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SEGMENT REPORTING | 6 Months Ended
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Jun. 30, 2022
Disclosure of operating segments [abstract] |
SEGMENT REPORTING | SEGMENT REPORTING Effective in the second quarter of 2022, the Company's operations are organized into three operating segments: Reinsurance, PRT and Direct Insurance. These segments are regularly reviewed by the Company’s chief operating decision maker (“CODM”) for the purpose of allocating resources to the segment and to assess its performance. Prior to this, operations were attributable to two segments: Reinsurance and PRT. During the second quarter of 2022, the Company acquired American National and thus, reporting to the CODM was changed. The periods presented prior to the acquisition of American National reflect the Company's operations attributable to two segments. The key measure used by the CODM in assessing performance and in making resource allocation decisions is Distributable Operating Earnings ( "Distributable Operating Earnings", or "DOE"). Distributable Operating Earnings is calculated as net income excluding the impact of depreciation and amortization, deferred income taxes, net income from our equity accounted investments, mark-to-market on investments and derivatives, breakage and transaction costs, and is inclusive of our proportionate share of adjusted earnings from our investments in associates. DOE allows the CODM to evaluate the Company’s segments on the basis of return on invested capital generated by its operations and allows the Company to evaluate the performance of its segments The tables below provide each segment’s results in the format that the CODM reviews its reporting segments to make decisions and assess performance.
FOR THE THREE MONTHS ENDED JUN. 30 2022 US$ MILLIONS |  | Reinsurance 1 |  | Pension Risk Transfer 2 |  | Direct Insurance 3 |  | Total
Net premiums |  | $ | 221 |  |  | $ | 1,010 |  |  | $ | 223 |  |  | $ | 1,454 |
Other net investment income, including funds withheld |  | 49 |  |  | 24 |  |  | 101 |  |  | 174 |
Segment revenues |  | 270 |  |  | 1,034 |  |  | 324 |  |  | 1,628 |
Proportionate share of equity accounted investment adjusted earnings |  | 15 |  |  | — |  |  | — |  |  | 15 |
Benefits paid on insurance contracts, net |  | (69) |  |  | (34) |  |  | (181) |  |  | (284) |
Changes in insurance reserves, net |  | (210) |  |  | (992) |  |  | (1) |  |  | (1,203) |
Changes in deferred acquisition costs |  | 35 |  |  | — |  |  | 17 |  |  | 52 |
Interest credited to other policyholder account balances |  | — |  |  | — |  |  | (5) |  |  | (5) |
Other reinsurance expenses |  | (28) |  |  | — |  |  | (62) |  |  | (90) |
Operating expenses excluding transactions costs |  | (2) |  |  | (3) |  |  | (44) |  |  | (49) |
Interest expense |  | (5) |  |  | — |  |  | (5) |  |  | (10) |
Current income tax recovery |  | — |  |  | — |  |  | 1 |  |  | 1 |
Segment DOE |  | 6 |  |  | 5 |  |  | 44 |  |  | 55 |
Corporate expenses |  |  |  |  |  |  |  | (9) |
Interest expense on junior preferred shares |  |  |  |  |  |  |  | (11) |
Depreciation expense |  |  |  |  |  |  |  | (3) |
Income tax expenses |  |  |  |  |  |  |  | (7) |
Transaction costs |  |  |  |  |  |  |  | (20) |
Other mark-to-market on investments and derivatives |  |  |  |  |  |  |  | (38) |
Other corporate activities |  |  |  |  |  |  |  | — |
Less: Proportionate share of equity accounted investment adjusted earnings |  |  |  |  |  |  |  | (15) |
Add: Income from equity accounted investments |  |  |  |  |  |  |  | 49 |
Net income |  |  |  |  |  |  |  | $ | 1 |
1.Net premiums in our Reinsurance segment are attributed to insurance contracts assumed from other companies. 2.Net premiums in our PRT segment include $1 million of insurance contracts ceded to other counterparties. 3.Net premiums in our Direct Insurance segment include $81 million of insurance contracts ceded to other counterparties.
FOR THE SIX MONTHS ENDED JUN. 30 2022 US$ MILLIONS |  | Reinsurance 1 |  | Pension Risk Transfer 2 |  | Direct Insurance 3 |  | Total
Net premiums |  | $ | 426 |  |  | $ | 1,119 |  |  | $ | 223 |  |  | $ | 1,768 |
Other net investment income, including funds withheld |  | 86 |  |  | 58 |  |  | 101 |  |  | 245 |
Segment revenues |  | 512 |  |  | 1,177 |  |  | 324 |  |  | 2,013 |
Proportionate share of equity accounted investment adjusted earnings |  | 31 |  |  | — |  |  | — |  |  | 31 |
Benefits paid on insurance contracts, net |  | (173) |  |  | (64) |  |  | (181) |  |  | (418) |
Changes in insurance reserves, net |  | (346) |  |  | (1,101) |  |  | (1) |  |  | (1,448) |
Changes in deferred acquisition costs |  | 59 |  |  | — |  |  | 17 |  |  | 76 |
Interest credited to other policyholder account balances |  | — |  |  | — |  |  | (5) |  |  | (5) |
Other reinsurance expenses |  | (55) |  |  | — |  |  | (62) |  |  | (117) |
Operating expenses excluding transactions costs |  | (7) |  |  | (6) |  |  | (44) |  |  | (57) |
Interest expense |  | (11) |  |  | — |  |  | (5) |  |  | (16) |
Current income tax recovery |  | — |  |  | — |  |  | 1 |  |  | 1 |
Segment DOE |  | 10 |  |  | 6 |  |  | 44 |  |  | 60 |
Corporate expenses |  |  |  |  |  |  |  | (13) |
Interest expense on junior preferred shares |  |  |  |  |  |  |  | (11) |
Depreciation expense |  |  |  |  |  |  |  | (3) |
Income tax expenses |  |  |  |  |  |  |  | (12) |
Transaction costs |  |  |  |  |  |  |  | (24) |
Other mark-to-market on investments and derivatives |  |  |  |  |  |  |  | 90 |
Other corporate activities |  |  |  |  |  |  |  | 11 |
Less: Proportionate share of equity accounted investment adjusted earnings |  |  |  |  |  |  |  | (31) |
Add: Income from equity accounted investments |  |  |  |  |  |  |  | 62 |
Net income |  |  |  |  |  |  |  | $ | 129 |
1.Net premiums in our Reinsurance segment are attributed to insurance contracts assumed from other companies. 2.Net premiums in our PRT segment include $1 million of insurance contracts ceded to other counterparties. 3.Net premiums in our Direct Insurance segment include $81 million of insurance contracts ceded to other counterparties.
FOR THE THREE MONTHS ENDED JUN. 30 2021 US$ MILLIONS |  | Reinsurance |  | Pension Risk Transfer |  | Direct Insurance |  | Total
Net premiums |  | $ | — |  |  | $ | 50 |  |  | $ | — |  |  | $ | 50 |
Other net investment income, including funds withheld |  | — |  |  | 9 |  |  | — |  |  | 9 |
Segment revenues |  | — |  |  | 59 |  |  | — |  |  | 59 |
Benefits paid on insurance contracts, net |  | — |  |  | (15) |  |  | — |  |  | (15) |
Changes in insurance reserves, net |  | — |  |  | (39) |  |  | — |  |  | (39) |
Other reinsurance expenses |  | — |  |  | — |  |  | — |  |  | — |
Operating expenses excluding transactions costs |  | — |  |  | (6) |  |  | — |  |  | (6) |
Segment DOE |  | — |  |  | (1) |  |  | — |  |  | (1) |
Income tax expense |  |  |  |  |  |  |  | — |
Other mark-to-market on investments and derivatives |  |  |  |  |  |  |  | 3 |
Net income |  |  |  |  |  |  |  | $ | 2 |
FOR THE SIX MONTHS ENDED JUN. 30 2021 US$ MILLIONS |  | Reinsurance |  | Pension Risk Transfer |  | Direct Insurance |  | Total
Net premiums |  | $ | — |  |  | $ | 52 |  |  | $ | — |  |  | $ | 52 |
Other net investment income, including funds withheld |  | — |  |  | 20 |  |  | — |  |  | 20 |
Segment revenues |  | — |  |  | 72 |  |  | — |  |  | 72 |
Benefits paid on insurance contracts, net |  | — |  |  | (26) |  |  | — |  |  | (26) |
Changes in insurance reserves, net |  | — |  |  | (40) |  |  | — |  |  | (40) |
Other reinsurance expenses |  | — |  |  | — |  |  | — |  |  | — |
Operating expenses excluding transactions costs |  | — |  |  | (9) |  |  | — |  |  | (9) |
Segment DOE |  | — |  |  | (3) |  |  | — |  |  | (3) |
Income tax expense |  |  |  |  |  |  |  | — |
Transaction costs |  |  |  |  |  |  |  | 1 |
Other mark-to-market on investments and derivatives |  |  |  |  |  |  |  | 7 |
Net income |  |  |  |  |  |  |  | $ | 5 |
Our Reinsurance business is focused primarily on the reinsurance of annuity-based products and transacts with direct insurers and other reinsurers. For the purpose of monitoring segment performance and allocating resources between segments, the CODM monitors the assets, including investments accounted for using the equity method, liabilities and common equity attributable to each segment.
AS AT JUN.30, 2022 US$ MILLIONS |  | Reinsurance |  | Pension Risk Transfer |  | Direct Insurance |  | Other 1 |  | Total
Assets |  | $ | 7,782 |  |  | $ | 3,119 |  |  | $ | 28,912 |  |  | $ | 1,206 |  |  | $ | 41,019 |
Liabilities |  | 6,806 |  |  | 2,828 |  |  | 25,359 |  |  | 4,718 |  |  | 39,711 |
Equity |  | 976 |  |  | 291 |  |  | 3,553 |  |  | (3,512) |  |  | 1,308 |
AS AT DEC.31, 2021 US$ MILLIONS |  | Reinsurance |  | Pension Risk Transfer |  | Direct Insurance |  | Other 1 |  | Total
Assets |  | $ | 7,921 |  |  | $ | 2,473 |  |  | $ | — |  |  | $ | 1,099 |  |  | $ | 11,493 |
Liabilities |  | 6,803 |  |  | 2,269 |  |  | — |  |  | 986 |  |  | 10,058 |
Equity |  | 1,118 |  |  | 204 |  |  | — |  |  | 113 |  |  | 1,435 |
1 .Other represents assets, liabilities and common equity attributable to other activities that do not constitute a segment.

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