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Insurance Contract Liabilities and Investment Contract Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Disclosure of insurance contract liabilities


As at December 31, 2022	Canada			U.S.			Asia		Corporate(1)			Total
Individual participating life		$	27,394		$	5,060	$	11,574		$	634	$	44,662
Individual non-participating life and health		13,681			12,808		11,397			266		38,152
Group life and health		11,693			5,599		33			(5)		17,320
Individual annuities		8,384			18		6			3,074		11,482
Group annuities		19,716			1		67			—		19,784
Insurance contract liabilities before other policy liabilities		80,868			23,486		23,077			3,969		131,400
Add: Other policy liabilities(2)		3,583			2,487		2,702			246		9,018
Total insurance contract liabilities		$	84,451		$	25,973	$	25,779		$	4,215	$	140,418

(1) Primarily business from the UK and run-off reinsurance operations. Includes UK business of $563 for Individual participating life, $154 for Individual non-participating life and health, $2,918 for Individual annuities, and $200 for Other policy liabilities.

(2) Consists of amounts on deposit, policy benefits payable, provisions for unreported claims, provisions for policyholder dividends, and provisions for experience rating refunds.


As at December 31, 2021	Canada			U.S.			Asia		Corporate(1)			Total
Individual participating life		$	28,205		$	5,150	$	12,982		$	860	$	47,197
Individual non-participating life and health		15,735			14,196		11,774			329		42,034
Group life and health		11,682			5,580		34			17		17,313
Individual annuities		9,538			16		5			4,729		14,288
Group annuities		18,765			5		69			—		18,839
Insurance contract liabilities before other policy liabilities		83,925			24,947		24,864			5,935		139,671
Add: Other policy liabilities(2)		3,559			1,847		2,523			211		8,140
Total insurance contract liabilities		$	87,484		$	26,794	$	27,387		$	6,146	$	147,811

(1) Primarily business from the UK and run-off reinsurance operations. Includes UK business of $771 for Individual participating life, $207 for Individual non-participating life and health, $4,546 for Individual annuities, and $164 for Other policy liabilities.

(2) Consists of amounts on deposit, policy benefits payable, provisions for unreported claims, provisions for policyholder dividends, and provisions for experience rating refunds.


For the years ended December 31,	2022									2021


	Insurance contract liabilities			Reinsurance assets			Net			Insurance contract liabilities			Reinsurance assets			Net
Balances before Other policy liabilities and assets as at January 1,		$	139,671		$	2,905		$	136,766		$	137,733		$	3,126		$	134,607

Change in balances on in-force policies		(15,530)			(137)			(15,393)			(1,642)			(18)			(1,624)
Balances arising from new policies		3,473			81			3,392			3,948			74			3,874
Method and assumption changes		950			1,007			(57)			131			(142)			273
Increase (decrease) in Insurance contract liabilities and Reinsurance assets		(11,107)			951			(12,058)			2,437			(86)			2,523


Other(1)		(2)			—			(2)			—			(109)			109
Foreign exchange rate movements		2,838			213			2,625			(499)			(26)			(473)
Balances before Other policy liabilities and assets		131,400			4,069			127,331			139,671			2,905			136,766
Other policy liabilities and assets		9,018			732			8,286			8,140			778			7,362

Total Insurance contract liabilities and Reinsurance assets, December 31		$	140,418		$	4,801		$	135,617		$	147,811		$	3,683		$	144,128

(1) Recapture of reinsurance contracts.

The following tables show the total assets supporting liabilities for the product lines shown (including insurance contract and investment contract liabilities) and assets supporting equity and other:


As at December 31, 2022	Debt securities			Equity securities			Mortgages and loans			Investment properties			Other		Total
Individual participating life		$	23,513		$	4,836		$	10,802		$	6,345	$	4,885	$	50,381
Individual non-participating life and health		17,438			1,804			15,029			3,103		11,160		48,534
Group life and health		7,057			24			10,412			117		4,252		21,862
Individual annuities		7,822			34			6,573			—		819		15,248
Group annuities		9,046			100			10,444			109		1,469		21,168
Equity and other		11,026			350			3,001			428		33,616		48,421
Total assets		$	75,902		$	7,148		$	56,261		$	10,102	$	56,201	$	205,614

As at December 31, 2021	Debt securities			Equity securities			Mortgages and loans			Investment properties			Other		Total
Individual participating life		$	26,715		$	5,374		$	9,559		$	5,932	$	4,801	$	52,381
Individual non-participating life and health		23,716			1,947			13,885			2,614		8,310		50,472
Group life and health		7,598			30			9,556			92		3,677		20,953
Individual annuities		10,314			40			6,435			—		907		17,696
Group annuities		9,612			111			9,198			24		1,305		20,250
Equity and other		10,772			1,611			3,059			447		27,733		43,622
Total assets		$	88,727		$	9,113		$	51,692		$	9,109	$	46,733	$	205,374

Changes in the balances of our insurance contract liabilities and investment contract liabilities, including the net transfers to (from) segregated funds, as well as changes in our reinsurance assets, consist of the following:


For the years ended December 31,	2022		2021
Increase (decrease) in insurance contract liabilities	$	(11,107)	$	2,437
Decrease (increase) in reinsurance assets	(951)		86
Increase (decrease) in investment contract liabilities	(107)		(22)
Net transfer to (from) segregated funds	(1,149)		(351)
Total changes in insurance contract liabilities, investment contract liabilities, reinsurance assets, and segregated funds	$	(13,314)	$	2,150

Schedule of impacts of method and changes in assumptions on insurance contract liabilities

Impacts of method and assumption changes on Insurance contract liabilities, net of Reinsurance assets, are as follows:

For the year ended December 31, 2022

Net increase (decrease) before income taxes

Description

Mortality / Morbidity

(96)

Updates to reflect mortality/morbidity experience in all jurisdictions. The largest items were favourable mortality impacts in the UK in Corporate and in Group Retirement Services in Canada offset partially by adverse morbidity impacts in Sun Life Health in Canada.

Policyholder behaviour

Updates to lapse and policyholder behaviour in all jurisdictions. The largest item was an adverse lapse impact in Vietnam in Asia.

Expenses

Updates to reflect expense experience.

Investment returns

Updates to various investment-related assumptions.

Model enhancements and other

(54)

Various enhancements and methodology changes.

Total impact

(57)

For the year ended December 31, 2021

Net increase (decrease) before income taxes

Description

Mortality / Morbidity

(89)

Updates to reflect mortality/morbidity experience in all jurisdictions.

Policyholder behaviour

219

Updates to policyholder behaviour in all jurisdictions. The largest item was in U.S. In-force Management.

Expenses

(202)

Updates to reflect expense experience and margins in all jurisdictions. The largest item was a reduction in expense margins.

Investment returns

416

Updates to various investment-related assumptions across the Company. The largest items were the updates to promulgated Ultimate Reinvestment Rate, promulgated maximum net credit spreads, and a reduction to the best estimate real estate assumption in all jurisdictions.

Model enhancements and other

(71)

Various enhancements and methodology changes across all jurisdictions.

Total impact

273

Schedule of investment contract liabilities


As at December 31, 2022	Canada			Asia	Corporate				Total
Individual participating life		$	—		$	—	$	4		$	4
Individual non-participating life and health		—			187		2			189
Individual annuities		2,550			—		35			2,585
Group annuities		—			536		—			536
Total investment contract liabilities		$	2,550		$	723	$	41		$	3,314

For the year ended December 31, 2022, Investment contract liabilities of $3,314 are comprised of investment contracts with DPF of $754, investment contracts without DPF measured at amortized cost of $2,550, and investment contracts without DPF measured at fair value of $10.


As at December 31, 2021	Canada			Asia	Corporate				Total
Individual participating life		$	—		$	—	$	4		$	4
Individual non-participating life and health		—			235		2			237
Individual annuities		2,487			1		37			2,525
Group annuities		—			602		—			602
Total investment contract liabilities		$	2,487		$	838	$	43		$	3,368

For the year ended December 31, 2021, Investment contract liabilities of $3,368 are comprised of investment contracts with DPF of $872, investment contracts without DPF measured at amortized cost of $2,487, and investment contracts without DPF measured at fair value of $9.

Schedule of reconciliation of changes in investment contract liabilities

Changes in investment contract liabilities without DPF are as follows:


For the years ended December 31,	2022						2021


	Measured at fair value			Measured at amortized cost			Measured at fair value			Measured at amortized cost

Balance as at January 1		$	9		$	2,487		$	2		$	2,690
Deposits		—			443			—			303
Interest		—			57			—			60
Withdrawals		—			(444)			—			(570)
Fees		—			(5)			—			(7)

Change in fair value		1			—			7			—
Other		—			12			—			10

Foreign exchange rate movements		—			—			—			1

Balance as at December 31		$	10		$	2,550		$	9		$	2,487

Changes in investment contract liabilities with DPF are as follows:


For the years ended December 31,	2022		2021



Balance as at January 1	$	872	$	497
Change in liabilities on in-force policies	(165)		(89)


Increase (decrease) in liabilities	(165)		(89)

Acquisitions (Note 3)	—		471
Foreign exchange rate movements	47		(7)

Balance as at December 31	$	754	$	872

Disclosure of claims and benefits paid


For the years ended December 31,	2022		2021


Maturities and surrenders	$	3,750	$	3,205
Annuity payments	2,124		2,017
Death and disability benefits	4,950		4,876
Health benefits	9,588		7,246
Policyholder dividends and interest on claims and deposits	1,632		1,378
Total gross claims and benefits paid	$	22,044	$	18,722