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Reinsurance
 6 Months Ended
Jun. 30, 2024
Insurance [Abstract]  
Reinsurance
12. Reinsurance    
The Company also reinsures its business through a diversified group of reinsurers. The Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements. The Company monitors trends in arbitration and any litigation outcomes with its reinsurers. Collectability of reinsurance balances is evaluated by monitoring ratings and the financial strength of its reinsurers. The effect of reinsurance on net premiums earned and claims incurred and policyholder benefits paid are as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
(Dollars in millions)
Premiums earned:
Gross amounts$1,387 $1,344 $2,871 $2,411 
Reinsurance ceded(382)(342)(722)(628)
Net premiums earned$1,005 $1,002 $2,149 $1,783 
Other policy revenue:
Gross amounts$203 $103 $315 $200 
Reinsurance ceded(19)— (19)— 
Net other policy revenue$184 $103 $296 $200 
Policyholder benefits paid and claims incurred:
Gross amounts$1,296 $1,171 $2,588 $2,029 
Reinsurance ceded(266)(182)(472)(340)
Net benefits paid and claims incurred$1,030 $989 $2,116 $1,689 
Change in fair value of market risk benefits:
Gross amounts$148 $(24)$186 $(14)
Reinsurance ceded(9)12 (28)7 
Net change in fair value of market risk benefits$139 $(12)$158 $(7)
Interest sensitive contract benefits:
Gross amounts$506 $175 $765 $365 
Reinsurance ceded(116)(59)(220)(160)
Net interest sensitive contract benefits$390 $116 $545 $205 
Annuity
The following summarizes our annuity reinsurance treaties and related recoverable (in millions):
Reinsurance
Recoverable
Agreement Type
Products Covered
June 30, 2024
(Dollars in millions)
Principal Reinsurers:
EquiTrust Life Insurance Company$245 CoinsuranceCertain Fixed Index and Fixed Rate Annuities
Athene Life Re Ltd.2,044 Coinsurance Funds Withheld, Modified CoinsuranceCertain Fixed Annuities and Multi-Year Guaranteed Annuities
North End Re (Cayman) SPC8,075 Coinsurance Funds Withheld, Modified CoinsuranceCertain Fixed Annuities
AeBe ISA LTD
4,397 Coinsurance Funds Withheld, CoinsuranceCertain Fixed Index and Fixed Rate Annuities
$14,761 
There were no significant changes to third party reinsurance agreements for the three and six months ended June 30, 2024.
We calculate estimated losses on reinsurance recoverable balances by determining an expected loss ratio. The expected loss ratio is based on industry historical loss experience and expected recovery timing adjusted for certain current and forecasted environmental factors management believes to be relevant. Estimated losses related to our reinsurance recoverable balances was $0 million as of June 30, 2024.
The company incurred risk charge fees of $3 million and $3 million during the three and six months ended June 30, 2024, in relation to reinsurance agreements.
Intercompany Reinsurance Agreements
The Company executes various intercompany reinsurance agreements between its subsidiaries, including off shore entities, for purposes of managing regulatory statutory capital and risk. All intercompany balances have been eliminated in the preparation of the accompanying financial statements.
These intercompany transactions are executed with wholly owned reinsurance subsidiaries, AEL Re Vermont, AEL Re Vermont II, Freestone Re Ltd. (“Freestone”), and AEL Re Bermuda Ltd. The reinsurance agreements with AEL Re Vermont and AEL Re Vermont II involve reinsuring a portion of lifetime income benefit rider payments in excess of policy fund values. These entities then entered into third-party excess of loss agreements which are permitted to be an admitted asset on the statutory balance sheets. The reinsurance agreement with AEL Re Bermuda Ltd. Is a coinsurance agreement to reinsure a portion of fixed index annuities on a funds withheld basis.
Property and Casualty
There were no significant changes to third party reinsurance agreements for the three and six months ended June 30, 2024 and 2023.