Reinsurance

9 Months Ended

Sep. 30, 2025

Retrocession Arrangements And Reinsurance Ceded Receivables [Abstract]

Retrocession Arrangements and Reinsurance Ceded Receivables

REINSURANCE

Ceded Reinsurance

In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance or reinsurance companies under excess coverage and coinsurance contracts. During the third quarter of 2024, the Company increased its per life retention limit from $8 million to $30 million effective January 1, 2025, and began notifying the Company’s retrocessionaires of the increased per life retention limit and the Company’s intention to recapture the risk ceded to the retrocessionaire in the future. The increased retention limit and updated recapture assumption resulted in a future policy benefits remeasurement loss of $136 million recognized in the third quarter of 2024.

Retrocession reinsurance treaties do not relieve the Company from its obligations to direct writing companies. Failure of retrocessionaires to honor their obligations could result in losses to the Company. Consequently, allowances would be established for amounts deemed uncollectible. The Company regularly evaluates the financial condition of the insurance companies from which it assumes and to which it cedes reinsurance. At September 30, 2025 and December 31, 2024, no allowances were deemed necessary.

Retrocessions are arranged through the Company’s retrocession pools for amounts in excess of the Company’s retention limit. As of September 30, 2025, all rated retrocession pool participants followed by the A.M. Best Company were rated “B++ (Good)” or better. The Company verifies retrocession pool participants’ ratings on a quarterly basis. For a majority of the retrocessionaires that were not rated, security in the form of letters of credit or trust assets have been posted. In addition, the Company performs annual financial reviews of its retrocessionaires to evaluate financial stability and performance.

During the fourth quarter of 2023, Ruby Reinsurance Company (“Ruby Re”), a Missouri-domiciled life reinsurance company to reinsure U.S. asset-intensive business, was launched with the Company as a sponsor. The Company, which is not an investor in Ruby Re, does not consolidate the entity. As of September 30, 2025, the Company has a ceded reinsurance recoverable from Ruby Re of approximately $3.0 billion.

Excluding amounts retroceded to Ruby Re, three major reinsurance companies account for 39.6% of reinsurance ceded receivables and other as of September 30, 2025.

Also included in reinsurance ceded receivables and other is a deposit asset on reinsurance of $2.7 billion and $2.8 billion as of September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, $8 million and $4 million of claims recoverable were in excess of 90 days past due, respectively.

Funds Withheld

Certain of the Company’s retrocession agreements, including those with Ruby Re, are on a modco or funds withheld basis. While the economic benefits of the funds withheld assets are passed on to the assuming company, the Company retains legal ownership of the assets within the funds withheld account and established a funds withheld liability. Net investment income related to the funds withheld assets are reported in other insurance expenses, and net realized gains (losses) related to the assets

are reported net of the amount that is passed on to the assuming company. The following assets were held in support of the Company’s funds withheld arrangements and are reported in the line items shown in the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 (dollars in millions):


	September 30, 2025		December 31, 2024
Fixed maturity securities available-for-sale	$	2,930	$	2,615
Equity securities	2		2
Mortgage loans	549		451
Funds withheld at interest	1,401		1,466
Real estate joint ventures	52		54
Short-term investments and cash and cash equivalents	67		89
Accrued investment income	37		31
Net other assets	1		—
Net assets	$	5,039	$	4,708

Certain assets are reported at amortized cost while the fair value of those assets is reflected in the funds withheld payable. The Company had a $5,277 million and $5,017 million funds withheld payable as of September 30, 2025 and December 31, 2024, respectively, net of an embedded derivative asset of $112 million and $160 million as of September 30, 2025 and December 31, 2024, respectively.