v3.24.2.u1
Future Policy Benefits
 6 Months Ended
Jun. 30, 2024
Insurance [Abstract]  
Future Policy Benefits
12. 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:
Individual
Retirement		Group
Retirement		Life
Insurance		Institutional
Markets		Corporate and OtherTotal
(in millions, except for liability durations)
Six Months Ended June 30, 2024
Present value of expected net premiums
Balance, beginning of year$— $— $8,379 $— $973 $9,352 
Effect of changes in discount rate assumptions (AOCI)— — 1,482 — 44 1,526 
Reclassified to Liabilities held-for-sale— — 4,287 — — 4,287 
Beginning balance at original discount rate— — 14,148 — 1,017 15,165 
Effect of actual variances from expected experience— — (12)— (6)(18)
Adjusted beginning of year balance— — 14,136 — 1,011 15,147 
Issuances— — 572 — — 572 
Interest accrual— — 202 — 22 224 
Net premium collected— — (634)— (57)(691)
Foreign exchange impact— — (46)— — (46)
Other— — (4)— — (4)
Dispositions
— — (5,108)— — (5,108)
Ending balance at original discount rate— — 9,118 — 976 10,094 
Effect of changes in discount rate assumptions (AOCI)— — (845)— (66)(911)
Balance, end of period$— $— $8,273 $— $910 $9,183 
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)
(21)(2)(10)(12)(16)(61)
Adjusted beginning of year balance1,464 212 25,385 20,376 21,075 68,512 
Issuances62 6 565 1,892 3 2,528 
Interest accrual32 6 435 439 503 1,415 
Benefit payments(67)(12)(814)(594)(731)(2,218)
Foreign exchange impact— — (61)(75)— (136)
Other— (5)(2)— (5)(12)
Dispositions
— — (6,796)— — (6,796)
Ending balance at original discount rate1,491 207 18,712 22,038 20,845 63,293 
Effect of changes in discount rate assumptions (AOCI)(170)(3)(1,717)(2,848)(1,406)(6,144)
Balance, end of period$1,321 $204 $16,995 $19,190 $19,439 $57,149 
Net liability for future policy benefits, end of period1,321 204 8,722 19,190 18,529 47,966 
Liability for future policy benefits for certain participating contracts— — 12 — 1,280 1,292 
Liability for universal life policies with secondary guarantees and similar features(b)
— — 3,916 — 55 3,971 
Deferred profit liability78 9 21 1,602 837 2,547 
Other reconciling items(c)
30 — 457 — 92 579 
Future policy benefits for life and accident and health insurance contracts1,429 213 13,128 20,792 20,793 56,355 
Less: Reinsurance recoverable:(4)— (699)(39)(20,793)(21,535)
Net liability for future policy benefits after reinsurance recoverable$1,425 $213 $12,429 $20,753 $— $34,820 
Weighted average liability duration of the liability for future policy benefits(d)
7.56.610.911.810.9
Individual
Retirement		Group
Retirement		Life
Insurance		Institutional
Markets		Corporate and OtherTotal
(in millions, except for liability durations)
Six Months Ended June 30, 2023
Present value of expected net premiums
Balance, beginning of year$— $— $11,654 $— $991 $12,645 
Effect of changes in discount rate assumptions (AOCI)— — 1,872 — 66 1,938 
Beginning balance at original discount rate— — 13,526 — 1,057 14,583 
Effect of actual variances from expected experience— — 10 — 6 16 
Adjusted beginning of year balance— — 13,536 — 1,063 14,599 
Issuances— — 666 — — 666 
Interest accrual— — 214 — 23 237 
Net premium collected— — (719)— (59)(778)
Foreign exchange impact— — 206 — — 206 
Other— — 10 — — 10 
Ending balance at original discount rate— — 13,913 — 1,027 14,940 
Effect of changes in discount rate assumptions (AOCI)— — (1,904)— (61)(1,965)
Balance, end of period$— $— $12,009 $— $966 $12,975 
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)
(1)— 36 17 (8)44 
Adjusted beginning of year balance1,389 213 24,639 15,115 21,504 62,860 
Issuances120 6 656 3,301 3 4,086 
Interest accrual25 5 450 301 513 1,294 
Benefit payments(65)(13)(943)(521)(739)(2,281)
Foreign exchange impact— — 236 308 — 544 
Other— — 5 — (6)(1)
Ending balance at original discount rate1,469 211 25,043 18,504 21,275 66,502 
Effect of changes in discount rate assumptions (AOCI)(158)(1)(3,386)(2,752)(822)(7,119)
Balance, end of period$1,311 $210 $21,657 $15,752 $20,453 $59,383 
Net liability for future policy benefits, end of period1,311 210 9,648 15,752 19,487 46,408 
Liability for future policy benefits for certain participating contracts— — 13 — 1,316 1,329 
Liability for universal life policies with secondary guarantees and similar features(b)
— — 3,402 — 56 3,458 
Deferred profit liability86 10 17 1,468 869 2,450 
Other reconciling items(c)
35 3 513 — 92 643 
Future policy benefits for life and accident and health insurance contracts1,432 223 13,593 17,220 21,820 54,288 
Less: Reinsurance recoverable:(4)— (1,148)(39)(21,820)(23,011)
Net liability for future policy benefits after reinsurance recoverable$1,428 $223 $12,445 $17,181 $— $31,277 
Weighted average liability duration of the liability for future policy benefits(d)
7.86.912.511.611.5
(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.
For the six months ended June 30, 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 $32 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:
Six Months Ended June 30,
(in millions)20242023
Individual RetirementUndiscounted expected future benefits and expense$2,139 $2,115 
Undiscounted expected future gross premiums$— $— 
Discounted expected future gross premiums (at current discount rate)$— $— 
Group RetirementUndiscounted expected future benefits and expense$306 $316 
Undiscounted expected future gross premiums$— $— 
Discounted expected future gross premiums (at current discount rate)$— $— 
Life Insurance (a)
Undiscounted expected future benefits and expense$30,783 $39,848 
Undiscounted expected future gross premiums$21,815 $29,792 
Discounted expected future gross premiums (at current discount rate)$14,318 $19,207 
Institutional MarketsUndiscounted expected future benefits and expense$42,543 $33,474 
Undiscounted expected future gross premiums$— $— 
Discounted expected future gross premiums (at current discount rate)$— $— 
Corporate and other (b)
Undiscounted expected future benefits and expense$42,304 $43,791 
Undiscounted expected future gross premiums$2,060 $2,179 
Discounted expected future gross premiums (at current discount rate)$1,356 $1,435 
(a) 2023 includes balances related to AIG Life U.K.
(b)    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
Six Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Individual Retirement$70 $136 $32 $25 
Group Retirement5 10 6 5 
Life Insurance1,070 1,175 233 236 
Institutional Markets
1,981 3,500 439 301 
Corporate and Other103 107 481 490 
Total$3,229 $4,928 $1,191 $1,057 
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
June 30, 2024
Weighted-average interest rate, original discount rate 3.79 %5.13 %4.68 %4.27 %4.86 %
Weighted-average interest rate, current discount rate 5.48 %5.44 %5.56 %5.43 %5.54 %
June 30, 2023
Weighted-average interest rate, original discount rate3.73 %5.14 %4.09 %3.95 %4.88 %
Weighted-average interest rate, current discount rate5.27 %5.26 %5.27 %5.34 %5.25 %
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:
Six Months Ended June 30,
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 experience192 (2)190 149 (1)148 
Adjusted beginning balance$3,923 $53 $3,976 $3,449 $54 $3,503 
Assessments288 1 289 341 1 342 
Excess benefits paid(413)— (413)(457)— (457)
Interest accrual78 1 79 61 1 62 
Other— — — (3)— (3)
Changes related to unrealized appreciation (depreciation) of investments40 — 40 11 — 11 
Balance, end of period$3,916 $55 $3,971 $3,402 $56 $3,458 
Less: Reinsurance recoverable(175)(55)(230)(172)— (172)
Balance, end of period, net of Reinsurance recoverable$3,741 $— $3,741 $3,230 $56 $3,286 
Weighted average duration of liability *
25.19.026.29.2
*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 AssessmentsInterest Accretion
Six Months Ended
June 30,		Six Months Ended
 June 30,
(in millions)2024202320242023
Life Insurance$500 $573 $78 $61 
Corporate and Other19 20 1 1 
Total$519 $593 $79 $62 
The following table presents the calculation of weighted average interest rate for the liability for universal life policies with secondary guarantees and similar features:
June 30,20242023
Life
Insurance		Corporate and OtherLife
Insurance		Corporate and Other
Weighted-average interest rate3.92 %4.20 %3.77 %4.20 %
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:
Six Months Ended June 30,
(in millions, except for attained age of contract holders)20242023
Account value$3,846$3,604
Net amount at risk$74,076$70,850
Average attained age of contract holders5453