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Long-duration insurance contracts
 9 Months Ended
Sep. 30, 2024
Insurance [Abstract]  
Long-duration insurance contracts

Note 16. Long-duration insurance contracts

A summary of our long-duration life, annuity and health insurance benefits liabilities as of September 30, 2024 and 2023, disaggregated for our two primary product categories, periodic payment annuity and life and health insurance, follows. Other liabilities include IBNR claims and claims in the course of settlement. Amounts are in millions.

 

September 30,

 

 

2024

 

2023

 

Periodic payment annuity

$

11,136

 

$

9,940

 

Life and health

 

4,456

 

 

5,365

 

Other

 

3,020

 

 

3,251

 

 

$

18,612

 

$

18,556

 

 

Notes to Consolidated Financial Statements

Note 16. Long-duration insurance contracts

Reconciliations of periodic payment annuity and life and health insurance benefits liabilities for the first nine months of 2024 and 2023 follow (in millions). The information reflects the changes in discounted present values of expected future policy benefits and expected future net premiums before reinsurance ceded. Net premiums represent the portion of expected gross premiums that are required to provide for future policy benefits and variable expenses.

 

Periodic payment annuity

 

 

Life and health

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Expected future policy benefits:

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

$

11,212

 

 

$

10,640

 

 

$

52,665

 

 

$

52,008

 

Balance at the beginning of the year - original discount rates

 

11,681

 

 

 

11,549

 

 

 

65,871

 

 

 

63,584

 

Effect of cash flow assumption changes

 

—

 

 

 

—

 

 

 

1,485

 

 

 

346

 

Effect of actual versus expected experience

 

2

 

 

 

3

 

 

 

(12,709

)

 

 

(425

)

Change in benefits, net

 

(357

)

 

 

(349

)

 

 

(1,404

)

 

 

(2,059

)

Interest accrual

 

411

 

 

 

402

 

 

 

891

 

 

 

1,288

 

Foreign currency effect

 

96

 

 

 

27

 

 

 

218

 

 

 

(528

)

Balance at September 30 - original discount rates

 

11,833

 

 

 

11,632

 

 

 

54,352

 

 

 

62,206

 

Effect of changes in discount rate assumptions

 

(697

)

 

 

(1,692

)

 

 

(11,111

)

 

 

(13,434

)

Balance at September 30

$

11,136

 

 

$

9,940

 

 

$

43,241

 

 

$

48,772

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected future net premiums:

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

 

 

 

 

 

 

$

46,916

 

 

$

46,129

 

Balance at the beginning of the year - original discount rates

 

 

 

 

 

 

 

58,731

 

 

 

56,535

 

Effect of cash flow assumption changes

 

 

 

 

 

 

 

1,449

 

 

 

276

 

Effect of actual versus expected experience

 

 

 

 

 

 

 

(11,033

)

 

 

(266

)

Change in premiums, net

 

 

 

 

 

 

 

(1,348

)

 

 

(1,833

)

Interest accrual

 

 

 

 

 

 

 

791

 

 

 

1,125

 

Foreign currency effect

 

 

 

 

 

 

 

200

 

 

 

(502

)

Balance at September 30 - original discount rates

 

 

 

 

 

 

 

48,790

 

 

 

55,335

 

Effect of changes in discount rate assumptions

 

 

 

 

 

 

 

(10,005

)

 

 

(11,928

)

Balance at September 30

 

 

 

 

 

 

$

38,785

 

 

$

43,407

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities for future policy benefits:

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30

$

11,136

 

 

$

9,940

 

 

$

4,456

 

 

$

5,365

 

Reinsurance recoverables

 

—

 

 

 

—

 

 

 

(52

)

 

 

(1,399

)

Balance at September 30, net of reinsurance recoverables

$

11,136

 

 

$

9,940

 

 

$

4,404

 

 

$

3,966

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities for future policy benefits and reinsurance recoverables declined in the first nine months of 2024, primarily attributable to the commutations of certain life reinsurance contracts. The impacts of these contract commutations on expected future policy benefits and future net premiums were reflected in effects of actual versus expected experience.

Notes to Consolidated Financial Statements

Note 16. Long-duration insurance contracts

Other information relating to our long-duration insurance liabilities as of September 30, 2024 and 2023 follows (dollars in millions).

 

Periodic payment annuity

 

 

Life and health

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Undiscounted expected future gross premiums

$

—

 

 

$

—

 

 

$

101,134

 

 

$

106,518

 

Discounted expected future gross premiums

 

—

 

 

 

—

 

 

 

58,530

 

 

 

64,394

 

Undiscounted expected future benefits

 

30,915

 

 

 

31,049

 

 

 

91,751

 

 

 

101,882

 

Weighted average discount rate

 

5.2

%

 

 

5.9

%

 

 

4.7

%

 

 

5.4

%

Weighted average accretion rate

 

4.8

%

 

 

4.8

%

 

 

2.6

%

 

 

3.4

%

Weighted average duration

17 years

 

 

16 years

 

 

13 years

 

 

14 years

 

Gross premiums earned and interest expense before reinsurance ceded for the first nine months of 2024 and 2023 were as follows (in millions).

 

Gross premiums

 

 

Interest expense

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Periodic payment annuity

$

—

 

 

$

—

 

 

$

411

 

 

$

402

 

Life and health

 

2,831

 

 

 

2,587

 

 

 

100

 

 

 

163