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Future Policy Benefits (Tables)

9 Months Ended

Sep. 30, 2024

Insurance [Abstract]

Liability for Future Policy Benefit, Activity

Liability for Future Policy Benefits – Traditional Business

The Company reviews actual and anticipated experience compared to the assumptions used to establish policy benefits on a quarterly basis and will update those assumptions if evidence suggests that they should be revised. It is the Company’s policy to complete its annual assumption review during the third quarter of each year. However, updates may occur in other quarters if information becomes available during the quarter that indicates an assumption update is necessary.

Significant assumptions used to compute the liability for future policy benefits for the Traditional business include mortality, morbidity, lapse rates and discount rates (both accretion and current). During the third quarter of 2024 and 2023, the Company completed its annual assumption review resulting in a $39 million and $85 million increase in the Company’s liability for future policy benefits for its Traditional business during 2024 and 2023, respectively. The increase in the liability in 2024 and 2023 was primarily the result of updating the mortality and lapse assumptions used to measure the liability for future policy benefits. The Company also updated the underlying market data used to determine the current discount rate resulting in changes to the discount rate assumption used to measure the net liability for future policy benefits.

The following tables provide the balances of and changes in the Company’s liability for future policy benefits for long-duration reinsurance contracts for its Traditional business, which primarily consists of individual life, group life and critical illness reinsurance for the nine months ended September 30, 2024 and 2023 (dollars in millions):

For the nine months ended September 30, 2024:						U.S. and Latin America – Traditional						Canada – Traditional						Europe, Middle East and Africa – Traditional						Asia Pacific – Traditional
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate						$	76,943					$	22,689					$	15,328					$	42,741
Effect of changes in cash flow assumptions						67						(592)						187						975
Effect of actual variances from expected experience						(510)						183						421						210
Adjusted balance, beginning of year						76,500						22,280						15,936						43,926
Issuances (1)						4,980						385						861						2,825
Interest accrual (2)						2,617						560						394						843
Net premiums collected (3)						(4,390)						(737)						(1,119)						(1,653)
Derecognition (4)						(1,000)						—						—						—
Foreign currency translation						(6)						(480)						751						(139)
Ending balance at original discount rate						78,701						22,008						16,823						45,802
Effect of changes in discount rate assumptions						(4,225)						(4,388)						(2,803)						(12,360)
Balance, end of period						$	74,476					$	17,620					$	14,020					$	33,442
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate						$	89,036					$	26,275					$	16,756					$	47,370
Effect of changes in cash flow assumptions						36						(620)						212						1,048
Effect of actual variances from expected experience						(623)						177						417						121
Adjusted balance, beginning of year						88,449						25,832						17,385						48,539
Issuances (1)						4,980						385						861						2,825
Interest accrual (2)						3,049						721						425						964
Benefit payments (5)						(4,292)						(799)						(1,115)						(1,476)
Derecognition (4)						(1,008)						—						—						—
Foreign currency translation						(5)						(563)						794						(138)
Ending balance at original discount rate						91,173						25,576						18,350						50,714
Effect of changes in discount rate assumptions						(5,364)						(3,651)						(3,131)						(14,496)
Balance, end of period						$	85,809					$	21,925					$	15,219					$	36,218
Liability for future policy benefits						$	11,333					$	4,305					$	1,199					$	2,776
Less: reinsurance recoverable						(726)						(272)						(24)						(85)
Net liability for future policy benefits						$	10,607					$	4,033					$	1,175					$	2,691
Weighted average duration of the liability (in years)						12						14						8						15
Weighted average interest accretion rate						4.6		%				3.6		%				3.3		%				2.6		%
Weighted average current discount rate						5.1		%				4.8		%				5.5		%				4.6		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

For the nine months ended September 30, 2023:						U.S. and Latin America – Traditional						Canada – Traditional						Europe, Middle East and Africa – Traditional						Asia Pacific – Traditional
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate						$	74,207					$	21,330					$	14,244					$	40,506
Effect of changes in cash flow assumptions						905						96						199						(180)
Effect of actual variances from expected experience						68						408						75						9
Adjusted balance, beginning of year						75,180						21,834						14,518						40,335
Issuances (1)						3,186						369						884						2,839
Interest accrual (2)						2,619						562						373						794
Net premiums collected (3)						(4,491)						(700)						(1,067)						(1,493)
Derecognition (4)						(35)						—						—						—
Foreign currency translation						5						(54)						(77)						(1,517)
Ending balance at original discount rate						76,464						22,011						14,631						40,958
Effect of changes in discount rate assumptions						(10,563)						(5,879)						(3,145)						(13,178)
Balance, end of period						$	65,901					$	16,132					$	11,486					$	27,780
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate						$	85,285					$	24,655					$	15,454					$	44,785
Effect of changes in cash flow assumptions						922						108						246						(171)
Effect of actual variances from expected experience						73						413						84						(40)
Adjusted balance, beginning of year						86,280						25,176						15,784						44,574
Issuances (1)						3,186						369						884						2,839
Interest accrual (2)						3,023						720						402						907
Benefit payments (5)						(4,097)						(752)						(1,033)						(1,287)
Derecognition (4)						(54)						—						—						—
Foreign currency translation						5						(60)						(77)						(1,559)
Ending balance at original discount rate						88,343						25,453						15,960						45,474
Effect of changes in discount rate assumptions						(13,185)						(5,520)						(3,402)						(15,342)
Balance, end of period						$	75,158					$	19,933					$	12,558					$	30,132
Liability for future policy benefits						$	9,257					$	3,801					$	1,072					$	2,352
Less: reinsurance recoverable						(658)						(259)						(33)						(115)
Net liability for future policy benefits						$	8,599					$	3,542					$	1,039					$	2,237
Weighted average duration of the liability (in years)						11						14						8						15
Weighted average interest accretion rate						4.7		%				3.7		%				3.5		%				2.7		%
Weighted average current discount rate						5.9		%				5.4		%				6.0		%				4.9		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

The Company’s Traditional business actual-to-expected variances and the effects of changes in cash flow and discount rate assumptions for the nine months ended September 30, 2024 and 2023 are summarized in the tables below:

For the nine months ended September 30, 2024:

Segment

Liability for future policy benefits at original discount rate

Changes in cash flow assumptions

Actual-to-expected variance

Impact of updating discount rate recognized in OCI

U.S. and Latin America – Traditional

$12.5 billion

$(31) million

$(113) million

$7 million

Canada – Traditional

$3.6 billion

$(28) million

$(6) million

$(134) million

Europe, Middle East and Africa – Traditional

$1.5 billion

$25 million

$(4) million

$(109) million

Asia Pacific – Traditional

$4.9 billion

$73 million

$(89) million

$(171) million

For the nine months ended September 30, 2023:

Segment

Liability for future policy benefits at original discount rate

Changes in cash flow assumptions

Actual-to-expected variance

Impact of updating discount rate recognized in OCI

U.S. and Latin America – Traditional

$12.0 billion

$17 million

$5 million

$(1) million

Canada – Traditional

$3.4 billion

$12 million

$5 million

$(267) million

Europe, Middle East and Africa – Traditional

$1.3 billion

$47 million

$9 million

$(88) million

Asia Pacific – Traditional

$4.5 billion

$9 million

$(49) million

$(233) million

Liability for Future Policy Benefits – Financial Solutions Business

The Company reviews actual and anticipated experience compared to the assumptions used to establish policy benefits on a quarterly basis and will update those assumptions if evidence suggests that they should be revised. The Company expects to complete its annual review and any necessary updates of cash flow assumptions used to calculate the liability for future policy benefits during the third quarter of each year. Updates may occur in other quarters if information becomes available during the quarter that indicates an assumption update is necessary.

Significant assumptions used to compute the liability for future policy benefits for the Financial Solutions business include mortality, morbidity, lapse rates and discount rates (both accretion and current). During the third quarter of 2024 and 2023, the Company completed its annual assumption review resulting in a $20 million increase and $78 million decrease in the Company’s liability for future policy benefits for its Financial Solutions business during 2024 and 2023, respectively. The increase and decrease in the liability in 2024 and 2023 were primarily the result of updating the lapse and mortality assumptions used to measure the liability for future policy benefits. The Company also updated the underlying market data used to determine the current discount rate resulting in changes to the discount rate assumption used to measure the net liability for future policy benefits.

The following tables provide the balances of and changes in the Company’s liability for future policy benefits, including the deferred profit liability related to the longevity business, for its Financial Solutions business, which primarily consists of longevity reinsurance, asset-intensive products, primarily annuities and financial reinsurance for the nine months ended September 30, 2024 and 2023 (dollars in millions):

For the nine months ended September 30, 2024:						U.S. and Latin America – Financial Solutions						Canada – Financial Solutions						Europe, Middle East and Africa – Financial Solutions						Asia Pacific – Financial Solutions
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate						$	1,455					$	3,184					$	54,832					$	2,057
Effect of changes in cash flow assumptions						12						—						(93)						1
Effect of actual variances from expected experience						(3)						(7)						1,025						(7)
Adjusted balance, beginning of year						1,464						3,177						55,764						2,051
Issuances (1)						2,755						4,983						9,881						6,443
Interest accrual (2)						33						96						1,364						22
Net premiums collected (3)						(2,867)						(4,284)						(4,046)						(6,823)
Derecognition (4)						—						—						—						—
Foreign currency translation						—						(56)						2,596						(52)
Ending balance at original discount rate						1,385						3,916						65,559						1,641
Effect of changes in discount rate assumptions						(179)						(204)						(8,677)						(232)
Balance, end of period						$	1,206					$	3,712					$	56,882					$	1,409
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate						$	6,843					$	3,210					$	60,938					$	8,019
Effect of changes in cash flow assumptions						20						—						(90)						10
Effect of actual variances from expected experience						—						(7)						1,026						(8)
Adjusted balance, beginning of year						6,863						3,203						61,874						8,021
Issuances (1)						2,882						4,983						9,881						6,443
Interest accrual (2)						276						189						1,530						129
Benefit payments (5)						(538)						(310)						(3,676)						(326)
Derecognition (4)						—						—						—						—
Foreign currency translation						—						(3)						2,918						108
Ending balance at original discount rate						9,483						8,062						72,527						14,375
Effect of changes in discount rate assumptions						(215)						(33)						(9,571)						(1,544)
Balance, end of period						$	9,268					$	8,029					$	62,956					$	12,831
Cumulative amount of fair value hedging adjustments						$	32					$	—					$	—					$	—
Liability for future policy benefits						$	8,094					$	4,317					$	6,074					$	11,422
Less: reinsurance recoverable						(1,241)						—						—						—
Net liability for future policy benefits						$	6,853					$	4,317					$	6,074					$	11,422
Weighted average duration of the liability (in years)						8						13						10						15
Weighted average interest accretion rate						3.9		%				4.1		%				3.1		%				1.6		%
Weighted average current discount rate						4.9		%				4.7		%				5.0		%				2.8		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

For the nine months ended September 30, 2023:						U.S. and Latin America – Financial Solutions						Canada – Financial Solutions						Europe, Middle East and Africa – Financial Solutions						Asia Pacific – Financial Solutions
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate						$	1,671					$	3,394					$	38,782					$	1,605
Effect of changes in cash flow assumptions						(69)						(54)						(561)						—
Effect of actual variances from expected experience						(20)						(5)						387						(10)
Adjusted balance, beginning of year						1,582						3,335						38,608						1,595
Issuances (1)						923						—						6,278						2,131
Interest accrual (2)						37						80						678						19
Net premiums collected (3)						(1,064)						(249)						(3,045)						(1,573)
Derecognition (4)						—						—						—						—
Foreign currency translation						2						(6)						15						(236)
Ending balance at original discount rate						1,480						3,160						42,534						1,936
Effect of changes in discount rate assumptions						(336)						(482)						(9,571)						(178)
Balance, end of period						$	1,144					$	2,678					$	32,963					$	1,758
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate						$	5,823					$	3,447					$	44,330					$	6,561
Effect of changes in cash flow assumptions						(91)						(76)						(595)						—
Effect of actual variances from expected experience						(28)						(13)						374						(12)
Adjusted balance, beginning of year						5,704						3,358						44,109						6,549
Issuances (1)						931						—						6,278						2,141
Interest accrual (2)						173						81						807						65
Benefit payments (5)						(405)						(248)						(2,748)						(199)
Derecognition (4)						(16)						—						—						—
Foreign currency translation						1						(5)						37						(948)
Ending balance at original discount rate						6,388						3,186						48,483						7,608
Effect of changes in discount rate assumptions						(788)						(480)						(10,552)						(997)
Balance, end of period						$	5,600					$	2,706					$	37,931					$	6,611
Liability for future policy benefits						$	4,456					$	28					$	4,968					$	4,853
Less: reinsurance recoverable						—						—						—						—
Net liability for future policy benefits						$	4,456					$	28					$	4,968					$	4,853
Weighted average duration of the liability (in years)						8						7						9						15
Weighted average interest accretion rate						3.5		%				3.3		%				2.3		%				1.3		%
Weighted average current discount rate						5.9		%				5.5		%				5.3		%				2.4		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

The Company’s Financial Solutions business actual-to-expected variances (including the effects of model updates) and the effects of changes in cash flow and discount rate assumptions for the nine months ended September 30, 2024 and 2023 are summarized in the tables below:

For the nine months ended September 30, 2024:

Segment

Liability for future policy benefits at original discount rate

Changes in cash flow assumptions

Actual-to-expected variance

Impact of updating discount rate recognized in OCI

U.S. and Latin America – Financial Solutions

$8.1 billion

$8 million

$3 million

$124 million

Canada – Financial Solutions

$4.1 billion

None

None

$168 million

Europe, Middle East and Africa – Financial Solutions

$7.0 billion

$3 million

$1 million

$(241) million

Asia Pacific – Financial Solutions

$12.7 billion

$9 million

$(1) million

$(540) million

For the nine months ended September 30, 2023:

Segment

Liability for future policy benefits at original discount rate

Changes in cash flow assumptions

Actual-to-expected variance

Impact of updating discount rate recognized in OCI

U.S. and Latin America – Financial Solutions

$4.9 billion

$(22) million

$(8) million

$(119) million

Canada – Financial Solutions

$26 million

$(22) million

$(8) million

$1 million

Europe, Middle East and Africa – Financial Solutions

$5.9 billion

$(34) million

$(13) million

$(67) million

Asia Pacific – Financial Solutions

$5.7 billion

None

$(2) million

$(359) million

Future Policy Benefits Reconciliation To Balance Sheet

Reconciliation and Other Disclosures

The reconciliation of the rollforward of the liability for future policy benefits to the condensed consolidated balance sheets as of September 30, 2024 and 2023 is as follows (dollars in millions):

						September 30,
						2024						2023
Liability for future policy benefits included in the rollforwards:
Traditional:
U.S. and Latin America						$	11,333					$	9,257
Canada						4,305						3,801
Europe, Middle East and Africa						1,199						1,072
Asia Pacific						2,776						2,352
Financial Solutions:
U.S. and Latin America						8,094						4,456
Canada						4,317						28
Europe, Middle East and Africa						6,074						4,968
Asia Pacific						11,422						4,853
Other long-duration contracts						117						126
Claims liability and incurred but not reported claims						5,406						5,062
Unearned revenue liability						890						499
Total liability for future policy benefits						$	55,933					$	36,474

Undiscounted and Discounted Future Gross Premiums and Expected Future Benefits

The amount of undiscounted and discounted expected future gross premiums and expected future benefit payments for the liability for future policy benefits included in the rollforwards as of September 30, 2024 and 2023 is as follows (dollars in millions):

						September 30,
						2024												2023
						Undiscounted						Discounted						Undiscounted						Discounted
Expected future gross premiums
Traditional:
U.S. and Latin America						$	182,731					$	87,831					$	177,307					$	77,008
Canada						54,520						21,928						54,378						19,902
Europe, Middle East and Africa						28,668						15,609						24,778						13,131
Asia Pacific						103,658						42,453						90,652						35,372
Financial Solutions:
U.S. and Latin America						2,816						1,828						3,012						1,794
Canada						6,306						4,101						4,545						2,856
Europe, Middle East and Africa						111,948						57,940						68,410						36,603
Asia Pacific						4,089						2,988						3,797						2,828
Expected future benefit payments
Traditional:
U.S. and Latin America						$	191,246					$	85,809					$	188,177					$	75,158
Canada						56,312						21,925						56,423						19,933
Europe, Middle East and Africa						28,796						15,219						24,509						12,558
Asia Pacific						99,908						36,218						87,120						30,132
Financial Solutions:
U.S. and Latin America						15,257						9,268						10,233						5,600
Canada						17,933						8,029						4,285						2,706
Europe, Middle East and Africa						120,917						62,956						71,027						37,931
Asia Pacific						22,330						12,831						10,522						6,611

Gross Premiums And Interest Expense Liability Future Policy Benefits

The amount of gross premiums and interest expense recognized in the condensed consolidated statements of income for the liability for future policy benefits included in the rollforwards for the nine months ended September 30, 2024 and 2023 is as follows (dollars in millions):

						Gross Premiums												Interest Expense
						September 30,												September 30,
						2024						2023						2024						2023
Traditional:
U.S. and Latin America						$	4,658					$	4,435					$	432					$	404
Canada						825						808						161						158
Europe, Middle East and Africa						1,101						1,058						31						29
Asia Pacific						2,095						1,959						121						113
Financial Solutions:
U.S. and Latin America						2,816						979						243						136
Canada						120						68						93						1
Europe, Middle East and Africa						669						515						166						129
Asia Pacific						158						171						107						46
Total						$	12,442					$	9,993					$	1,354					$	1,016

During the nine months ended September 30, 2024 and 2023, no material charges were incurred resulting from net premiums exceeding gross premiums.

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- Definition

Future Policy Benefits Reconciliation To Balance Sheet

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Gross Premiums And Interest Expense Liability Future Policy Benefits

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- Definition

Tabular disclosure of beginning balance to ending balance for liability for future policy benefit, with separate presentation of expected future net premium and expected future benefit.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480016/944-40-65-2

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 55
-Paragraph 29E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480046/944-40-55-29E

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480081/944-40-50-6

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