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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2024
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 5. Fair Value Measurements FAIR VALUE MEASUREMENTS ON A RECURRING BASIS We carry certain of our financial instruments at fair value. We define the fair value of a financial instrument as the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We are responsible for the determination of the value of the investments carried at fair value and the supporting methodologies and assumptions. The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, liquidity and general market conditions. Fair Value Hierarchy Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three “levels” based on the observability of valuation inputs: •Level 1: Fair value measurements based on quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. We do not adjust the quoted price for such instruments. •Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. •Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions about the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The following is a description of the valuation methodologies used for instruments carried at fair value. These methodologies are applied to assets and liabilities across the levels discussed above, and the observability of the inputs used determines the appropriate level in the fair value hierarchy for the respective asset or liability. VALUATION METHODOLOGIES OF FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE Incorporation of Credit Risk in Fair Value Measurements •Our Own Credit Risk. Fair value measurements for certain liabilities incorporate our own credit risk by determining the explicit cost for each counterparty to protect against its net credit exposure to us at the balance sheet date by reference to observable AIG credit default swaps (CDS) or cash bond spreads. We calculate the effect of credit spread changes using discounted cash flow techniques that incorporate current market interest rates. A derivative counterparty’s net credit exposure to us is determined based on master netting agreements, when applicable, which take into consideration all derivative positions with us, as well as collateral we post with the counterparty at the balance sheet date. •Counterparty Credit Risk. Fair value measurements for freestanding derivatives incorporate counterparty credit by determining the explicit cost for us to protect against our net credit exposure to each counterparty at the balance sheet date by reference to observable counterparty CDS spreads, when available. When not available, other directly or indirectly observable credit spreads will be used to derive the best estimates of the counterparty spreads. Our net credit exposure to a counterparty is determined based on master netting agreements, which take into consideration all derivative positions with the counterparty, as well as collateral posted by the counterparty at the balance sheet date. Fair values for fixed maturity securities based on observable market prices for identical or similar instruments implicitly incorporate counterparty credit risk. Fair values for fixed maturity securities based on internal models incorporate counterparty credit risk by using discount rates that take into consideration cash issuance spreads for similar instruments or other observable information. For fair values measured based on internal models, the cost of credit protection is determined under a discounted present value approach considering the market levels for single name CDS spreads for each specific counterparty, the mid-market value of the net exposure (reflecting the amount of protection required) and the weighted average life of the net exposure. CDS spreads are provided to us by an independent third party. We utilize an interest rate based on the appropriate benchmark curve to derive our discount rates. While this approach does not explicitly consider all potential future behavior of the derivative transactions or potential future changes in valuation inputs, we believe this approach provides a reasonable estimate of the fair value of the assets and liabilities, including consideration of the impact of non-performance risk. Fixed Maturity Securities Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure fixed maturity securities at fair value. Market price data is generally obtained from dealer markets. We employ independent third-party valuation service providers to gather, analyze, and interpret market information to derive fair value estimates for individual investments, based upon market-accepted methodologies and assumptions. The methodologies used by these independent third-party valuation service providers are reviewed and understood by management, through periodic discussion with and information provided by the independent third-party valuation service providers. In addition, as discussed further below, control processes designed to ensure the accuracy of these values are applied to the fair values received from independent third-party valuation service providers. Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of market-accepted valuation methodologies, which may utilize matrix pricing, financial models, accompanying model inputs and various assumptions, provide a single fair value measurement for individual securities. The inputs used by the valuation service providers include, but are not limited to, market prices from completed transactions for identical securities and transactions for comparable securities, benchmark yields, interest rate yield curves, credit spreads, prepayment rates, default rates, recovery assumptions, currency rates, quoted prices for similar securities and other market-observable information, as applicable. If fair value is determined using financial models, these models generally take into account, among other things, market observable information as of the measurement date as well as the specific attributes of the security being valued, including its term, interest rate, credit rating, industry sector, and when applicable, collateral quality and other security or issuer-specific information. When market transactions or other market observable data is limited, the extent to which judgment is applied in determining fair value is greatly increased. We have control processes designed to ensure that the fair values received from independent third-party valuation service providers are accurately recorded, that their data inputs and valuation techniques are appropriate and consistently applied and that the assumptions used appear reasonable and consistent with the objective of determining fair value. We assess the reasonableness of individual security values received from independent third-party valuation service providers through various analytical techniques, and have procedures to escalate related questions internally and to the independent third-party valuation service providers for resolution. To assess the degree of pricing consensus among various valuation service providers for specific asset types, we conduct comparisons of prices received from available sources. We use these comparisons to establish a hierarchy for the fair values received from independent third-party valuation service providers to be used for particular security classes. We also validate prices for selected securities through reviews by members of management who have relevant expertise and who are independent of those charged with executing investing transactions. When our independent third-party valuation service providers are unable to obtain sufficient market observable information upon which to estimate the fair value for a particular security, fair value is determined either by requesting brokers who are knowledgeable about these securities to provide a price quote, which is generally non-binding, or by employing market accepted valuation models internally or via our third party asset managers. Broker prices may be based on an income approach, which converts expected future cash flows to a single present value amount, with specific consideration of inputs relevant to particular security types. For structured securities, such inputs may include ratings, collateral types, geographic concentrations, underlying loan vintages, loan delinquencies and defaults, loss severity assumptions, prepayments, and weighted average coupons and maturities. When the volume or level of market activity for a security is limited, certain inputs used to determine fair value may not be observable in the market. Broker prices may also be based on a market approach that considers recent transactions involving identical or similar securities. Fair values provided by brokers are subject to similar control processes to those noted above for fair values from independent third-party valuation service providers, including management reviews. For those corporate debt instruments (for example, private placements) that are not traded in active markets or that are subject to transfer restrictions, valuations reflect illiquidity and non-transferability, based on available market evidence. When observable price quotations are not available, fair value is determined based on discounted cash flow models using discount rates based on credit spreads, yields or price levels of comparable securities, adjusted for illiquidity and structure. Fair values determined internally or via our third party asset managers are also subject to management review to ensure that valuation models and related inputs are reasonable. The methodology above is relevant for all fixed maturity securities including residential mortgage backed securities (RMBS), commercial mortgage backed securities (CMBS), collateralized loan obligations (CLO), other asset‑backed securities (ABS) and fixed maturity securities issued by government sponsored entities and corporate entities. Equity Securities Traded in Active Markets Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure equity securities at fair value. Market price data is generally obtained from exchange or dealer markets. Mortgage and Other Loans Receivable We estimate the fair value of mortgage and other loans receivable that are measured at fair value by using dealer quotations, discounted cash flow analyses and/or internal valuation models. The determination of fair value considers inputs such as interest rate, maturity, the borrower’s creditworthiness, collateral, subordination, guarantees, past-due status, yield curves, credit curves, prepayment rates, market pricing for comparable loans and other relevant factors. Other Invested Assets We initially estimate the fair value of investments in certain hedge funds, private equity funds and other investment partnerships by reference to the transaction price. Subsequently, we generally obtain the fair value of these investments from net asset value information provided by the general partner or manager of the investments, the financial statements of which are generally audited annually. We consider observable market data and perform certain control procedures to validate the appropriateness of using the net asset value as a fair value measurement. The fair values of other investments carried at fair value, such as direct private equity holdings, are initially determined based on transaction price and are subsequently estimated based on available evidence such as market transactions in similar instruments, other financing transactions of the issuer and other available financial information for the issuer, with adjustments made to reflect illiquidity as appropriate. AIG's retained investments in Corebridge, for which we have elected the fair value option, is determined using Corebridge's stock price as its fair value. Short-term Investments For short-term investments that are measured at amortized cost, the carrying amounts of these assets approximate fair values because of the relatively short period of time between origination and expected realization, and their limited exposure to credit risk. Securities purchased under agreements to resell (reverse repurchase agreements) are generally treated as collateralized receivables. We report certain receivables arising from securities purchased under agreements to resell as Short-term investments in the Consolidated Balance Sheets. When these receivables are measured at fair value, we use market-observable interest rates to determine fair value. Freestanding Derivatives Derivative assets and liabilities can be exchange-traded or traded over-the-counter (OTC). We generally value exchange-traded derivatives such as futures and options using quoted prices in active markets for identical derivatives at the balance sheet date. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market clearing transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in the instrument, as well as the availability of pricing information in the market. We generally use similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices and rates, yield curves, credit curves, measures of volatility, prepayment rates and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as generic forwards, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment. For certain OTC derivatives that trade in less liquid markets, where we generally do not have corroborating market evidence to support significant model inputs and cannot verify the model to market transactions, the transaction price may provide the best estimate of fair value. Accordingly, when a pricing model is used to value such an instrument, the model is adjusted so the model value at inception equals the transaction price. We will update valuation inputs in these models only when corroborated by evidence such as similar market transactions, independent third-party valuation service providers and/or broker or dealer quotations, or other empirical market data. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. We value our super senior credit default swap portfolio using prices obtained from vendors and/or counterparties. The valuation of the super senior credit derivatives is complex because of the limited availability of market observable information due to the lack of trading and price transparency in certain structured finance markets. Our valuation methodologies for the super senior CDS portfolio have evolved over time in response to market conditions and the availability of market observable information. We have sought to calibrate the methodologies to available market information and to review the assumptions of the methodologies on a regular basis. Fortitude Re funds withheld payable The reinsurance transactions between AIG and Fortitude Re were structured as modco and loss portfolio transfer arrangements with funds withheld (funds withheld). AIG has established a funds withheld payable to Fortitude Re while simultaneously establishing a reinsurance asset representing reserves for the insurance coverage that Fortitude Re has assumed. The funds withheld payable contains an embedded derivative and changes in fair value of the embedded derivative related to the funds withheld payable are recognized in earnings through realized gains (losses). This embedded derivative is considered a total return swap with contractual returns that are attributable to various assets and liabilities associated with these reinsurance agreements. Other Liabilities Other liabilities measured at fair value include certain securities sold under agreements to repurchase and certain securities sold but not yet purchased. Liabilities arising from securities sold under agreements to repurchase are generally treated as collateralized borrowings. We estimate the fair value of liabilities arising under these agreements by using market-observable interest rates. This methodology considers such factors as the coupon rate, yield curves and other relevant factors. Fair values for securities sold but not yet purchased are based on current market prices. ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:
December 31, 2024 |  | Level 1 |  | Level 2 |  | Level 3 | Counterparty Netting(a) | Cash Collateral |  | Total
(in millions) |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Bonds available for sale: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and government sponsored entities | $ | 36 |  | $ | 3,231 |  | $ | — |  | $ | — |  | $ | — |  | $ | 3,267 |
Obligations of states, municipalities and political subdivisions |  | — |  |  | 3,140 |  |  | 3 |  |  | — |  |  | — |  |  | 3,143 |
Non-U.S. governments |  | 161 |  |  | 7,939 |  |  | 7 |  |  | — |  |  | — |  |  | 8,107 |
Corporate debt |  | — |  |  | 31,586 |  |  | 240 |  |  | — |  |  | — |  |  | 31,826 |
RMBS |  | — |  |  | 6,710 |  |  | 1,894 |  |  | — |  |  | — |  |  | 8,604 |
CMBS |  | — |  |  | 3,900 |  |  | 26 |  |  | — |  |  | — |  |  | 3,926 |
CLO/ABS |  | — |  |  | 4,293 |  |  | 840 |  |  | — |  |  | — |  |  | 5,133 |
Total bonds available for sale |  | 197 |  |  | 60,799 |  |  | 3,010 |  |  | — |  |  | — |  |  | 64,006 |
Other bond securities: |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states, municipalities and political subdivisions |  | — |  |  | 50 |  |  | — |  |  | — |  |  | — |  |  | 50 |
Non-U.S. governments |  | — |  |  | 24 |  |  | — |  |  | — |  |  | — |  |  | 24 |
Corporate debt |  | — |  |  | 281 |  |  | 1 |  |  | — |  |  | — |  |  | 282 |
RMBS |  | — |  |  | 50 |  |  | 50 |  |  | — |  |  | — |  |  | 100 |
CMBS |  | — |  |  | 43 |  |  | — |  |  | — |  |  | — |  |  | 43 |
CLO/ABS |  | — |  |  | 133 |  |  | 113 |  |  | — |  |  | — |  |  | 246 |
Total other bond securities |  | — |  |  | 581 |  |  | 164 |  |  | — |  |  | — |  |  | 745 |
Equity securities |  | 689 |  |  | — |  |  | 15 |  |  | — |  |  | — |  |  | 704 |
Other invested assets(b) |  | 3,810 |  |  | 119 |  |  | 163 |  |  | — |  |  | — |  |  | 4,092 |
Derivative assets(c): |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | — |  |  | 277 |  |  | — |  |  | — |  |  | — |  |  | 277 |
Foreign exchange contracts |  | — |  |  | 296 |  |  | — |  |  | — |  |  | — |  |  | 296 |
Equity contracts |  | — |  |  | — |  |  | 20 |  |  | — |  |  | — |  |  | 20 |
Credit contracts |  | — |  |  | — |  |  | 31 |  |  | — |  |  | — |  |  | 31 |
Counterparty netting and cash collateral |  | — |  |  | — |  |  | — |  |  | (270) |  |  | (304) |  |  | (574) |
Total derivative assets |  | — |  |  | 573 |  |  | 51 |  |  | (270) |  |  | (304) |  |  | 50 |
Short-term investments |  | 7,942 |  |  | 1,847 |  |  | — |  |  | — |  |  | — |  |  | 9,789 |
Other assets(c) |  | — |  |  | — |  |  | 129 |  |  | — |  |  | — |  |  | 129 |
Total(d) | $ | 12,638 |  | $ | 63,919 |  | $ | 3,532 |  | $ | (270) |  | $ | (304) |  | $ | 79,515 |
December 31, 2024 |  | Level 1 |  | Level 2 |  | Level 3 | Counterparty Netting(a) | Cash Collateral |  | Total
(in millions) |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities(c): |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | $ | — |  | $ | 304 |  | $ | — |  | $ | — |  | $ | — |  | $ | 304 |
Foreign exchange contracts |  | — |  |  | 267 |  |  | — |  |  | — |  |  | — |  |  | 267 |
Equity contracts |  | — |  |  | — |  |  | 20 |  |  | — |  |  | — |  |  | 20 |
Credit contracts |  | — |  |  | — |  |  | 31 |  |  | — |  |  | — |  |  | 31 |
Counterparty netting and cash collateral |  | — |  |  | — |  |  | — |  |  | (270) |  |  | (201) |  |  | (471) |
Total derivative liabilities |  | — |  |  | 571 |  |  | 51 |  |  | (270) |  |  | (201) |  |  | 151 |
Fortitude Re funds withheld payable |  | — |  |  | — |  |  | (128) |  |  | — |  |  | — |  |  | (128) |
Other liabilities |  | — |  |  | — |  |  | 100 |  |  | — |  |  | — |  |  | 100 |
Total | $ | — |  | $ | 571 |  | $ | 23 |  | $ | (270) |  | $ | (201) |  | $ | 123 |
December 31, 2023 |  | Level 1 |  | Level 2 |  | Level 3 | Counterparty Netting(a) | Cash Collateral |  | Total
(in millions) |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Bonds available for sale: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and government sponsored entities | $ | 15 |  | $ | 4,380 |  | $ | — |  | $ | — |  | $ | — |  | $ | 4,395 |
Obligations of states, municipalities and political subdivisions |  | — |  |  | 4,830 |  |  | 3 |  |  | — |  |  | — |  |  | 4,833 |
Non-U.S. governments |  | 233 |  |  | 8,156 |  |  | 7 |  |  | — |  |  | — |  |  | 8,396 |
Corporate debt |  | — |  |  | 32,023 |  |  | 323 |  |  | — |  |  | — |  |  | 32,346 |
RMBS |  | — |  |  | 4,415 |  |  | 1,792 |  |  | — |  |  | — |  |  | 6,207 |
CMBS |  | — |  |  | 4,122 |  |  | 25 |  |  | — |  |  | — |  |  | 4,147 |
CLO/ABS |  | — |  |  | 3,629 |  |  | 1,289 |  |  | — |  |  | — |  |  | 4,918 |
Total bonds available for sale |  | 248 |  |  | 61,555 |  |  | 3,439 |  |  | — |  |  | — |  |  | 65,242 |
Other bond securities: |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states, municipalities and political subdivisions |  | — |  |  | 51 |  |  | — |  |  | — |  |  | — |  |  | 51 |
Non-U.S. governments |  | — |  |  | 24 |  |  | — |  |  | — |  |  | — |  |  | 24 |
Corporate debt |  | — |  |  | 210 |  |  | 45 |  |  | — |  |  | — |  |  | 255 |
RMBS |  | — |  |  | 42 |  |  | 51 |  |  | — |  |  | — |  |  | 93 |
CMBS |  | — |  |  | 33 |  |  | — |  |  | — |  |  | — |  |  | 33 |
CLO/ABS |  | — |  |  | 69 |  |  | 138 |  |  | — |  |  | — |  |  | 207 |
Total other bond securities |  | — |  |  | 429 |  |  | 234 |  |  | — |  |  | — |  |  | 663 |
Equity securities |  | 612 |  |  | 39 |  |  | 14 |  |  | — |  |  | — |  |  | 665 |
Other invested assets (b) |  | — |  |  | 155 |  |  | 221 |  |  | — |  |  | — |  |  | 376 |
Derivative assets(c): |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | — |  |  | 335 |  |  | 406 |  |  | — |  |  | — |  |  | 741 |
Foreign exchange contracts |  | — |  |  | 450 |  |  | 1 |  |  | — |  |  | — |  |  | 451 |
Equity contracts |  | — |  |  | 18 |  |  | 48 |  |  | — |  |  | — |  |  | 66 |
Credit contracts |  | — |  |  | — |  |  | 33 |  |  | — |  |  | — |  |  | 33 |
Other contracts |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | 1 |
Counterparty netting and cash collateral |  | — |  |  | — |  |  | — |  |  | (450) |  |  | (711) |  |  | (1,161) |
Total derivative assets |  | — |  |  | 803 |  |  | 489 |  |  | (450) |  |  | (711) |  |  | 131 |
Short-term investments |  | 2,613 |  |  | 6,750 |  |  | — |  |  | — |  |  | — |  |  | 9,363 |
Other assets(c) |  | — |  |  | — |  |  | 243 |  |  | — |  |  | — |  |  | 243 |
Total(d) | $ | 3,473 |  | $ | 69,731 |  | $ | 4,640 |  | $ | (450) |  | $ | (711) |  | $ | 76,683 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities(c): |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | $ | — |  | $ | 352 |  | $ | — |  | $ | — |  | $ | — |  | $ | 352 |
Foreign exchange contracts |  | — |  |  | 561 |  |  | 3 |  |  | — |  |  | — |  |  | 564 |
Credit contracts |  | — |  |  | 3 |  |  | 33 |  |  | — |  |  | — |  |  | 36 |
Counterparty netting and cash collateral |  | — |  |  | — |  |  | — |  |  | (450) |  |  | (249) |  |  | (699) |
Total derivative liabilities |  | — |  |  | 916 |  |  | 36 |  |  | (450) |  |  | (249) |  |  | 253 |
Fortitude Re funds withheld payable |  | — |  |  | — |  |  | (148) |  |  | — |  |  | — |  |  | (148) |
Other liabilities |  | — |  |  | 107 |  |  | 122 |  |  | — |  |  | — |  |  | 229 |
Total | $ | — |  | $ | 1,023 |  | $ | 10 |  | $ | (450) |  | $ | (249) |  | $ | 334 |
(a)Represents netting of derivative exposures covered by qualifying master netting agreements. (b)Excludes investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent), which totaled $3.3 billion and $3.8 billion as of December 31, 2024 and 2023, respectively. As of December 31, 2024, includes AIG's ownership interest in Corebridge of $3.8 billion on which AIG elected the fair value option. (c)Presented as part of Other assets and Other liabilities on the Consolidated Balance Sheets. (d)Excludes $15 million of assets reclassified to Assets held for sale on the Consolidated Balance Sheets at December 31, 2023. CHANGES IN LEVEL 3 RECURRING FAIR VALUE MEASUREMENTS The following tables present changes during the years ended December 31, 2024 and 2023 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities in the Consolidated Balance Sheets at December 31, 2024 and 2023:
(in millions) |  | Fair Value Beginning of Year |  | Net Realized and Unrealized Gains (Losses) Included in Income |  | Other Comprehensive Income (Loss) |  | Purchases, Sales, Issuances and Settlements, Net |  | Gross Transfers In |  | Gross Transfers Out |  | Other |  | Fair Value End of Year |  | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year |  | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states, municipalities and political subdivisions | $ | 3 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 3 |  | $ | — |  | $ | (5) |
Non-U.S. governments |  | 7 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | — |  |  | — |
Corporate debt |  | 323 |  |  | (1) |  |  | (3) |  |  | (71) |  |  | 232 |  |  | (245) |  |  | 5 |  |  | 240 |  |  | — |  |  | (6) |
RMBS |  | 1,792 |  |  | 53 |  |  | 32 |  |  | (238) |  |  | 308 |  |  | (89) |  |  | 36 |  |  | 1,894 |  |  | — |  |  | (43) |
CMBS |  | 25 |  |  | (11) |  |  | 13 |  |  | (32) |  |  | 108 |  |  | (78) |  |  | 1 |  |  | 26 |  |  | — |  |  | 1 |
CLO/ABS |  | 1,289 |  |  | (22) |  |  | 54 |  |  | (441) |  |  | 43 |  |  | (83) |  |  | — |  |  | 840 |  |  | — |  |  | 37 |
Total bonds available for sale |  | 3,439 |  |  | 19 |  |  | 96 |  |  | (782) |  |  | 691 |  |  | (495) |  |  | 42 |  |  | 3,010 |  |  | — |  |  | (16) |
Other bond securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt |  | 45 |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | (45) |  |  | — |  |  | 1 |  |  | — |  |  | — |
RMBS |  | 51 |  |  | 1 |  |  | — |  |  | (3) |  |  | — |  |  | (3) |  |  | 4 |  |  | 50 |  |  | 2 |  |  | — |
CLO/ABS |  | 138 |  |  | 1 |  |  | — |  |  | 4 |  |  | 2 |  |  | (32) |  |  | — |  |  | 113 |  |  | (1) |  |  | — |
Total other bond securities |  | 234 |  |  | 2 |  |  | — |  |  | 1 |  |  | 3 |  |  | (80) |  |  | 4 |  |  | 164 |  |  | 1 |  |  | — |
Equity securities |  | 14 |  |  | 1 |  |  | — |  |  | 4 |  |  | 11 |  |  | (13) |  |  | (2) |  |  | 15 |  |  | 1 |  |  | — |
Other invested assets |  | 221 |  |  | (16) |  |  | — |  |  | (35) |  |  | — |  |  | (13) |  |  | 6 |  |  | 163 |  |  | (11) |  |  | — |
Other assets |  | 243 |  |  | — |  |  | — |  |  | (114) |  |  | — |  |  | — |  |  | — |  |  | 129 |  |  | — |  |  | — |
Total | $ | 4,151 |  | $ | 6 |  | $ | 96 |  | $ | (926) |  | $ | 705 |  | $ | (601) |  | $ | 50 |  | $ | 3,481 |  | $ | (9) |  | $ | (16) |
(in millions) |  | Fair Value Beginning of Year |  | Net Realized and Unrealized (Gains) Losses Included in Income |  | Other Comprehensive Income (Loss) |  | Purchases, Sales, Issuances and Settlements, Net |  | Gross Transfers In |  | Gross Transfers Out |  | Other |  | Fair Value End of Year |  | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year |  | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | $ | (406) |  | $ | 61 |  | $ | — |  | $ | 345 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Foreign exchange contracts |  | 2 |  |  | (2) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Equity contracts |  | (48) |  |  | (18) |  |  | — |  |  | 31 |  |  | — |  |  | — |  |  | 35 |  |  | — |  |  | — |  |  | — |
Credit contracts |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | (1) |  |  | — |
Other contracts |  | (1) |  |  | (1) |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |
Total derivative liabilities, net(a) |  | (453) |  |  | 41 |  |  | — |  |  | 377 |  |  | — |  |  | — |  |  | 35 |  |  | — |  |  | (1) |  |  | — |
Fortitude Re funds withheld payable |  | (148) |  |  | 75 |  |  | — |  |  | (55) |  |  | — |  |  | — |  |  | — |  |  | (128) |  |  | (26) |  |  | — |
Other Liabilities |  | 122 |  |  | (2) |  |  | — |  |  | (20) |  |  | — |  |  | — |  |  | — |  |  | 100 |  |  | — |  |  | — |
Total | $ | (479) |  | $ | 114 |  | $ | — |  | $ | 302 |  | $ | — |  | $ | — |  | $ | 35 |  | $ | (28) |  | $ | (27) |  | $ | — |
(in millions) |  | Fair Value Beginning of Year |  | Net Realized and Unrealized Gains (Losses) Included in Income |  | Other Comprehensive Income (Loss) |  | Purchases, Sales, Issuances and Settlements, Net |  | Gross Transfers In |  | Gross Transfers Out |  | Other |  | Fair Value End of Year |  | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year |  | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states, municipalities and political subdivisions | $ | 20 |  | $ | (1) |  | $ | 1 |  | $ | (16) |  | $ | — |  | $ | (1) |  | $ | — |  | $ | 3 |  | $ | — |  | $ | — |
Non-U.S. governments |  | 2 |  |  | — |  |  | 1 |  |  | (5) |  |  | 11 |  |  | (2) |  |  | — |  |  | 7 |  |  | — |  |  | 1 |
Corporate debt |  | 879 |  |  | (8) |  |  | 11 |  |  | (537) |  |  | 236 |  |  | (258) |  |  | — |  |  | 323 |  |  | — |  |  | (5) |
RMBS |  | 1,884 |  |  | 114 |  |  | (10) |  |  | (142) |  |  | — |  |  | (54) |  |  | — |  |  | 1,792 |  |  | — |  |  | (17) |
CMBS |  | 207 |  |  | (31) |  |  | 4 |  |  | (6) |  |  | 44 |  |  | (193) |  |  | — |  |  | 25 |  |  | — |  |  | (11) |
CLO/ABS |  | 1,483 |  |  | (39) |  |  | 66 |  |  | (179) |  |  | 17 |  |  | (75) |  |  | 16 |  |  | 1,289 |  |  | — |  |  | 3 |
Total bonds available for sale |  | 4,475 |  |  | 35 |  |  | 73 |  |  | (885) |  |  | 308 |  |  | (583) |  |  | 16 |  |  | 3,439 |  |  | — |  |  | (29) |
Other bond securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt |  | — |  |  | 1 |  |  | — |  |  | 44 |  |  | — |  |  | — |  |  | — |  |  | 45 |  |  | 1 |  |  | — |
RMBS |  | 65 |  |  | 4 |  |  | — |  |  | (18) |  |  | — |  |  | — |  |  | — |  |  | 51 |  |  | (7) |  |  | — |
CLO/ABS |  | 158 |  |  | 4 |  |  | — |  |  | (34) |  |  | 1 |  |  | (3) |  |  | 12 |  |  | 138 |  |  | (25) |  |  | — |
Total other bond securities |  | 223 |  |  | 9 |  |  | — |  |  | (8) |  |  | 1 |  |  | (3) |  |  | 12 |  |  | 234 |  |  | (31) |  |  | — |
Equity securities |  | 13 |  |  | 1 |  |  | — |  |  | 3 |  |  | 10 |  |  | (13) |  |  | — |  |  | 14 |  |  | 1 |  |  | — |
Other invested assets |  | 244 |  |  | 3 |  |  | — |  |  | (36) |  |  | 10 |  |  | — |  |  | — |  |  | 221 |  |  | (1) |  |  | — |
Other assets |  | 107 |  |  | — |  |  | — |  |  | 136 |  |  | — |  |  | — |  |  | — |  |  | 243 |  |  | — |  |  | — |
Total | $ | 5,062 |  | $ | 48 |  | $ | 73 |  | $ | (790) |  | $ | 329 |  | $ | (599) |  | $ | 28 |  | $ | 4,151 |  | $ | (31) |  | $ | (29) |
(in millions) |  | Fair Value Beginning of Year |  | Net Realized and Unrealized (Gains) Losses Included in Income |  | Other Comprehensive Income (Loss) |  | Purchases, Sales, Issuances and Settlements, Net |  | Gross Transfers In |  | Gross Transfers Out |  | Other |  | Fair Value End of Year |  | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year |  | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | $ | (311) |  | $ | (44) |  | $ | — |  | $ | (51) |  | $ | — |  | $ | — |  | $ | — |  | $ | (406) |  | $ | 37 |  | $ | — |
Foreign exchange contracts |  | — |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | (2) |  |  | — |
Equity contracts |  | (271) |  |  | 72 |  |  | — |  |  | 151 |  |  | — |  |  | — |  |  | — |  |  | (48) |  |  | 19 |  |  | — |
Credit contracts |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | — |
Other contracts |  | (1) |  |  | (2) |  |  | — |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | 2 |  |  | — |
Total derivative liabilities, net(a) |  | (583) |  |  | 28 |  |  | — |  |  | 102 |  |  | — |  |  | — |  |  | — |  |  | (453) |  |  | 55 |  |  | — |
Fortitude Re funds withheld payable |  | (41) |  |  | 273 |  |  | — |  |  | (380) |  |  | — |  |  | — |  |  | — |  |  | (148) |  |  | (151) |  |  | — |
Other liabilities |  | 112 |  |  | 10 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 122 |  |  | — |  |  | — |
Total | $ | (512) |  | $ | 311 |  | $ | — |  | $ | (278) |  | $ | — |  | $ | — |  | $ | — |  | $ | (479) |  | $ | (96) |  | $ | — |
(a)Total Level 3 derivative exposures have been netted in these tables for presentation purposes only. Net realized and unrealized gains and losses included in income related to Level 3 assets and liabilities shown above are reported in the Consolidated Statements of Income (Loss) as follows:
(in millions) | Net Investment Income |  | Net Realized Gains (Losses) |  |  |  | Total
December 31, 2024 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Bonds available for sale | $ | 75 |  |  | $ | (56) |  |  |  |  | $ | 19 |
Other bond securities | 2 |  |  | — |  |  |  |  | 2 |
Equity securities | 1 |  |  | — |  |  |  |  | 1 |
Other invested assets | (16) |  |  | — |  |  |  |  | (16) |
December 31, 2023 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Bonds available for sale | $ | 104 |  |  | $ | (69) |  |  |  |  | $ | 35 |
Other bond securities | 9 |  |  | — |  |  |  |  | 9 |
Equity securities | 1 |  |  | — |  |  |  |  | 1 |
Other invested assets | 4 |  |  | (1) |  |  |  |  | 3 |
(in millions) | Net Investment Income |  | Net Realized (Gains) Losses |  |  |  | Total
December 31, 2024 |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |
Derivative liabilities, net | $ | — |  |  | $ | 41 |  |  |  |  | $ | 41 |
Fortitude Re funds withheld payable | — |  |  | 75 |  |  |  |  | 75 |
Other Liabilities | — |  |  | (2) |  |  |  |  | (2) |
December 31, 2023 |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |
Derivative liabilities, net | $ | — |  |  | $ | 28 |  |  |  |  | $ | 28 |
Fortitude Re funds withheld payable | — |  |  | 273 |  |  |  |  | 273 |
Other Liabilities | — |  |  | 10 |  |  |  |  | 10 |
The following table presents the gross components of purchases, sales, issuances and settlements, net, shown above, for the years ended December 31, 2024 and 2023 related to Level 3 assets and liabilities in the Consolidated Balance Sheets:
(in millions) | Purchases |  | Sales |  | Issuances and Settlements(a) |  | Purchases, Sales, Issuances and Settlements, Net(a)
December 31, 2024 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Bonds available for sale: |  |  |  |  |  |  |
Obligations of states, municipalities and political subdivisions | $ | 1 |  |  | $ | — |  |  | $ | (1) |  |  | $ | — |
Non-U.S. governments | 4 |  |  | — |  |  | (4) |  |  | — |
Corporate debt | 43 |  |  | (29) |  |  | (85) |  |  | (71) |
RMBS | 89 |  |  | (53) |  |  | (274) |  |  | (238) |
CMBS | — |  |  | (15) |  |  | (17) |  |  | (32) |
CLO/ABS | 447 |  |  | (681) |  |  | (207) |  |  | (441) |
Total bonds available for sale | 584 |  |  | (778) |  |  | (588) |  |  | (782) |
Other bond securities: |  |  |  |  |  |  |
RMBS | 3 |  |  | (1) |  |  | (5) |  |  | (3) |
CLO/ABS | 13 |  |  | — |  |  | (9) |  |  | 4 |
Total other bond securities | 16 |  |  | (1) |  |  | (14) |  |  | 1 |
Equity securities | 6 |  |  | (2) |  |  | — |  |  | 4 |
Other invested assets | 3 |  |  | — |  |  | (38) |  |  | (35) |
Other assets | — |  |  | — |  |  | (114) |  |  | (114) |
Total | $ | 609 |  |  | $ | (781) |  |  | $ | (754) |  |  | $ | (926) |
Liabilities: |  |  |  |  |  |  |
Derivative liabilities, net | $ | — |  |  | $ | — |  |  | $ | 377 |  |  | $ | 377 |
Fortitude Re funds withheld payable | — |  |  | — |  |  | (55) |  |  | (55) |
Other Liabilities | — |  |  | — |  |  | (20) |  |  | (20) |
Total | $ | — |  |  | $ | — |  |  | $ | 302 |  |  | $ | 302 |
December 31, 2023 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Bonds available for sale: |  |  |  |  |  |  |
Obligations of states, municipalities and political subdivisions | $ | 1 |  |  | $ | (15) |  |  | $ | (2) |  |  | $ | (16) |
Non-U.S. governments | — |  |  | — |  |  | (5) |  |  | (5) |
Corporate Debt | 21 |  |  | (4) |  |  | (554) |  |  | (537) |
RMBS | 228 |  |  | (25) |  |  | (345) |  |  | (142) |
CMBS | 1 |  |  | (23) |  |  | 16 |  |  | (6) |
CLO/ABS | 291 |  |  | (437) |  |  | (33) |  |  | (179) |
Total bonds available for sale | 542 |  |  | (504) |  |  | (923) |  |  | (885) |
Other bond securities: |  |  |  |  |  |  |
Corporate debt | 20 |  |  | — |  |  | 24 |  |  | 44 |
RMBS | — |  |  | — |  |  | (18) |  |  | (18) |
CLO/ABS | 14 |  |  | (10) |  |  | (38) |  |  | (34) |
Total other bond securities | 34 |  |  | (10) |  |  | (32) |  |  | (8) |
(in millions) | Purchases |  | Sales |  | Issuances and Settlements(a) |  | Purchases, Sales, Issuances and Settlements, Net(a)
Equity securities | 6 |  |  | (2) |  |  | (1) |  |  | 3 |
Other invested assets | 1 |  |  | — |  |  | (37) |  |  | (36) |
Other assets | 130 |  |  | — |  |  | 6 |  |  | 136 |
Total | $ | 713 |  |  | $ | (516) |  |  | $ | (987) |  |  | $ | (790) |
Liabilities: |  |  |  |  |  |  |
Derivative liabilities, net | $ | (481) |  |  | $ | 7 |  |  | $ | 576 |  |  | $ | 102 |
Fortitude Re funds withheld payable | — |  |  | — |  |  | (380) |  |  | (380) |
Total | $ | (481) |  |  | $ | 7 |  |  | $ | 196 |  |  | $ | (278) |
(a)There were no issuances during the years ended December 31, 2024 and 2023. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above. As a result, the unrealized gains (losses) on instruments held at December 31, 2024 and 2023 may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable inputs (e.g., changes in unobservable long-dated volatilities). Transfers of Level 3 Assets and Liabilities The Net realized and unrealized gains (losses) included in income (loss) or Other comprehensive income (loss) (OCI) as shown in the table above excludes $(35) million and $2 million of net gains (losses) related to assets and liabilities transferred into Level 3 during the years ended December 31, 2024 and 2023, respectively, and includes $(13) million and $(11) million of net gains (losses) related to assets and liabilities transferred out of Level 3 during the years ended December 31, 2024 and 2023, respectively. Transfers of Level 3 Assets During the years ended December 31, 2024 and 2023, transfers into Level 3 assets primarily included certain investments in private placement corporate debt, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS), collateralized loan obligations (CLO)/asset-backed securities (ABS) and equity securities. Transfers of private placement corporate debt and certain ABS into Level 3 assets were primarily the result of limited market pricing information that required us to determine fair value for these securities based on inputs that are adjusted to better reflect our own assumptions regarding the characteristics of a specific security or associated market liquidity. The transfers of investments in CMBS, RMBS, CLO and certain ABS into Level 3 assets were due to diminished market transparency and liquidity for individual security types. During the years ended December 31, 2024 and 2023, transfers out of Level 3 assets primarily included certain investments in private placement corporate debt, CMBS, RMBS, CLO/ABS, municipal bonds and equity securities. Transfers of private placement corporate debt out of Level 3 assets were based on consideration of market liquidity as well as related transparency of pricing and associated observable inputs for these investments. Transfers of certain investments in private placement corporate debt out of Level 3 assets were primarily the result of using observable pricing information that reflects the fair value of those securities without the need for adjustment based on our own assumptions regarding the characteristics of a specific security or the current liquidity in the market. Transfers of Level 3 Liabilities There were no significant transfers of derivative or other liabilities into or out of Level 3 for the years ended December 31, 2024 and 2023. QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and includes only those instruments for which information about the inputs is reasonably available to us, such as data from independent third-party valuation service providers. Because input information from third-parties with respect to certain Level 3 instruments (primarily CLO/ABS) may not be reasonably available to us, balances shown below may not equal total amounts reported for such Level 3 assets and liabilities:
(in millions) |  | Fair Value at December 31, 2024 | Valuation Technique | Unobservable Input(b) | Range (Weighted Average)(c)
Assets: |  |  |  |  |  |
Obligations of states, municipalities and political subdivisions | $ | 3 |  | Discounted cash flow | Yield | 5.09% - 5.57% (5.33%)
Corporate debt |  | 177 |  | Discounted cash flow | Yield | 6.83% - 11.61% (9.22%)
RMBS(a) |  |  | 1,321 |  | Discounted cash flow | Constant prepayment rate | 4.10% - 9.26% (6.68%)
|  |  |  |  | Loss severity | 40.81% - 76.72% (58.76%)
(in millions) |  | Fair Value at December 31, 2024 | Valuation Technique | Unobservable Input(b) | Range (Weighted Average)(c)
|  |  |  |  | Constant default rate | 0.57% - 2.48% (1.52%)
|  |  |  |  | Yield | 5.89% - 6.98% (6.44%)
CLO/ABS(a) |  |  | 760 |  | Discounted cash flow | Yield | 4.24% - 8.42% (6.33%)
CMBS |  |  | 25 |  | Discounted cash flow | Yield | 7.04% - 10.12% (8.70%)
(in millions) | Fair Value at December 31, 2023 | Valuation Technique | Unobservable Input(b) | Range (Weighted Average)(c)
Assets: |  |  |  |  |
Obligations of states, municipalities and political subdivisions | $ | 3 |  | Discounted cash flow | Yield | 5.00% - 5.50% (5.23%)
Corporate debt |  | 332 |  | Discounted cash flow | Yield | 5.16% - 9.62% (7.39%)
RMBS(a) |  |  | 1,341 |  | Discounted cash flow | Constant prepayment rate | 4.43% - 10.30% (7.36%)
|  |  |  |  | Loss severity | 43.21% - 76.65% (59.93%)
|  |  |  |  | Constant default rate | 0.82% - 2.64% (1.73%)
|  |  |  |  | Yield | 6.18% - 7.42% (6.80%)
CLO/ABS(a) |  |  | 1,100 |  | Discounted cash flow | Yield | 5.31% - 8.56% (6.94%)
CMBS |  |  | 22 |  | Discounted cash flow | Yield | 9.84% - 17.24% (13.54%)
(a)Information received from third-party valuation service providers. The ranges of the unobservable inputs for constant prepayment rate, loss severity and constant default rate relate to each of the individual underlying mortgage loans that comprise the entire portfolio of securities in the RMBS and CLO securitization vehicles and not necessarily to the securitization vehicle bonds (tranches) purchased by us. The ranges of these inputs do not directly correlate to changes in the fair values of the tranches purchased by us, because there are other factors relevant to the fair values of specific tranches owned by us including, but not limited to, purchase price, position in the waterfall, senior versus subordinated position and attachment points. (b)Represents discount rates, estimates and assumptions that we believe would be used by market participants when valuing these assets and liabilities. (c)The weighted averaging for fixed maturity securities is based on the estimated fair value of the securities. The ranges of reported inputs for Obligations of states, municipalities and political subdivisions, Corporate debt, RMBS, CLO/ABS, and CMBS valued using a discounted cash flow technique consist of one standard deviation in either direction from the value‑weighted average. The preceding table does not give effect to our risk management practices that might offset risks inherent in these Level 3 assets and liabilities. Interrelationships Between Unobservable Inputs We consider unobservable inputs to be those for which market data is not available and that are developed using the best information available to us about the assumptions that market participants would use when pricing the asset or liability. Relevant inputs vary depending on the nature of the instrument being measured at fair value. The following paragraphs provide a general description of significant unobservable inputs along with interrelationships between and among the significant unobservable inputs and their impact on the fair value measurements. In practice, simultaneous changes in assumptions may not always have a linear effect on the inputs discussed below. Interrelationships may also exist between observable and unobservable inputs. Such relationships have not been included in the discussion below. For each of the individual relationships described below, the inverse relationship would also generally apply. Fixed Maturity Securities The significant unobservable input used in the fair value measurement of fixed maturity securities is yield. The yield is affected by the market movements in credit spreads and U.S. Treasury yields. The yield may be affected by other factors including constant prepayment rates, loss severity, and constant default rates. In general, increases in the yield would decrease the fair value of investments, and conversely, decreases in the yield would increase the fair value of investments. Embedded Derivatives within Reinsurance Contracts The fair value of embedded derivatives associated with funds withheld reinsurance contracts is determined based upon a total return swap technique with reference to the fair value of the investments held by AIG related to AIG’s funds withheld payable. The fair value of the underlying assets is generally based on market observable inputs using industry standard valuation techniques. The valuation also requires certain significant inputs, which are generally not observable, and accordingly, the valuation is considered Level 3 in the fair value hierarchy. INVESTMENTS IN CERTAIN ENTITIES CARRIED AT FAIR VALUE USING NET ASSET VALUE PER SHARE The following table includes information related to our investments in certain other invested assets, including private equity funds, hedge funds and other alternative investments that calculate net asset value per share (or its equivalent). For these investments, which are measured at fair value on a recurring basis, we use the net asset value per share to measure fair value.
|  |  | December 31, 2024 |  |  | December 31, 2023
(in millions) | Investment Category Includes |  | Fair Value Using NAV Per Share (or its equivalent) |  | Unfunded Commitments |  |  | Fair Value Using NAV Per Share (or its equivalent) |  | Unfunded Commitments
Investment Category |  |  |  |  |  |  |  |  |  |
Private equity funds: |  |  |  |  |  |  |  |  |  |
Leveraged buyout | Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage | $ | 1,126 |  | $ | 375 |  |  | $ | 1,171 |  | $ | 558 |
Real assets | Investments in real estate properties, agricultural and infrastructure assets, including power plants and other energy producing assets |  | 782 |  |  | 261 |  |  |  | 870 |  |  | 344 |
Venture capital | Early-stage, high-potential, growth companies expected to generate a return through an eventual realization event, such as an initial public offering or sale of the company |  | 83 |  |  | 40 |  |  |  | 67 |  |  | 50 |
Growth equity | Funds that make investments in established companies for the purpose of growing their businesses |  | 175 |  |  | 1 |  |  |  | 196 |  |  | 9 |
Mezzanine | Funds that make investments in the junior debt and equity securities of leveraged companies |  | 120 |  |  | 58 |  |  |  | 140 |  |  | 56 |
Other | Includes distressed funds that invest in securities of companies that are in default or under bankruptcy protection, as well as funds that have multi- strategy, and other strategies |  | 819 |  |  | 57 |  |  |  | 944 |  |  | 64 |
Total private equity funds |  | 3,105 |  |  | 792 |  |  |  | 3,388 |  |  | 1,081 |
Hedge funds: |  |  |  |  |  |  |  |  |  |
Event-driven | Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations |  | 11 |  |  | — |  |  |  | 13 |  |  | — |
Long-short | Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk |  | 168 |  |  | — |  |  |  | 389 |  |  | — |
Other | Includes investments held in funds that are less liquid, as well as other strategies which allow for broader allocation between public and private investments |  | 8 |  |  | — |  |  |  | 9 |  |  | — |
Total hedge funds |  |  | 187 |  |  | — |  |  |  | 411 |  |  | — |
Total |  | $ | 3,292 |  | $ | 792 |  |  | $ | 3,799 |  | $ | 1,081 |
Private equity fund investments included above are not redeemable, because distributions from the funds will be received when underlying investments of the funds are liquidated. Private equity funds are generally expected to have 10-year lives at their inception, but these lives may be extended at the fund manager’s discretion, typically in one-year or two-year increments. FAIR VALUE OPTION Under the fair value option, we may elect to measure at fair value financial assets and financial liabilities that are not otherwise required to be carried at fair value. Subsequent changes in fair value for designated items are reported in earnings. We elect the fair value option for certain hybrid securities given the complexity of bifurcating the economic components associated with the embedded derivatives. For additional information related to embedded derivatives, see Note 11. Additionally, we elect the fair value option for certain alternative investments when such investments are eligible for this election. We believe this measurement basis is consistent with the applicable accounting guidance used by the respective investment company funds themselves. For additional information on securities and other invested assets for which we have elected the fair value option, see Note 6. The following table presents the gains or losses recorded related to the eligible instruments for which we elected the fair value option:
Years Ended December 31, |  |  | Gain (Loss)
(in millions) |  |  |  |  |  |  | 2024 |  | 2023 |  | 2022
Other bond securities(a) |  |  |  |  |  | $ | 19 |  | $ | 46 |  | $ | (374) |
Alternative investments(b) |  |  |  |  |  |  | 257 |  |  | 220 |  |  | 32 |
Retained investment in Corebridge(c) |  |  |  |  |  |  | 439 |  |  | — |  |  | — |
Total gain (loss) |  |  |  |  |  | $ | 715 |  | $ | 266 |  | $ | (136) |
(a)Includes certain securities supporting the funds withheld arrangements with Fortitude Re. For additional information regarding the gains and losses for Other bond securities, see Note 6. For additional information regarding the funds withheld arrangements with Fortitude Re, see Note 8. (b)Includes certain hedge funds, private equity funds and real estate investments. (c)Represents the impact of changes in Corebridge stock price on the value of AIG's ownership interest in Corebridge and gain on sale of Corebridge shares. Interest income and dividend income on assets measured under the fair value option are recognized and included in Net investment income in the Consolidated Statements of Income. Interest expense on liabilities measured under the fair value option is reported in Other Income in the Consolidated Statements of Income. For additional information about our policies for recognition, measurement, and disclosure of interest and dividend income, see Note 6. We calculate the effect of these credit spread changes using discounted cash flow techniques that incorporate current market interest rates, our observable credit spreads on these liabilities and other factors that mitigate the risk of nonperformance such as cash collateral posted. FAIR VALUE INFORMATION ABOUT FINANCIAL INSTRUMENTS NOT MEASURED AT FAIR VALUE Information regarding the estimation of fair value for financial instruments not carried at fair value (excluding insurance contracts and lease contracts) is discussed below: •Mortgage and other loans receivable: Fair values of loans on commercial real estate and other loans receivable are estimated for disclosure purposes using discounted cash flow calculations based on discount rates that we believe market participants would use in determining the price that they would pay for such assets. For certain loans, our current incremental lending rates for similar types of loans are used as the discount rates, because we believe this rate approximates the rates market participants would use. Fair values of residential mortgage loans are generally determined based on market prices, using market based adjustments for credit and servicing as appropriate. The fair values of policy loans are generally estimated based on unpaid principal amount as of each reporting date. No consideration is given to credit risk because policy loans are effectively collateralized by the cash surrender value of the policies. •Other invested assets: The majority of the Other invested assets that are not measured at fair value represent time deposits with the original maturity at purchase greater than one year. The fair value of long-term time deposits is determined using the expected discounted future cash flow. •Cash and short-term investments: The carrying amounts of these assets approximate fair values because of the relatively short period of time between origination and expected realization, and their limited exposure to credit risk. •Other liabilities: The majority of Other liabilities that are financial instruments not measured at fair value represent secured financing arrangements, including repurchase agreements. The carrying amounts of these liabilities approximate fair value, because the financing arrangements are short-term and are secured by cash or other liquid collateral. •Fortitude Re funds withheld payable: The funds withheld payable contains an embedded derivative and the changes in its fair value are recognized in earnings each period. The difference between the total Fortitude Re funds withheld payable and the embedded derivative represents the host contract. •Long-term debt and Debt of consolidated investment entities: Fair values of these obligations were determined by reference to quoted market prices, when available and appropriate, or discounted cash flow calculations based upon our current market‑observable implicit‑credit‑spread rates for similar types of borrowings with maturities consistent with those remaining for the debt being valued. The following table presents the carrying amounts and estimated fair values of our financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:
|  | Estimated Fair Value |  | Carrying Value
(in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |
December 31, 2024 |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Mortgage and other loans receivable | $ | — |  | $ | 339 |  | $ | 3,413 |  | $ | 3,752 |  | $ | 3,868 |
Other invested assets |  | — |  |  | 578 |  |  | 5 |  |  | 583 |  |  | 583 |
Short-term investments |  | — |  |  | 4,673 |  |  | — |  |  | 4,673 |  |  | 4,673 |
Cash |  | 1,302 |  |  | — |  |  | — |  |  | 1,302 |  |  | 1,302 |
Other assets |  | 15 |  |  | — |  |  | — |  |  | 15 |  |  | 15 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Fortitude Re funds withheld payable |  | — |  |  | — |  |  | 3,335 |  |  | 3,335 |  |  | 3,335 |
Long-term debt |  | — |  |  | 7,981 |  |  | 240 |  |  | 8,221 |  |  | 8,764 |
Debt of consolidated investment entities |  | — |  |  | — |  |  | 158 |  |  | 158 |  |  | 158 |
|  | Estimated Fair Value |  | Carrying Value
(in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |
December 31, 2023 |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Mortgage and other loans receivable | $ | — |  | $ | 242 |  | $ | 4,113 |  | $ | 4,355 |  | $ | 4,441 |
Other invested assets |  | — |  |  | 645 |  |  | 6 |  |  | 651 |  |  | 651 |
Short-term investments |  | — |  |  | 3,502 |  |  | — |  |  | 3,502 |  |  | 3,502 |
Cash |  | 1,540 |  |  | — |  |  | — |  |  | 1,540 |  |  | 1,540 |
Other assets |  | 32 |  |  | — |  |  | — |  |  | 32 |  |  | 32 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Fortitude Re funds withheld payable |  | — |  |  | — |  |  | 3,675 |  |  | 3,675 |  |  | 3,675 |
Long-term debt |  | — |  |  | 9,623 |  |  | 267 |  |  | 9,890 |  |  | 10,375 |
Debt of consolidated investment entities |  | — |  |  | — |  |  | 231 |  |  | 231 |  |  | 231 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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