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Reinsurance | 12 Months Ended
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Dec. 31, 2024
Insurance [Abstract] |
Reinsurance | 12. Reinsurance The Company 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:
| Successor |  |  | Predecessor
| Year Ended December 31, |  | Period From May 25 to December 31, |  |  | Period From January 1 to May 24,
| 2024 |  | 2023 |  | 2022 |  |  | 2022
| (Dollars in millions)
Premiums earned: |  |  |  |  |  |  |  |
Gross amounts, including reinsurance assumed | $ | 6,343 |  |  | $ | 4,907 |  |  | $ | 1,909 |  |  |  | $ | 1,282 |
Reinsurance ceded | (824) |  |  | (1,386) |  |  | (455) |  |  |  | (303) |
Net premiums earned | $ | 5,519 |  |  | $ | 3,521 |  |  | $ | 1,454 |  |  |  | $ | 979 |
Other policy revenue: |  |  |  |  |  |  |  |
Gross amounts, including reinsurance assumed | $ | 779 |  |  | $ | 414 |  |  | $ | 226 |  |  |  | $ | 159 |
Reinsurance ceded | (122) |  |  | — |  |  | — |  |  |  | — |
Net other policy revenue | $ | 657 |  |  | $ | 414 |  |  | $ | 226 |  |  |  | $ | 159 |
Policyholder benefits paid and claims incurred: |  |  |  |  |  |  |  |
Gross amounts, including reinsurance assumed | $ | 7,821 |  |  | $ | 4,103 |  |  | $ | 1,564 |  |  |  | $ | 1,089 |
Reinsurance ceded | (2,460) |  |  | (814) |  |  | (374) |  |  |  | (258) |
Net benefits paid and claims incurred | $ | 5,361 |  |  | $ | 3,289 |  |  | $ | 1,190 |  |  |  | $ | 831 |
Change in fair value of market risk benefits: |  |  |  |  |  |  |  |
Gross amounts, including reinsurance assumed | $ | 92 |  |  | $ | (69) |  |  | $ | (102) |  |  |  | $ | — |
Reinsurance ceded | (95) |  |  | — |  |  | — |  |  |  | — |
Net change in fair value of market risk benefits | $ | (3) |  |  | $ | (69) |  |  | $ | (102) |  |  |  | $ | — |
Interest sensitive contract benefits: |  |  |  |  |  |  |  |
Gross amounts, including reinsurance assumed | $ | 2,184 |  |  | $ | 480 |  |  | $ | 217 |  |  |  | $ | 150 |
Reinsurance ceded | (439) |  |  | — |  |  | — |  |  |  | — |
Net interest sensitive contract benefits | $ | 1,745 |  |  | $ | 480 |  |  | $ | 217 |  |  |  | $ | 150 |
The following summarizes our significant life and annuity reinsurance treaties and related recoverable:
| Reinsurance Recoverable |  |  |  | Agreement Type |  | Products Covered
| December 31, 2024 |  |  |  |  |  |
| (Dollars in millions) |  |  |  |  |  |
Principal Reinsurers: |  |  |  |  |  |  |
EquiTrust Life Insurance Company | $ | 231 |  |  |  |  | Coinsurance |  | Certain Fixed Index and Fixed Rate Annuities
Athene Life Re Ltd. | 1,747 |  |  |  |  | Coinsurance Funds Withheld, Modified Coinsurance |  | Certain Fixed Annuities and Multi-Year Guaranteed Annuities
AeBe ISA LTD | 4,166 |  |  |  |  | Coinsurance Funds Withheld, Coinsurance |  | Certain Fixed Index and Fixed Rate Annuities
Reinsurance Group of America Inc. (RGA) | 3,420 |  |  |  |  | Coinsurance |  | Certain Term, Whole, Indexed Universal, Universal, and Universal with Secondary Guarantee Life Insurance Policies
| $ | 9,564 |  |  |  |  |  |  |
Effective July 1, 2021, American Equity Investment Life Insurance Company (“AEILIC”) entered into a reinsurance agreement with North End Re (the "North End Re reinsurance treaty”), a wholly owned subsidiary of Brookfield Wealth Solutions and an affiliate of the Company through the AEL acquisition, to reinsure 70% on a Modco and 30% on a coinsurance basis certain in-force and ongoing flow fixed indexed annuity product liabilities. The liabilities reinsured on a coinsurance basis are secured by assets held in a statutory and supplemental trust (collectively referred to as the “Trusts”) with AEILIC as the sole beneficiary. The liabilities reinsured on a Modco basis are secured by assets held by AEILIC in a segregated Modco account. The North End Re reinsurance treaty was subsequently amended in 2022 to include additional in-force and flow fixed indexed annuity products and in 2023 to stop the reinsurance of flow products effective as of October 1, 2023. Effective December 1, 2024, both parties mutually entered into a Recapture Agreement whereby 100% of the liabilities and obligations were recaptured (the “North End Re recapture”). All balances previously recorded by the Company were written off the balance sheet at the carrying amount as of December 1, 2024. The assets held in the Trusts were transferred to AEILIC and recognized at fair value in the Consolidated Statements of Financial Position as of December 1, 2024. As this is considered a common control transaction, the net impact of the recapture was recognized as a capital contribution of approximately $762 million. The capital contribution was recognized in “Additional Paid In Capital” in the Consolidated Statements of Financial Position. Effective July 1, 2024, certain of American National’s subsidiaries entered into a reinsurance agreements with certain subsidiaries of Reinsurance Group of America Inc. (“RGA”), a third party reinsurance group. In accordance with the terms of this agreement, such American National subsidiaries ceded to the reinsurer, on a coinsurance basis, mortality risk and approximately $3.4 billion of reserves associated with a diversified block of term life insurance, whole life insurance, indexed universal life insurance, universal life insurance and universal life insurance with secondary guarantee. Policies written by American National Insurance Company, American National Life Insurance Company of Texas and Garden State Life Insurance Company are ceded on a 100% quota share basis, while policies written by American National Life Insurance Company of New York are ceded on an 80% quota share basis. This reinsurance transaction represents approximately half of the Company’s in-force life business. As part of this reinsurance transaction, the Company recognized a deferred gain of $1.6 billion, which is recorded in Other liabilities in the Consolidated Statements of Financial Position as of December 31, 2024. This deferred gain represents the unamortized portion of the cost of reinsurance related to the in-force business which will be amortized over the life of the underlying reinsured policies. The deferred gain represents primarily the difference between liabilities ceded and assets transferred as part of the reinsurance agreement. The amortization of the deferred gain recognized in Other income in the Consolidated Statements of Operations for the year ended December 31, 2024 was $35 million. Effective December 16, 2024, a subsidiary of American National entered into PRT transactions under a coinsurance reinsurance agreement with a third party insurer in the United Kingdom, whereby this subsidiary recognized approximately $1.3 billion of investments and future policy benefits liability assumed. There were no other significant changes to third party reinsurance agreements for the year ended December 31, 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 $298 million as of December 31, 2024. The company incurred risk charge fees of $13 million, during the year ended December 31, 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. Effective December 1, 2024, AEILIC entered into a reinsurance agreement with AEL Re Vermont III, Inc. (“Vermont III”), a wholly-owned captive reinsurance company of ANGI and affiliate of AEILIC, to cede both in-force and ongoing flow of lifetime income benefit rider payments in excess of policy fund values and additional collateral contributed by AEILIC on a funds withheld basis (the "VT III Agreement”). In connection with the VT III Agreement, Vermont III entered into an excess of loss reinsurance agreement (the "VT III XOL treaty") with Canada Life to retrocede the lifetime income benefit rider payments in excess of the policy fund values ceded under the VT III Agreement after the funds withheld account balance is exhausted, subject to a limit. Vermont III is permitted to carry the VT III XOL treaty as an admitted asset on the Vermont III statutory balance sheet. The effects of this VT III XOL treaty are not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP. Effective December 1, 2024, AEILIC entered into a modified coinsurance agreement (“AEILIC Modco agreement”) with Freestone Re Ltd (“Freestone”), an affiliated Bermuda reinsurer wholly owned by the Company, to reinsure a quota share of in-force fixed rate, fixed indexed and payout annuities at 50% and ongoing flow fixed rate and fixed indexed annuities at 70%. Effective December 1, 2024, Eagle Life Insurance Company entered into a modified coinsurance agreement (“Eagle Life Modco agreement”) with Freestone, to reinsure a quota share of in-force fixed rate, fixed indexed and payout annuities at 50% and ongoing flow fixed rate and fixed indexed annuities at 70%. Effective June 30, 2024, American National Insurance Company (“ANICO”) entered into modified coinsurance agreements with Freestone. Pursuant to such agreements, ANICO has ceded to Freestone 80% of in-force (at June 30, 2024) and future flow PRT business, and 70% of in-force (at June 30, 2024) and future flow single premium immediate annuity business, 100% of fixed deferred and equity-indexed annuity business issued up to December 31, 2021, and 70% of fixed deferred and equity-indexed annuity business in 2022 and later. Effective October 1, 2023, AEILIC entered into a reinsurance agreement with AEL Re Vermont II, its wholly-owned captive reinsurance company, to cede both in-force and ongoing flow of lifetime income benefit rider payments in excess of policy fund values and additional collateral contributed by AEILIC on a funds withheld basis (the "VT II Agreement"). In connection with the VT II Agreement, AEL Re Vermont II entered into an excess of loss reinsurance agreement (the "VT II XOL treaty") with the Canada Life Assurance Company, operating through its Barbados branch (“Canada Life”) to retrocede the lifetime income benefit rider payments in excess of the policy fund values ceded under the VT II Agreement after the funds withheld account balance is exhausted, subject to a limit. AEL Re Vermont II is permitted to carry the VT II XOL treaty as an admitted asset on the AEL Re Vermont II statutory balance sheet. The effects of this VT II XOL treaty are not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP. Effective December 1, 2024, both parties mutually agreed to suspend the ongoing flow business ceded to AEL Re Vermont II. Effective December 31, 2021, AEILIC entered into a coinsurance agreement with AEL Re Bermuda Ltd, an affiliated Bermuda reinsurer wholly owned by the Company, to reinsure a quota share of fixed index annuities issued from January 1, 1997 through December 31, 2007 on a funds withheld basis. Effective December 1, 2024, both parties mutually entered into a Recapture Agreement whereby 100% of the liabilities and obligations were recaptured. Effective October 1, 2021, AEILIC entered into a coinsurance agreement with AEL Re Vermont Inc., a wholly-owned captive reinsurance company, to cede a portion of lifetime income benefit rider payments in excess of policy fund values on a funds withheld basis ("the AEL Re Vermont Agreement"). In connection with the agreement, AEL Re Vermont entered into an excess of loss reinsurance agreement (the "XOL treaty") with Hannover, to retrocede the lifetime income benefit rider payments in excess of the policy fund values ceded under the AEL Re Vermont Agreement upon exhaustion of the funds withheld account balance under the AEL Re Vermont Agreement. AEL Re Vermont is permitted to carry the XOL treaty as an admitted asset on the AEL Re Vermont statutory balance sheet. The XOL treaty does not satisfy risk transfer and is treated as a financing agreement. The associated charges are recorded as risk charges that are included in other operating costs and expenses in the consolidated statements of operations.

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- Definition The entire disclosure pertaining to the existence, magnitude and information about insurance that has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479838/944-20-50-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479838/944-20-50-4 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 944 -SubTopic 605 -Name Accounting Standards Codification -Section 55 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477548/944-605-55-12 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Topic 944 -SubTopic 605 -Name Accounting Standards Codification -Section 55 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477548/944-605-55-15 + Details
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