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Future Policy Benefits (Tables)

6 Months Ended

Jun. 30, 2024

Liability for Future Policy Benefit, after Reinsurance [Abstract]

Summary of Components of Liability for Future Policy Benefits

The following table sets forth our liability for future policy benefits as of the dates indicated:

(Amounts in millions)		June 30, 2024				December 31, 2023
Long-term care insurance		$	41,024			$	43,929
Life insurance			1,585				1,698
Fixed annuities			10,972				11,829
Total long-duration insurance contracts			53,581				57,456
Deferred profit liability			132				128
Cost of reinsurance			61				71
Total future policy benefits		$	53,774			$	57,655

Summary of Liability for Future Policy Benefit Activity

The following tables present the balances of and changes in the liability for future policy benefits as of and for the periods indicated:

		June 30, 2024
(Dollar amounts in millions)		Long-term care insurance				Life insurance				Fixed annuities
Present value of expected net premiums:
Beginning balance as of January 1		$	18,650			$	4,180			$	—
Beginning balance, at original discount rate		$	18,346			$	3,918			$	—
Effect of changes in cash flow assumptions			31				—				—
Effect of actual variances from expected experience			(251	)			(15	)			—
Adjusted beginning balance			18,126				3,903				—
Issuances			—				—				20
Interest accretion			463				108				—
Net premiums collected (1)			(916	)			(226	)			(20	)
Derecognition (lapses and withdrawals)			—				—				—
Other			—				1				—
Ending balance, at original discount rate			17,673				3,786				—
Effect of changes in discount rate assumptions			(280	)			74				—
Ending balance as of June 30		$	17,393			$	3,860			$	—
Present value of expected future policy benefits:
Beginning balance as of January 1		$	62,579			$	5,412			$	11,829
Beginning balance, at original discount rate		$	60,513			$	5,146			$	9,920
Effect of changes in cash flow assumptions			(55	)			—				—
Effect of actual variances from expected experience			(203	)			(3	)			(42	)
Adjusted beginning balance			60,255				5,143				9,878
Issuances			—				—				16
Interest accretion			1,641				137				322
Benefit payments			(1,984	)			(409	)			(490	)
Derecognition (lapses and withdrawals)			—				—				—
Other			—				—				5
Ending balance, at original discount rate			59,912				4,871				9,731
Effect of changes in discount rate assumptions			(1,495	)			104				1,241
Ending balance as of June 30		$	58,417			$	4,975			$	10,972
Net liability for future policy benefits, before flooring adjustments		$	41,024			$	1,115			$	10,972
Flooring adjustments (2)			—				470				—
Net liability for future policy benefits			41,024				1,585				10,972
Less: reinsurance recoverable			6,994				818				8,365
Net liability for future policy benefits, net of reinsurance recoverable		$	34,030			$	767			$	2,607
Weighted-average liability duration (years)			13.0				5.7				10.3

(1) Represents the portion of gross premiums collected from policyholders that is used to fund expected benefit payments.

(2) Flooring adjustments are necessary when a cohort’s present value of future net premiums exceeds the present value of future benefits. The flooring adjustment ensures that the liability for future policy benefits for each cohort is not less than zero. This adjustment is most prevalent in our term life insurance products due to their product design of a level premium period followed by annual premium rate increases.

		December 31, 2023
(Dollar amounts in millions)		Long-term care insurance				Life insurance				Fixed annuities
Present value of expected net premiums:
Beginning balance as of January 1		$	19,895			$	4,083			$	—
Beginning balance, at original discount rate		$	19,959			$	3,922			$	—
Effect of changes in cash flow assumptions			(276	)			180				—
Effect of actual variances from expected experience			(365	)			38				—
Adjusted beginning balance			19,318				4,140				—
Issuances			2				—				42
Interest accretion			994				217				—
Net premiums collected (1)			(1,968	)			(439	)			(42	)
Derecognition (lapses and withdrawals)			—				—				—
Other			—				—				—
Ending balance, at original discount rate			18,346				3,918				—
Effect of changes in discount rate assumptions			304				262				—
Ending balance as of December 31		$	18,650			$	4,180			$	—
Present value of expected future policy benefits:
Beginning balance as of January 1		$	61,352			$	5,556			$	11,923
Beginning balance, at original discount rate		$	61,148			$	5,374			$	10,300
Effect of changes in cash flow assumptions			(292	)			261				(33	)
Effect of actual variances from expected experience			(50	)			61				(30	)
Adjusted beginning balance			60,806				5,696				10,237
Issuances			2				—				35
Interest accretion			3,327				281				663
Benefit payments			(3,621	)			(823	)			(1,016	)
Derecognition (lapses and withdrawals)			—				—				—
Other			(1	)			(8	)			1
Ending balance, at original discount rate			60,513				5,146				9,920
Effect of changes in discount rate assumptions			2,066				266				1,909
Ending balance as of December 31		$	62,579			$	5,412			$	11,829
Net liability for future policy benefits, before flooring adjustments		$	43,929			$	1,232			$	11,829
Flooring adjustments (2)			—				466				—
Net liability for future policy benefits			43,929				1,698				11,829
Less: reinsurance recoverable			7,572				852				9,008
Net liability for future policy benefits, net of reinsurance recoverable		$	36,357			$	846			$	2,821
Weighted-average liability duration (years)			13.7				5.9				11.1

(1) Represents the portion of gross premiums collected from policyholders that is used to fund expected benefit payments.

(2) Flooring adjustments are necessary when a cohort’s present value of future net premiums exceeds the present value of future benefits. The flooring adjustment ensures that the liability for future policy benefits for each cohort is not less than zero. This adjustment is most prevalent in our term life insurance products due to their product design of a level premium period followed by annual premium rate increases.

Summary of Weighted Average Interest and Discount Rates

The following table provides the weighted-average interest rates for the liability for future policy benefits as of the dates indicated:

		June 30, 2024				December 31, 2023
Long-term care insurance
Interest accretion (locked-in) rate			5.7	%			5.8	%
Current discount rate			5.6	%			5.1	%
Life insurance
Interest accretion (locked-in) rate			5.8	%			5.8	%
Current discount rate			5.3	%			4.8	%
Fixed annuities
Interest accretion (locked-in) rate			6.8	%			6.7	%
Current discount rate			5.6	%			5.0	%

Summary of Undiscounted and Discounted Expected Future Gross Premiums and Expected Future Benefit Payments

The following table sets forth the amount of undiscounted and discounted expected future gross premiums and expected future benefit payments as of the dates indicated:

		June 30, 2024								December 31, 2023
(Amounts in millions)		Undiscounted				Discounted				Undiscounted				Discounted
Long-term care insurance
Expected future gross premiums		$	36,523			$	24,512			$	38,279			$	26,341
Expected future benefit payments		$	122,000			$	58,417			$	124,594			$	62,579
Life insurance
Expected future gross premiums		$	10,292			$	5,788			$	10,693			$	6,278
Expected future benefit payments		$	7,107			$	4,975			$	7,524			$	5,412
Fixed annuities
Expected future gross premiums		$	—			$	—			$	—			$	—
Expected future benefit payments		$	23,385			$	10,972			$	23,903			$	11,829

Summary of Revenue and Interest Expense in Respect of Future Policy Benefits

The following table sets forth the amount of revenue and interest accretion (expense) recognized in net income related to our liability for future policy benefits for the periods indicated:

		Three months ended June 30,																Six months ended June 30,																Year ended
		2024								2023								2024								2023								December 31, 2023
(Amounts in millions		Gross premiums				Interest accretion (1)				Gross premiums				Interest accretion (1)				Gross premiums				Interest accretion (1)				Gross premiums				Interest accretion (1)				Gross premiums				Interest accretion (1)
Long-term care insurance		$	613			$	589			$	671			$	582			$	1,243			$	1,178			$	1,346			$	1,160			$	2,713			$	2,333
Life insurance			165				14				174				16				334				29				353				33				688				64
Fixed annuities			—				160				—				166				—				322				—				334				—				663
Total		$	778			$	763			$	845			$	764			$	1,577			$	1,529			$	1,699			$	1,527			$	3,401			$	3,060

(1) Amounts for interest accretion are included in benefits and other changes in policy reserves in the condensed consolidated statements of income.

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- Definition

Disclosure in tabular form of revenue and interest expense in respect of future policy benefits.

+ References

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- Definition

Disclosure in tabular form of weighted average interest and discount rates for the liability for future policy benefits.

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- Definition

Tabular disclosure of beginning balance to ending balance for liability for future policy benefit, with separate presentation of expected future net premium and expected future benefit.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480016/944-40-65-2

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 55
-Paragraph 29E
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480046/944-40-55-29E

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480081/944-40-50-6

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- Definition

The entire disclosure for the present values of future benefits to be paid to or on behalf of policyholders and related expenses less the present value of future net premiums using assumptions such as estimates of expected investment yields, mortality, morbidity, terminations and expenses, applicable at the time the insurance contracts are made and unpaid claim costs relating to insurance contracts including estimates of costs relating to incurred but not reported claims based on the estimated ultimate cost of settling the claims (including effects of inflation and other societal and economic factors), using past experience adjusted for current trends and any other factors that would modify past experience by element such as business segment, country and interest rate range.

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