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Future Contract Benefits | 9 Months Ended
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Sep. 30, 2024
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] |
Future Contract Benefits | Future Contract Benefits The following table reconciles future contract benefits (in millions) to the Consolidated Balance Sheets:
| As of September 30, |  | As of December 31,
| 2024 |  | 2023
Payout Annuities (1) | $ | 2,119 |  |  | $ | 2,085 |
Traditional Life (1) | 3,938 |  |  | 3,841 |
Group Protection (2) | 5,773 |  |  | 5,689 |
UL and Other (3) | 16,554 |  |  | 15,000 |
Other Operations (4) | 9,471 |  |  | 9,879 |
Other (5) | 3,314 |  |  | 3,371 |
Total future contract benefits | $ | 41,169 |  |  | $ | 39,864 |
(1) See liability for future policy benefits (“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 ($5.6 billion as of September 30, 2024, and December 31, 2023) and Swiss Re ($1.9 billion and $2.2 billion as of September 30, 2024, and December 31, 2023, respectively) that are excluded from the following tables. (5) Represents other miscellaneous reserves that are not representative of long-duration contracts and 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 Nine Months Ended September 30, 2024 |  | As of or For the Nine Months Ended September 30, 2023
| Payout Annuities |  | Traditional Life |  | Payout Annuities |  | Traditional Life
Present Value of Expected Net Premiums |  |  |  |  |  |  |
Balance as of beginning-of-year | $ | – |  |  | $ | 6,200 |  |  | $ | – |  |  | $ | 6,063 |
Less: Effect of cumulative changes in discount |  |  |  |  |  |  |
rate assumptions | – |  |  | (148) |  |  | – |  |  | (582) |
Beginning balance at original discount rate | – |  |  | 6,348 |  |  | – |  |  | 6,645 |
Effect of changes in cash flow assumptions | – |  |  | 28 |  |  | – |  |  | (12) |
Effect of actual variances from expected experience | – |  |  | (59) |  |  | – |  |  | (280) |
Adjusted balance as of beginning-of-year | – |  |  | 6,317 |  |  | – |  |  | 6,353 |
Issuances | – |  |  | 289 |  |  | – |  |  | 460 |
Interest accrual | – |  |  | 188 |  |  | – |  |  | 182 |
Net premiums collected | – |  |  | (596) |  |  | – |  |  | (604) |
Flooring impact of LFPB | – |  |  | 1 |  |  | – |  |  | (3) |
Ending balance at original discount rate | – |  |  | 6,199 |  |  | – |  |  | 6,388 |
Effect of cumulative changes in discount |  |  |  |  |  |  |
rate assumptions | – |  |  | (19) |  |  | – |  |  | (527) |
Balance as of end-of-period | $ | – |  |  | $ | 6,180 |  |  | $ | – |  |  | $ | 5,861 |
Present Value of Expected LFPB |  |  |  |  |  |  |
Balance as of beginning-of-year | $ | 2,085 |  |  | $ | 10,041 |  |  | $ | 2,004 |  |  | $ | 9,572 |
Less: Effect of cumulative changes in discount |  |  |  |  |  |  |
rate assumptions | (187) |  |  | (189) |  |  | (263) |  |  | (785) |
Beginning balance at original discount rate (1) | 2,272 |  |  | 10,230 |  |  | 2,267 |  |  | 10,357 |
Effect of changes in cash flow assumptions | – |  |  | (68) |  |  | 17 |  |  | (29) |
Effect of actual variances from expected experience | 3 |  |  | (70) |  |  | (1) |  |  | (309) |
Adjusted balance as of beginning-of-year | 2,275 |  |  | 10,092 |  |  | 2,283 |  |  | 10,019 |
Issuances | 78 |  |  | 289 |  |  | 83 |  |  | 461 |
Interest accrual | 65 |  |  | 299 |  |  | 64 |  |  | 288 |
Benefit payments | (152) |  |  | (576) |  |  | (143) |  |  | (537) |
Ending balance at original discount rate (1) | 2,266 |  |  | 10,104 |  |  | 2,287 |  |  | 10,231 |
Effect of cumulative changes in discount |  |  |  |  |  |  |
rate assumptions | (147) |  |  | 14 |  |  | (344) |  |  | (832) |
Balance as of end-of-period | $ | 2,119 |  |  | $ | 10,118 |  |  | $ | 1,943 |  |  | $ | 9,399 |
Net balance as of end-of-period | $ | 2,119 |  |  | $ | 3,938 |  |  | $ | 1,943 |  |  | $ | 3,538 |
Less: reinsurance recoverables (2) | 1,578 |  |  | 388 |  |  | 3 |  |  | 450 |
Net balance as of end-of-period, net of reinsurance | $ | 541 |  |  | $ | 3,550 |  |  | $ | 1,940 |  |  | $ | 3,088 |
Weighted-average duration of future policyholder |  |  |  |  |  |  |
benefit liability (years) | 9 |  | 9 |  | 9 |  | 9
(1) Includes deferred profit liability within Payout Annuities of $60 million and $38 million as of September 30, 2024 and 2023, respectively. (2) Increase in Payout Annuities reinsurance recoverables driven by the fourth quarter 2023 reinsurance transaction. See Note 7 for additional information. For the nine months ended September 30, 2024, Payout Annuities did not have a significant cash flow assumption impact to net income (loss) attributable to the annual assumption review, and Traditional Life had a favorable cash flow assumption impact from updates to mortality assumptions, partially offset by an unfavorable impact from updates to policyholder behavior assumptions. For the nine months ended September 30, 2024, Payout Annuities and Traditional Life did not have any significantly different actual experience compared to expected. For the nine months ended September 30, 2023, Payout Annuities had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to mortality assumptions, and Traditional Life had a favorable cash flow assumption impact from updates to mortality assumptions, partially offset by an unfavorable impact from updates to policyholder lapse behavior assumptions. For the nine months ended September 30, 2023, Payout Annuities and Traditional Life 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 September 30, 2024 |  | As of September 30, 2023
| Undiscounted |  | Discounted |  | Undiscounted |  | Discounted
Payout Annuities |  |  |  |  |  |  |
Expected future gross premiums | $ | – |  |  | $ | – |  |  | $ | – |  |  | $ | – |
Expected future benefit payments | 3,437 |  |  | 2,119 |  |  | 3,553 |  |  | 1,943 |
Traditional Life |  |  |  |  |  |  |
Expected future gross premiums | 14,126 |  |  | 9,964 |  |  | 14,070 |  |  | 9,294 |
Expected future benefit payments | 14,377 |  |  | 10,118 |  |  | 14,579 |  |  | 9,399 |
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 Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Payout Annuities |  |  |  |  |  |  |
Gross premiums | $ | 40 |  |  | $ | 16 |  |  | $ | 84 |  |  | $ | 88 |
Interest accretion | 22 |  |  | 21 |  |  | 65 |  |  | 64 |
Traditional Life |  |  |  |  |  |  |
Gross premiums | 311 |  |  | 310 |  |  | 942 |  |  | 937 |
Interest accretion | 37 |  |  | 35 |  |  | 111 |  |  | 106 |
The following table summarizes the weighted-average interest rates:
| For the Nine Months Ended September 30,
| 2024 |  | 2023
Payout Annuities |  |  |
Interest accretion rate | 4.0 | % |  | 3.9 | %
Current discount rate | 4.7 | % |  | 5.8 | %
Traditional Life |  |  |
Interest accretion rate | 5.0 | % |  | 5.0 | %
Current discount rate | 4.4 | % |  | 5.6 | %
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 Nine Months Ended September 30,
| 2024 |  | 2023
Balance as of beginning-of-year | $ | 5,689 |  |  | $ | 5,462 |
Less: Effect of cumulative changes in discount |  |  |
rate assumptions | (490) |  |  | (597) |
Beginning balance at original discount rate | 6,179 |  |  | 6,059 |
Effect of changes in cash flow assumptions | (2) |  |  | (27) |
Effect of actual variances from expected experience | (278) |  |  | (233) |
Adjusted beginning-of-year balance | 5,899 |  |  | 5,799 |
New incidence | 1,236 |  |  | 1,267 |
Interest | 138 |  |  | 122 |
Benefit payments | (1,125) |  |  | (1,095) |
Ending balance at original discount rate | 6,148 |  |  | 6,093 |
Effect of cumulative changes in discount |  |  |
rate assumptions | (375) |  |  | (720) |
Balance as of end-of-period | 5,773 |  |  | 5,373 |
Less: reinsurance recoverables | 120 |  |  | 117 |
Balance as of end-of-period, net of reinsurance | $ | 5,653 |  |  | $ | 5,256 |
Weighted-average duration of liability for future |  |  |
claims (years) | 5 |  | 5
For the nine months ended September 30, 2024, we did not have a significant cash flow assumption impact to net income (loss) attributable to the annual assumption review. For the nine months ended September 30, 2024, we experienced more favorable reported incidence and claim terminations than assumed. For the nine months ended September 30, 2023, we had a favorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to long-term disability and life waiver claim termination rate assumptions, partially offset by unfavorable impacts from updates to long-term disability social security offset assumptions. For the nine months ended September 30, 2023, we experienced more favorable reported incidence and claim terminations than assumed. The following table summarizes the discounted and undiscounted expected future benefit payments (in millions):
| As of September 30, 2024 |  | As of September 30, 2023
| Undiscounted |  | Discounted |  | Undiscounted |  | Discounted
Group Protection |  |  |  |  |  |  |
Expected future benefit payments | $ | 7,154 |  |  | $ | 5,773 |  |  | $ | 7,148 |  |  | $ | 5,373 |
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 Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Group Protection |  |  |  |  |  |  |
Gross premiums | $ | 887 |  |  | $ | 874 |  |  | $ | 2,676 |  |  | $ | 2,645 |
Interest accretion | 45 |  |  | 39 |  |  | 138 |  |  | 122 |
The following table summarizes the weighted-average interest rates:
| For the Nine Months Ended September 30,
| 2024 |  | 2023
Group Protection |  |  |
Interest accretion rate | 3.3 | % |  | 3.0 | %
Current discount rate | 4.4 | % |  | 5.7 | %
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 Nine Months Ended September 30,
| 2024 |  | 2023
Balance as of beginning-of-year | $ | 15,000 |  |  | $ | 14,818 |
Less: Effect of cumulative changes in shadow |  |  |
balance in AOCI | (2,222) |  |  | (905) |
Balance as of beginning-of-year, excluding |  |  |
shadow balance in AOCI | 17,222 |  |  | 15,723 |
Effect of changes in cash flow assumptions | 244 |  |  | 173 |
Effect of actual variances from expected experience | 170 |  |  | (28) |
Adjusted beginning-of-year balance | 17,636 |  |  | 15,868 |
Interest accrual | 639 |  |  | 573 |
Net assessments collected | 860 |  |  | 895 |
Benefit payments | (718) |  |  | (473) |
Balance as of end-of-period, excluding shadow |  |  |
balance in AOCI | 18,417 |  |  | 16,863 |
Effect of cumulative changes in shadow |  |  |
balance in AOCI | (1,863) |  |  | (897) |
Balance as of end-of-period | 16,554 |  |  | 15,965 |
Less: reinsurance recoverables (1) | 5,139 |  |  | 654 |
Balance as of end-of-period, net of reinsurance | $ | 11,415 |  |  | $ | 15,311 |
Weighted-average duration of additional liabilities |  |  |
for other insurance benefits (years) | 16 |  | 17
(1) Increase in reinsurance recoverables driven by the fourth quarter 2023 reinsurance transaction, for certain blocks of in-force ULSG. See Note 7 for additional information. For the nine months ended September 30, 2024, we had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review impacting reinsured blocks of MoneyGuard® business for updates to policyholder behavior and mortality assumptions that were partially offset by updates to capital market assumptions. For the nine months ended September 30, 2024, we had unfavorable actual mortality experience compared to expected on reinsured and retained business. For the nine months ended September 30, 2023, we had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to policyholder lapse behavior assumptions, partially offset by a favorable impact from updates to interest rate assumptions. For the nine months ended September 30, 2023, we did not have any significantly different actual experience compared to expected. 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 Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
UL and Other |  |  |  |  |  |  |
Gross assessments | $ | 732 |  |  | $ | 337 |  |  | $ | 2,177 |  |  | $ | 1,794 |
Interest accretion | 218 |  |  | 197 |  |  | 639 |  |  | 573 |
The following table summarizes the weighted-average interest rates:
| For the Nine Months Ended September 30,
| 2024 |  | 2023
UL and Other |  |  |
Interest accretion rate | 5.4 | % |  | 5.1 | %

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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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