Investments

6 Months Ended

Jun. 30, 2025


Note 5			Investments


Portfolio composition
($ in millions)	June 30, 2025		December 31, 2024
Fixed income securities, at fair value	$	54,435	$	52,747
Equity securities, at fair value	2,397		4,463
Mortgage loans, net	807		784
Limited partnership interests	9,194		9,255
Short-term investments, at fair value	9,640		4,537
Other investments, net	964		824
Total	$	77,437	$	72,610


Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities
($ in millions)	Amortized cost, net		Gross unrealized				Fair value
			Gains		Losses
June 30, 2025
U.S. government and agencies	$	15,640	$	86	$	(14)	$	15,712
Municipal	7,451		29		(194)		7,286
Corporate	27,849		470		(357)		27,962
Foreign government	1,385		18		(12)		1,391
Asset-backed securities (“ABS”)	973		14		(4)		983
Mortgage-backed securities (“MBS”)	1,085		16		—		1,101
Total fixed income securities	$	54,383	$	633	$	(581)	$	54,435

December 31, 2024
U.S. government and agencies	$	11,423	$	15	$	(330)	$	11,108
Municipal	8,985		33		(176)		8,842
Corporate	30,630		272		(710)		30,192
Foreign government	1,352		22		(10)		1,364
ABS	1,130		19		(4)		1,145
MBS	96		—		—		96
Total fixed income securities	$	53,616	$	361	$	(1,230)	$	52,747


Scheduled maturities for fixed income securities
($ in millions)	June 30, 2025				December 31, 2024
	Amortized cost, net		Fair value		Amortized cost, net		Fair value
Due in one year or less	$	1,639	$	1,625	$	1,544	$	1,531
Due after one year through five years	31,226		31,300		22,889		22,595
Due after five years through ten years	13,052		13,164		17,431		17,130
Due after ten years	6,408		6,262		10,526		10,250
	52,325		52,351		52,390		51,506
ABS and MBS	2,058		2,084		1,226		1,241
Total	$	54,383	$	54,435	$	53,616	$	52,747

Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. ABS and MBS are shown separately because of potential prepayment of principal prior to contractual maturity dates.


Net investment income
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Fixed income securities	$	602	$	571	$	1,210	$	1,097
Equity securities	17		18		37		33
Mortgage loans	9		9		19		18
Limited partnership interests	74		103		268		302
Short-term investments	97		62		169		129
Other investments	24		25		45		46
Investment income, before expense	823		788		1,748		1,625
Investment expense	(69)		(76)		(140)		(149)
Net investment income	$	754	$	712	$	1,608	$	1,476


Net gains (losses) on investments and derivatives by type
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Fixed income securities	$	(250)	$	(96)	$	(378)	$	(197)
Equity securities	164		14		52		76
Mortgage loans	—		1		—		1
Limited partnership interests	13		(13)		8		(5)
Derivatives	(65)		(15)		(84)		(23)
Other investments	(6)		6		(24)		4
Other (1)	—		—		(67)		(123)
Net gains (losses) on investments and derivatives	$	(144)	$	(103)	$	(493)	$	(267)

(1)2025 is related to losses recorded for variable interests in Adirondack Insurance Exchange (“Adirondack”) and New Jersey Skylands Insurance Association (“Skylands”) (together “Reciprocal Exchanges”). 2024 is related to losses for the carrying value of the surplus notes issued by the Reciprocal Exchanges. See Note 8 for further detail.


Net gains (losses) on investments and derivatives by transaction type
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Sales	$	(245)	$	(90)	$	(382)	$	(201)
Credit losses	(4)		(16)		(80)		(131)
Valuation change of equity investments (1)	170		18		53		88
Valuation change and settlements of derivatives	(65)		(15)		(84)		(23)
Net gains (losses) on investments and derivatives	$	(144)	$	(103)	$	(493)	$	(267)

(1)Includes valuation change of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities.


Gross realized gains (losses) on sales of fixed income securities
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Gross realized gains	$	116	$	33	$	187	$	74
Gross realized losses	(367)		(124)		(565)		(270)


Net appreciation (decline) recognized in net income for assets that are still held
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Equity securities	$	129	$	18	$	125	$	78
Limited partnership interests carried at fair value	(12)		17		(29)		47
Total	$	117	$	35	$	96	$	125


Credit losses recognized in net income
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Assets
Fixed income securities:

Corporate	$	1	$	(5)	$	—	$	(1)


Total fixed income securities	1		(5)		—		(1)
Mortgage loans	—		1		—		1
Limited partnership interests	(4)		(16)		(4)		(16)
Other investments
Bank loans	(1)		2		(9)		5
Real estate	—		2		—		2
Other assets	—		—		(52)		(123)



Commitments to fund line of credit, commercial mortgage loans and bank loans	—		—		(15)		1
Total	$	(4)	$	(16)	$	(80)	$	(131)


Unrealized net capital gains and losses included in accumulated other comprehensive income (“AOCI”)
($ in millions)	Fair value		Gross unrealized				Unrealized net gains (losses)
June 30, 2025			Gains		Losses
Fixed income securities	$	54,435	$	633	$	(581)	$	52
Short-term investments	9,640		—		(2)		(2)
Derivative instruments	—		—		(2)		(2)

Investments classified as held for sale							1
Unrealized net capital gains and losses, pre-tax							49
Reclassification of noncontrolling interest							—
Deferred income taxes							(13)
Unrealized net capital gains and losses, after-tax							$	36

December 31, 2024
Fixed income securities	$	52,747	$	361	$	(1,230)	$	(869)
Short-term investments	4,537		—		(2)		(2)
Derivative instruments	—		—		(2)		(2)

Investments classified as held for sale							(110)
Unrealized net capital gains and losses, pre-tax							(983)
Reclassification of noncontrolling interest							3
Deferred income taxes							209
Unrealized net capital gains and losses, after-tax							$	(771)


Change in unrealized net capital gains (losses)
($ in millions)	Six months ended June 30, 2025
Fixed income securities	$	921
Short-term investments	—
Derivative instruments	—

Investments classified as held for sale (1)	111
Total	1,032
Reclassification of noncontrolling interest	(3)
Deferred income taxes	(222)
Change in unrealized net capital gains and losses, after-tax	$	807

(1)Primarily unrealized net capital gains and losses for investments disposed of in the EVB business sale.

Mortgage loans The Company’s mortgage loans totaled $807 million and $784 million, net of credit loss allowance, as of June 30, 2025 and December 31, 2024, respectively, and are primarily commercial mortgage loans collateralized by a variety of commercial real estate property types located across the United States. Substantially all of the commercial mortgage loans are non-recourse to the borrower. Residential mortgage loans totaled $112 million and $61 million as of June 30, 2025 and December 31, 2024, respectively, and are recourse to the borrower.

Limited partnership interests


Carrying value for limited partnership interests
($ in millions)	June 30, 2025		December 31, 2024
Private equity	$	7,578	$	7,734
Real estate	1,405		1,236
Other (1)	211		285
Total	$	9,194	$	9,255

(1)Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities.

Short-term investments, including money market funds, commercial paper, U.S. Treasury bills, fixed income securities with a contractual maturity of one year or less at time of acquisition and other short-term investments, are carried at fair value. As of June 30, 2025 and December 31, 2024, the fair value of short-term investments totaled $9.64 billion and $4.54 billion, respectively.

Other investments primarily consist of bank loans, real estate and derivatives. Bank loans are primarily senior secured corporate loans and are carried at amortized cost, net. Real estate is carried at cost less accumulated depreciation.


Other investments by asset type
($ in millions)	June 30, 2025		December 31, 2024
Bank loans, net	$	335	$	201
Real estate	628		620

Other	1		3
Total	$	964	$	824

Portfolio monitoring and credit losses

Fixed income securities The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income security that may require a credit loss allowance.

For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with incremental losses recorded in earnings.

If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates the estimated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate and is compared to the amortized cost of the security.

The determination of cash flow estimates is inherently subjective, and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security is considered when

developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, credit ratings and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement.

If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, a credit loss allowance is recorded in earnings for the shortfall in expected cash flows; however, the amortized cost, net of the credit loss allowance, may not be lower than the fair value of the security. The portion of the unrealized loss related to factors other than credit remains classified in AOCI. If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings.

When a security is sold or otherwise disposed or when the security is deemed uncollectible and written off, the Company reduces the credit loss allowance.

Recoveries after write-offs are recognized when received.

Accrued interest excluded from the amortized cost of fixed income securities totaled $568 million and $574 million as of June 30, 2025 and December 31, 2024, respectively, and is reported within the accrued investment income line of the Condensed Consolidated Statements of Financial Position. The Company monitors accrued interest and writes off amounts when they are not expected to be received.

The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. The process also includes the monitoring of other credit loss indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the

Company may have a concern, are evaluated for potential credit losses using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of credit losses for these securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value requires a credit loss allowance are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the extent to which the fair value has been less than amortized cost.


Rollforward of credit loss allowance for fixed income securities
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2025		2024		2025		2024
Beginning balance	$	(18)	$	(17)	$	(17)	$	(36)
Credit losses on securities for which credit losses not previously reported	—		(4)		(1)		(7)
Net (increases) decreases related to credit losses previously reported	1		(1)		1		3
(Increase) decrease related to sales and other	—		—		—		3
Write-offs	—		3		—		18

Ending balance	$	(17)	$	(19)	$	(17)	$	(19)

Components of credit loss allowance as of June 30

Corporate bonds					(16)		(18)
ABS					(1)		(1)

Total					$	(17)	$	(19)


Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position (1)
($ 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
June 30, 2025
Fixed income securities
U.S. government and agencies	81	$	1,179	$	(5)	56	$	357	$	(9)	$	(14)
Municipal	571	3,703		(123)		697	1,176		(71)		(194)
Corporate	366	2,456		(53)		948	5,750		(304)		(357)
Foreign government	53	298		(4)		62	47		(8)		(12)
ABS	40	164		(1)		12	44		(3)		(4)
MBS	14	6		—		68	4		—		—
Total fixed income securities	1,125	$	7,806	$	(186)	1,843	$	7,378	$	(395)	$	(581)
Investment grade fixed income securities	981	$	7,362	$	(160)	1,665	$	6,524	$	(350)	$	(510)
Below investment grade fixed income securities	144	444		(26)		178	854		(45)		(71)
Total fixed income securities	1,125	$	7,806	$	(186)	1,843	$	7,378	$	(395)	$	(581)

December 31, 2024
Fixed income securities
U.S. government and agencies	179	$	8,520	$	(256)	99	$	801	$	(74)	$	(330)
Municipal	990	4,889		(67)		1,089	1,693		(109)		(176)
Corporate	943	9,178		(166)		1,237	7,877		(544)		(710)
Foreign government	42	159		(2)		73	73		(8)		(10)
ABS	15	76		—		15	51		(4)		(4)
MBS	35	2		—		70	5		—		—
Total fixed income securities	2,204	$	22,824	$	(491)	2,583	$	10,500	$	(739)	$	(1,230)
Investment grade fixed income securities	2,002	$	21,846	$	(473)	2,367	$	9,281	$	(655)	$	(1,128)
Below investment grade fixed income securities	202	978		(18)		216	1,219		(84)		(102)
Total fixed income securities	2,204	$	22,824	$	(491)	2,583	$	10,500	$	(739)	$	(1,230)

(1)Includes fixed income securities with fair values of $10 million and $16 million and unrealized losses of $1 million and $1 million with credit loss allowances of $1 million and $3 million as of June 30, 2025 and December 31, 2024, respectively.


Gross unrealized losses by unrealized loss position and credit quality as of June 30, 2025
($ in millions)	Investment grade		Below investment grade		Total
Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1)	$	(477)	$	(60)	$	(537)
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (2)	(33)		(11)		(44)
Total unrealized losses	$	(510)	$	(71)	$	(581)

(1)Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses.

(2)Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.

Investment grade is defined as a security having a National Association of Insurance Commissioners (“NAIC”) designation of 1 or 2, which is comparable to a rating of Aaa, Aa, A or Baa from Moody’s Investors Service (“Moody’s”) or AAA, AA, A or BBB from S&P Global Ratings (“S&P”), or a comparable internal rating if an externally provided rating is not available. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Unrealized losses on investment grade securities are principally related to an increase in market yields which may include increased risk-free interest rates or wider credit spreads since the time of initial purchase. The unrealized losses are expected to reverse as the securities approach maturity.

ABS and MBS in an unrealized loss position were evaluated based on actual and projected collateral losses relative to the securities’ positions in the respective securitization trusts, security specific expectations of cash flows, and credit ratings. This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, and (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread. Municipal bonds in an unrealized loss position were evaluated based on the underlying credit quality of the primary obligor, obligation type and quality of the underlying assets.

As of June 30, 2025, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis.

Loans The Company establishes a credit loss allowance for mortgage loans and bank loans when they are originated or purchased, and for unfunded commitments unless they are unconditionally cancellable by the Company. The Company uses a probability of default and loss given default model for mortgage loans and bank loans to estimate current expected credit losses that considers all relevant information available including past events, current conditions, and reasonable and supportable forecasts over the life of an asset. The Company also considers

such factors as historical losses, expected prepayments and various economic factors. For mortgage loans, the Company considers origination vintage year and property level information such as debt service coverage, property type, property location and collateral value. For bank loans, the Company considers the credit rating of the borrower, credit spreads and type of loan. After the reasonable and supportable forecast period, the Company’s model reverts to historical loss trends.

Loans are evaluated on a pooled basis when they share similar risk characteristics. The Company monitors loans through a quarterly credit monitoring process to determine when they no longer share similar risk characteristics and are to be evaluated individually when estimating credit losses.

Loans are written off against their corresponding allowances when there is no reasonable expectation of recovery. If a loan recovers after a write-off, the estimate of expected credit losses includes the expected recovery.

Accrual of income is suspended for loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on loans on non-accrual status are generally recorded as a reduction of amortized cost.

Mortgage loans When it is determined a mortgage loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as using collateral value less estimated costs to sell where applicable, including when foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. When collateral value is used, the mortgage loans may not have a credit loss allowance when the fair value of the collateral exceeds the loan’s amortized cost. An alternative approach may be utilized to estimate credit losses using the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate. Individual loan credit loss allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell, when applicable, or present value of the loan’s expected future repayment cash flows.

Debt service coverage ratio is considered a key credit quality indicator when commercial mortgage loan credit loss allowances are estimated. Debt service coverage ratio represents the amount of estimated cash flow from the property available to the borrower to meet principal and interest payment obligations. Debt service coverage ratio estimates are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process.

If the debt service coverage ratio is below 1.0 and the borrower has the financial capacity to fund the revenue shortfalls from the properties for the foreseeable term, the decrease in cash flows from the properties is considered temporary, or there are other risk mitigating circumstances such as additional collateral, escrow balances or borrower guarantees, the commercial loans may not be considered impaired.


Commercial mortgage loans amortized cost by debt service coverage ratio distribution and year of origination
	June 30, 2025														December 31, 2024
($ in millions)	2020 and prior		2021		2022		2023		2024		2025		Total		Total

1.0 - 1.25	$	37	$	—	$	18	$	25	$	46	$	—	$	126	$	137
1.26 - 1.50	56		—		24		18		—		—		98		105
Above 1.50	179		164		48		76		15		—		482		493
Amortized cost before allowance	$	272	$	164	$	90	$	119	$	61	$	—	$	706	$	735
Allowance													(11)		(12)
Amortized cost, net													$	695	$	723

Payments on all mortgage loans were current as of June 30, 2025 and December 31, 2024.


Rollforward of credit loss allowance for mortgage loans
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2025		2024		2025		2024
Beginning balance	$	(12)	$	(11)	$	(12)	$	(11)

Net (increases) decreases related to credit losses	—		1		—		1
Write-offs	—		—		—		—


Ending balance	$	(12)	$	(10)	$	(12)	$	(10)

Components of credit loss allowance as of June 30
Commercial					$	(11)	$	(10)
Residential					(1)		—
Total					$	(12)	$	(10)

Bank loans When it is determined a bank loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate.

Credit ratings of the borrower are considered a key credit quality indicator when bank loan credit loss

allowances are estimated. The ratings are either received from the Securities Valuation Office of the NAIC based on availability of applicable ratings from rating agencies on the NAIC credit rating provider list or a comparable internal rating. The year of origination is determined to be the year in which the asset is acquired.


Bank loans amortized cost by credit rating and year of origination
	June 30, 2025														December 31, 2024
($ in millions)	2020 and prior		2021		2022		2023		2024		2025		Total		Total
NAIC 1 / A	$	—	$	—	$	—	$	—	$	45	$	111	$	156	$	45
NAIC 2 / BBB	—		—		—		—		1		41		42		6
NAIC 3 / BB	—		—		1		2		13		11		27		27
NAIC 4 / B	19		2		—		30		41		25		117		122
NAIC 5-6 / CCC and below	—		—		1		7		1		1		10		11
Amortized cost before allowance	$	19	$	2	$	2	$	39	$	101	$	189	$	352	$	211
Allowance													(17)		(10)
Amortized cost, net													$	335	$	201


Rollforward of credit loss allowance for bank loans
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Beginning balance	$	(16)	$	(13)	$	(10)	$	(22)

Net (increases) decreases related to credit losses	(1)		2		(9)		5

Write-offs	—		—		2		6

Ending balance	$	(17)	$	(11)	$	(17)	$	(11)