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Future Policy Benefits and Claims | 3 Months Ended
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Mar. 31, 2023
Future Policy Benefits and Claims |
Future Policy Benefits and Claims | 8. Future Policy Benefits and Claims Future policy benefits and claims include reserves for short-duration contracts and long-duration contracts as well as certain reinsurance balances, when in a liability position. The following tables summarize disaggregated amounts included in future policy benefit and claims and reconcile the totals to those reported in the consolidated statements of financial position. ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2023 |  | December 31, 2022
​ | ​ | (in millions)
Liability for future policy benefits by segment (1): |  | ​ |  |  | ​ |
Retirement and Income Solutions: |  | ​ |  |  | ​ |
Pension risk transfer | ​ | $ | 22,146.1 |  | $ | 21,211.4
Individual fixed income annuities | ​ |  | 5,092.3 |  | ​ | 5,019.4
Total Retirement and Income Solutions | ​ |  | 27,238.4 |  | ​ | 26,230.8
Principal Asset Management — Principal International: | ​ |  | ​ |  | ​ |
Latin America: | ​ | ​ | ​ | ​ | ​ | ​
Individual fixed income annuities | ​ |  | 5,416.9 |  | ​ | 5,042.3
Benefits and Protection: | ​ |  | ​ |  | ​ |
Specialty Benefits: | ​ |  | ​ |  | ​ |
Individual disability | ​ |  | 1,815.9 |  | ​ | 1,698.8
Life Insurance: | ​ |  | ​ |  | ​ |
Term life | ​ |  | 961.2 |  | ​ | 909.0
Total Benefits and Protection | ​ |  | 2,777.1 |  | ​ | 2,607.8
Corporate: | ​ |  | ​ |  | ​ |
Long-term care insurance | ​ |  | 188.4 |  | ​ | 183.5
Total liability for future policy benefits | ​ |  | 35,620.8 |  | ​ | 34,064.4
​ | ​ | ​ | ​ | ​ | ​ | ​
Additional liability for certain benefit features by segment (2): | ​ |  | ​ |  | ​ |
Benefits and Protection - Life Insurance: | ​ |  | ​ |  | ​ |
Universal life | ​ |  | 4,219.3 |  | ​ | 4,095.2
Total additional liability for certain benefit features | ​ |  | 4,219.3 |  | ​ | 4,095.2
​ | ​ | ​ | ​ | ​ | ​ | ​
Reconciling items: | ​ |  | ​ |  | ​ |
Participating contracts | ​ |  | 3,166.3 |  | ​ | 3,207.2
Short-duration contracts | ​ |  | 1,294.0 |  | ​ | 1,295.6
Cost of reinsurance liability | ​ |  | 184.5 |  | ​ | 191.1
Reinsurance recoverable liability | ​ | ​ | 43.5 | ​ | ​ | 39.4
Other (3) | ​ |  | 171.5 |  | ​ | 132.4
Future policy benefits and claims per consolidated statements of financial position | ​ | $ | 44,699.9 |  | $ | 43,025.3
(1) | Amounts include the deferred profit liability.
(2) | Includes reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years.
(3) | Includes other miscellaneous reserves and the impact of unrealized gains (losses) on the additional liability for certain benefit features.
Liability for Unpaid Claims The liability for unpaid claims is reported in future policy benefits and claims within our consolidated statements of financial position. Activity associated with unpaid claims was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended March 31,
​ |  | 2023 |  | 2022
​ | ​ | (in millions)
Balance at beginning of period | ​ | $ | 1,395.0 | ​ | $ | 1,370.9
Less: reinsurance recoverable | ​ |  | 68.6 | ​ |  | 68.7
Net balance at beginning of period | ​ |  | 1,326.4 | ​ |  | 1,302.2
Incurred: | ​ |  | ​ | ​ |  | ​
Current year | ​ |  | 429.4 | ​ |  | 404.6
Prior years | ​ |  | (40.8) | ​ |  | (15.0)
Total incurred | ​ |  | 388.6 | ​ |  | 389.6
Payments: | ​ |  | ​ | ​ |  | ​
Current year | ​ |  | 225.9 | ​ |  | 205.3
Prior years | ​ |  | 162.5 | ​ |  | 174.1
Total payments | ​ |  | 388.4 | ​ |  | 379.4
Net balance at end of period | ​ |  | 1,326.6 | ​ |  | 1,312.4
Plus: reinsurance recoverable | ​ |  | 69.6 | ​ |  | 68.9
Balance at end of period | ​ | $ | 1,396.2 | ​ | $ | 1,381.3
​ Incurred liability adjustments relating to prior years, which affected current operations during 2023 and 2022, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims. Long-Duration Contracts Gross Premiums or Assessments and Interest Accretion The amount of gross premiums or assessments and interest accretion recognized by segment in the consolidated statements of operations was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Gross premiums or assessments (1) |  | Interest accretion (2)
​ | ​ | For the three months ended | ​ | ​ | For the three months ended
​ | ​ | March 31, | ​ | March 31,
​ |  | 2023 |  | 2022 |  | 2023 |  | 2022
​ |  | (in millions)
Retirement and Income Solutions: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Pension risk transfer | ​ | $ | 577.0 | ​ | $ | 116.5 |  | $ | 245.2 |  | $ | 232.7
Individual fixed income annuities | ​ |  | 8.0 | ​ |  | 6.8 |  | ​ | 55.7 |  | ​ | 58.5
Total Retirement and Income Solutions | ​ |  | 585.0 | ​ |  | 123.3 |  | ​ | 300.9 |  | ​ | 291.2
Principal Asset Management - Principal International: | ​ |  |  | ​ |  |  |  | ​ |  |  | ​ |
Latin America: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individual fixed income annuities (3) | ​ |  | 6.6 | ​ |  | 10.5 |  | ​ | 106.2 |  | ​ | 139.1
Benefits and Protection: | ​ |  |  | ​ |  |  |  | ​ |  |  | ​ |
Specialty Benefits: | ​ |  |  | ​ |  |  |  | ​ |  |  | ​ |
Individual disability | ​ |  | 150.6 | ​ |  | 144.4 |  | ​ | 23.2 |  | ​ | 22.3
Life Insurance: | ​ |  |  | ​ |  |  |  | ​ |  |  | ​ |
Universal life | ​ |  | 174.6 | ​ |  | 142.5 |  | ​ | 46.3 |  | ​ | 42.5
Term life | ​ |  | 160.9 | ​ |  | 157.2 |  | ​ | 11.4 |  | ​ | 10.8
Total Benefits and Protection | ​ |  | 486.1 | ​ |  | 444.1 |  | ​ | 80.9 |  | ​ | 75.6
Corporate: | ​ |  |  | ​ |  |  |  | ​ |  |  | ​ |
Long-term care insurance | ​ |  | 1.5 | ​ |  | 1.4 |  | ​ | 2.5 |  | ​ | 2.4
Total per consolidated statements of operations | ​ | $ | 1,079.2 | ​ | $ | 579.3 |  | $ | 490.5 |  | $ | 508.3
(1) | Gross premiums are included within premiums and other considerations on the consolidated statements of operations. Assessments, which are only applicable to the Life Insurance - Universal life level of aggregation, are included within fees and other revenues on the consolidated statements of operations.
(2) | Interest accretion is included within benefits, claims and settlement expenses on the consolidated statements of operations.
(3) | Includes inflation adjustments included within the liability for future policy benefits rollforward for interest accretion.
Liability for Future Policy Benefits The liability for future policy benefits for individual and group annuities is generally equal to the present value of expected future policy benefit payments. The reserves are computed using assumptions for mortality and interest. Mortality rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience. The liability for future policy benefits for non-participating term life insurance, individual disability income contracts and individual and group long-term care contracts is generally equal to the present value of expected future policy benefit payments less the present value of expected net premiums. The reserves are computed using assumptions for mortality, interest, morbidity and lapse. An interest accretion rate is determined for an identified cohort and remains unchanged after the issue year. For policies issued on or prior to December 31, 2020, the interest accretion rate is based on the assumed investment yield when the business was issued. For policies issued after December 31, 2020, the interest accretion rate is based on the upper-medium grade fixed-income instrument yields, which is generally equivalent to a single-A rated bond yield matched to the duration of our insurance liabilities, when the business was issued. The liability for future policy benefits is remeasured to reflect current upper-medium grade fixed-income instrument yields as of each reporting date. The liability is calculated by discounting cash flows using rate curves reflecting the currency and duration of the insurance liabilities. For discount rate tenors, or points on the curves, where the upper-medium grade fixed-income instrument yields are not liquid or limited observable market data is available, we use various estimation techniques consistent with fair value measurement guidance. For our individual fixed income annuities in Latin America, the discount rate methodology is designed to prioritize observable inputs based on market data available in the local debt markets where the respective policies are issued in the currency in which the policies are denominated. For discount rate tenors where upper-medium grade fixed-income instrument yields based on international rating standards are not liquid or limited observable market data is available, estimation techniques are used to determine a curve in the appropriate currency. Further details regarding reference rates used are included under “Interest Accretion and Current Discount Rates.” Retirement and Income Solutions The balances and the changes in the present value for expected future policy benefits were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended |  | For the year ended
​ | ​ | March 31, 2023 | ​ | December 31, 2022
​ | ​ | Pension | ​ | Individual | ​ | Pension | ​ | Individual
​ | ​ | risk | ​ | fixed income | ​ | risk | ​ | fixed income
​ |  | transfer |  | annuities |  | transfer |  | annuities
​ |  | ($ in millions)
Present value of expected future policy benefit payments |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Balance at beginning of period | ​ | $ | 21,211.4 | ​ | $ | 5,019.4 | ​ | $ | 25,365.8 | ​ | $ | 6,535.0
Effect of changes in discount rate assumptions at beginning of period | ​ |  | 1,799.6 | ​ |  | 439.0 | ​ |  | (3,386.5) | ​ |  | (812.6)
Balance at beginning of period at original discount rate | ​ |  | 23,011.0 | ​ |  | 5,458.4 | ​ |  | 21,979.3 | ​ |  | 5,722.4
Effect of changes in cash flow assumptions | ​ |  | — | ​ |  | — | ​ |  | (7.9) | ​ |  | (3.0)
Effect of actual variances from expected experience | ​ |  | (13.3) | ​ |  | (0.8) | ​ |  | (3.2) | ​ |  | —
Adjusted beginning of period balance at original discount rate | ​ |  | 22,997.7 | ​ |  | 5,457.6 | ​ |  | 21,968.2 | ​ |  | 5,719.4
Interest accrual | ​ |  | 245.2 | ​ |  | 55.7 | ​ |  | 935.7 | ​ |  | 229.7
Benefit payments | ​ |  | (481.5) | ​ |  | (126.9) | ​ |  | (1,841.7) | ​ |  | (520.4)
Issuances | ​ |  | 578.5 | ​ |  | 7.9 | ​ |  | 1,948.8 | ​ |  | 29.7
Balance at end of period at original discount rate | ​ |  | 23,339.9 | ​ |  | 5,394.3 | ​ |  | 23,011.0 | ​ |  | 5,458.4
Effect of changes in discount rate assumptions at end of period | ​ |  | (1,193.8) | ​ |  | (302.0) | ​ |  | (1,799.6) | ​ |  | (439.0)
Future policy benefits | ​ |  | 22,146.1 | ​ |  | 5,092.3 | ​ |  | 21,211.4 | ​ |  | 5,019.4
Reinsurance impact | ​ |  | — | ​ |  | (4,782.5) | ​ |  | — | ​ |  | (4,714.0)
Future policy benefits after reinsurance | ​ | $ | 22,146.1 | ​ | $ | 309.8 | ​ | $ | 21,211.4 | ​ | $ | 305.4
Weighted-average duration for future policy benefits (years) (1) | ​ |  | 8.6 | ​ |  | 8.0 | ​ |  | 8.5 | ​ |  | 7.9
(1) | Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort.
Upper-medium grade fixed-income instrument yields decreased during the three months ended March 31, 2023, resulting in an increase to the liability for future policy benefits of $605.8 million for Pension risk transfer and $137.0 million for Individual fixed income annuities. Upper-medium grade fixed-income instrument yields increased during the year ended December 31, 2022, resulting in a decrease to the liability for future policy benefits of $5,186.1 million for Pension risk transfer and $1,251.6 million for Individual fixed income annuities. See “Interest Accretion and Current Discount Rates” for further details. Principal Asset Management - Principal International The balances and the changes in the present value for expected future policy benefits for Latin America – Individual fixed income annuities were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended |  | For the year ended
​ | ​ | March 31, 2023 | ​ | December 31, 2022
​ |  | ($ in millions)
Present value of expected future policy benefit payments |  | ​ |  |  | ​ |
Balance at beginning of period | ​ | $ | 5,042.3 | ​ | $ | 4,336.8
Effect of changes in discount rate assumptions at beginning of period | ​ |  | (754.6) | ​ |  | (478.5)
Balance at beginning of period at original discount rate | ​ |  | 4,287.7 | ​ |  | 3,858.3
Effect of actual variances from expected experience | ​ |  | 0.7 | ​ |  | (4.7)
Adjusted beginning of period balance at original discount rate | ​ |  | 4,288.4 | ​ |  | 3,853.6
Interest accrual (1) | ​ |  | 106.2 | ​ |  | 662.0
Benefit payments | ​ |  | (90.5) | ​ |  | (325.8)
Issuances | ​ |  | 7.1 | ​ |  | 86.4
Foreign currency translation adjustment | ​ |  | 333.3 | ​ |  | 11.5
Balance at end of period at original discount rate | ​ |  | 4,644.5 | ​ |  | 4,287.7
Effect of changes in discount rate assumptions at end of period | ​ |  | 772.4 | ​ |  | 754.6
Future policy benefits | ​ | $ | 5,416.9 | ​ | $ | 5,042.3
​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average duration for future policy benefits (years) (2) | ​ |  | 10.7 | ​ |  | 10.9
(1) | Includes inflation adjustments.
(2) | Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort.
Upper-medium grade fixed-income instrument yields impacting Latin America increased during the three months ended March 31, 2023; however, foreign currency movements offset the impact of those yields, resulting in an increase to the liability for future policy benefits of $17.8 million. Upper-medium grade fixed-income instrument yields impacting Latin America decreased during the year ended December 31, 2022, resulting in an increase to the liability for future policy benefits of $276.1 million. See “Interest Accretion and Current Discount Rates” for further details. Benefits and Protection The balances and the changes in the present value for expected net premiums and expected future policy benefits were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the year ended
​ | ​ | March 31, 2023 | ​ | December 31, 2022
​ | ​ | Specialty | ​ | Life | ​ | Specialty | ​ | Life
​ | ​ | Benefits | ​ | Insurance | ​ | Benefits | ​ | Insurance
​ | ​ | Individual | ​ | ​ | ​ | ​ | Individual | ​ | ​ | ​
​ |  | disability |  | Term life |  | disability |  | Term life
​ | ​ | ($ in millions)
Present value of expected net premiums |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Balance at beginning of period | ​ | $ | 2,341.8 | ​ | $ | 3,423.2 | ​ | $ | 3,149.9 | ​ | $ | 4,193.7
Effect of changes in discount rate assumptions at beginning of period | ​ |  | 395.2 | ​ |  | 196.0 | ​ |  | (198.9) | ​ |  | (690.1)
Balance at beginning of period at original discount rate | ​ |  | 2,737.0 | ​ |  | 3,619.2 | ​ |  | 2,951.0 | ​ |  | 3,503.6
Effect of changes in cash flow assumptions | ​ |  | — | ​ |  | — | ​ |  | (413.1) | ​ |  | —
Effect of actual variances from expected experience | ​ |  | 82.9 | ​ |  | 28.4 | ​ |  | 235.9 | ​ |  | 128.6
Adjusted beginning of period balance at original discount rate | ​ |  | 2,819.9 | ​ |  | 3,647.6 | ​ |  | 2,773.8 | ​ |  | 3,632.2
Interest accrual | ​ |  | 23.5 | ​ |  | 41.5 | ​ |  | 95.2 | ​ |  | 162.9
Net premiums collected | ​ |  | (66.1) | ​ |  | (86.4) | ​ |  | (276.5) | ​ |  | (346.6)
Issuances | ​ |  | 23.5 | ​ |  | 49.6 | ​ |  | 144.5 | ​ |  | 170.7
Balance at end of period at original discount rate | ​ |  | 2,800.8 | ​ |  | 3,652.3 | ​ |  | 2,737.0 | ​ |  | 3,619.2
Effect of changes in discount rate assumptions at end of period | ​ |  | (315.0) | ​ |  | (95.9) | ​ |  | (395.2) | ​ |  | (196.0)
Balance at end of period | ​ | $ | 2,485.8 | ​ | $ | 3,556.4 | ​ | $ | 2,341.8 | ​ | $ | 3,423.2
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Present value of expected future policy benefit payments | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Balance at beginning of period | ​ | $ | 4,040.6 | ​ | $ | 4,332.2 | ​ | $ | 5,648.3 | ​ | $ | 5,311.3
Effect of changes in discount rate assumptions at beginning of period | ​ |  | 1,021.4 | ​ |  | 251.6 | ​ |  | (501.0) | ​ |  | (913.9)
Balance at beginning of period at original discount rate | ​ |  | 5,062.0 | ​ |  | 4,583.8 | ​ |  | 5,147.3 | ​ |  | 4,397.4
Effect of changes in cash flow assumptions | ​ |  | — | ​ |  | — | ​ |  | (476.3) | ​ |  | —
Effect of actual variances from expected experience | ​ |  | 92.4 | ​ |  | 32.2 | ​ |  | 240.0 | ​ |  | 139.0
Adjusted beginning of period balance at original discount rate | ​ |  | 5,154.4 | ​ |  | 4,616.0 | ​ |  | 4,911.0 | ​ |  | 4,536.4
Interest accrual | ​ |  | 46.7 | ​ |  | 52.9 | ​ |  | 185.4 | ​ |  | 206.8
Benefit payments | ​ |  | (49.3) | ​ |  | (87.3) | ​ |  | (183.7) | ​ |  | (340.6)
Issuances | ​ |  | 24.3 | ​ |  | 53.5 | ​ |  | 149.3 | ​ |  | 181.2
Balance at end of period at original discount rate | ​ |  | 5,176.1 | ​ |  | 4,635.1 | ​ |  | 5,062.0 | ​ |  | 4,583.8
Effect of changes in discount rate assumptions at end of period | ​ |  | (874.4) | ​ |  | (117.5) | ​ |  | (1,021.4) | ​ |  | (251.6)
Balance at end of period | ​ | $ | 4,301.7 | ​ | $ | 4,517.6 | ​ | $ | 4,040.6 | ​ | $ | 4,332.2
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Future policy benefits (1) | ​ | $ | 1,815.9 | ​ | $ | 961.2 | ​ | $ | 1,698.8 | ​ | $ | 909.0
Reinsurance impact | ​ |  | (412.3) | ​ |  | 43.5 | ​ |  | (386.8) | ​ |  | 25.6
Future policy benefits after reinsurance | ​ | $ | 1,403.6 | ​ | $ | 1,004.7 | ​ | $ | 1,312.0 | ​ | $ | 934.6
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average duration for future policy benefits (years) (2) | ​ |  | 18.5 | ​ |  | 9.5 | ​ |  | 18.5 | ​ |  | 9.6
(1)Represents the present value of expected future policy benefit payments less the present value of expected net premiums.
(2) | Represents the average of the cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort.
Upper-medium grade fixed-income instrument yields decreased during the three months ended March 31, 2023, resulting in an increase to the liability for future policy benefits of $66.8 million for Individual disability and $34.0 million for Term life. Upper-medium grade fixed-income instrument yields increased during the year ended December 31, 2022, resulting in a decrease to the liability for future policy benefits of $928.3 million for Individual disability and $279.4 million for Term life. See “Interest Accretion and Current Discount Rates” for further details. We updated our actuarial assumptions during the third quarter of 2022, resulting in a $63.2 million decrease in the liability for future policy benefits and a $52.4 million increase to income before taxes and pre-tax operating earnings, net of reinsurance, for our individual disability business. This was primarily due to favorable updates to claim experience assumptions. Additional Liability for Certain Benefit Features The liability for future policy benefits also includes an additional reserve on certain universal life contracts where benefit features result in gains in early years followed by losses in later years. The liability for these future losses is accrued in relation to estimated contract assessments. A premium deficiency exists if the net liabilities together with future premiums are determined to be insufficient to provide for expected future policy benefits. Premium deficiency testing considers, among other factors, anticipated investment income and does not include a provision for adverse deviation. We did not have a premium deficiency reserve as of March 31, 2023 or December 31, 2022. The balances and the changes in the additional liability for certain benefits features for Life Insurance - Universal life contracts were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the year ended
​ |  | March 31, 2023 |  | December 31, 2022
​ | ​ | ($ in millions)
Balance at beginning of period | ​ | $ | 4,095.2 | ​ | $ | 3,814.2
Effect of changes in cash flow assumptions | ​ |  | — | ​ |  | (6.0)
Effect of actual variances from expected experience | ​ |  | 15.1 | ​ |  | 54.9
Interest accrual | ​ |  | 46.3 | ​ |  | 171.2
Net assessments collected | ​ |  | 89.2 | ​ |  | 320.3
Benefit payments | ​ |  | (26.5) | ​ |  | (91.9)
Other (1) | ​ |  | — | ​ |  | (167.5)
Balance at end of period | ​ |  | 4,219.3 | ​ |  | 4,095.2
Reinsurance impact | ​ |  | (4,215.2) | ​ |  | (4,091.4)
Balance at end of period after reinsurance | ​ | $ | 4.1 | ​ | $ | 3.8
​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average duration for additional liability (years) (2) | ​ |  | 27.0 | ​ |  | 27.6
(1) | Reflects the impact of re-cohorting in 2022 as a result of our decision to manage the ULSG business separately from our other universal life business following a comprehensive review of our business mix and capital management options (the “Strategic Review”).
(2) | Represents the average of the cohort-level duration of the benefits less the net assessment cash flows weighted by the reserve balance for each cohort.
Corporate The balances and the changes in the present value for expected net premiums and expected future policy benefits for long-term care insurance were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended | ​ | For the year ended
​ | ​ | March 31, 2023 | ​ | December 31, 2022
​ | ​ | ($ in millions)
Present value of expected net premiums |  | ​ |  |  | ​ |
Balance at beginning of period | ​ | $ | 64.6 | ​ | $ | 62.8
Effect of changes in discount rate assumptions at beginning of period | ​ |  | (3.6) | ​ |  | (14.0)
Balance at beginning of period at original discount rate | ​ |  | 61.0 | ​ |  | 48.8
Effect of changes in cash flow assumptions | ​ |  | — | ​ |  | 10.0
Effect of actual variances from expected experience | ​ |  | (3.6) | ​ |  | 4.1
Adjusted beginning of period balance at original discount rate | ​ |  | 57.4 | ​ |  | 62.9
Interest accrual | ​ |  | 0.9 | ​ |  | 3.3
Net premiums collected | ​ |  | (1.5) | ​ |  | (5.2)
Balance at end of period at original discount rate | ​ |  | 56.8 | ​ |  | 61.0
Effect of changes in discount rate assumptions at end of period | ​ |  | 4.7 | ​ |  | 3.6
Balance at end of period | ​ | $ | 61.5 | ​ | $ | 64.6
​ | ​ | ​ | ​ | ​ | ​ | ​
Present value of expected future policy benefit payments | ​ |  |  | ​ |  |
Balance at beginning of period | ​ | $ | 248.1 | ​ | $ | 297.5
Effect of changes in discount rate assumptions at beginning of period | ​ |  | (18.9) | ​ |  | (89.5)
Balance at beginning of period at original discount rate | ​ |  | 229.2 | ​ |  | 208.0
Effect of changes in cash flow assumptions | ​ |  | — | ​ |  | 17.2
Effect of actual variances from expected experience | ​ |  | (5.9) | ​ |  | 3.7
Adjusted beginning of period balance at original discount rate | ​ |  | 223.3 | ​ |  | 228.9
Interest accrual | ​ |  | 3.4 | ​ |  | 13.1
Benefit payments | ​ |  | (3.3) | ​ |  | (12.8)
Balance at end of period at original discount rate | ​ |  | 223.4 | ​ |  | 229.2
Effect of changes in discount rate assumptions at end of period | ​ |  | 26.5 | ​ |  | 18.9
Balance at end of period | ​ | $ | 249.9 | ​ | $ | 248.1
​ | ​ | ​ | ​ | ​ | ​ | ​
Future policy benefits (1) | ​ | $ | 188.4 | ​ | $ | 183.5
Reinsurance impact | ​ |  | (188.4) | ​ |  | (183.5)
Future policy benefits after reinsurance | ​ | $ | — | ​ | $ | —
​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average duration for future policy benefits (years) (2) | ​ |  | 11.8 | ​ |  | 11.8
(1) | Represents the present value of expected future policy benefit payments less the present value of expected net premiums.
(2) | Represents the average of cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort.
Upper-medium grade fixed-income instrument yields decreased during the three months ended March 31, 2023, resulting in an increase to the liability for future policy benefits of $6.5 million. Upper-medium grade fixed-income instrument yields increased during the year ended December 31, 2022, resulting in a decrease to the liability for future policy benefits of $60.2 million. See “Interest Accretion and Current Discount Rates” for further details. Expected Future Gross Premiums and Benefit Payments The amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums, utilizing the current upper-medium fixed-income instrument yield, were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2023 |  | December 31, 2022
​ |  | (in millions)
Retirement and Income Solutions: |  | ​ |  |  | ​ |
Pension risk transfer |  | ​ |  |  | ​ |
Expected undiscounted future benefit payments | ​ | $ | 34,085.9 |  | $ | 33,691.4
​ | ​ | ​ | ​ | ​ | ​ | ​
Individual fixed income annuities | ​ |  |  |  | ​ |
Expected undiscounted future benefit payments | ​ | $ | 7,605.3 |  | $ | 7,716.6
​ | ​ | ​ | ​ | ​ | ​ | ​
Principal Asset Management - Principal International: | ​ |  |  |  | ​ |
Latin America: | ​ | ​ | ​ | ​ | ​ | ​
Individual fixed income annuities | ​ |  |  |  | ​ |
Expected undiscounted future benefit payments | ​ | $ | 6,960.9 |  | $ | 6,449.9
​ | ​ | ​ | ​ | ​ | ​ | ​
Benefits and Protection - Specialty Benefits: | ​ |  |  |  | ​ |
Individual disability | ​ |  |  |  | ​ |
Expected discounted future gross premiums | ​ | $ | 5,316.8 |  | $ | 5,140.9
Expected undiscounted future gross premiums | ​ | $ | 8,035.8 |  | $ | 7,978.7
Expected undiscounted future benefit payments | ​ | $ | 8,656.7 |  | $ | 8,473.9
​ | ​ | ​ | ​ | ​ | ​ | ​
Benefits and Protection - Life Insurance: | ​ |  |  |  | ​ |
Term life | ​ |  |  |  | ​ |
Expected discounted future gross premiums | ​ | $ | 6,301.3 |  | $ | 6,104.6
Expected undiscounted future gross premiums | ​ | $ | 10,169.3 |  | $ | 10,146.3
Expected undiscounted future benefit payments | ​ | $ | 7,264.7 |  | $ | 7,202.5
​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate: | ​ |  |  |  | ​ |
Long-term care insurance | ​ |  |  |  | ​ |
Expected discounted future gross premiums | ​ | $ | 61.5 |  | $ | 64.6
Expected undiscounted future gross premiums | ​ | $ | 89.3 |  | $ | 96.5
Expected undiscounted future benefit payments | ​ | $ | 468.6 |  | $ | 483.4
​ Interest Accretion and Current Discount Rates The interest accretion rate shown for each level of aggregation is an average of the cohort-level accretion rates weighted by the reserve balance for each cohort within that level of aggregation. The current discount rate is calculated at a cohort-level based on current upper-medium fixed-income instrument yields and weighted by the reserve balance for each cohort within each level of aggregation. The weighted-average rates were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Interest accretion rate | ​ | Current discount rate |
​ |  | March 31, 2023 |  | December 31, 2022 |  | March 31, 2023 |  | December 31, 2022 |
Retirement and Income Solutions: |  |  |  |  |  |  |  |  | ​
Pension risk transfer |  | 4.40 | % | 4.38 | % | 4.96 | % | 5.31 | %
Individual fixed income annuities |  | 4.21 | % | 4.22 | % | 4.94 | % | 5.30 | %
Principal Asset Management - Principal International (1): |  |  |  |  |  |  |  |  | ​
Latin America: |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Individual fixed income annuities | ​ | 4.24 | % | 4.24 | % | 2.50 | % | 2.43 | %
Benefits and Protection: |  |  |  |  |  |  |  |  | ​
Specialty Benefits: |  |  |  |  |  |  |  |  | ​
Individual disability |  | 4.01 | % | 4.03 | % | 5.01 | % | 5.36 | %
Life Insurance: |  |  |  |  |  |  |  |  | ​
Universal life |  | 4.73 | % | 4.73 | % | See note (2) |  | See note (2) | ​
Term life |  | 4.85 | % | 4.89 | % | 4.83 | % | 5.22 | %
Corporate: |  |  |  |  |  |  |  |  | ​
Long-term care insurance |  | 6.16 | % | 6.16 | % | 5.00 | % | 5.34 | %
(1) | The interest accretion rate and current discount rate are Chilean real rates, excluding inflation, in the local currency.
(2) | The additional liability for certain benefit features for Life Insurance – Universal life is measured using the discount rate at contract inception. Therefore, the current discount rate is not applicable for this product.

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