v3.24.1.u1
Future Policy Benefits
 3 Months Ended
Mar. 31, 2024
Insurance [Abstract]  
Future Policy Benefits
13. Future Policy Benefits
Future policy benefits primarily include reserves for traditional life and annuity payout contracts, which represent an estimate of the present value of future benefits less the present value of future net premiums. Included in Future policy benefits are liabilities for annuities issued in structured settlement arrangements whereby a claimant receives life contingent payments over their lifetime. Also included are pension risk transfer arrangements whereby an upfront premium is received in exchange for guaranteed retirement benefits. All payments under these arrangements are fixed and determinable with respect to their amounts and dates. Structured settlement or other annuitization elections (e.g., certain single premium immediate annuities) that do not involve life contingent payments, but rather payments for a stated period are included in Policyholder contract deposits.
For traditional and limited pay long-duration products, benefit reserves are accrued and benefit expense is recognized using a net premium ratio (“NPR”) methodology for each annual cohort of business.
The following tables present the balances and changes in the liability for future policy benefits and a reconciliation of the net liability for future policy benefits to the liability for future policy benefits in the Condensed Consolidated Balance Sheets:
Three Months Ended March 31, 2024Individual
Retirement		Group
Retirement		Life
Insurance		Institutional
Markets		Corporate and OtherTotal
(in millions, except for liability durations)
Present value of expected net premiums
Balance, beginning of year$— $— $8,379 $— $973 $9,352 
Effect of changes in discount rate assumptions (AOCI)— — 1,482 — 44 1,526 
Reclassified to Liabilities held-for-sale— — 4,287 — — 4,287 
Beginning balance at original discount rate— — 14,148 — 1,017 15,165 
Effect of actual variances from expected experience— — (13)— — (13)
Adjusted beginning of year balance— — 14,135 — 1,017 15,152 
Issuances— — 353 — — 353 
Interest accrual— — 117 — 11 128 
Net premium collected— — (381)— (29)(410)
Foreign exchange impact— — (46)— — (46)
Other— — (4)— — (4)
Ending balance at original discount rate— — 14,174 — 999 15,173 
Effect of changes in discount rate assumptions (AOCI)— — (1,621)— (57)(1,678)
Reclassified to Liabilities held-for-sale— — (4,247)— — (4,247)
Balance, end of period$— $— $8,306 $— $942 $9,248 
Present value of expected future policy benefits
Balance, beginning of year$1,353 $217 $17,531 $18,482 $20,654 $58,237 
Effect of changes in discount rate assumptions (AOCI)132 (3)2,745 1,906 437 5,217 
Reclassified to Liabilities held-for-sale— — 5,119 — — 5,119 
Beginning balance at original discount rate1,485 214 25,395 20,388 21,091 68,573 
Effect of actual variances from expected experience(a)
(6)(1)(7)— (9)(23)
Adjusted beginning of year balance1,479 213 25,388 20,388 21,082 68,550 
Issuances34 5 350 1,726 2 2,117 
Interest accrual16 3 236 217 252 724 
Benefit payments(33)(7)(458)(283)(370)(1,151)
Foreign exchange impact— — (61)(82)— (143)
Other— — (3)— (3)(6)
Ending balance at original discount rate1,496 214 25,452 21,966 20,963 70,091 
Effect of changes in discount rate assumptions (AOCI)(153)— (3,149)(2,347)(959)(6,608)
Reclassified to Liabilities held-for-sale— — (5,078)— — (5,078)
Balance, end of period$1,343 $214 $17,225 $19,619 $20,004 $58,405 
Net liability for future policy benefits, end of period1,343 214 8,919 19,619 19,062 49,157 
Liability for future policy benefits for certain participating contracts— — 13 — 1,289 1,302 
Liability for universal life policies with secondary guarantees and similar features(b)
— — 3,917 — 55 3,972 
Deferred profit liability78 9 20 1,595 850 2,552 
Other reconciling items(c)
31 — 477 — 96 604 
Future policy benefits for life and accident and health insurance contracts1,452 223 13,346 21,214 21,352 57,587 
Less: Reinsurance recoverable:(4)— (714)(37)(21,352)(22,107)
Net liability for future policy benefits after reinsurance recoverable$1,448 $223 $12,632 $21,177 $— $35,480 
Weighted average liability duration of the liability for future policy benefits(d)(e)
7.76.712.612.211.2
Three Months Ended March 31, 2023Individual
Retirement		Group
Retirement		Life
Insurance		Institutional
Markets		Corporate and OtherTotal
(in millions, except for liability durations)
Present value of expected net premiums
Balance, beginning of year$— $— $11,654 $— $991 $12,645 
Effect of changes in discount rate assumptions (AOCI)— — 1,872 — 66 1,938 
Beginning balance at original discount rate— — 13,526 — 1,057 14,583 
Effect of actual variances from expected experience1 — 12 — 3 16 
Adjusted beginning of year balance1 — 13,538 — 1,060 14,599 
Issuances6 — 322 — — 328 
Interest accrual— — 106 — 12 118 
Net premium collected(7)— (352)— (30)(389)
Foreign exchange impact— — 96 — — 96 
Other— — 3 — — 3 
Ending balance at original discount rate— — 13,713 — 1,042 14,755 
Effect of changes in discount rate assumptions (AOCI)— — (1,648)— (48)(1,696)
Balance, end of period$— $— $12,065 $— $994 $13,059 
Present value of expected future policy benefits
Balance, beginning of year$1,223 $211 $21,179 $12,464 $20,429 $55,506 
Effect of changes in discount rate assumptions (AOCI)167 2 3,424 2,634 1,083 7,310 
Beginning balance at original discount rate1,390 213 24,603 15,098 21,512 62,816 
Effect of actual variances from expected experience(a)
(3)(1)26 (5)— 17 
Adjusted beginning of year balance1,387 212 24,629 15,093 21,512 62,833 
Issuances70 2 318 1,450 3 1,843 
Interest accrual12 3 224 139 257 635 
Benefit payments(32)(7)(476)(228)(379)(1,122)
Foreign exchange impact— — 277 125 — 402 
Other— — 1 — (3)(2)
Ending balance at original discount rate1,437 210 24,973 16,579 21,390 64,589 
Effect of changes in discount rate assumptions (AOCI)(141)3 (3,081)(2,302)(492)(6,013)
Balance, end of period$1,296 $213 $21,892 $14,277 $20,898 $58,576 
Net liability for future policy benefits, end of period1,296 213 9,827 14,277 19,904 45,517 
Liability for future policy benefits for certain participating contracts— — 14 — 1,326 1,340 
Liability for universal life policies with secondary guarantees and similar features(b)
— — 3,457 — 55 3,512 
Deferred profit liability83 10 16 1,415 871 2,395 
Other reconciling items(c)
39 3 493 — 107 642 
Future policy benefits for life and accident and health insurance contracts1,418 226 13,807 15,692 22,263 53,406 
Less: Reinsurance recoverable:(4)— (1,187)(37)(22,263)(23,491)
Net liability for future policy benefits after reinsurance recoverable$1,414 $226 $12,620 $15,655 $— $29,915 
Weighted average liability duration of the liability for future policy benefits(d)
7.77.112.411.511.6
(a)    Effect of changes in cash flow assumptions and variances from actual experience are partially offset by changes in the deferred profit liability.
(b)    Additional details can be found in the table that presents the balances and changes in the liability for universal life policies with secondary guarantees and similar features.
(c)    Other reconciling items primarily include the Accident and Health as well as Group Benefits (short-duration) contracts.
(d)    The weighted average liability durations are calculated as the modified duration using projected future net liability cashflows that are aggregated at the segment level, utilizing the segment level weighted average interest rates and current discount rate, which can be found in the table below.
(e)    Includes balances that were reclassified to Liabilities held-for-sale in the Condensed Consolidated Balance Sheets. See Note 4 for additional information.
For the three months ended March 31, 2024 and 2023 in the traditional and term life insurance block, capping of net premium ratios at 100% caused a (credit)/charge to net income of $(1) million and $25 million, respectively. The discount rate was updated based on market observable information. Relative to the prior period, the increase in upper-medium-grade fixed income yields resulted in a decrease in the liability for future policy benefits.
The following table presents the amount of undiscounted expected future benefit payments and undiscounted and discounted expected gross premiums for future policy benefits for nonparticipating contracts:
Three Months Ended March 31,
(in millions)20242023
Individual RetirementUndiscounted expected future benefits and expense$2,156 $2,048 
Undiscounted expected future gross premiums$— $— 
Group RetirementUndiscounted expected future benefits and expense$309 $317 
Undiscounted expected future gross premiums$— $— 
Life Insurance(a) (b)
Undiscounted expected future benefits and expense$40,741 $39,028 
Undiscounted expected future gross premiums$30,656 $28,964 
Institutional MarketsUndiscounted expected future benefits and expense$42,519 $29,029 
Undiscounted expected future gross premiums$— $— 
Corporate and other (c)(d)
Undiscounted expected future benefits and expense$42,701 $44,148 
Undiscounted expected future gross premiums$2,106 $2,225 
(a)    Includes balances that have been reclassified to Liabilities held-for-sale in the Condensed Consolidated Balance Sheets. See Note 4 for additional information.
(b)    Life insurance discounted expected future gross premiums (at current discount rate) for three months ended March 31, 2024 were $20.0 billion.
(c)    Corporate and other discounted expected future gross premiums (at current discount rate) for three months ended March 31, 2024 were $1.4 billion
(d)    Represents activity ceded to Fortitude Re.
The following table presents the amount of revenue and interest recognized in the Condensed Consolidated Statements of Income (Loss) for future policy benefits for nonparticipating contracts:
Gross PremiumsInterest Accretion
Three Months Ended March 31,Three Months Ended March 31,
(in millions)2024202320242023
Individual Retirement$39 $75 $16 $12 
Group Retirement5 6 3 3 
Life Insurance618 575 119 118 
Institutional Markets
1,805 1,581 217 139 
Corporate and Other52 54 241 245 
Total$2,519 $2,291 $596 $517 
The following table presents the weighted-average interest rate for future policy benefits for nonparticipating contracts:
Individual
Retirement		Group
Retirement		Life
Insurance		Institutional
Markets		Corporate and Other
March 31, 2024
Weighted-average interest rate, original discount rate *3.79 %5.13 %4.12 %4.25 %4.86 %
Weighted-average interest rate, current discount rate *5.27 %5.24 %5.28 %5.19 %5.32 %
March 31, 2023
Weighted-average interest rate, original discount rate3.65 %5.19 %4.11 %3.76 %4.88 %
Weighted-average interest rate, current discount rate5.33 %4.91 %5.08 %5.04 %5.10 %
*    Weighted-average interest rates for Life Insurance include balances that have been reclassified to Liabilities held-for-sale.
The weighted average interest rates are calculated using projected future net liability cash flows that are aggregated to the segment level, and are represented as an annual rate.
Additional Liabilities: For universal-life type products, insurance benefits in excess of the account balance are generally recognized as expenses in the period incurred unless the design of the product is such that future charges are insufficient to cover the benefits, in which case an “additional liability” is accrued over the life of the contract. These additional liabilities are included in Future policy benefits for life and accident and health insurance contracts in the Condensed Consolidated Balance Sheets.
Our additional liabilities primarily consist of universal life policies with secondary guarantees and these additional liabilities are recognized in addition to the Policyholder account balances. For universal life policies with secondary guarantees, as well as other universal life policies for which profits followed by losses are expected at contract inception, a liability is recognized based on a benefit ratio of (a) the present value of total expected payments, in excess of the account value, over the life of the contract, divided by (b) the present value of total expected assessments over the life of the contract. For universal life policies without secondary guarantees, for which profits followed by losses are first expected after contract inception, we establish a liability, in addition to policyholder account balances, so that expected future losses are recognized in proportion to the emergence of profits in the earlier (profitable) years. Universal life account balances are reported within Policyholder contract deposits, while these additional liabilities are reported within the liability for future policy benefits in the Condensed Consolidated Balance Sheets. These additional liabilities are also adjusted to reflect the effect of unrealized gains or losses on fixed maturity securities available-for-sale on accumulated assessments, with related changes recognized through Other comprehensive income. The policyholder behavior assumptions for these liabilities include mortality, lapses and premium persistency. The capital market assumptions used for the liability for universal life secondary guarantees include discount rates and net earned rates.
The following table presents the balances and changes in the liability for universal life policies with secondary guarantees and similar features:
Three Months Ended March 31,
20242023
Life
Insurance		Corporate and OtherTotalLife
Insurance		Corporate and OtherTotal
(in millions, except duration of liability)
Balance, beginning of year$3,731 $55 $3,786 $3,300 $55 $3,355 
Effect of changes in experience109 (1)108 74 (1)73 
Adjusted beginning balance$3,840 $54 $3,894 $3,374 $54 $3,428 
Assessments145 — 145 179 — 179 
Excess benefits paid(232)— (232)(238)— (238)
Interest accrual38 1 39 28 1 29 
Other— — — (5)— (5)
Changes related to unrealized appreciation (depreciation) of investments126 — 126 119 — 119 
Balance, end of period$3,917 $55 $3,972 $3,457 $55 $3,512 
Less: Reinsurance recoverable(172)(55)(227)(192)— (192)
Balance, end of period, net of Reinsurance recoverable$3,745 $— $3,745 $3,265 $55 $3,320 
Weighted average duration of liability *
25.39.126.49.4
*     The weighted average duration of liabilities is calculated as the modified duration using projected future net liability cashflows that are aggregated at the segment level, utilizing the segment level weighted average interest rates, which can be found in the table below.
The following table presents the amount of revenue and interest recognized in the Condensed Consolidated Statements of Income (Loss) for the liability for universal life policies with secondary guarantees and similar features:
Gross Assessments Three Months Ended March 31,Interest Accretion Three Months Ended March 31,
(in millions)2024202320242023
Life Insurance$248 $299 $38 $28 
Corporate and Other10 10 1 1 
Total$258 $309 $39 $29 
The following table presents the calculation of weighted average interest rate for the liability for universal life policies with secondary guarantees and similar features:
March 31,20242023
Life
Insurance		Corporate and OtherLife
Insurance		Corporate and Other
Weighted-average interest rate3.92 %4.20 %3.76 %4.24 %
The weighted average interest rates are calculated using projected future net liability cash flows that are aggregated to the segment level, and are represented as an annual rate.
The following table presents details concerning our universal life policies with secondary guarantees and similar features:
Three Months Ended March 31,
(in millions, except for attained age of contract holders)20242023
Account value$3,773$3,556
Net amount at risk$73,092$70,014
Average attained age of contract holders5353