Insurance

12 Months Ended

Dec. 31, 2019

Insurance [Abstract]

Insurance

4. Insurance

Insurance Liabilities

Insurance liabilities are comprised of future policy benefits, policyholder account balances and other policy-related balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:

	December 31,
	2019		2018
	(In millions)
U.S.	$	150,327	$	141,641
Asia	118,027		108,456
Latin America	15,911		16,131
EMEA	16,951		17,069
MetLife Holdings	101,945		102,371
Corporate & Other	1,546		1,334
Total	$	404,707	$	387,002

Future policy benefits are measured as follows:

Product Type:	Measurement Assumptions:
Participating life	Aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the non-forfeiture interest rate, ranging from 3% to 7% for U.S. businesses and less than 1% to 13% for non-U.S. businesses and mortality rates guaranteed in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends for U.S. businesses.
Nonparticipating life	Aggregate of the present value of future expected benefit payments and related expenses less the present value of future expected net premiums. Assumptions as to mortality and persistency are based upon the Company’s experience when the basis of the liability is established. Interest rate assumptions for the aggregate future policy benefit liabilities range from 2% to 11% for U.S. businesses and less than 1% to 13% for non-U.S. businesses.
Individual and group traditional fixed annuities after annuitization	Present value of future expected payments. Interest rate assumptions used in establishing such liabilities range from less than 1% to 11% for U.S. businesses and less than 1% to 11% for non-U.S. businesses.
Non-medical health insurance	The net level premium method and assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rate assumptions used in establishing such liabilities range from 1% to 7% (primarily related to U.S. businesses).
Disabled lives	Present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 2% to 8% for U.S. businesses and less than 1% to 9% for non-U.S. businesses.
Property and casualty insurance	The amount estimated for claims that have been reported but not settled and claims IBNR are based upon the Company’s historical experience and other actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs, reduced for anticipated salvage and subrogation.

Participating business represented 3% of the Company’s life insurance in-force at both December 31, 2019 and 2018. Participating policies represented 15%, 14% and 15% of gross traditional life insurance premiums for the years ended December 31, 2019, 2018 and 2017, respectively.

Policyholder account balances are equal to: (i) policy account values, which consist of an accumulation of gross premium payments and investment performance; (ii) credited interest, ranging from less than 1% to 8% for U.S. businesses and less than 1% to 17% for non-U.S. businesses, less expenses, mortality charges and withdrawals; and (iii) fair value adjustments relating to business combinations.

Guarantees

The Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits. GMABs, the non-life contingent portion of GMWBs and certain non-life contingent portions of GMIBs are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 9. Guarantees accounted for as insurance liabilities include:

Guarantee:			Measurement Assumptions:
GMDBs	•	A return of purchase payment upon death even if the account value is reduced to zero.	•	Present value of expected death benefits in excess of the projected account balance recognizing the excess ratably over the accumulation period based on the present value of total expected assessments.
	•	An enhanced death benefit may be available for an additional fee.	•	Assumptions are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk.
			•	Investment performance and volatility assumptions are consistent with the historical experience of the appropriate underlying equity index, such as the S&P 500 Index.
			•	Benefit assumptions are based on the average benefits payable over a range of scenarios.
GMIBs	•	After a specified period of time determined at the time of issuance of the variable annuity contract, a minimum accumulation of purchase payments, even if the account value is reduced to zero, that can be annuitized to receive a monthly income stream that is not less than a specified amount.	•	Present value of expected income benefits in excess of the projected account balance at any future date of annuitization and recognizing the excess ratably over the accumulation period based on present value of total expected assessments.
	•	Certain contracts also provide for a guaranteed lump sum return of purchase premium in lieu of the annuitization benefit.	•	Assumptions are consistent with those used for estimating GMDB liabilities.
			•	Calculation incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder.
GMWBs	•	A return of purchase payment via partial withdrawals, even if the account value is reduced to zero, provided that cumulative withdrawals in a contract year do not exceed a certain limit.	•	Expected value of the life contingent payments and expected assessments using assumptions consistent with those used for estimating the GMDB liabilities.
	•	Certain contracts include guaranteed withdrawals that are life contingent.

The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit.

Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating to annuity and universal and variable life contracts was as follows:

	Annuity Contracts						Universal and Variable Life Contracts
	GMDBs and GMWBs			GMIBs			Secondary Guarantees			Paid-Up Guarantees		Total
	(In millions)
Direct and Assumed:
Balance at January 1, 2017	$	451		$	601		$	2,989		$	331	$	4,372
Incurred guaranteed benefits (1)	91			121			233			16		461
Paid guaranteed benefits	(14		)	(2		)	(34		)	—		(50		)
Balance at December 31, 2017	528			720			3,188			347		4,783
Incurred guaranteed benefits (1)	(78		)	178			291			12		403
Paid guaranteed benefits	(22		)	—			(37		)	—		(59		)
Balance at December 31, 2018	428			898			3,442			359		5,127
Incurred guaranteed benefits (1)	62			(3		)	358			68		485
Paid guaranteed benefits	(25		)	(1		)	(38		)	—		(64		)
Balance at December 31, 2019	$	465		$	894		$	3,762		$	427	$	5,548
Ceded:
Balance at January 1, 2017	$	24		$	5		$	191		$	231	$	451
Incurred guaranteed benefits	4			1			50			11		66
Paid guaranteed benefits	6			—			—			—		6
Balance at December 31, 2017	34			6			241			242		523
Incurred guaranteed benefits	(38		)	4			28			9		3
Paid guaranteed benefits	4			—			—			—		4
Balance at December 31, 2018	—			10			269			251		530
Incurred guaranteed benefits	(4		)	—			80			30		106
Paid guaranteed benefits	4			—			—			—		4
Balance at December 31, 2019	$	—		$	10		$	349		$	281	$	640
Net:
Balance at January 1, 2017	$	427		$	596		$	2,798		$	100	$	3,921
Incurred guaranteed benefits	87			120			183			5		395
Paid guaranteed benefits	(20		)	(2		)	(34		)	—		(56		)
Balance at December 31, 2017	494			714			2,947			105		4,260
Incurred guaranteed benefits	(40		)	174			263			3		400
Paid guaranteed benefits	(26		)	—			(37		)	—		(63		)
Balance at December 31, 2018	428			888			3,173			108		4,597
Incurred guaranteed benefits	66			(3		)	278			38		379
Paid guaranteed benefits	(29		)	(1		)	(38		)	—		(68		)
Balance at December 31, 2019	$	465		$	884		$	3,413		$	146	$	4,908

__________________

(1)

Secondary guarantees include the effects of foreign currency translation of $23 million, $62 million and $78 million at December 31, 2019, 2018 and 2017, respectively.

Information regarding the Company’s guarantee exposure, which includes direct and assumed business, but excludes offsets from hedging or ceded reinsurance, if any, was as follows at:

	December 31,
	2019							2018
	In the Event of Death			At Annuitization				In the Event of Death (8)			At Annuitization (8)
	(Dollars in millions)
Annuity Contracts:
Variable Annuity Guarantees:
Total account value (1), (2), (3)	$	64,506		$	24,036			$	63,381		$	23,174
Separate account value (1)	$	41,305		$	22,291			$	38,888		$	21,385
Net amount at risk (2)	$	1,572	(4)	$	584	(5)		$	3,197	(4)	$	511	(5)
Average attained age of contractholders	67 years			65 years				66 years			64 years
Other Annuity Guarantees:
Total account value (1), (3)	N/A			$	5,671			N/A			$	5,787
Net amount at risk	N/A			$	408	(6	)	N/A			$	549	(6)
Average attained age of contractholders	N/A			51 years				N/A			50 years

	December 31,
	2019				2018
	Secondary Guarantees		Paid-Up Guarantees		Secondary Guarantees (8)		Paid-Up Guarantees
	(Dollars in millions)
Universal and Variable Life Contracts:
Total account value (1), (3)	$	11,937	$	2,940	$	11,205	$	3,070
Net amount at risk (7)	$	86,221	$	14,500	$	93,028	$	15,539
Average attained age of policyholders	53 years		65 years		52 years		64 years

__________________

(1) The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.

(2) Includes amounts, which are not reported on the consolidated balance sheets, from assumed variable annuity guarantees from the Company’s former operating joint venture in Japan.

(3) Includes the contractholder’s investments in the general account and separate account, if applicable.

(4) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.

(5) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved.

(6) Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date.

(7) Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.

(8) Certain of the Company’s guarantee exposure amounts at December 31, 2018 have been revised to conform to the 2019 presentation, which includes certain contracts with guarantees that were previously excluded. They include the following increases from the amounts previously reported: (i) variable annuity guarantees in the event of death: $7.1 billion from $56.2 billion for total account value, $1.5 billion from $37.3 billion for separate account value and $429 million from $2.8 billion for net amount at risk; (ii) variable annuity guarantees at annuitization: $1.5 billion from $21.6 billion for total account value, $1.5 billion from $19.8 billion for separate account value and $28 million from $483 million for net amount at risk; (iii) other annuity guarantees: $4.5 billion from $1.3 billion for total account value and $60 million from $489 million for net amount at risk; and (iv) universal and variable life contract secondary guarantees: $2.3 billion from $8.9 billion for total account value and $28.9 billion from $64.2 billion for net amount at risk. 

Additionally, the average attained age of contractholders at annuitization for variable annuity guarantees decreased by one year from 65 years and the average attained age of policyholders with universal and variable life contract secondary guarantees decreased by five years from 57 years.

Guarantees — Separate Accounts

Account balances of contracts with guarantees were invested in separate account asset classes as follows at:

	December 31,
	2019		2018 (1)
	(In millions)
Fund Groupings:
Equity	$	25,097	$	22,450
Balanced	19,014		18,332
Bond	5,565		5,537
Money Market	117		134
Total	$	49,793	$	46,453

__________________

(1)

In connection with the Company’s guarantee exposure amount revisions discussed above, the account balances of contracts with guarantees invested in separate account asset classes at December 31, 2018 have been revised to conform to the 2019 presentation. The total increase to the fund grouping amounts previously reported is $4.2 billion, which primarily includes asset class changes of $2.9 billion for Equity and $1.3 billion for Balanced.

Obligations Under Funding Agreements

The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain unconsolidated special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. For the years ended December 31, 2019, 2018 and 2017, the Company issued $37.3 billion, $41.8 billion and $42.7 billion, respectively, and repaid $36.4 billion, $43.7 billion and $41.4 billion, respectively, of such funding agreements. At December 31, 2019 and 2018, liabilities for funding agreements outstanding, which are included in policyholder account balances, were $34.6 billion and $32.3 billion, respectively.

Certain of the Company’s subsidiaries are members of regional FHLBs. Holdings of common stock of regional FHLBs, included in other invested assets, were as follows at:

	December 31,
	2019		2018
	(In millions)
FHLB of New York	$	737	$	724
FHLB of Des Moines	$	4	$	17
FHLB of Pittsburgh	$	35	$	19

Certain U.S. subsidiaries have also entered into funding agreements with regional FHLBs and a subsidiary of the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. (“Farmer Mac”). The liability for such funding agreements is included in policyholder account balances. Information related to such funding agreements was as follows at:

	Liability				Collateral
	December 31,
	2019		2018		2019			2018
	(In millions)
FHLB of New York (1)	$	14,445	$	14,245	$	16,570	(2)	$	16,557	(2)
Farmer Mac (3)	$	2,550	$	2,550	$	2,670		$	2,639
FHLB of Des Moines (1)	$	100	$	425	$	141	(2)	$	709	(2)
FHLB of Pittsburgh (1)	$	775	$	450	$	895	(2)	$	590	(2)

__________________

(1) Represents funding agreements issued to the applicable regional FHLB in exchange for cash and for which such regional FHLB has been granted a lien on certain assets, some of which are in the custody of such regional FHLB, including residential mortgage-backed securities (“RMBS”), to collateralize obligations under such funding agreements. The applicable subsidiary of the Company is permitted to withdraw any portion of the collateral in the custody of such regional FHLB as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by such subsidiary, the applicable regional FHLB’s recovery on the collateral is limited to the amount of such subsidiary’s liability to such regional FHLB.

(2) Advances are collateralized by mortgage-backed securities. The amount of collateral presented is at estimated fair value.

(3)

Represents funding agreements issued to a subsidiary of Farmer Mac. The obligations under these funding agreements are secured by a pledge of certain eligible agricultural mortgage loans and may, under certain circumstances, be secured by other qualified collateral. The amount of collateral presented is at carrying value.

Liabilities for Unpaid Claims and Claim Expenses

The following is information about incurred and paid claims development by segment at December 31, 2019. Such amounts are presented net of reinsurance, and are not discounted. The tables present claims development and cumulative claim payments by incurral year. The development tables are only presented for significant short-duration product liabilities within each segment. Where practical, up to 10 years of history has been provided. In order to eliminate potential fluctuations related to foreign exchange rates, liabilities and payments denominated in a foreign currency have been translated using the 2019 year end spot rates for all periods presented. The information about incurred and paid claims development prior to 2019 is presented as supplementary information.

U.S.

Group Life - Term

	Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance																			At December 31, 2019
	For the Years Ended December 31,																			Total IBNR Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(Unaudited)
Incurral Year	2011		2012		2013		2014		2015		2016		2017		2018		2019
	(Dollars in millions)
2011	$	6,318	$	6,290	$	6,293	$	6,269	$	6,287	$	6,295	$	6,294	$	6,295	$	6,297		$	1	207,857
2012			6,503		6,579		6,569		6,546		6,568		6,569		6,569		6,572			2		209,500
2013					6,637		6,713		6,719		6,720		6,730		6,720		6,723			2		212,019
2014							6,986		6,919		6,913		6,910		6,914		6,919			4		214,563
2015									7,040		7,015		7,014		7,021		7,024			5		216,429
2016											7,125		7,085		7,095		7,104			8		215,108
2017													7,432		7,418		7,425			15		253,613
2018															7,757		7,655			37		235,820
2019																	7,935			848		185,891
Total																	63,654
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																	(61,612		)
All outstanding liabilities for incurral years prior to 2011, net of reinsurance																	15
Total unpaid claims and claim adjustment expenses, net of reinsurance																	$	2,057

	Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
	(Unaudited)
Incurral Year	2011		2012		2013		2014		2015		2016		2017		2018		2019
	(In millions)
2011	$	4,982	$	6,194	$	6,239	$	6,256	$	6,281	$	6,290	$	6,292	$	6,295	$	6,296
2012			5,132		6,472		6,518		6,532		6,558		6,565		6,566		6,569
2013					5,216		6,614		6,664		6,678		6,711		6,715		6,720
2014							5,428		6,809		6,858		6,869		6,902		6,912
2015									5,524		6,913		6,958		6,974		7,008
2016											5,582		6,980		7,034		7,053
2017													5,761		7,292		7,355
2018															6,008		7,521
2019																	6,178
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																	$	61,612

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration at December 31, 2019:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1	2	3	4	5	6	7	8	9
Group Life - Term	78.3%	20.0%	0.7%	0.2%	0.4%	0.1%	—%	—%	—%

Group Long-Term Disability

	Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance																			At December 31, 2019
	For the Years Ended December 31,																			Total IBNR Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(Unaudited)
Incurral Year	2011		2012		2013		2014		2015		2016		2017		2018		2019
	(Dollars in millions)
2011	$	955	$	916	$	894	$	914	$	924	$	923	$	918	$	917	$	914		$	—	21,644
2012			966		979		980		1,014		1,034		1,037		1,021		1,015			—		20,085
2013					1,008		1,027		1,032		1,049		1,070		1,069		1,044			—		21,137
2014							1,076		1,077		1,079		1,101		1,109		1,098			—		22,851
2015									1,082		1,105		1,093		1,100		1,087			—		21,203
2016											1,131		1,139		1,159		1,162			—		17,958
2017													1,244		1,202		1,203			12		16,266
2018															1,240		1,175			35		14,869
2019																	1,277			657		8,350
Total																	9,975
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																	(4,713		)
All outstanding liabilities for incurral years prior to 2011, net of reinsurance																	1,829
Total unpaid claims and claim adjustment expenses, net of reinsurance																	$	7,091

	Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
	(Unaudited)
Incurral Year	2011		2012		2013		2014		2015		2016		2017		2018		2019
	(In millions)
2011	$	44	$	217	$	337	$	411	$	478	$	537	$	588	$	635	$	670
2012			43		229		365		453		524		591		648		694
2013					43		234		382		475		551		622		676
2014							51		266		428		526		609		677
2015									50		264		427		524		601
2016											49		267		433		548
2017													56		290		476
2018															54		314
2019																	57
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																	$	4,713

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration at December 31, 2019:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1	2	3	4	5	6	7	8	9
Group Long-Term Disability	4.5%	19.4%	14.3%	8.9%	7.2%	6.5%	5.5%	4.8%	4.0%

Significant Methodologies and Assumptions

Group Life - Term and Group Long-Term Disability incurred but not paid (“IBNP”) liabilities are developed using a combination of loss ratio and development methods. Claims in the course of settlement are then subtracted from the IBNP liabilities, resulting in the IBNR liabilities. The loss ratio method is used in the period in which the claims are neither sufficient nor credible. In developing the loss ratios, any material rate increases that could change the underlying premium without affecting the estimated incurred losses are taken into account. For periods where sufficient and credible claim data exists, the development method is used based on the claim triangles which categorize claims according to both the period in which they were incurred and the period in which they were paid, adjudicated or reported. The end result is a triangle of known data that is used to develop known completion ratios and factors. Claims paid are then subtracted from the estimated ultimate incurred claims to calculate the IBNP liability.

An expense liability is held for the future expenses associated with the payment of incurred but not yet paid claims (IBNR and pending). This is expressed as a percentage of the underlying claims liability and is based on past experience and the anticipated future expense structure.

For Group Life - Term and Group Long-Term Disability, first year incurred claims and allocated loss adjustment expenses increased in 2019 compared to the 2018 incurral year due to the growth in the size of the business.

There were no significant changes in methodologies for the year ended December 31, 2019. The assumptions used in calculating the unpaid claims and claim adjustment expenses for Group Life - Term and Group Long-Term Disability are updated annually to reflect emerging trends in claim experience.

No additional premiums or return premiums have been accrued as a result of the prior year development.

Liabilities for Group Life - Term unpaid claims and claim adjustment expenses are not discounted.

The liabilities for Group Long-Term Disability unpaid claims and claim adjustment expenses were $6.0 billion at both December 31, 2019 and 2018. Using interest rates ranging from 3% to 8%, based on the incurral year, the total discount applied to these liabilities was $1.2 billion and $1.3 billion at December 31, 2019 and 2018, respectively. The amount of interest accretion recognized was $470 million, $509 million and $510 million for the years ended December 31, 2019, 2018 and 2017, respectively. These amounts were reflected in policyholder benefits and claims.

For Group Life - Term, claims were based upon individual death claims. For Group Long-Term Disability, claim frequency was determined by the number of reported claims as identified by a unique claim number assigned to individual claimants. Claim counts initially include claims that do not ultimately result in a liability. These claims are omitted from the claim counts once it is determined that there is no liability.

The Group Long-Term Disability IBNR, included in the development tables above, was developed using discounted cash flows, and is presented on a discounted basis.

Property & Casualty - Auto Liability

	Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance																					At December 31, 2019
	For the Years Ended December 31,																					Total IBNR Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(Dollars in millions)
2010	$	863	$	873	$	853	$	847	$	833	$	826	$	825	$	822	$	823	$	822		$	—	204,497
2011			863		876		869		855		846		843		843		842		841			1		204,972
2012					882		881		869		851		846		847		846		846			1		199,357
2013							911		900		882		878		876		876		874			1		204,372
2014									897		910		913		910		911		912			2		207,630
2015											975		984		979		980		983			5		212,806
2016													1,012		1,002		997		999			11		211,041
2017															957		960		987			33		191,978
2018																	938		964			78		180,220
2019																			970			203		163,655
Total																			9,198
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			(8,062		)
All outstanding liabilities for incurral years prior to 2010, net of reinsurance																			26
Total unpaid claims and claim adjustment expenses, net of reinsurance																			$	1,162

	Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(In millions)
2010	$	319	$	572	$	695	$	762	$	796	$	810	$	816	$	818	$	820	$	821
2011			324		590		711		777		810		825		831		835		837
2012					333		600		715		783		815		831		840		843
2013							346		618		743		809		843		859		869
2014									352		648		777		844		884		900
2015											384		691		822		903		956
2016													396		702		842		932
2017															379		686		838
2018																	371		687
2019																			379
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			$	8,062

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration at December 31, 2019:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1	2	3	4	5	6	7	8	9	10
Auto Liability	38.6%	31.5%	14.3%	8.0%	4.2%	1.8%	0.9%	0.3%	0.3%	0.1%

Property & Casualty - Home

	Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance																					At December 31, 2019
	For the Years Ended December 31,																					Total IBNR Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(Dollars in millions)
2010	$	573	$	589	$	587	$	584	$	582	$	581	$	580	$	579	$	579	$	579		$	—	115,522
2011			891		868		843		840		835		835		834		833		833			—		166,467
2012					714		713		703		698		696		694		693		692			—		146,559
2013							654		652		635		635		634		632		632			1		107,562
2014									707		702		704		705		701		699			1		113,679
2015											759		753		752		746		742			1		107,259
2016													740		743		743		736			3		107,271
2017															747		763		761			8		115,610
2018																	671		658			9		98,754
2019																			649			67		80,133
Total																			6,981
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			(6,753		)
All outstanding liabilities for incurral years prior to 2010, net of reinsurance																			1
Total unpaid claims and claim adjustment expenses, net of reinsurance																			$	229

	Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(In millions)
2010	$	436	$	546	$	562	$	571	$	574	$	577	$	578	$	578	$	579	$	579
2011			690		804		819		825		827		830		832		833		833
2012					559		668		681		687		689		690		690		691
2013							505		604		618		626		628		629		630
2014									574		670		685		692		695		696
2015											603		717		731		736		739
2016													593		704		720		727
2017															610		727		742
2018																	529		629
2019																			487
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			$	6,753

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration at December 31, 2019:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1	2	3	4	5	6	7	8	9	10
Home	79.8%	15.4%	2.1%	1.0%	0.3%	0.3%	0.2%	0.1%	0.1%	—%

Significant Methodologies and Assumptions

The liability for unpaid claim and claim adjustment expenses for the Property & Casualty business is determined by examining the historical claims and allocated claim adjustment expenses data. This data, which is gross of salvage and subrogation, is classified by incurral year and coverage and includes paid claims data and reported liabilities. For homeowners and auto liability injury claims, the reported liabilities are set by the Company’s claims adjusters based on the individual case, and a supplemental liability is added based on the historical development of reported claims. These supplemental liabilities are estimated by coverage based on adjusted report year data triangles to determine the estimated ultimate claim liability. Adjustments are made for settlement rates and average case liabilities. For auto non-injury claims, the Company holds an average statistical liability for every reported claim. This statistical liability is based on an estimated average payment that varies by coverage, report year and state. These average estimated payments are updated monthly.

For all property and casualty coverages, many actuarial methods such as adjusted loss development (adjusted for settlement rates and average case liabilities) and loss ratio methods are employed to develop a best estimate of the IBNR for each coverage type. Similar actuarial methods are used to determine the best estimate of the expected salvage and subrogation; methods that look at recoveries by age and ratios of recoveries to paid loss are compared for each coverage. A liability for unpaid allocated claim adjustment expenses is held for the future claim adjustment costs associated with the payment of incurred but not yet paid claims. This liability is calculated as a percentage of the underlying unpaid claims liability. The percentage is based on historical ratios of essential claim department expenses compared with paid losses.

There were no significant changes in methodologies or assumptions for the year ended December 31, 2019. The assumptions used in calculating the unpaid claims and claim adjustment expenses for Property & Casualty - Auto Liability and Property & Casualty - Home are updated annually to reflect emerging trends in claim experience.

No additional premiums or return premiums have been accrued as a result of the prior year development.

Liabilities for unpaid claims and claim adjustment expenses were not discounted.

The cumulative number of reported claims for auto liability coverages are counted by individual coverages (i.e. bodily injury and property damage) and, if multiple occupants are injured, then each injury is counted as a separate claim. For home coverages, each exposure is counted separately, so a house fire would, for example, have separate claim counts for the building, the contents, and additional living expenses. Claim counts include claims that do not ultimately result in a liability. Any liability established upon receipt of these claims would subsequently be reversed.

Asia

Group Disability & Group Life

	Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance																					At December 31, 2019
	For the Years Ended December 31,																					Total IBNR Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(Dollars in millions)
2010	$	73	$	70	$	75	$	96	$	96	$	93	$	121	$	130	$	122	$	118		$	2	2,812
2011			58		61		79		80		84		112		119		116		109			5		3,021
2012					88		94		92		106		107		110		120		114			9		4,536
2013							133		135		156		151		150		159		159			15		5,210
2014									267		250		230		230		241		237			31		6,167
2015											252		240		243		237		247			37		5,970
2016													210		214		202		215			42		3,895
2017															273		253		261			56		4,056
2018																	332		304			96		3,730
2019																			359			185		2,390
Total																			2,123
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			(1,506		)
All outstanding liabilities for incurral years prior to 2010, net of reinsurance																			10
Total unpaid claims and claim adjustment expenses, net of reinsurance																			$	627

	Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(In millions)
2010	$	18	$	36	$	48	$	58	$	71	$	80	$	102	$	108	$	113	$	116
2011			11		36		49		60		73		92		98		100		104
2012					27		58		77		89		96		101		102		105
2013							39		89		109		123		134		147		144
2014									62		130		161		182		204		205
2015											73		139		173		187		212
2016													59		122		138		173
2017															79		144		190
2018																	87		160
2019																			97
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			$	1,506

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration at December 31, 2019:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1	2	3	4	5	6	7	8	9	10
Group Disability & Group Life	24.4%	25.3%	13.0%	9.8%	9.1%	7.5%	6.0%	3.2%	3.7%	3.9%

Significant Methodologies and Assumptions

This business line consists of employer sponsored and industry sponsored Group Life and Group Disability risks.

For Group Life, the IBNR liability is determined by using the Bornhuetter-Ferguson Method, with factors derived by examining the experience of historical claims. A pending liability is also calculated for claims that have been reported but have not been paid. A claim eligibility ratio based on past experience is applied to the face amount of individual claims.

For Group Disability, the IBNR liability is calculated by applying a percentage to premiums in-force based on the expected delay as evidenced by the experience in the portfolio. The IBNR liability is then allocated back into different incurral years based on historical run-off patterns. As the benefit for this class of business is a regular series of payments, an additional reserve is required for the liability for ongoing benefit payments - claims in course of payment (“CICP”). The assumptions employed in the calculation of the CICP are adjusted for the Company’s own experience.

An expense liability is held for the future expenses associated with the payment of incurred but not yet paid claims. This is expressed as a percentage of the underlying claims liability and is based on past experience and the future expense structure.

There were no significant changes in methodologies for the year ended December 31, 2019. The assumptions used in calculating the unpaid claims and claim adjustment expenses for Group Disability and Group Life are updated annually to reflect emerging trends in claim experience.

No additional premiums or return premiums have been accrued as a result of the prior year development.

The liabilities for unpaid claims and claim adjustment expenses were $814 million and $733 million at December 31, 2019 and 2018, respectively. These amounts were discounted using interest rates ranging from 1% to 7%, based on the incurral year. The total discount applied to these liabilities was $52 million and $61 million at December 31, 2019 and 2018, respectively. The amount of interest accretion recognized was $20 million, $19 million and $26 million for the years ended December 31, 2019, 2018 and 2017, respectively. These amounts were reflected in policyholder benefits and claims.

The Company tracks claim frequency by the number of reported claims as identified by a unique claim number assigned to individual claimants. Claim counts include claims that do not ultimately result in a liability. A liability is only established for those claims that are expected to result in a liability, based on historical factors.

Latin America

Protection Life

	Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance																					At December 31, 2019
	For the Years Ended December 31,																					Total IBNR Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(Dollars in millions)
2010	$	259	$	333	$	340	$	341	$	341	$	341	$	341	$	342	$	344	$	344		$	—	34,663
2011			144		222		229		230		230		231		227		230		230			—		28,955
2012					153		208		213		214		215		212		215		216			—		29,014
2013							168		236		243		244		243		246		247			—		33,259
2014									247		376		387		354		358		359			—		41,648
2015											324		463		432		438		438			—		47,505
2016													347		447		459		466			1		41,590
2017															358		350		349			5		33,396
2018																	334		324			16		31,302
2019																			364			124		24,180
Total																			3,337
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			(3,030		)
All outstanding liabilities for incurral years prior to 2010, net of reinsurance																			10
Total unpaid claims and claim adjustment expenses, net of reinsurance																			$	317

	Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(In millions)
2010	$	238	$	310	$	317	$	318	$	318	$	318	$	318	$	320	$	321	$	324
2011			141		218		224		225		225		225		226		227		228
2012					151		205		209		211		211		210		211		213
2013							165		229		234		234		234		236		238
2014									221		330		336		339		343		346
2015											264		372		395		403		410
2016													242		432		452		460
2017															210		318		335
2018																	169		287
2019																			189
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			$	3,030

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration at December 31, 2019:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1	2	3	4	5	6	7	8	9	10
Protection Life	60.5%	29.8%	3.1%	0.9%	0.5%	0.3%	0.4%	0.6%	0.5%	1.0%

Protection Health

	Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance																					At December 31, 2019
	For the Years Ended December 31,																					Total IBNR Liabilities Plus Expected Development on Reported Claims		Cumulative Number of Reported Claims
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(Dollars in millions)
2010	$	187	$	208	$	210	$	210	$	211	$	211	$	211	$	215	$	215	$	215		$	—	96,784
2011			224		249		251		252		252		252		249		249		249			—		106,631
2012					216		243		245		246		246		244		245		245			—		100,400
2013							235		265		266		267		264		264		264			—		104,234
2014									243		271		273		271		270		270			—		97,755
2015											209		237		239		238		238			—		87,108
2016													274		316		313		313			1		105,877
2017															397		370		370			3		120,142
2018																	425		447			6		140,671
2019																			142			19		87,541
Total																			2,753
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			(2,689		)
All outstanding liabilities for incurral years prior to 2010, net of reinsurance																			9
Total unpaid claims and claim adjustment expenses, net of reinsurance																			$	73

	Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
	For the Years Ended December 31,
	(Unaudited)
Incurral Year	2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
	(In millions)
2010	$	187	$	208	$	210	$	210	$	211	$	211	$	211	$	214	$	214	$	215
2011			224		249		251		252		252		252		249		249		249
2012					216		243		245		246		246		245		245		245
2013							235		265		266		267		264		264		264
2014									241		269		271		267		267		267
2015											209		237		236		237		237
2016													258		308		311		312
2017															324		365		367
2018																	363		414
2019																			119
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance																			$	2,689

Average Annual Percentage Payout

The following is supplementary information about average historical claims duration at December 31, 2019:

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years	1	2	3	4	5	6	7	8	9	10
Protection Health	86.6%	11.5%	0.6%	—%	(0.1%)	—%	(0.3%)	0.5%	0.1%	—%

Significant Methodologies and Assumptions

The Latin America segment establishes liabilities for unpaid losses, which are equal to the accumulation of unpaid reported claims, plus an estimate for claims IBNR.

In general terms, for both the Protection Life and Protection Health products, the methodology for IBNR is the Bornhuetter-Ferguson Method, with factors derived by examining the experience of historical claims. In the more recent incurral months, the credibility is higher on expected loss ratios and lower on claims calculated using the experience-derived factors. The credibility grows for the factors as incurral months become older.

For Protection Health products, claim duration can be very long due to the multiple incidences that may occur over time for a single claim. The number of claims reported per year is based on the original claim occurrence date for each individual claim. Any subsequent claims that are considered part of the original claim occurrence are not counted as a new claim. For Protection Life products, claims are based upon individual death claims.

There were no significant changes in methodologies or assumptions for the year ended December 31, 2019. The assumptions used in calculating the unpaid claims and claim adjustment expenses for Protection Life and Protection Health are updated annually to reflect emerging trends in claim experience.

No additional premiums or return premiums have been accrued as a result of the prior year development.

Liabilities for unpaid claims and claim adjustment expenses were not discounted.

For Protection Life and Protection Health products, claim counts initially include claims that do not ultimately result in a liability. These claims are omitted from the claim counts once it is determined that there is no liability.

Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses

The reconciliation of the net incurred and paid claims development tables to the liability for unpaid claims and claims adjustment expenses on the consolidated balance sheet was as follows at:

	December 31, 2019
	(In millions)
Short-Duration:
Unpaid claims and allocated claims adjustment expenses, net of reinsurance:
U.S.:
Group Life - Term	$	2,057
Group Long-Term Disability	7,091
Property & Casualty - Auto	1,162
Property & Casualty - Home	229
Total			$	10,539
Asia - Group Disability & Group Life			627
Latin America:
Protection Life	317
Protection Health	73
Total			390
Other insurance lines - all segments combined			2,031
Total unpaid claims and allocated claims adjustment expenses, net of reinsurance			13,587
Reinsurance recoverables on unpaid claims:
U.S.:
Group Life - Term	13
Group Long-Term Disability	133
Property & Casualty - Auto	68
Property & Casualty - Home	1
Total			215
Asia - Group Disability & Group Life			238
Latin America:
Protection Life	7
Protection Health	18
Total			25
Other insurance lines - all segments combined			333
Total reinsurance recoverable on unpaid claims			811
Total unpaid claims and allocated claims adjustment expense			14,398
Unallocated claims adjustment expenses			98
Discounting			(1,285		)
Liability for unpaid claims and claim adjustment liabilities - short-duration			13,211
Liability for unpaid claims and claim adjustment liabilities - all long-duration lines			6,005
Total liability for unpaid claims and claim adjustment expense (included in future policy benefits and other policy-related balances)			$	19,216

Rollforward of Claims and Claim Adjustment Expenses

Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Balance at January 1,	$	17,788		$	17,094		$	16,157
Less: Reinsurance recoverables	2,332			2,198			1,968
Net balance at January 1,	15,456			14,896			14,189
Incurred related to:
Current year	27,093			24,571			24,370
Prior years (1)	313			454			133
Total incurred	27,406			25,025			24,503
Paid related to:
Current year	(20,141		)	(18,757		)	(18,525		)
Prior years	(5,882		)	(5,708		)	(5,271		)
Total paid	(26,023		)	(24,465		)	(23,796		)
Net balance at December 31,	16,839			15,456			14,896
Add: Reinsurance recoverables	2,377			2,332			2,198
Balance at December 31,	$	19,216		$	17,788		$	17,094

__________________

(1)

For the years ended December 31, 2019, 2018 and 2017, claims and claim adjustment expenses associated with prior years increased due to events incurred in prior years but reported in the current year.

Separate Accounts

Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $142.5 billion and $129.2 billion at December 31, 2019 and 2018, respectively, for which the policyholder assumes all investment risk, and separate accounts for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $45.9 billion and $46.4 billion at December 31, 2019 and 2018, respectively. The latter category consisted primarily of guaranteed interest contracts (“GICs”). The average interest rate credited on these contracts was 2.92% and 2.60% at December 31, 2019 and 2018, respectively.

For the years ended December 31, 2019, 2018 and 2017, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts.