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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 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:

						September 30, 2024												December 31, 2023
						Carrying Amount						Fair Value						Carrying Amount						Fair Value
						(Dollars in millions)
Financial assets:
Available-for-sale fixed maturity securities						$	45,683					$	45,683					$	12,877					$	12,877
Equity securities (1)						1,522						1,522						1,404						1,404
Mortgage loans on real estate, net of allowance						11,866						11,783						5,658						5,405
Private loans, net of allowance						2,725						2,725						194						194
Policy loans						277						277						390						390
Short-term investments						3,674						3,674						2,397						2,397
Real estate partnerships (4)						974						974						—						—
Other invested assets:
Derivative assets						1,886						1,886						227						227
Collaterals received on derivatives (excluding excess collateral)						(1,825)						(1,825)						(226)						(226)
Separately managed accounts						98						98						105						105
Other (2)						983						983						14						14
Cash and cash equivalents						13,873						13,873						3,192						3,192
Reinsurance recoverables and deposit assets						14,527						13,463						—						—
Other assets - market risk benefits						758						758						34						34
Separate account assets (3)						1,302						1,302						1,189						1,189
Total financial assets						$	98,323					$	97,176					$	27,455					$	27,202
Financial liabilities:
Policyholders’ account balances – embedded derivative						$	1,771					$	1,771					$	873					$	873
Market risk benefits						3,725						3,725						34						34
Other liabilities:
Derivative liabilities						26						26						—						—
Funds withheld for reinsurance liabilities						278						278						—						—
Notes payable						179						179						174						174
Long term borrowings						2,959						2,991						1,493						1,493
Separate account liabilities (3)						1,302						1,302						1,189						1,189
Total financial liabilities						$	10,240					$	10,272					$	3,763					$	3,763

(1)Balance as of September 30, 2024 and December 31, 2023 includes $0 million and $424 million, respectively, of private equity measured at cost less impairment, if any, as their fair values were not readily determinable and were therefore not subject to fair value hierarchy.

(2)Balance includes $427 million and $14 million of other invested assets not subject to fair value hierarchy as of September 30, 2024 and December 31, 2023, respectively.

(3)Balance includes $22 million and $26 million of assets, and corresponding liabilities, that are not subject to fair value hierarchy as of September 30, 2024 and December 31, 2023, respectively.

(4)Balance as of September 30, 2024 and December 31, 2023 represents only real estate partnerships in which the company has elected fair value option under ASC 825.

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)
September 30, 2024
Financial assets
Available-for-sale fixed maturity securities:
U.S. treasury and government						$	78					$	77					$	1					$	—
U.S. states and political subdivisions						3,383						—						3,323						60
Foreign governments						429						—						429						—
Corporate debt securities						31,473						—						28,292						3,181
Residential mortgage-backed securities						1,120						—						1,096						24
Commercial mortgage-backed securities						2,792						—						2,773						19
Collateralized debt securities						6,408						—						3,351						3,057
Total fixed maturity, available-for-sale						45,683						77						39,265						6,341
Equity securities:
Common stock						1,246						554						2						690
Preferred stock						272						26						174						72
Private equity and other						4						—						—						4
Total equity securities						1,522						580						176						766
Real estate at fair value (1)						1,282						—						—						1,282
Real estate partnerships at fair value (1)						1,014						—						—						1,014
Investment funds (1)(2)						115						—						—						115
Short-term investments						3,675						2,306						566						803
Other invested assets:
Derivative assets						1,886						—						1,621						265
Collaterals received on derivatives (excluding excess collateral)						(1,825)						(1,825)						—						—
Separately managed accounts						98						—						—						98
Other						556						—						—						556
Cash and cash equivalents						13,873						13,873						—						—
Other assets – market risk benefit assets						758						—						—						758
Separate account assets (3)						1,280						201						1,079						—
Total financial assets						$	69,917					$	15,212					$	42,707					$	11,998
Financial liabilities
Policyholders’ account balances – embedded derivative						$	1,771					$	—					$	—					$	1,771
Market risk benefits						3,725						—						—						3,725
Funds withheld for reinsurance liabilities – embedded derivatives						278						—						—						278
Other liabilities – derivative liabilities						26						—						26						—
Separate account liabilities (3)						1,280						201						1,079						—
Total financial liabilities						$	7,080					$	201					$	1,105					$	5,774

(1)Balances represent financial assets that are fair valued in accordance with ASC 825 as well as financial assets that are fair valued as a result of consolidation of investment company VIE in accordance with ASC 946.

(2)Balance excludes $397 million of investments measured at estimated fair value using NAV as a practical expedient.

(3)Balance includes $22 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						—						—						—						—
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 for reinsurance liabilities – embedded derivatives						—						—						—						—
Other liabilities – derivative liabilities						—						—						—						—
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)
September 30, 2024
Financial assets
Mortgage loans on real estate, net of allowance						$	11,866					$	11,783					$	—					$	—					$	11,783
Private loans, net of allowance						2,725						2,725						—						—						2,725
Policy loans						277						277						—						1						276
Deposit assets, included in reinsurance recoverables and deposit assets						14,527						13,463						—						—						13,463
Other invested assets						427						427						—						403						24
Total financial assets						$	29,822					$	28,675
Financial liabilities
Policyholders' account balances – investment contracts, excluding embedded derivative						$	78,107					$	78,107					$	—					$	—					$	78,107
Long term borrowings						2,959						2,991						—						—						2,991
Notes payable						179						179						—						—						179
Total financial liabilities						$	81,245					$	81,277
						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 – investment contracts, 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 September 30, 2024
			Assets															Liabilities
			Invested Assets (1)						Derivative Assets																		Policyholders’ Account Balances – Embedded Derivative												Funds Withheld for Reinsurance Liabilities - Embedded Derivative
			(Dollars in millions)
Balance, beginning of period			$	9,598					$	254																	$	1,196											$	79
Acquisitions from business combination			—						—																		—												—
Fair value changes in net income			177						41																		533												199
Fair value changes in other comprehensive income			(61)						—																		—												—
Purchases			1,697						37																		—												—
Sales			(298)						(67)																		—												—
Settlements or maturities			—						—																		—												—
Premiums less benefits			—						—																		42												—
Transfers into Level 3			65						—																		—												—
Transfers out of Level 3			(203)						—																		—												—
Balance, end of period			$	10,975					$	265																	$	1,771											$	278
			Three Months Ended September 30, 2023
			Assets																					Liabilities
			Invested Assets (1)						Derivative Assets																		Policyholders’ Account Balances – Embedded Derivative												Funds Withheld for Reinsurance Liabilities - Embedded Derivative
			(Dollars in millions)
Balance, beginning of period			$	4,620					$	215																	$	809											$	—
Acquisitions from business combination			—						—																		—												—
Fair value changes in net income			—						(32)																		23												—
Fair value changes in other comprehensive income			(382)						—																		—												—
Purchases			653						38																		—												—
Sales			(1,058)						—																		—												—
Settlements or maturities			(12)						(45)																		—												—
Premiums less benefits			—						—																		(7)												—
Transfers into Level 3			—						—																		—												—
Transfers out of Level 3			—						—																		—												—
Balance, end of period			$	3,821					$	176																	$	825											$	—

			Nine Months Ended September 30, 2024
			Assets															Liabilities
			Invested Assets (1)						Derivative Assets																		Policyholders’ Account Balances – Embedded Derivative												Funds Withheld for Reinsurance Liabilities - Embedded Derivative
			(Dollars in millions)
Balance, beginning of year			$	5,585					$	227																	$	872											$	—
Acquisitions from business combination			4,288						—																		—												—
Fair value changes in net income			189						122																		858												278
Fair value changes in other comprehensive income			121						—																		—												—
Purchases			5,042						111																		—												—
Sales			(4,083)						(67)																		—												—
Settlements or maturities			(2)						(128)																		(30)												—
Premiums less benefits			—						—																		71												—
Transfers into Level 3			177						—																		—												—
Transfers out of Level 3			(342)						—																		—												—
Balance, end of period			$	10,975					$	265																	$	1,771											$	278
			Nine Months Ended September 30, 2023
			Assets															Liabilities
			Invested Assets (1)						Derivative Assets																		Policyholders’ Account Balances – 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						40																		125												—
Fair value changes in other comprehensive income			(383)						—																		—												—
Purchases			2,888						98																		—												—
Sales			(1,936)						—																		—												—
Settlements or maturities			(12)						(83)																		—												—
Premiums less benefits			—						—																		(26)												—
Transfers into Level 3			—						—																		—												—
Transfers out of Level 3			—						—																		—												—
Balance, end of period			$	3,821					$	176																	$	825											$	—

(1)Balance includes derivative collateral, separately managed accounts, and certain consolidated variable interest entities.

Schedule of Significant Unobservable Inputs

The following table provides 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.

September 30, 2024

Valuation Techniques(s)

Unobservable Input Description

Assets:

Fixed maturity securities:

Corporate debt securities

Discounted cash flow

Discount rate

Weighted average lives

Collateralized debt securities

Discounted cash flow

Discount rate

Weighted average lives

Real estate and real estate partnerships:

Fair value option under ASC 825

Discounted cash flow

Discount rate

Terminal capitalization rate

Investment horizon (years)

Investment company VIE under ASC 946

Broker price opinion

Market comparable home sales

Age and size of home

Location and property condition

Investment funds at fair value

Discounted cash flow

Discount rate

Other invested assets - other

Discounted cash flow

Discount rate

Weighted average lives

Separately managed accounts

Discounted cash flows (yield analysis)

Discount rate

CVM

NCY EBITDA

Market transaction

December 31, 2023

Valuation Techniques(s)

Unobservable Input Description

(Dollars in millions)

Assets:

Separately managed accounts

Discounted cash flows (yield analysis)

Discount rate

CVM

NCY EBITDA

Market transaction

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