The largest component of the investment portfolio is fixed-maturity securities, the majority of which are investment grade and managed by outside managers. The Company has established investment guidelines for these investment managers regarding credit quality, exposure to a particular sector and exposure to a particular obligor within a sector.


	As of
	June 30, 2025		December 31, 2024
	(in millions)
Fixed-maturity securities, available-for-sale	$	6,498	$	6,369
Fixed-maturity securities, trading	137		147
Short-term investments	939		1,221
Other invested assets:
Equity method investments:
Ownership interest in Sound Point	412		418
Funds and other investments	567		496
Other	16		12
Total (1)	$	8,569	$	8,663

(1) In the investment portfolio, the aggregate carrying value of Sound Point managed investments was $582 million and $569 million as of June 30, 2025 and December 31, 2024, respectively, excluding the Company’s ownership interest in Sound Point of $412 million and $418 million as of June 30, 2025 and December 31, 2024, respectively, and excluding certain investments in funds that are accounted for as CIVs.

As of June 30, 2025 and December 31, 2024, 13.4% and 12.6%, respectively, of available-for-sale fixed-maturity securities were either rated BIG or not rated, primarily consisting of Loss Mitigation Securities and collateralized loan obligation (CLO) equity tranches. As of June 30, 2025 and December 31, 2024, the carrying value of Loss Mitigation Securities was $503 million and $479 million, respectively. In July 2025, the Company’s largest Loss Mitigation Security with a carrying value of $408 million as of June 30, 2025 reached its final resolution and was paid down after liquidation of the trust assets. This paydown had no significant effect on the consolidated statement of operations. As of June 30, 2025 and December 31, 2024, the carrying value of CLO equity tranches was $238 million and $277 million, respectively. Fixed-maturity securities classified as trading securities primarily include contingent value instruments (CVIs) and are not rated.

The investment portfolio includes $923 million in alternative investments primarily consisting of (i) CLO equity securities classified as available-for-sale fixed-maturity securities, and (ii) $583 million of investments across various asset classes that are reported in other invested assets. In addition, as of June 30, 2025 and December 31, 2024, $40 million and $33 million, respectively, of the Company’s total alternative investments was invested in a Sound Point managed fund which was reported in “assets of CIVs,” “other liabilities” and “nonredeemable noncontrolling interests.” See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles. The Company’s alternative investment commitments as of

June 30, 2025 include $567 million in unfunded commitments which together with its $923 million in funded commitments total $1.5 billion, including a $1 billion commitment to invest in Sound Point managed alternative investments, subject to certain conditions precedent. Capital allocated to alternative investments was committed to several funds pursuing various strategies, including private healthcare investing, asset-based/specialty finance and CLOs. See Note 1, Business and Basis of Presentation, for a description of the Company’s alternative investments agreement with Sound Point.

In addition to the commitments above, the Company agreed to subscribe for liquidity bonds to be issued by a U.K. regulated utility to which it has insured exposure. As of June 30, 2025, the Company purchased approximately £55 million (or $75 million) in liquidity bonds and is committed to purchase an additional £55 million (or $75 million).


Security Type	Percent of Total (1)		Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(dollars in millions)
Obligations of state and political subdivisions	27	%	$	1,851	$	(12)	$	28	$	(95)	$	1,772
U.S. government and agencies	1		42		—		1		(5)		38
Corporate securities (2)	42		2,826		(6)		57		(131)		2,746
Mortgage-backed securities (3):
RMBS	10		670		(24)		5		(58)		593
Commercial mortgage-backed securities (CMBS)	2		150		—		2		(1)		151
Asset-backed securities:
CLOs	8		554		(5)		6		(28)		527
Other (4)	9		583		—		4		(1)		586
Non-U.S. government securities	1		89		—		4		(8)		85
Total available-for-sale fixed-maturity securities	100	%	$	6,765	$	(47)	$	107	$	(327)	$	6,498


Security Type	Percent of Total (1)		Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(dollars in millions)
Obligations of state and political subdivisions	30	%	$	2,032	$	(14)	$	25	$	(103)	$	1,940
U.S. government and agencies	1		72		—		1		(6)		67
Corporate securities (2)	38		2,586		(7)		9		(206)		2,382
Mortgage-backed securities (3):
RMBS	9		657		(21)		2		(71)		567
CMBS	3		189		—		—		(3)		186
Asset-backed securities:
CLOs	9		615		(1)		6		(9)		611
Other (4)	9		593		(17)		1		(30)		547
Non-U.S. government securities	1		83		—		—		(14)		69
Total available-for-sale fixed-maturity securities	100	%	$	6,827	$	(60)	$	44	$	(442)	$	6,369


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(dollars in millions)
Obligations of state and political subdivisions	$	288	$	(5)	$	833	$	(89)	$	1,121	$	(94)
U.S. government and agencies	2		—		12		(5)		14		(5)
Corporate securities	225		(3)		849		(100)		1,074		(103)
Mortgage-backed securities:
RMBS	82		(1)		115		(7)		197		(8)
CMBS	—		—		65		(1)		65		(1)
Asset-backed securities:
CLOs	87		(6)		29		—		116		(6)
Other	79		(1)		10		—		89		(1)
Non-U.S. government securities	—		—		20		(8)		20		(8)
Total	$	763	$	(16)	$	1,933	$	(210)	$	2,696	$	(226)
Number of securities (1)			275				906				1,165


	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(dollars in millions)
Obligations of state and political subdivisions	$	624	$	(7)	$	964	$	(96)	$	1,588	$	(103)
U.S. government and agencies	5		—		28		(6)		33		(6)
Corporate securities	762		(20)		1,046		(150)		1,808		(170)
Mortgage-backed securities:
RMBS	255		(4)		123		(10)		378		(14)
CMBS	83		—		103		(3)		186		(3)
Asset-backed securities:
CLOs	151		(5)		107		(1)		258		(6)
Other	60		(1)		16		—		76		(1)
Non-U.S. government securities	35		(3)		30		(11)		65		(14)
Total	$	1,975	$	(40)	$	2,417	$	(277)	$	4,392	$	(317)
Number of securities (1)			569				1,065				1,591

(1) The number of securities does not add across because lots consisting of the same securities have been purchased at different times and appear in both categories above (i.e., less than 12 months and 12 months or more). If a security appears in both categories, it is counted only once in the total column.

The Company considered the credit quality, cash flows, interest rate movements, ability to hold a security to recovery and intent to sell a security in determining whether a security had a credit loss. The Company has determined that the unrealized losses recorded as of June 30, 2025 and December 31, 2024 were primarily related to higher interest rates rather than credit quality. As of June 30, 2025, the Company did not intend to and was not required to sell investments in an unrealized loss position prior to the expected recovery in value. As of June 30, 2025, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 321 securities had unrealized losses in excess of 10% of their carrying value, whereas as of December 31, 2024, 438 securities had unrealized losses in excess of 10% of their carrying value. The total unrealized loss for these securities was $169 million as of June 30, 2025 and $223 million as of December 31, 2024.

The amortized cost and estimated fair value of available-for-sale fixed-maturity securities by contractual maturity as of June 30, 2025 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized Cost		Estimated Fair Value
	(in millions)
Due within one year	$	166	$	167
Due after one year through five years	1,385		1,391
Due after five years through 10 years	2,109		2,074
Due after 10 years	2,285		2,122
Mortgage-backed securities:
RMBS	670		593
CMBS	150		151
Total	$	6,765	$	6,498

Based on fair value, fixed-maturity securities, short-term investments and cash that are either held in trust for the benefit of third-party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements or otherwise pledged or restricted totaled $79 million as of both June 30, 2025 and December 31, 2024. The investment portfolio also contains securities that are held in trust by certain AGL subsidiaries or are otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements with a fair value of $1,092 million and $1,135 million as of June 30, 2025 and December 31, 2024, respectively.


	Second Quarter				Six Months
	2025		2024		2025		2024
	(in millions)
Investment income:
Fixed-maturity securities, available-for-sale (1)	$	77	$	60	$	151	$	122
Short-term investments	12		22		25		45
Other invested assets	1		—		2		—
Investment income	90		82		178		167
Investment expenses	(1)		(1)		(2)		(2)
Net investment income	$	89	$	81	$	176	$	165

Fair value gains (losses) on trading securities (2)	$	2	$	17	$	3	$	43

Equity in earnings (losses) of investees:
Ownership interest in Sound Point	$	(1)	$	(3)	$	12	$	1
Funds and other investments	4		8		44		28
Equity in earnings (losses) of investees	$	3	$	5	$	56	$	29

(1) Amounts include $7 million income on Loss Mitigation Securities for both second quarter 2025 and second quarter 2024, and $14 million for both six months 2025 and six months 2024. The increase in second quarter 2025 and six months 2025 is primarily due to investment income on CLO equity tranches in the available-for-sale portfolio. Certain CLO equity tranche investments were reclassified to the available-for-sale fixed-maturity portfolio in the fourth quarter of 2024, with interest income now reported in net investment income, and changes in fair value reported in other comprehensive income (OCI). The Company had previously held the CLO equity tranches in a Sound Point managed fund with changes in net asset value (NAV) reported in “equity in earnings (losses) of investees.”

(2) Fair value gains on trading securities pertaining to securities still held as of June 30, 2025 were $2 million for second quarter 2025 and $3 million for six months 2025. Fair value gains on trading securities pertaining to securities still held as of June 30, 2024 were $14 million for second quarter 2024 and $31 million for six months 2024.

A majority of the trading securities are Puerto Rico CVIs. In 2022, as a result of the resolution of certain defaulting Puerto Rico exposures, the Company received Puerto Rico CVIs, along with other consideration. The CVIs are intended to provide creditors with additional recoveries tied to the outperformance of the Puerto Rico 5.5% sales and use tax receipts against May 2020 certified fiscal plan projections, subject to annual and lifetime caps. As of June 30, 2025, the remaining CVIs had a fair value of $117 million. The Company may sell in the future any CVIs it continues to hold.


	Second Quarter				Six Months
	2025		2024		2025		2024
	(in millions)
Gross realized gains on sales of available-for-sale securities	$	1	$	1	$	4	$	2
Gross realized losses on sales of available-for-sale securities	(1)		(4)		(9)		(7)
Net foreign currency gains (losses)	—		(2)		(1)		(2)
Change in the allowance for credit losses and intent to sell	(3)		(2)		(13)		8
Other net realized gains (losses)	(3)		1		(3)		1
Net realized investment gains (losses)	$	(6)	$	(6)	$	(22)	$	2

The proceeds from sales of fixed-maturity securities classified as available-for-sale were $211 million in second quarter 2025, $129 million in second quarter 2024, $427 million in six months 2025 and $488 million in six months 2024.


	Second Quarter				Six Months
	2025		2024		2025		2024
	(in millions)
Balance, beginning of period	$	45	$	67	$	60	$	77
Additions for securities for which credit losses were not previously recognized	3		—		3		—
Additions (reductions) for securities for which credit losses were previously recognized	(1)		2		9		(8)
Write-offs charged against the allowance	—		—		(25)		—
Balance, end of period	$	47	$	69	$	47	$	69