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Segments | 6 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
Segments | Segments The Company provides its principal products and services through three segments: Wealth Solutions, Health Solutions and Investment Management. The Company's chief operating decision maker views and manages the business through these three segments. The Wealth Solutions segment provides tax-deferred, employer-sponsored retirement savings plans and administrative services to corporate, education, healthcare, other non-profit and government entities, and stable value products to institutional clients where the Company may or may not be providing defined contribution products and services, as well as individual retirement accounts ("IRAs"), other retail financial products and comprehensive financial services to individual customers. The Health Solutions segment provides stop loss, group life, voluntary employee-paid and disability products to mid-sized and large businesses as well as benefit administration software solutions to employers and health plans. On January 24, 2023, the Company completed its acquisition of Benefitfocus. The financial results of Benefitfocus are reported in the Health Solutions segment for periods after the acquisition. The Investment Management segment provides investment products and retirement solutions across a broad range of geographies, market sectors, investment styles and capitalization spectrums. Products and services are offered to institutional clients, including public, corporate and union retirement plans, endowments and foundations and insurance companies, as well as individual investors and general accounts of the Company's insurance subsidiaries and are distributed through the Company's direct sales force, consultant channel and intermediary partners (such as banks, broker-dealers and independent financial advisers). The following corporate and business activities are included in Corporate Adjusted operating earnings before income taxes: •corporate operations, corporate level assets and financial obligations, financing and interest expenses, dividend payments made to preferred shareholders, and other items not allocated or directly related to the Company's segments, including items such as certain expenses and liabilities of employee benefit plans, certain adjustments to short-term and long-term incentive accruals, certain insurance costs and intercompany eliminations; and •investment income on assets backing surplus in excess of amounts held at the segment level. Measurement Adjusted operating earnings before income taxes is a meaningful measure used by management to evaluate its business and segment performance. This measure enhances the understanding of the Company’s financial results by focusing on the operating performance and trends of the underlying core business segments by excluding items that tend to be highly variable from period to period based on capital market conditions and/or other factors. The Company uses the same accounting policies and procedures to measure segment Adjusted operating earnings before income taxes as it does for the directly comparable U.S. GAAP measure Income (loss) before income taxes. Adjusted operating earnings before income taxes does not replace Income (loss) before income taxes as the U.S. GAAP measure of the Company’s consolidated results of operations. Therefore, the Company believes that it is useful to evaluate both measures when reviewing the Company’s financial and operating performance. Each segment’s Adjusted operating earnings before income taxes is calculated by adjusting Income (loss) before income taxes for the following items: •Net investment gains (losses), which are significantly influenced by economic and market conditions, including interest rates and credit spreads, and are not indicative of normal operations. Net investment gains (losses) include gains (losses) on the sale of securities, impairments, changes in the fair value of investments using the FVO unrelated to the implied loan-backed security income recognition for certain mortgage-backed obligations, and changes in the fair value of derivative instruments, excluding gains (losses) associated with swap settlements and accrued interest. It also includes changes in the fair value of derivatives related to managed custody guarantees, net of related reserve increases (decreases), less the estimated cost of these benefits, changes in nonperformance spread, and changes in market risk benefits; •Income (loss) related to businesses exited or to be exited through reinsurance or divestment, which includes gains and (losses) associated with transactions to exit blocks of business, amortization of intangible assets and residual run-off activity. Excluding this activity better reveals trends in the Company's core business and more closely aligns Adjusted operating earnings before income taxes with how the Company manages its segments; •Income (loss) attributable to noncontrolling interests to which the Company is not economically entitled, such as Allianz's stake in the results of VIM Holdings LLC (referred to as redeemable noncontrolling interest or Allianz noncontrolling interest) or the attribution of results from consolidated VIEs or VOEs; •Dividend payments made to preferred shareholders are included as reductions to reflect the Adjusted operating earnings before income taxes that are available to common shareholders; •Other adjustments may include the following items: ◦Income (loss) related to early extinguishment of debt since the outcome of decisions to restructure debt are not indicative of normal operations; ◦Impairment of goodwill and intangible assets as these represent losses related to infrequent events and do not reflect normal, cash-settled expenses; ◦Amortization of acquisition-related intangible assets as well as contingent consideration fair value adjustments incurred in connection with certain acquisitions which are not indicative of current Operating expense fundamentals; ◦Expected return on plan assets net of interest costs associated with the Company's qualified defined benefit pension plan and immediate recognition of net actuarial gains (losses) related to all of the Company's pension and other postretirement benefit obligations and gains (losses) from plan amendments and curtailments. These amounts do not reflect cash-settled expenses, and are not indicative of current Operating expense fundamentals; and ◦Other items not indicative of normal operations or performance of the Company's segments or related to events such as capital or organizational restructurings, including certain costs related to debt and equity offerings, acquisition / merger integration expenses, severance and other third-party expenses associated with such activities, and expenses attributable to vacant real estate. These items vary widely in timing, scope and frequency between periods as well as between companies to which the Company is compared. Accordingly, the Company adjusts for these items as management believes that these items distort the ability to make a meaningful evaluation of the current and future performance of the Company's segments. The summary below reconciles Adjusted operating earnings before income taxes for the segments to Income (loss) before income taxes for the periods indicated:
| Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
| 2024 |  | 2023 |  |  |  | 2024 |  | 2023 |  |
Adjusted operating earnings before income taxes by segment: |  |  |  |  |  |  |  |  |  |  |
Wealth Solutions | $ | 214 |  |  | $ | 174 |  |  |  |  | $ | 400 |  |  | $ | 306 |  |  |
Health Solutions | 60 |  |  | 124 |  |  |  |  | 119 |  |  | 218 |  |  |
Investment Management | 64 |  |  | 63 |  |  |  |  | 117 |  |  | 105 |  |  |
Corporate | (54) |  |  | (54) |  |  |  |  | (118) |  |  | (123) |  |  |
Total including Allianz noncontrolling interest | 284 |  |  | 307 |  |  |  |  | 518 |  |  | 507 |  |  |
Less: Earning (loss) attributable to Allianz noncontrolling interest | 13 |  |  | 13 |  |  |  |  | 24 |  |  | 21 |  |  |
Total | $ | 271 |  |  | $ | 294 |  |  |  |  | $ | 494 |  |  | $ | 486 |  |  |
Adjustments: |  |  |  |  |  |  |  |  |  |  |
Net investment gains (losses) | 20 |  |  | (38) |  |  |  |  | 84 |  |  | (47) |  |  |
Income (loss) related to businesses exited or to be exited through reinsurance or divestment | (37) |  |  | (21) |  |  |  |  | (69) |  |  | (54) |  |  |
Income (loss) attributable to noncontrolling interests | 30 |  |  | 77 |  |  |  |  | 67 |  |  | 123 |  |  |
Dividend payments made to preferred shareholders | 4 |  |  | 4 |  |  |  |  | 21 |  |  | 18 |  |  |
Other adjustments | (12) |  |  | (52) |  |  |  |  | (35) |  |  | (122) |  |  |
Total adjustments to income (loss) before income taxes | 5 |  |  | (31) |  |  |  |  | 68 |  |  | (82) |  |  |
Income (loss) before income taxes | $ | 276 |  |  | $ | 263 |  |  |  |  | $ | 563 |  |  | $ | 404 |  |  |
Adjusted operating revenues is a measure of the Company's segment revenues. Each segment's Operating revenues are calculated by adjusting Total revenues to exclude the following items: •Net investment gains (losses); •Revenues related to businesses exited or to be exited through reinsurance or divestment; •Revenues attributable to noncontrolling interests, which represents the attribution of results from consolidated VIEs or VOEs; and •Other adjustments primarily reflect fee income earned by the Company's broker-dealers for sales of non-proprietary products, which are reflected net of commission expense in the Company's segments’ operating revenues, other items where the income is passed on to third parties and the elimination of intercompany investment expenses included in Adjusted operating revenues. The summary below reconciles Adjusted operating revenues for the segments to Total revenues for the periods indicated:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Adjusted operating revenues by segment: |  |  |  |  |  |  |
Wealth Solutions | $ | 730 |  |  | $ | 705 |  |  | $ | 1,450 |  |  | $ | 1,389 |
Health Solutions | 892 |  |  | 775 |  |  | 1,798 |  |  | 1,549 |
Investment Management | 234 |  |  | 226 |  |  | 468 |  |  | 455 |
Corporate | 4 |  |  | 15 |  |  | 9 |  |  | 26 |
Total | $ | 1,860 |  |  | $ | 1,721 |  |  | $ | 3,724 |  |  | $ | 3,419 |
Adjustments: |  |  |  |  |  |  |
Net investment gains (losses) | 16 |  |  | (46) |  |  | 62 |  |  | (60) |
Revenues related to businesses exited or to be exited through reinsurance or divestment | 13 |  |  | 2 |  |  | 37 |  |  | 32 |
Revenues attributable to noncontrolling interests | 102 |  |  | 128 |  |  | 167 |  |  | 188 |
Other adjustments | 42 |  |  | 67 |  |  | 93 |  |  | 127 |
Total adjustments to revenues | 173 |  |  | 151 |  |  | 360 |  |  | 288 |
Total revenues | $ | 2,033 |  |  | $ | 1,871 |  |  | $ | 4,084 |  |  | $ | 3,706 |
Other Segment Information The Investment Management segment revenues include the following intersegment revenues, primarily consisting of asset-based management and administration fees for the periods indicated:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Investment Management intersegment revenues | $ | 19 |  |  | $ | 22 |  |  | $ | 39 |  |  | $ | 44 |
The summary below presents Total assets for the Company’s segments as of the dates indicated:
| June 30, 2024 |  | December 31, 2023
Wealth Solutions | $ | 126,897 |  |  | $ | 122,318 |
Health Solutions | 3,430 |  |  | 3,336 |
Investment Management | 1,753 |  |  | 1,600 |
Corporate | 25,083 |  |  | 25,527 |
Total assets, before consolidation(1) | 157,163 |  |  | 152,781 |
Consolidation of investment entities | 4,117 |  |  | 4,304 |
Total assets | $ | 161,280 |  |  | $ | 157,085 |
(1) Total assets, before consolidation include the Company's direct investments in CIEs prior to consolidation, which are accounted for using the equity method or fair value option.

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