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Future Contract Benefits | 6 Months Ended
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Jun. 30, 2023
Future Contract Benefits [Abstract] |
Future Contract Benefits | ‎ 12. Future Contract Benefits The following table reconciles future contract benefits (in millions) to the Consolidated Balance Sheets:
| As of |  | As of |
| June 30, |  | December 31, |
| 2023 |  | 2022 |
Traditional Life (1) | $ | 3,676 |  | $ | 3,509 |
Payout Annuities (1) |  | 2,048 |  |  | 2,004 |
Group Protection (2) |  | 5,493 |  |  | 5,462 |
UL and Other (3) |  | 15,525 |  |  | 14,818 |
Other Operations (4) |  | 9,707 |  |  | 9,782 |
Other (5) |  | 3,262 |  |  | 3,251 |
Total future contract benefits | $ | 39,711 |  | $ | 38,826 |
(1)See “LFPB” below for further information. (2)See “Liability for Future Claims” below for further information. (3)See “Additional Liabilities for Other Insurance Benefits” below for further information. (4)Represents future contract benefits reported in Other Operations primarily attributable to the indemnity reinsurance agreements with Protective ($5.5 billion and $5.4 billion as of June 30, 2023, and December 31, 2022, respectively) and Swiss Re ($2.2 billion and $2.3 billion as of June 30, 2023, and December 31, 2022, respectively) that are excluded from the following tables. (5)Represents other miscellaneous reserves outside the scope of ASU 2018-12 that are excluded from the following tables. ‎ LFPB The following table summarizes the balances of and changes in the present values of expected net premiums and LFPB (in millions, except years):
| As of or For the |  | As of or For the |
| Six Months Ended |  | Year Ended |
| June 30, 2023 |  | December 31, 2022 |
| Traditional |  | Payout |  | Traditional |  | Payout |
| Life |  | Annuities |  | Life |  | Annuities |
Present Value of Expected Net Premiums |  |  |  |  |  |  |  |  |  |  |  |
Balance as of beginning-of-year | $ | 6,063 |  | $ | - |  | $ | 6,858 |  | $ | - |
Less: Effect of cumulative changes in discount |  |  |  |  |  |  |  |  |  |  |  |
rate assumptions |  | (582 | ) |  | - |  |  | 883 |  |  | - |
Beginning balance at original discount rate |  | 6,645 |  |  | - |  |  | 5,975 |  |  | - |
Effect of changes in cash flow assumptions |  | - |  |  | - |  |  | (484 | ) |  | - |
Effect of actual variances from expected |  |  |  |  |  |  |  |  |  |  |  |
experience |  | (276 | ) |  | - |  |  | 50 |  |  | - |
Adjusted balance as of beginning-of-year |  | 6,369 |  |  | - |  |  | 5,541 |  |  | - |
Issuances |  | 330 |  |  | - |  |  | 1,656 |  |  | - |
Interest accrual |  | 120 |  |  | - |  |  | 222 |  |  | - |
Net premiums collected |  | (406 | ) |  | - |  |  | (765 | ) |  | - |
Flooring impact of LFPB |  | 1 |  |  | - |  |  | (9 | ) |  | - |
Ending balance at original discount rate |  | 6,414 |  |  | - |  |  | 6,645 |  |  | - |
Effect of cumulative changes in discount |  |  |  |  |  |  |  |  |  |  |  |
rate assumptions |  | (327 | ) |  | - |  |  | (582 | ) |  | - |
Balance as of end-of-period | $ | 6,087 |  | $ | - |  | $ | 6,063 |  | $ | - |
Present Value of Expected LFPB |  |  |  |  |  |  |  |  |  |  |  |
Balance as of beginning-of-year | $ | 9,572 |  | $ | 2,004 |  | $ | 11,008 |  | $ | 2,512 |
Less: Effect of cumulative changes in discount |  |  |  |  |  |  |  |  |  |  |  |
rate assumptions |  | (785 | ) |  | (263 | ) |  | 1,561 |  |  | 266 |
Beginning balance at original discount rate (1) |  | 10,357 |  |  | 2,267 |  |  | 9,447 |  |  | 2,246 |
Effect of changes in cash flow assumptions |  | - |  |  | - |  |  | (415 | ) |  | - |
Effect of actual variances from expected |  |  |  |  |  |  |  |  |  |  |  |
experience |  | (300 | ) |  | (2 | ) |  | 69 |  |  | 3 |
Adjusted balance as of beginning-of-year |  | 10,057 |  |  | 2,265 |  |  | 9,101 |  |  | 2,249 |
Issuances |  | 330 |  |  | 69 |  |  | 1,655 |  |  | 122 |
Interest accrual |  | 191 |  |  | 43 |  |  | 356 |  |  | 84 |
Benefit payments |  | (343 | ) |  | (93 | ) |  | (755 | ) |  | (188 | )
Ending balance at original discount rate (1) |  | 10,235 |  |  | 2,284 |  |  | 10,357 |  |  | 2,267 |
Effect of cumulative changes in discount |  |  |  |  |  |  |  |  |  |  |  |
rate assumptions |  | (472 | ) |  | (236 | ) |  | (785 | ) |  | (263 | )
Balance as of end-of-period | $ | 9,763 |  | $ | 2,048 |  | $ | 9,572 |  | $ | 2,004 |
Net balance as of end-of-period | $ | 3,676 |  | $ | 2,048 |  | $ | 3,509 |  | $ | 2,004 |
Less: reinsurance recoverables |  | 498 |  |  | 3 |  |  | 532 |  |  | 3 |
Net balance as of end-of-period, net of reinsurance | $ | 3,178 |  | $ | 2,045 |  | $ | 2,977 |  | $ | 2,001 |
Weighted-average duration of future policyholder |  |  |  |  |  |  |  |  |  |  |  |
benefit liability (years) |  | 10 |  |  | 9 |  |  | 10 |  |  | 9 |
(1)Includes DPL within Payout Annuities of $53 million, $38 million and $22 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. For the six months ended June 30, 2023, Traditional Life and Payout Annuities did not have any significantly different actual experience compared to expected. For the year ended December 31, 2022, Traditional Life had updates to the mortality and lapse assumptions resulting in lower projected premiums and benefits, and a corresponding increase in reserves. Payout Annuities did not have any significant assumption updates. For the year ended December 31, 2022, Traditional Life and Payout Annuities did not have any significantly different actual experience compared to expected. The following table summarizes the discounted and undiscounted expected future gross premiums and expected future benefit payments (in millions):
| As of June 30, 2023 |  | As of December 31, 2022 |
| Undiscounted |  | Discounted |  | Undiscounted |  | Discounted |
Traditional Life |  |  |  |  |  |  |  |  |  |  |  |
Expected future gross premiums | $ | 14,009 |  | $ | 9,583 |  | $ | 13,945 |  | $ | 9,475 |
Expected future benefit payments |  | 13,834 |  |  | 9,763 |  |  | 13,640 |  |  | 9,572 |
Payout Annuities |  |  |  |  |  |  |  |  |  |  |  |
Expected future gross premiums |  | - |  |  | - |  |  | - |  |  | - |
Expected future benefit payments |  | 3,501 |  |  | 2,048 |  |  | 3,472 |  |  | 2,004 |
The following table summarizes the gross premiums and interest accretion (in millions) recognized in insurance premiums and benefits, respectively, on the Consolidated Statements of Comprehensive Income (Loss):
| For the Three |  | For the Six |
| Months Ended |  | Months Ended |
| June 30, |  | June 30, |
| 2023 |  | 2022 |  | 2023 |  | 2022 |
Traditional Life |  |  |  |  |  |  |  |  |  |  |  |
Gross premiums | $ | 314 |  | $ | 301 |  | $ | 627 |  | $ | 594 |
Interest accretion |  | 36 |  |  | 33 |  |  | 71 |  |  | 66 |
Payout Annuities |  |  |  |  |  |  |  |  |  |  |  |
Gross premiums |  | 44 |  |  | 21 |  |  | 72 |  |  | 43 |
Interest accretion |  | 22 |  |  | 21 |  |  | 43 |  |  | 42 |
The following table summarizes the weighted-average interest rates:
| For the Six |  |  |
| Months |  | For the Year |
| Ended |  | Ended |
| June 30, |  | December 31, |
| 2023 |  | 2022 |
Traditional Life |  |  |  |  |  |
Interest accretion rate |  | 5.1% |  |  | 5.1% |
Current discount rate |  | 5.1% |  |  | 5.1% |
Payout Annuities |  |  |  |  |  |
Interest accretion rate |  | 3.9% |  |  | 3.9% |
Current discount rate |  | 5.2% |  |  | 5.3% |
‎ Liability for Future Claims The following table summarizes the balances of and changes in liability for future claims (in millions, except years):
| Group Protection |  |  |  |  |  |  |
| As of or For |  |  |  |  |  |  |  |  |  |
| the Six |  | As of or For |  |  |  |  |  |  |
| Months |  | the Year |  |  |  |  |  |  |
| Ended |  | Ended |  |  |  |  |  |  |
| June 30, |  | December 31, |  |  |  |  |  |  |
| 2023 |  | 2022 |  |  |  |  |  |  |
Balance as of beginning-of-year | $ | 5,462 |  | $ | 5,936 |  |  |  |  |  |  |
Less: Effect of cumulative changes in discount |  |  |  |  |  |  |  |  |  |  |  |
rate assumptions |  | (597 | ) |  | 262 |  |  |  |  |  |  |
Beginning balance at original discount rate |  | 6,059 |  |  | 5,674 |  |  |  |  |  |  |
Effect of changes in cash flow assumptions |  | - |  |  | 15 |  |  |  |  |  |  |
Effect of actual variances from expected |  |  |  |  |  |  |  |  |  |  |  |
experience |  | (220 | ) |  | (117 | ) |  |  |  |  |  |
Adjusted beginning-of-year balance |  | 5,839 |  |  | 5,572 |  |  |  |  |  |  |
New incidence |  | 882 |  |  | 1,777 |  |  |  |  |  |  |
Interest |  | 83 |  |  | 141 |  |  |  |  |  |  |
Benefit payments |  | (734 | ) |  | (1,431 | ) |  |  |  |  |  |
Ending balance at original discount rate |  | 6,070 |  |  | 6,059 |  |  |  |  |  |  |
Effect of cumulative changes in discount |  |  |  |  |  |  |  |  |  |  |  |
rate assumptions |  | (577 | ) |  | (597 | ) |  |  |  |  |  |
Balance as of end-of-period |  | 5,493 |  |  | 5,462 |  |  |  |  |  |  |
Less: reinsurance recoverables |  | 121 |  |  | 127 |  |  |  |  |  |  |
Balance as of end-of-period, net of reinsurance | $ | 5,372 |  | $ | 5,335 |  |  |  |  |  |  |
Weighted-average duration of liability for future |  |  |  |  |  |  |  |  |  |  |  |
claims (years) |  | 4 |  |  | 4 |  |  |  |  |  |  |
For the six months ended June 30, 2023, we experienced more favorable reported incidence and claim terminations than assumed. For the year ended December 31, 2022, we had an unfavorable impact from updates to the long-term disability incidence and severity assumptions, partially offset by favorable impacts from updates to the life waiver termination rate assumptions. For the year ended December 31, 2022, we experienced more favorable claim terminations than assumed. The following table summarizes the discounted and undiscounted expected future benefit payments (in millions):
| As of June 30, 2023 |  | As of December 31, 2022 |
| Undiscounted |  | Discounted |  | Undiscounted |  | Discounted |
Group Protection |  |  |  |  |  |  |  |  |  |  |  |
Expected future benefit payments | $ | 7,111 |  | $ | 6,070 |  | $ | 7,063 |  | $ | 6,059 |
The following table summarizes the gross premiums and interest accretion (in millions) recognized in insurance premiums and benefits, respectively, on the Consolidated Statements of Comprehensive Income (Loss):
| For the Three |  | For the Six |
| Months Ended |  | Months Ended |
| June 30, |  | June 30, |
| 2023 |  | 2022 |  | 2023 |  | 2022 |
Group Protection |  |  |  |  |  |  |  |  |  |  |  |
Gross premiums | $ | 885 |  | $ | 841 |  | $ | 1,770 |  | $ | 1,671 |
Interest accretion |  | 41 |  |  | 36 |  |  | 83 |  |  | 78 |
‎ The following table summarizes the weighted-average interest rates:
| For the Six |  |  |  |  |  |  |  |  |
| Months |  | For the Year |  |  |  |  |  |
| Ended |  | Ended |  |  |  |  |
| June 30, |  | December 31, |  |  |  |  |
| 2023 |  | 2022 |  |  |  |  |
Group Protection |  |  |  |  |  |  |  |  |  |
Interest accretion rate |  | 2.9% |  |  | 2.8% |  |  |  |  |  |  |
Current discount rate |  | 5.1% |  |  | 5.1% |  |  |  |  |  |  |
Additional Liabilities for Other Insurance Benefits The following table summarizes the balances of and changes in additional liabilities for other insurance benefits (in millions, except years):
| UL and Other |
| As of or For |  |  |  |
| the Six |  | As of or For |
| Months |  | the Year |
| Ended |  | Ended |
| June 30, |  | December 31, |
| 2023 |  | 2022 |
Balance as of beginning-of-year | $ | 14,818 |  | $ | 12,556 |
Less: Effect of cumulative changes in shadow |  |  |  |  |  |
balance in AOCI |  | (905 | ) |  | 1,113 |
Balance as of beginning-of-year, excluding |  |  |  |  |  |
shadow balance in AOCI |  | 15,723 |  |  | 11,443 |
Effect of changes in cash flow assumptions |  | - |  |  | 3,108 |
Effect of actual variances from expected |  |  |  |  |  |
experience |  | 6 |  |  | 195 |
Adjusted beginning-of-year balance |  | 15,729 |  |  | 14,746 |
Issuances |  | - |  |  | 7 |
Interest accrual |  | 376 |  |  | 626 |
Net assessments collected |  | 609 |  |  | 972 |
Benefit payments |  | (360 | ) |  | (628 | )
Balance as of end-of-period, excluding |  |  |  |  |  |
shadow balance in AOCI |  | 16,354 |  |  | 15,723 |
Effect of cumulative changes in shadow |  |  |  |  |  |
balance in AOCI |  | (829 | ) |  | (905 | )
Balance as of end-of-period |  | 15,525 |  |  | 14,818 |
Less: reinsurance recoverables |  | 870 |  |  | 856 |
Balance as of end-of-period, net of reinsurance | $ | 14,655 |  | $ | 13,962 |
Weighted-average duration of additional liabilities |  |  |  |  |  |
for other insurance benefits (years) |  | 18 |  |  | 17 |
For the six months ended June 30, 2023, we did not have any significantly different actual experience compared to expected. For the year ended December 31, 2022, we had an unfavorable impact primarily from updates to policyholder lapse behavior assumptions related to UL products with secondary guarantees in the amount of $1.9 billion, net of reinsurance, after-tax, and to a lesser extent mortality and morbidity assumptions. We had unfavorable actual mortality experience compared to expected due to ongoing effects of the COVID-19 pandemic. The following table summarizes the gross assessments and interest accretion (in millions) recognized in insurance premiums and benefits, respectively, on the Consolidated Statements of Comprehensive Income (Loss):
| For the Three |  | For the Six |
| Months Ended |  | Months Ended |
| June 30, |  | June 30, |
| 2023 |  | 2022 |  | 2023 |  | 2022 |
UL and Other |  |  |  |  |  |  |  |  |  |  |  |
Gross assessments | $ | 542 |  | $ | 680 |  | $ | 1,457 |  | $ | 1,407 |
Interest accretion |  | 190 |  |  | 137 |  |  | 376 |  |  | 270 |
The following table summarizes the weighted-average interest rates:
| For the Six |  |  |  |
| Months |  | For the Year |
| Ended |  | Ended |
| June 30, |  | December 31, |
| 2023 |  | 2022 |
UL and Other |  |  |  |  |  |
Interest accretion rate |  | 4.9% |  |  | 5.0% |

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- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//944-40/tableOfContent + Details
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