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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2024

Schedule Of Positions in Derivative Instruments

The following table sets forth our positions in derivative instruments as of the dates indicated:

		Derivative assets										Derivative liabilities
				Fair value										Fair value
(Amounts in millions)		Balance sheet classification		June 30, 2024				December 31, 2023				Balance sheet classification		June 30, 2024				December 31, 2023
Derivatives designated as hedges
Cash flow hedges:
Interest rate swaps		Other invested assets		$	26			$	55			Other liabilities		$	636			$	490
Foreign currency swaps		Other invested assets			12				10			Other liabilities			1				2
Forward bond purchase commitments		Other invested assets			21				51			Other liabilities			13				—
Total cash flow hedges					59				116						650				492
Total derivatives designated as hedges					59				116						650				492
Derivatives not designated as hedges
Equity index options		Other invested assets			21				15			Other liabilities			—				—
Financial futures (1)		Other invested assets			—				—			Other liabilities			—				—
Forward bond purchase commitments		Other invested assets			—				—			Other liabilities			20				9
Fixed indexed annuity embedded derivatives		Other assets			—				—			Policyholder account balances (2)			160				165
Indexed universal life embedded derivatives		Reinsurance recoverable			—				—			Policyholder account balances (3)			16				15
Total derivatives not designated as hedges					21				15						196				189
Total derivatives				$	80			$	131					$	846			$	681

(1)  The period end valuations of financial futures were zero as a result of settling the margins on these contracts on a daily basis.

(2)  Represents the embedded derivatives associated with our fixed indexed annuity liabilities.

(3)  Represents the embedded derivatives associated with our indexed universal life liabilities.

Schedule of Notional Amounts Outstanding on Derivative Instruments

The following tables represent activity associated with derivative instruments as of the dates indicated:

				December 31,								Maturities/				June 30,
(Notional in millions)		Measurement		2023				Additions				terminations				2024
Derivatives designated as hedges
Cash flow hedges:
Interest rate swaps		Notional		$	8,975			$	231			$	(399	)		$	8,807
Foreign currency swaps		Notional			131				13				—				144
Forward bond purchase commitments		Notional			1,075				1,528				—				2,603
Total cash flow hedges					10,181				1,772				(399	)			11,554
Total derivatives designated as hedges					10,181				1,772				(399	)			11,554
Derivatives not designated as hedges
Equity index options		Notional			702				308				(357	)			653
Financial futures		Notional			1,251				2,363				(2,455	)			1,159
Forward bond purchase commitments		Notional			500				—				—				500
Total derivatives not designated as hedges					2,453				2,671				(2,812	)			2,312
Total derivatives				$	12,634			$	4,443			$	(3,211	)		$	13,866
				December 31,								Maturities/				June 30,
(Number of policies)		Measurement		2023				Additions				terminations				2024
Derivatives not designated as hedges
Fixed indexed annuity embedded derivatives		Policies			5,826				—				(530	)			5,296
Indexed universal life embedded derivatives		Policies			749				—				(17	)			732

Schedule of Pre-Tax Income (Loss) Effects of Cash Flow Hedges

The following table provides information about the pre-tax income effects of cash flow hedges for the three months ended June 30, 2024:

(Amounts in millions)		Gain (loss) recognized in OCI				Gain (loss) reclassified into net income from OCI				Classification of gain (loss) reclassified into net income		Gain (loss) recognized in net income				Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets		$	(77	)		$	52			Net investment income		$	—			Net investment gains (losses)
Interest rate swaps hedging assets			—				1			Net investment gains (losses)			—			Net investment gains (losses)
Interest rate swaps hedging liabilities			—				(1	)		Interest expense			—			Net investment gains (losses)
Foreign currency swaps			2				—			Net investment income			—			Net investment gains (losses)
Forward bond purchase commitments			(33	)			—			Net investment gains (losses)			—			Net investment gains (losses)
Total		$	(108	)		$	52					$	—

The following table provides information about the pre-tax income effects of cash flow hedges for the three months ended June 30, 2023:

(Amounts in millions)		Gain (loss) recognized in OCI				Gain (loss) reclassified into net income from OCI				Classification of gain (loss) reclassified into net income		Gain (loss) recognized in net income				Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets		$	(104	)		$	55			Net investment income		$	—			Net investment gains (losses)
Interest rate swaps hedging assets			—				3			Net investment gains (losses)			—			Net investment gains (losses)
Foreign currency swaps			(2	)			—			Net investment income			—			Net investment gains (losses)
Total		$	(106	)		$	58					$	—

The following table provides information about the pre-tax income effects of cash flow hedges for the six months ended June 30, 2024:

(Amounts in millions)		Gain (loss) recognized in OCI				Gain (loss) reclassified into net income from OCI				Classification of gain (loss) reclassified into net income		Gain (loss) recognized in net income				Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets		$	(225	)		$	105			Net investment income		$	—			Net investment gains (losses)
Interest rate swaps hedging assets			—				5			Net investment gains (losses)			—			Net investment gains (losses)
Interest rate swaps hedging liabilities			—				(2	)		Interest expense			—			Net investment gains (losses)
Foreign currency swaps			3				—			Net investment income			—			Net investment gains (losses)
Forward bond purchase commitments			(44	)			—			Net investment gains (losses)			—			Net investment gains (losses)
Total		$	(266	)		$	108					$	—

The following table provides information about the pre-tax income effects of cash flow hedges for the six months ended June 30, 2023:

(Amounts in millions)		Gain (loss) recognized in OCI				Gain (loss) reclassified into net income from OCI				Classification of gain (loss) reclassified into net income		Gain (loss) recognized in net income				Classification of gain (loss) recognized in net income
Interest rate swaps hedging assets		$	42			$	109			Net investment income		$	—			Net investment gains (losses)
Interest rate swaps hedging assets			—				8			Net investment gains (losses)			—			Net investment gains (losses)
Interest rate swaps hedging liabilities			—				(1	)		Interest expense			—			Net investment gains (losses)
Interest rate swaps hedging liabilities			—				1			Net investment gains (losses)			—			Net investment gains (losses)
Foreign currency swaps			(3	)			—			Net investment income			—			Net investment gains (losses)
Foreign currency swaps			—				2			Net investment gains (losses)			—			Net investment gains (losses)
Total		$	39			$	119					$	—

Reconciliation of Current Period Changes, Net of Applicable Income Taxes, for Derivatives Qualifying as Hedge

The following table provides a reconciliation of current period changes, net of applicable income taxes, for these designated derivatives presented in the separate component of stockholders’ equity labeled “derivatives qualifying as hedges,” as of and for the periods indicated:

		Three months ended June 30,								Six months ended June 30,
(Amounts in millions)		2024				2023				2024				2023
Beginning balance		$	849			$	1,274			$	1,010			$	1,200
Current period increases (decreases) in fair value, net of deferred taxes of $23, $23, $56 and $(8)			(85	)			(83	)			(210	)			31
Reclassification to net (income), net of deferred taxes of $18, $21, $38 and $42			(34	)			(37	)			(70	)			(77	)
Ending balance		$	730			$	1,154			$	730			$	1,154

Schedule of Pre-Tax Gain (Loss) Recognized in Net Income (loss) for Effects of Derivatives Not Designated as Hedges

The following table provides the pre-tax gain (loss) recognized in net income for the effects of derivatives not designated as hedges for the periods indicated:

		Three months ended June 30,								Six months ended June 30,								Classification of gain (loss) recognized in net income
(Amounts in millions)		2024				2023				2024				2023
Equity index options		$	1			$	5			$	6			$	6			Net investment gains (losses)
Financial futures			(15	)			(65	)			(79	)			(67	)		Changes in fair value of market risk benefits and associated hedges
Forward bond purchase commitments			(7	)			(3	)			(11	)			(3	)		Net investment gains (losses)
Fixed indexed annuity embedded derivatives			(5	)			(8	)			(13	)			(10	)		Net investment gains (losses)
Indexed universal life embedded derivatives			2				2				6				7			Net investment gains (losses)
Total derivatives not designated as hedges		$	(24	)		$	(69	)		$	(91	)		$	(67	)

Derivative Assets and Liabilities Subject to Master Netting Arrangement

The following table presents additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated:

		June 30, 2024												December 31, 2023
(Amounts in millions)		Derivative assets (1)				Derivative liabilities (1)				Net derivatives				Derivative assets (1)				Derivative liabilities (1)				Net derivatives
Amounts presented in the balance sheet:
Gross amounts recognized		$	80			$	670			$	(590	)		$	131			$	501			$	(370	)
Gross amounts offset in the balance sheet			—				—				—				—				—				—
Net amounts presented in the balance sheet			80				670				(590	)			131				501				(370	)
Gross amounts not offset in the balance sheet:
Financial instruments (2)			(38	)			(38	)			—				(59	)			(59	)			—
Collateral received			(17	)			—				(17	)			(19	)			—				(19	)
Collateral pledged			—				(1,288	)			1,288				—				(1,100	)			1,100
Over collateralization			2				656				(654	)			—				658				(658	)
Net amount		$	27			$	—			$	27			$	53			$	—			$	53

(1)  Does not include amounts related to embedded derivatives as of June 30, 2024 and December 31, 2023.

(2)  Amounts represent derivative assets and/or liabilities that are presented gross within the balance sheet but are held with the same counterparty where we have a master netting arrangement. This adjustment results in presenting the net asset and net liability position for each counterparty.

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