XML 50 R30.htm IDEA: XBRL DOCUMENT v3.25.0.1
BUSINESS SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION BUSINESS SEGMENT INFORMATION
We have six reportable segments: Individual Retirement, Group Retirement, Asset Management, Protection Solutions, Wealth Management and Legacy.
These segments reflect the manner by which the Company’s chief operating decision maker (“CODM”) views and manages the business. A brief description of these segments follows:
•The Individual Retirement (“IR”) segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.
•The Group Retirement (“GR”) segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses.
•The Asset Management (“AM”) segment provides diversified investment management and related solutions globally to a broad range of clients through three main client channels - Institutional, Retail and Private Wealth.
•The Protection Solutions (“PS”) segment includes our life insurance and group EB businesses.
•The Wealth Management (“WM”) segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products through Equitable Advisors.
•The Legacy (“L”) segment primarily consists of the capital intensive fixed-rate GMxB business written in the Individual Retirement market prior to 2011.
The CODM is the chief executive officer and President of Holdings. The CODM evaluates the reported measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. Significant segment expenses are part of the CODM review and are critically important to understand the level of profitability of operating segments but also the overall company performance. This assessment will inform the way the allocation of resources will be done among the different operating segments.
Measurement
Operating earnings (loss) is the financial measure which primarily focuses on the Company’s segments’ results of operations as well as the underlying profitability of the Company’s core business. By excluding items that can be distortive and unpredictable such as investment gains (losses) and investment income (loss) from derivative instruments, the Company believes operating earnings (loss) by segment enhances the understanding of the Company’s underlying drivers of profitability and trends in the Company’s segments.
Operating earnings is calculated by adjusting each segment’s net income (loss) attributable to Holdings for the following items:
•Items related to variable annuity product features, which include: (i) changes in the fair value of MRB and purchased MRB, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the MRB which result in residual net income volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk;
•Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
•Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation;
•Other adjustments, which primarily include restructuring costs related to severance and separation, lease write-offs related to non-recurring restructuring activities, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses and realized capital gains/losses from sales or disposals of select securities, certain legal accruals; a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to those UL policies, impact of the annual actuarial assumption updates attributable to LFPB when the majority of the impact relates to the non-core business; and
•Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period and changes to the deferred tax valuation allowance.
The General Account investment portfolio is used to support the insurance and annuity liabilities of our Individual Retirement, Group Retirement, Protection Solutions and Legacy business segments.
In the fourth quarter of 2023, the Company updated its operating earnings measure to exclude the impact of realized amounts related to equity classified instruments. The recognition of the realized capital gains and losses from investments in current net investment income is generally considered distortive and not reflective of the ongoing core business activities of the segments. The presentation of operating earnings in prior periods was not revised to reflect this modification. The impact to operating earnings was immaterial for the year ended December 31, 2023.
In the first quarter of 2024, the Company began allocating to its business segments collateral expense resulting from a designated rate to be paid on the collateral held back to counterparties. The new segment allocation methodology for collateral expense is based on the income earned on cash equivalents held in the surplus segments and income earned in portfolios backing collateral expenses, such that the collateral expense would be allocated to the segments up to that amount. Any remaining amount is included within Corporate and Other. This expense was previously recorded in Corporate and Other with no allocation to our business segments in prior reporting periods.
The presentation of operating earnings in prior periods was not revised to reflect this modification, however, the Company estimated that allocating collateral expense to the segments for the year ended December 31, 2023 and 2022, respectively, would have resulted in a decrease to operating earnings of $4.0 million and $0.8 million for Individual Retirement, $7.7 million and $1.4 million for Group Retirement, $21.9 million and $2.5 million for Protection Solutions, $4.2 million and $1.0 million for Legacy, and an increase of $37.8 million and $5.7 million for Corporate and Other. Total Company operating earnings were not impacted.
During the third quarter 2024, the Company moved revenues and expenses related to payout annuitizations from the Legacy segment to the Individual Retirement segment. Now all payout annuities will be reported within the Individual Retirement segment as the block is managed on an aggregate basis. Prior periods have been recast to reflect this change.
Revenues derived from any customer did not exceed 10% of revenues for the years ended December 31, 2024, 2023 and 2022.
The Company accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices.
The table below presents operating earnings (loss) by segment and Corporate and Other (C&O):
Year Ended December 31, 2024
IRGRAMPSWMLC&OEliminations
Total
(in millions)
Segment revenues$3,656 $1,194 $4,479 $3,329 $1,796 $498 $944 $(906)$14,990 
Benefits and other deductions
Policyholders’ benefits324 — — 1,901 — 1 470 — 2,696 
Interest credited to policyholders’ account balances1,208 227 — 534 — 33 509 — 2,511 
Commissions and distribution related payments356 170 742 172 1,133 160 20 (857)1,896 
Amortization of deferred policy acquisition costs460 54 — 125 — 62 10 — 711 
Compensation and benefits48 37 1,788 137 314 30 13 — 2,367 
Interest expense and financing fees— — 44 1 — — 222 (26)241 
Significant segment expenses2,396 488 2,574 2,870 1,447 286 1,244 (883)10,422 
Other segment items (1)154 100 821 243 105 60 178 (23)1,638 
Income taxes(153)(84)(178)(30)(60)(21)71 — (455)
Less: Operating (earnings) loss attributable to the noncontrolling interest— — 427 — — — 41 — 468 
Operating earnings (loss)$953 $522 $479 $186 $184 $131 $(448)$— $2,007 
_____________
(1)Other segment items include Remeasurment for liability for future policy benefits and Other operating expenses and costs. Additionally, other segment items reflected in Asset Management segment is primarily driven by other operating expense and costs related to general and administrative costs and promotion and servicing expenses.
 Year Ended December 31, 2023
 IRGRAMPSWMLC&OEliminations
Total
(in millions)
Segment revenues$2,913 $1,021 $4,117 $3,180 $1,551 $531 $1,118 $(810)$13,621 
Benefits and other deductions
Policyholders’ benefits299 — — 1,975 — — 486 — 2,760 
Interest credited to policyholders’ account balances708 215 — 520 — 36 604 — 2,083 
Commissions and distribution related payments262 155 610 158 968 171 18 (752)1,590 
Amortization of deferred policy acquisition costs388 59 — 120 — 63 11 — 641 
Compensation and benefits57 27 1,736 116 285 28 20 — 2,269 
Interest expense and financing fees1 — 54 5 — — 229 (37)252 
Significant segment expenses1,715 456 2,400 2,894 1,253 298 1,368 (789)9,595 
Other segment items (1)138 86 831 225 88 52 162 (21)1,561 
Income taxes(176)(80)(126)(10)(51)(30)72 — (401)
Less: Operating (earnings) loss attributable to the noncontrolling interest— — 349 — — — 21 — 370 
Operating earnings (loss)$884 $399 $411 $51 $159 $151 $(361)$— $1,694 
_____________
(1)Other segment items include Remeasurment for liability for future policy benefits and Other operating expenses and costs. Additionally, other segment items reflected in Asset Management segment is primarily driven by other operating expense and costs related to general and administrative costs and promotion and servicing expenses.
 Year Ended December 31, 2022
 IRGRAMPSWMLC&OEliminations
Total
(in millions)
Segment revenues$2,279 $1,158 $4,105 $3,120 $1,446 $568 $910 $(760)$12,826 
Benefits and other deductions
Policyholders’ benefits222 — — 1,896 — 1 509 — 2,628 
Interest credited to policyholders’ account balances327 281 — 511 — 40 251 — 1,410 
Commissions and distribution related payments236 154 630 142 940 186 15 (736)1,567 
Amortization of deferred policy acquisition costs334 59 — 117 — 65 11 — 586 
Compensation and benefits21 18 1,647 76 313 11 23 — 2,109 
Interest expense and financing fees1 $1 18 1 — — 205 — 226 
Significant segment expenses1,141 513 2,295 2,743 1,253 303 1,014 (736)8,526 
Other segment items (1)145 105 872 260 57 50 313 (24)1,778 
Income taxes(173)(94)(162)(20)(35)(38)73 — (449)
Less: Operating (earnings) loss attributable to the noncontrolling interest— — 352 — — — (5)— 347 
Operating earnings (loss)$820 $446 $424 $97 $101 $177 $(339)$— $1,726 
_____________
(1)Other segment items include Remeasurment for liability for future policy benefits and Other operating expenses and costs. Additionally, other segment items reflected in Asset Management segment is primarily driven by other operating expense and costs related to general and administrative costs and promotion and servicing expenses.
The table below presents a reconciliation to net income (loss) attributable to Holdings:
 Year Ended December 31,
 202420232022
(in millions)
Net income (loss) attributable to Holdings$1,307 $1,302 $2,153 
Adjustments related to:
Variable annuity product (1)
606 607 (2,193)
Investment (gains) losses133 713 945 
Net actuarial (gains) losses related to pension and other postretirement benefit obligations60 39 82 
Other adjustments (2) (3) (4) (6)
93 351 605 
Income tax expense (benefit) related to above adjustments (187)(359)118 
Non-recurring tax items (5)
(5)(959)16 
Operating earnings (loss)$2,007 $1,694 $1,726 
______________
(1)Includes the impact of favorable assumption updates of $16 million for the year ended December 31, 2024, respectively, and $40 million for the year ended December 31, 2023, respectively. Includes the impact of unfavorable assumption updates of $204 million for the year ended December 31, 2022.
(2)Includes certain gross legal expenses related to the COI litigation of $106 million, $144 million and $218 million for the year ended December 31, 2024, 2023 and 2022, respectively. Includes policyholder benefit costs of $75 million for the year ended December 31, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life
settlement market. Includes the impact of unfavorable annual actuarial assumptions updates related to LFPB of $61 million for the year ended December 31, 2023.
(3)For the year ended December 31, 2024, includes $82 million of the gain on sale on AB's Bernstein Research Service attributable to Holdings.
(4)For the year ended December 31, 2024, includes $78 million contingent payment gain recognized in connection with the fair value adjustment related to our contingent payment liability associated with our acquisition of CarVal in 2022.
(5)For the year ended December 31, 2024 and 2023, respectively, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period. A decrease of the deferred tax valuation allowance of $1.0 billion during year ended December 31, 2023.
(6)Includes Non-GMxB related derivative hedge gains and losses of $6 million, $26 million and $(34) million for the years ended December 31, 2024, 2023 and 2022, respectively.
Segment revenues is a measure of the Company’s revenue by segment as adjusted to exclude certain items. The following table reconciles segment revenues to total revenues by excluding the following items:
•Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features and changes in the fair value of the embedded derivatives reflected within the net derivative results of variable annuity product features;
•Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
•Other adjustments, which primarily includes net derivative gains (losses) on certain Non-GMxB derivatives and Net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments and unrealized gain/losses associated with equity securities.
The table below presents revenues by segment and C&O:
 
Year Ended December 31,
 
202420232022
(in millions)
Segment revenues:
Individual Retirement (1)$3,656 $2,913 $2,279 
Group Retirement (1)1,194 1,021 1,158 
Asset Management (2)4,479 4,117 4,105 
Protection Solutions (1)3,329 3,180 3,120 
Wealth Management (3)1,796 1,551 1,446 
Legacy (1)498 531 568 
Corporate and Other (1)944 1,118 910 
Eliminations(906)(810)(760)
Adjustments related to:
Variable annuity product features, excluding change in MRBs (4)
(2,589)(2,414)913 
Investment gains (losses), net(133)(713)(945)
Other adjustments to segment revenues (4)
169 34 (150)
Total revenues$12,437 $10,528 $12,644 
______________
(1)Includes investment expenses charged by AB of $144 million, $140 million and $110 million for the years ended December 31, 2024, 2023 and 2022, respectively, for services provided to the Company.
(2)Inter-segment investment management and other fees of $166 million, $160 million and $134 million for the years ended December 31, 2024, 2023 and 2022, respectively, are included in segment revenues of the Investment Management and Research segment.
(3)Inter-segment distribution fees of $857 million, $752 million and $736 million for the years ended December 31, 2024, 2023 and 2022, respectively, are included in segment revenues of the Wealth Management segment.
(4)Prior periods were revised to conform with current presentation.
Total assets by segment were as follows:
 
December 31, 2024December 31, 2023
(in millions)
Total assets by segment:
Individual Retirement$110,358 $90,805 
Group Retirement51,269 47,260 
Asset Management10,514 11,088 
Protection Solutions41,583 38,933 
Wealth Management168 144 
Legacy42,518 49,487 
Corporate and Other39,456 39,097 
Total assets$295,866 $276,814