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Fair Value Measurements (excluding Consolidated Investment Entities)
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements (excluding Consolidated Investment Entities) Fair Value Measurements (excluding Consolidated Investment Entities)
Fair Value Measurement

The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2024:
Level 1Level 2Level 3Total
Assets:
Fixed maturities, including securities pledged:
U.S. Treasuries
$402 $70 $— $472 
U.S. Government agencies and authorities
— 30 — 30 
State, municipalities and political subdivisions— 580 — 580 
U.S. corporate public securities— 6,949 59 7,008 
U.S. corporate private securities— 3,486 1,497 4,983 
Foreign corporate public securities and foreign governments(1)
— 2,412 60 2,472 
Foreign corporate private securities(1)
— 2,116 421 2,537 
Residential mortgage-backed securities— 3,404 67 3,471 
Commercial mortgage-backed securities— 3,132 — 3,132 
Other asset-backed securities— 2,746 23 2,769 
Total fixed maturities, including securities pledged
402 24,925 2,127 27,454 
Equity securities148 — 98 246 
Derivatives:
Interest rate contracts— 246 — 246 
Foreign exchange contracts— 55 — 55 
Equity contracts— 2 — 2 
Embedded derivative on reinsurance— 55 — 55 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements2,511 1 23 2,535 
Assets held in separate accounts95,946 5,390 340 101,676 
Total assets$99,007 $30,674 $2,588 $132,269 
Liabilities:
Contingent consideration$— $— $2 $2 
Stabilizer and MCGs— — 19 19 
Derivatives:
Interest rate contracts11 302 — 313 
Foreign exchange contracts— 8 — 8 
Equity contracts— 9 — 9 
Credit contracts— 2 — 2 
Embedded derivative on reinsurance— (12)
(2)
53 41 
Total liabilities$11 $309 $74 $394 
(1) Primarily U.S. dollar denominated.
(2) The Company classifies the embedded derivative within liabilities given the underlying nature of the balance and the right-of-offset.
The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2023:
Level 1Level 2Level 3Total
Assets:
Fixed maturities, including securities pledged:
U.S. Treasuries$346 $57 $— $403 
U.S. Government agencies and authorities— 55 1 56 
State, municipalities and political subdivisions— 771 — 771 
U.S. corporate public securities— 7,648 18 7,666 
U.S. corporate private securities— 3,234 1,526 4,760 
Foreign corporate public securities and foreign governments(1)
— 2,702 — 2,702 
Foreign corporate private securities(1)
— 2,376 436 2,812 
Residential mortgage-backed securities— 3,419 57 3,476 
Commercial mortgage-backed securities— 3,495 — 3,495 
Other asset-backed securities— 2,418 52 2,470 
Total fixed maturities, including securities pledged346 26,175 2,090 28,611 
Equity securities140 — 96 236 
Derivatives:
Interest rate contracts7 263 — 270 
Foreign exchange contracts— 37 — 37 
Equity contracts— 4 — 4 
Embedded derivative on reinsurance— 61 — 61 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements2,148 17 — 2,165 
Assets held in separate accounts87,180 5,605 348 93,133 
Total assets$89,821 $32,162 $2,534 $124,517 
Liabilities:
Contingent consideration$— $— $51 $51 
Stabilizer and MCGs— — 9 9 
Derivatives:
Interest rate contracts— 354 — 354 
Foreign exchange contracts— 13 — 13 
Equity contracts— 2 — 2 
Credit contracts— 2 — 2 
Embedded derivative on reinsurance— (9)
(2)
58 49 
Total liabilities$— $362 $118 $480 
(1) Primarily U.S. dollar denominated.
(2) The Company classifies the embedded derivative within liabilities given the underlying nature of the balance and the right-of-offset.
Valuation of Financial Assets and Liabilities at Fair Value

Certain assets and liabilities are measured at estimated fair value on the Company's Consolidated Balance Sheets. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based measurement that is determined based on a hypothetical transaction at the measurement date, from a market participant's perspective. The Company considers three broad valuation approaches when a quoted price is unavailable: (i) the market approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the inputs to fair valuation approaches and allows for the use of unobservable inputs to the extent that observable inputs are not available.

The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of exit price and the fair value hierarchy as prescribed in ASC Topic 820. Valuations are obtained from third-party commercial pricing services, brokers and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from third-party commercial pricing services are non-binding. The Company reviews the assumptions and inputs used by third-party commercial pricing services for each reporting period in order to determine an appropriate fair value hierarchy level. The documentation and analysis obtained from third-party commercial pricing services are reviewed by the Company, including in-depth validation procedures confirming the observability of inputs. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes.

When available, the fair value of the Company's financial assets and liabilities are based on quoted prices of identical assets in active markets and therefore, reflected in Level 1. The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below.

For fixed maturities classified as Level 2 assets, fair values are determined using a matrix-based market approach, based on prices obtained from third-party commercial pricing services and the Company’s matrix and analytics-based pricing models, which in each case incorporate a variety of market observable information as valuation inputs. The market observable inputs used for these fair value measurements, by fixed maturity asset class, are as follows:

U.S. Treasuries: Fair value is determined using third-party commercial pricing services, with the primary inputs being stripped interest and principal U.S. Treasury yield curves that represent a U.S. Treasury zero-coupon curve.

U.S. government agencies and authorities, State, municipalities and political subdivisions: Fair value is determined using third-party commercial pricing services, with the primary inputs being U.S. Treasury yield curves, trades of comparable securities, credit spreads off benchmark yields and issuer ratings.

U.S. corporate public securities, Foreign corporate public securities and foreign governments: Fair value is determined using third-party commercial pricing services, with the primary inputs being benchmark yields, trades of comparable securities, issuer ratings, bids and credit spreads off benchmark yields.

U.S. corporate private securities and Foreign corporate private securities: Fair values are determined using a matrix and analytics-based pricing model. The model incorporates the current level of risk-free interest rates, current corporate credit spreads, credit quality of the issuer and cash flow characteristics of the security. The model also considers a liquidity spread, the value of any collateral, the capital structure of the issuer, the presence of guarantees, and prices and quotes for comparably rated publicly traded securities.

RMBS, CMBS and ABS: Fair value is determined using third-party commercial pricing services, with the primary inputs being credit spreads off benchmark yields, prepayment speed assumptions, current and forecasted loss severity, debt service coverage ratios, collateral type, payment priority within tranche and the vintage of the loans underlying the security.
Generally, the Company does not obtain more than one vendor price from pricing services per instrument. The Company uses a hierarchy process in which prices are obtained from a primary vendor and, if that vendor is unable to provide the price, the next vendor in the hierarchy is contacted until a price is obtained or it is determined that a price cannot be obtained from a commercial pricing service. When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited. Securities priced using independent broker quotes are classified as Level 3.

Fair values of privately placed bonds are determined primarily using a matrix-based pricing model and are generally classified as Level 2 assets. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer and cash flow characteristics of the security. Also considered are factors such as the net worth of the borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees and the Company's evaluation of the borrower's ability to compete in its relevant market. Using this data, the model generates estimated market values, which the Company considers reflective of the fair value of each privately placed bond.

Equity securities: Level 2 and Level 3 equity securities, typically private equities or equity securities not traded on an exchange, are valued by other sources such as analytics or brokers.

Derivatives: Derivatives are carried at fair value, which is determined using the Company's derivative accounting system in conjunction with observable key financial data from third-party sources, such as yield curves, exchange rates, S&P 500 Index prices, Overnight Index Swap ("OIS") rates, and Secured Overnight Financing Rate ("SOFR"). The Company uses SOFR discounting for valuations of interest rate derivatives; however, certain legacy positions may continue to be discounted on OIS. The Company uses OIS for valuations of collateralized interest rate derivatives, which are obtained from third-party sources. For those derivatives that are unable to be valued by the accounting system, the Company typically utilizes values established by third-party brokers. Counterparty credit risk is considered and incorporated in the Company's valuation process through counterparty credit rating requirements and monitoring of overall exposure. It is the Company's policy to transact only with investment grade counterparties with a credit rating of A- or better. The Company's nonperformance risk is also considered and incorporated in the Company's valuation process. The Company also has certain credit default swaps and options that are priced by third party vendors or by using models that primarily use market observable inputs, but contain inputs that are not observable to market participants, which have been classified as Level 3. The remaining derivative instruments are valued based on market observable inputs and are classified as Level 2. See the Derivative Financial Instruments Note to these Consolidated Financial Statements for more information.

Contingent consideration: The fair value of the contingent consideration liability associated with the Company’s acquisitions uses unobservable inputs and as such are reported as Level 3. Unobservable inputs include projected revenues, duration of earnouts and other metrics as well as discount rate. Changes in the fair value of the contingent consideration are recorded in Operating expenses in the Company’s Consolidated Statements of Operations.

Stabilizer and MCGs: The Company records reserves for Stabilizer and MCG contracts containing guaranteed credited rates. The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value. The estimated fair value is determined based on the present value of projected future claims, minus the present value of future guaranteed premiums. At inception of the contract, the Company projects a guaranteed premium to be equal to the present value of the projected future claims. The income associated with the contracts is projected using relevant actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are projected under multiple capital market scenarios using observable risk-free rates and other best estimate assumptions. These derivatives are classified as Level 3 liabilities.

The discount rate used to determine the fair value of the Company's Stabilizer embedded derivative liabilities and MCG stand-alone derivative includes an adjustment to reflect the risk that these obligations will not be fulfilled ("nonperformance risk"). The nonperformance risk adjustment incorporates a blend of observable, similarly rated peer holding company credit spreads, adjusted to reflect the credit quality of the individual insurance subsidiary that issued the guarantee, as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.

Embedded derivatives on reinsurance: The carrying value of embedded derivatives is estimated based upon the change in the fair value of the assets supporting the funds withheld payable under reinsurance agreements. The fair value of the embedded derivative is based on market observable inputs and is classified as Level 2. The remaining derivative instruments are classified
as Level 3 and are estimated using the income approach. The fair value is calculated by estimating future cash flows for a certain discrete projection period, estimating the terminal value, if appropriate, and discounting these amounts to present value at a rate of return that considers the relative risk of the cash flows and the time value of money.

Level 3 Financial Instruments

The fair values of certain assets and liabilities are determined using prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (i.e., Level 3 as defined by ASC Topic 820), including but not limited to liquidity spreads for investments within markets deemed not currently active. These valuations, whether derived internally or obtained from a third-party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. In addition, the Company has determined, for certain financial instruments, an active market is such a significant input to determine fair value that the presence of an inactive market may lead to classification in Level 3. In light of the methodologies employed to obtain the fair values of financial assets and liabilities classified as Level 3, additional information is presented below.

Significant Unobservable Inputs

The Company's Level 3 fair value measurements of its fixed maturities, equity securities and equity and credit derivative contracts are primarily based on broker quotes for which the quantitative detail of the unobservable inputs is neither provided nor reasonably corroborated, thus negating the ability to perform a sensitivity analysis. The Company performs a review of broker quotes by performing a monthly price variance comparison and back tests broker quotes to recent trade prices.
The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities and transfers in and out of Level 3 for the period indicated:
Year Ended December 31, 2024
Fair Value
as of
January 1
Realized/ Unrealized
Gains (Losses)
Included in:
PurchasesIssuancesSales

Settlements
Transfers
into
Level 3		Transfers
out of
Level 3		Fair Value as of December 31
Change In
Unrealized
Gains
(Losses)
Included in
Earnings(3)
Change In
Unrealized
Gains
(Losses)
Included in
OCI(3)
Net
Income		OCI
Fixed maturities, including securities pledged:
U.S. Government agencies and authorities
$1 $— $— $— $— $— $— $— $(1)$— $— $— 
U.S. corporate public securities18 — (1)49 — — (7)— — 59 — (2)
U.S. corporate private securities1,526 (4)1 377 — (22)(246)— (135)1,497 — (5)
Foreign corporate public securities and foreign governments(1)
— — — 60 — — — — — 60 — — 
Foreign corporate private securities(1)
436 (8)(33)35 — (9)(51)51 — 421 — (33)
Residential mortgage-backed securities57 (4)— 18 — — — — (4)67 (4)— 
Other asset-backed securities52 — — 3 — — (7)— (25)23 — — 
Total fixed maturities including securities pledged
2,090 (16)(33)542 — (31)(311)51 (165)2,127 (4)(40)
Equity securities, at fair value96 2 — — — — — — — 98 2 — 
Contingent consideration(51)1 — — — — 48 — — (2)— — 
Stabilizer and MCGs(2)
(9)(8)— — (2)— — — — (19)— — 
Embedded derivatives on
reinsurance		(58)(1)— — — — 6 — — (53)— — 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements— — — 23 — — — — — 23 — — 
Assets held in separate accounts(4)
348 6 — 47 — (26)— 5 (40)340 — — 
(1) Primarily U.S. dollar denominated.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis. These amounts are included in Net gains (losses) in the Consolidated Statements of Operations.
(3) For financial instruments still held as of December 31 amounts are included in Net investment income and Net gains (losses) in the Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Consolidated Statements of Comprehensive Income.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.
Year Ended December 31, 2023
Fair Value
as of
January 1
Realized/ Unrealized
Gains (Losses)
Included in:
PurchasesIssuancesSales

Settlements
Transfers
into
Level 3		Transfers
out of
Level 3		Fair Value as of December 31
Change In
Unrealized
Gains
(Losses)
Included in
Earnings(3)
Change In
Unrealized
Gains
(Losses)
Included in
OCI(3)
Net
Income		OCI
Fixed maturities, including securities pledged:
U.S. Government agencies and authorities$1 $— $— $— $— $— $— $— $— $1 $— $— 
U.S. corporate public securities20 1 — — — — — — (3)18 — — 
U.S. corporate private securities1,801 1 22 142 — (4)(219)79 (296)1,526 1 19 
Foreign corporate public securities and foreign governments(1)
3 — — — — — — — (3)— — — 
Foreign corporate private securities(1)
432 3 9 129 — (14)(167)51 (7)436 3 8 
Residential mortgage-backed securities28 (4)— 31 — — — 2 — 57 (3)— 
Other asset-backed securities64 — 1 15 — (2)(4)— (22)52 — — 
Total fixed maturities including securities pledged2,349 1 32 317 — (20)(390)132 (331)2,090 1 27 
Equity securities, at fair value196 (3)— 3 — — (100)— — 96 (3)— 
Contingent consideration(112)61 
(5)
— — — — — — — (51)— — 
Stabilizer and MCGs(2)
(6)(1)— — (2)— — — — (9)— — 
Embedded derivatives on
reinsurance .		(58)— — — — — — — — (58)— — 
Assets held in separate accounts(4)
347 1 — 8 — (21)— 14 (1)348 — — 
(1) Primarily U.S. dollar denominated.
(2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by contract basis. These amounts are included in Net gains (losses) in the Consolidated Statements of Operations.
(3) For financial instruments still held as of December 31 amounts are included in Net investment income and Net gains (losses) in the Consolidated Statements of Operations or Unrealized gains (losses) on securities in the Consolidated Statements of Comprehensive Income.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company.
For the years ended December 31, 2024 and 2023, the transfers in and out of Level 3 for fixed maturities were due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using independent broker quotes when prices are not available from one of the commercial pricing services are reflected as transfers into Level 3. When securities are valued using more widely available information, the securities are transferred out of Level 3 and into Level 1 or 2, as appropriate.

Other Financial Instruments

The following disclosures are made in accordance with the requirements of ASC Topic 825 which requires disclosure of fair value information about financial instruments, whether or not recognized at fair value on the Consolidated Balance Sheets. ASC Topic 825 excludes certain financial instruments, including insurance contracts and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The carrying values and estimated fair values of the Company's financial instruments as of the dates indicated:
December 31, 2024December 31, 2023
Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Assets:
Fixed maturities, including securities pledged$27,454 $27,454 $28,611 $28,611 
Equity securities246 246 236 236 
Mortgage loans on real estate4,699 4,459 5,218 4,941 
Policy loans342 342 352 352 
Cash, cash equivalents, short-term investments and short-term investments under securities loan agreements2,535 2,535 2,165 2,165 
Derivatives303 303 311 311 
Embedded derivatives on reinsurance
55 55 61 61 
Other investments, including securities pledged
74 74 64 64 
Assets held in separate accounts101,676 101,676 93,133 93,133 
Liabilities:
Investment contract liabilities:
Funding agreements without fixed maturities and deferred annuities(1)
$31,082 $32,877 $32,848 $34,856 
Funding agreements with fixed maturities 1,249 1,257 1,175 1,178 
Supplementary contracts, immediate annuities and other570 515 628 571 
Stabilizer and MCGs19 19 9 9 
Derivatives332 332 371 371 
Embedded derivatives on reinsurance
41 41 49 49 
Short-term debt399 399 1 1 
Long-term debt2,103 2,023 2,097 1,998 
(1) Certain amounts included in Funding agreements without fixed maturities and deferred annuities are also reflected within the Stabilizer and MCGs section of the table above.
The following table presents the classification of financial instruments which are not carried at fair value on the Consolidated Balance Sheets:
Financial InstrumentClassification
Mortgage loans on real estateLevel 3
Policy loansLevel 2
Other investmentsLevel 2
Funding agreements without fixed maturities and deferred annuitiesLevel 3
Funding agreements with fixed maturitiesLevel 2
Supplementary contracts and immediate annuitiesLevel 3
Short-term debt and Long-term debtLevel 2