||
Reinsurance recoverables, net | 91 | 333 | ||||||||||||
Income taxes | (125) | 93 | ||||||||||||
Other operating assets and liabilities | (87) | (574) | ||||||||||||
Net cash provided by operating activities | 601 | 432 | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Proceeds from sales | ||||||||||||||
Fixed income securities | 7,008 | 12,400 | ||||||||||||
Equity securities | 3,739 | 5,216 | ||||||||||||
Limited partnership interests | 414 | 300 | ||||||||||||
Other investments | 55 | 208 | ||||||||||||
Investment collections | ||||||||||||||
Fixed income securities | 646 | 104 | ||||||||||||
Mortgage loans | 22 | 3 | ||||||||||||
Other investments | 25 | 49 | ||||||||||||
Investment purchases | ||||||||||||||
Fixed income securities | (8,424) | (13,220) | ||||||||||||
Equity securities | (1,187) | (3,624) | ||||||||||||
Limited partnership interests | (226) | (216) | ||||||||||||
Mortgage loans | (41) | (37) | ||||||||||||
Other investments | (73) | (186) | ||||||||||||
Change in short-term and other investments, net | (2,675) | 114 | ||||||||||||
Purchases of property and equipment, net | (79) | (130) | ||||||||||||
Net cash (used in) provided by investing activities | (796) | 981 | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issuance of long-term debt | 744 | — | ||||||||||||
Redemption and repayment of debt | (250) | — | ||||||||||||
Contractholder fund deposits | 33 | 34 | ||||||||||||
Contractholder fund withdrawals | (9) | (9) | ||||||||||||
Dividends paid on common stock | (224) | (230) | ||||||||||||
Dividends paid on preferred stock | (26) | (26) | ||||||||||||
Treasury stock purchases | (153) | (802) | ||||||||||||
Shares reissued under equity incentive plans, net | 6 | 17 | ||||||||||||
Other | — | (30) | ||||||||||||
Net cash provided by (used in) financing activities | 121 | (1,046) | ||||||||||||
Net (decrease) increase in cash | (74) | 367 | ||||||||||||
Cash at beginning of period | 736 | 763 | ||||||||||||
Cash at end of period | $ | 662 | $ | 1,130 |
Note 1 | General |
After-tax cumulative effect of change in accounting principle on transition date | ||||||||
($ in millions) | January 1, 2021 | |||||||
Decrease in retained income | $ | 21 | ||||||
Decrease in accumulated other comprehensive income (“AOCI”) | 277 | |||||||
Total decrease in equity | $ | 298 |
Impact of adoption for reserve for future policy benefits | ||||||||||||||||||||
( $ in millions) | Accident and health | Traditional life | Total | |||||||||||||||||
Pre-adoption 12/31/2020 balance (1) | $ | 728 | $ | 311 | $ | 1,039 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Effect of the remeasurement of the reserve at upper-medium grade fixed income-based rate (2) | 232 | 153 | 385 | |||||||||||||||||
Adjustments for contracts with net premiums in excess of gross premiums (3) | 77 | — | 77 | |||||||||||||||||
Total adjustments | 309 | 153 | 462 | |||||||||||||||||
Post-adoption 1/1/2021 balance | 1,037 | 464 | 1,501 | |||||||||||||||||
Less: reinsurance recoverables (4) | 159 | 3 | 162 | |||||||||||||||||
Post-adoption 1/1/2021 balance, after reinsurance recoverables | $ | 878 | $ | 461 | $ | 1,339 |
Impact of adoption for DAC | ||||||||||||||||||||||||||
( $ in millions) | Accident and health | Traditional life | Interest- sensitive life | Total | ||||||||||||||||||||||
Pre-adoption 12/31/2020 balance | $ | 343 | $ | 32 | $ | 95 | $ | 470 | ||||||||||||||||||
Adjustment for removal of impact of unrealized gains or losses (1) | — | — | 2 | 2 | ||||||||||||||||||||||
Post-adoption 1/1/2021 balance | $ | 343 | $ | 32 | $ | 97 | $ | 472 |
Consolidated Statements of Operations | ||||||||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||
($ in millions, except per share data) | As reported | Impact of change | As adjusted | |||||||||||||||||
Revenues | ||||||||||||||||||||
Accident and health insurance premiums and contract charges | $ | 469 | $ | (1) | $ | 468 | ||||||||||||||
Total revenues | 12,337 | (1) | 12,336 | |||||||||||||||||
Costs and expenses | ||||||||||||||||||||
Accident, health and other policy benefits | 269 | (1) | 268 | |||||||||||||||||
Amortization of deferred policy acquisition costs | 1,612 | (4) | 1,608 | |||||||||||||||||
Total costs and expenses | 11,540 | (5) | 11,535 | |||||||||||||||||
Income from operations before income tax expense | 797 | 4 | 801 | |||||||||||||||||
Income tax expense | 151 | — | 151 | |||||||||||||||||
Net income | 646 | 4 | 650 | |||||||||||||||||
Net income attributable to Allstate | 656 | 4 | 660 | |||||||||||||||||
Net income applicable to common shareholders | $ | 630 | $ | 4 | $ | 634 | ||||||||||||||
Earnings per common share: | ||||||||||||||||||||
Net income applicable to common shareholders per common share - Basic | $ | 2.27 | $ | 0.01 | $ | 2.28 | ||||||||||||||
Net income applicable to common shareholders per common share - Diluted | $ | 2.24 | $ | 0.01 | $ | 2.25 |
Condensed Consolidated Statements of Comprehensive Income (unaudited) | ||||||||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||
($ in millions) | As reported | Impact of change | As adjusted | |||||||||||||||||
Net income | $ | 646 | $ | 4 | $ | 650 | ||||||||||||||
Other comprehensive income (loss), after-tax | ||||||||||||||||||||
Changes in: | ||||||||||||||||||||
Unrealized net capital gains and losses | (1,593) | (1) | (1,594) | |||||||||||||||||
Discount rate for reserve for future policy benefits | — | 95 | 95 | |||||||||||||||||
Other comprehensive loss, after-tax | (1,608) | 94 | (1,514) | |||||||||||||||||
Comprehensive loss | (962) | 98 | (864) | |||||||||||||||||
Comprehensive loss attributable to Allstate | $ | (940) | $ | 98 | $ | (842) | ||||||||||||||
Condensed Consolidated Statements of Shareholders’ Equity (unaudited) | ||||||||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||
($ in millions) | As reported | Impact of change | As adjusted | |||||||||||||||||
Retained income | ||||||||||||||||||||
Balance, beginning of period | $ | 53,294 | $ | (6) | $ | 53,288 | ||||||||||||||
Net income | 656 | 4 | 660 | |||||||||||||||||
Balance, end of period | 53,688 | (2) | 53,686 | |||||||||||||||||
Accumulated other comprehensive income (loss) | ||||||||||||||||||||
Balance, beginning of period | 655 | (229) | 426 | |||||||||||||||||
Change in unrealized net capital gains and losses | (1,593) | (1) | (1,594) | |||||||||||||||||
Change in discount rate for reserve for future policy benefits | — | 95 | 95 | |||||||||||||||||
Balance, end of period | (953) | (135) | (1,088) | |||||||||||||||||
Total Allstate shareholders’ equity | 23,212 | (137) | 23,075 | |||||||||||||||||
Total equity | $ | 23,138 | $ | (137) | $ | 23,001 |
Note 2 | Earnings per Common Share |
Computation of basic and diluted earnings per common share | ||||||||||||||
(In millions, except per share data) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Numerator: | ||||||||||||||
Net (loss) income | $ | (321) | $ | 650 | ||||||||||
Less: Net loss attributable to noncontrolling interest | (1) | (10) | ||||||||||||
Net (loss) income attributable to Allstate | (320) | 660 | ||||||||||||
Less: Preferred stock dividends | 26 | 26 | ||||||||||||
Net (loss) income applicable to common shareholders | $ | (346) | $ | 634 | ||||||||||
Denominator: | ||||||||||||||
Weighted average common shares outstanding | 263.5 | 278.1 | ||||||||||||
Effect of dilutive potential common shares (1): | ||||||||||||||
Stock options | — | 2.6 | ||||||||||||
Restricted stock units (non-participating) and performance stock awards | — | 1.1 | ||||||||||||
Weighted average common and dilutive potential common shares outstanding | 263.5 | 281.8 | ||||||||||||
Earnings per common share - Basic | $ | (1.31) | $ | 2.28 | ||||||||||
Earnings per common share - Diluted (1) | $ | (1.31) | $ | 2.25 | ||||||||||
Anti-dilutive options excluded from diluted earnings per common share | 1.1 | 1.2 | ||||||||||||
Weighted average dilutive potential common shares excluded due to net loss applicable to common shareholders (1) | 2.6 | — |
Note 3 | Reportable Segments |
• | Net gains and losses on investments and derivatives | ||||
• | Pension and other postretirement remeasurement gains and losses | ||||
• | Amortization or impairment of purchased intangibles | ||||
• | Gain or loss on disposition | ||||
• | Adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years | ||||
• | Income tax expense or benefit on reconciling items |
Reportable segments financial performance | ||||||||||||||
Three months ended March 31, | ||||||||||||||
($ in millions) | 2023 | 2022 | ||||||||||||
Underwriting income (loss) by segment | ||||||||||||||
Allstate Protection | $ | (998) | $ | 282 | ||||||||||
Run-off Property-Liability | (3) | (2) | ||||||||||||
Total Property-Liability | (1,001) | 280 | ||||||||||||
Adjusted net income (loss) by segment, after-tax | ||||||||||||||
Protection Services | 34 | 53 | ||||||||||||
Allstate Health and Benefits | 56 | 57 | ||||||||||||
Corporate and Other | (89) | (111) | ||||||||||||
Reconciling items | ||||||||||||||
Property-Liability net investment income | 509 | 558 | ||||||||||||
Net gains (losses) on investments and derivatives | 14 | (267) | ||||||||||||
Pension and other postretirement remeasurement gains (losses) | 53 | 247 | ||||||||||||
Amortization of purchased intangibles (1) | (24) | (29) | ||||||||||||
Gain (loss) on disposition | 9 | (16) | ||||||||||||
Income tax benefit (expense) on reconciling items | 92 | (148) | ||||||||||||
Total reconciling items | 653 | 345 | ||||||||||||
Less: Net loss attributable to noncontrolling interest (2) | (1) | (10) | ||||||||||||
Net (loss) income applicable to common shareholders | $ | (346) | $ | 634 |
Reportable segments revenue information | ||||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Property-Liability | ||||||||||||||
Insurance premiums | ||||||||||||||
Auto | $ | 7,908 | $ | 7,081 | ||||||||||
Homeowners | 2,810 | 2,490 | ||||||||||||
Other personal lines | 562 | 531 | ||||||||||||
Commercial lines | 232 | 283 | ||||||||||||
Other business lines | 123 | 113 | ||||||||||||
Allstate Protection | 11,635 | 10,498 | ||||||||||||
Run-off Property-Liability | — | — | ||||||||||||
Total Property-Liability insurance premiums | 11,635 | 10,498 | ||||||||||||
Other revenue | 353 | 347 | ||||||||||||
Net investment income | 509 | 558 | ||||||||||||
Net gains (losses) on investments and derivatives | 12 | (203) | ||||||||||||
Total Property-Liability | 12,509 | 11,200 | ||||||||||||
Protection Services | ||||||||||||||
Protection plans | 361 | 313 | ||||||||||||
Roadside assistance | 49 | 53 | ||||||||||||
Finance and insurance products | 128 | 117 | ||||||||||||
Intersegment premiums and service fees (1) | 33 | 41 | ||||||||||||
Other revenue | 84 | 94 | ||||||||||||
Net investment income | 16 | 9 | ||||||||||||
Net gains (losses) on investments and derivatives | (1) | (13) | ||||||||||||
Total Protection Services | 670 | 614 | ||||||||||||
Allstate Health and Benefits | ||||||||||||||
Employer voluntary benefits | 255 | 263 | ||||||||||||
Group health | 107 | 94 | ||||||||||||
Individual health | 101 | 111 | ||||||||||||
Other revenue | 101 | 95 | ||||||||||||
Net investment income | 19 | 17 | ||||||||||||
Net gains (losses) on investments and derivatives | 2 | (7) | ||||||||||||
Total Allstate Health and Benefits | 585 | 573 | ||||||||||||
Corporate and Other | ||||||||||||||
Other revenue | 23 | 24 | ||||||||||||
Net investment income | 31 | 10 | ||||||||||||
Net gains (losses) on investments and derivatives | 1 | (44) | ||||||||||||
Total Corporate and Other | 55 | (10) | ||||||||||||
Intersegment eliminations (1) | (33) | (41) | ||||||||||||
Consolidated revenues | $ | 13,786 | $ | 12,336 |
Note 4 | Investments |
Portfolio composition | ||||||||||||||
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Fixed income securities, at fair value | $ | 44,103 | $ | 42,485 | ||||||||||
Equity securities, at fair value | 2,174 | 4,567 | ||||||||||||
Mortgage loans, net | 781 | 762 | ||||||||||||
Limited partnership interests | 7,971 | 8,114 | ||||||||||||
Short-term investments, at fair value | 6,722 | 4,173 | ||||||||||||
Other investments, net | 1,724 | 1,728 | ||||||||||||
Total | $ | 63,475 | $ | 61,829 |
Net investment income | ||||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Fixed income securities | $ | 390 | $ | 267 | ||||||||||
Equity securities | 11 | 36 | ||||||||||||
Mortgage loans | 8 | 8 | ||||||||||||
Limited partnership interests | 134 | 292 | ||||||||||||
Short-term investments | 66 | 2 | ||||||||||||
Other investments | 41 | 40 | ||||||||||||
Investment income, before expense | 650 | 645 | ||||||||||||
Investment expense | (75) | (51) | ||||||||||||
Net investment income | $ | 575 | $ | 594 |
Net gains (losses) on investments and derivatives by asset type | ||||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Fixed income securities | $ | (136) | $ | (152) | ||||||||||
Equity securities | 167 | (347) | ||||||||||||
Mortgage loans | — | (1) | ||||||||||||
Limited partnership interests | 22 | (101) | ||||||||||||
Derivatives | (52) | 318 | ||||||||||||
Other investments | 13 | 16 | ||||||||||||
Net gains (losses) on investments and derivatives | $ | 14 | $ | (267) |
Net gains (losses) on investments and derivatives by transaction type | ||||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Sales | $ | (120) | $ | (127) | ||||||||||
Credit losses | (12) | (11) | ||||||||||||
Valuation change of equity investments (1) | 198 | (447) | ||||||||||||
Valuation change and settlements of derivatives | (52) | 318 | ||||||||||||
Net gains (losses) on investments and derivatives | $ | 14 | $ | (267) |
Gross realized gains (losses) on sales of fixed income securities | ||||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Gross realized gains | $ | 46 | $ | 66 | ||||||||||
Gross realized losses | (173) | (218) |
Net appreciation (decline) recognized in net income for assets that are still held | ||||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Equity securities | $ | 20 | $ | (92) | ||||||||||
Limited partnership interests carried at fair value | 16 | 38 | ||||||||||||
Total | $ | 36 | $ | (54) |
Credit losses recognized in net income | ||||||||||||||
($ in millions) | Three months ended March 31, | |||||||||||||
2023 | 2022 | |||||||||||||
Assets | ||||||||||||||
Fixed income securities: | ||||||||||||||
Corporate | $ | (9) | $ | — | ||||||||||
Total fixed income securities | (9) | — | ||||||||||||
Mortgage loans | — | (1) | ||||||||||||
Other investments | ||||||||||||||
Bank loans | (3) | (10) | ||||||||||||
Total credit losses by asset type | $ | (12) | $ | (11) | ||||||||||
Liabilities | ||||||||||||||
Commitments to fund commercial mortgage loans and bank loans | — | — | ||||||||||||
Total | $ | (12) | $ | (11) |
Unrealized net capital gains and losses included in AOCI | ||||||||||||||||||||||||||
($ in millions) | Fair value | Gross unrealized | Unrealized net gains (losses) | |||||||||||||||||||||||
March 31, 2023 | Gains | Losses | ||||||||||||||||||||||||
Fixed income securities | $ | 44,103 | $ | 211 | $ | (2,228) | $ | (2,017) | ||||||||||||||||||
Short-term investments | 6,722 | — | — | — | ||||||||||||||||||||||
Derivative instruments | — | — | (2) | (2) | ||||||||||||||||||||||
Limited partnership interests (1) | 4 | |||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | (2,015) | |||||||||||||||||||||||||
Other unrealized net capital gains and losses, pre-tax (2) | 18 | |||||||||||||||||||||||||
Deferred income taxes | 424 | |||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | (1,573) | ||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Fixed income securities | $ | 42,485 | $ | 92 | $ | (2,977) | $ | (2,885) | ||||||||||||||||||
Short-term investments | 4,173 | — | (1) | (1) | ||||||||||||||||||||||
Derivative instruments | — | — | (3) | (3) | ||||||||||||||||||||||
Limited partnership interests (1) | 2 | |||||||||||||||||||||||||
Unrealized net capital gains and losses, pre-tax | (2,887) | |||||||||||||||||||||||||
Other unrealized net capital gains and losses, pre-tax (2) | 23 | |||||||||||||||||||||||||
Deferred income taxes | 609 | |||||||||||||||||||||||||
Unrealized net capital gains and losses, after-tax | $ | (2,255) |
Change in unrealized net capital gains (losses) | ||||||||
($ in millions) | Three months ended March 31, 2023 | |||||||
Fixed income securities | $ | 868 | ||||||
Short-term investments | 1 | |||||||
Derivative instruments | 1 | |||||||
Limited partnership interests | 2 | |||||||
Total | 872 | |||||||
Other unrealized net capital gains and losses, pre-tax | (5) | |||||||
Deferred income taxes | (185) | |||||||
Increase in unrealized net capital gains and losses, after-tax | $ | 682 |
Carrying value for limited partnership interests | ||||||||||||||||||||||||||||||||||||||
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||
EMA | Fair Value | Total | EMA | Fair Value | Total | |||||||||||||||||||||||||||||||||
Private equity | $ | 5,546 | $ | 1,199 | $ | 6,745 | $ | 5,372 | $ | 1,217 | $ | 6,589 | ||||||||||||||||||||||||||
Real estate | 1,019 | 29 | 1,048 | 1,013 | 29 | 1,042 | ||||||||||||||||||||||||||||||||
Other (1) | 178 | — | 178 | 483 | — | 483 | ||||||||||||||||||||||||||||||||
Total | $ | 6,743 | $ | 1,228 | $ | 7,971 | $ | 6,868 | $ | 1,246 | $ | 8,114 |
Other investments by asset type | ||||||||||||||
($ in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Bank loans, net | $ | 698 | $ | 686 | ||||||||||
Real estate | 790 | 813 | ||||||||||||
Policy loans | 120 | 120 | ||||||||||||
Derivatives | 10 | 1 | ||||||||||||
Other | 106 | 108 | ||||||||||||
Total | $ | 1,724 | $ | 1,728 |
Rollforward of credit loss allowance for fixed income securities | ||||||||||||||
Three months ended March 31, | ||||||||||||||
($ in millions) | 2023 | 2022 | ||||||||||||
Beginning balance | $ | (13) | $ | (6) | ||||||||||
Credit losses on securities for which credit losses not previously reported | — | — | ||||||||||||
Net increases related to credit losses previously reported | (9) | — | ||||||||||||
Reduction of allowance related to sales | — | — | ||||||||||||
Write-offs | — | — | ||||||||||||
Ending balance | $ | (22) | $ | (6) | ||||||||||
Components of credit loss allowance | ||||||||||||||
Corporate bonds | $ | (20) | $ | (6) | ||||||||||
ABS | (2) | — | ||||||||||||
Total | $ | (22) | $ | (6) |
Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | Less than 12 months | 12 months or more | Total unrealized losses | |||||||||||||||||||||||||||||||||||||||||
Number of issues | Fair value | Unrealized losses | Number of issues | Fair value | Unrealized losses | |||||||||||||||||||||||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government and agencies | 70 | $ | 2,576 | $ | (41) | 104 | $ | 3,216 | $ | (111) | $ | (152) | ||||||||||||||||||||||||||||||||
Municipal | 1,183 | 1,632 | (27) | 1,860 | 2,376 | (213) | (240) | |||||||||||||||||||||||||||||||||||||
Corporate | 970 | 8,673 | (286) | 1,777 | 14,543 | (1,501) | (1,787) | |||||||||||||||||||||||||||||||||||||
Foreign government | 15 | 197 | (1) | 87 | 452 | (23) | (24) | |||||||||||||||||||||||||||||||||||||
ABS | 74 | 160 | (5) | 152 | 669 | (20) | (25) | |||||||||||||||||||||||||||||||||||||
Total fixed income securities | 2,312 | $ | 13,238 | $ | (360) | 3,980 | $ | 21,256 | $ | (1,868) | $ | (2,228) | ||||||||||||||||||||||||||||||||
Investment grade fixed income securities | 2,132 | $ | 12,415 | $ | (313) | 3,601 | $ | 18,633 | $ | (1,509) | $ | (1,822) | ||||||||||||||||||||||||||||||||
Below investment grade fixed income securities | 180 | 823 | (47) | 379 | 2,623 | (359) | (406) | |||||||||||||||||||||||||||||||||||||
Total fixed income securities | 2,312 | $ | 13,238 | $ | (360) | 3,980 | $ | 21,256 | $ | (1,868) | $ | (2,228) | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Fixed income securities | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government and agencies | 112 | $ | 4,900 | $ | (138) | 75 | $ | 2,393 | $ | (93) | $ | (231) | ||||||||||||||||||||||||||||||||
Municipal | 3,015 | 3,944 | (215) | 507 | 740 | (111) | (326) | |||||||||||||||||||||||||||||||||||||
Corporate | 2,085 | 18,072 | (1,389) | 845 | 6,105 | (956) | (2,345) | |||||||||||||||||||||||||||||||||||||
Foreign government | 74 | 739 | (22) | 42 | 200 | (18) | (40) | |||||||||||||||||||||||||||||||||||||
ABS | 194 | 874 | (27) | 83 | 109 | (8) | (35) | |||||||||||||||||||||||||||||||||||||
Total fixed income securities | 5,480 | $ | 28,529 | $ | (1,791) | 1,552 | $ | 9,547 | $ | (1,186) | $ | (2,977) | ||||||||||||||||||||||||||||||||
Investment grade fixed income securities | 4,959 | $ | 25,487 | $ | (1,409) | 1,437 | $ | 8,791 | $ | (1,009) | $ | (2,418) | ||||||||||||||||||||||||||||||||
Below investment grade fixed income securities | 521 | 3,042 | (382) | 115 | 756 | (177) | (559) | |||||||||||||||||||||||||||||||||||||
Total fixed income securities | 5,480 | $ | 28,529 | $ | (1,791) | 1,552 | $ | 9,547 | $ | (1,186) | $ | (2,977) |
Gross unrealized losses by unrealized loss position and credit quality as of March 31, 2023 | ||||||||||||||||||||
($ in millions) | Investment grade | Below investment grade | Total | |||||||||||||||||
Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2) | $ | (1,669) | $ | (296) | $ | (1,965) | ||||||||||||||
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4) | (153) | (110) | (263) | |||||||||||||||||
Total unrealized losses | $ | (1,822) | $ | (406) | $ | (2,228) |