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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Carrying Amount and Fair Value of Financial Instruments

The carrying amount and fair value of financial instruments are shown below:

						June 30, 2024												December 31, 2023
						Carrying Amount						Fair Value						Carrying Amount						Fair Value
						(Dollars in millions)
Financial assets:
Available-for-sale fixed maturity securities						$	46,480					$	46,480					$	12,877					$	12,877
Equity securities						1,200						1,200						1,404						1,404
Mortgage loans on real estate, net of allowance						12,042						11,812						5,658						5,405
Private loans, net of allowance						1,724						1,729						194						194
Policy loans						401						401						390						390
Short-term investments						1,945						1,945						2,397						2,397
Other invested assets:
Derivative assets						1,610						1,610						227						227
Collaterals received on derivatives (excluding excess collateral)						(1,587)						(1,587)						(226)						(226)
Separately managed accounts						89						89						105						105
Other (1)						832						832						14						14
Cash and cash equivalents						13,895						13,895						3,192						3,192
Reinsurance recoverables and deposit assets						15,261						14,196						—						—
Other assets - market risk benefits						704						704						34						34
Separate account assets (2)						1,266						1,266						1,189						1,189
Total financial assets						$	95,862					$	94,572					$	27,455					$	27,202
Financial liabilities:
Policyholders' account balances, excluding embedded derivative						$	76,797					$	76,797					$	14,097					$	14,097
Policyholders’ account balances – embedded derivative						1,196						1,196						873						873
Market risk benefits						3,276						3,276						34						34
Other liabilities:
Funds withheld liabilities						79						79						—						—
Notes payable						657						657						174						174
Long term borrowings						2,476						2,458						1,493						1,493
Separate account liabilities (2)						1,266						1,266						1,189						1,189
Total financial liabilities						$	85,747					$	85,729					$	17,860					$	17,860

(1)Balance includes $407 million and $14 million other invested assets not subject to fair value hierarchy as of June 30, 2024 and December 31, 2023, respectively.

(2)Balance includes $32 million and $26 million of assets, and corresponding liabilities, that are not subject to fair value hierarchy as of June 30, 2024 and December 31, 2023, respectively.

Schedule of Fair Value Hierarchy Measurements of Financial Instruments

The fair value hierarchy measurements for assets and liabilities measured at fair value on a recurring basis are shown below:

						Assets and Liabilities Carried at Fair Value by Hierarchy Level
						Total Fair Value						Level 1						Level 2						Level 3
						(Dollars in millions)
June 30, 2024
Financial assets
Available-for-sale fixed maturity securities:
U.S. treasury and government						$	83					$	83					$	—					$	—
U.S. states and political subdivisions						3,299						—						3,047						252
Foreign governments						453						—						453						—
Corporate debt securities						31,949						—						29,035						2,914
Residential mortgage-backed securities						1,079						—						1,057						22
Commercial mortgage-backed securities						2,766						—						2,743						23
Collateralized debt securities						6,851						—						3,775						3,076
Total fixed maturity, available-for-sale						46,480						83						40,110						6,287
Equity securities:
Common stock						1,081						384						2						695
Preferred stock						114						23						—						91
Private equity and other						5						—						—						5
Total equity securities						1,200						407						2						791
Real estate at fair value (1)						1,279						—						—						1,279
Real estate partnerships at fair value (1)						39						—						—						39
Investment funds (fair value option) (1)(2)						111						—						—						111
Short-term investments						1,945						823						544						578
Other invested assets:
Derivative assets						1,610						—						1,356						254
Collaterals received on derivatives (excluding excess collateral)						(1,587)						(1,587)						—						—
Separately managed accounts						89						—						—						89
Other						425						—						—						425
Cash and cash equivalents						13,895						13,895						—						—
Other assets - market risk benefit assets						704						—						—						704
Separate account assets (3)						1,234						200						1,034						—
Total financial assets						$	67,424					$	13,821					$	43,046					$	10,557
Financial liabilities
Policyholders’ account balances – embedded derivative						$	1,196					$	—					$	—					$	1,196
Market risk benefits						3,276						—						—						3,276
Funds withheld liabilities - embedded derivatives						79						—						—						79
Separate account liabilities (3)						1,234						200						1,034						—
Total financial liabilities						$	5,785					$	200					$	1,034					$	4,551

(1)Balances represent financial assets that are fair valued as a result of consolidation of investment company VIE in accordance with ASC 946.

(2)Balance excludes $360 million of investments measured at estimated fair value using NAV as a practical expedient.

(3)Balance includes $32 million of assets, and corresponding liabilities, that are not subject to fair value hierarchy.

						Assets and Liabilities Carried at Fair Value by Hierarchy Level
						Total Fair Value						Level 1						Level 2						Level 3
						(Dollars in millions)
December 31, 2023
Financial assets
Available-for-sale fixed maturity securities:
U.S. treasury and government						$	62					$	62					$	—					$	—
U.S. states and political subdivisions						578						—						578						—
Foreign governments						9						—						9						—
Corporate debt securities						10,784						—						8,570						2,214
Residential mortgage-backed securities						127						—						127						—
Commercial mortgage-backed securities						—						—						—						—
Collateralized debt securities						1,317						—						416						901
Total fixed maturity, available-for-sale						12,877						62						9,700						3,115
Equity securities:
Common stock						1,307						314						—						993
Preferred stock						97						22						—						75
Private equity and other						—						—						—						—
Total equity securities						1,404						336						—						1,068
Real estate at fair value						—						—						—						—
Real estate partnerships at fair value						—						—						—						—
Investment funds (fair value option)						—						—						—						—
Short-term investments						2,397						1,100						—						1,297
Other invested assets:
Derivative assets						227						—						—						227
Collaterals received on derivatives (excluding excess collateral)						(226)						—						—						(226)
Separately managed accounts						105						—						—						105
Other						—						—						—						—
Cash and cash equivalents						3,192						3,192						—						—
Other assets - market risk benefit assets						34						—						—						34
Separate account assets (1)						1,163						406						757						—
Total financial assets						$	21,173					$	5,096					$	10,457					$	5,620
Financial liabilities
Policyholders’ account balances – embedded derivative						$	873					$	—					$	—					$	873
Market risk benefits						34						—						—						34
Funds withheld liabilities - embedded derivatives						—						—						—						—
Separate account liabilities (1)						1,163						406						757						—
Total financial liabilities						$	2,070					$	406					$	757					$	907

(1)Balance includes $26 million of assets, and corresponding liabilities, that are not subject to fair value hierarchy.

Schedule of Carrying Value and Estimated Fair Value of Financial Instruments Not Recorded at Fair Value on a Recurring Basis

The carrying value and estimated fair value of financial instruments not recorded at fair value on a recurring basis are shown below:

						Carrying Amount						Fair Value						Fair Value Hierarchy Level
																		Level 1						Level 2						Level 3
						(Dollars in millions)
June 30, 2024
Financial assets
Mortgage loans on real estate, net of allowance						$	12,042					$	11,812					$	—					$	—					$	11,812
Private loans, net of allowance						1,724						1,729						—						846						883
Policy loans						401						401						—						—						401
Deposit assets, included in reinsurance recoverables and deposit assets						15,261						14,196						—						—						14,196
Other invested assets						407						407						—						403						4
Total financial assets						$	29,835					$	28,545
Financial liabilities
Policyholders' account balances, excluding embedded derivative						$	76,797					$	76,797					$	—					$	—					$	76,797
Long term borrowings						2,476						2,458						—						—						2,458
Notes payable						657						657						—						—						657
Total financial liabilities						$	79,930					$	79,912
						Carrying Amount						Fair Value						Fair Value Hierarchy Level
																		Level 1						Level 2						Level 3
						(Dollars in millions)
December 31, 2023
Financial assets
Mortgage loans on real estate, net of allowance						$	5,658					$	5,405					$	—					$	—					$	5,405
Private loans, net of allowance						194						194						—						—						194
Policy loans						390						390						—						—						390
Deposit assets, included in reinsurance recoverables and deposit assets						—						—						—						—						—
Other invested assets						14						14						—						—						14
Total financial assets						$	6,256					$	6,003
Financial liabilities
Policyholders' account balances, excluding embedded derivative						$	14,097					$	14,097					$	—					$	—					$	14,097
Long term borrowings						1,493						1,493						—						—						1,493
Notes payable						174						174						—						—						174
Total financial liabilities						$	15,764					$	15,764

Schedule of Fair Value Assets Measured on Recurring Basis

For financial assets and financial liabilities measured at fair value on a recurring basis using Level 3 inputs during the periods, reconciliations of the beginning and ending balances are shown below:

			Three Months Ended June 30, 2024
			Assets															Liabilities
			Invested Assets (1)						Derivative Assets																		PAB – Embedded Derivative												Funds Withheld for Reinsurance Liabilities - Embedded Derivative
			(Dollars in millions)
Balance, beginning of period			$	5,199					$	257																	$	904											$	—
Acquisitions from business combination			4,288						—																		—												—
Fair value changes in net income			12						24																		287												79
Net change included in interest sensitive contract benefits			—						—																		—												—
Fair value changes in other comprehensive income			875						—																		—												—
Purchases			1,302						39																		—												—
Sales			(2,048)						—																		—												—
Settlements or maturities			(2)						(66)																		(30)												—
Premiums less benefits			—						—																		35												—
Transfers into Level 3			112						—																		—												—
Transfers out of Level 3			(139)						—																		—												—
Balance, end of period			$	9,599					$	254																	$	1,196											$	79
			Three Months Ended June 30, 2023
			Assets																					Liabilities
			Invested Assets (1)						Derivative Assets																		PAB – Embedded Derivative												Funds Withheld for Reinsurance Liabilities - Embedded Derivative
			(Dollars in millions)
Balance, beginning of period			$	4,419					$	167																	$	784											$	—
Acquisitions from business combination			—						—																		—												—
Fair value changes in net income			11						47																		—												—
Net change included in interest sensitive contract benefits			—						—																		51												—
Fair value changes in other comprehensive income			(1)						—																		—												—
Purchases			822						30																		—												—
Sales			(631)						—																		—												—
Settlements or maturities			—						(29)																		—												—
Premiums less benefits			—						—																		(26)												—
Transfers into Level 3			—						—																		—												—
Transfers out of Level 3			—						—																		—												—
Balance, end of period			$	4,620					$	215																	$	809											$	—

			Six Months Ended June 30, 2024
			Assets															Liabilities
			Invested Assets (1)						Derivative Assets																		PAB – Embedded Derivative												Funds Withheld for Reinsurance Liabilities - Embedded Derivative
			(Dollars in millions)
Balance, beginning of year			$	5,585					$	227																	$	873											$	—
Acquisitions from business combination			4,288						—																		—												—
Fair value changes in net income			12						81																		287												79
Net change included in interest sensitive contract benefits			—						—																		(38)												—
Fair value changes in other comprehensive income			182						—																		—												—
Purchases			3,346						74																		—												—
Sales			(3,785)						—																		—												—
Settlements or maturities			(2)						(128)																		(30)												—
Premiums less benefits			—						—																		104												—
Transfers into Level 3			112						—																		—												—
Transfers out of Level 3			(139)						—																		—												—
Balance, end of period			$	9,599					$	254																	$	1,196											$	79
			Six Months Ended June 30, 2023
			Assets															Liabilities
			Invested Assets (1)						Derivative Assets																		PAB – Embedded Derivative												Funds Withheld for Reinsurance Liabilities - Embedded Derivative
			(Dollars in millions)
Balance, beginning of year			$	3,167					$	121																	$	726											$	—
Acquisitions from business combination			—						—																		—												—
Fair value changes in net income			97						72																		—												—
Net change included in interest sensitive contract benefits			—						—																		102												—
Fair value changes in other comprehensive income			(1)						—																		—												—
Purchases			2,235						60																		—												—
Sales			(878)						—																		—												—
Settlements or maturities			—						(38)																		—												—
Premiums less benefits			—						—																		(19)												—
Transfers into Level 3			—						—																		—												—
Transfers out of Level 3			—						—																		—												—
Balance, end of period			$	4,620					$	215																	$	809											$	—

(1)Balance includes derivative collaterals and separately managed accounts.

Schedule of Significant Unobservable Inputs

The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding investments where third party valuation inputs were not reasonably available.

June 30, 2024

Assets / (Liabilities) Measured at Fair Value

Valuation Techniques(s)

Unobservable Input Description

(Dollars in millions)

Assets:

Fixed maturity securities:

Corporate debt securities

$

83

Discounted cash flow

Liquidity premium

Collateralized debt securities

1,947

Discounted cash flow

Discount rate

Weighted average lives

Real estate at fair value

1,279

Broker price opinion

Real estate partnerships at fair value

39

Discounted cash flow

Residual capitalization rate

Discount rate

Investment funds at fair value

111

Discounted cash flow

Discount rate

Other invested assets - other

157

Discounted cash flow

Discount rate

Weighted average lives

Separately managed accounts

89

Discounted cash flows (yield analysis)

Discount rate

CVM

NCY EBITDA

Market transaction

December 31, 2023

Assets / (Liabilities) Measured at Fair Value

Valuation Techniques(s)

Unobservable Input Description

(Dollars in millions)

Assets:

Separately managed accounts

$

105

Discounted cash flows (yield analysis)

Discount rate

CVM

NCY EBITDA

Market transaction

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- Definition

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