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INVESTMENTS | 6 Months Ended
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Jun. 30, 2025
Investments [Abstract] |
INVESTMENTS | INVESTMENTS Investment Holdings The amortized cost and allowance for credit losses for the Company's investments in fixed maturity securities and the fair values of these investments as well as the fair value of the Company's investments in equity securities are shown in the following tables.
| June 30, 2025
(In millions) | Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value
Securities available-for-sale, carried at fair value through other comprehensive income: |  |  |  |  |
Fixed maturity securities: |  |  |  |  |
Yen-denominated: |  |  |  |  |
Japan government and agencies | $ | 20,289 |  | $ | 0 |  | $ | 174 |  | $ | 2,935 |  | $ | 17,528 |
Municipalities | 950 |  | 0 |  | 49 |  | 118 |  | 881 |
Mortgage- and asset-backed securities | 338 |  | 0 |  | 3 |  | 30 |  | 311 |
Public utilities | 2,861 |  | 0 |  | 165 |  | 183 |  | 2,843 |
Sovereign and supranational | 359 |  | 0 |  | 9 |  | 11 |  | 357 |
Banks/financial institutions | 5,771 |  | 0 |  | 214 |  | 420 |  | 5,565 |
Other corporate | 5,755 |  | 0 |  | 445 |  | 438 |  | 5,762 |
Total yen-denominated | 36,323 |  | 0 |  | 1,059 |  | 4,135 |  | 33,247 |
U.S. dollar-denominated: |  |  |  |  |
U.S. government and agencies | 226 |  | 0 |  | 1 |  | 2 |  | 225 |
Municipalities | 1,212 |  | 0 |  | 66 |  | 85 |  | 1,193 |
Mortgage- and asset-backed securities | 4,065 |  | 0 |  | 171 |  | 69 |  | 4,167 |
Public utilities | 4,378 |  | 0 |  | 350 |  | 155 |  | 4,573 |
Sovereign and supranational | 58 |  | 0 |  | 20 |  | 0 |  | 78 |
Banks/financial institutions | 3,930 |  | 0 |  | 371 |  | 39 |  | 4,262 |
Other corporate | 19,708 |  | 0 |  | 2,031 |  | 738 |  | 21,001 |
Total U.S. dollar-denominated | 33,577 |  | 0 |  | 3,010 |  | 1,088 |  | 35,499 |
Other currencies: |  |  |  |  |
Mortgage- and asset-backed securities | 47 |  | 0 |  | 1 |  | 0 |  | 48 |
Public utilities | 57 |  | 0 |  | 1 |  | 0 |  | 58 |
Other corporate | 26 |  | 0 |  | 1 |  | 0 |  | 27 |
Total other currencies | 130 |  | 0 |  | 3 |  | 0 |  | 133 |
Total securities available-for-sale | $ | 70,030 |  | $ | 0 |  | $ | 4,072 |  | $ | 5,223 |  | $ | 68,879 |
| December 31, 2024
(In millions) | Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value
Securities available-for-sale, carried at fair value through other comprehensive income: |  |  |  |  |
Fixed maturity securities: |  |  |  |  |
Yen-denominated: |  |  |  |  |
Japan government and agencies | $ | 19,409 |  | $ | 0 |  | $ | 465 |  | $ | 2,234 |  | $ | 17,640 |
Municipalities | 869 |  | 0 |  | 65 |  | 79 |  | 855 |
Mortgage- and asset-backed securities | 327 |  | 0 |  | 4 |  | 23 |  | 308 |
Public utilities | 2,746 |  | 0 |  | 202 |  | 108 |  | 2,840 |
Sovereign and supranational | 330 |  | 0 |  | 16 |  | 8 |  | 338 |
Banks/financial institutions | 5,376 |  | 0 |  | 267 |  | 342 |  | 5,301 |
Other corporate | 5,329 |  | 0 |  | 568 |  | 305 |  | 5,592 |
Total yen-denominated | 34,386 |  | 0 |  | 1,587 |  | 3,099 |  | 32,874 |
U.S. dollar-denominated: |  |  |  |  |
U.S. government and agencies | 208 |  | 0 |  | 1 |  | 3 |  | 206 |
Municipalities | 1,167 |  | 0 |  | 65 |  | 53 |  | 1,179 |
Mortgage- and asset-backed securities | 2,987 |  | 0 |  | 302 |  | 34 |  | 3,255 |
Public utilities | 3,938 |  | 0 |  | 418 |  | 151 |  | 4,205 |
Sovereign and supranational | 57 |  | 0 |  | 21 |  | 0 |  | 78 |
Banks/financial institutions | 3,271 |  | 0 |  | 420 |  | 36 |  | 3,655 |
Other corporate | 18,050 |  | 0 |  | 2,493 |  | 752 |  | 19,791 |
Total U.S. dollar-denominated | 29,678 |  | 0 |  | 3,720 |  | 1,029 |  | 32,369 |
Other currencies: |  |  |  |  |
Other corporate | 25 |  | 0 |  | 1 |  | 0 |  | 26 |
Total other currencies | 25 |  | 0 |  | 1 |  | 0 |  | 26 |
Total securities available-for-sale | $ | 64,089 |  | $ | 0 |  | $ | 5,308 |  | $ | 4,128 |  | $ | 65,269 |
| June 30, 2025
(In millions) | Amortized Cost | Allowance for Credit Losses | Net Carrying Amount | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value
Securities held-to-maturity, carried at amortized cost: |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |
Japan government and agencies | $ | 16,720 |  | $ | 2 |  | $ | 16,718 |  | $ | 414 |  | $ | 272 |  | $ | 16,860 |
Municipalities | 255 |  | 0 |  | 255 |  | 10 |  | 0 |  | 265 |
Public utilities | 35 |  | 0 |  | 35 |  | 0 |  | 1 |  | 34 |
Sovereign and supranational | 412 |  | 3 |  | 409 |  | 21 |  | 0 |  | 430 |
Other corporate | 17 |  | 0 |  | 17 |  | 1 |  | 0 |  | 18 |
Total yen-denominated | 17,439 |  | 5 |  | 17,434 |  | 446 |  | 273 |  | 17,607 |
Total securities held-to-maturity | $ | 17,439 |  | $ | 5 |  | $ | 17,434 |  | $ | 446 |  | $ | 273 |  | $ | 17,607 |
| December 31, 2024
(In millions) | Amortized Cost | Allowance for Credit Losses | Net Carrying Amount | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value
Securities held-to-maturity, carried at amortized cost: |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |
Yen-denominated: |  |  |  |  |  |
Japan government and agencies | $ | 15,311 |  | $ | 2 |  | $ | 15,309 |  | $ | 759 |  | $ | 9 |  | $ | 16,059 |
Municipalities | 235 |  | 0 |  | 235 |  | 22 |  | 0 |  | 257 |
Public utilities | 32 |  | 0 |  | 32 |  | 1 |  | 0 |  | 33 |
Sovereign and supranational | 377 |  | 3 |  | 374 |  | 31 |  | 0 |  | 405 |
Other corporate | 16 |  | 0 |  | 16 |  | 2 |  | 0 |  | 18 |
Total yen-denominated | 15,971 |  | 5 |  | 15,966 |  | 815 |  | 9 |  | 16,772 |
Total securities held-to-maturity | $ | 15,971 |  | $ | 5 |  | $ | 15,966 |  | $ | 815 |  | $ | 9 |  | $ | 16,772 |
| June 30, 2025 |  | December 31, 2024
(In millions) | Fair Value |  | Fair Value
Equity securities, carried at fair value through net earnings: |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |
Yen-denominated |  | $ | 538 |  |  |  |  | $ | 484 |  |
U.S. dollar-denominated |  | 344 |  |  |  |  | 312 |  |
Total equity securities |  | $ | 882 |  |  |  |  | $ | 796 |  |
The methods of determining the fair values of the Company's investments in fixed maturity securities and equity securities are described in Note 5. During the first six months of 2025 and 2024, respectively, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category. Contractual and Economic Maturities The contractual and economic maturities of the Company's investments in fixed maturity securities at June 30, 2025, were as follows:
(In millions) | Amortized Cost (1) |  | Fair Value |
Available-for-sale: |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 1,382 |  |  |  |  | $ | 1,481 |  |  |
Due after one year through five years |  | 8,612 |  |  |  |  | 9,422 |  |  |
Due after five years through 10 years |  | 16,665 |  |  |  |  | 17,423 |  |  |
Due after 10 years |  | 38,921 |  |  |  |  | 36,027 |  |  |
Mortgage- and asset-backed securities |  | 4,450 |  |  |  |  | 4,526 |  |  |
Total fixed maturity securities available-for-sale |  | $ | 70,030 |  |  |  |  | $ | 68,879 |  |  |
Held-to-maturity: |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 35 |  |  |  |  | $ | 35 |  |  |
Due after one year through five years |  | 45 |  |  |  |  | 46 |  |  |
Due after five years through 10 years |  | 9,256 |  |  |  |  | 9,647 |  |  |
Due after 10 years |  | 8,098 |  |  |  |  | 7,879 |  |  |
Total fixed maturity securities held-to-maturity |  | $ | 17,434 |  |  |  |  | $ | 17,607 |  |  |
(1) Net of allowance for credit losses Economic maturities are used for certain debt instruments with no stated maturity where the expected maturity date is based on the combination of features in the financial instrument such as the right to call or prepay obligations or changes in coupon rates. Investment Concentrations The Company's process for investing in credit-related investments begins with an independent approach to underwriting each issuer's fundamental credit quality. The Company evaluates independently those factors that it believes could influence an issuer's ability to make payments under the contractual terms of the Company's instruments. This includes a thorough analysis of a variety of items including the issuer's country of domicile (including political, legal, and financial considerations); the industry in which the issuer competes (with an analysis of industry structure, end-market dynamics, and regulation); company specific issues (such as management, assets, earnings, cash generation, and capital needs); and contractual provisions of the instrument (such as financial covenants and position in the capital structure). The Company further evaluates the investment considering broad business and portfolio management objectives, including asset/liability needs, portfolio diversification, and expected income. Investment exposures that individually exceeded 10% of shareholders' equity were as follows:
| June 30, 2025 |  | December 31, 2024
(In millions) | Credit Rating |  | Amortized Cost |  | Fair Value |  | Credit Rating |  | Amortized Cost |  | Fair Value
Japan National Government(1) | A+ |  | $36,029 |  | $33,508 |  | A+ |  | $33,822 |  | $32,844
(1) Japan Government Bonds (JGBs) or JGB-backed securities Net Investment Gains and Losses Information regarding pretax net gains and losses from investments is as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30, |
(In millions) | 2025 |  | 2024 |  | 2025 |  | 2024 |
Net investment gains (losses): |  |  |  |  |  |  |  |
Sales and redemptions: |  |  |  |  |  |  |  |
Fixed maturity securities available-for-sale: |  |  |  |  |  |  |  |
Gross gains from sales | $ | 5 |  |  | $ | 6 |  |  | $ | 119 |  |  | $ | 40 |  |
Gross losses from sales | (98) |  |  | (27) |  |  | (333) |  |  | (309) |  |
Foreign currency gains (losses) | 79 |  |  | 71 |  |  | 240 |  |  | 487 |  |
Other investments: |  |  |  |  |  |  |  |
Gross gains (losses) from sales and redemptions | 11 |  |  | 5 |  |  | 12 |  |  | 10 |  |
Total sales and redemptions | (3) |  |  | 55 |  |  | 38 |  |  | 228 |  |
Equity securities | 98 |  |  | 11 |  |  | 37 |  |  | 87 |  |
Real estate owned impairments | (6) |  |  | 0 |  |  | (6) |  |  | 0 |  |
Credit losses: |  |  |  |  |  |  |  |
Fixed maturity securities held-to-maturity | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |
Commercial mortgage and other loans | (61) |  |  | (21) |  |  | (114) |  |  | (28) |  |
Loan commitments | 2 |  |  | 2 |  |  | 0 |  |  | 3 |  |
Reinsurance recoverables and other | 1 |  |  | 0 |  |  | 1 |  |  | 5 |  |
Total credit losses | (58) |  |  | (19) |  |  | (113) |  |  | (20) |  |
Derivatives and other: |  |  |  |  |  |  |  |
Derivative gains (losses) | 23 |  |  | (275) |  |  | (22) |  |  | (490) |  |
Foreign currency gains (losses) | (475) |  |  | 924 |  |  | (1,318) |  |  | 1,842 |  |
Total derivatives and other | (452) |  |  | 649 |  |  | (1,340) |  |  | 1,352 |  |
Total net investment gains (losses) | $ | (421) |  |  | $ | 696 |  |  | $ | (1,384) |  |  | $ | 1,647 |  |
During the second quarter of 2025, the Company recognized an impairment loss of $6 million on an office-type real estate owned (REO) property classified as held-and-used for the production of income. The impairment was based on the Company's evaluation of a material adverse change in occupancy and resulted in an estimated fair value of the REO property of $12 million. The fair value was based on expected future cash flows utilizing inputs classified as Level 3 under the fair value guidance in ASC 820. The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended June 30, 2025 that relate to equity securities held at the June 30, 2025 reporting date were $101 million. The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended June 30, 2024 that relate to equity securities held at the June 30, 2024 reporting date were $15 million. The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the six-month period ended June 30, 2025 that relate to equity securities held at the June 30, 2025 reporting date were $47 million. The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the six-month period ended June 30, 2024 that relate to equity securities held at the June 30, 2024 reporting date were $70 million. Unrealized Investment Gains and Losses Effect on Shareholders’ Equity The net effect on shareholders’ equity of unrealized gains and losses from fixed maturity securities was as follows:
(In millions) | June 30, 2025 |  | December 31, 2024
Unrealized gains (losses) on securities available-for-sale |  | $ | (1,151) |  |  |  |  | $ | 1,180 |  |
Deferred income taxes |  | (677) |  |  |  |  | (1,156) |  |
Shareholders’ equity, unrealized gains (losses) on fixed maturity securities |  | $ | (1,828) |  |  |  |  | $ | 24 |  |
Gross Unrealized Loss Aging The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended June 30, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.
| June 30, 2025
| Total |  | Less than 12 months |  | 12 months or longer
(In millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Fixed maturity securities available- for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | $ | 108 |  |  |  |  | $ | 2 |  |  |  |  | $ | 73 |  |  |  |  | $ | 0 |  |  |  |  | $ | 35 |  |  |  |  | $ | 2 |  |
Japan government and agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 11,469 |  |  |  |  | 2,935 |  |  |  |  | 5,838 |  |  |  |  | 288 |  |  |  |  | 5,631 |  |  |  |  | 2,647 |  |
Municipalities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 650 |  |  |  |  | 85 |  |  |  |  | 88 |  |  |  |  | 5 |  |  |  |  | 562 |  |  |  |  | 80 |  |
Yen-denominated |  | 341 |  |  |  |  | 118 |  |  |  |  | 88 |  |  |  |  | 9 |  |  |  |  | 253 |  |  |  |  | 109 |  |
Mortgage- and asset- backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 1,578 |  |  |  |  | 69 |  |  |  |  | 1,182 |  |  |  |  | 41 |  |  |  |  | 396 |  |  |  |  | 28 |  |
Yen-denominated |  | 214 |  |  |  |  | 30 |  |  |  |  | 23 |  |  |  |  | 0 |  |  |  |  | 191 |  |  |  |  | 30 |  |
Public utilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 1,911 |  |  |  |  | 155 |  |  |  |  | 1,045 |  |  |  |  | 30 |  |  |  |  | 866 |  |  |  |  | 125 |  |
Yen-denominated |  | 1,048 |  |  |  |  | 183 |  |  |  |  | 211 |  |  |  |  | 10 |  |  |  |  | 837 |  |  |  |  | 173 |  |
Sovereign and supranational: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 48 |  |  |  |  | 11 |  |  |  |  | 0 |  |  |  |  | 0 |  |  |  |  | 48 |  |  |  |  | 11 |  |
Banks/financial institutions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 1,065 |  |  |  |  | 39 |  |  |  |  | 890 |  |  |  |  | 16 |  |  |  |  | 175 |  |  |  |  | 23 |  |
Yen-denominated |  | 3,759 |  |  |  |  | 420 |  |  |  |  | 655 |  |  |  |  | 16 |  |  |  |  | 3,104 |  |  |  |  | 404 |  |
Other corporate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 7,675 |  |  |  |  | 738 |  |  |  |  | 3,823 |  |  |  |  | 105 |  |  |  |  | 3,852 |  |  |  |  | 633 |  |
Yen-denominated |  | 2,190 |  |  |  |  | 438 |  |  |  |  | 566 |  |  |  |  | 34 |  |  |  |  | 1,624 |  |  |  |  | 404 |  |
Total |  | $ | 32,056 |  |  |  |  | $ | 5,223 |  |  |  |  | $ | 14,482 |  |  |  |  | $ | 554 |  |  |  |  | $ | 17,574 |  |  |  |  | $ | 4,669 |  |
| December 31, 2024
| Total |  | Less than 12 months |  | 12 months or longer
(In millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Fixed maturity securities available- for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | $ | 106 |  |  |  |  | $ | 3 |  |  |  |  | $ | 59 |  |  |  |  | $ | 1 |  |  |  |  | $ | 47 |  |  |  |  | $ | 2 |  |
Japan government and agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 8,136 |  |  |  |  | 2,234 |  |  |  |  | 2,070 |  |  |  |  | 57 |  |  |  |  | 6,066 |  |  |  |  | 2,177 |  |
Municipalities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 666 |  |  |  |  | 53 |  |  |  |  | 67 |  |  |  |  | 3 |  |  |  |  | 599 |  |  |  |  | 50 |  |
Yen-denominated |  | 341 |  |  |  |  | 79 |  |  |  |  | 96 |  |  |  |  | 2 |  |  |  |  | 245 |  |  |  |  | 77 |  |
Mortgage- and asset- backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 567 |  |  |  |  | 34 |  |  |  |  | 173 |  |  |  |  | 2 |  |  |  |  | 394 |  |  |  |  | 32 |  |
Yen-denominated |  | 196 |  |  |  |  | 23 |  |  |  |  | 12 |  |  |  |  | 0 |  |  |  |  | 184 |  |  |  |  | 23 |  |
Public utilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 1,570 |  |  |  |  | 151 |  |  |  |  | 699 |  |  |  |  | 19 |  |  |  |  | 871 |  |  |  |  | 132 |  |
Yen-denominated |  | 1,020 |  |  |  |  | 108 |  |  |  |  | 368 |  |  |  |  | 11 |  |  |  |  | 652 |  |  |  |  | 97 |  |
Sovereign and supranational: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Yen-denominated |  | 47 |  |  |  |  | 8 |  |  |  |  | 0 |  |  |  |  | 0 |  |  |  |  | 47 |  |  |  |  | 8 |  |
Banks/financial institutions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 625 |  |  |  |  | 36 |  |  |  |  | 376 |  |  |  |  | 7 |  |  |  |  | 249 |  |  |  |  | 29 |  |
Yen-denominated |  | 3,197 |  |  |  |  | 342 |  |  |  |  | 471 |  |  |  |  | 22 |  |  |  |  | 2,726 |  |  |  |  | 320 |  |
Other corporate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. dollar-denominated |  | 6,097 |  |  |  |  | 752 |  |  |  |  | 2,036 |  |  |  |  | 59 |  |  |  |  | 4,061 |  |  |  |  | 693 |  |
Yen-denominated |  | 1,733 |  |  |  |  | 305 |  |  |  |  | 289 |  |  |  |  | 14 |  |  |  |  | 1,444 |  |  |  |  | 291 |  |
Total |  | $ | 24,301 |  |  |  |  | $ | 4,128 |  |  |  |  | $ | 6,716 |  |  |  |  | $ | 197 |  |  |  |  | $ | 17,585 |  |  |  |  | $ | 3,931 |  |
Analysis of Securities in Unrealized Loss Positions The unrealized losses on the Company's available-for-sale securities have been primarily related to general market factors such as changes in interest rates, foreign exchange rates, and/or the levels of credit spreads rather than specific concerns with the issuer's ability to pay interest and repay principal. For available-for-sale securities in an unrealized loss position, the Company performs detailed analyses to identify whether the drivers of the decline in fair value are due to general market factors, such as the recent rise in interest rates, or due to credit-related factors. Identifying the drivers of the declines in fair value helps to align and allocate the Company‘s resources to the review and monitoring of securities with real credit-related concerns that could impact ultimate collection of principal and interest. For any significant declines in fair value determined to be non-interest rate or market-related, the Company performs a more focused review of the related issuers' specific credit profile. For corporate issuers, the Company evaluates their assets and business profile, including industry dynamics and competitive positioning, financial statements and other available financial data. For non-corporate issuers, the Company analyzes all sources of credit support, including issuer-specific factors. The Company utilizes information available in the public domain and, for certain private placement issuers, from consultations with the issuers directly. The Company also considers ratings from Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security it owns including seniority in the issuer's capital structure, covenant protections, or other relevant features. From these reviews, the Company evaluates the issuers' continued ability to service the Company's investment through payment of interest and principal. Assuming no credit-related factors develop, unrealized gains and losses on available-for-sale securities are expected to diminish as investments near maturity. Based on its credit analysis, the Company believes that the issuers of its available-for-sale investments in the sectors shown in the table above have the ability to service their obligations to the Company. Further, the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. However, if the Company identifies certain available-for-sale securities where the amortized cost basis exceeds the present value of the cash flows expected to be collected due to credit-related factors, an allowance for credit losses is recognized. Based on an evaluation of its securities currently in an unrealized loss position, the Company has determined that those securities should not have an allowance for credit losses as of June 30, 2025. Refer to the Allowance for Credit Losses section below for additional information. As of June 30, 2025 and December 31, 2024, the Company had an immaterial amount of fixed maturity securities on nonaccrual status. Commercial Mortgage and Other Loans The Company classifies its transitional real estate loans (TREs), commercial mortgage loans (CMLs), middle market loans (MMLs), and other loans as held-for-investment and includes them in the commercial mortgage and other loans line on the consolidated balance sheets. The Company carries them on the balance sheet at amortized cost less an estimated allowance for credit losses. The following table reflects the composition of the carrying value for commercial mortgage and other loans by property type as of the periods presented.
| June 30, 2025 |  | December 31, 2024
(In millions) | Amortized Cost |  | % of Total |  | Amortized Cost |  | % of Total
Commercial Mortgage and other loans: |  |  |  |  |  |  |
Transitional real estate loans: |  |  |  |  |  |  |
Office | $ | 1,246 |  |  | 11.7 | % |  | $ | 1,361 |  |  | 12.1 | %
Retail | 314 |  |  | 2.9 |  |  | 349 |  |  | 3.1 |
Apartments/Multi-Family | 1,881 |  |  | 17.7 |  |  | 2,201 |  |  | 19.6 |
Industrial | 100 |  |  | .9 |  |  | 117 |  |  | 1.1 |
Hospitality | 525 |  |  | 4.9 |  |  | 556 |  |  | 5.0 |
Other | 292 |  |  | 2.7 |  |  | 318 |  |  | 2.8 |
Total transitional real estate loans | 4,358 |  |  | 40.8 |  |  | 4,902 |  |  | 43.7 |
Commercial mortgage loans: |  |  |  |  |  |  |
Office | 294 |  |  | 2.8 |  |  | 300 |  |  | 2.7 |
Retail | 210 |  |  | 2.0 |  |  | 214 |  |  | 1.9 |
Apartments/Multi-Family | 559 |  |  | 5.3 |  |  | 572 |  |  | 5.1 |
Industrial | 413 |  |  | 3.9 |  |  | 436 |  |  | 3.9 |
Other | 14 |  |  | .1 |  |  | 15 |  |  | .1 |
Total commercial mortgage loans | 1,490 |  |  | 14.1 |  |  | 1,537 |  |  | 13.7 |
Middle market loans | 4,355 |  |  | 40.9 |  |  | 4,423 |  |  | 39.4 |
Other loans | 445 |  |  | 4.2 |  |  | 362 |  |  | 3.2 |
Total commercial mortgage and other loans | $ | 10,648 |  |  | 100.0 | % |  | $ | 11,224 |  |  | 100.0 | %
Allowance for credit losses | (384) |  |  |  |  | (355) |  |  |
Total net commercial mortgage and other loans | $ | 10,264 |  |  |  |  | $ | 10,869 |  |  |
CMLs and TREs are secured by properties entirely within the U.S. (with the largest concentrations in California (20%), Texas (14%) and Florida (10%)). MMLs are issued only to companies domiciled within the U.S. and Canada. Transitional Real Estate Loans TREs are relatively short-term floating rate commercial mortgage loans that are secured by a first lien on the property. These loans provide funding for properties undergoing a change in their physical characteristics and/or economic profile and do not typically require any principal repayment prior to the maturity date. As of June 30, 2025, the Company had $175 million in outstanding commitments to fund TREs. These commitments are contingent on the final underwriting and due diligence to be performed. Commercial Mortgage Loans CMLs are typically fixed rate loans on commercial real estate with partial repayment of principal over the life of the loan with the remaining outstanding principal being repaid upon maturity. This loan portfolio is generally considered higher quality investment grade loans. Middle Market Loans MMLs are typically first lien senior secured cash flow loans to small to mid-size companies for working capital, refinancing, acquisition, and recapitalization. These loans are generally considered to be below investment grade. As of June 30, 2025, the Company had commitments of approximately $646 million to fund future MMLs. These commitments are contingent upon the availability of MMLs that meet the Company's underwriting criteria. Other Loans Other loans are primarily infrastructure loans. Infrastructure loans are typically senior secured, financing operating portfolios of renewable and conventional energy generation assets characterized by predictable, often contractual cash flows for loan repayment. The infrastructure loan portfolio weighted average rating is investment grade. As of June 30, 2025, the Company had commitments of approximately $1 million to fund future other loans. These commitments are contingent upon the availability of other loans that meet the Company's underwriting criteria. Credit Quality Indicators For TREs, the Company’s key credit quality indicators include performance of the loan and loan-to-value (LTV), which is calculated by dividing the current outstanding loan balance by the estimated property value, primarily using values at origination. Given that TREs involve properties undergoing a repositioning of their commercial profile, LTV provides the most insight into the credit risk of the loan. The Company monitors the performance of the loans periodically, but not less frequently than quarterly. The monitoring process also focuses on higher risk loans, which include those that are delinquent or for which foreclosure or deed in lieu of foreclosure is anticipated. For CMLs, the Company’s key credit quality indicators include LTV and debt service coverage ratios (DSCR). DSCR is the most recently available net operating income of the underlying property compared to the required debt service of the loan. For MMLs and held-to-maturity fixed maturity securities, the Company’s key credit quality indicator is credit ratings. The Company’s held-to-maturity portfolio is composed of investment grade securities that are senior unsecured instruments, while its MMLs generally have below-investment-grade ratings but are typically senior secured instruments. The Company monitors the credit ratings periodically, but not less frequently than quarterly. For other loans, the Company’s key credit quality indicator is credit ratings. The Company monitors these credit ratings periodically, but not less frequently than quarterly. The following tables present as of June 30, 2025 the amortized cost basis of TREs, CMLs, MMLs, and other loans by year of origination and credit quality indicator.
Transitional Real Estate Loans
(In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total
Loan-to-Value Ratio: |  |  |  |  |  |  |
0%-59.99% | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 370 |  | $ | 391 |  | $ | 10 |  | $ | 771 |
60%-69.99% | 0 |  | 0 |  | 77 |  | 419 |  | 442 |  | 400 |  | 1,338 |
70%-79.99% | 0 |  | 0 |  | 14 |  | 772 |  | 625 |  | 44 |  | 1,455 |
80% or greater | 0 |  | 0 |  | 0 |  | 186 |  | 297 |  | 311 |  | 794 |
Total | $ | 0 |  | $ | 0 |  | $ | 91 |  | $ | 1,747 |  | $ | 1,755 |  | $ | 765 |  | $ | 4,358 |
Current-period gross writeoffs: | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 5 |  | $ | 0 |  | $ | 24 |  | $ | 29 |
Commercial Mortgage Loans
(In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | Weighted-Average DSCR
Loan-to-Value Ratio: |  |  |  |  |  |  |  |
0%-59.99% | $ | 0 |  | $ | 0 |  | $ | 32 |  | $ | 0 |  | $ | 247 |  | $ | 1,010 |  | $ | 1,289 |  | 2.68
60%-69.99% | 0 |  | 0 |  | 0 |  | 0 |  | 25 |  | 53 |  | 78 |  | 2.14
70%-79.99% | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 8 |  | 8 |  | 1.48
80% or greater | 0 |  | 12 |  | 0 |  | 0 |  | 0 |  | 103 |  | 115 |  | 0.76
Total | $ | 0 |  | $ | 12 |  | $ | 32 |  | $ | 0 |  | $ | 272 |  | $ | 1,174 |  | $ | 1,490 |  | 2.50
Weighted Average DSCR | 0.00 | 1.13 | 2.49 | 0.00 | 3.04 | 2.39 |  |
Current-period gross writeoffs: | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  |
Middle Market Loans
(In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans | Total
Credit Ratings: |  |  |  |  |  |  |  |
BBB | $ | 13 |  | $ | 37 |  | $ | 30 |  | $ | 0 |  | $ | 71 |  | $ | 106 |  | $ | 11 |  | $ | 268 |
BB | 233 |  | 466 |  | 37 |  | 385 |  | 349 |  | 620 |  | 77 |  | 2,167 |
B | 46 |  | 181 |  | 46 |  | 257 |  | 460 |  | 475 |  | 31 |  | 1,496 |
CCC | 17 |  | 5 |  | 0 |  | 9 |  | 62 |  | 194 |  | 20 |  | 307 |
CC | 0 |  | 0 |  | 0 |  | 14 |  | 0 |  | 0 |  | 1 |  | 15 |
C and lower | 0 |  | 0 |  | 0 |  | 0 |  | 16 |  | 80 |  | 6 |  | 102 |
Total | $ | 309 |  | $ | 689 |  | $ | 113 |  | $ | 665 |  | $ | 958 |  | $ | 1,475 |  | $ | 146 |  | $ | 4,355 |
Current-period gross writeoffs: | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 17 |  | $ | 39 |  | $ | 0 |  | $ | 56 |
Other Loans
(In millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Revolving Loans | Total
Credit Ratings: |  |  |  |  |  |  |  |
A | $ | 40 |  | $ | 0 |  | $ | 0 |  | $ | 74 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 114 |
AA | 0 |  | 0 |  | 0 |  | 8 |  | 3 |  | 0 |  | 0 |  | 11 |
BBB | 5 |  | 217 |  | 72 |  | 26 |  | 0 |  | 0 |  | 0 |  | 320 |
BB | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |
Total | $ | 45 |  | $ | 217 |  | $ | 72 |  | $ | 108 |  | $ | 3 |  | $ | 0 |  | $ | 0 |  | $ | 445 |
Current-period gross writeoffs: | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 0 |
Past Due and Nonaccrual Loans The following tables present an aging of past due and nonaccrual loans at amortized cost, before allowance for credit losses, as of the periods presented.
| June 30, 2025
(In millions) | Current | Less Than 90 Days Past Due | 90 Days or More Past Due(1) | Total Past Due | Total Loans | Nonaccrual Status
Transitional real estate loans | $ | 3,808 |  | $ | 142 |  | $ | 408 |  | $ | 550 |  | $ | 4,358 |  | $ | 408 |
Commercial mortgage loans | 1,490 |  | 0 |  | 0 |  | 0 |  | 1,490 |  | 0 |
Middle market loans | 4,273 |  | 23 |  | 59 |  | 82 |  | 4,355 |  | 59 |
Other loans | 445 |  | 0 |  | 0 |  | 0 |  | 445 |  | 0 |
Total | $ | 10,016 |  | $ | 165 |  | $ | 467 |  | $ | 632 |  | $ | 10,648 |  | $ | 467 |
(1) As of June 30, 2025, there were no loans that were 90 days or more past due that continued to accrue interest.
| December 31, 2024
(In millions) | Current | Less Than 90 Days Past Due | 90 Days or More Past Due(1) | Total Past Due | Total Loans | Nonaccrual Status
Transitional real estate loans | $ | 4,364 |  | $ | 195 |  | $ | 343 |  | $ | 538 |  | $ | 4,902 |  | $ | 378 |
Commercial mortgage loans | 1,537 |  | 0 |  | 0 |  | 0 |  | 1,537 |  | 0 |
Middle market loans | 4,295 |  | 63 |  | 65 |  | 128 |  | 4,423 |  | 108 |
Other loans | 362 |  | 0 |  | 0 |  | 0 |  | 362 |  | 0 |
Total | $ | 10,558 |  | $ | 258 |  | $ | 408 |  | $ | 666 |  | $ | 11,224 |  | $ | 486 |
(1) As of December 31, 2024, there were no loans that were 90 days or more past due that continued to accrue interest. For the three-month period ended June 30, 2025, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status. For the six-month period ended June 30, 2025, the Company recognized $1 million of interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status. For the three- and six-month periods ended June 30, 2024, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status. Of these loans, TREs with an amortized cost of $45 million and $140 million had no credit loss allowance as of June 30, 2025 and December 31, 2024, respectively, because these loans are collateral dependent assets for which the estimated fair values of the collateral were in excess of amortized cost. As of June 30, 2025, no MMLs were on nonaccrual status without an allowance for credit loss. As of December 31, 2024, MMLs with an amortized cost of $5 million were on nonaccrual status without an allowance for credit losses. Loan Modifications to Borrowers Experiencing Financial Difficulties The Company granted certain loan modifications to borrowers experiencing financial difficulty during the first six months of 2025 and 2024. The types of modifications granted may include interest rate reductions, principal forgiveness, other-than-insignificant payment delays, term extensions or a combination of these types of modifications. The amount, timing, and extent of modifications granted are considered in determining any credit loss allowance recorded. Loans that have both been modified and are paid or written off during the period, resulting in an amortized cost balance of zero at the end of the period, are not included in the disclosures below. The following tables present the amortized cost basis of modified loans to borrowers experiencing financial difficulty and the financial effect of the modifications, disaggregated by loan classification and type of modification.
Three Months Ended June 30, 2025
(In millions) | Amortized Cost (1) |  | % of Total |  | Financial Effect
Transitional Real Estate Loans: |  |  |  |  |
Term extension | $ | 128 |  |  | 3.1 | % |  | Term extension of 22 months on average
Term extension and interest rate reduction | 152 |  |  | 3.7 |  |  | Term extension of 26 months on average and reduction in the weighted-average contractual interest rate from 4.8% to 4.3%
Middle Market Loans: |  |  |  |  |
Principal forgiveness | $ | 4 |  |  | .1 | % |  | Reduction in the amortized cost basis of $0.3 million
Principal forgiveness and term extension | 25 |  |  | .6 |  |  | Reduction in the amortized cost basis of $34 million and term extension of 30 months on average
(1) Net of allowance for credit losses
Three Months Ended June 30, 2024
(In millions) | Amortized Cost (1) |  | % of Total |  | Financial Effect
Transitional Real Estate Loans: |  |  |  |  |
Other-than-insignificant payment delays and interest rate reduction | $ | 121 |  |  | 2.2 | % |  | Delay in payments of 31 months on average and reduction in the weighted-average contractual interest rate from 8.1% to 7.8%
(1) Net of allowance for credit losses
Six Months Ended June 30, 2025
(In millions) | Amortized Cost (1) |  | % of Total |  | Financial Effect
Transitional Real Estate Loans: |  |  |  |  |
Term extension | $ | 159 |  |  | 3.9 | % |  | Term extension of 20 months on average
Term extension and interest rate reduction | 152 |  |  | 3.7 |  |  | Term extension of 26 months on average and reduction in the weighted-average contractual interest rate from 4.8% to 4.3%
Middle Market Loans: |  |  |  |  |
Principal forgiveness | $ | 6 |  |  | .1 | % |  | Reduction in the amortized cost basis of $4 million
Term extension | 33 |  |  | .8 |  |  | Term extension of six months on average
Other-than-insignificant payment delays | 28 |  |  | .7 |  |  | Delay in principal and interest payments of 35 months on average
Principal forgiveness and term extension | 25 |  |  | .6 |  |  | Reduction in the amortized cost basis of $34 million and term extension of 30 months on average
(1) Net of allowance for credit losses
Six Months Ended June 30, 2024
(In millions) | Amortized Cost (1) |  | % of Total |  | Financial Effect
Transitional Real Estate Loans: |  |  |  |  |
Other-than-insignificant payment delays and interest rate reduction | $ | 332 |  |  | 6.0 | % |  | Delay in payments of 44 months on average and reduction in the weighted-average contractual interest rate from 8.2% to 7.3%
(1) Net of allowance for credit losses Additionally, an immaterial percentage of MMLs were modified in the form of principal forgiveness during each of the three- and six-month periods ended June 30, 2024. The modifications resulted in forgiveness of principal of $15 million, resulting in a remaining amortized cost of $2 million as of June 30, 2024. The following table presents an aging of loans that received modifications in the 12 months preceding the period presented, at amortized cost.
| June 30, 2025 |  |
(In millions) | Current | Less Than 90 Days Past Due | 90 Days or More Past Due | Nonaccrual Status |  |  |  |
Transitional real estate loans | $ | 592 |  | $ | 0 |  | $ | 60 |  | $ | 60 |  |  |  |  |
Middle market loans | 106 |  | 1 |  | 0 |  | 0 |  |  |  |  |
Total | $ | 698 |  | $ | 1 |  | $ | 60 |  | $ | 60 |  |  |  |  |
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Loans that were granted a modification in the past 12 months, as of June 30, 2025 and 2024, and subsequently defaulted in the three- and six-month periods ended June 30, 2025 and 2024, were immaterial. As of June 30, 2025, the Company had $12 million of outstanding commitments to lend additional funds to borrowers experiencing financial difficulty that were granted a loan modification, compared with $14 million as of December 31, 2024. Allowance for Credit Losses The Company calculates its allowance for credit losses for held-to-maturity securities, loan receivables and loan commitments by grouping assets with similar risk characteristics when there is not a specific expectation of a loss for an individual asset. For held-to-maturity securities, MMLs, and MML commitments, the Company groups assets by credit ratings, industry, and country. The Company groups CMLs and TREs and respective loan commitments by property type, property location and the property’s LTV and DSCR. On a quarterly basis, CMLs and TREs within a portfolio segment that share similar risk characteristics are pooled for calculation of credit loss allowance. On an ongoing basis, TREs, CMLs and other loans with dissimilar risk characteristics (i.e., loans with significant declines in credit quality), such as collateral dependent mortgage loans (i.e., when the borrower is experiencing financial difficulty, including when foreclosure is probable), are evaluated individually for credit loss. For example, the credit loss allowance for a collateral dependent loan is established as the excess of amortized cost over the estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the change in the estimated fair value of the collateral dependent loans, which are evaluated individually for credit loss, is recorded as a change in the credit loss allowance as a component of net investment gains (losses) in the consolidated statements of earnings. The credit allowance for held-to-maturity securities and loan receivables is estimated using a probability-of-default (PD) / loss-given-default (LGD) method, discounted for the time value of money. For held-to-maturity securities, available-for-sale securities and loan receivables, the Company includes the change in present value due to the passage of time in the change in the allowance for credit losses. The Company’s methodology for estimating credit losses utilizes the contractual maturity date of the financial asset, adjusted when necessary to reflect the expected timing of repayment (such as prepayment options, renewal options, call options, or extension options). The Company applies reasonable and supportable forecasts of macroeconomic variables that impact the determination of PD / LGD over a two-year period for held-to-maturity securities and MMLs. The Company reverts to historical loss information over one year, following the two-year forecast period. For the CML and TRE portfolio, the Company applies reasonable and supportable forecasts of macroeconomic variables as well as national and local real-estate market factors to estimate future credit losses where the market factors revert back to historical levels over time with the period being dependent on current market conditions, projected market conditions and difference in the current and historical market levels for each factor. The Company continuously monitors the estimation methodology, due to changes in portfolio composition, changes in underwriting practices and significant events or conditions and makes adjustments as necessary. The Company’s held-to-maturity portfolio includes Japan Government and Agency securities of $16.6 billion amortized cost as of June 30, 2025 that meet the requirements for zero-credit-loss expectation and therefore these asset classes have been excluded from the current expected credit loss measurement. An investment in an available-for-sale security may be impaired if the fair value falls below amortized cost. The Company regularly reviews its available-for-sale portfolio for declines in fair value. The Company's available-for-sale impairment model focuses on the ultimate collection of the cash flows from its investments and whether the Company has the intent to sell or if it is more likely than not the Company would be required to sell the security prior to recovery of its amortized cost. The determination of the amount of impairments under this model is based upon the Company's periodic evaluation and assessment of known and inherent risks associated with the respective securities. Such evaluations and assessments are revised as conditions change and new information becomes available. When determining the Company's intention to sell a security prior to recovery of its amortized cost basis, the Company evaluates facts and circumstances such as, but not limited to, future cash flow needs, decisions to reposition its security portfolio, and risk profile of individual investment holdings. The Company performs ongoing analyses of its liquidity needs, which includes cash flow testing of its policy liabilities, debt maturities, projected dividend payments, and other cash flow and liquidity needs. The Company’s methodology for estimating credit losses for available-for-sale securities utilizes the discounted cash flow model, based on past events, current market conditions and future economic conditions, as well as industry analysis and credit ratings of the securities. In addition, the Company evaluates the specific issuer’s probability of default and expected recovery of its position in the event of default based on the underlying financial condition and assets of the borrower as well as seniority and/or security of other debt holders in the issuer when developing management’s best estimate of expected cash flows. The following table presents the roll forward of the allowance for credit losses by portfolio segment for loans and by accounting classification for securities.
(In millions) | Transitional Real Estate Loans | Commercial Mortgage Loans | Middle Market Loans | Other Loans and Loan Commitments | Held-to- Maturity Securities | Available- for-Sale Securities | Total
Three Months Ended June 30, 2025: |  |  |  |  |  |  |
Balance at March 31, 2025 | $ | (203) |  | $ | (15) |  | $ | (150) |  | $ | (19) |  | $ | (5) |  | $ | 0 |  | $ | (392) |
(Addition to) release of allowance for credit losses | (45) |  | 3 |  | (19) |  | 2 |  | 0 |  | 0 |  | (59) |
Writeoffs, net of recoveries | 5 |  | 0 |  | 42 |  | 0 |  | 0 |  | 0 |  | 47 |
Change in foreign exchange | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |
Balance at June 30, 2025 | $ | (243) |  | $ | (12) |  | $ | (127) |  | $ | (17) |  | $ | (5) |  | $ | 0 |  | $ | (404) |
Three Months Ended June 30, 2024: |  |  |  |  |  |  |
Balance at March 31, 2024 | $ | (114) |  | $ | (19) |  | $ | (99) |  | $ | (15) |  | $ | (5) |  | $ | 0 |  | $ | (252) |
(Addition to) release of allowance for credit losses | (24) |  | 2 |  | 1 |  | 2 |  | 0 |  | 0 |  | (19) |
Writeoffs, net of recoveries | 15 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 15 |
Change in foreign exchange | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |
Balance at June 30, 2024 (2) | $ | (123) |  | $ | (17) |  | $ | (98) |  | $ | (13) |  | $ | (5) |  | $ | 0 |  | $ | (256) |
Six Months Ended June 30, 2025: |  |  |  |  |  |  |
Balance at December 31, 2024 | $ | (199) |  | $ | (14) |  | $ | (140) |  | $ | (17) |  | $ | (5) |  | $ | 0 |  | $ | (375) |
(Addition to) release of allowance for credit losses | (73) |  | 2 |  | (43) |  | 0 |  | 0 |  | 0 |  | (114) |
Writeoffs, net of recoveries | 29 |  | 0 |  | 56 |  | 0 |  | 0 |  | 0 |  | 85 |
Change in foreign exchange | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |
Balance at June 30, 2025 | $ | (243) |  | $ | (12) |  | $ | (127) |  | $ | (17) |  | $ | (5) |  | $ | 0 |  | $ | (404) |
Six Months Ended June 30, 2024: |  |  |  |  |  |  |
Balance at December 31, 2023 | $ | (112) |  | $ | (16) |  | $ | (146) |  | $ | (16) |  | $ | (5) |  | $ | 0 |  | $ | (295) |
(Addition to) release of allowance for credit losses | (26) |  | (1) |  | (2) |  | 3 |  | 0 |  | 0 |  | (26) |
Writeoffs, net of recoveries | 15 |  | 0 |  | 50 |  | 0 |  | 0 |  | 0 |  | 65 |
Change in foreign exchange | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |
Balance at June 30, 2024 | $ | (123) |  | $ | (17) |  | $ | (98) |  | $ | (13) |  | $ | (5) |  | $ | 0 |  | $ | (256) |
As of June 30, 2025, the Company identified TREs with an amortized cost of $136 million in anticipation of potential foreclosure or deed in lieu of foreclosure transactions. As of June 30, 2025, the Company established a credit allowance of $20 million related to these loans. Other Investments The table below reflects the composition of the carrying value for other investments as of the periods presented.
(In millions) | June 30, 2025 |  | December 31, 2024
Other investments: |  |  |  |  |  |  |
Policy loans |  | $ | 221 |  |  |  |  | $ | 203 |  |
Short-term investments (1) |  | 2,375 |  |  |  |  | 1,599 |  |
Limited partnerships (2) |  | 3,745 |  |  |  |  | 3,435 |  |
Real estate owned |  | 964 |  |  |  |  | 682 |  |
Other |  | 40 |  |  |  |  | 39 |  |
Total other investments |  | $ | 7,345 |  |  |  |  | $ | 5,958 |  |
(1) Includes securities lending collateral (2) Includes tax credit investments and asset classes such as private equity and real estate funds The Parent Company invests in partnerships that specialize in rehabilitating historic structures or the installation of solar equipment in order to receive federal historic rehabilitation and solar tax credits. These investments are classified as limited partnerships and included in other investments in the consolidated balance sheets. The change in value of each investment is recorded as a reduction to net investment income. Tax credits generated by these investments are recorded as an income tax benefit in the consolidated statements of earnings. REO consists of office buildings or other commercial properties obtained through foreclosure or deed in lieu of foreclosure of certain of the Company’s TREs. As of June 30, 2025 and December 31, 2024, all REO was classified as held-and-used for the production of income, which is carried at cost less accumulated depreciation. Depreciation expense was $8 million and $3 million for the three-month periods and $14 million and $4 million for the six-month periods ended June 30, 2025 and 2024, respectively. Additionally, as of June 30, 2025 and December 31, 2024, accumulated depreciation was $28 million and $14 million, respectively. The Company had $2.4 billion and $2.8 billion in outstanding commitments to fund investments in limited partnerships, which included $2.1 billion and $2.1 billion of unfunded commitments related to VIEs that are non-consolidated as of June 30, 2025 and December 31, 2024, respectively. Variable Interest Entities (VIEs) In the normal course of its activities, the Company invests in legal entities that are VIEs. The Company's variable interests in VIEs are limited to the debt and equity instruments issued by them. With the exception of commitments to limited partnerships and to certain loan investments made in the normal course of business, the Company has not provided any direct or contingent obligations to fund the limited activities of these VIEs, or support related to the limited activities of these VIEs, and does not have any intention to do so in the future, nor has it provided any direct or indirect financial guarantees. The Company's risk of loss related to its interests in any of its VIEs is limited to the carrying value of the related investments, and in certain cases, to any unfunded commitments held in the VIE. For those VIEs other than certain unit trust structures, the Company's involvement is passive in nature. VIEs - Consolidated If the Company determines that it is the VIE’s primary beneficiary, it consolidates the VIE. Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company except to the extent of the unfunded commitments referenced above, as the Company’s obligation to each VIE is limited to the amount of its committed investment. The following table presents the carrying value and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. Investments in Consolidated Variable Interest Entities
(In millions) | June 30, 2025 |  | December 31, 2024
Assets: |  |  |  |  |  |  |
Fixed maturity securities, available-for-sale |  | $ | 3,675 |  |  |  |  | $ | 3,428 |  |
Commercial mortgage and other loans |  | 8,207 |  |  |  |  | 8,693 |  |
Other investments (1) |  | 2,220 |  |  |  |  | 2,176 |  |
Other assets (2) |  | 45 |  |  |  |  | 53 |  |
Total assets of consolidated VIEs |  | $ | 14,147 |  |  |  |  | $ | 14,350 |  |
Liabilities: |  |  |  |  |  |  |
Other liabilities (2) |  | $ | 589 |  |  |  |  | $ | 604 |  |
Total liabilities of consolidated VIEs |  | $ | 589 |  |  |  |  | $ | 604 |  |
(1) Consists entirely of alternative investments in limited partnerships, which represent VIEs where the Company is not the primary beneficiary and, therefore, are not consolidated (2) Consists entirely of derivatives The Company is the sole investor in the consolidated VIEs listed in the table above. The Company invests in fixed maturity securities issued by VIEs that in turn hold U.S. dollar-denominated fixed maturity securities coupled with foreign currency swap agreements. The weighted-average lives of the Company's investments in these VIEs are very similar to the underlying collateral held by these VIEs. The activities of these VIEs are limited to holding invested assets and foreign currency swaps and utilizing the cash flows from these securities to service the VIEs' debt. Neither the Company nor any of its creditors are able to obtain the underlying collateral of these VIEs unless there is an event of default or other specified event. The Company is not a direct counterparty to the foreign currency swap contracts and has no control over them. The Company's loss exposure to these VIEs is limited to its original investment. These consolidated VIEs do not rely on outside or ongoing sources of funding to support their activities beyond the underlying collateral and foreign currency swap contracts, if applicable. The underlying collateral assets and funding of these consolidated VIEs are generally static in nature. Investments in Unit Trust Structures The Company also utilizes unit trust structures in its Aflac Japan segment to invest in various asset classes, which include CMLs, MMLs, TREs, other loans and limited partnerships. As the sole investor of these VIEs, the Company is required to consolidate these trusts under U.S. GAAP. The limited partnership investments are comprised of private equity and real estate funds. The Company's loss exposure to these VIEs is limited to its original investments, together with any unfunded portion of the Company's commitments made in the normal course of business to fund certain loan investments and limited partnership investments, as described in the Commercial Mortgage and Other Loans and Other Investments sections of this note. Excluding these commitments, the Company does not provide financial or other support to consolidated VIEs. VIEs - Not Consolidated The table below reflects the carrying value and balance sheet caption in which the Company's investments in VIEs that are not consolidated are reported. Investments in Variable Interest Entities Not Consolidated
(In millions) | June 30, 2025 |  | December 31, 2024
Assets: |  |  |  |  |  |  |
Fixed maturity securities, available-for-sale |  | $ | 7,121 |  |  |  |  | $ | 6,243 |  |
Other investments (1) |  | 1,367 |  |  |  |  | 1,124 |  |
Total investments in VIEs not consolidated |  | $ | 8,488 |  |  |  |  | $ | 7,367 |  |
(1) Consists entirely of alternative investments in limited partnerships Certain investments in VIEs that the Company is not required to consolidate are investments that are in the form of debt obligations issued by the VIEs. These fixed maturity securities include structured securities, primarily asset-backed securities. The Company's involvement in the related VIEs is limited to that of a passive investor in asset-backed securities issued by the VIEs. The Company also invests in fixed maturity debt securities issued by VIEs that are the primary financing vehicles used by their corporate sponsors to raise financing in the capital markets. The variable interests created by these VIEs are principally or solely a result of the debt instruments issued by them. The Company does not have the power to direct the activities that most significantly impact the entity's economic performance, nor does it have the obligation to absorb losses of the VIE entity or the right to receive benefits from the entity that could be significant to the entity. As such, the Company is not the primary beneficiary of these VIEs and therefore is not required to consolidate them. The Company also holds equity investments in limited partnerships that have been determined to be VIEs. These partnerships primarily invest in private equity and real estate funds. The Company’s maximum exposure to loss on these investments is limited to the amount of its investment and any unfunded commitments. As described in the Other Investments section of this note, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to unconsolidated VIEs. The Company is not the primary beneficiary of these VIEs and is therefore not required to consolidate them. The Company classifies these investments as other investments in the consolidated balance sheets. Securities Lending and Pledged Securities The Company lends fixed maturity securities and, from time to time, public equity securities to financial institutions in short-term securities lending transactions. These short-term securities lending arrangements increase investment income with minimal risk. The Company receives cash or other securities as collateral for such loans. The Company's securities lending policy requires that the fair value of the securities received as collateral be 102% or more of the fair value of the loaned securities and that unrestricted cash received as collateral be 100% or more of the fair value of the loaned securities. The securities loaned continue to be carried as investment assets on the Company's balance sheet during the terms of the loans and are not reported as sales. For loans involving unrestricted cash or securities as collateral, the collateral is reported as an asset with a corresponding liability for the return of the collateral. For loans where the Company receives as collateral securities that the Company is not permitted to sell or repledge, the collateral is not reflected in the consolidated financial statements. Details of collateral by loaned security type and remaining maturity of the agreements were as follows:
Securities Lending Transactions Accounted for as Secured Borrowings
Remaining Contractual Maturity of the Agreements
| June 30, 2025 |  | December 31, 2024
(In millions) | Overnight and Continuous(1) |  | Up to 30 days |  | 30-90 days |  | Total |  | Overnight and Continuous(1) |  | Up to 30 days |  | Total
Securities lending transactions: |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Japan government and agencies | $ | 0 |  |  | $ | 3,837 |  |  | $ | 1,035 |  |  | $ | 4,872 |  |  | $ | 0 |  |  | $ | 1,027 |  |  | $ | 1,027 |
Public utilities | 27 |  |  | 0 |  |  | 0 |  |  | 27 |  |  | 34 |  |  | 0 |  |  | 34 |
Banks/financial institutions | 145 |  |  | 0 |  |  | 0 |  |  | 145 |  |  | 193 |  |  | 0 |  |  | 193 |
Other corporate | 723 |  |  | 0 |  |  | 0 |  |  | 723 |  |  | 783 |  |  | 0 |  |  | 783 |
Total borrowings | $ | 895 |  |  | $ | 3,837 |  |  | $ | 1,035 |  |  | $ | 5,767 |  |  | $ | 1,010 |  |  | $ | 1,027 |  |  | $ | 2,037 |
Gross amount of recognized liabilities for securities lending transactions |  |  | $ | 5,767 |  |  |  |  |  |  | $ | 2,037 |
(1) The related loaned security, under the Company's U.S. securities lending program, can be returned to the Company at the transferee's discretion; therefore, they are classified as Overnight and Continuous. In connection with securities lending, in addition to cash collateral received, the Company received from counterparties securities collateral of $1.5 billion and $3.0 billion at June 30, 2025 and December 31, 2024, respectively, which may not be sold or re-pledged, unless the counterparty is in default. Such securities collateral is not reflected on the consolidated financial statements.
The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of June 30, 2025, and December 31, 2024, respectively. Certain fixed maturity securities can be pledged as collateral as part of derivative transactions, or pledged to support state deposit requirements on certain investment programs. For additional information regarding pledged securities related to derivative transactions, see Note 4.

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