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NET INVESTMENT-RELATED GAINS (LOSSES) - INSURANCE
 12 Months Ended
Dec. 31, 2022
Insurance [Abstract]  
NET INVESTMENT-RELATED GAINS (LOSSES) - INSURANCE NET INVESTMENT INCOME - INSURANCE
Net investment income for Global Atlantic is comprised primarily of interest income, including amortization of premiums and accretion of discounts, based on yields that change due to expectations in projected cash flows, dividend income from common and preferred stock, earnings from investments accounted for under equity method accounting, and lease income on other investments.
The components of net investment income were as follows:
Years Ended December 31,
20222021
Fixed maturity securities – interest and other income$3,257,226 $2,262,326 
Mortgage and other loan receivables1,572,308 952,951 
Investments in transportation and other leased assets281,941 208,057 
Investments in renewable energy206,566 142,095 
Investments in real estate116,975 16,101 
Short-term and other investment income119,476 54,785 
Income assumed from funds withheld receivable at interest91,608 79,989 
Policy loans31,433 35,411 
Equity securities – dividends and other income— 1,492 
Income ceded to funds withheld payable at interest(954,763)(461,505)
Gross investment income4,722,770 3,291,702 
Less investment expenses:
Investment management and administration364,609 272,321 
Transportation and renewable energy asset depreciation and maintenance215,672 171,306 
Interest expense on derivative collateral and repurchase agreements24,243 2,452 
Net investment income$4,118,246 $2,845,623 
NET INVESTMENT-RELATED GAINS (LOSSES) - INSURANCE
Net investment-related gains (losses) from insurance operations primarily consists of (i) realized gains and (losses) from the disposal of investments, (ii) unrealized gains and (losses) from investments held for trading, equity securities, real estate investments accounted for under investment company accounting, and investments with fair value remeasurements recognized in earnings as a result of the election of a fair-value option, (iii) unrealized gains and (losses) on funds withheld at interest, (iv) unrealized gains and (losses) from derivatives not designated in an hedging relationship, and (v) allowances for credit losses, and other impairments of investments.
Net investment-related gains (losses) were as follows:
Years Ended December 31,
20222021
Realized gains on equity investments$— $511,247 
Realized losses on available-for-sale fixed maturity debt securities(559,987)(201,411)
Credit loss allowances on available-for-sale securities(57,411)25,316 
Credit loss allowances on mortgage and other loan receivables(369,296)(252,979)
Allowances on unfunded commitments(34,112)(21,675)
Unrealized losses on fixed maturity securities classified as trading(2,603,874)(118,714)
Unrealized gains on investments recognized under the fair-value option60,237 39,758 
Unrealized (losses) gains on real estate investments recognized at fair value under investment company accounting(42,870)35,418 
Net gains on derivative instruments2,346,747 222,745 
Realized gains (losses) on funds withheld at interest payable portfolio38,074 (30,015)
Realized (losses) gains on funds withheld at interest receivable portfolio(3,176)12,418 
Other realized losses(92,822)(18,355)
Net investment-related (losses) gains$(1,318,490)$203,753 
Allowance for credit losses
Available-for-sale fixed maturity securities
The table below presents a roll-forward of the allowance for credit losses recognized for fixed maturity securities held by Global Atlantic:
Year Ended December 31, 2022Year Ended December 31, 2021
CorporateStructuredTotalCorporateStructuredTotal
Balance, as of beginning of period(1)
$3,238 $84,895 $88,133 $— $120,895 $120,895 
Initial impairments for credit losses recognized on securities not previously impaired791 68,943 69,734 3,238 55,271 58,509 
Initial credit loss allowance recognized on purchased credit deteriorated ("PCD") securities— 707 707 — 8,072 8,072 
Accretion of initial credit loss allowance on PCD securities— 1,847 1,847 — 2,782 2,782 
Reductions due to sales (or maturities, pay downs or prepayments) during the period of securities previously identified as credit impaired— (11,925)(11,925)— (18,300)(18,300)
Net additions / reductions for securities previously impaired5,110 (17,433)(12,323)— (83,825)(83,825)
Balances charged off(7,841)— (7,841)— — — 
Balance, as of end of period$1,298 $127,034 $128,332 $3,238 $84,895 $88,133 
(1)For the year ended December 31, 2021, includes securities designated as purchased credit impaired as of the time of the acquisition of Global Atlantic.
Mortgage and other loan receivables
Changes in the allowance for credit losses on mortgage and other loan receivables held by Global Atlantic are summarized below:
Year Ended December 31, 2022Year Ended December 31, 2021
Commercial Mortgage LoansResidential Mortgage LoansConsumer and Other Loan ReceivablesTotalCommercial Mortgage LoansResidential Mortgage LoansConsumer and Other Loan ReceivablesTotal
Balance, as of beginning of period(1)
$65,970 $72,082 $236,025 $374,077 $58,203 $62,056 $— $120,259 
Net provision (release)161,345 74,798 133,153 369,296 7,767 10,024 235,188 252,979 
Loans purchased with credit deterioration— — — — — 799 837 1,636 
Balances charged off, net of recoveries(2)
— (21,055)(162,090)(183,145)— (797)— (797)
Balance, as of end of period$227,315 $125,825 $207,088 $560,228 $65,970 $72,082 $236,025 $374,077 
(1)For the year ended December 31, 2021, includes loans designated as purchased credit deteriorated as of the time of the acquisition of Global Atlantic.
(2)Consumer and other loan receivables included $12.8 million of recoveries for the year ended December 31, 2022.
Proceeds and gross gains and losses from voluntary sales
The proceeds from voluntary sales and the gross gains and losses on those sales of available-for-sale ("AFS") fixed maturity securities were as follows:
Years Ended December 31,
20222021
AFS fixed maturity securities:
Proceeds from voluntary sales$12,050,106 $17,946,293 
Gross gains21,567 45,532 
Gross losses(569,706)(187,619)
INSURANCE INTANGIBLES, UNEARNED REVENUE RESERVES AND UNEARNED FRONT-END LOADS
The following reflects the changes to the DAC asset:
Years Ended December 31,
20222021
Balance, as of beginning of period
$447,886 $— 
Deferrals486,992 459,781 
Amortized to expense during the period(1)
(84,445)(23,492)
Adjustment for unrealized investment-related (gains) losses during the period(21,435)11,597 
Balance, as of end of period$828,998 $447,886 
(1)These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.
The following reflects the changes to the VOBA asset:
Years Ended December 31,
20222021
Balance, as of beginning of period
$959,263 $1,024,520 
Amortized to expense during the period(1)
(65,580)(65,257)
Balance, as of end of period$893,683 $959,263 
(1)These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.
The following reflects the changes to the negative VOBA liability:
Years Ended December 31,
20222021
Balance, as of beginning of period
$1,118,716 $1,273,414 
Amortized to expense during the period(1)
(139,035)(154,698)
Balance, as of end of period$979,681 $1,118,716 
(1)These amounts are reported within amortization of policy acquisition costs in the consolidated statements of operations.

Estimated future amortization of VOBA and Negative VOBA as of December 31, 2022 is as follows:
YearsVOBANegative VOBATotal, net
2023$59,826 $(117,695)$(57,869)
202456,255 (95,547)(39,292)
202553,033 (78,281)(25,248)
202649,998 (64,462)(14,464)
202747,135 (54,789)(7,654)
2028 and thereafter627,436 (568,907)58,529 
Total$893,683 $(979,681)$(85,998)
The following reflects the changes to the URR and UFEL:
Years Ended December 31,
20222021
Balance, as of beginning of period
$33,604 $— 
Deferrals69,548 57,649 
Amortized to expense during the period(1)
(23,886)(12,247)
Adjustment for unrealized investment-related gains during the period(79,266)(11,798)
Balance, as of end of period$— $33,604 
(1)These amounts are reported within policy fees in the consolidated statements of operations.
POLICY LIABILITIES
Policy liabilities by product were as follows as of December 31, 2022 and 2021:
December 31, 2022December 31, 2021
Fixed-rate annuity(1)
$68,718,308 $61,827,855 
Fixed-indexed annuity31,738,016 27,935,000 
Indexed universal life13,623,263 12,133,840 
Other life insurance10,373,376 11,840,323 
Funding agreements7,535,489 6,014,553 
Preneed2,858,628 2,897,018 
Variable annuity5,311,294 2,469,759 
Closed blocks1,017,632 1,351,601 
Other47,281 50,095 
Total$141,223,287 $126,520,044 
(1)Policy liabilities as of December 31, 2022 and 2021 include $7.0 billion and $7.6 billion assumed disability income insurance of which 98% and 97% are comprised of policies in claim payout status, generally for the lifetime of the insured, and the remaining 2% and 3% comprised of an active life reserve where the Global Atlantic has retroceded the morbidity risk, respectively.

Guaranteed benefits
Guaranteed minimum death benefits
Certain variable annuity and fixed-indexed annuity contracts contain GMDB features that provide a guarantee that the benefit received at death will be no less than a prescribed minimum amount, even if the account balance is reduced to zero. This amount is based on either the net deposits paid into the contract, the net deposits accumulated at a specified rate, the highest historical account value on a contract anniversary, or sometimes a combination of these values. If the GMDB is higher than the current account value at the time of death, Global Atlantic pays a benefit equal to the difference.
The following table shows the balance of the GMDB reserves (as well as a rider for a long-term care benefit) reported in contractholder deposit funds and other policy liabilities in the consolidated statements of financial condition. The GMDB exposure includes reinsurance assumed.
Years Ended December 31,
20222021
Balance, as of beginning of year$119,705 $110,243 
Expense incurred71,687 28,352 
Claims paid(27,832)(15,011)
Reinsurance premium paid(18,101)(13,267)
Claims ceded to reinsurers15,549 9,388 
Balance, as of end of year$161,008 $119,705 
The reserve is calculated by estimating the present value of total expected excess benefit payments over the life of the contract divided by the present value of total expected assessments over the life of the contract, or the “benefit ratio,” multiplied by the cumulative assessments as of the reporting date, less cumulative benefit payments, plus interest.
The GMDB reserve methodology varies by block. For the legacy variable annuity block, a fair value election of the entire contract was made at February 1, 2021 as part of the GA Acquisition. The fair value is calculated using 1,000 risk neutral scenarios and discounted using U.S. Treasury rates plus an adjustment for own company credit risk. For the non-legacy variable annuity block, a Gross Premium Valuation (GPV) approach is used. The GPV is based on the present value of excess GMDB claims less the present value of a portion of the GMDB rider fees. Both the excess claims and rider fees are computed over 1,000 real world scenarios, and an average across all scenarios is calculated.
The following information relates to the reserving methodology and assumptions for GMDB as of December 31, 2022 and 2021:
•The GPV uses stochastic scenarios consistent with the American Academy of Actuaries VM21 paths. Equity volatility is also consistent with the VM21 paths, with lower volatility modelled for the volatility controlled funds (as determined by a third-party proprietary model);
•The projection of equity index returns for the legacy Fair Value variable annuity blocks are determined by a third-party proprietary model. Equity volatilities are also determined by the same third-party proprietary model;
•The mortality assumptions are factors of an industry standard mortality table based on company experience varying by age and gender, with 20 years of mortality improvements; and,
•The partial withdrawal rate assumption varies by tax-qualified status and attained age. For the years ended December 31, 2022 and 2021, total projected partial withdrawals were from 3.0% to 7.7% and 3.0% to 8.1%, respectively.
The following table presents the account value, net amount at risk and average attained age of underlying variable annuity contractholders for guarantees in the event of death as of December 31, 2022 and 2021. The net amount at risk is the death benefit coverage in-force or the amount that Global Atlantic would have to pay if all variable annuity contractholders had died as of the specified date, and represents the excess of the guaranteed benefit over the account value.
December 31, 2022December 31, 2021
($ in thousands, except for contractholders information)
Net deposits paid
Account value$3,516,540 $4,615,409 
Net amount at risk$274,144 $95,467 
Average attained age of contractholders6969
Ratchet (highest historical account value at specified anniversary dates)
Account value$575,999 $512,683 
Net amount at risk$41,145 $15,827 
Average attained age of contractholders7172
Roll-up (net deposits accumulated at a specified rate)
Account value$— $11,053 
Net amount at risk$— $1,801 
Average attained age of contractholders084
Higher of ratchet or roll-up
Account value$1,259,431 $1,694,832 
Net amount at risk$485,094 $278,424 
Average attained age of contractholders7777
Total of guaranteed benefits categorized above
Account value$5,351,970 $6,833,977 
Net amount at risk$800,383 $391,519 
Average attained age of contractholders (weighted by account value)7171
Number of contractholders71,944 77,059 
Guaranteed minimum withdrawal benefits
Certain fixed-indexed and variable annuity contracts are issued with a guaranteed minimum withdrawal feature. GMWB are an optional benefit where a contractholder is entitled to withdraw up to a specified amount of their benefit base each year.
The feature provides annuity policyholders with a minimum guaranteed stream of income for life, once the option is elected. The annual income amount is based on an annual withdrawal percentage multiplied by the contractual benefit base. The benefit base is defined in the contract and is generally the initial premium, reduced by any partial withdrawals, increased by a contractually defined percentage. Benefit payments are first deducted from the contractual account value. Excess guaranteed benefits are defined as the benefits paid once the underlying account value has reached zero.
The ultimate cost of these benefits will depend on the level of market returns and the level of contractual guarantees, as well as policyholder behavior, including surrenders, withdrawals and benefit utilization. For fixed-indexed annuity products, costs also include certain non-guaranteed terms that impact the ultimate cost, such as caps on crediting rates that can, at Global Atlantic’s discretion, reset annually.
Reserves for the fixed indexed annuity GMWB are calculated by estimating the present value of total expected (excess) benefit payments over the life of the contract divided by the present value of total expected assessments over the life of the contract, or the "benefit ratio", and multiplying this ratio by the cumulative assessments recorded from the contract inception through the balance sheet date less cumulative benefit payments plus interest on reserves.
The variable annuity GMWB meets the criteria for an embedded derivative, which is required to be measured at fair value. Refer to "Variable annuities with guaranteed minimum withdrawal benefits" below for more guidance on how these reserves are valued.
The following table shows the balance of the GMWB reserves reported in contractholder deposit funds and other policyholder liabilities in the consolidated balance sheets:
Years Ended
December 31, 2022December 31, 2021
Balance, as of beginning of year$1,010,846 $872,914 
Expense incurred171,603 137,932 
Balance, as of end of year$1,182,449 $1,010,846 
The following table presents the account value, net amount at risk and number of contractholders for annuity contracts with guaranteed withdrawal benefits as of December 31, 2022 and 2021:
December 31, 2022December 31, 2021
($ in thousands, except for contractholders information)
Account value$10,444,227 $11,057,318 
Net amount at risk$4,761,980 $3,655,914 
Number of contractholders80,559 80,955 
Contractholder deposit funds with embedded derivatives
The following table shows the balances of the account value and embedded derivatives reported in policy liabilities in the consolidated statements of financial condition:
December 31, 2022December 31, 2021
Account value$35,615,978 $28,537,784 
Embedded derivatives$2,193,226 $2,541,225 
The following paragraphs describe the products presented within the above table along with the underlying methodology used to calculate the embedded derivatives.
Global Atlantic’s fixed-indexed annuity, indexed universal life and variable annuity products contain equity-indexed features which are considered embedded derivatives and required to be measured at fair value. The fair value of the equity-indexed embedded derivative is calculated as the present value of future projected benefits in excess of the projected guaranteed benefits, using an option budget as the indexed account value growth rate, for fixed-index annuity and indexed universal life products, and the present value of future projected benefits in excess of the future allocated assessments for variable annuity products. In addition, the fair value of the embedded derivative is reduced to reflect the risk of nonperformance on Global Atlantic’s obligation, referred to as nonperformance risk. Changes in interest rates, future index credits, nonperformance risk, projected withdrawal and surrender activity, and mortality can have a significant impact on the value of the embedded derivative.
Fixed-indexed annuities
Fixed-indexed annuity contracts allow the policyholder to elect a fixed interest rate return or a market indexed strategy where interest credited is based on the performance of an index, such as S&P 500 or other indices. The equity market strategy is an embedded derivative, similar to a call option. The fair value of the embedded derivative is computed as the present value of benefits attributable to the excess of the projected policy contract values over the projected minimum guaranteed contract values. The projections of policy contract values are based on assumptions for future policy growth, which include assumptions for expected index credits, future equity option costs, volatility, interest rates and policyholder behavior. The projections of minimum guaranteed contract values include the same assumptions for policyholder behavior as are used to project policy contract values. The embedded derivative cash flows are discounted using a risk free interest rate increased by a non-performance risk spread tied to Global Atlantic’s own credit rating.
Indexed universal life
Indexed universal life contracts allow a policyholder’s account value growth to be indexed to certain equity indices, which result in an embedded derivative similar to a call option. The embedded derivative related to the index is bifurcated from the account value and measured at fair value. The valuation of the embedded derivative is the present value of future projected benefits in excess of the projected guaranteed benefits, using the option budget as the indexed account value growth rate and the guaranteed interest rate as the guaranteed account value growth rate. Present values are based on discount rate curves determined at the valuation date/issue date as well as assumed lapse and mortality rates. The discount rate equals the forecast treasury rate plus a non-performance risk spread tied to Global Atlantic’s own credit rating. Changes in discount rates and other assumptions such as spreads and/or option budgets can have a substantial impact on the embedded derivative.
Variable annuities with guaranteed minimum withdrawal benefits
Global Atlantic has issued variable annuity contracts with a GMWB feature. The GMWB feature provides annuity contractholders with a guaranteed stream of payments for life, once income is activated. The annual income amount is based on a percentage multiplied by the contractual benefit base. The benefit base is defined in the contract and may incorporate various combinations of ratchet and roll-up features. Benefit payments are first deducted from the account value. Excess guaranteed benefits are defined as all GMWB paid once the underlying account value has reached zero. The GMWB is considered an embedded derivative and measured at fair value.
The fair value calculation for the embedded derivative includes the following considerations:
•The reserve is based on projections run under a large number of stochastic scenarios;
•All underlying scenarios are generated using risk neutral assumptions;
•The mean of the projected returns is based on a risk free rate;
•Volatilities are based on market implied volatilities; and,
•The discount rate for this fair value calculation equals the risk free rate plus a spread consistent with Global Atlantic’s risk of non-performance on its obligations, which is referred to as its own credit risk.
Universal life with no-lapse guarantee
Global Atlantic has certain in-force universal life contracts which provide a secondary guarantee, or “no-lapse guarantee,” to the policyholder. The policy can remain in-force, even if the policyholder’s account value is zero, as long as contractual secondary guarantee requirements have been met. The primary risk associated with these guarantees are that the premium collected under these policies, together with the investment return earned on that premium, is ultimately insufficient to pay the policyholder’s benefits and the expenses associated with issuing and administering these policies. Global Atlantic holds an additional reserve in connection with these guarantees. The change in the reserve is included in policy benefits and claims in the consolidated statements of income.
The additional reserve related to universal life products with secondary guarantees is calculated using methods similar to those described above under “Guaranteed minimum death benefits.” The costs related to these secondary guarantees are recognized over the life of the contracts through the accrual and subsequent release of a reserve which is revalued each period. The reserve is determined for any point in time equal to the accumulated value of the assessments since inception times the benefit ratio less the accumulated value of death benefits paid since inception. The benefit ratio is the present value of total expected benefit payments over the life of the contract divided by the present value of total expected assessments over the life of the contract. Generally, total expected excess benefit payments are the aggregate of death claims after the policyholder account value is exhausted. The exception is when the cost of insurance charges is insufficient to produce consistently positive earnings in the future. In this case, all death benefits are deemed to be excess benefits. The reserves for universal life no-lapse guarantees were $4.9 billion and $4.6 billion as of December 31, 2022 and 2021, respectively.
Preneed reserves
Preneed life insurance pays a death benefit that helps cover funeral costs according to a prearranged funeral agreement. A liability for preneed policyholder benefits is established in an amount determined by the account or contract balance that accrues to the benefit of the policyholder. Reserves on preneed business are based on cash surrender values of issued policies. An additional insurance liability is established as of each reporting date where the total liability is equal to the present value of projected future benefits and maintenance expenses, including discretionary death benefits to be credited to policies using current period discretionary death benefit crediting rates under current assumptions. We have the discretion to adjust these death benefit crediting rates up or down. Global Atlantic has also issued preneed insurance contracts with crediting rates tied to inflation as measured by the Consumer Price Index or other indices. For these contracts, future death benefit growth is based on the expected yield curve on the swaps hedging the reserves.
These crediting rates utilize the following assumptions:
•Credited interest rate: Based on the non-forfeiture rates of 3.0% to 5.5%.
•Mortality: Based on Global Atlantic’s experience.
•Death benefit inflation: Based on the discretionary death benefit inflation rates in effect at the current reporting date. To mitigate the risk that a policy will not keep pace with increases in funeral prices or remain competitive, Global Atlantic has the discretion to increase or decrease the death benefit. Such increases or decreases are considered on a quarterly basis and vary by plan.
•Maintenance expenses: Based on Global Atlantic’s experience and expressed as a cost per paid-up policy and a cost per premium-paying policy.
The earned interest rate used to calculate estimated gross profits is based on the asset yield.
Closed blocks
Summarized financial information of Global Atlantic’s closed blocks is as follows:
December 31, 2022December 31, 2021
Assets
Total investments$1,365 $2,964 
Cash and cash equivalents4,007 2,904 
Accrued investment income44 35 
Reinsurance recoverable981,775 1,293,791 
Deferred income taxes43,766 59,902 
Total assets1,030,957 1,359,596 
Liabilities
Future policy benefits894,117 1,226,231 
Outstanding claims27,912 28,655 
Contractholder deposit funds and other liabilities1,010 1,074 
Policyholder dividend obligation at fair value(1)
79,575 81,280 
Policyholder dividends payable at fair value(1)
10,013 11,096 
Total policy liabilities1,012,627 1,348,336 
Accrued expenses and other liabilities12,803 10,412 
Total liabilities1,025,430 1,358,748 
Excess of closed block liabilities over assets designated to the closed blocks and maximum future earnings to be recognized from closed block assets and liabilities$(5,527)$(848)
(1)Included within contractholder deposit funds and other policyholder liabilities in the consolidated balance sheets.

Years Ended
December 31, 2022December 31, 2021
Revenues
Premiums and other income$(436)$660 
Net investment expense164 (28)
Total revenues(272)632 
Benefits and expenses
Policy benefits(12,141)(5,652)
Other expenses251 8 
Total benefits and expenses(11,890)(5,644)
Net contribution from the closed blocks11,618 6,276 
Income tax (benefit) expense16,185 (3,026)
Net (loss) income$(4,567)$9,302 
Many expenses related to the closed block operations are charged to operations outside the closed blocks; accordingly, the contribution from the closed blocks does not represent the actual profitability of the closed block operations.
The closed blocks of business represent policies acquired through acquisition, which were valued at fair value as of the acquisition date.