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Investments | 3 Months Ended
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Mar. 31, 2025
Investments [Abstract] |
Investments | INVESTMENTS Fixed Maturity Securities Available-for-Sale The Company holds various types of fixed maturity securities available-for-sale and classifies them as corporate securities (“Corporate”), Canadian and Canadian provincial government securities (“Canadian government”), Japanese government and agencies (“Japanese government”), asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), U.S. government and agencies (“U.S. government”), state and political subdivisions, and other foreign government, supranational and foreign government-sponsored enterprises (“Other foreign government”). ABS, CMBS, and RMBS are collectively “structured securities.” The following tables provide information relating to investments in fixed maturity securities by type as of March 31, 2025 and December 31, 2024 (dollars in millions):
March 31, 2025: |  | Amortized |  | Allowance for |  | Unrealized |  | Unrealized |  | Estimated Fair |  | % of |  |
|  | Cost |  | Credit Losses |  | Gains |  | Losses |  | Value |  | Total |  |
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  | $ | 59,278 |  |  | $ | 88 |  |  | $ | 680 |  |  | $ | 4,150 |  |  | $ | 55,720 |  |  | 65.9 | % |  |
Canadian government |  | 4,604 |  |  | — |  |  | 440 |  |  | 48 |  |  | 4,996 |  |  | 5.9 |  |  |
Japanese government |  | 7,207 |  |  | — |  |  | 29 |  |  | 1,131 |  |  | 6,105 |  |  | 7.2 |  |  |
ABS |  | 5,666 |  |  | 15 |  |  | 44 |  |  | 175 |  |  | 5,520 |  |  | 6.5 |  |  |
CMBS |  | 2,334 |  |  | — |  |  | 20 |  |  | 87 |  |  | 2,267 |  |  | 2.7 |  |  |
RMBS |  | 1,571 |  |  | — |  |  | 18 |  |  | 87 |  |  | 1,502 |  |  | 1.8 |  |  |
U.S. government |  | 2,191 |  |  | — |  |  | 20 |  |  | 248 |  |  | 1,963 |  |  | 2.3 |  |  |
State and political subdivisions |  | 805 |  |  | — |  |  | 3 |  |  | 86 |  |  | 722 |  |  | 0.9 |  |  |
Other foreign government |  | 6,053 |  |  | — |  |  | 94 |  |  | 435 |  |  | 5,712 |  |  | 6.8 |  |  |
Total fixed maturity securities |  | $ | 89,709 |  |  | $ | 103 |  |  | $ | 1,348 |  |  | $ | 6,447 |  |  | $ | 84,507 |  |  | 100.0 | % |  |
December 31, 2024: |  | Amortized |  | Allowance for |  | Unrealized |  | Unrealized |  | Estimated Fair |  | % of
|  | Cost |  | Credit Losses |  | Gains |  | Losses |  | Value |  | Total
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  | $ | 54,705 |  |  | $ | 82 |  |  | $ | 642 |  |  | $ | 4,274 |  |  | $ | 50,991 |  |  | 65.7 | %
Canadian government |  | 4,655 |  |  | — |  |  | 412 |  |  | 51 |  |  | 5,016 |  |  | 6.5 |
Japanese government |  | 5,319 |  |  | — |  |  | 1 |  |  | 875 |  |  | 4,445 |  |  | 5.7 |
ABS |  | 5,197 |  |  | 15 |  |  | 42 |  |  | 184 |  |  | 5,040 |  |  | 6.5 |
CMBS |  | 2,344 |  |  | 1 |  |  | 22 |  |  | 98 |  |  | 2,267 |  |  | 2.9 |
RMBS |  | 1,412 |  |  | — |  |  | 12 |  |  | 107 |  |  | 1,317 |  |  | 1.7 |
U.S. government |  | 2,734 |  |  | — |  |  | 11 |  |  | 281 |  |  | 2,464 |  |  | 3.2 |
State and political subdivisions |  | 789 |  |  | — |  |  | 3 |  |  | 99 |  |  | 693 |  |  | 0.9 |
Other foreign government |  | 5,752 |  |  | — |  |  | 56 |  |  | 424 |  |  | 5,384 |  |  | 6.9 |
Total fixed maturity securities |  | $ | 82,907 |  |  | $ | 98 |  |  | $ | 1,201 |  |  | $ | 6,393 |  |  | $ | 77,617 |  |  | 100.0 | %
The Company monitors its concentrations of financial instruments on an ongoing basis and mitigates credit risk by maintaining a diversified investment portfolio that limits exposure to any one issuer. The Company’s exposure to concentrations of credit risk from single issuers, including certain agencies, greater than 10% of the Company’s equity are disclosed below, as of March 31, 2025 and December 31, 2024 (dollars in millions):
| March 31, 2025 |  | December 31, 2024
| Amortized Cost |  | Estimated Fair Value |  | Amortized Cost |  | Estimated Fair Value
Fixed maturity securities guaranteed or issued by: |  |  |  |  |  |  |
Japanese government | $ | 7,207 |  |  | $ | 6,105 |  |  | $ | 5,319 |  |  | $ | 4,445 |
U.S. government | 2,191 |  |  | 1,963 |  |  | 2,734 |  |  | 2,464 |
Canadian province of Quebec | 1,560 |  |  | 1,773 |  |  | 1,537 |  |  | 1,741 |
Canadian province of Ontario | 1,149 |  |  | 1,249 |  |  | 1,117 |  |  | 1,207 |
The amortized cost and estimated fair value of fixed maturity securities classified as available-for-sale as of March 31, 2025, are shown by contractual maturity in the table below (dollars in millions). Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Structured securities are shown separately in the table below, as they are not due at a single maturity date.
|  | Amortized Cost |  | Estimated Fair Value
Available-for-sale: |  |  |  |
Due in one year or less |  | $ | 2,112 |  |  | $ | 2,128 |
Due after one year through five years |  | 12,720 |  |  | 12,694 |
Due after five years through ten years |  | 14,833 |  |  | 14,610 |
Due after ten years |  | 50,473 |  |  | 45,786 |
Structured securities |  | 9,571 |  |  | 9,289 |
Total |  | $ | 89,709 |  |  | $ | 84,507 |
Corporate Fixed Maturity Securities The tables below show the major sectors of the Company’s corporate fixed maturity holdings as of March 31, 2025 and December 31, 2024 (dollars in millions):
March 31, 2025: |  | Amortized Cost |  | Estimated Fair Value |  | % of Total
Finance |  | $ | 18,647 |  |  | $ | 17,470 |  |  | 31.4 | %
Industrial |  | 30,662 |  |  | 28,958 |  |  | 52.0 |
Utility |  | 9,969 |  |  | 9,292 |  |  | 16.6 |
Total |  | $ | 59,278 |  |  | $ | 55,720 |  |  | 100.0 | %
December 31, 2024: |  | Amortized Cost |  | Estimated Fair Value |  | % of Total
Finance |  | $ | 17,905 |  |  | $ | 16,673 |  |  | 32.7 | %
Industrial |  | 28,267 |  |  | 26,476 |  |  | 51.9 |
Utility |  | 8,533 |  |  | 7,842 |  |  | 15.4 |
Total |  | $ | 54,705 |  |  | $ | 50,991 |  |  | 100.0 | %
Allowance for Credit Losses and Impairments – Fixed Maturity Securities Available-for-Sale As discussed in Note 2 – “Significant Accounting Policies and Pronouncements” of the Company’s 2024 Annual Report, allowances for credit losses on fixed maturity securities are recognized in investment related gains (losses), net. The Company estimates the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following tables present the rollforward of the allowance for credit losses in fixed maturity securities by type for the three months ended March 31, 2025 and 2024 (dollars in millions):
For the three months ended March 31, 2025: |
| Corporate |  | ABS |  | CMBS |  |  |  |  |  | Total
Balance, beginning of year | $ | 82 |  |  | $ | 15 |  |  | $ | 1 |  |  |  |  |  |  | $ | 98 |
Credit losses recognized on securities for which credit losses were not previously recorded | 10 |  |  | — |  |  | — |  |  |  |  |  |  | 10 |
Reductions for securities sold during the period | (2) |  |  | — |  |  | — |  |  |  |  |  |  | (2) |
Additional increases or decreases for credit losses on securities that had an allowance recorded in a previous period | (1) |  |  | — |  |  | (1) |  |  |  |  |  |  | (2) |
Foreign currency translation | (1) |  |  | — |  |  | — |  |  |  |  |  |  | (1) |
Balance, end of period | $ | 88 |  |  | $ | 15 |  |  | $ | — |  |  |  |  |  |  | $ | 103 |
For the three months ended March 31, 2024: |  |  |
| Corporate |  | ABS |  | CMBS |  |  |  | Total |  |
Balance, beginning of year | $ | 62 |  |  | $ | 12 |  |  | $ | 1 |  |  |  |  | $ | 75 |  |  |
Credit losses recognized on securities for which credit losses were not previously recorded | 30 |  |  | — |  |  | — |  |  |  |  | 30 |  |  |
Reductions for securities sold during the period | (8) |  |  | — |  |  | — |  |  |  |  | (8) |  |  |
Additional increases or decreases for credit losses on securities that had an allowance recorded in a previous period | (5) |  |  | 3 |  |  | — |  |  |  |  | (2) |  |  |
Foreign currency translation | — |  |  | — |  |  | — |  |  |  |  | — |  |  |
Balance, end of period | $ | 79 |  |  | $ | 15 |  |  | $ | 1 |  |  |  |  | $ | 95 |  |  |
Unrealized Losses for Fixed Maturity Securities Available-for-Sale The Company’s determination of whether a decline in value necessitates the recording of an allowance for credit losses includes an analysis of whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment. The following tables present the estimated fair value and gross unrealized losses for the 6,260 and 6,401 fixed maturity securities for which both the estimated fair value had declined and remained below amortized cost and an allowance for credit loss has not been recorded as of March 31, 2025 and December 31, 2024, respectively (dollars in millions). These investments are presented by class and grade of security, as well as the length of time the related fair value has continuously remained below amortized cost.
|  | Less than 12 months |  | 12 months or greater |  | Total
March 31, 2025: |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses
Investment grade securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  | $ | 14,280 |  |  | $ | 481 |  |  | $ | 19,066 |  |  | $ | 3,610 |  |  | $ | 33,346 |  |  | $ | 4,091 |
Canadian government |  | 185 |  |  | 3 |  |  | 438 |  |  | 45 |  |  | 623 |  |  | 48 |
Japanese government |  | 348 |  |  | 8 |  |  | 4,119 |  |  | 1,123 |  |  | 4,467 |  |  | 1,131 |
ABS |  | 1,580 |  |  | 19 |  |  | 1,446 |  |  | 149 |  |  | 3,026 |  |  | 168 |
CMBS |  | 360 |  |  | 7 |  |  | 937 |  |  | 78 |  |  | 1,297 |  |  | 85 |
RMBS |  | 219 |  |  | 3 |  |  | 600 |  |  | 84 |  |  | 819 |  |  | 87 |
U.S. government |  | 202 |  |  | 4 |  |  | 673 |  |  | 244 |  |  | 875 |  |  | 248 |
State and political subdivisions |  | 112 |  |  | 3 |  |  | 434 |  |  | 83 |  |  | 546 |  |  | 86 |
Other foreign government |  | 1,308 |  |  | 49 |  |  | 1,757 |  |  | 348 |  |  | 3,065 |  |  | 397 |
Total investment grade securities |  | 18,594 |  |  | 577 |  |  | 29,470 |  |  | 5,764 |  |  | 48,064 |  |  | 6,341 |
Below investment grade securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  | 758 |  |  | 22 |  |  | 280 |  |  | 36 |  |  | 1,038 |  |  | 58 |
ABS |  | 5 |  |  | 1 |  |  | 31 |  |  | 6 |  |  | 36 |  |  | 7 |
Other foreign government |  | — |  |  | — |  |  | 130 |  |  | 38 |  |  | 130 |  |  | 38 |
Total below investment grade securities |  | 763 |  |  | 23 |  |  | 441 |  |  | 80 |  |  | 1,204 |  |  | 103 |
Total fixed maturity securities |  | $ | 19,357 |  |  | $ | 600 |  |  | $ | 29,911 |  |  | $ | 5,844 |  |  | $ | 49,268 |  |  | $ | 6,444 |
|  | Less than 12 months |  | 12 months or greater |  | Total
December 31, 2024: |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Gross Unrealized Losses
Investment grade securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  | $ | 14,741 |  |  | $ | 529 |  |  | $ | 18,851 |  |  | $ | 3,682 |  |  | $ | 33,592 |  |  | $ | 4,211 |
Canadian government |  | 286 |  |  | 5 |  |  | 469 |  |  | 46 |  |  | 755 |  |  | 51 |
Japanese government |  | 2,037 |  |  | 192 |  |  | 2,365 |  |  | 683 |  |  | 4,402 |  |  | 875 |
ABS |  | 940 |  |  | 19 |  |  | 1,730 |  |  | 159 |  |  | 2,670 |  |  | 178 |
CMBS |  | 333 |  |  | 4 |  |  | 980 |  |  | 91 |  |  | 1,313 |  |  | 95 |
RMBS |  | 354 |  |  | 7 |  |  | 593 |  |  | 100 |  |  | 947 |  |  | 107 |
U.S. government |  | 792 |  |  | 15 |  |  | 656 |  |  | 266 |  |  | 1,448 |  |  | 281 |
State and political subdivisions |  | 155 |  |  | 7 |  |  | 417 |  |  | 92 |  |  | 572 |  |  | 99 |
Other foreign government |  | 1,408 |  |  | 42 |  |  | 1,816 |  |  | 344 |  |  | 3,224 |  |  | 386 |
Total investment grade securities |  | 21,046 |  |  | 820 |  |  | 27,877 |  |  | 5,463 |  |  | 48,923 |  |  | 6,283 |
Below investment grade securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate |  | 347 |  |  | 7 |  |  | 347 |  |  | 50 |  |  | 694 |  |  | 57 |
ABS |  | 101 |  |  | 1 |  |  | 40 |  |  | 5 |  |  | 141 |  |  | 6 |
Other foreign government |  | — |  |  | — |  |  | 130 |  |  | 38 |  |  | 130 |  |  | 38 |
Total below investment grade securities |  | 448 |  |  | 8 |  |  | 517 |  |  | 93 |  |  | 965 |  |  | 101 |
Total fixed maturity securities |  | $ | 21,494 |  |  | $ | 828 |  |  | $ | 28,394 |  |  | $ | 5,556 |  |  | $ | 49,888 |  |  | $ | 6,384 |
The Company did not intend to sell, and more likely than not would not be required to sell, the securities outlined in the tables above, as of the dates presented. However, unforeseen facts and circumstances may cause the Company to sell fixed maturity securities in the ordinary course of managing its portfolio to meet certain diversification, credit quality and liquidity guidelines. Changes in unrealized losses are primarily driven by changes in risk-free interest rates and credit spreads. Net Investment Income Major categories of net investment income consist of the following (dollars in millions):
|  |  |  | Three months ended March 31,
|  |  |  |  |  | 2025 |  | 2024
Fixed maturity securities available-for-sale |  |  |  |  |  | $ | 1,063 |  |  | $ | 760 |
Equity securities |  |  |  |  |  | 2 |  |  | 2 |
Mortgage loans |  |  |  |  |  | 119 |  |  | 90 |
Policy loans |  |  |  |  |  | 18 |  |  | 14 |
Funds withheld at interest |  |  |  |  |  | 66 |  |  | 89 |
Limited partnerships and real estate joint ventures |  |  |  |  |  | (15) |  |  | 7 |
Short-term investments and cash and cash equivalents |  |  |  |  |  | 36 |  |  | 34 |
Other invested assets |  |  |  |  |  | (5) |  |  | 4 |
Investment income |  |  |  |  |  | 1,284 |  |  | 1,000 |
Investment expense |  |  |  |  |  | (52) |  |  | (39) |
Net investment income |  |  |  |  |  | $ | 1,232 |  |  | $ | 961 |
Investment Related Gains (Losses), Net Investment related gains (losses), net consist of the following (dollars in millions):
|  |  | Three months ended March 31,
|  |  |  |  | 2025 |  | 2024
Fixed maturity securities available-for-sale: |  |  |  |  |  |  |
Change in allowance for credit losses |  |  |  |  | $ | (6) |  |  | $ | (20) |
Realized gains on investment activity |  |  |  |  | 36 |  |  | 32 |
Realized losses on investment activity |  |  |  |  | (87) |  |  | (134) |
Net gains (losses) on equity securities |  |  |  |  | (1) |  |  | 4 |
Change in mortgage loan allowance for credit losses |  |  |  |  | 4 |  |  | (10) |
Limited partnerships and real estate joint ventures impairment losses |  |  |  |  | (5) |  |  | (8) |
Change in fair value of certain limited partnership investments |  |  |  |  | (7) |  |  | 1 |
Net losses on freestanding derivatives |  |  |  |  | (2) |  |  | (99) |
Net gains (losses) on embedded derivatives |  |  |  |  | (11) |  |  | 77 |
Other, net |  |  |  |  | — |  |  | 8 |
Total investment related gains (losses), net |  |  |  |  | $ | (79) |  |  | $ | (149) |
Collateral Arrangements The Company enters into various collateral arrangements with counterparties that require both the pledging and acceptance of invested assets as collateral. Pledged invested assets are included in the condensed consolidated balance sheets. Invested assets received as collateral are held in separate custodial accounts and are not recorded on the Company’s condensed consolidated balance sheets. Subject to certain constraints, the Company is permitted by contract to sell or repledge collateral it receives; however, as of March 31, 2025 and December 31, 2024, none of the collateral received had been sold or repledged. The Company also holds invested assets on deposit to meet regulatory requirements and holds assets in trust to satisfy collateral requirements under derivative transactions and certain third-party reinsurance treaties. The following table includes invested assets on deposit, invested assets pledged and received as collateral, assets in trust held to satisfy collateral requirements and FHLB common stock restricted as to sale as of March 31, 2025 and December 31, 2024 (dollars in millions):
| March 31, 2025 |  | December 31, 2024
| Amortized Cost |  | Estimated Fair Value |  | Amortized Cost |  | Estimated Fair Value
Invested assets on deposit (regulatory deposits) | $ | 10 |  |  | $ | 9 |  |  | $ | 10 |  |  | $ | 8 |
Invested assets pledged as collateral | 1,307 |  |  | 1,095 |  |  | 1,200 |  |  | 1,046 |
Invested assets received as collateral | n/a |  | 2,319 |  |  | n/a |  | 2,233 |
Assets in trust held to satisfy collateral requirements | 54,053 |  |  | 51,343 |  |  | 47,162 |  |  | 44,473 |
FHLB common stock restricted as to sale | 71 |  |  | 71 |  |  | 71 |  |  | 71 |
Securities Lending and Repurchase/Reverse Repurchase Agreements The following table provides the estimated fair value of securities relating to securities lending and repurchase/reverse repurchase agreements as of March 31, 2025 and December 31, 2024 (dollars in millions):
| March 31, 2025 |  | December 31, 2024
| Securities Loaned, Pledged, or Sold (1) |  | Securities Borrowed or Collateral Received from Counterparties (2) |  | Cash Collateral Received from Counterparties (3) |  | Securities Loaned, Pledged, or Sold (1) |  | Securities Borrowed or Collateral Received from Counterparties (2) |  | Cash Collateral Received from Counterparties (3)
Securities lending transactions | $ | 835 |  |  | $ | 1,078 |  |  | $ | — |  |  | $ | 836 |  |  | $ | 1,093 |  |  | $ | — |
Repurchase/reverse repurchase transactions | 1,808 |  |  | 689 |  |  | 1,005 |  |  | 1,781 |  |  | 688 |  |  | 982 |
(1)Securities loaned or pledged through securities lending transactions or sold to counterparties through repurchase transactions are included within fixed maturity securities. Collateral associated with certain securities lending transactions is not included within this table as the collateral pledged to the counterparty is the right to reinsurance treaty cash flows. Certain securities lending transactions do not require collateral. (2)Securities borrowed or received as collateral through securities lending transactions or purchased from counterparties through reverse repurchase transactions are not reflected on the condensed consolidated balance sheets. (3)A payable for the cash received by the Company is included within other liabilities. The following table presents the estimated fair value of securities by the remaining contractual maturity of the Company’s securities lending and repurchase agreements as of March 31, 2025 and December 31, 2024 (dollars in millions):
| March 31, 2025 |  | December 31, 2024
| Remaining Contractual Maturity of the Agreements |  | Remaining Contractual Maturity of the Agreements
| Overnight and Continuous |  | Up to 30 Days |  | 30 – 90 Days |  | Greater than 90 Days |  | Total |  | Overnight and Continuous |  | Up to 30 Days |  | 30 – 90 Days |  | Greater than 90 Days |  | Total
Securities lending transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate | $ | — |  |  | $ | 76 |  |  | $ | 143 |  |  | $ | 204 |  |  | $ | 423 |  |  | $ | — |  |  | $ | 75 |  |  | $ | 7 |  |  | $ | 333 |  |  | $ | 415 |
Japanese government | — |  |  | 236 |  |  | — |  |  | 72 |  |  | 308 |  |  | — |  |  | 227 |  |  | — |  |  | 75 |  |  | 302 |
ABS | — |  |  | — |  |  | 17 |  |  | 3 |  |  | 20 |  |  | — |  |  | — |  |  | 17 |  |  | 3 |  |  | 20 |
CMBS | — |  |  | — |  |  | 46 |  |  | — |  |  | 46 |  |  | — |  |  | — |  |  | 46 |  |  | — |  |  | 46 |
RMBS | — |  |  | — |  |  | 12 |  |  | — |  |  | 12 |  |  | — |  |  | — |  |  | 13 |  |  | 6 |  |  | 19 |
U.S. government | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8 |  |  | 8 |
State and political subdivisions | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |
Other foreign government | — |  |  | — |  |  | 11 |  |  | 9 |  |  | 20 |  |  | — |  |  | — |  |  | — |  |  | 20 |  |  | 20 |
Total | — |  |  | 312 |  |  | 229 |  |  | 294 |  |  | 835 |  |  | — |  |  | 302 |  |  | 83 |  |  | 451 |  |  | 836 |
Repurchase/reverse repurchase transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate | — |  |  | — |  |  | — |  |  | 521 |  |  | 521 |  |  | — |  |  | — |  |  | — |  |  | 527 |  |  | 527 |
Japanese government | — |  |  | — |  |  | — |  |  | 374 |  |  | 374 |  |  | — |  |  | — |  |  | 214 |  |  | 144 |  |  | 358 |
ABS | — |  |  | — |  |  | — |  |  | 210 |  |  | 210 |  |  | — |  |  | — |  |  | 27 |  |  | 251 |  |  | 278 |
CMBS | — |  |  | — |  |  | — |  |  | 262 |  |  | 262 |  |  | — |  |  | — |  |  | 49 |  |  | 184 |  |  | 233 |
RMBS | — |  |  | — |  |  | — |  |  | 102 |  |  | 102 |  |  | — |  |  | — |  |  | 7 |  |  | 42 |  |  | 49 |
U.S. government | — |  |  | — |  |  | — |  |  | 262 |  |  | 262 |  |  | — |  |  | — |  |  | — |  |  | 257 |  |  | 257 |
Other foreign government | — |  |  | — |  |  | — |  |  | 77 |  |  | 77 |  |  | — |  |  | — |  |  | — |  |  | 79 |  |  | 79 |
Total | — |  |  | — |  |  | — |  |  | 1,808 |  |  | 1,808 |  |  | — |  |  | — |  |  | 297 |  |  | 1,484 |  |  | 1,781 |
Total transactions | $ | — |  |  | $ | 312 |  |  | $ | 229 |  |  | $ | 2,102 |  |  | $ | 2,643 |  |  | $ | — |  |  | $ | 302 |  |  | $ | 380 |  |  | $ | 1,935 |  |  | $ | 2,617 |
Mortgage Loans As of March 31, 2025, mortgage loans were geographically dispersed throughout the U.S. with the largest concentrations in California (13.1%), Texas (10.6%) and Washington (5.8%), in addition to loans secured by properties in Canada (6.5%) and the United Kingdom (2.3%). The recorded investment in mortgage loans presented below is gross of unamortized deferred loan origination fees and expenses and allowance for credit losses. The following table presents the distribution of the Company’s recorded investment in mortgage loans by property type as of March 31, 2025 and December 31, 2024 (dollars in millions):
|  | March 31, 2025 |  | December 31, 2024
|  | Carrying Value |  | % of Total |  | Carrying Value |  | % of Total
Commercial: |  |  |  |  |  |  |  |
Office |  | $ | 1,696 |  |  | 17.9 | % |  | $ | 1,717 |  |  | 19.2 | %
Retail |  | 2,944 |  |  | 31.2 |  |  | 2,925 |  |  | 32.7 |
Industrial |  | 2,963 |  |  | 31.4 |  |  | 2,714 |  |  | 30.3 |
Apartment |  | 1,213 |  |  | 12.8 |  |  | 1,121 |  |  | 12.5 |
Hotel |  | 441 |  |  | 4.7 |  |  | 443 |  |  | 4.9 |
Other commercial |  | 102 |  |  | 1.1 |  |  | 32 |  |  | 0.4 |
Total commercial |  | 9,359 |  |  | 99.1 |  |  | 8,952 |  |  | 100.0 |
Residential |  | 82 |  |  | 0.9 |  |  | — |  |  | — |
Recorded investment |  | 9,441 |  |  | 100.0 | % |  | 8,952 |  |  | 100.0 | %
Unamortized balance of loan origination fees and expenses |  | (21) |  |  |  |  | (20) |  |  |
Allowance for credit losses |  | (89) |  |  |  |  | (93) |  |  |
Total mortgage loans |  | $ | 9,331 |  |  |  |  | $ | 8,839 |  |  |
Commercial Loans The following table presents the maturities of the Company’s recorded investment in commercial mortgage loans as of March 31, 2025 and December 31, 2024 (dollars in millions):
|  | March 31, 2025 |  | December 31, 2024
|  | Recorded Investment |  | % of Total |  | Recorded Investment |  | % of Total
Due within five years |  | $ | 4,215 |  |  | 45.0 | % |  | $ | 3,984 |  |  | 44.5 | %
Due after five years through ten years |  | 4,301 |  |  | 46.0 |  |  | 3,959 |  |  | 44.2 |
Due after ten years |  | 843 |  |  | 9.0 |  |  | 1,009 |  |  | 11.3 |
Total commercial |  | $ | 9,359 |  |  | 100.0 | % |  | $ | 8,952 |  |  | 100.0 | %
The following tables set forth certain key credit quality indicators of the Company’s recorded investment in commercial mortgage loans as of March 31, 2025 and December 31, 2024 (dollars in millions):
| Recorded Investment
| Debt Service Ratios |  | Construction loans |  |  |  |
| >1.20x |  | 1.00x – 1.20x |  | <1.00x |  |  | Total |  | % of Total
March 31, 2025: |  |  |  |  |  |  |  |  |  |  |
Loan-to-Value Ratio |  |  |  |  |  |  |  |  |  |  |
0% – 59.99% | $ | 4,186 |  |  | $ | 167 |  |  | $ | 98 |  |  | $ | 4 |  |  | $ | 4,455 |  |  | 47.6 | %
60% – 69.99% | 2,420 |  |  | 232 |  |  | 76 |  |  | 46 |  |  | 2,774 |  |  | 29.6 |
70% – 79.99% | 1,179 |  |  | 218 |  |  | 68 |  |  | — |  |  | 1,465 |  |  | 15.7 |
80% or greater | 446 |  |  | 36 |  |  | 183 |  |  | — |  |  | 665 |  |  | 7.1 |
Total commercial | $ | 8,231 |  |  | $ | 653 |  |  | $ | 425 |  |  | $ | 50 |  |  | $ | 9,359 |  |  | 100.0 | %
| Recorded Investment
| Debt Service Ratios |  | Construction loans |  |  |  |
| >1.20x |  | 1.00x – 1.20x |  | <1.00x |  |  | Total |  | % of Total
December 31, 2024: |  |  |  |  |  |  |  |  |  |  |
Loan-to-Value Ratio |  |  |  |  |  |  |  |  |  |  |
0% – 59.99% | $ | 4,017 |  |  | $ | 189 |  |  | $ | 42 |  |  | $ | 7 |  |  | $ | 4,255 |  |  | 47.5 | %
60% – 69.99% | 2,298 |  |  | 184 |  |  | 51 |  |  | 46 |  |  | 2,579 |  |  | 28.8 |
70% – 79.99% | 1,205 |  |  | 178 |  |  | 47 |  |  | — |  |  | 1,430 |  |  | 16.0 |
80% or greater | 523 |  |  | 45 |  |  | 120 |  |  | — |  |  | 688 |  |  | 7.7 |
Total commercial | $ | 8,043 |  |  | $ | 596 |  |  | $ | 260 |  |  | $ | 53 |  |  | $ | 8,952 |  |  | 100.0 | %
The following tables set forth credit quality grades by year of origination of the Company’s recorded investment in commercial mortgage loans as of March 31, 2025 and December 31, 2024 (dollars in millions):
| Recorded Investment
| Year of Origination |  |
| 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | Prior |  | Total
March 31, 2025: |  |  |  |  |  |  |  |  |  |  |  |  |
Internal credit quality grade: |  |  |  |  |  |  |  |  |  |  |  |  |
High investment grade | $ | 28 |  |  | $ | 592 |  |  | $ | 435 |  |  | $ | 539 |  |  | $ | 600 |  |  | $ | 1,967 |  |  | $ | 4,161 |
Investment grade | 518 |  |  | 1,269 |  |  | 746 |  |  | 793 |  |  | 403 |  |  | 1,067 |  |  | 4,796 |
Average | — |  |  | — |  |  | 19 |  |  | — |  |  | 36 |  |  | 206 |  |  | 261 |
Watch list | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 135 |  |  | 135 |
In or near default | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |
Total commercial | $ | 546 |  |  | $ | 1,861 |  |  | $ | 1,200 |  |  | $ | 1,332 |  |  | $ | 1,039 |  |  | $ | 3,381 |  |  | $ | 9,359 |
| Recorded Investment
| Year of Origination |  |
| 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | Prior |  | Total
December 31, 2024: |  |  |  |  |  |  |  |  |  |  |  |  |
Internal credit quality grade: |  |  |  |  |  |  |  |  |  |  |  |  |
High investment grade | $ | 593 |  |  | $ | 436 |  |  | $ | 543 |  |  | $ | 600 |  |  | $ | 246 |  |  | $ | 1,828 |  |  | $ | 4,246 |
Investment grade | 1,270 |  |  | 750 |  |  | 806 |  |  | 404 |  |  | 219 |  |  | 850 |  |  | 4,299 |
Average | — |  |  | 19 |  |  | — |  |  | 36 |  |  | 18 |  |  | 203 |  |  | 276 |
Watch list | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 125 |  |  | 125 |
In or near default | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |
Total commercial | $ | 1,863 |  |  | $ | 1,205 |  |  | $ | 1,349 |  |  | $ | 1,040 |  |  | $ | 483 |  |  | $ | 3,012 |  |  | $ | 8,952 |
The following table presents the current and past due composition of the Company’s recorded investment in commercial mortgage loans as of March 31, 2025 and December 31, 2024 (dollars in millions):
|  | March 31, 2025 |  | December 31, 2024
Current |  | $ | 9,311 |  |  | $ | 8,934 |
31 – 60 days past due |  | 42 |  |  | 12 |
Greater than 90 days past due |  | 6 |  |  | 6 |
Total commercial |  | $ | 9,359 |  |  | $ | 8,952 |
The following table presents information regarding the Company’s allowance for credit losses for commercial mortgage loans for the three months ended March 31, 2025 and 2024 (dollars in millions):
|  |  |  | Three months ended March 31,
|  |  |  |  |  | 2025 |  | 2024
Balance, beginning of period |  |  |  |  |  | $ | 93 |  |  | $ | 67 |
Provision (release) of credit losses |  |  |  |  |  | (6) |  |  | 11 |
Write-offs, net of recoveries |  |  |  |  |  | — |  |  | (1) |
Balance, end of period |  |  |  |  |  | $ | 87 |  |  | $ | 77 |
The Company modified three mortgage loans and two mortgage loans for borrowers experiencing financial difficulty during the three months ended March 31, 2025 and 2024, respectively, providing interest only payments, maturity extensions or payment deferrals. The total recorded investment before allowance for credit losses for the modified loans was $19 million and $21 million as of March 31, 2025 and 2024, respectively. The Company had one mortgage loan in the amount of $6 million and three mortgage loans in the amount of $23 million that were on nonaccrual status as of March 31, 2025 and 2024, respectively. The Company did not convert any mortgage loans to owned properties through a deed in lieu of foreclosure during the three months ended March 31, 2025 and 2024. The Company did not acquire any impaired mortgage loans during the three months ended March 31, 2025 and 2024. Residential Loans The Company had residential mortgage loans totaling $82 million as of March 31, 2025. The allowance for credit losses of residential mortgage loans was $2 million as of March 31, 2025. The Company’s primary credit quality indicator for residential mortgage loans is whether the loan is performing or nonperforming. All residential mortgage loans were performing as of March 31, 2025. The Company did not have any residential mortgage loans modified or placed on non-accrual status as of March 31, 2025. Policy Loans The majority of policy loans are associated with one client. These policy loans present no credit risk as the amount of the loan cannot exceed the obligation due to the ceding company upon the death of the insured or surrender of the underlying policy. The provisions of the treaties in force and the underlying policies determine the policy loan interest rates. The Company earns a spread between the interest rate earned on policy loans and the interest rate credited to corresponding liabilities. Funds Withheld at Interest As of March 31, 2025, $2.9 billion of the funds withheld at interest balance is primarily associated with two clients. For reinsurance agreements written on a modco basis and certain agreements written on a coinsurance funds withheld basis, assets equal to the net statutory reserves are withheld and legally owned and managed by the ceding company and are reflected as funds withheld at interest. In the event of a ceding company’s insolvency, the Company would need to assert a claim on the assets supporting its reserve liabilities. However, the risk of loss to the Company is mitigated by its ability to offset amounts it owes the ceding company for claims or allowances against amounts owed to the Company from the ceding company. Limited Partnerships and Real Estate Joint Ventures The carrying values of limited partnerships and real estate joint ventures as of March 31, 2025 and December 31, 2024 are as follows (dollars in millions):
|  | March 31, 2025 |  | December 31, 2024
Limited partnerships – equity method |  | $ | 1,146 |  |  | $ | 1,067 |
Limited partnerships – fair value |  | 963 |  |  | 966 |
Limited partnerships – cost method |  | 65 |  |  | 64 |
Real estate joint ventures |  | 1,054 |  |  | 970 |
Total limited partnerships and real estate joint ventures |  | $ | 3,228 |  |  | $ | 3,067 |
Other Invested Assets Other invested assets include lifetime mortgages, derivative contracts and FHLB common stock. Other invested assets also includes real estate held for investment, which is included in “Other” in the table below. As of March 31, 2025 and December 31, 2024, the allowance for credit losses for lifetime mortgages was not material. The carrying values of other invested assets as of March 31, 2025 and December 31, 2024 are as follows (dollars in millions):
|  | March 31, 2025 |  | December 31, 2024
Lifetime mortgages |  | $ | 1,043 |  |  | $ | 984 |
Derivatives |  | 114 |  |  | 121 |
FHLB common stock |  | 71 |  |  | 71 |
Other |  | 67 |  |  | 66 |
Total other invested assets |  | $ | 1,295 |  |  | $ | 1,242 |

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