Derivatives and Hedge Accounting (Tables)

6 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following table presents the notional amounts of our derivatives and the fair value of derivative assets and liabilities in the Condensed Consolidated Balance Sheets:


	June 30, 2024								December 31, 2023
	Gross Derivative Assets				Gross Derivative Liabilities				Gross Derivative Assets				Gross Derivative Liabilities
(in millions)	Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives designated as hedging instruments:(a)
Interest rate contracts	$	1,560	$	217	$	4,977	$	85	$	2,213	$	238	$	833	$	18
Foreign exchange contracts	5,607		447		1,957		55		2,918		354		4,829		164
Derivatives not designated as hedging instruments:(a)
Interest rate contracts	53,412		3,318		35,930		3,330		41,056		2,709		41,225		3,260
Foreign exchange contracts	9,509		585		5,108		280		6,260		586		7,878		399
Equity contracts	81,499		3,498		22,247		1,679		76,561		2,017		14,144		745
Credit contracts(b)	2,005		76		5		—		305		8		5		—
Other contracts(c)	43,737		13		47		—		44,640		13		47		2
Total derivatives, gross	$	197,329	$	8,154	$	70,271	$	5,429	$	173,953	$	5,925	$	68,961	$	4,588
Counterparty netting(d)			(4,940)				(4,940)				(3,646)				(3,646)
Cash collateral(e)			(2,723)				(305)				(1,886)				(801)
Total derivatives on Condensed Consolidated Balance Sheets(f)			$	491			$	184			$	393			$	141

(a)Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral.

(b)Includes written credit default swaps linked to certain actively traded indices. In the case of a credit event, the maximum future payment is limited to the constituent’s representation within the index.

(c)Consists primarily of stable value wraps and contracts with multiple underlying exposures.

(d)Represents netting of derivative exposures covered by a qualifying master netting agreement.

(e)Represents cash collateral posted and received that is eligible for netting.

(f)Freestanding derivatives only, excludes embedded derivatives. Derivative instrument assets and liabilities are recorded in Other assets and Other liabilities, respectively. The fair value of assets related to bifurcated embedded derivatives were both zero at June 30, 2024 and December 31, 2023. The fair value of liabilities related to bifurcated embedded derivatives was $11.1 billion and $10.2 billion at June 30, 2024 and December 31, 2023, respectively. A bifurcated embedded derivative is generally presented with the host contract in the Condensed Consolidated Balance Sheets. Embedded derivatives are primarily related to guarantee features in fixed index annuities, index universal life contracts and bonds available-for-sale, which include equity and interest rate components and the funds withheld arrangement with Fortitude Re. For additional information, see Note 7.

The following table presents the gross notional amounts of our derivatives and the fair value of derivative assets and liabilities with related parties and third parties:


	June 30, 2024								December 31, 2023
	Gross Derivative Assets				Gross Derivative Liabilities				Gross Derivative Assets				Gross Derivative Liabilities
(in millions)	Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value		Notional Amount		Fair Value
Total derivatives with related parties	$	3,362	$	65	$	1	$	—	$	53,163	$	622	$	5,720	$	232
Total derivatives with third parties	193,967		8,089		70,270		5,429		120,790		5,303		63,241		4,356
Total derivatives, gross	$	197,329	$	8,154	$	70,271	$	5,429	$	173,953	$	5,925	$	68,961	$	4,588

As of June 30, 2024 and December 31, 2023, the following amounts were recorded on the Condensed Consolidated Balance Sheets related to the carrying amount of the hedged assets (liabilities) and cumulative basis adjustments included in the carrying amount for fair value hedges:


	June 30, 2024				December 31, 2023
(in millions)	Carrying Amount of the Hedged Assets (Liabilities)		Cumulative Amount of Fair Value Hedging Adjustments Included In the Carrying Amount of the Hedged Assets Liabilities		Carrying Amount of the Hedged Assets (Liabilities)		Cumulative Amount of Fair Value Hedging Adjustments Included In the Carrying Amount of the Hedged Assets Liabilities
Balance sheet line item in which hedged item is recorded:
Fixed maturities, available-for-sale, at fair value	$	6,662	$	—	$	7,412	$	—
Commercial mortgage and other loans(a)	—		(22)		—		(24)
Policyholder contract deposits(b)	(7,422)		43		(4,756)		(31)

(a)This relates to hedge accounting that has been discontinued, but the respective loans are still held. The cumulative adjustment is being amortized into earnings over the remaining life of the loan.

(b)This relates to fair value hedges on GICs.

The following table presents the gain (loss) recognized in earnings on our derivative instruments in fair value hedging relationships in the Condensed Consolidated Statements of Income (Loss):


	Gains/(Losses) Recognized in Earnings for:
(in millions)	Hedging Derivatives(a)(c)		Excluded Components(b)(c)		Hedged Items		Net Impact
Three Months Ended June 30, 2024
Interest rate contracts:

Interest credited to policyholder account balances	$	(10)	$	—	$	4	$	(6)

Foreign exchange contracts:
Realized gains (losses)	$	25	$	53	$	(25)	$	53
Three Months Ended June 30, 2023
Interest rate contracts:

Interest credited to policyholder account balances	$	(43)	$	—	$	37	$	(6)

Foreign exchange contracts:
Realized gains (losses)	$	(79)	$	30	$	79	$	30



Six Months Ended June 30, 2024
Interest rate contracts:
Interest credited to policyholder account balances	$	(69)	$	—	$	69	$	—

Foreign exchange contracts:
Realized gains (losses)	$	169	$	42	$	(169)	$	42
Six Months Ended June 30, 2023
Interest rate contracts:

Interest credited to policyholder account balances	$	43	$	—	$	(51)	$	(8)

Foreign exchange contracts:
Realized gains (losses)	(162)		109		162		109

(a)Gains and losses on derivative instruments designated and qualifying in fair value hedges that are included in the assessment of hedge effectiveness.

(b)Includes gains and losses with related parties for the three and six months ended June 30, 2024 and 2023.

(c)Gains and losses on derivative instruments designated and qualifying in fair value hedges that are excluded from the assessment of hedge effectiveness and recognized in earnings on a mark-to-market basis.

The following table presents the effect of derivative instruments not designated as hedging instruments in the Condensed Consolidated Statements of Income (Loss):


	Gains (Losses) Recognized in Earnings
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2024		2023		2024		2023
By Derivative Type:
Interest rate contracts	$	3	$	(148)	$	(364)	$	(116)
Foreign exchange contracts	(60)		(123)		164		(190)
Equity contracts	14		(131)		203		(48)
Credit contracts	3		—		26		—
Other contracts	15		152		31		25
Embedded derivatives	(275)		(435)		(837)		(819)
Fortitude Re funds withheld embedded derivative	36		122		58		(903)
Total(a)	$	(264)	$	(563)	$	(719)	$	(2,051)
By Classification:
Policy fees	$	14	$	16	$	29	$	32
Net investment income (loss) - Fortitude Re funds withheld assets	6		—		11		(2)
Net realized gains (losses) - excluding Fortitude Re funds withheld assets(b)	(129)		9		169		(405)

Net realized losses on Fortitude Re funds withheld assets	(37)		(85)		(132)		(42)
Net realized gains (losses) on Fortitude Re funds withheld embedded derivatives	36		122		58		(903)
Policyholder benefits	—		(3)		—		—
Change in the Fair value of market risk benefits(c)	(154)		(622)		(854)		(731)
Total(a)	$	(264)	$	(563)	$	(719)	$	(2,051)

(a)Includes gains (losses) with related parties of $49 million and $(246) million for the three months ended June 30, 2024 and 2023, respectively, and $36 million and $(240) million for the six months ended June 30, 2024 and 2023, respectively.

(b)Includes a $5 million gain related to the sale of AIG Life U.K. reported in net (gain) loss on divestitures for the six months ended June 30, 2024. For further details on this transaction, see Note 1.

(c)This represents activity related to derivatives that economically hedged changes in fair value of certain MRBs.

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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