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Financial Instrument Risk Management (Tables)
 12 Months Ended
Dec. 31, 2022
Financial Instruments [Abstract]  
Disclosure of maximum exposure to credit risk
The positive fair value of derivative assets is used to determine the credit risk exposure if the counterparties were to default. The credit risk exposure is the cost of replacing, at current market rates, all derivative contracts with a positive fair value. Additionally, we have credit exposure to items not on the Consolidated Statements of Financial Position as follows:
As at December 31,20222021
Off-balance sheet item:
Loan commitments(1)
$2,217 $2,402 

(1)    Loan commitments include commitments to extend credit under commercial and multi-family residential mortgages and private debt securities not quoted in an active market. Commitments on debt securities contain provisions that allow for withdrawal of the commitment if there is deterioration in the credit quality of the borrower.
Disclosure of right of offset and collateral
We do not offset financial instruments in our Consolidated Statements of Financial Position, as our rights of offset are conditional. The following tables present the effect of conditional netting and similar arrangements. Similar arrangements include global master repurchase agreements, security lending agreements, and any related rights to financial collateral.
As at December 31,20222021
Financial
instruments
presented
in the
Consolidated
Statements
of Financial
Position(1)
Related amounts not set off in the Consolidated Statements of Financial Position
Financial
instruments
presented
in the
Consolidated
Statements
of Financial
Position(1)
Related amounts not set off in the Consolidated Statements of Financial Position
Financial instruments subject to master netting or similar agreements
Financial collateral (received) pledged(2)
Net amount Financial instruments subject to master netting or similar agreements
Financial collateral (received) pledged(2)
Net amount
Financial assets:
Derivative assets (Note 6.A.v)
$2,095 $(1,088)$(923)$84 $1,583 $(828)$(558)$197 
Reverse repurchase agreements (Note 8)
14 (14)— — — — — — 
Total financial assets$2,109 $(1,102)$(923)$84 $1,583 $(828)$(558)$197 
Financial liabilities:
Derivative liabilities$(2,351)$1,088 $1,136 $(127)$(1,392)$828 $550 $(14)
Repurchase agreements (Note 5.F.ii)
(2,725)14 2,711 — (2,324)— 2,324 — 
Cash collateral on securities lent (Note 5.F.iii)
(215)— 203 (12)(51)— 48 (3)
Obligations for securities borrowing(73)— 73 — (51)— 51 — 
Total financial liabilities$(5,364)$1,102 $4,123 $(139)$(3,818)$828 $2,973 $(17)

(1)    Net amounts of the financial instruments presented in our Consolidated Statements of Financial Position are the same as our gross recognized financial instruments, as we do not offset financial instruments in our Consolidated Statements of Financial Position.
(2)     Financial collateral presented in the table above excludes overcollateralization and, for exchange traded derivatives, initial margin. Total financial collateral, including initial margin and overcollateralization, received on derivative assets was $1,061 (December 31, 2021 — $678), received on reverse repurchase agreements was $14 (December 31, 2021 — $nil), pledged on derivative liabilities was $2,068 (December 31, 2021 — $1,616), and pledged on repurchase agreements was $2,725 (December 31, 2021 — $2,324).
Disclosure of financial assets
The following table summarizes the financial assets included in our Consolidated Statements of Financial Position and the asset classifications applicable to these assets:
Cash, cash equivalents and short-term securitiesFVTPL
Debt securitiesFVTPL and AFS
Equity securitiesFVTPL and AFS
Mortgages and loansLoans and receivables
Other invested assetsFVTPL and AFS
Policy loansLoans and receivables
The carrying values and fair values of our financial assets are shown in the following table:
As atDecember 31, 2022December 31, 2021
Carrying
value		Fair
value		Carrying
value		Fair
value
Assets
Cash, cash equivalents and short-term securities$11,219 $11,219 $12,278 $12,278 
Debt securities - fair value through profit or loss62,757 62,757 75,998 75,998 
Debt securities - available-for-sale(1)
13,145 13,145 12,729 12,729 
Equity securities - fair value through profit or loss6,824 6,824 7,538 7,538 
Equity securities - available-for-sale324 324 1,575 1,575 
Mortgages and loans(1)
56,261 51,850 51,692 55,756 
Derivative assets2,095 2,095 1,583 1,583 
Other invested assets - fair value through profit or loss(2)
5,542 5,542 4,435 4,435 
Other invested assets - available-for-sale(2)
996 996 781 781 
Other invested assets - Collateralized Loan Obligations3,044 2,880 1,865 1,855 
Policy loans3,350 3,350 3,261 3,261 
Total financial assets(3)
$165,557 $160,982 $173,735 $177,789 

(1)    As at December 31, 2022, the fair value of invested assets that have contractual cash flows that qualify as SPPI include $12,829 of Debt securities - AFS (December 31, 2021 — $12,604), $48,614 of Mortgages and loans supporting insurance contract liabilities (December 31, 2021 — $51,249), and $3,229 of Mortgages and loans not supporting insurance contract liabilities (December 31, 2021 — $4,499).
(2)    Other invested assets (FVTPL and AFS) include our investments in segregated funds, mutual funds and limited partnerships.
(3)    Invested assets on our Consolidated Statements of Financial Position of $177,292 (December 31, 2021 — $184,522) includes Total financial assets in this table, Investment properties of $10,102 (December 31, 2021 — $9,109), Other invested assets - non-financial assets of $1,633 (December 31, 2021 — $1,678).
The following table provides a reconciliation of the beginning and ending balances for assets and liabilities that are categorized in Level 3:
For the years endedDebt securities - fair value through profit or loss Debt securities - available-for-saleEquity securities - fair value through profit or lossEquity securities - available-for-saleOther
 invested
 assets		Investment
 properties		Total
 invested
 assets
 measured
 at fair
 value		Investments
 for account
 of segregated
 fund holders		Total
 assets
 measured
 at fair
 value
December 31, 2022
Beginning balance $162 $43 $96 $74 $3,650 $9,109 $13,134 $611 $13,745 
Included in net income(1)(2)(3)
(31)1 — 5 322 625 922 (32)890 
Included in OCI(2)
— (4)— — 12 — 8 — 8 
Purchases321 75 6 1 1,843 664 2,910 78 2,988 
Sales / Payments— (2)(4)(12)(313)(430)(761)(6)(767)
Settlements(1)— — — (47)— (48)(1)(49)
Transfers (out) of Level 3(4)
(59)(64)— — — — (123)— (123)
Foreign currency translation(5)
5 — — 5 88 134 232 (19)213 
Ending balance$397 $49 $98 $73 $5,555 $10,102 $16,274 $631 $16,905 
Gains (losses) included in earnings relating to instruments still held at the reporting date(1)
$(31)$— $— $— $295 $612 $876 $(20)$856 
December 31, 2021
Beginning balance $225 $67 $181 $47 $2,645 $7,516 $10,681 $550 $11,231 
Included in net income(1)(2)(3)
(6)— 10 5 392 1,032 1,433 23 1,456 
Included in OCI(2)
— (1)— 33 13 — 45 — 45 
Purchases29 5 8 15 1,074 764 1,895 65 1,960 
Sales / Payments(9)(13)(25)(26)(469)(197)(739)(9)(748)
Settlements(15)(3)(5)— — — (23)(1)(24)
Transfers (out) of Level 3(4)
(57)(10)(73)— — — (140)— (140)
Foreign currency translation(5)
(5)(2)— — (5)(6)(18)(17)(35)
Ending balance$162 $43 $96 $74 $3,650 $9,109 $13,134 $611 $13,745 
Gains (losses) included in earnings relating to instruments still held at the reporting date(1)
$(4)$— $11 $5 $382 $1,038 $1,432 $27 $1,459 

(1)    Included in Net investment income (loss) for Total invested assets measured at fair value in our Consolidated Statements of Operations.
(2)    Total gains and losses in net income (loss) and OCI are calculated assuming transfers into or out of Level 3 occur at the beginning of the period. For an asset or liability that transfers into Level 3 during the reporting period, the entire change in fair value for the period is included in the table above. For transfers out of Level 3 during the reporting period, the change in fair value for the period is excluded from the table above.
(3)    Investment properties included in net income is comprised of fair value changes on investment properties of $667 (2021 — $1,070), net of amortization of leasing commissions and tenant inducements of $42 (2021 — $38). As at December 31, 2022, we have used assumptions that reflect known changes in the property values including changes in expected future cash flows.
(4)    Transfers out of Level 3 occur when the pricing inputs become more transparent and satisfy the Level 1 or 2 criteria and are primarily the result of observable market data being available at the reporting date, thus removing the requirement to rely on inputs that lack observability.
(5)    Foreign currency translation relates to the foreign exchange impact of translating Level 3 assets and liabilities of foreign subsidiaries from their functional currencies to Canadian dollars.
Cash, cash equivalents and short-term securities presented in our Consolidated Statements of Financial Position and Net cash, cash equivalents and short-term securities presented in our Consolidated Statements of Cash Flows consist of the following:
As at December 31,20222021
Cash$3,068 $2,297 
Cash equivalents6,310 5,529 
Short-term securities1,841 4,452 
Cash, cash equivalents and short-term securities11,219 12,278 
Less: Bank overdraft, recorded in Other liabilities6 133 
Net cash, cash equivalents and short-term securities$11,213 $12,145 
The carrying value of debt securities by geographic location is shown in the following table. The geographic location is based on the country of the creditor's parent.
As at December 31,20222021
Fair value
through
profit or loss		Available-
for-sale		Total debt
securities		Fair value
through
profit or loss		Available-
for-sale		Total debt
securities
Canada$27,816 $4,861 $32,677 $33,028 $5,135 $38,163 
United States21,412 5,058 26,470 26,678 4,552 31,230 
United Kingdom2,914 583 3,497 4,196 562 4,758 
Other10,615 2,643 13,258 12,096 2,480 14,576 
Total debt securities$62,757 $13,145 $75,902 $75,998 $12,729 $88,727 
The carrying value of debt securities by issuer and industry sector is shown in the following table:
As at December 31,20222021
Fair value
through
profit or loss		Available-
for-sale		Total debt
securities		Fair value
through
profit or loss		Available-
for-sale		Total debt
securities
Debt securities issued or guaranteed by:
Canadian federal government$3,881 $1,730 $5,611 $4,798 $2,303 $7,101 
Canadian provincial and municipal government12,638 1,027 13,665 15,930 1,149 17,079 
U.S. government and agency808 729 1,537 1,642 771 2,413 
Other foreign government3,863 761 4,624 4,754 757 5,511 
Total government issued or guaranteed debt securities21,190 4,247 25,437 27,124 4,980 32,104 
Corporate debt securities by industry sector:
Financials9,377 1,978 11,355 10,258 1,690 11,948 
Utilities5,979 697 6,676 7,414 778 8,192 
Industrials4,762 813 5,575 5,791 805 6,596 
Energy3,069 273 3,342 3,992 287 4,279 
Communication services2,937 392 3,329 3,534 352 3,886 
Real estate1,920 586 2,506 2,334 354 2,688 
Health care1,682 352 2,034 2,081 346 2,427 
Consumer staples1,677 301 1,978 2,047 231 2,278 
Consumer discretionary1,395 441 1,836 1,814 306 2,120 
Information technology1,130 254 1,384 1,426 209 1,635 
Materials1,107 188 1,295 1,361 156 1,517 
Total corporate debt securities35,035 6,275 41,310 42,052 5,514 47,566 
Asset-backed securities6,532 2,623 9,155 6,822 2,235 9,057 
Total debt securities$62,757 $13,145 $75,902 $75,998 $12,729 $88,727 

The carrying value of mortgages and loans by geographic location and type is shown in the following tables. The geographic location for mortgages is based on location of property, while for corporate loans it is based on the country of the creditor's parent.
As at December 31, 2022
CanadaUnited StatesUnited KingdomOtherTotal
Mortgages:
Retail$1,546 $1,455 $— $— $3,001 
Office1,762 1,522 — — 3,284 
Multi-family residential4,025 1,245 — — 5,270 
Industrial and land1,779 1,104 — — 2,883 
Other780 113 29 — 922 
Total mortgages(1)
$9,892 $5,439 $29 $— $15,360 
Loans$13,143 $17,238 $4,923 $5,597 $40,901 
Total mortgages and loans$23,035 $22,677 $4,952 $5,597 $56,261 

(1)    $4,174 of mortgages in Canada are insured by the CMHC.

As at December 31, 2021
CanadaUnited StatesUnited KingdomOtherTotal
Mortgages:
Retail$1,765 $1,623 $— $— 3,388 
Office1,892 1,639 — — 3,531 
Multi-family residential4,138 1,589 — — 5,727 
Industrial and land1,094 941 — — 2,035 
Other680 115 9 — 804 
Total mortgages(1)
$9,569 $5,907 $9 $— $15,485 
Loans$12,885 $14,596 $4,111 $4,615 $36,207 
Total mortgages and loans$22,454 $20,503 $4,120 $4,615 $51,692 

(1)    $4,218 of mortgages in Canada are insured by the CMHC.
The contractual maturities of debt securities are shown in the following table. Actual maturities could differ from contractual maturities because of the borrower's right to call or extend or right to prepay obligations, with or without prepayment penalties.
As at December 31,20222021
Fair value
through
profit or loss		Available-
for-sale		Total debt
securities		Fair value
through
profit or loss		Available-
for-sale		Total debt
securities
Due in 1 year or less$2,426 $1,334 $3,760 $2,505 $1,373 $3,878 
Due in years 2-510,972 5,919 16,891 10,475 4,971 15,446 
Due in years 6-109,889 2,969 12,858 11,328 3,350 14,678 
Due after 10 years39,470 2,923 42,393 51,690 3,035 54,725 
Total debt securities$62,757 $13,145 $75,902 $75,998 $12,729 $88,727 

The carrying value of mortgages by scheduled maturity, before allowances for losses, is as follows:
As at December 31,2022 2021 
Due in 1 year or less$1,350 $884 
Due in years 2-56,312 6,172 
Due in years 6-105,210 5,979 
Due after 10 years2,568 2,530 
Total mortgages$15,440 $15,565 

The carrying value of loans by scheduled maturity, before allowances for losses, is as follows:
As at December 31,20222021 
Due in 1 year or less$2,893 $1,772 
Due in years 2-57,237 7,108 
Due in years 6-108,726 7,393 
Due after 10 years22,157 19,986 
Total loans$41,013 $36,259 
Disclosure of notional amounts of derivative instruments by type and maturity
Notional amounts of derivative financial instruments are the basis for calculating payments and are generally not the actual amounts exchanged. The following table provides the notional amounts of derivative instruments outstanding by type of derivative and term to maturity:
As at December 31,20222021
Term to maturityTerm to maturity
Under
1 Year		1 to 5
Years		Over 5
Years		TotalUnder
1 Year		1 to 5
Years		Over 5
Years		Total
Over-the-counter contracts:
Interest rate contracts:
Forward contracts$7 $— $— $7 $94 $6 $— $100 
Swap contracts1,193 4,089 12,233 17,515 1,273 3,434 13,042 17,749 
Options purchased1,512 2,080 1,253 4,845 878 3,297 1,674 5,849 
Options written(1)
135 224 — 359 — 461 — 461 
Foreign exchange contracts:
Forward contracts17,243 — — 17,243 10,824 3,097 — 13,921 
Swap contracts806 2,598 18,138 21,542 725 2,654 16,494 19,873 
Other contracts:
Options purchased338 — — 338 271 8 — 279 
Forward contracts145 168 — 313 154 163 — 317 
Swap contracts441 — — 441 446 — — 446 
Credit derivatives302 1,058 — 1,360 322 513 — 835 
Exchange-traded contracts:
Interest rate contracts:
Futures contracts3,005 — — 3,005 3,818 — — 3,818 
Equity contracts:
Futures contracts2,481 — — 2,481 2,105 — — 2,105 
Options purchased189 78 — 267 213 — — 213 
Options written52 — — 52 — — — — 
Total notional amount$27,849 $10,295 $31,624 $69,768 $21,123 $13,633 $31,210 $65,966 

(1)    These are covered short derivative positions that may include interest rate options, swaptions, or floors.

The following table provides the fair value of derivative instruments outstanding by term to maturity:
As at December 31,20222021
Term to maturityTerm to maturity
Under
1 Year		1 to 5
 Years		Over 5
 Years		TotalUnder
1 Year		1 to 5
 Years		Over 5
 Years		Total
Derivative assets$167 $351 $1,577 $2,095 $139 $249 $1,195 $1,583 
Derivative liabilities$(379)$(196)$(1,776)$(2,351)$(97)$(184)$(1,111)$(1,392)
Disclosure of debt securities, mortgages, and loans by credit quality
The following table summarizes our debt securities by credit quality:
As at December 31,20222021
Fair value
through
profit or loss		Available-
for-sale		Total debt
securities		Fair value
through
profit or loss		Available-
for-sale		Total debt
securities
Debt securities by credit rating:
AAA$10,400 $4,862 $15,262 $12,811 $5,294 $18,105 
AA9,545 1,765 11,310 11,510 1,502 13,012 
A24,144 3,552 27,696 29,984 3,282 33,266 
BBB17,947 2,721 20,668 20,710 2,484 23,194 
BB and lower721 245 966 983 167 1,150 
Total debt securities$62,757 $13,145 $75,902 $75,998 $12,729 $88,727 
The following tables summarize our mortgages and loans by credit quality indicator:
As at December 31, 20222021
Mortgages by credit rating:
Insured$4,174 $4,218 
AA1,769 1,640 
A5,917 4,979 
BBB2,911 3,814 
BB and lower589 822 
Impaired— 12 
Total mortgages$15,360 $15,485 
As at December 31,20222021
Loans by credit rating:
AAA$274 $192 
AA5,712 4,994 
A16,891 14,231 
BBB15,920 14,632 
BB and lower 2,071 2,139 
Impaired33 19 
Total loans$40,901 $36,207 
The following table shows the OTC derivative financial instruments with a positive fair value split by counterparty credit rating:
As at December 31,20222021
Gross positive replacement cost(2)
Impact of master netting agreements(3)
  Net replacement cost(4)
Gross positive replacement cost(2)
Impact of
master netting
agreements(3)
  Net replacement cost(4)
Over-the-counter contracts:
AA$482 $(254)$228 $402 $(219)$183 
A1,560 (834)726 1,080 (598)482 
BBB15 — 15 74 (11)63 
Total over-the-counter derivatives(1)
$2,057 $(1,088)$969 $1,556 $(828)$728 

(1)    Exchange-traded derivatives with a positive fair value of $38 in 2022 (2021 — $27) are excluded from the table above, as they are subject to daily margining requirements. Our credit exposure on these derivatives is with the exchanges and clearinghouses.
(2)    Used to determine the credit risk exposure if the counterparties were to default. The credit risk exposure is the cost of replacing, at current market rates, all contracts with a positive fair value.
(3)    The credit risk associated with derivative assets subject to master netting arrangements is reduced by derivative liabilities due to the same counterparty in the event of default or early termination. Our overall exposure to credit risk reduced through master netting arrangements may change substantially following the reporting date as the exposure is affected by each transaction subject to the arrangement.
(4)    Net replacement cost is positive replacement cost less the impact of master netting agreements.
The following table provides a summary of the credit default swap protection sold by credit rating of the underlying reference security:
As at December 31,20222021
Notional
amount		Fair
value		Notional
amount		Fair
value
Single name credit default swap contracts:
AA$20 $— $38 $1 
A587 4 347 4 
BBB706 5 431 9 
BB47 7 19 — 
Total single name credit default swap contracts$1,360 $16 $835 $14 
Total credit default swap contracts sold$1,360 $16 $835 $14 
The table below presents the distribution of Reinsurance assets by credit rating:
As at December 31,20222021
Gross exposureCollateralNet exposureGross exposureCollateralNet exposure
Reinsurance assets by credit rating:
AA$2,409 $— $2,409 $2,170 $— $2,170 
A1,308 30 1,278 928 28 900 
BBB133 118 15 139 117 22 
BB2,046 2,000 46 1,861 1,825 36 
B3 — 3 — — — 
CCC237 237 — 197 194 3 
Not rated105 97 8 136 131 5 
Total$6,241 $2,482 $3,759 $5,431 $2,295 $3,136 
Less: Negative reinsurance assets1,440 1,748 
Total Reinsurance assets$4,801 $3,683 
Disclosure of mortgages and loans past due or impaired
The distribution of mortgages and loans past due or impaired is shown in the following tables:
Gross carrying valueAllowance for losses
As at December 31, 2022
MortgagesLoansTotalMortgagesLoansTotal
Not past due$15,360 $40,868 $56,228 $— $— $— 
Impaired80 145 225 80 112 192 
Total$15,440 $41,013 $56,453 $80 $112 $192 
Gross carrying valueAllowance for losses
As at December 31, 2021
MortgagesLoansTotalMortgagesLoansTotal
Not past due$15,473 $36,188 $51,661 $— $— $— 
Impaired92 71 163 80 52 132 
Total$15,565 $36,259 $51,824 $80 $52 $132 
Disclosure of changes in allowance for losses
The changes in the allowances for losses are as follows:
MortgagesLoansTotal
Balance, January 1, 2021
$66 $49 $115 
Provision for (reversal of) losses15 5 20 
Write-offs, net of recoveries, and other adjustments— (2)(2)
Foreign exchange rate movements(1)— (1)
Balance, December 31, 2021
$80 $52 $132 
Provision for (reversal of) losses(2)57 55 
Foreign exchange rate movements2 3 5 
Balance, December 31, 2022
$80 $112 $192 
Disclosure of equities by issue country
The carrying value of equities by issuer country is shown in the following table:
As at December 31,20222021
Fair value
through
profit or loss		Available-
for-sale		Total
equities		Fair value
through
profit or loss		Available-
for-sale		Total
equities
Canada$2,981 $57 $3,038 $3,301 $62 $3,363 
United States1,732 192 1,924 2,010 1,405 3,415 
United Kingdom150 4 154 186 6 192 
Other1,961 71 2,032 2,041 102 2,143 
Total equities$6,824 $324 $7,148 $7,538 $1,575 $9,113