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v3.25.1

Life Policy and Investment Contract Reserves (Tables) | 3 Months Ended
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Mar. 31, 2025
Policyholder Account Balance [Abstract] |
Reserve For Losses Loss Adjustment Expenses Table | The following table summarizes our life policy and investment contract reserves and provides a reconciliation of the balances described in the below tables to those in the condensed consolidated balance sheets:
(Dollars in millions) |  | March 31, 2025 |  | December 31, 2024
Life policy reserves: |  |  |  |
Term |  | $ | 1,064 |  |  | $ | 1,051 |
Whole life |  | 412 |  |  | 405 |
Other |  | 99 |  |  | 98 |
Subtotal |  | 1,575 |  |  | 1,554 |
Investment contract reserves: |  |  |  |
Deferred annuities |  | 582 |  |  | 595 |
Universal life |  | 587 |  |  | 586 |
Structured settlements |  | 116 |  |  | 116 |
Other |  | 108 |  |  | 109 |
Subtotal |  | 1,393 |  |  | 1,406 |
Total life policy and investment contract reserves |  | $ | 2,968 |  |  | $ | 2,960 |
Liability for Future Policy Benefit, Activity | The balances and changes in the term and whole life policy reserves included in life policy and investment contract reserves are as follows:
(Dollars in millions) |  | Three months ended March 31,
|  | 2025 |  | 2024
|  | Term |  | Whole life |  | Term |  | Whole life
Present value of expected net premiums: |  |  |  |  |  |  |  |
Balance, beginning of period |  | $ | 1,638 |  |  | $ | 218 |  |  | $ | 1,700 |  |  | $ | 223 |
Beginning balance at original discount rate |  | 1,719 |  |  | 228 |  |  | 1,712 |  |  | 225 |
Effect of changes in cash flow assumptions |  | — |  |  | — |  |  | — |  |  | — |
Effect of actual variances from expected experience |  | (8) |  |  | — |  |  | (9) |  |  | — |
Adjusted beginning of period balance |  | 1,711 |  |  | 228 |  |  | 1,703 |  |  | 225 |
Issuances |  | 35 |  |  | 3 |  |  | 35 |  |  | 5 |
Interest accrual |  | 19 |  |  | 3 |  |  | 18 |  |  | 2 |
Net premiums collected |  | (46) |  |  | (7) |  |  | (46) |  |  | (7) |
Ending balance at original discount rate |  | 1,719 |  |  | 227 |  |  | 1,710 |  |  | 225 |
Effect of changes in discount rate assumptions |  | (60) |  |  | (7) |  |  | (50) |  |  | (6) |
Balance, end of period |  | 1,659 |  |  | 220 |  |  | 1,660 |  |  | 219 |
Present value of expected future policy benefits: |  |  |  |  |  |  |  |
Balance, beginning of period |  | 2,668 |  |  | 623 |  |  | 2,751 |  |  | 657 |
Beginning balance at original discount rate |  | 2,812 |  |  | 646 |  |  | 2,765 |  |  | 628 |
Effect of changes in cash flow assumptions |  | — |  |  | — |  |  | — |  |  | — |
Effect of actual variances from expected experience |  | (14) |  |  | — |  |  | (14) |  |  | — |
Adjusted beginning of period balance |  | 2,798 |  |  | 646 |  |  | 2,751 |  |  | 628 |
Issuances |  | 36 |  |  | 3 |  |  | 35 |  |  | 5 |
Interest accrual |  | 32 |  |  | 9 |  |  | 31 |  |  | 8 |
Benefits paid |  | (54) |  |  | (10) |  |  | (37) |  |  | (8) |
Ending balance at original discount rate |  | 2,812 |  |  | 648 |  |  | 2,780 |  |  | 633 |
Effect of changes in discount rate assumptions |  | (109) |  |  | (17) |  |  | (82) |  |  | 4 |
Balance, end of period |  | 2,703 |  |  | 631 |  |  | 2,698 |  |  | 637 |
Net liability for future policy benefits: |  |  |  |  |  |  |  |
Present value of expected future policy benefits less expected net premiums |  | 1,044 |  |  | 411 |  |  | 1,038 |  |  | 418 |
Impact of flooring at cohort level |  | 20 |  |  | 1 |  |  | 16 |  |  | — |
Net life policy reserves |  | 1,064 |  |  | 412 |  |  | 1,054 |  |  | 418 |
Less reinsurance recoverable at original discount rate |  | (82) |  |  | (25) |  |  | (100) |  |  | (24) |
Less effect of discount rate assumption changes on reinsurance recoverable |  | (8) |  |  | (3) |  |  | (8) |  |  | (4) |
Net life policy reserves, after reinsurance recoverable |  | $ | 974 |  |  | $ | 384 |  |  | $ | 946 |  |  | $ | 390 |
Weighted-average duration of the net life policy reserves in years |  | 11 |  | 15 |  | 11 |  | 16
The total impact of flooring at cohort level in the above tables includes the effect of discount rate assumption changes of $3 million and $2 million at March 31, 2025 and 2024, respectively. The following table shows the amount of undiscounted and discounted expected future benefit payments and expected gross premiums for our term and whole life policies:
(Dollars in millions) |  | At March 31,
|  | 2025 |  | 2024
|  | Undiscounted |  | Discounted |  | Undiscounted |  | Discounted
Term |  |  |  |  |  |  |  |
Expected future benefit payments |  | $ | 4,894 |  |  | $ | 2,703 |  |  | $ | 4,816 |  |  | $ | 2,698 |
Expected future gross premiums |  | 4,561 |  |  | 2,658 |  |  | 4,386 |  |  | 2,601 |
Whole life |  |  |  |  |  |  |  |
Expected future benefit payments |  | $ | 1,719 |  |  | $ | 631 |  |  | $ | 1,660 |  |  | $ | 637 |
Expected future gross premiums |  | 692 |  |  | 415 |  |  | 663 |  |  | 402 |
The following table shows the amount of revenue and interest recognized in the condensed consolidated statements of income related to our term and whole life policies:
(Dollars in millions) |  |  |  | Three months ended March 31,
|  |  |  |  |  | 2025 |  | 2024
Gross premiums |  |  |  |  |  |  |  |
Term |  |  |  |  |  | $ | 74 |  |  | $ | 74 |
Whole life |  |  |  |  |  | 13 |  |  | 13 |
Total |  |  |  |  |  | $ | 87 |  |  | $ | 87 |
Interest accretion |  |  |  |  |  |  |  |
Term |  |  |  |  |  | $ | 13 |  |  | $ | 13 |
Whole life |  |  |  |  |  | 6 |  |  | 6 |
Total |  |  |  |  |  | $ | 19 |  |  | $ | 19 |
Adverse development that resulted in an immediate charge to income due to net premiums exceeding gross premiums was immaterial for the three months ended March 31, 2025, and 2024. The following table shows the weighted-average interest rate for our term and whole life products:
|  | At March 31, |  |  |  |
|  | 2025 |  | 2024 |  |  |  |
Term |  |  |  |  |  |  |  |
Interest accretion rate |  | 5.20 | % |  | 5.26 | % |  |  |  |
Current discount rate |  | 4.96 |  |  | 5.09 |  |  |  |  |
Whole life |  |  |  |  |  |  |  |
Interest accretion rate |  | 5.87 | % |  | 5.90 | % |  |  |  |
Current discount rate |  | 5.67 |  |  | 5.40 |  |  |  |  |
The discount rate assumption was developed by calculating forward rates from market yield curves of upper-medium grade fixed-income instruments.
Policyholder Account Balance | The following table shows the balances and changes in policyholders' account balances included in investment contract reserves:
(Dollars in millions) |  |  | Three months ended March 31,
|  |  |  |  | 2025 |  | 2024
|  |  |  |  |  |  |  |  | Deferred annuity |  | Universal life |  | Deferred annuity |  | Universal life
Balance, beginning of period |  |  |  |  |  |  |  |  | $ | 595 |  |  | $ | 456 |  |  | $ | 656 |  |  | $ | 457 |
Premiums received |  |  |  |  |  |  |  |  | 4 |  |  | 10 |  |  | 9 |  |  | 10 |
Policy charges |  |  |  |  |  |  |  |  | — |  |  | (10) |  |  | — |  |  | (10) |
Surrenders and withdrawals |  |  |  |  |  |  |  |  | (17) |  |  | (3) |  |  | (37) |  |  | (4) |
Benefit payments |  |  |  |  |  |  |  |  | (5) |  |  | (1) |  |  | (3) |  |  | (2) |
Interest credited |  |  |  |  |  |  |  |  | 5 |  |  | 5 |  |  | 6 |  |  | 5 |
Balance, end of period |  |  |  |  |  |  |  |  | $ | 582 |  |  | $ | 457 |  |  | $ | 631 |  |  | $ | 456 |
Weighted average crediting rate |  |  |  |  |  |  |  |  | 3.68 | % |  | 4.40 | % |  | 3.55 | % |  | 4.33 | %
Net amount at risk |  |  |  |  |  |  |  |  | $ | — |  |  | $ | 3,801 |  |  | $ | — |  |  | $ | 3,908 |
Cash surrender value |  |  |  |  |  |  |  |  | 575 |  |  | 428 |  |  | 625 |  |  | 425 |
Policyholder Account Balance, Guaranteed Minimum Crediting Rate | The following table shows the balance of account values by range of guaranteed minimum crediting rates, in basis points, and the related range of the difference between rates being credited to policyholders and the respective guaranteed minimums for our deferred annuity and universal life contracts:
(Dollars in millions) |  | At guaranteed minimum |  | 1 to 50 basis points above |  | 51-150 basis points above |  | Greater than 150 basis points |  | Total
At March 31, 2025 |  |  |  |  |
Deferred annuity |  |  |  |  |  |  |  |  |  |
1.00-3.00% |  | $ | 2 |  |  | $ | 286 |  |  | $ | 15 |  |  | $ | 233 |  |  | $ | 536 |
3.01-4.00% |  | 46 |  |  | — |  |  | — |  |  | — |  |  | 46 |
Total |  | $ | 48 |  |  | $ | 286 |  |  | $ | 15 |  |  | $ | 233 |  |  | $ | 582 |
Universal life |  |  |  |  |  |  |  |  |  |
1.00-3.00% |  | $ | — |  |  | $ | 55 |  |  | $ | 65 |  |  | $ | 6 |  |  | $ | 126 |
3.01-4.00% |  | 50 |  |  | — |  |  | 5 |  |  | — |  |  | 55 |
Greater than 4.00% |  | 276 |  |  | — |  |  | — |  |  | — |  |  | 276 |
Total |  | $ | 326 |  |  | $ | 55 |  |  | $ | 70 |  |  | $ | 6 |  |  | $ | 457 |
At March 31, 2024 |  |  |  |  |  |  |  |  |  |
Deferred annuity |  |  |  |  |  |  |  |  |  |
1.00-3.00% |  | $ | 4 |  |  | $ | 337 |  |  | $ | 15 |  |  | $ | 226 |  |  | $ | 582 |
3.01-4.00% |  | 49 |  |  | — |  |  | — |  |  | — |  |  | 49 |
Total |  | $ | 53 |  |  | $ | 337 |  |  | $ | 15 |  |  | $ | 226 |  |  | $ | 631 |
Universal life |  |  |  |  |  |  |  |  |  |
1.00-3.00% |  | $ | — |  |  | $ | 60 |  |  | $ | 58 |  |  | $ | 4 |  |  | $ | 122 |
3.01-4.00% |  | 49 |  |  | 5 |  |  | — |  |  | — |  |  | 54 |
Greater than 4.00% |  | 280 |  |  | — |  |  | — |  |  | — |  |  | 280 |
Total |  | $ | 329 |  |  | $ | 65 |  |  | $ | 58 |  |  | $ | 4 |  |  | $ | 456 |
Additional Liability, Long-Duration Insurance | The following table shows the balances and changes in the other additional liability related to the no-lapse guarantees contained within our universal life contracts:
(Dollars in millions) |  |  | Three months ended March 31,
|  |  |  |  | 2025 |  | 2024
Balance, beginning of period |  |  |  |  | $ | 130 |  |  | $ | 128 |
Balance, beginning of period before shadow reserve adjustments |  |  |  |  | 131 |  |  | 129 |
Effect of changes in cash flow assumptions |  |  |  |  | — |  |  | — |
Effect of actual variances from expected experience |  |  |  |  | 2 |  |  | — |
Adjusted beginning of period balance |  |  |  |  | 133 |  |  | 129 |
Interest accrual |  |  |  |  | 1 |  |  | 1 |
Excess death benefits |  |  |  |  | (7) |  |  | (2) |
Attributed assessments |  |  |  |  | 3 |  |  | 3 |
Effect of changes in interest rate assumptions |  |  |  |  | 1 |  |  | (1) |
Balance, end of period before shadow reserve adjustments |  |  |  |  | 131 |  |  | 130 |
Shadow reserve adjustments |  |  |  |  | (1) |  |  | (1) |
Balance, end of period |  |  |  |  | 130 |  |  | 129 |
Less reinsurance recoverable, end of period |  |  |  |  | 8 |  |  | 6 |
Net other additional liability, after reinsurance recoverable |  |  |  |  | $ | 138 |  |  | $ | 135 |
Weighted-average duration of the other additional liability in years |  |  |  |  | 29 |  | 31
Separate Account, Liability | The following table shows balances and changes in separate accounts balances during the period:
(Dollars in millions) |  |  |  | Three months ended March 31,
|  |  |  |  |  | 2025 |  | 2024
Balance, beginning of period |  |  |  |  |  | $ | 952 |  |  | $ | 925 |
Interest credited before policy charges |  |  |  |  |  | 11 |  |  | 10 |
Benefit payments |  |  |  |  |  | (8) |  |  | — |
Other |  |  |  |  |  | 4 |  |  | (8) |
Balance, end of period |  |  |  |  |  | $ | 959 |  |  | $ | 927 |
Cash surrender value |  |  |  |  |  | $ | 949 |  |  | $ | 925 |

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- Definition The entire disclosure for the present values of future benefits to be paid to or on behalf of policyholders and related expenses less the present value of future net premiums using assumptions such as estimates of expected investment yields, mortality, morbidity, terminations and expenses, applicable at the time the insurance contracts are made and unpaid claim costs relating to insurance contracts including estimates of costs relating to incurred but not reported claims based on the estimated ultimate cost of settling the claims (including effects of inflation and other societal and economic factors), using past experience adjusted for current trends and any other factors that would modify past experience by element such as business segment, country and interest rate range. + References No definition available. + Details
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