Segment Information

12 Months Ended

Dec. 31, 2020

22. Segment Information

We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments. As discussed in Note 3, we completed the acquisition of Liberty Life during the second quarter of 2018. Related results are included within the Group Protection segment. We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments. Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business. The following is a brief description of these segments and Other Operations.

The Annuities segment provides tax-deferred investment growth and lifetime income opportunities for its clients by offering fixed (including indexed) and variable annuities.

The Retirement Plan Services segment provides employer-sponsored defined benefit and individual retirement accounts, as well as individual and group variable annuities, group fixed annuities and mutual-fund based programs in the retirement plan marketplace.

The Life Insurance segment focuses in the creation and protection of wealth through life insurance products, including term insurance, a linked-benefit product (which is a UL policy linked with riders that provide for long-term care costs), IUL and both single and survivorship versions of UL and VUL, including corporate-owned UL and VUL and bank-owned UL and VUL products.

The Group Protection segment offers group non-medical insurance products, including short and long-term disability, absence management services, term life, dental, vision and accident and critical illness benefits and services to the employer marketplace through various forms of employee-paid and employer-paid plans.

Other Operations includes investments related to the excess capital in our insurance subsidiaries; benefit plan net liability; the unamortized deferred gain on indemnity reinsurance related to the sale of reinsurance; the results of certain disability income business; our run-off institutional pension business, the majority of which was sold on a group annuity basis; debt costs; strategic digitization expense; and other corporate investments.

Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments. Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:

Realized gains and losses associated with the following (“excluded realized gain (loss)”):

Sales or disposals and impairments of financial assets;

Changes in the fair value of equity securities;

Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities (“gain (loss) on the mark-to-market on certain instruments”);

Changes in the fair value of the derivatives we own to hedge our GDB riders within our variable annuities;

Changes in the fair value of the embedded derivatives of our GLB riders reflected within variable annuity net derivative results accounted for at fair value;

Changes in the fair value of the derivatives we own to hedge our GLB riders reflected within variable annuity net derivative results; and

Changes in the fair value of the embedded derivative liabilities related to index options we may purchase or sell in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for at fair value (“indexed annuity forward-starting option”);

Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”);

Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;

Gains (losses) on early extinguishment of debt;

Losses from the impairment of intangible assets;

Income (loss) from discontinued operations;

Acquisition and integration costs related to mergers and acquisitions; and

Income (loss) from the initial adoption of new accounting standards, regulations, and policy changes including the net impact from the Tax Cuts and Jobs Act.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:

Excluded realized gain (loss);

Revenue adjustments from the initial adoption of new accounting standards;

Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and

Amortization of deferred gains arising from reserve changes on business sold through reinsurance.

The tables below reconcile our segment measures of performance to the GAAP measures presented in our Consolidated Statements of Comprehensive Income (Loss) (in millions):



	For the Years Ended December 31,
	2020			2019			2018
Revenues
Operating revenues:
Annuities	$	4,455		$	4,600		$	4,383
Retirement Plan Services		1,213			1,200			1,178
Life Insurance		7,516			7,438			6,922
Group Protection		4,793			4,588			3,757
Other Operations		185			220			235
Excluded realized gain (loss), pre-tax		(721	)		(794	)		(46	)
Amortization of DFEL associated with benefit ratio unlocking, pre-tax		(2	)		6			(5	)
Total revenues	$	17,439		$	17,258		$	16,424



	For the Years Ended December 31,
	2020			2019			2018
Net Income (Loss)
Income (loss) from operations:
Annuities	$	983		$	954		$	1,102
Retirement Plan Services		168			172			171
Life Insurance		(34	)		259			645
Group Protection		43			238			187
Other Operations		(295	)		(268	)		(225	)
Excluded realized gain (loss), after-tax		(570	)		(627	)		(37	)
Benefit ratio unlocking, after-tax		194			277			(136	)
Net impact from the Tax Cuts and Jobs Act		37			17			19
Acquisition and integration costs related to mergers and acquisitions, after-tax		(15	)		(103	)		(67	)
Gain (loss) on early extinguishment of debt, after-tax		(12	)		(33	)		(18	)
Net income (loss)	$	499		$	886		$	1,641

Other segment information (in millions) was as follows:



	For the Years Ended December 31,
	2020		2019		2018
Net Investment Income
Annuities	$	1,272	$	1,140	$	1,005
Retirement Plan Services		933		924		899
Life Insurance		2,823		2,658		2,697
Group Protection		330		307		260
Other Operations		152		194		224
Total net investment income	$	5,510	$	5,223	$	5,085



	For the Years Ended December 31,
	2020		2019		2018
Amortization of DAC and VOBA, Net of Interest
Annuities	$	387	$	408	$	410
Retirement Plan Services		29		26		28
Life Insurance		785		779		711
Group Protection		114		111		92
Total amortization of DAC and VOBA, net of interest	$	1,315	$	1,324	$	1,241



	For the Years Ended December 31,
	2020			2019			2018
Federal Income Tax Expense (Benefit)
Annuities	$	149		$	139		$	183
Retirement Plan Services		24			23			29
Life Insurance		(33	)		47			147
Group Protection		11			63			50
Other Operations		(82	)		(92	)		(77	)
Excluded realized gain (loss)		(151	)		(167	)		(9	)
Gain (loss) on early extinguishment of debt		(3	)		(9	)		(5	)
Benefit ratio unlocking		51			74			(36	)
Net impact from the Tax Cuts and Jobs Act		(37	)		(17	)		(19	)
Acquisition and integration costs related to
mergers and acquisitions		(5	)		(28	)		(19	)
Total federal income tax expense (benefit)	$	(76	)	$	33		$	244



	As of December 31,
	2020		2019
Assets
Annuities	$	184,678	$	167,443
Retirement Plan Services		45,372		40,184
Life Insurance		101,941		92,561
Group Protection		10,201		9,467
Other Operations		23,756		25,106
Total assets	$	365,948	$	334,761