bhf-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File Number: 001-37905

Brighthouse Financial, Inc.

(Exact name of registrant as specified in its charter)

Delaware

81-3846992

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

11225 North Community House Road, Charlotte, North Carolina

28277

(Address of principal executive offices)

(Zip Code)

(980) 365-7100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BHF	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/1,000th interest in a share of 6.600% Non-Cumulative Preferred Stock, Series A	BHFAP	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/1,000th interest in a share of 6.750% Non-Cumulative Preferred Stock, Series B	BHFAO	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/1,000th interest in a share of 5.375% Non-Cumulative Preferred Stock, Series C	BHFAN	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/1,000th interest in a share of 4.625% Non-Cumulative Preferred Stock, Series D	BHFAM	The Nasdaq Stock Market LLC
6.250% Junior Subordinated Debentures due 2058	BHFAL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of May 5, 2022, 74,893,889 shares of the registrant’s common stock were outstanding.

Table of Contents


		Page
Part I — Financial Information
Item 1.	Consolidated Financial Statements (at March 31, 2022 (Unaudited) and December 31, 2021 and for the Three Months Ended March 31, 2022 and 2021 (Unaudited)):
	Interim Condensed Consolidated Balance Sheets	2
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	3
	Interim Condensed Consolidated Statements of Equity	4
	Interim Condensed Consolidated Statements of Cash Flows	5
	Notes to the Interim Condensed Consolidated Financial Statements (Unaudited):
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	6
	Note 2 — Segment Information	7
	Note 3 — Insurance	10
	Note 4 — Investments	11
	Note 5 — Derivatives	22
	Note 6 — Fair Value	27

	Note 7 — Equity	36
	Note 8 — Other Revenues and Other Expenses	38
	Note 9 — Earnings Per Common Share	39
	Note 10 — Contingencies, Commitments and Guarantees	40
	Note 11 — Subsequent Event	42
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	79
Item 4.	Controls and Procedures	79

Part II — Other Information
Item 1.	Legal Proceedings	81
Item 1A.	Risk Factors	81
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	81

Item 6.	Exhibits	82

Signature		83

Table of Contents

Part I — Financial Information

Item 1. Financial Statements

Brighthouse Financial, Inc.

Interim Condensed Consolidated Balance Sheets

March 31, 2022 (Unaudited) and December 31, 2021

(In millions, except share and per share data)


	March 31, 2022		December 31, 2021
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $81,242 and $79,246, respectively; allowance for credit losses of $11 and $11, respectively)	$	82,496	$	87,582
Equity securities, at estimated fair value	80		101
Mortgage loans (net of allowance for credit losses of $127 and $123, respectively)	21,357		19,850
Policy loans	1,270		1,264
Limited partnerships and limited liability companies	4,587		4,271
Short-term investments, principally at estimated fair value	1,062		1,841
Other invested assets, principally at estimated fair value (net of allowance for credit losses of $13 and $13, respectively)	2,568		3,316
Total investments	113,420		118,225
Cash and cash equivalents	4,101		4,474
Accrued investment income	754		724
Premiums, reinsurance and other receivables (net of allowance for credit losses of $10 and $10, respectively)	16,290		16,094
Deferred policy acquisition costs and value of business acquired	5,581		5,377

Other assets	465		482
Separate account assets	104,441		114,464
Total assets	$	245,052	$	259,840
Liabilities and Equity
Liabilities
Future policy benefits	$	41,979	$	43,807
Policyholder account balances	67,887		66,851
Other policy-related balances	3,457		3,457
Payables for collateral under securities loaned and other transactions	6,209		6,269
Long-term debt	3,157		3,157
Current income tax payable	61		62
Deferred income tax liability	215		1,062
Other liabilities	4,767		4,504
Separate account liabilities	104,441		114,464
Total liabilities	232,173		243,633
Contingencies, Commitments and Guarantees (Note 10)
Equity
Brighthouse Financial, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; $1,753 aggregate liquidation preference	—		—
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 122,068,462 and 121,513,442 shares issued, respectively; 75,799,704 and 77,870,072 shares outstanding, respectively	1		1
Additional paid-in capital	14,133		14,154
Retained earnings (deficit)	(2)		(642)
Treasury stock, at cost; 46,268,758 and 43,643,370 shares, respectively	(1,681)		(1,543)
Accumulated other comprehensive income (loss)	363		4,172
Total Brighthouse Financial, Inc.’s stockholders’ equity	12,814		16,142
Noncontrolling interests	65		65
Total equity	12,879		16,207
Total liabilities and equity	$	245,052	$	259,840

See accompanying notes to the interim condensed consolidated financial statements.

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Brighthouse Financial, Inc.

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the Three Months Ended March 31, 2022 and 2021 (Unaudited)

(In millions, except per share data)


	Three Months Ended March 31,
		2022		2021
Revenues
Premiums		$	166	$	184
Universal life and investment-type product policy fees		841		930
Net investment income		1,151		1,187
Other revenues		137		127
Net investment gains (losses)		(68)		14
Net derivative gains (losses)		513		(1,504)
Total revenues		2,740		938
Expenses
Policyholder benefits and claims		906		756
Interest credited to policyholder account balances		290		297
Amortization of deferred policy acquisition costs and value of business acquired		227		91
Other expenses		510		562
Total expenses		1,933		1,706
Income (loss) before provision for income tax		807		(768)
Provision for income tax expense (benefit)		165		(185)
Net income (loss)		642		(583)
Less: Net income (loss) attributable to noncontrolling interests		2		2
Net income (loss) attributable to Brighthouse Financial, Inc.		640		(585)
Less: Preferred stock dividends		27		25
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders		$	613	$	(610)
Comprehensive income (loss)		$	(3,167)	$	(2,910)
Less: Comprehensive income (loss) attributable to noncontrolling interests		2		2
Comprehensive income (loss) attributable to Brighthouse Financial, Inc.		$	(3,169)	$	(2,912)


Earnings per common share
Basic	$	7.98	$	(6.96)
Diluted	$	7.91	$	(6.96)

See accompanying notes to the interim condensed consolidated financial statements.

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Brighthouse Financial, Inc.

Interim Condensed Consolidated Statements of Equity

For the Three Months Ended March 31, 2022 and 2021 (Unaudited)

(In millions)


	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Treasury Stock at Cost		Accumulated Other Comprehensive Income (Loss)		Brighthouse Financial, Inc.’s Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2021	$	—	$	1	$	14,154	$	(642)	$	(1,543)	$	4,172	$	16,142	$	65	$	16,207
Treasury stock acquired in connection with share repurchases									(127)				(127)				(127)
Share-based compensation			—		6				(11)				(5)				(5)
Dividends on preferred stock					(27)								(27)				(27)
Change in noncontrolling interests													—		(2)		(2)
Net income (loss)							640						640		2		642
Other comprehensive income (loss), net of income tax											(3,809)		(3,809)				(3,809)
Balance at March 31, 2022	$	—	$	1	$	14,133	$	(2)	$	(1,681)	$	363	$	12,814	$	65	$	12,879


	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Treasury Stock at Cost		Accumulated Other Comprehensive Income (Loss)		Brighthouse Financial, Inc.’s Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2020	$	—	$	1	$	13,878	$	(534)	$	(1,038)	$	5,716	$	18,023	$	65	$	18,088
Treasury stock acquired in connection with share repurchases									(68)				(68)				(68)
Share-based compensation			—		5				(6)				(1)				(1)
Dividends on preferred stock					(25)								(25)				(25)
Change in noncontrolling interests													—		(2)		(2)
Net income (loss)							(585)						(585)		2		(583)
Other comprehensive income (loss), net of income tax											(2,327)		(2,327)				(2,327)
Balance at March 31, 2021	$	—	$	1	$	13,858	$	(1,119)	$	(1,112)	$	3,389	$	15,017	$	65	$	15,082

See accompanying notes to the interim condensed consolidated financial statements.

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Brighthouse Financial, Inc.

Interim Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2022 and 2021 (Unaudited)

(In millions)


	Three Months Ended March 31,
	2022		2021
Net cash provided by (used in) operating activities	$	(163)	$	(104)
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities	3,715		2,662
Equity securities	20		54
Mortgage loans	461		726
Limited partnerships and limited liability companies	67		49
Purchases of:
Fixed maturity securities	(5,532)		(3,959)
Equity securities	—		(6)
Mortgage loans	(1,972)		(568)
Limited partnerships and limited liability companies	(279)		(204)
Cash received in connection with freestanding derivatives	1,440		1,012
Cash paid in connection with freestanding derivatives	(1,197)		(1,581)



Net change in policy loans	(5)		46
Net change in short-term investments	781		1,569
Net change in other invested assets	(18)		—

Net cash provided by (used in) investing activities	(2,519)		(200)
Cash flows from financing activities
Policyholder account balances:
Deposits	6,340		2,058
Withdrawals	(3,727)		(698)
Net change in payables for collateral under securities loaned and other transactions	(60)		(971)

Long-term debt repaid	(1)		—

Dividends on preferred stock	(27)		(25)
Treasury stock acquired in connection with share repurchases	(127)		(68)



Financing element on certain derivative instruments and other derivative related transactions, net	(76)		(67)
Other, net	(13)		(8)
Net cash provided by (used in) financing activities	2,309		221
Change in cash, cash equivalents and restricted cash	(373)		(83)
Cash, cash equivalents and restricted cash, beginning of period	4,474		4,108
Cash, cash equivalents and restricted cash, end of period	$	4,101	$	4,025
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest	$	6	$	6
Income tax	$	1	$	(21)

See accompanying notes to the interim condensed consolidated financial statements.

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Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies

Business

Brighthouse Financial, Inc. (“BHF” and together with its subsidiaries, “Brighthouse Financial” or the “Company”) is a holding company formed in 2016 to own the legal entities that historically operated a substantial portion of MetLife, Inc.’s former retail segment until becoming a separate, publicly-traded company in August 2017. Brighthouse Financial is one of the largest providers of annuity and life insurance products in the U.S. through multiple independent distribution channels and marketing arrangements with a diverse network of distribution partners. The Company is organized into three segments: Annuities; Life; and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other.

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.

Consolidation

The accompanying interim condensed consolidated financial statements include the accounts of Brighthouse Financial, as well as partnerships and limited liability companies (“LLC”) that the Company controls. Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting for investments in limited partnerships and LLCs when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period. When the Company has virtually no influence over the investee’s operations, the investment is carried at fair value.

The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2021 consolidated balance sheet data was derived from audited consolidated financial statements included in Brighthouse Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2021 Annual Report.

Adoption of New Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. There were no significant ASUs adopted during the period ended March 31, 2022.

Future Adoption of New Accounting Pronouncements

In August 2018, the FASB issued new guidance on long-duration contracts (ASU 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts). This new guidance is effective for fiscal years beginning after January 1, 2023. The amendments to Topic 944 will result in significant changes to the measurement, presentation and disclosure requirements for long-duration insurance contracts. A summary of the most significant changes is provided below:

(1) Guaranteed benefits associated with variable annuity and certain fixed annuity contracts will be classified and presented separately on the consolidated balance sheets as market risk benefits (“MRB”). MRBs will be measured at fair value through net income and reported separately on the consolidated statements of operations, except for instrument-specific credit risk changes, which will be recognized in other comprehensive income (loss) (“OCI”).

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Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

(2) Cash flow assumptions used to measure the liability for future policy benefits on traditional long-duration contracts (including term and non-participating whole life insurance and immediate annuities) will be updated on an annual basis using a retrospective method. The resulting remeasurement gain or loss will be reported separately on the consolidated statements of operations along with the remeasurement gain or loss on universal life-type contract liabilities.

(3) The discount rate assumption used to measure the liability for traditional long-duration contracts will be based on an upper-medium grade fixed income yield, updated quarterly, with changes recognized in OCI.

(4) Deferred policy acquisition costs (“DAC”) for all insurance products are required to be amortized on a constant-level basis over the expected term of the contracts, using amortization methods that are not a function of revenue or profit emergence. Changes in assumptions used to amortize DAC will be recognized as a revision to future amortization amounts.

(5) There will be a significant increase in required disclosures, including disaggregated rollforwards of insurance contract assets and liabilities supplemented by qualitative and quantitative information regarding the cash flows, assumptions, methods and judgements used to measure those balances.

The amendments to Topic 944 will be applied to the earliest period presented in the financial statements, making the transition date January 1, 2021. The MRB guidance is required to be applied on a retrospective basis, while the guidance for insurance liability assumption updates and DAC amortization will be applied to existing carrying amounts on the transition date.

The new guidance will have a significant impact on the Company’s financial statements upon adoption, and will change the pattern and market sensitivity of the Company’s earnings after the transition date. The most significant impact will be the requirement that all variable annuity guarantees be considered MRBs and measured at fair value, because a significant amount of variable annuity guarantees are classified as insurance liabilities under current guidance. The impacts to the financial statements at adoption are highly dependent on market conditions, especially interest rates. The Company is, therefore, unable to currently estimate the ultimate impact of the new guidance on the financial statements; however, at prevailing interest rate levels at the end of 2021, the Company expects the new guidance, upon adoption, would likely result in a material decrease in stockholders’ equity.

2. Segment Information

The Company is organized into three segments: Annuities; Life; and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other.

Annuities

The Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security.

Life

The Life segment consists of insurance products and services, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be on a tax-advantaged basis.

Run-off

The Run-off segment consists of products that are no longer actively sold and are separately managed, including universal life with secondary guarantees, structured settlements, pension risk transfer contracts, certain company-owned life insurance policies and certain funding agreements.

Corporate & Other

Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes long-term care and workers’ compensation business reinsured through 100% quota share reinsurance agreements, activities related to funding agreements associated with the Company’s institutional spread margin business, as well as direct-to-consumer life insurance that is no longer actively sold.

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Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

2. Segment Information (continued)

Financial Measures and Segment Accounting Policies

Adjusted earnings is a financial measure used by management to evaluate performance and facilitate comparisons to industry results. Consistent with GAAP guidance for segment reporting, adjusted earnings is also used to measure segment performance. The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by the investor community by highlighting the results of operations and the underlying profitability drivers of the business.

Adjusted earnings, which may be positive or negative, focuses on the Company’s primary businesses by excluding the impact of market volatility, which could distort trends.

The following are significant items excluded from total revenues in calculating adjusted earnings:

•Net investment gains (losses);

•Net derivative gains (losses) except earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment; and

•Certain variable annuity guaranteed minimum income benefits (“GMIB”) fees (“GMIB Fees”).

The following are significant items excluded from total expenses in calculating adjusted earnings:

•Amounts associated with benefits related to GMIBs (“GMIB Costs”);

•Amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets; and

•Amortization of DAC and value of business acquired (“VOBA”) related to (i) net investment gains (losses), (ii) net derivative gains (losses) and (iii) GMIB Fees and GMIB Costs.

The tax impact of the adjustments discussed above is calculated net of the statutory tax rate, which could differ from the Company’s effective tax rate.

The segment accounting policies are the same as those used to prepare the Company’s interim condensed consolidated financial statements, except for the adjustments to calculate adjusted earnings described above. In addition, segment accounting policies include the methods of capital allocation described below.

Segment investment and capitalization targets are based on statutory oriented risk principles and metrics. Segment invested assets backing liabilities are based on net statutory liabilities plus excess capital. For the variable annuity business, the excess capital held is based on the target statutory total asset requirement consistent with the Company’s variable annuity risk management strategy. For insurance businesses other than variable annuities, excess capital held is based on a percentage of required statutory risk-based capital. Assets in excess of those allocated to the segments, if any, are held in Corporate & Other. Segment net investment income reflects the performance of each segment’s respective invested assets.

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Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

2. Segment Information (continued)

Operating results by segment, as well as Corporate & Other, were as follows:


	Three Months Ended March 31, 2022
	Annuities		Life		Run-off		Corporate & Other		Total
	(In millions)
Pre-tax adjusted earnings	$	383	$	32	$	20	$	(31)	$	404
Provision for income tax expense (benefit)	72		6		4		(1)		81
Post-tax adjusted earnings	311		26		16		(30)		323
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		2		2
Less: Preferred stock dividends	—		—		—		27		27
Adjusted earnings	$	311	$	26	$	16	$	(59)	294
Adjustments for:
Net investment gains (losses)									(68)
Net derivative gains (losses)									513
Other adjustments to net income (loss)									(42)
Provision for income tax (expense) benefit									(84)
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders									$	613

Interest revenue	$	555	$	153	$	401	$	48
Interest expense	$	—	$	—	$	—	$	38


	Three Months Ended March 31, 2021
	Annuities		Life		Run-off		Corporate & Other		Total
	(In millions)
Pre-tax adjusted earnings	$	414	$	52	$	85	$	(61)	$	490
Provision for income tax expense (benefit)	78		10		9		(19)		78
Post-tax adjusted earnings	336		42		76		(42)		412
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		2		2
Less: Preferred stock dividends	—		—		—		25		25
Adjusted earnings	$	336	$	42	$	76	$	(69)	385
Adjustments for:
Net investment gains (losses)									14
Net derivative gains (losses)									(1,504)
Other adjustments to net income (loss)									232
Provision for income tax (expense) benefit									263
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders									$	(610)

Interest revenue	$	550	$	166	$	462	$	14
Interest expense	$	—	$	—	$	—	$	41

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Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

2. Segment Information (continued)

Total revenues by segment, as well as Corporate & Other, were as follows:


	Three Months Ended March 31,
		2022		2021
		(In millions)
Annuities		$	1,272	$	1,298
Life		340		410
Run-off		562		628
Corporate & Other		67		35
Adjustments		499		(1,433)
Total		$	2,740	$	938

Total assets by segment, as well as Corporate & Other, were as follows at:


	March 31, 2022		December 31, 2021
	(In millions)
Annuities	$	167,759	$	178,700
Life	23,463		24,514
Run-off	34,038		37,055
Corporate & Other	19,792		19,571
Total	$	245,052	$	259,840

3. Insurance

Guarantees

As discussed in Notes 1 and 3 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report, the Company issues variable annuity contracts with guaranteed minimum benefits. Guaranteed minimum death benefits, the life contingent portion of guaranteed minimum withdrawal benefits (“GMWB”) and certain portions of GMIBs are accounted for as insurance liabilities in future policyholder benefits, while other guarantees are accounted for in whole or in part as embedded derivatives in policyholder account balances and are further discussed in Note 5.

The Company also has secondary guarantees on universal and variable life insurance contracts accounted for as insurance liabilities.

Information regarding the Company’s guarantee exposure was as follows at:


	March 31, 2022						December 31, 2021
	In the Event of Death			At Annuitization			In the Event of Death			At Annuitization
	(Dollars in millions)
Annuity Contracts (1), (2)
Variable Annuity Guarantees
Total account value (3)	$	100,728		$	54,256		$	109,968		$	59,735
Separate account value	$	95,783		$	53,074		$	105,023		$	58,555
Net amount at risk	$	9,266	(4)	$	5,739	(5)	$	6,361	(4)	$	5,240	(5)
Average attained age of contract holders	71 years			70 years			71 years			70 years

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Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

3. Insurance (continued)


	March 31, 2022		December 31, 2021
	Secondary Guarantees
	(Dollars in millions)
Universal Life Contracts
Total account value (3)	$	5,447	$	5,518
Net amount at risk (6)	$	66,682	$	67,248
Average attained age of policyholders	68 years		68 years

Variable Life Contracts
Total account value (3)	$	4,436	$	4,785
Net amount at risk (6)	$	18,714	$	18,857
Average attained age of policyholders	52 years		52 years

_______________

(1)The Company’s annuity 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 direct business, but excludes offsets from hedging or reinsurance, if any. Therefore, the net amount at risk presented reflects the economic exposures of living and death benefit guarantees associated with variable annuities, but not necessarily their impact on the Company. See Note 5 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for a discussion of guaranteed minimum benefits which have been reinsured.

(3)Includes the contract holder’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 contract holders 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 contract holders have achieved.

(6)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.

4. Investments

See Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report for a description of the Company’s accounting policies for investments and the fair value hierarchy for investments and the related valuation methodologies.

Table of Contents

Brighthouse Financial, Inc.

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) (continued)

4. Investments (continued)

Fixed Maturity Securities Available-for-sale

Fixed Maturity Securities by Sector

Fixed maturity securities by sector were as follows at:


	March 31, 2022										December 31, 2021
	Amortized Cost		Allowance for Credit Losses		Gross Unrealized				Estimated Fair Value		Amortized Cost		Allowance for Credit Losses	Gross Unrealized		Estimated Fair Value
					Gains		Losses							Gains	Losses
	(In millions)
U.S. corporate	$	35,794	$	2	$	1,448	$	1,222	$	36,018	$	35,326