Life and Annuity Benefits

9 Months Ended

Sep. 30, 2023

Liability for Future Policy Benefit, before Reinsurance [Abstract]

The Company's run-off block of life and annuity reinsurance contracts consists primarily of Euro and U.S. Dollar denominated life-contingent payout annuities and traditional and universal life contracts. The following table presents the components of the Company's liabilities for life and annuity benefits.


(dollars in thousands)	September 30, 2023		December 31, 2022
Liability for future policyholder benefits	$	508,436	$	554,366
Deferred profit liability	52,034		48,569
Other	39,786		47,786
Total	$	600,256	$	650,721

The primary component of the Company's liabilities for life and annuity benefits is the liability for future policyholder benefits. Life and annuity benefit reserves are calculated for aggregated cohorts of contracts, which are determined based on the attributes of the underlying contracts, and are discounted using standard actuarial techniques and cash flow models. Since the development of the life and annuity reinsurance reserves is based upon cash flow projection models, the Company makes estimates and assumptions based on cedent experience and industry mortality tables. The cash flow assumptions used to determine the Company's life and annuity benefit reserves are reviewed, and updated as necessary, at least annually. The discount rate assumptions are updated at each reporting date. There were no changes to the cash flow assumptions used to measure the Company's life and annuity benefit reserves as a result of the annual review of cash flow assumptions completed in the third quarter of 2023 and 2022. The following table presents a rollforward of the present value of the liability for future policyholder benefits.


	Nine Months Ended September 30,
(dollars in thousands)	2023		2022
Liability for future policyholder benefits, beginning of year	$	554,366	$	821,632
Liability for future policyholder benefits at original discount rate, beginning of year	667,761		745,313
Effect of changes in cash flow assumptions	—		—
Effect of actual variances from expected experience	(5,890)		(3,859)
Adjusted liability for future policyholder benefits, beginning of year	661,871		741,454
Interest accretion	11,251		11,909
Benefit payments	(39,819)		(40,643)
Effect of foreign currency rate changes	(356)		(77,166)
Liability for future policyholder benefits at original discount rate, end of period	632,947		635,554
Cumulative effect of changes in discount rate assumptions	(124,511)		(112,459)
Liability for future policyholder benefits, end of period (1)	$	508,436	$	523,095

(1) The undiscounted liability for future policyholder benefits was $813.6 million and $822.3 million as of September 30, 2023 and 2022, respectively.

The following table summarizes additional details for the Company's liability for future policyholder benefits.


	September 30, 2023		December 31, 2022
Weighted-average interest rate:
Interest accretion rate	2.3	%	2.3	%
Current discount rate	4.7	%	4.3	%
Weighted-average liability duration	8.2 years		8.6 years