As filed with the Securities and Exchange Commission on March 28, 2022

Registration No. 333-  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER THE

SECURITIES ACT OF 1933

SAFG Retirement Services, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	6311	95-4715639
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

2919 Allen Parkway, Woodson Tower

Houston, Texas 77019

1-877-375-2422

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Christine Nixon, Esq.

General Counsel

SAFG Retirement Services, Inc.

21650 Oxnard Street, Suite 750

Woodland Hills, California 91367

1-877-375-2422

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

 Eric T. Juergens, Esq.
Paul M. Rodel, Esq.
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York 10022
(212) 909-6000 Edward D. Herlihy, Esq.
David K. Lam, Esq.
Mark A. Stagliano, Esq.
Wachtell, Lipton, Rosen & Katz LLP
51 West 52^nd Street
New York, New York 10019
(212) 403-1000 Craig B. Brod, Esq.
Jeffrey D. Karpf, Esq.
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
(212) 225-2000

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

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 7(a)(2)(B) of the Securities Act.  ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the U.S. Securities and Exchange Commission declares our registration statement effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 28, 2022

    Shares

 

SAFG Retirement Services, Inc.

 

Common Stock

This is the initial public offering of shares of common stock of SAFG Retirement Services, Inc. The selling stockholder, American International Group, Inc., is offering     shares of our common stock. We will not receive any of the proceeds from the sale of the shares being sold by the selling stockholder in this offering. We anticipate that the initial public offering price will be between $    and $    per share.

Prior to this offering, there has been no public market for our common stock. Upon the completion of this offering, we intend to apply to list our common stock on the New York Stock Exchange (the “NYSE”) under the symbol “CRBG.” Prior to this offering, we intend to change our name to “Corebridge Financial, Inc.”

After the completion of this offering, we will be a “controlled company” within the meaning of the corporate governance standards of the NYSE.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 23 of this prospectus to read about factors you should consider before buying shares of our common stock.

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds to the selling stockholder, before expenses	$	$

The underwriters also may purchase up to     additional shares from the selling stockholder at the initial offering price less the underwriting discounts and commissions, within 30 days from the date of this prospectus.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved the securities described herein or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about    , 2022.

J.P. Morgan Morgan Stanley Piper Sandler

Prospectus dated   , 2022

TABLE OF CONTENTS

Prospectus Summary	1
Introductory Information	2
Summary Risk Factors	14
The Offering	16
Summary Historical Financial Data	17
Summary Unaudited Pro Forma Financial Data	19
Risk Factors	23
Special Note Regarding Forward-Looking Statements and Information	68
Use of Proceeds	72
Dividend Policy	73
The Reorganization Transactions	74
Recapitalization	75
Capitalization	77
Unaudited Pro Forma Condensed Consolidated Financial Information	78
Management’s Discussion and Analysis of Financial Condition and Results of Operations	87
Business	180
Management	252
Executive Compensation	260
Principal and Selling Stockholders	289
Certain Relationships and Related Party Transactions	291
Description of Capital Stock	307
Shares Available for Future Sale	313
Certain U.S. Federal Income Tax Considerations for Non-U.S. Holders	315
Underwriting	318
Validity of Common Stock	326
Actuarial Firm	326
Experts	326
Where You Can Find More Information	327
Glossary	328
Acronyms	331
Index to Consolidated Financial Statements	F-1

You should rely only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered to you. We have not, and the selling stockholder and the underwriters have not, authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus and any related free writing prospectus. We, the selling stockholder and the underwriters, take no responsibility for, and can provide no assurances as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is only accurate as of the date of this prospectus, regardless of the time of delivery of this prospectus and any sale of shares of our common stock. Our business, results of operations, financial condition, liquidity and prospects may have changed since that date.

For investors outside of the United States: neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to this offering and the distribution of this prospectus outside of the United States.

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INTRODUCTORY INFORMATION

Certain Important Terms

We use the following capitalized terms in this prospectus:

• “1844 Market” means 1844 Market Street, LLC;

• “AGAMHC” means AIG Global Asset Management Holding Corporation;

• “AGC” means AGC Life Insurance Company, a Missouri insurance company;

• “AGL” means American General Life Insurance Company, a Texas insurance company;

• “AGREIC” means AIG Global Real Estate Investment Corporation;

• “AHAC” means American Home Assurance Company, a consolidated subsidiary of AIG;

• “AIG” means American International Group, Inc. and its subsidiaries, other than SAFG and SAFG’s subsidiaries;

• “AIG 200” means AIG’s multi-year effort to support underwriting excellence, modernize its operating infrastructure, enhance user and customer experiences and become a more unified company. Under this program, SAFG and its subsidiaries have a targeted savings of $125 million on an annual run rate basis by the end of 2022, of which $25 million has been earned to date (both amounts are on a pre-tax basis);

• “AIG Bermuda” means AIG Life of Bermuda, Ltd, a Bermuda insurance company;

• “AIG FP” means AIG Financial Products Corporation, a consolidated subsidiary of AIG;

• “AIG Group” means American International Group, Inc. and its subsidiaries, including SAFG and SAFG’s subsidiaries;

• “AIG Inc.” means American International Group, Inc., a Delaware corporation;

• “AIGLH” means AIG Life Holdings, Inc., a Texas corporation;

• “AIG Life UK” means AIG Life Ltd, a UK insurance company, and its subsidiary;

• “AIGM” means AIG Markets, Inc., a consolidated subsidiary of AIG;

• “AIGT” means AIG Technologies, Inc., a New Hampshire corporation;

• “AIRCO” means American International Reinsurance Company, Ltd., a consolidated subsidiary of AIG;

• “AMG” means AIG Asset Management (U.S.), LLC;

• “Argon” means Argon Holdco LLC, a wholly owned subsidiary of Blackstone Inc.;

• “Blackstone” means Blackstone Inc. and its subsidiaries;

• “Blackstone IM” means Blackstone ISG-1 Advisors L.L.C.;

• “BlackRock” means BlackRock Financial Management, Inc.;

• “Cap Corp” means AIG Capital Corporation, a Delaware corporation;

• “Eastgreen” means Eastgreen Inc.;

• “Fortitude Re” means Fortitude Reinsurance Company Ltd., a Bermuda insurance company. In 2018, AIG established Fortitude Re, a wholly-owned subsidiary of Fortitude Group Holdings, LLC, in a series of reinsurance transactions related to certain legacy operations. In February 2018, AGL, VALIC and USL entered into modco reinsurance agreements with Fortitude Re and AIG Bermuda novated its assumption of certain long duration contracts from an affiliated entity to Fortitude Re. In the modco agreements, the investments supporting the reinsurance agreements, which reflect the majority of the

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consideration that would be paid to the reinsurer for entering into the transaction, are withheld by, and therefore continue to reside on the balance sheet of, the ceding company (i.e., AGL, VALIC and USL) thereby creating an obligation for the ceding company to pay the reinsurer (i.e., Fortitude Re) at a later date;

• “Laya” means Laya Healthcare Limited, an Irish insurance intermediary, and its subsidiary;

• “Lexington” means Lexington Insurance Company, an AIG subsidiary;

• “LIMRA” means the Life Insurance Marketing and Research Association International, Inc.;

• “Majority Interest Fortitude Sale” means the sale by AIG of a majority of its interests in Fortitude Group Holdings, LLC to Carlyle FRL, L.P., an investment fund advised by an affiliate of The Carlyle Group Inc., and T&D United Capital Co., Ltd., a subsidiary of T&D Holdings, Inc., under the terms of a membership interest purchase agreement entered into on November 25, 2019 by and among AIG, Fortitude Group Holdings, LLC, Carlyle FRL, L.P., The Carlyle Group Inc., T&D United Capital Co., Ltd. and T&D Holdings, Inc.;

• “NUFIC” means National Union Fire Insurance Company of Pittsburgh, PA, a consolidated subsidiary of AIG;

• “NYSE” means the New York Stock Exchange;

• “Reorganization” means the transactions described under the heading “The Reorganization Transactions;”

• “SAFG” means SAFG Retirement Services, Inc., a Delaware corporation;

• “USL” means The United States Life Insurance Company in the City of New York, a New York insurance company;

• “VALIC” means The Variable Annuity Life Insurance Company, a Texas insurance company;

• “VALIC Financial Advisors” means VALIC Financial Advisors, Inc., a Texas corporation; and

• “we,” “us,” “our” or the “Company” means SAFG and its subsidiaries after giving effect to the transactions described under “The Reorganization Transactions.”

Market and Industry Data

This prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms and our own estimates based on our management’s knowledge of, and experience in, the insurance industry and market segments in which we compete. Third-party industry publications and forecasts generally state that the information contained therein has been obtained from sources generally believed to be reliable. Information sourced from LIMRA regarding total annuity sales rankings includes the annuities we offer across our Individual Retirement and Group Retirement segments. Kevin Hogan, our President and Chief Executive Officer and a member of our board of directors (the “Board”), serves as a director of LL Global, the parent company of LIMRA, and Todd Solash, our Executive Vice President and President of Individual Retirement and Life Insurance, serves as a director of the Secure Retirement Institute, a division of LIMRA. Unless otherwise noted, all market data refers to the U.S. market. We have obtained certain information related to Blackstone and its investment funds from Blackstone’s publicly available information, which we believe to be reliable. Although we have no reason to believe the foregoing information is not reliable, we have not independently verified this information and cannot guarantee its accuracy or completeness. This information is subject to a number of assumptions and limitations, and you are cautioned not to give undue weight to it. Our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed in “Risk Factors,” “Special Note Regarding Forward-Looking Statements and Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Service Marks, Trademarks and Trade Names

We use various service marks, trademarks and trade names, such as VALIC and American General, our logo design and Corebridge, that we deem particularly important to the advertising activities conducted by each of our businesses, some of which are owned by AIG. After the completion of this offering, such service marks,

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trademarks and trade names will be the property of our Company or licensed by our Company from AIG. This prospectus also contains trademarks, service marks and trade names of other companies which are the property of their respective holders. We do not intend our use or display of such names or marks to imply relationships with, or endorsements of us by, any other company.

Basis of Presentation

The financial statements in this prospectus were prepared in connection with the proposed separation of AIG’s Life and Retirement business. The financial statements present the consolidated and combined results of operations, financial condition and cash flows of SAFG and its controlled subsidiaries. The financial statements presented for periods on or after December 31, 2021, the date on which the Reorganization was completed, are presented on a consolidated basis, and include the financial position, results of operations and cash flows of the Company. The financial statements for the periods prior to December 31, 2021 are presented on a combined basis, and reflect the historical combined financial position, results of operations and cash flows of SAFG, Cap Corp, AIG Life UK and Laya, as the operations were under common control of AIG and reflect the historical combined financial position, results of operations and cash flows of those legal entities. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All material intercompany accounts and transactions between consolidated or combined entities have been eliminated. The amounts presented in the consolidated financial statements are not comparable to AIG Inc.’s financial statements. The consolidated financial statements reflect customary adjustments for financial statements prepared for, and included in, prospectuses. The consolidated balance sheets include the attribution of certain assets and liabilities that have historically been held at AIG Inc. or certain of its subsidiaries not included in the historically consolidated SAFG financial statements. Similarly, certain assets attributable to shared services managed at AIG Inc. have been excluded from the combined balance sheets. The consolidated statements of income reflect certain corporate expenses allocated to SAFG by AIG Inc. for certain corporate functions and for shared services provided by AIG Inc. These expenses have been allocated to SAFG based on direct usage or benefit where specifically identifiable, with the remainder allocated based upon other reasonable allocation measures. We consider the expense methodology and results to be reasonable for all periods presented. See “Risk Factors—Following the completion of this offering, we may fail to replicate or replace functions, systems and infrastructure provided by AIG or certain of its affiliates (including through shared service contracts) or lose benefits from AIG’s global contracts, and AIG may fail to perform the services provided for in the transition services agreement with AIG (the “Transition Services Agreement”). We also expect to incur incremental costs as a stand-alone public company.”

Our historical financial results included in the consolidated financial statements do not necessarily reflect the business, results of operations, financial condition or liquidity we would have achieved as a stand-alone company during the periods presented or those we will achieve in the future. The consolidated financial statements reflect all adjustments necessary in the opinion of management for a fair presentation of the consolidated financial position of SAFG and its combined results of operations and cash flows for the periods presented.

We have recorded affiliated transactions with certain AIG subsidiaries that are not included within SAFG. As these affiliated transactions are with AIG subsidiaries that are not included within SAFG, they are not eliminated in the combined financial statements of SAFG. See “Certain Relationships and Related Party Transactions—Historical Related Party Transactions” and Note 21 to our audited financial statements.

Currency amounts in this prospectus are stated in United States dollars unless otherwise indicated. Certain amounts in this prospectus may not sum due to rounding. Unless otherwise indicated, all amounts and percentages, including those set forth under “Prospectus Summary—Financial Goals,” “Business—Financial Goals,” and “Business—Our Segments—Individual Retirement—Products—Variable Annuities” are approximate.

State Insurance Regulation

We are subject to regulation under the insurance holding company laws of various jurisdictions. See “Business—Regulation.” Insurance holding company laws generally provide that no person, corporation or other entity may acquire control of an insurance company, or a controlling interest in any direct or indirect parent company of an insurance company, without the prior approval of such insurance company’s domiciliary state insurance regulator. Under the laws of each of the domiciliary states of our U.S. insurance subsidiaries, Missouri, New York and Texas, any person acquiring, directly or indirectly, 10% or more of the voting securities of an

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insurance company is presumed to have acquired “control” of the company, which may consider voting securities held at both the parent company and subsidiary collectively for these purposes. This statutory presumption of control may be rebutted by a showing that control does not exist in fact. State insurance regulators, however, may find that “control” exists in circumstances in which a person owns or controls less than 10% of the voting securities. We are a subsidiary of AIG, our parent company. See “Prospectus Summary—Organizational Structure.” AIG's common stock (its voting securities) trades on the NYSE. Consequently, persons considering an investment in our common stock (our voting securities) should take into consideration their ownership of AIG voting securities and consult their own legal advisors regarding such insurance holding company laws relating to the purchase and ownership of our common stock in light of their particular circumstances.

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PROSPECTUS SUMMARY

The following summary highlights selected information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information you should consider before investing in our common stock. You should carefully read the entire prospectus, including “Risk Factors,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Special Note Regarding Forward-Looking Statements and Information” as well as our financial statements included elsewhere in this prospectus, before making an investment decision. For the definitions of certain capitalized terms, financial terms and acronyms used in this prospectus, please refer to “Certain Important Terms,” “Glossary” and “Acronyms,” respectively.

Our Company

Overview

We are one of the largest providers of retirement solutions and insurance products in the United States, committed to helping individuals plan, save for and achieve secure financial futures. Our addressable markets are large, with powerful, long-term secular trends given an aging U.S. population and a growing need for retirement solutions. We offer a broad set of products and services through our market leading Individual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses, each of which features capabilities and industry experience we believe are difficult to replicate. These four businesses collectively seek to enhance stockholder returns while maintaining our attractive risk profile, which has historically resulted in consistent and strong cash flow generation.

Our strong competitive position is supported by:

• our scaled platform and position as a leading life and annuity company across a broad range of products, managing or administering $410.9 billion in client assets as of December 31, 2021;

• our four businesses, which provide a diversified and attractive mix of fee income, spread income and underwriting margin;

• our broad distribution platform, which gives us access to end customers, employers, retirement plan sponsors, banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents;

• our proven expertise in product design, which positions us to optimize risk-adjusted returns as we grow our business;

• our strategic partnership with Blackstone, which we believe will allow us to further grow both our retail and institutional product lines, and enhance risk-adjusted returns;

• our high-quality liability profile, supported by our strong balance sheet and disciplined approach to risk management, which has limited our exposure to product features and portfolios with less attractive risk-adjusted returns;

• our ability to deliver consistent cash flows and an attractive return for our stockholders; and

• our strong and experienced senior management team.

Operating four established, at-scale businesses positions us to optimize risk-adjusted returns when writing new business across our broad suite of market-leading products. According to LIMRA, we are the only company to rank in the top two in U.S. annuity sales in each of the last nine years, with leading positions across each of the fixed, fixed index and variable annuity categories. Our Group Retirement business is recognized as a pioneer and has long held a leading position in the attractive 403(b) retirement plan market through our AIG Retirement Services brand. We ranked in the top 10 in total term life insurance sales in 2021.

We believe we have an attractive business mix that balances fee and spread-based income sources and is diversified across our broad product suite. In 2021, our businesses generated fee income of $2.4 billion, spread income of $4.4 billion and underwriting margin of $1.2 billion, resulting in a balanced mix of 30%, 55% and

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15%, respectively, among these income sources. We are well-diversified across our operating businesses with our Individual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses representing 30%, 16%, 23% and 25% of total adjusted revenue, respectively, for the year ended December 31, 2021.

 

Our diversified business model is enabled by our long-standing distribution relationships that are distinguished through both their breadth and depth. We have a large distribution platform in the U.S. life and retirement market, with a wide range of relationships with financial advisors, insurance agents and plan sponsors, as well as our own career financial advisors and direct-to-consumer platform. AIG Financial Distributors (“AIG FD”), our sales platform, serves as a valuable partner to our third-party distributors, including banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents. Many of our partners have sold our products for multiple decades and as of December 31, 2021, our top 25 partners generated approximately 13% of their total sales volume through our products. We also provide customized products and services to help meet consumer needs. In our Group Retirement business, our approximately 1,300 career financial advisors as of December 31, 2021 provide us with the opportunity, as permitted by employer guidelines, to work with approximately 1.7 million individuals, as of December 31, 2021, in employer-defined contribution plans (“in-plan”) and over 300,000 individuals outside of the traditional employer-sponsored pension plans (“out-of-plan”). Our financial advisors are positioned to guide individuals as they invest through employer programs, and to build relationships resulting in the continued provision of advice and guidance over the course of their savings and retirement journey. The strength of these relationships is illustrated by our strong client retention rate of over 90% in 2021.

A disciplined approach to investment management is at the core of our business. We believe our recently announced strategic partnership with Blackstone will allow us to leverage Blackstone’s ability to originate, and significantly enhance our ability to invest in, attractive and privately sourced fixed-income oriented assets that we believe are well suited for liability-driven investing within an insurance company framework. Additionally, we believe BlackRock's scale and fee structure make BlackRock an excellent outsourcing partner for certain asset classes and will allow us to further optimize our investment management operating model while improving overall performance.

We believe we have a strong balance sheet that has resulted from decades of focus on effective and prudent risk management practices. We have employed a consistent, disciplined approach to product design and risk selection, resulting in a high-quality liability profile. For example, our broad retail and institutional product suite allows us to be selective in liability origination, and our ability to quickly refine our offerings in response to market dynamics allows us to be opportunistic when we identify areas of attractive risk-adjusted returns. We have a well-managed annuity liability portfolio, with product structures and hedging strategies designed to manage our exposure to living and death benefits. For example, our individual fixed and fixed index annuities represent approximately 56% of our Individual Retirement AUMA as of December 31, 2021, and the vast majority of our AUMA in these products has no exposure to any optional living or death benefits. Our individual variable annuities with living benefits, which represent only 33% of our Individual Retirement AUMA as of December 31, 2021, were predominantly originated after the 2008 financial crisis, and as of December 31, 2021, 96% of our Group Retirement variable annuities have no living benefits.

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We have also fully reinsured our limited exposure to long-term care (“LTC”) policies. Our risk management approach includes an efficient hedging program designed to manage risk exposure to our balance sheet, the careful management of our asset-liability matching and the use of reinsurance. We believe our strong risk management framework will continue to help us manage market volatility, optimize our capital and produce attractive stockholder returns.

We believe that our strong competitive position and our enhanced focus on growth as a stand-alone company position us well to capitalize on compelling structural changes in the life and retirement market. We expect our target market of individuals planning for retirement to continue to grow, with the size of the U.S. population age 65 and over expected to increase by approximately 30% by 2030 from 2020. In addition, we believe that reduced employer-paid retirement benefits will drive an increasing need for our individual retirement solutions. Further, consumers in the United States continue to prefer purchasing life insurance and retirement products through an agent or advisor, which positions us favorably given our broad distribution platform and in-house advice capabilities. We continue to see opportunities to develop new products and adapt our existing products to the growing needs of individuals to plan, save for and achieve secure financial futures. In addition, the domestic pension risk transfer (“PRT”) market has grown from $3.8 billion in premiums in 2013 to $38.1 billion in 2021, and our presence in this market provides us with opportunities to assist employers that choose to close and transfer obligations under their defined benefit plans.

Our Businesses

Our businesses share common commitments to customer value and disciplined pricing, and each business benefits from enterprise-wide risk management infrastructure, investment management capabilities, hedging strategies and administrative platforms. We have four operating businesses:

• Individual Retirement — We are a leading provider in the $255 billion individual annuity market across a range of product types, including fixed, fixed index and variable annuities, with $13.7 billion in premiums and deposits in 2021. We offer a variety of optional benefits within these products, including lifetime income guarantees and death benefits. Our broad and scaled product offerings and operating platform have allowed our company to rank in the top two in total individual annuity sales in each of the last nine years, and we are the only top 10 annuity provider with a balanced mix of products across all major annuity categories according to LIMRA. Our strong distribution relationships and broad multi-product offerings allow us to quickly adapt to respond to shifting customer needs and economic and competitive dynamics, targeting areas where we see the greatest opportunity for risk-adjusted returns. We are well-positioned for growth due to demographic trends in the U.S. retirement market, supported by our strong platform. Our Individual Retirement business is the largest contributor to our earnings, historically generating consistent spread and fee income.

• Group Retirement — We are a leading provider of retirement plans and services to employees of tax-exempt and public sector organizations within the K-12, higher education, healthcare, government and other tax-exempt markets, having ranked third in K-12 schools, fourth in higher education institutions and fifth in healthcare institutions by total assets as of June 30, 2021. According to Cerulli Associates Inc. (“Cerulli Associates”), the size of the not-for-profit defined contribution retirement plan market, excluding the Federal Thrift Savings Plan, was $1.9 trillion in 2020. We work with approximately 1.7 million individuals as of December 31, 2021 through our in-plan products and services and over 300,000 individuals through our out-of-plan products and services. Our out-of-plan capabilities include proprietary and non-proprietary annuities, financial planning, brokerage and advisory services. We offer financial planning advice to employees participating in retirement plans through our career financial advisors. These advisors allow us to develop long-term relationships with our customers by engaging with them early in their careers and providing customized solutions and support. Approximately 26% of our individual customers have been customers of our Group Retirement business for more than 20 years and the average length of our relationships with plan sponsors exceeds 28 years. Our strong customer relationships have led to growth in our AUMA, evidenced by stable in-plan spread-based assets, growing in-plan fee-based assets and growing out-of-plan assets. Our Group Retirement business generates a combination of spread and fee income. While the revenue mix remains balanced, we have grown our advisory and brokerage fee revenue over the last several years, which provides a less capital intensive stream of cash flows.

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• Life Insurance — We offer a range of life insurance and protection solutions in the approximately $159 billion U.S. life insurance market (based on premium) as of December 31, 2021, according to the Insurance Information Institute, with a growing international presence in the UK and Ireland. We are a key player in the term, indexed universal life and smaller face whole life markets; ranking as a top 15 seller of term, universal and whole life products as of December 31, 2021. Our competitive and flexible product suite is designed to meet the needs of our customers, and we actively participate in product lines that we believe have attractive growth and margin prospects. Further, we have strong third-party distribution relationships and a long history in the direct-to-consumer market, providing us with access to a broad range of customers from the middle market to high net worth. We have also been working to automate certain underwriting reviews so as to make decisions on applications without human intervention, and we reached a decision on approximately 45% of all underwriting applications in 2021 on an automated basis. As of December 31, 2021, we had approximately 4.5 million in-force life insurance policies in the United States, net of those ceded to Fortitude Re. Our Life Insurance product portfolio generates returns through underwriting margin.

• Institutional Markets — We serve the institutional life and retirement insurance market with an array of products that include PRT, institutional life insurance sold through the bank-owned life insurance and corporate-owned life insurance markets, stable value wraps and structured settlements. We are also active in the capital markets through our funding agreement-backed note (“FABN”) program. We provide sophisticated, bespoke risk management solutions to both financial and non-financial institutions. Historically, a small number of incremental transactions have enabled us to generate significant new business volumes, providing a meaningful contribution to earnings, while maintaining a small and efficient operational footprint. We believe that market trends will contribute to growth in our stable value wrap product. Our Institutional Markets products generate earnings primarily through net investment spread, with a smaller portion of fee-based income and underwriting margin.

Our Distribution Platform

We have built a leading distribution platform through a range of partnerships. Our distribution platform includes banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents, as well as our career financial advisors, plan consultants, employers, specialized agents and a direct-to-consumer platform. We believe our distribution relationships are difficult to replicate and are strengthened by the breadth of our product offerings and long history of partnership. This platform includes:

• AIG FD — We have a specialized team of approximately 500 sales professionals who partner with and grow our non-affiliated distribution on our broad platform, which includes banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents. Our direct-to-consumer platform, AIG Direct, primarily markets to middle market consumers through a variety of direct channels, including several types of digital channels such as search advertising, display advertising and email as well as direct mail.

• Group Retirement — We have a broad team of relationship managers, consultant relationship professionals, business acquisition professionals and distribution leaders that focus on acquiring, serving and retaining retirement plans. Our affiliated platform, VALIC Financial Advisors, which includes approximately 1,300 career financial advisors as of December 31, 2021, focuses on our Group Retirement business, guiding individuals in both in-plan and out-of-plan investing.

• Institutional Relationships — We have strong relationships with insurance brokers, bankers, asset managers, pension consultants and specialized agents who serve as intermediaries in our institutional business.

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The following chart presents our sales by distribution channel for the year ended December 31, 2021, including premiums, deposits and other consideration for Individual Retirement and Group Retirement and sales on a periodic basis for Life Insurance⁽¹⁾, excluding Institutional Markets and $31.1 million and $0.7 million from AIG Direct and AIG Financial Network, respectively.

 

(1)
Life Insurance sales, excluding contributions from AIG Direct and AIG Financial Network on a periodic basis, totaled $281 million through the Independent Agents channel for the year ended December 31, 2021.

Our Strategic Partnership with Blackstone

We recently entered into a strategic partnership with Blackstone that we believe has the potential to yield significant economic and strategic benefits over time. We believe that Blackstone’s ability to originate, and our enhanced ability to invest in, attractive and privately sourced, fixed-income oriented assets, will be accretive to our businesses and provide us with an enhanced competitive advantage.

Pursuant to the partnership, Blackstone manages $50 billion of assets in our investment portfolio, with that amount increasing by $8.5 billion in each of the next five years beginning in the fourth quarter of 2022 for an aggregate of $92.5 billion by the third quarter of 2027. We expect Blackstone to invest these assets primarily in Blackstone-originated investments across a range of asset classes, including private and structured credit. Blackstone’s typical credit and lending strategy is to seek to control all significant components of the underwriting and pricing processes with the goal of facilitating bespoke opportunities with historically strong credit protection and attractive risk-adjusted returns. Blackstone seeks to capture enhanced economics to those available in the traditional fixed income markets by going directly to the lending source.

With a market capitalization in excess of $146 billion and $881 billion of AUM as of December 31, 2021, Blackstone is one of the most recognized firms in asset management. Blackstone operates across asset categories, including real estate (both equity and debt), corporate private equity, credit, hedge fund management, infrastructure and secondaries. In addition to its role as the world’s largest real estate investor, with $279 billion of investor capital under management as of December 31, 2021, Blackstone owns and operates one of the world’s largest private real estate debt businesses, Blackstone Real Estate Debt Strategies, which has generated over $102 billion of gross loan commitments over its 13-year operating history. Separately, Blackstone Liquid Credit is one of the world’s largest originators of private credit, with $243 billion in total AUM as of December 31, 2021 and is one of the longest-tenured investors in the U.S. direct lending market with a 16-year performance history and approximately $65 billion invested from 2006 to December 31, 2021.

Blackstone will manage a portfolio of private and structured credit assets as described above, where we believe Blackstone is well-positioned to add value and drive new originations. We continue to manage asset allocation and portfolio-level risk management decisions with respect to any assets managed by Blackstone, ensuring that we maintain a consistent level of oversight across our entire investment portfolio.

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As part of our partnership, Blackstone acquired a 9.9% position in our common stock, aligning its economic interests with our stockholders. See “Certain Relationships and Related Party Transactions—Partnership with Blackstone.” This $2.2 billion investment, subject to post-closing adjustments, represented the largest corporate investment in Blackstone’s firm history.

Our Expected Investment Management Arrangement with BlackRock

We have entered into a binding letter of intent with BlackRock pursuant to which certain of our insurance company subsidiaries will enter into separate investment management agreements with BlackRock prior to the offering (the “BlackRock Arrangement”). We expect to transfer the management of up to $90 billion of liquid fixed income and certain private placement assets in the aggregate to BlackRock over a period of 12 months in connection with the BlackRock Arrangement. We expect the BlackRock Arrangement will provide us with access to market-leading capabilities, including portfolio management, research and tactical strategies in addition to a larger pool of investment professionals. We believe BlackRock’s scale and fee structure make BlackRock an excellent outsourcing partner for certain asset classes and will allow us to further optimize our investment management operating model while improving overall performance. See “Business—Our Segments—Investment Management—Our Expected Investment Management Arrangement with BlackRock.”

Our Historical Results and Capital Management

We have a history of consistent and strong results. Our well-diversified, attractive risk-adjusted return profile results from a combination of fee and spread-based income and has historically provided stability through market cycles. Our statutory capital position has been strengthened by our consistent capital generation, and our risk-based capital ratio across our primary life insurance companies, AGL, USL and VALIC (“Life Fleet RBC”) was 447% as of December 31, 2021, consistent with our target Life Fleet RBC ratio of above 400%. We intend to allocate excess capital opportunistically to invest in our business and return capital to stockholders while maintaining a strong ratings profile.

Market Opportunities

We believe that several market dynamics will drive significant demand for our products and services. These dynamics include the aging of the U.S. population and the resulting generational wealth transfer, the strong consumer preference for financial planning advice, the continued reduction of corporate defined benefit plans and the significant life insurance protection gap for consumers. We believe our businesses are well-positioned to capitalize on the opportunities presented by these long-term trends.

Large and growing retirement-aged population in the U.S.

According to the U.S. Census Bureau, there were approximately 56 million Americans age 65 and older in 2020, representing 17% of the U.S. population. By 2030, this segment of the population is expected to increase by 17 million, or 30%, to approximately 73 million Americans, representing 21% of the U.S. population. Technological advances and improvements in healthcare are projected (notwithstanding near-term COVID-19 impacts) to continue to contribute to increasing average life expectancy. Accordingly, aging individuals must be prepared to fund retirement periods that will last longer than those of previous generations. We believe these longer retirement periods will result in increased demand for our retirement products. Further, Cerulli Associates estimates that by the end of 2042, $70 trillion will change hands from aging households passing on their wealth, providing a significant opportunity for our annuities, life insurance and investment products.

Strong consumer preference for financial planning advice

According to LIMRA, U.S. consumers continue to favor purchasing life insurance in person through an agent or advisor compared to another channel, with 93% of annuities being purchased through financial professionals for the year ended December 31, 2020, despite the impact of the COVID-19 pandemic. According to Cerulli Associates, 31% of U.S. retirees prefer to seek retirement advice from financial professionals, the most popular avenue for retirement advice in this demographic, and 20% of U.S. active workers prefer to engage financial professionals for retirement planning. Also according to Cerulli Associates, financial professionals are also the most popular option for retirement planning services for U.S. active workers with $100,000 or more in assets, and nearly half of U.S. active workers with $500,000 or more in assets prefer to receive retirement advice

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from a financial professional. Due to the complexity of financial planning, we believe that many consumers will continue to seek advice in connection with the purchase of these products, providing a competitive advantage to our broad distribution platforms and in-house advice capabilities.

Reduced corporate safety net

According to the Employee Benefits Research Institute, the percentage of private-sector wage and salary workers participating in only a defined benefit pension plan decreased from 28% in 1979 to just 1% in 2019. By contrast, the percentage participating in only defined contribution pension plans jumped from 7% to 41%. These statistics demonstrate the increasing need for individuals to seek private solutions to retirement planning and lifetime income. We believe that the dramatic and continuous shift of private-sector worker plan coverage will drive continued demand for our products and expertise. In addition, as more employers close defined benefit plans and look to transfer some or all of their obligations to pay retirement benefits, the domestic PRT market has grown from $3.8 billion in premiums in 2013 to $38.1 billion in 2021, a trend that we expect to continue.

Growing life insurance protection gap and increased awareness of life insurance need due to COVID-19 pandemic

According to LIMRA, almost half (48%) of American adults in 2021 do not own any form of life insurance, an increase of two percentage points from 2020 and eight percentage points from 2016. Against this trend, the COVID-19 pandemic is expected to increase consumer demand for life insurance, with almost one-third of Americans (31%) saying they are more likely to purchase coverage because of the pandemic, according to LIMRA. We believe the COVID-19 pandemic has highlighted the importance of our protection products and will have a lasting effect on consumers’ attitudes toward purchasing life insurance.

Our Competitive Strengths

Scaled platform with leading positions across a broad suite of products. Our scaled businesses collectively manage $410.9 billion of AUMA as of December 31, 2021, and we generated $30.6 billion of premiums and deposits and $2.4 billion in fee income for the year ended December 31, 2021. We have approximately $12.5 billion of statutory capital and surplus as of December 31, 2021, which makes us the eighth largest life and annuity company in the United States. We have $19.5 billion of GAAP shareholders’ equity, excluding accumulated other comprehensive income (“AOCI”) net of Fortitude Re funds withheld, as of December 31, 2021. We believe our scale provides us with significant operating and competitive advantages, including our importance to our distribution partners and our ability to utilize investments in technological and operational efficiencies to benefit customers.

We maintain leading positions across multiple products and we have in many cases held these leading positions for decades. According to LIMRA, in 2021 we ranked second in total annuity sales while ranking fourth, third and fifth across fixed, fixed index and variable annuities, respectively. We hold top five market positions in K-12 education, higher education and healthcare institutions group retirement assets as of June 30, 2021, while ranking in the top 10 in government group retirement assets as of June 30, 2021, and in the top 10 in term life sales as of December 31, 2021. In recent years, we have also experienced significant growth in advisory-based assets across both in-plan and out-of-plan products.

Our breadth of products allows us to manage our businesses to prioritize value over volume. We have the flexibility to allocate resources towards areas that we believe present the highest available risk-adjusted returns across our portfolio. We manage sales of our portfolio of products and services based on consumer demand and our view of profitability and risk across the markets in which we compete. We believe that this approach allows us to deliver consistent performance over time through a wide range of economic conditions and market environments.

Diversified and attractive business mix. Our business mix is well-balanced by both product type and revenue source. In 2021, our four operating businesses collectively generated $5.6 billion in premiums, $3.1 billion in policy fees and $9.9 billion in net investment income excluding Fortitude Re funds withheld assets, contributing to a total of $23.4 billion in total revenue, including Fortitude Re. Our adjusted revenue is spread across our four operating businesses with Individual Retirement, Group Retirement, Life Insurance and Institutional Markets accounting for 30%, 16%, 23% and 25%, respectively, in 2021.

Our diversified financial model generates earnings through a combination of spread income, fee income and underwriting margin. In 2021, our spread-based income totaled $4.4 billion, our fee-based income totaled $2.4 billion and our underwriting margin was $1.2 billion, providing a balanced mix of 55% spread-based

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income, 30% fee-based income, and 15% underwriting margin, in each case as a percentage of the total of these income sources. For further discussion regarding our earnings, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Financial Measures and Key Operating Metrics—Key Operating Metrics—Fee and Spread Income and Underwriting Margin.”

Broad distribution platform giving us access to customers and financial intermediaries. We have a leading distribution platform with a range of partnerships and capabilities across the value chain and a culture of focus on the customer. We believe our distribution relationships are strengthened by the breadth of our product offerings and our high-touch client services. Our distribution capabilities include:

• AIG FD has approximately 500 specialized sales professionals that leverage our strategic account relationships and other partnerships to address multiple client needs. This platform is primarily focused on our non-affiliated distribution through banks, broker-dealers and independent marketing organizations, and specializes in aligning our robust product offering of over 160 life and annuity products with individual partner preferences, reaching independent advisors, agencies and other firms. AIG FD primarily facilitates distribution for our Individual Retirement and Life Insurance businesses, including providing certain partners a unified coverage model that allows for distribution of both our life insurance and annuity products.

• Individual Retirement maintains a growing multi-channel distribution footprint built on long-term relationships. As of December 31, 2021, our footprint included over 25,000 advisors and agents actively selling our annuities in the prior twelve months, accessed through long-term relationships with approximately 700 firms distributing our annuity products. These advisors and agents included over 8,500 new producers who sold our annuity products for the first time in twelve months.

• Life Insurance has a well-balanced distribution footprint that reaches over 35,000 independent agents as of December 31, 2021, who actively sell our life insurance solutions, through diverse independent channels as well as a direct-to-consumer model. We had access to over 1,000 managing general agents (“MGAs”) and brokerage general agents (“BGAs”) in 2021. In addition to our non-affiliated distribution, our life insurance policies are sold through AIG Direct, our direct-to-consumer brand with more than 140 active agents as of December 31, 2021, which represented 12% of our life insurance sales in 2021.

• Group Retirement is supported by a broad team of relationship managers, consultant relationship professionals and business acquisition professionals that focus on acquiring, serving and retaining retirement plans with more than 22,000 plan sponsor relationships as of December 31, 2021. Also, VALIC Financial Advisors helps build relationships with employees through our holistic and vertically-integrated offering. Our field force of approximately 1,300 career financial advisors, as of December 31, 2021, comprises experienced field and phone-based financial advisors, retirement plan consultants and experienced financial planners with an average of nearly 10 years of tenure with VALIC Financial Advisors. These professionals provide education, financial planning and retirement advice to individuals participating in their employer sponsored plan. Due to the relationships built with individuals and employers, our financial professionals can, as permitted by employer guidelines, build broad relationships to provide financial planning, advisory and retirement solutions to approximately 1.7 million individuals through our in-plan products and services and over 300,000 individuals through our out-of-plan products and services, as of December 31, 2021.

• Institutional Markets largely writes bespoke transactions and works with a broad range of consultants and brokers, maintaining relationships with insurance brokers, bankers, asset managers and specialized agents who serve as intermediaries.

We focus on maintaining strong and longstanding relationships with our partners and seek to grow our volumes with intermediaries. As of December 31, 2021, we represented approximately 13% on average of the total sales volume of our top 25 third-party distribution partners for our annuities. These partners have been with our platform for an average of over 24 years, with nine of them for 30 years or more. Each of our distribution

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platforms has a different strategy. For example, our wholesale operations, through AIG FD, provide high-touch customer service to our intermediaries and seek to help them grow in tandem with our business, while our VALIC Financial Advisors allows us to develop deep and trust-centered relationships directly with individuals to support their broader retirement and insurance needs.

Proven ability to design innovative products and services. Our ability to innovate has contributed to our ability to maintain leading market positions and capitalize on profitable growth opportunities while carefully managing risk, including interest rate and equity risk within our products. The culture of innovation is deeply ingrained in our business and goes back decades. For example, our business issued the first 403(b) annuity contract in a K-12 school system over 50 years ago, to a client that continues to be one of our largest in the Group Retirement business. More recently, we accelerated the growth of our fixed index annuity platform, growing from negligible operations in 2012 to the third-largest player by sales in 2020. This growth was supported by regular product innovation, including exclusive products provided to select distributors with innovative living benefits and customized indices. Fixed index annuities are now our largest Individual Retirement product category by premiums and deposits. We also launched the first fixed index annuity with a living benefit for sale in New York State. We introduced novel risk management features in our variable annuity products with living benefits, including VIX-indexed fee structures and a required fixed account allocation, each of which are now present in 90% of our in-force variable annuity products with living benefits as of December 31, 2021and present in all of our new variable annuity sales in 2021. Within our PRT business, we have developed new product offerings and solutions to participate in complex plan terminations, and are developing longevity swap products to enhance our deal execution capabilities.

Our strategic partnership with Blackstone. Blackstone is expected to originate, and significantly enhance our ability to invest in, attractive and privately sourced, fixed-income oriented assets that are well-suited for liability-driven investing within an insurance company framework. We believe these expanded investment capabilities will improve our investment returns,accelerate our product innovation and enhance the competitiveness of our products. When scaled across our businesses, we believe these expanded capabilitiescan provide a significant catalyst for future growth.

High-quality liability profile supported by a strong balance sheet and disciplined approach to risk management. We believe our diverse product portfolio and history of disciplined execution have produced a strong balance sheet that is expected to generate significant cash flows over time. First, our disciplined risk selection has resulted in a high-quality liability profile with limited-to-no exposure to “challenged” product portfolios. We have minimal gross exposure, and no net exposure, to LTC policies, which we have fully reinsured to Fortitude Re. Additionally, we have well-managed and limited exposure to optional guarantees within our individual annuity portfolio. As of December 31, 2021, individual annuities with living benefits represented less than 17% of total AUMA, with 4% of these related to guarantees on fixed and fixed index annuities. Our historically profitable variable annuity portfolio has benefited from disciplined risk selection and product design with, as of December 31, 2021, 60% of the portfolio having no guaranteed living benefits and 6% of variable annuity reserves attributable to living benefit business written prior to 2009. In our Institutional Markets business, we offer certain products, such as stable value wraps (“SVWs”), without significant mortality or longevity exposure. Furthermore, the breadth of our Institutional Markets offering allows us to be selective in our liability generation and allocate capital towards the areas where we see the greatest risk-adjusted returns.

Our balance sheet is supported by our strong capital position and high-quality investment portfolio. As of December 31, 2021, we had a Life Fleet RBC ratio of 447%, consistent with our target Life Fleet RBC ratio of above 400%. We intend to manage our financial leverage appropriately with a target financial leverage ratio of 25% to 30%. See “Glossary” for the definition of financial leverage ratio. Our investment portfolio is primarily invested in fixed income securities, 92% of which are designated investment grade by the NAIC as of December 31, 2021.

We also have an active hedging program for our living benefit guarantees, which is informed by our view of the economic liability of the business and is intended to provide protection against adverse market scenarios that could cause the value of the associated liability to increase. In addition, we have an active asset-liability management (“ALM”) program that seeks to closely match the characteristics of our asset portfolio with the characteristics of our liabilities.

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Ability to deliver consistent cash flows and attractive returns for stockholders. Through our scaled and diverse businesses, underpinned by our strong balance sheet and disciplined approach to risk management, we have delivered consistent earnings and cash flows to our parent company. We have also delivered an attractive return on equity, despite the challenging macroeconomic environment with low interest rates and the impact of the COVID-19 pandemic.

Experienced management team. We have a strong and experienced senior management team with a range of backgrounds across insurance, financial services and other areas of expertise. Our senior management team has an average of over 25 years of experience in the financial services industry.

Our Strategy

Leverage our platform to deliver increased earnings. There are significant trends supporting the growth of each of our four businesses, and we believe that we are positioned to take advantage of these trends to achieve targeted growth opportunities.

• We believe we can leverage our broad platform to benefit from changing Individual Retirement market dynamics. We intend to maintain and expand our products to provide income and accumulation benefits to our customers. For example, we recently broadened our product portfolio to include a fee-based fixed index annuity to meet the needs of our investment advisor distribution partners. Through our customized wholesaling model, we plan to capitalize on this opportunity by leveraging both external and proprietary data to identify the highest value opportunities at both the distribution partner and financial professional level.

• We believe our high-touch model is well-tailored for many employers in the not-for-profit retirement plan market and enables us to help middle market and mass affluent individuals achieve retirement security. Specifically, our career financial advisors provide education and advice to plan participants while accumulating assets in-plan and can seek to serve more of the participant’s financial needs during their lifetime beyond the in-plan relationship, as permitted by employer guidelines. As of December 31, 2021, we have a large extended customer base of approximately 1.7 million plan participants to whom we have access through our in-plan Group Retirement offerings and 300,000 former plan participants we serve through our out-of-plan Group Retirement offerings. With in-plan income solutions beginning to emerge, we are well-positioned to benefit from market needs. Moreover, by continuing to offer investment advisory services and third-party annuity products, we expect to capture additional fee-based revenue while providing our clients attractive financial solutions outside of the scope of our own product suite.

• Our Life Insurance business has an opportunity to help close the current protection gap in the United States and offer value to our customers internationally. For example, we have begun to offer simplified and less expensive insurance options to middle market pre-retirees looking for final expense protection through the launch of our new Simplified Issue Whole Life (“SIWL”) product in the fourth quarter of 2021. Additionally, we expect our strong performance in the term life insurance market to accelerate through enhanced consumer awareness of life insurance coupled with an improved new business process. Our long history in the direct-to-consumer market through a variety of direct-to-consumer channels provides valuable insights and experience for these opportunities.

• Our Institutional Markets business has developed relationships with brokers, consultants and other distribution partners to drive increased earnings for its products. We expect to continue to achieve attractive risk-adjusted returns through PRT deals by focusing on the larger end of the full plan termination market where we can leverage our differentiated capabilities around managing market risks, asset-in-kind portfolios and deferred participant longevity. Additionally, we plan to grow our guaranteed investment contract (“GIC”) portfolio by expanding our FABN program. We believe that our Blackstone partnership will differentiate our competitive position by providing assets with a duration, liquidity and return profile that are well-suited to our Institutional Markets offerings, allowing us to grow our transaction volume.

Leverage our strategic partnership with Blackstone to create differentiated pricing and liability sourcing. Blackstone is a market-leading alternative investment manager with significant direct asset origination capabilities, representing additional opportunities for us to source the fixed-income oriented assets needed to back

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our liabilities and enhance risk-adjusted returns. We intend to use our collective asset origination and investment management capabilities to help drive value and growth for all of our businesses.

Drive further cost reduction and productivity improvement across the organization.

We have identified opportunities to improve profitability across our businesses through operating expense reductions, without impacting our ability to serve our existing clients, and in many cases enhancing our service capabilities, to enable growth in our businesses. We aim to achieve an annual run rate expense reduction of $200 million to $300 million on a pre-tax basis within three years of this offering. To achieve this goal, we have created a productivity improvement program with a one-time expense of $200 million and intend to complete our “AIG 200” savings of $125 million on an annual run rate basis by the end of 2022, of which $25 million has been earned to date (all such amounts presented on a pre-tax basis). In particular, we plan to:

• simplify our customer service model and modernize our technology infrastructure with more efficient, up-to-date alternatives, including cloud migration and cloud-based solutions;

• further optimize our functional operating model;

• build on existing partnership arrangements to further improve scale and drive spend efficiency through technology deployment and process optimization;

• rationalize our real estate footprint to align with our business strategy, future operating model and organizational structure; and;

• optimize our vendor relationships to drive additional savings.

Apart from the above, we intend to evolve our investments organization, which we expect will create additional efficiencies, to reflect our relationships with key external partners, our expected implementation of BlackRock’s “Aladdin” investment management technology platform and our expected reduction in fees from AIG for asset management services.

For additional information about our cost reduction and productivity improvements across the organization, see “Risk Factors—Our productivity improvement initiatives may not yield our expected expense reductions and improvements in operational and organizational efficiency.”

Closely manage capital to continue to provide strong cash flow for stockholders. We have historically provided strong cash flows from our existing businesses to our parent company, and we intend to continue to manage our businesses to produce meaningful returns to stockholders through potential dividends and share repurchases. We also intend to closely manage our in-force portfolio, seek to ensure that new business is profitable and proactively manage our businesses to optimize returns within and across portfolios.

Financial Goals

We have designed our financial goals to maintain a strong balance sheet while delivering disciplined profitable growth. We have established the following financial goals, based on the assumptions below, which we believe best measure the execution of our business strategy and align with our stockholders’ interests.

• Life Fleet RBC of at least 400%;

• Return of capital to stockholders equal to 60-65% of adjusted after-tax operating income attributable to our common stockholders (“AATOI”) consisting of common stockholder dividends of between $400 million and $600 million each year and share repurchases, subject to approval by our Board (see “Dividend Policy”); and

• Adjusted ROAE in the range of 12% to 13% based on current accounting rules in effect on the date hereof and without giving effect to any changes resulting from the adoption of the new accounting standard for long duration contracts.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Financial Measures and Key Operating Measures—Non-GAAP Financial Measures” for a discussion of AATOI and Adjusted ROAE.

These financial goals are based on certain assumptions, including assumptions regarding interest rates, geopolitical stability and market performance.

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While these goals are presented with numerical specificity, and we believe such goals to be reasonable as of the date of this prospectus, given the uncertainties surrounding such assumptions, there are significant risks that these assumptions may not be realized and as a result, the financial goals may not be achieved in whole or in part. We caution you that these goals are not guarantees of future performance or outcomes and that actual performance and outcomes, including our actual results of operations, may differ materially from those suggested by these goals, particularly if actual events adversely differ from one or more of our key assumptions. The financial goals and their underlying assumptions are forward-looking statements and other risks, uncertainties and factors, including those discussed in “Risk Factors,” could cause our actual results to differ materially from those projected in any forward-looking statements we make. You should read carefully the factors described in “Risk Factors,” “Special Note Regarding Forward-Looking Statements and Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements, including with respect to these financial goals. These goals are made only as of the date of this prospectus, and we do not undertake any obligation to update or revise any goals to reflect the occurrence of events, changes in assumptions or adjustments in such financial goals, unanticipated or otherwise, other than as may be required by law. In addition, we expect our financial goals to evolve over time to reflect changes in our business strategies and our balance sheet mix.

For additional information about our financial goals, including a non-exclusive list of the underlying assumptions and certain risks, see “Business—Financial Goals” and “Risk Factors—Our business strategy may not be effective in accomplishing our objectives, including as a result of events that can cause our fundamental business model to change and assumptions that may prove not to be accurate.”

Our History and Development

SAFG is currently a direct, majority-owned subsidiary of AIG Inc., a leading global insurance organization. AIG Inc. provides a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to customers in approximately 80 countries and jurisdictions. Our life insurance subsidiaries have a long track record of serving the financial needs of policyholders and distributors in the United States and trace their corporate history back to 1850 with the formation of The United States Life Insurance Company in the City of New York. We further expanded with the acquisition of SunAmerica Inc., a leading retirement and financial services company in 1999, and American General Corporation, a leading life insurer in 2001. Through our various life insurance subsidiaries, we are licensed to conduct life insurance and annuity business in all 50 states in the United States and the District of Columbia and in the UK and Bermuda. Neither AIG nor any affiliate of AIG will have any obligation to provide additional capital or credit support to us following closing of this offering.

On November 2, 2021, Blackstone invested $2.2 billion, subject to post-closing adjustments, in the Company for approximately 9.9% of our outstanding common stock. In addition, we entered into various asset management agreements with Blackstone pursuant to which Blackstone manages $50 billion of assets in our investment portfolio as of December 31, 2021, with that amount increasing by $8.5 billion in each of the next five years beginning in the fourth quarter of 2022 for an aggregate of $92.5 billion by the third quarter of 2027. See “Certain Relationships and Related Party Transactions—Partnership with Blackstone.”

Organizational Structure

We are currently in the process of an internal reorganization (the “Reorganization”). The Reorganization’s primary goals are to ensure that we will hold all of AIG Group’s life and retirement business and substantially all of AIG Group’s investment management operations prior to the consummation of this offering. See “The Reorganization Transactions.”

AIG will hold approximately    % of our common stock (or    % if the underwriters exercise their option to purchase additional shares from the selling stockholder) and Blackstone will hold approximately 9.9% of our common stock after the consummation of the Reorganization and this offering. As a result, we will continue to be a “controlled company” within the meaning of the NYSE corporate governance standards following the consummation of the offering. This status will allow us to rely on exemptions from certain corporate governance requirements otherwise applicable to NYSE-listed companies. See “Management—Corporate Governance.”

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The following chart illustrates our organizational structure (including the jurisdiction of incorporation of each respective entity) after giving effect to the Reorganization and this offering, assuming the underwriters do not exercise their option to purchase additional shares from the selling stockholder. The chart reflects only certain of our subsidiaries and has been simplified for illustrative purposes. All ownership percentages shown below are 100% unless otherwise noted.

 

Following this offering, AIG will continue to hold a majority of our outstanding common stock, and as a result AIG will continue to have control of our business, including pursuant to the agreements described in “Certain Relationships and Related Party Transactions—Relationship with AIG Following this Offering.” In addition, Blackstone will have corporate governance, consent and information rights with respect to us under the Blackstone Stockholders' Agreement as described in “Certain Relationships and Related Party Transactions—Partnership with Blackstone.”

Capital Structure

We have historically operated with a capital structure that reflected our status as a subsidiary of AIG. To prepare for this offering and operation as a stand-alone public company, we will undertake a number of recapitalization and financing initiatives designed to provide an efficient and flexible capital structure, similar to those of our U.S. public company peers (the “Recapitalization”). Specifically, we expect to enter into letters of credit and a revolving credit facility, and we have entered into delayed draw term loan facilities. Further, depending on market conditions and other factors, we currently anticipate issuing debt securities prior to the consummation of this offering and intend to use the proceeds from the sale to repay outstanding indebtedness owed by us to AIG. See “Recapitalization” and “Capitalization.”

Corporate Information

SAFG Retirement Services, Inc., the issuer in this offering, is a Delaware corporation. Our principal executive offices are located at 2919 Allen Parkway, Woodson Tower, Houston, Texas 77019, and our telephone number is 1-877-375-2422. Our website is www.           .com. None of the information contained on, or that may be accessed through, our website or any other website identified herein is part of, or incorporated into, this prospectus, and you should not rely on any such information in connection with your decision to invest in our common stock. Reference to our website is made as an inactive textual reference.

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SUMMARY RISK FACTORS

Our business is subject to a number of risks, including risks that could prevent us from achieving our business objectives or financial goals or that otherwise could adversely affect our business, results of operations, financial condition and liquidity, that you should carefully consider before making a decision to invest in our common stock. These risks are discussed more fully in “Risk Factors.” These risks include the following:

• sustained low, declining or negative interest rates, rapidly increasing interest rates or changes to credit spreads;

• the deterioration of economic conditions, changes in market conditions, weakening in capital markets, the rise of inflation or geopolitical tensions, including the armed conflict between Ukraine and Russia;

• the impact of COVID-19, which will depend on future developments, including with respect to new variants, that are uncertain and cannot be predicted;

• unavailable, uneconomical or inadequate reinsurance;

• a failure by Fortitude Re to perform its obligations under its reinsurance agreements;

• the inaccuracy of the methodologies, estimations and assumptions underlying our valuation of investments and derivatives;

• our potential inability to refinance all or a portion of our indebtedness to obtain additional financing;

• our limited ability to access funds from our subsidiaries;

• a downgrade in the Insurer Financial Strength (“IFS”) ratings of our insurance companies and a downgrade in our credit ratings;

• our exposure to liquidity and other risks due to participation in a securities lending program and a repurchase program;

• exposure to credit risk due to nonperformance or defaults by our counterparties;

• the inadequate and unanticipated performance of third parties that we rely upon to provide certain business and administrative services on our behalf;

• our inability to maintain the availability of our critical technology systems and data and safeguard the confidentiality and integrity of our data;

• the ineffectiveness of our risk management policies and procedures;

• significant legal, governmental or regulatory proceedings;

• the ineffectiveness of new elements of our business strategy in accomplishing our objectives;

• the intense competition we face in each of our business lines and the technological changes that may present new and intensified challenges to our business;

• catastrophes, including those associated with climate change and pandemics;

• material changes to, or termination of, our significant investment advisory contracts with other parties, including Fortitude Re;

• business or asset acquisitions and dispositions that may expose us to certain risks;

• changes in laws and regulations that may affect our operations, increase our insurance subsidiary capital requirements or reduce our profitability;

• new laws and regulations, both domestically and internationally;

• differences between actual experience and the estimates used in the preparation of financial statements and modeled results used in various areas of our business;

• differences in actual experience and the assumptions and estimates used in preparing projections for our financial goals, reserves and cash flows;

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• the ineffectiveness of our productivity improvement initiatives in yielding our expected expense reductions and improvements in operational and organizational efficiency;

• recognition of an impairment of our goodwill or the establishment of an additional valuation allowance against our deferred income tax assets as a result of our business lines underperforming or their estimated fair values declining;

• our inability to attract and retain the key employees and highly skilled people we need to support our business, including in light of current competition for talent;

• the termination by Blackstone IM of the separately managed account agreements (“SMAs”), or our commitment letter with it to manage portions of our investment portfolio, or risks related to limitations on our ability to terminate the Blackstone IM arrangements;

• the failure to enter into investment management agreements with BlackRock pursuant to the binding letter of intent;

• our limited ability to pursue certain investment opportunities and retain well-performing investment managers due to our exclusive investment management arrangements with Blackstone IM in relation to certain asset classes;

• the historical performance of AMG, Blackstone IM and BlackRock not being indicative of the future results of our investment portfolio, our future results or any returns expected on our common shares;

• ineffective management of our investment portfolio or harm to our business reputation due to increased regulation or scrutiny of alternative investment advisers and investment activities;

• our failure to replicate or replace functions, systems and infrastructure provided by AIG or certain of its affiliates (including through shared service contracts) or our loss of benefits from AIG’s global contracts, and AIG’s failure to perform the services provided for in the Transition Services Agreement, as well as incremental costs we expect to incur as a stand-alone public company;

• costs associated with rebranding;

• additional expenses requiring us to implement future operational and organizational efficiencies due to our restructuring initiatives in connection with our separation from AIG;

• the significant influence that AIG has over us;

• actual or potential conflicts of interest with certain of our directors because of their AIG equity ownership or their current or former AIG positions;

• the interpretation of insurance holding company laws which may deem that investors in AIG “control” us following their investment in our common stock;

• potentially higher U.S. federal income taxes due to our inability to file a single U.S. consolidated federal income tax return following our separation from AIG;

• our potential liability for U.S. income taxes of the entire AIG Consolidated Tax Group for all taxable years or portions thereof in which we (or our subsidiaries) were members of such group; and

• other potential adverse tax consequences to us from our separation from AIG.

15

THE OFFERING

Common stock offered by the selling

stockholder

    shares

Total common stock to be outstanding after this offering

    shares

Option to purchase additional shares

The underwriters have a 30-day option to purchase up to     additional shares of common stock from the selling stockholder at the initial public offering price, less underwriting discounts and commissions.

Use of proceeds

We will not receive any proceeds from the sale of common stock in this offering; the selling stockholder will receive all of the proceeds from the sale of shares of our common stock.

Dividend policy

We intend to pay quarterly cash dividends on our common stock at an initial amount of approximately $     per share beginning     , although any declaration of dividends will be at the discretion of our Board and will depend on our financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by Delaware law, general business conditions and any other factors that our Board deems relevant in making such a determination. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock, or as to the amount of any such dividends. See “Dividend Policy.”

Proposed NYSE symbol

“CRBG”.

The number of shares of our common stock to be outstanding immediately following this offering is based on         shares outstanding as of          , 2022 and excludes      shares of common stock reserved for future issuance following this offering under our equity plans.

Unless otherwise indicated, all information in this prospectus:

• gives effect to a          -for-          stock split on our common stock effected on          , 2022;

• assumes no exercise by the underwriters of their option to purchase additional shares of common stock from the selling stockholder;

• assumes that the initial public offering price of our common stock will be $    per share (which is the midpoint of the price range set forth on the cover page of this prospectus); and

• gives effect to amendments to our amended and restated certificate of incorporation and amended and restated by-laws to be adopted prior to the settlement of this offering.

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SUMMARY HISTORICAL FINANCIAL DATA

The following tables set forth our summary historical financial data derived from our financial statements as of the dates and for each of the periods indicated. The summary historical financial data as of and for each of the three years ended December 31, 2021, 2020 and 2019 have been derived from our audited financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected for any future period.

You should read this summary historical financial data in conjunction with the section entitled “Unaudited Pro Forma Condensed Consolidated Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements included elsewhere in this prospectus.

	Years Ended December 31,
	2021	2020	2019
	(in millions)
Statement of Income (Loss)
Revenues:
Premiums	$5,637	$4,341	$3,501
Policy fees	3,051	2,874	2,930
Net investment income:
Net investment income – excluding Fortitude Re funds withheld assets	9,897	9,089	9,176
Net investment income – Fortitude Re funds withheld assets	1,775	1,427	1,598
Total net investment income	11,672	10,516	10,774
Net realized gains (losses):
Net realized gains (losses) – excluding Fortitude Re funds withheld assets and embedded derivative	1,618	(765)	(159)
Net realized gains (losses) on Fortitude Re funds withheld assets	924	1,002	262
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative	(687)	(3,978)	(5,167)
Total net realized losses	1,855	(3,741)	(5,064)
Advisory fee income	597	553	572
Other income	578	519	497
Total revenue	23,390	15,062	13,210
Benefits and Expenses:
Policyholder benefits	8,050	6,602	5,335
Interest credited to policyholder account balances	3,549	3,528	3,614
Amortization of deferred policy acquisition costs and value of business acquired	1,057	543	674
Non-deferrable insurance commissions	680	604	564
Advisory fee expenses	322	316	322
General operating expenses	2,104	2,027	1,975
Interest expense	389	490	555
Loss on extinguishment of debt	219	10	32
Net (gain) loss on divestitures	(3,081)	—	—
Net (gain) loss on Fortitude Re transactions	(26)	91	—
Total benefits and expenses	13,263	14,211	13,071
Income (loss) before income tax (benefit)	10,127	851	139
Income tax (benefit)	1,843	(15)	(168)
Net income (loss)	8,284	866	307
Net income attributable to non-controlling interests	929	224	257
Net income (loss) attributable to SAFG	7,355	642	50
Earnings Per Share
Non-GAAP Financial Measures:(1)
Adjusted revenues	20,490	17,406	16,798
Adjusted pre-tax operating income (loss)	3,685	3,194	3,584
Adjusted after-tax operating income (loss)	2,929	2,556	2,892

(1)
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of Non-GAAP Financial Measures and Key Operating Metrics—Non-GAAP Financial Measures” for a discussion of these measures and a reconciliation of each to the most directly comparable GAAP measure.

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	Years Ended December 31,
	2021	2020	2019
	(in millions)
Adjusted Pre-Tax Operating Income by Segment:
Individual Retirement	1,895	1,942	2,010
Group Retirement	1,273	975	958
Life Insurance	96	146	522
Institutional Markets	584	367	322

	As of December 31,
	2021	2020	2019
	(in millions)
Balance Sheet
Assets:
Total investments	$256,318	$260,274	$238,888
Reinsurance assets — Fortitude Re, net of allowance for credit losses and disputes	28,472	29,158	29,497
Separate account assets, at fair value	109,111	100,290	93,272
Total assets	416,212	410,155	382,476
Liabilities:
Future policy benefits for life and accident and health insurance contracts	57,751	54,660	50,490
Policyholder contract deposits	156,846	154,892	147,731
Fortitude Re funds withheld payable	35,144	36,789	34,433
Long-term debt	427	905	912
Debt of consolidated investment entities	6,936	10,341	10,166
Separate account liabilities	109,111	100,290	93,272
Total liabilities	387,284	370,323	348,797
Equity:
SAFG Shareholders’ equity:
Common stock class A, $1.00 par value;      shares authorized;      shares issued	–	–	–
Common stock class B, $1.00 par value;      shares authorized;      shares issued	–	–	–
Additional paid-in capital	8,060	–	–
Retained earnings	8,859	–	–
Shareholder’s net investment	–	22,579	22,476
Accumulated other comprehensive income	10,167	14,653	9,329
Total SAFG Shareholders’ equity	27,086	37,232	31,805
Non-redeemable noncontrolling interests	1,759	2,549	1,874
Total equity	28,845	39,781	33,679

The following table summarizes our normalized distributions:

	Years Ended December 31,
(in millions)	2021	2020	2019	2018	2017
Subsidiary dividends paid	$1,564	$540	$1,535	$2,488	$2,409
Less: Non-recurring dividends	(295)	600	(400)	(1,113)	(890)
Tax sharing payments related to utilization of tax attributes	$902	$1,026	$954	$370	$782
Normalized distributions(1)	2,171	2,166	2,089	1,745	2,301

(1)
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of Non-GAAP Financial Measures and Key Operating Metrics—Non-GAAP Measures” for a discussion of this measure and a reconciliation to the most directly comparable GAAP measure.

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SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA

The summary unaudited pro forma financial data consists of unaudited pro forma condensed consolidated balance sheet information as of December 31, 2021 and unaudited pro forma condensed consolidated statement of income (loss) information for the year ended December 31, 2021. The summary unaudited pro forma financial data should be read in conjunction with the information included under “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Recapitalization,” “The Reorganization Transactions,” “Certain Relationships and Related Party Transactions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements included elsewhere in this prospectus. We believe the summary unaudited pro forma financial data presented below are useful to investors because it presents our historical results of operations for the periods presented giving effect to the Recapitalization, disposition of the affordable housing portfolio, tax deconsolidation, Investment Management, including our Strategic Partnership with Blackstone, and other costs expected to be incurred as part of the Separation, as if they had occurred or were incurred as of the dates indicated below.

The following summary unaudited pro forma financial data present the historical financial statements of the Company as if these transactions had been completed as of December 31, 2021 for purposes of the unaudited pro forma condensed consolidated balance sheet, and as of January 1, 2021 for purposes of the unaudited pro forma condensed consolidated statement of income (loss).

The summary unaudited pro forma financial data are presented for informational purposes only and do not purport to represent our financial condition or our results of operations had these transactions occurred on or as of the dates noted above or to project the results for any future date or period. Actual results may differ from the summary unaudited pro forma financial data.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

as of December 31, 2021

(in millions, except for share data)
Assets:
Investments:
Fixed maturity securities:
Bonds available for sale	$198,568
Other bond securities	2,082
Equity securities	242
Mortgage and other loans receivable	39,388
Other invested assets	10,567
Short-term investments	5,471
Total Investments	256,318
Cash	1,220
Accrued investment income	1,760
Premiums and other receivables	884
Reinsurance assets - Fortitude Re	28,472
Reinsurance assets - other	2,932
Deferred income taxes	4,728
Deferred policy acquisition costs and value of business acquired	8,058
Other assets	3,588
Separate account assets	109,111
Total assets	$417,071

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(in millions, except for share data)
Liabilities:
Future policy benefits for life and accident and health insurance contracts	$57,751
Policyholder contract deposits	156,846
Other policyholder funds	2,849
Fortitude Re funds withheld payable	35,144
Other liabilities	9,903
Short-term debt	—
Long-term debt	9,427
Debt of consolidated investment entities	6,936
Separate account liabilities	109,111
Total liabilities	$387,967
Redeemable noncontrolling interest	$83
SAFG Shareholders' equity
Class A Common stock, $1.00 par value, 180,000 shares authorized; 90,100 shares issued	—
Class B Common stock, $1.00 par value, 20,000 shares authorized; 9,900 shares issued	—
Additional paid-in capital	8,060
Retained earnings	8,750
Accumulated other comprehensive income (loss)	10,452
Total SAFG Shareholders' equity	27,262
Non-redeemable noncontolling interests	1,759
Total Equity	$29,021
Total Liabilities, redeemable noncontrolling interest and equity	$417,071

Unaudited Pro Forma Condensed Consolidated Statement of Income (Loss) Data

for the Year Ended December 31, 2021

(dollars in millions, except per common share data)
Revenues:
Premiums	5,637
Policy fees	3,051
Net investment income:
Net investment income: excluding Fortitude Re funds withheld assets	9,441
Net investment income: Fortitude Re funds withheld assets	1,775
Total net investment income	$11,216
Net Realized gains (losses):
Net realized gains (losses) excluding Fortitude Re funds withheld assets and embedded derivative	1,618
Net realized gains (losses) on Fortitude Re funds withheld assets	924
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative	(687)
Total Net realized gains (losses)	1,855
Advisory fee income	597
Other income	578
Total Revenues	$22,934

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(dollars in millions, except per common share data)
Benefits and expenses:
Policyholder benefits	8,050
Interest credited to policyholder account balances	3,549
Amortization of deferred policy acquisition costs and value of business acquired	1,057
Non-deferrable insurance commissions	681
Advisory fees	322
General operating and other expenses	2,190
Interest expense	655
Loss on extinguishment of debt	219
Net (gain) loss on divestitures	(3,081)
Loss on Fortitude Re Reinsurance Contract	(26)
Total benefits and expenses	$13,616
Income (loss) before income tax expense	9,318
Income tax expense (benefit):
Current	1,913
Deferred	(103)
Income tax expense (benefit):	$1,810
Net income (loss)	$7,508
Less:
Net income (loss) attributable to noncontrolling interests	$861
Net income (loss) attributable to SAFG	$6,647
Income (loss) per common share attributable to SAFG common shareholders:
Class A - Basic and diluted	$
Class B - Basic and diluted	$
Weighted average shares outstanding:
Class A - Basic and diluted
Class B - Basic and diluted
Other Pro forma Data(1)
Pro forma APTOI	$2,876
Pro forma AATOI	$2,291
Adjusted ROAE	12.3%

(1)
APTOI, AATOI and Adjusted ROAE are non-GAAP financial measures. For our definition of APTOI, AATOI and Adjusted ROAE and the uses of such non-GAAP measures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Financial Measures and Key Operating Metrics—Non-GAAP Financial Measures.”

21

The following table presents a reconciliation of pro forma pre-tax income (loss) / net income (loss) attributable to SAFG to pro forma APTOI / AATOI attributable to SAFG. Pro forma adjustments a, c, d, e, and f all reduce APTOI and AATOI. Pro forma adjustment b is excluded from APTOI and AATOI:

	Pre-tax	Total Tax (Benefit) Charge	Non-Controlling Interests	After Tax
Pro forma Pre-tax income (loss)/net income (loss) including NCI	9,318	1,810	—	7,508
Noncontrolling interests	—	—	(861)	(861)
Pro forma Pre-tax income (loss)/ net income attributable to SAFG	9,318	1,810	(861)	6,647
Fortitude Re Related Items	(2,038)	(428)	—	(1,610)
Other non- Fortitude Re reconciling items(1)	(4,404)	(797)	861	(2,746)
Total adjustments	(6,442)	(1,225)	861	(4,356)
APTOI / AATOI	2,876	585	—	2,291

(1)
Includes $3.1 billion of pre-tax net gain on divestitures, including disposition of the affordable housing portfolio. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Factors Impacting Our Results—Affordable Housing Sale” and Note 1 to our audited consolidated financial statements.

The following table presents a reconciliation of Pro forma Adjusted ROAE.

(in millions)	December 31, 2021
Pro forma Net income (loss) attributable to SAFG (a)	$6,647
Pro forma AATOI (b)	$2,291
Pro forma average Total SAFG Shareholders' equity (c)(1)	$31,948
Pro forma average Adjusted Book Value (d)(2)	$18,672
Pro forma ROAE (a /c)	20.8%
Pro forma Adjusted ROAE (b /d)(3)	12.3%

(1)
Represents the average of historical Total SAFG Shareholders’ equity as of December 31, 2020 and 2021 less one half of the aggregate net income impact of the adjustments described in notes (a), (b), (c), (d) and (e) under “Unaudited Pro Forma Condensed Consolidated Financial Information.”

(2)
Represents the average of historical Adjusted Book Value as of December 31, 2021 and 2020, in each case adjusted to reflect the full-year impact of the $8.3 billion dividend paid to AIG which we believe more meaningfully presents our future capital structure, less one-half of the aggregate net income impact of the adjustments described in notes (a), (b), (c), (d) and (e) under “Unaudited Pro Forma Condensed Consolidated Financial Information.”

(3)
Reflects a 200 basis point benefit in 2021 due to alternative investments performing better than our long- term expectation, net of elevated mortality due to COVID-19.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as the other information contained in this prospectus, including our financial statements included elsewhere in this prospectus, before making an investment decision. The risks described below are not the only ones we face. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could cause a material adverse effect on our business, results of operations, financial condition and liquidity. In any such case, the trading price of our common stock could decline, and you could lose all or part of your investment. In addition, many of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence of certain of them could in turn cause the emergence or exacerbate the effect of others. The risk factors described below are not necessarily presented in order of importance. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. See “Special Note Regarding Forward-Looking Statements and Information.”

Risks Relating to Market Conditions

Sustained low, declining or negative interest rates, rapidly increasing interest rates or changes to credit spreads have materially and adversely affected, and may continue to materially and adversely affect, our profitability.

Global interest rates have been at or near historic lows in recent years, even after an increase in interest rates during 2021.

We are exposed primarily to the following risks arising from fluctuations in interest rates:

• mismatch between the expected duration of our liabilities and our assets;

• impairment to our ability to earn the returns or spreads assumed in the pricing and the reserving for our products;

• increases in certain statutory reserve requirements that are based on formulas or models that consider interest rates, which would reduce statutory capital;

• increases in capital requirements and the amount of assets we must maintain to support statutory reserves, which would reduce surplus, due to decreases in interest rates or changes in prescribed interest rates;

• increases in the costs of derivatives we use for hedging or increases in the volume of hedging we do as interest rates change;

• loss related to customer withdrawals following a sharp and sustained increase in interest rates;

• loss from reduced fee income, increased guaranteed benefit costs and accelerated deferred policy acquisition costs (“DAC”) amortization arising from fluctuations in the variable product separate account values associated with fixed income investment options due to increased interest rates or credit spread widening;

• the reinvestment risk associated with more prepayments on mortgage-backed securities and other fixed income securities in decreasing interest rate environments and fewer prepayments in increasing interest rate environments;

• an increase in policy loans, surrenders and withdrawals as interest rates rise; and

• volatility in our GAAP results of operations driven by interest rate related components of liabilities and equity related to optional guarantee benefits and the cost of associated hedges in low interest rate environments.

Sustained low interest rates have negatively affected and may in the future continue to negatively affect the performance of our investments and reduce the level of investment income earned on our investment portfolios, resulting in net investment spread compression. Sustained low interest rates also result in lower asset adequacy margins and may result in the need to hold higher statutory cash flow testing reserves. We experience lower

23

investment income as well as lower sales of new products and policies when a low or declining U.S. interest rate and credit spread environment persists, and/or interest rates turn or, in certain circumstances, remain negative across various global economies. For example, the low interest rate environment has negatively affected sales of interest rate sensitive products in our industry and negatively impacted the profitability of our existing business as we reinvest cash flows from investments, including due to increased calls and prepayments of fixed-rate securities and mortgage loans, at rates below the average yield of our existing portfolios. As a result, we have de-emphasized sales of interest sensitive products in our Life Insurance segment.

Certain of our annuity and life insurance products pay guaranteed minimum interest crediting rates. We are required to pay these guaranteed minimum rates even if yields on our investment portfolio decline, with the resulting investment margin compression negatively impacting earnings. Further, we would expect more policyholders to hold policies with comparatively high guaranteed rates longer (resulting in lower than expected surrender rates) in a low interest rate environment. A prolonged low interest rate environment may also subject us to an increase in the amount of statutory reserves that our insurance subsidiaries are required to hold for guaranteed living benefits (“GLBs”) and guaranteed minimum death benefits (“GMDBs”), lowering their statutory surplus, which could adversely affect our insurance subsidiaries’ ability to pay dividends to us. In addition, it may also increase the perceived value of GLBs to our policyholders, which in turn may lead to a higher rate of benefit utilization and lower than expected surrender rates of those products over time as compared to pricing assumptions. Finally, low interest rates may accelerate DAC amortization or reserve increase.

An increase in interest rates could also have a material adverse effect on the value of our investment portfolio, for example, by decreasing the estimated fair values of the fixed income securities that constitute a substantial portion of our investment portfolio. This in turn could increase the unrealized loss positions in our portfolio and adversely affect our ability to realize our deferred tax assets, thereby materially and adversely affecting our business, results of operations, financial condition and liquidity.

In periods of rapidly increasing interest rates, we may not be able to replace, in a timely manner, the investments in our general account with higher yielding investments needed to fund the higher crediting rates necessary to keep interest rate sensitive products competitive. Therefore, we may need to accept a lower investment spread and, thus, lower profitability, or face a decline in sales and greater loss of existing contracts and related assets. Policy loans, surrenders and withdrawals also tend to increase as policyholders seek investments with higher perceived returns as interest rates rise. These impacts may result in significant cash outflows requiring that we sell investments at a time when the prices of those investments are adversely affected by the increase in interest rates, which could result in realized investment losses by selling assets in an unrealized loss position.

The primary source of our exposure to credit spreads is in the value of our fixed income securities. If credit spreads widen significantly, we could be exposed to higher levels of defaults and impairments. If credit spreads tighten significantly, it could result in reduced net investment income and in turn, reduced profitability, associated with new purchases of fixed maturity securities.

Widening credit spreads would also reduce the value of bonds held and support policy investment options, decreasing the average account value of our annuity contracts and negatively impacting the fee income we earn. Tightening credit spreads would reduce the discount rates used in the principles-based statutory reserve calculation, potentially increasing statutory reserve requirements and, in turn, reducing statutory capital. Although these effects on bond fund valuation and reserve discount rates run in offsetting directions for either credit spread widening or narrowing, it is possible for one of them to outweigh the other under certain market conditions. Any of these risks could cause a material adverse effect on our business, results of operations, financial condition and liquidity.

Deterioration of economic conditions, geopolitical tensions, changes in market conditions or weakening in capital markets may materially affect our business, results of operations, financial condition, availability of capital, cost of capital and liquidity.

Our business is highly dependent on economic and capital market conditions. Weaknesses in economic conditions and capital market volatility have in the past led to, and may in the future lead to, among other consequences, a poor operating environment, erosion of consumer and investor confidence, reduced business

24

volumes, deteriorating liquidity, declines in asset valuations and impacts on policyholder behavior that could influence reserve valuations. Further, if our investment managers, including AMG and Blackstone IM, fail to react appropriately to difficult market or economic conditions, our investment portfolio could incur material losses.

Key ways in which we have in the past been, and could in the future be, negatively affected by economic conditions include:

• increases in policy withdrawals, surrenders and cancellations and other impacts from changes in policyholder behavior as compared to that assumed in pricing;

• write-offs of DAC;

• increases in liability for future policy benefits due to loss recognition on certain long-duration insurance and reinsurance contracts;

• increases in costs associated with third-party reinsurance, or decreased ability to obtain reinsurance at acceptable terms; and

• increased likelihood of, or increased magnitude of, asset impairments caused by market fluctuations.

Adverse economic conditions may result from domestic and global economic and political developments, including plateauing or decreasing economic growth and business activity, and inflationary or deflationary pressures in developed economies, including the United States, civil unrest, disruptions caused by the COVID-19 pandemic, geopolitical tensions or military action, such as the armed conflict between Ukraine and Russia and corresponding sanctions imposed by the United States and other countries, and new or evolving legal and regulatory requirements on business investment, hiring, migration, labor supply and global supply chains. These and other market, economic and political factors, including the impact of any new or prolonged government financial stimulus package, could have a material adverse effect on our business, results of operations, financial condition and liquidity in many ways, including:

• lower levels of consumer demand for and ability to afford our products that decreased and may in the future continue to decrease revenues and profitability;

• increased credit losses across numerous asset classes that could result in widening of credit spreads and higher than expected defaults that could reduce investment asset valuations, decrease fee income and increase statutory capital requirements;

• increased market volatility and uncertainty that could decrease liquidity with respect to our assets and increase borrowing costs and limit access to capital markets;

• the reduction of investment income generated by our investment portfolio;

• impeding our ability to execute strategic transactions or fulfill contractual obligations, including those under ceded or assumed reinsurance contracts;

• increased costs associated with third-party reinsurance, or decreased ability to obtain reinsurance on acceptable terms;

• increased levels of recapturing liabilities covered by certain reinsurance contracts, including our reinsurance contracts with Fortitude Re;

• increasing the potential adverse impact of optional guarantee benefits included in our annuities;

• increased frequency of life insurance claims;

• the reduction in the availability and effectiveness of hedging instruments;

• increased likelihood of customers choosing to defer paying premiums or stop paying premiums altogether and other impacts to policyholder behavior not contemplated in our historical pricing of our products;

• increased costs related to our direct and third-party support services, labor and financing as a result of inflationary pressures;

25

• increased policy withdrawals, surrenders and cancellations;

• increased likelihood of disruptions in one market or asset class spreading to other markets or asset classes; and

• limitations on business activities and increased compliance risks with respect to economic sanctions regulations relating to jurisdictions in which our businesses operate.

Furthermore, market disruptions and uncertainty as to the timing and degree of global economic conditions improvements may negatively affect our credit ratings or ratings outlook or our ability to generate or access liquidity we may need to operate our business and meet our obligations, including to pay interest on our debt, discharge or refinance our maturing debt obligations and meet the capital needs of our subsidiaries through potential capital contributions. For example, if an economic recovery is prolonged, an increased number of clients and policyholders may face difficulty paying insurance premiums, and global regulators may seek to implement new or renew existing premium deferral measures to alleviate such difficulties, which could impair our cash flows. As a holding company, we depend on dividends, distributions and other payments from our subsidiaries for our liquidity needs; these subsidiaries’ ability to pay dividends, make distributions or otherwise generate parent liquidity may be reduced to the extent they are unable to generate sufficient distributable income or in the event regulators suspend or otherwise restrict dividends or other payments from subsidiaries to parent companies.

COVID-19 has adversely affected, and is expected to continue to adversely affect, our business, results of operations, financial condition and liquidity, and its ultimate impact will depend on future developments, including with respect to new variants, that are uncertain and cannot be predicted.

The COVID-19 pandemic is still evolving, but it has caused significant societal disruption and created adverse economic impacts relevant to our business, such as a mortality increase as compared to pricing expectations, volatility in the capital markets, disruptions in the labor market, supply chain disruption, and most recently, an inflationary environment.

We cannot estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and liquidity. We also cannot, at this time, estimate the full extent to which the pandemic has caused and may continue to cause certain risks to our business, including those discussed herein, to be heightened or realized.

Our insurance business has experienced, and may continue to experience, increased claim volumes in the United States, which has seen a high number of COVID-19 cases and deaths relative to other jurisdictions. Beginning in March 2020, we experienced an increase in mortality claims as compared to our pricing assumptions, which we expect to continue until the COVID-19 pandemic subsides. In addition, COVID-19 adversely affected our premiums and deposits in some of our product lines. If there are any future “surges” of COVID-19 variants, these impacts may continue into 2022 and beyond. Circumstances resulting from the COVID-19 pandemic, in addition to an increase in claims, may also impact utilization of benefits, lapses or surrenders of policies and payments of insurance premiums, all of which have impacted and could further impact the revenues and expenses associated with our products.

As part of our response to the COVID-19 pandemic, we adjusted our underwriting guidelines for certain classes and ages, which have negatively impacted our sales and new business generation in our life insurance business.

The economic impacts of the COVID-19 pandemic have resulted and may continue to result in policyholders cancelling insurance policies or may result in policyholders seeking sources of liquidity, such as policy loans and withdrawals, at rates greater than expected. The ongoing impacts on the economy and labor force could also cause policyholders or institutions that we serve to utilize their policies in ways that we did not price for or reserve for, thus adversely impacting our economics, including but not limited to lapse and surrender rates, premium payments and payment patterns, benefit utilization and fund allocations.

We use reinsurance to mitigate exposure and loss in a number of ways, but our reinsurers may also be adversely impacted by the COVID-19 pandemic, potentially causing non-payment, delayed payment and reduced availability, materially different terms and/or increased cost of reinsurance going forward.

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The COVID-19 pandemic has also resulted in adverse changes and developments affecting the global economy, including the significant global economic downturn and increased volatility in financial and capital markets, and lower interest rates and tighter credit spreads, individually and in the aggregate. These impacts have had, and may continue to have, negative effects on our overall investment portfolio and our ability to competitively price our products. While, to date, the short-term economic and market-related impacts of COVID-19 have been largely offset by intervention taken by governments and monetary authorities, it remains difficult to quantify the potential long-term financial impacts on our investment portfolio.

Further, in the event of a resurgence in COVID-19 cases, particularly due to the rise in cases associated with current and any future potential variants of COVID-19, there can be no assurance that governments and monetary authorities will continue to intervene in markets or provide for economic stimulus, and if they do, whether such intervention will be successful. Within our investment portfolio, for instance, there is concentrated exposure to certain segments of the economy, including real estate and real estate-related investments, which exposes us to negative impacts from the deferral of mortgage payments, renegotiated commercial mortgage loans or outright mortgage defaults and potential acceleration of macro trends such as work from home and online shopping, as well as significant exposure to certain industries negatively impacted by the economic downturn, such as offline retail, travel and transportation.

Models utilizing historic information on correlations among macroeconomic factors, our products and our investment portfolio may not reflect the relationship between macroeconomic factors, our products and our investment portfolio in the current environment, as a result of the unique nature of the COVID-19 pandemic and the intervention by regulators and monetary authorities to mitigate the impacts on policyholders and the broader economy.

Government officials have recommended or mandated precautions to mitigate the spread of COVID-19, including prohibitions on congregating in heavily populated areas, social distancing requirements, stay-at-home orders and similar measures. As a result, we implemented work-from-home business continuity plans for non-essential staff globally. Where permitted by local laws and regulations, our offices are open to fully vaccinated employees, with mask mandates, social distancing and office capacity limits, and we have strict quarantine and contact tracing protocols in place in the event a positive case occurs. These precautionary measures have also impacted our distribution organizations and wholesaler interactions with our clients across multiple channels where our business benefits from a high degree of customer interaction. Our results may be adversely impacted by these and other actions taken to contain or reduce the impact of COVID-19, and the extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted. Changes to our workforce as a result of COVID-19, including wage inflation, may also increase our costs and the risk of errors due to turnover, remote work and inexperience. Moreover, the extended remote work environment puts ongoing stress on our current business continuity plans and may prove them to be less effective than expected.

The social distancing requirements, stay-at-home orders and similar measures have had a significant impact on our Individual Retirement and Life Insurance distribution organizations and wholesaler interactions with our clients across multiple channels where our business benefits from a high degree of customer interaction. As a result, we have seen declines in our retail sales, new plan acquisitions and overall customer satisfaction. Should these conditions persist or worsen, we may see further declines in such retail sales, new policy origination and overall customer satisfaction. In our Group Retirement business, where a significant part of our value proposition involves the provision of in-person financial advice, our inability to interact with current and prospective clients in an in-person environment has negatively impacted the business. These requirements have also and may continue to impact decision-making by pension consultants and pension sponsors relative to new business acquisition opportunities in our Group Retirement business. Our business continuity plans, or the business continuity plans of our third-party vendors, may not be sustainable or effective.

Any future business continuity plans may not be sustainable or effective. Our business operations may also be significantly disrupted if our critical workforce, key vendors, third-party providers or other counterparties we transact business with, are unable to work effectively, including because of illness, quarantines, government and regulatory actions in response to COVID-19 or other reasons, or if the technology on which our remote business operations rely, some of which is developed and maintained by third parties, is disrupted or impaired or becomes unavailable. In addition, remote work may negatively impact our culture and employees’ morale, which could result in greater turnover, lower productivity and greater operational risks.

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Moreover, as vaccinations have become readily available, certain organizations have imposed vaccine mandates on employees returning to the office and customers or clients accessing offices, stores and other spaces, and governments have imposed vaccine mandates on certain daily activities. It is currently not possible to predict the exact impact any such mandates would have on us. If the vaccines are not as effective as expected, including against new variants of COVID-19, our business, results of operations, financial condition and liquidity could be adversely affected.

Due to the evolving and disruptive nature of the COVID-19 pandemic, we could experience other potential impacts, including, but not limited to, increased mortality and morbidity expectations from longer term consequences of COVID-19 infections, potential impairment charges to the carrying amounts of goodwill and deferred tax assets. Further, new and potentially unforeseen risks beyond those described above and in other Risk Factors herein may arise as a result of the COVID-19 pandemic and the actions taken by governmental and regulatory authorities to mitigate its impact, including the provision of governmental assistance.

Equity market declines or volatility may materially and adversely affect our business, results of operations, financial condition and liquidity.

U.S. equity indices are on a multi-year bull market run and are at or near record high levels. A market correction or bear market or volatility could, in addition to affecting our liability hedging strategies and programs, materially and adversely affect our investment returns, business, results of operations, financial condition and liquidity. For example, equity market declines or volatility could, among other things, decrease the asset value of our annuity, variable life and advisory and brokerage contracts which, in turn, would reduce the amount of revenue we derive from fees charged on those account and asset values. While our variable annuity business is sensitive to interest rate and credit spreads, it is also highly sensitive to equity markets, and a sustained weakness or stagnation in equity markets could decrease our revenues and earnings with respect to those products and therefore our liquidity. At the same time, for annuity contracts that include GLBs, equity market declines increase the amount of our potential financial obligations related to such GLBs and could increase the cost of executing GLB-related hedges beyond what was anticipated in the pricing of the contracts being hedged. This could result in an increase in claims and reserves related to those contracts, net of any proceeds from our hedging strategies. We may not be able to effectively mitigate, including through our hedging strategies, and we may sometimes choose based on economic considerations and other factors not to fully mitigate, the equity market volatility of our portfolio.

Equity market declines and volatility may also influence policyholder behavior, which may adversely impact the levels of surrenders and withdrawals and the amounts withdrawn from our annuity, variable life and advisory and brokerage contracts or cause policyholders to reallocate a portion of their account balances to more conservative investment options (which may have lower fees), which could negatively impact our future profitability, negatively impact our liquidity or increase our benefit obligations, particularly if they were to remain in such options during an equity market increase.

Market volatility can negatively impact the value of equity securities we hold for investment, which could in turn reduce the statutory capital of certain of our insurance subsidiaries. In addition, equity market volatility could reduce demand for variable products relative to fixed products, lead to changes in estimates underlying our calculations of DAC that, in turn, could accelerate our DAC amortization and reduce our current earnings and result in changes to the fair value of our GLB liabilities, which could increase the volatility of our earnings. Lastly, periods of high market volatility or adverse conditions could decrease the availability or increase the cost of hedges, including derivatives.

Risks Relating to Insurance Risk and Related Exposures

The amount and timing of insurance liability claims are difficult to predict and may exceed the related reserves for future policy benefits, or the liabilities associated with certain guaranteed benefits and indexed features accounted for as embedded derivatives at fair value.

For our business, establishment and ongoing calculations of reserves for future policy benefits and related reinsurance assets is a complex process, with significant judgmental inputs, assumptions and modeling techniques. We make assumptions regarding mortality, longevity and policyholder behavior at various points, including at the time of issuance and in subsequent reporting periods. An increase in the valuation of the liability could result to the extent emerging and actual experience deviates from these policyholder behavior assumptions. The inputs and assumptions

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used in connection with calculations of reserves for future policy benefits are inherently uncertain. Experience may develop adversely such that additional reserves must be established or the value of embedded derivatives may increase. Adverse experience could arise out of a number of factors, including, but not limited to, a severe short-term event, such as a pandemic or changes to policyholder behavior during stressed economic periods, or due to mis-estimation of long-term assumptions such as mortality, interest rates, credit spreads, equity market levels and volatility and persistency assumptions. Certain variables, such as policyholder behavior, are difficult to estimate and can have a significant impact on future policy benefits and embedded derivatives. We review and update actuarial assumptions at least annually, typically in the third quarter for reserves and embedded derivatives. Additionally, we regularly carry out loss recognition testing for GAAP reporting and cash flow testing for statutory reporting. For a further discussion of our loss reserves, see Note 7 and Note 21 to the audited consolidated financial statements.

Reinsurance may not be available or economical and may not be adequate to protect us against losses.

We purchase third-party reinsurance and we use reinsurance as part of our overall risk management strategy. Reinsurers may attempt to increase rates with respect to our existing reinsurance arrangements, and their ability to increase rates depends upon the terms of each reinsurance contract and the market environment when we negotiate reinsurance arrangements for our in-force and new business. An increase in reinsurance rates may affect the profitability of our insurance business. Additionally, such a rate increase could result in our recapture of the business, which may result in a need for additional reserves and increase our exposure to claims. Reinsurance for new business may be more difficult or costly to obtain in the event of prolonged or severe adverse mortality or morbidity experience. We may, at certain times, be forced to incur additional costs for reinsurance or may be unable to obtain sufficient reinsurance on acceptable terms. In the latter case, we would have to accept an increase in exposure to risk and the increase in volatility of mortality experience on a going-forward basis, reduce the maximum policy size and amount of business written by our subsidiaries or seek alternatives in line with our risk limits or a combination thereof.

The insolvency of one or more of our reinsurance counterparties, or the inability or unwillingness of such reinsurers to make timely payments under the terms of our contracts or payments in an amount equal to our expected reinsurance recoverables, could have a material adverse effect on our business, results of operations, financial condition and liquidity. Additionally, we are exposed to credit risk with respect to our reinsurers to the extent the reinsurance receivable is not secured, or is inadequately secured, by collateral or does not benefit from other credit enhancements. We bear the risk that a reinsurer is, or may be, unable to pay amounts we have recorded as reinsurance receivables for any reason, including that:

• the reinsurance transaction performs differently than we anticipated as compared to the original structure, terms or conditions;

• the terms of the reinsurance contract do not reflect the intent of the parties to the contract or there is a disagreement between the parties as to their intent;

• the terms of the contract are interpreted by a court or arbitration panel differently than expected;

• a change in laws and regulations, or in the interpretation of the laws and regulations, materially impacts a reinsurance transaction; or

• the terms of the contract cannot be legally enforced.

Further, we face the risk of financial responsibility for risks related to assumed reinsurance, including claims made by the ceding company.

Our subsidiaries also utilize intercompany reinsurance arrangements to provide capital benefits to their affiliated cedants. We have also begun and may continue to pursue reinsurance transactions and permitted practices to manage the capital impact of statutory reserve requirements under applicable reserving rules, including principle-based reserving (“PBR”). The application of actuarial guidelines and PBR involves numerous interpretations. If state insurance departments do not agree with our interpretations or if regulations change with respect to our ability to manage the capital impact of certain statutory reserve requirements, our statutory reserve requirements could increase, or our ability to take reserve credit for reinsurance transactions could be reduced or eliminated. Additionally, if our ratings decline, we could incur higher costs to obtain reinsurance, each of which could adversely affect sales of our products and our financial condition or results of operations.

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A failure by Fortitude Re to perform its obligations could have a material effect on our business, results of operations and liquidity and the accounting treatment of our reinsurance agreements with Fortitude Re has led, and will continue to lead, to volatility in our results of operations.

As of December 31, 2021, $28.5 billion of reserves related to business written by us had been ceded to Fortitude Re under reinsurance transactions. These reserve balances are fully collateralized pursuant to the terms of the reinsurance transactions. Our subsidiaries continue to remain primarily liable to policyholders under the business reinsured with Fortitude Re. As a result, and if Fortitude Re is unable to successfully operate, or other issues arise that affect its financial condition or ability to satisfy or perform its obligations to our subsidiaries, we could experience a material adverse effect on our results of operations, financial condition and liquidity to the extent the amount of collateral posted in respect of our reinsurance receivable is inadequate. Further, as is customary in similar reinsurance agreements, upon the occurrence of certain termination and recapture triggers on the part of Fortitude Re under the applicable reinsurance agreements, our subsidiaries may elect or may be required, to recapture the business ceded under such reinsurance agreements, which would result in a substantial increase to our insurance liabilities and capital requirements and may require us to raise capital in order to recapture such ceded business. These termination and recapture triggers include Fortitude Re becoming insolvent or being placed into liquidation, rehabilitation, conservatorship, supervision, receivership, bankruptcy or similar proceedings, certain regulatory ratios falling below certain thresholds, in the case of those reinsurance agreements made with us, Fortitude Re’s failure to perform under the reinsurance agreements or its entry into certain transactions without receiving our consent. Currently, AGAMHC, which will be our indirect subsidiary at the time of our initial public offering (“IPO”), manages a significant proportion of the funds withheld assets in connection with the reinsurance to Fortitude Re. However, beginning in June 2023, Fortitude Re will have certain rights to replace AGAMHC as investment manager with respect to such assets under certain circumstances, which would negatively impact the income that we receive from management of the funds withheld assets. Additionally, while we currently hold a 3.5% ownership interest in, and have a seat on the board of Fortitude Re Bermuda, the parent entity of Fortitude Group Holdings, LLC, our ability to influence its operations is limited.

As the reinsurance transactions between us and Fortitude Re are structured as modified coinsurance (“modco”), the manner in which we account for these reinsurance arrangements has led, and will continue to lead, to volatility in our results of operations. In modco arrangements, the investments supporting the reinsurance agreements, and which reflect the majority of the consideration that would be paid to the reinsurer for entering into the transaction, are withheld by, and therefore continue to reside on the balance sheet of, the ceding company (i.e., us) thereby creating an obligation for the ceding company to pay the reinsurer (i.e., Fortitude Re) at a later date. Additionally, as our applicable insurance subsidiaries maintain ownership of these investments, we will maintain the existing accounting for these assets (e.g., the changes in fair value of available for sale securities will be recognized within other comprehensive income (“OCI”)). Under the modco arrangement, our applicable insurance subsidiaries have established a funds withheld payable to Fortitude Re while simultaneously establishing a reinsurance asset representing reserves for the insurance coverage that Fortitude Re has assumed. The funds withheld payable contains an embedded derivative and changes in fair value of the embedded derivative related to the funds withheld payable are recognized in earnings through realized gains (losses). This embedded derivative is considered a total return swap with contractual returns that are attributable to various assets and liabilities associated with these reinsurance agreements. As a result of changes in the fair value of the embedded derivative, we experience volatility in our GAAP net income.

Furthermore, post-separation, AIG’s separate general insurance reinsurance contracts with Fortitude Re will remain in force. To the extent there is adverse development on this business, it may impact the financial condition of Fortitude Re, which may result in diminished capital for Fortitude Re causing us to recapture the business we have ceded to Fortitude Re.

Interest rate fluctuations, increased lapses and surrenders, declining investment returns and other events may require our subsidiaries to accelerate the amortization of DAC, and record additional liabilities for future policy benefits.

We incur significant costs in connection with acquiring new and renewing our insurance business. DAC represents deferred costs that are incremental and directly related to the successful acquisition of new business or renewal of existing business. The recovery of these costs is generally dependent upon the future profitability of the related business, but DAC amortization varies based on the type of contract. For long-duration traditional

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business, DAC is generally amortized in proportion to premium revenue and varies with lapse experience. Actual lapses in excess of expectations can result in an acceleration of DAC amortization, and therefore, adversely impact our results of operations.

DAC for investment-oriented products is generally amortized in proportion to actual and estimated gross profits. Estimated gross profits are affected by a number of factors, including levels of current and expected interest rates, net investment income (which is net of investment expenses) and credit spreads, net realized gains and losses, fees, surrender rates, mortality experience, policyholder behavior experience and equity market returns and volatility. If actual and/or future estimated gross profits are less than originally expected, then the amortization of these costs would be accelerated in the period this is determined and would result in a lower-than-expected profitability, potentially impacting our ability to achieve our financial goals described in “Prospectus Summary—Financial Goals” and “Business—Financial Goals.” For example, if interest rates rise rapidly and significantly, customers with policies that have interest crediting rates below the current market may seek competing products with higher returns and we may experience an increase in surrenders and withdrawals of life and annuity contracts, and thereby a strain on cash flow. Additionally, this would also result in a decrease in expected future profitability and an acceleration of the amortization of DAC, and therefore lower than expected pre-tax income earned during the then-current period.

We also periodically review products for potential loss recognition events, principally long duration products. This review involves estimating the future profitability of in-force business and requires significant management judgment about assumptions including, but not limited to, mortality, morbidity, persistency, maintenance expenses and investment returns, including net realized gains (losses). If actual experience or revised future expectations result in projected future losses, we may be required to amortize any remaining DAC and record additional liabilities through a charge to policyholder benefit expense in the then-current period, which could negatively affect our business, results of operations, financial condition and liquidity.

Risks Relating to Our Investment Portfolio and Concentration of Investments

Gross unrealized losses on fixed maturity securities may be realized or result in future impairments, resulting in a reduction in our net earnings.

Substantially all of the fixed maturity securities we hold are classified as available-for-sale and, as a result, are reported at fair value. Unrealized gains or losses on available-for-sale securities are recognized as a component of other comprehensive income (loss) and are, therefore, excluded from net earnings. The accumulated change in estimated fair value of these available-for-sale securities is recognized in net earnings when the gain or loss is realized upon the sale of the security when it is determined that an allowance for credit losses is necessary or when all or a portion of the unrealized loss on a security is recognized. The determination of the amount of the allowance for credit losses varies by investment type and is based upon our periodic evaluation and assessment of known and inherent risks associated with the respective asset class. There can be no assurance that our management has accurately assessed the level of the allowance recorded, which is reflected in our financial statements. With respect to unrealized losses, we establish deferred tax assets for the tax benefit we may receive in the event that losses are realized. The realization of significant realized losses could result in an inability to recover the tax benefits and may result in the establishment of valuation allowances against our deferred tax assets. Realized losses or increases in our allowance for credit losses may have a material adverse impact on our results of operations in a particular quarterly or annual period.

The occurrence of a major economic downturn, acts of corporate malfeasance, widening credit spreads, or other events that adversely affect the issuers or guarantors of securities we own or the underlying collateral of structured securities we own could cause the estimated fair value of our fixed maturity securities portfolio and corresponding earnings to decline and cause the default rate of the fixed maturity securities in our investment portfolio to increase. A ratings downgrade affecting issuers or guarantors of particular securities we hold, or similar trends that could worsen the credit quality of issuers or guarantors and cause the valuation of such securities to decline. With economic uncertainty, credit quality of issuers or guarantors could be adversely affected. Similarly, a ratings downgrade affecting a security we hold could indicate the credit quality of that security has deteriorated and could increase the capital we must hold to support that security to maintain our insurance companies’ Risk-Based Capital (“RBC”) levels. Write-downs or impairments are impacted by intent to sell, or our assessment of the likelihood that we will be required to sell, fixed maturity securities and may cause

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us to raise and contribute more capital to our insurance company subsidiaries to maintain RBC levels. Realized losses or allowances for credit losses on these securities may have a material adverse effect on our business, results of operations, financial condition and liquidity in, or at the end of, any quarterly or annual period.

Our valuation of investments and derivatives involves the application of methodologies and assumptions to derive estimates, which may differ from actual experience and could result in changes to investment valuations that may materially adversely affect our business, results of operations, financial condition and liquidity or lead to volatility in our profitability.

It has been and may continue to be difficult to value certain of our investments or derivatives if trading becomes less frequent and/or market data becomes less observable. There may be cases where certain assets in normally active markets with significant observable data become inactive with insufficient observable data due to the financial environment or market conditions in effect at that time. As a result, valuations may include inputs and assumptions that are less observable or require greater estimation and judgment as well as valuation methods that are more complex. These values may not be realized in a market transaction, may not reflect the value of the asset and may change very rapidly as market conditions change and valuation assumptions are modified. Decreases in value and/or an inability to realize that value in a market transaction or other disposition may have a material adverse effect on our business, results of operations, financial condition and liquidity or lead to volatility in our profitability.

Risks Relating to Liquidity, Capital and Credit

Our ability to access funds from our subsidiaries is limited and our liquidity may be insufficient to meet our needs.

We are a holding company for all of our operations and we are a legal entity separate from our subsidiaries. We depend on dividends, distributions and other payments from our subsidiaries to fund dividends on, or repurchases of, our common stock, to pay corporate operating expenses, to make interest and principal payments due on our obligations, including outstanding debt, to pay tax or to make other investments. The majority of our assets are held by our regulated subsidiaries. The inability to receive dividends or other distributions from our subsidiaries could have a material adverse effect on our business, results of operations, financial condition and liquidity, and restrict our ability to pay dividends to our stockholders.

For our subsidiaries, the principal sources of liquidity are premiums and fees, income from our investment portfolio and other income generating assets or activities. The ability of our subsidiaries to pay dividends or other distributions to us in the future will depend on their earnings, tax considerations, covenants contained in any financing or other agreements and applicable regulatory restrictions or actions. In addition, such payments could be limited as a result of claims against our subsidiaries by their creditors, including suppliers, vendors, lessors and policyholders.

Specific to our insurance subsidiaries, the ability to pay dividends and make other distributions to us will depend on their ability to meet applicable regulatory standards and receive regulatory approvals, which are based in part on the prior year’s statutory income, capital and surplus, and unassigned funds (surplus) and require our insurance subsidiaries to hold a specific amount of minimum reserves in order to meet future obligations on their outstanding policies. Unassigned funds (surplus) represent the undistributed and unappropriated amount of statutory surplus at any balance sheet date (comparable to GAAP retained earnings). These regulations specify that the minimum reserves must be sufficient to meet future obligations, after giving consideration to future required premiums to be received, and are based on, among other things, certain specified mortality tables, interest rates and methods of valuation, which are subject to change. Our insurance subsidiaries regularly monitor their statutory reserves to ensure they hold sufficient amounts to cover actual or expected contract and claims payments. Requiring our insurance subsidiaries to hold additional reserves has the potential to constrain their ability to pay dividends to us. Changes in, or reinterpretations of, these regulatory standards could constrain the ability of our subsidiaries to pay dividends or to advance or repay funds in sufficient amounts and at times necessary to meet our debt obligations and corporate expenses. If statutory earnings or statutory surplus are not sufficient for the payment of ordinary dividends, an “extraordinary” dividend may be paid only if approved, or if a 30-day waiting period has passed during which it has not been disapproved, by the commissioner or director of the insurance department of the applicable insurance company subsidiary’s state of domicile.

Our subsidiaries have no obligation to pay amounts due on the debt obligations owed by us or to make funds available to us for such payments. In particular, our subsidiaries have no obligation to pay amounts owed

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by us under our contractual obligations under the Commitment Letter or other agreements we entered into with affiliates of Blackstone, which may result in an increase in our direct liabilities under those contracts.

Our decision to pursue strategic changes or transactions in our business and operations may also subject our subsidiaries’ dividend plans to heightened regulatory scrutiny and could make obtaining regulatory approvals for extraordinary distributions by our subsidiaries, if any are sought, more difficult. The inability of our subsidiaries to make payments, dividends or other distributions in an amount sufficient to enable us to meet our cash requirements could have an adverse effect on our operations, and on our ability to pay dividends, repurchase our common stock and debt obligations, to meet our debt service obligations, pay our operating expenses and to meet capital and liquidity needs of our subsidiaries, including to maintain regulatory capital ratios, comply with rating agency requirements, meet unexpected cash flow obligations, satisfy capital maintenance and guarantee agreements and collateralize debt with respect to certain subsidiaries.

If our liquidity is insufficient to meet our needs, at such time, we may draw on our committed revolving credit facility or seek third-party financing, including through the capital markets, or other sources of liquidity, which may not be available or could be prohibitively expensive. The availability and cost of any additional financing at any given time depends on a variety of factors, including general market conditions, the volume of trading activities, the overall availability of credit, regulatory actions and our credit ratings and credit capacity. It is also possible that, as a result of such recourse to external financing, customers, lenders or investors could develop a negative perception of our long- or short-term financial prospects. Disruptions, volatility and uncertainty in the financial markets, and downgrades in our financial strength or credit ratings, may limit our ability to access external capital markets at times and on terms favorable to us to meet our capital and liquidity needs or prevent our accessing the external capital markets or other financing sources. If we are unable to satisfy a capital need of a subsidiary, the credit rating agencies could downgrade our subsidiary’s financial strength ratings or the subsidiary could become insolvent or, in certain cases, could be seized by its regulator.

Further, we may be required to post additional collateral in respect of our reinsurance and derivatives liabilities due to regulatory changes from time to time. The need to post this additional collateral, if significant enough, may require us to sell investments at a loss in order to provide securities of suitable credit quality or otherwise secure adequate capital at an unattractive cost. This could adversely impact our business, results of operations, financial condition and liquidity.

Our indebtedness and the degree to which we are leveraged could materially and adversely affect our business, results of operations, financial condition and liquidity.

As of December 31, 2021, on a pro forma basis giving effect to the Recapitalization, we would have had $9.4 billion of indebtedness, representing a financial leverage ratio of 30.8%. We have historically relied upon AIG for financing and for other financial support functions. After the completion of the IPO, we will not be able to rely on AIG’s earnings, assets or cash flows, and we will be responsible for servicing our own indebtedness, obtaining and maintaining sufficient working capital and paying any dividends to our stockholders. In addition, despite our indebtedness levels, we may be able to incur substantially more indebtedness under the terms of our debt agreements. Any such incurrence of additional indebtedness would increase the risks created by our level of indebtedness.

Our ability to make payments on and to refinance our indebtedness will depend on our ability to generate cash in the future from operations, financing or asset sales.

Overall, our ability to generate cash is subject to general economic, financial market, competitive, legislative and regulatory factors, client behavior, our IFS rating, credit and long-term debt ratings and other factors that are beyond our control. We may not generate sufficient funds to service our debt and meet our business needs, such as funding working capital or the expansion of our operations. If we are not able to repay or refinance our debt as it becomes due, we may be subject to increased regulatory supervision, and ultimately, receivership or similar proceedings, and we could be forced to take unfavorable actions, including significant business and legal entity restructuring, limited new business investment, selling assets or dedicating an unsustainable level of our cash flow from operations to the payment of principal and interest on our indebtedness. In addition, our ability to withstand competitive pressures and to react to changes in our industry could be impaired. In the event we default, the lenders who hold our debt could also accelerate amounts due, which could potentially trigger a default or acceleration of the maturity of our other debt.

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In addition, the level of our indebtedness could put us at a competitive disadvantage compared to our competitors that are less leveraged than us. These competitors could have greater financial flexibility to pursue strategic acquisitions and secure additional financing for their operations. The level of our indebtedness could also impede our ability to withstand downturns in our industry or the economy in general.

Prior to this offering, we plan to enter into a $2.5 billion committed revolving credit facility and, on February 25, 2022, we entered into a $9.0 billion delayed draw term loan facility. The rights to borrow funds under the committed revolving credit and delayed draw term loan facilities are subject to the fulfillment of certain conditions, including compliance with all covenants. Our failure to comply with the covenants in these facilities or fulfill the conditions to borrowings, or the failure of lenders to fund their lending commitments (whether due to insolvency, illiquidity or other reasons) in the amounts provided for under the terms of the facilities, would restrict our ability to access the facilities when needed, harm our ability to meet our obligations, restrict our ability to raise further debt and, consequently, could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors outside our control.

We intend to draw on the term loan facility under the Three-Year DDTL Agreement prior to consummation of this offering. The Three-Year DDTL Agreement matures on February 25, 2025. We may be unable to refinance our indebtedness on terms acceptable to us or at all. Market disruptions, such as those experienced in 2008, 2009 and 2020 and ongoing geopolitical concerns, as well as our indebtedness level, may increase our cost of borrowing or adversely affect our ability to refinance our obligations as they become due. If we are unable to refinance our indebtedness or access additional credit, or if short-term or long-term borrowing costs dramatically increase, our ability to meet our short-term and long-term obligations could be adversely affected, which would have a material adverse effect on our business, financial condition, results or operations and cash flows.

We may not be able to generate cash to meet our needs due to the illiquidity of some of our investments.

We and our subsidiaries have a diversified investment portfolio. However, economic conditions, as well as adverse capital market conditions, including a lack of buyers, the inability of potential buyers to obtain financing on reasonable terms, volatility, credit spread changes, interest rate changes, foreign currency exchange rates and/or decline in collateral values have in the past impacted, and may in the future impact, the liquidity and value of our investments.

For example, we have made investments in certain securities that are generally considered less liquid, including certain fixed income securities and certain structured securities, privately placed securities, investments in private equity funds and hedge funds, mortgage loans, finance receivables and real estate. Collectively, investments in these assets had a carrying value of $50 billion at December 31, 2021. The reported values of our relatively less liquid types of investments do not necessarily reflect the values achievable in a stressed market environment for those investments. If we are forced to sell certain of our assets on short notice, we could be unable to sell them for the prices at which we have recorded them, and we could be forced to sell them at significantly lower prices, which could cause a material adverse effect on our business, results of operations, financial condition and liquidity. Adverse changes in the valuation of real estate and real estate-linked assets, deterioration of capital markets and widening credit spreads have in the past, and may in the future, materially adversely affect the liquidity and the value of our investment portfolios, including our residential and commercial mortgage-related securities portfolios.

In the event additional liquidity is required by one or more of our companies, it may be difficult for us to generate additional liquidity by selling, pledging or otherwise monetizing these or other of our investments at reasonable prices and time frames.

A downgrade in the IFS ratings of our insurance companies could limit their ability to generate new business and impair their retention of customers and in-force business, and a downgrade in our credit ratings could adversely affect our business, results of operations, financial condition and liquidity.

IFS ratings are an important factor in establishing the competitive position of insurance companies. IFS ratings measure an insurance company’s ability to meet its obligations to contract holders and policyholders.

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Credit rating agencies estimate a company’s ability to meet its ongoing financial obligations and high IFS and credit ratings help maintain public confidence in a company’s products, facilitate marketing of products and enhance its competitive position. Downgrades of the IFS ratings of our insurance companies, including related to changes in rating agency methodologies, could prevent these companies from selling, or make it more difficult for them to succeed in selling, products and services, make it more difficult for them to obtain new reinsurance or obtain it on reasonable pricing terms, or result in increased policy cancellations, lapses and surrenders, termination of, or increased collateral posting obligations under, assumed reinsurance contracts, or return of premiums. Under credit rating agency policies and practices concerning the relationship between parent and subsidiary ratings, a downgrade in our credit ratings could result in a downgrade of the IFS ratings of our insurance or reinsurance subsidiaries.

Similarly, under credit rating agency policies and practices, a downgrade of the IFS ratings of our insurance and reinsurance subsidiaries could also result in a downgrade in our credit ratings.

In addition, a downgrade of our long-term debt ratings by one or more of the major rating agencies, including related to changes in rating agency methodologies, could potentially increase our financing costs and collateral requirements and limit the availability of financing, which in turn could make it more difficult to refinance maturing debt obligations such as our delayed draw term loan facility and our revolving loan facility, support business growth at our insurance subsidiaries and to maintain or improve the current IFS ratings of our principal insurance subsidiaries. Additionally, a downgrade in our IFS or credit ratings could cause counterparties to limit or reduce their exposure to us and thus reduce our ability to manage our market risk exposures effectively during times of market stress. Such a downgrade could materially and adversely affect our business, results of operations, financial condition and liquidity.

In response to the announcement by AIG in October 2020 of its intention to separate the Life and Retirement business from AIG, Fitch placed the credit ratings of AIG on “Rating Watch Negative,” Moody’s placed the debt ratings of AIG on review for downgrade and S&P placed the credit ratings of AIG and the financial strength ratings of most of the General Insurance subsidiaries on CreditWatch with negative implications. Moody’s and Fitch affirmed the financial strength ratings and outlooks on AIG’s insurance subsidiaries. In connection with the announcement by AIG in July 2021 that it reached a definitive agreement with Blackstone, through Argon, to acquire a 9.9% equity stake in AIG’s Life and Retirement business, Moody’s lowered its debt ratings of AIG to Baa2 from Baa1 and assigned a stable outlook. Moody’s also revised the outlook on the A2 financial strength ratings of AIG’s Life and Retirement subsidiaries, to be transferred to us, to negative from stable. A further downgrade in the credit and debt ratings of AIG would negatively impact our business, results of operations, financial condition and liquidity.

Our participation in a securities lending program and a repurchase program subjects us to liquidity and other risks.

We participate in a securities lending program whereby securities are loaned to third-party borrowers. We generally obtain cash collateral in an amount based upon the estimated fair value of the loaned securities. A return of loaned securities by a borrower requires us to return the cash collateral associated with such loaned securities. In some cases, the fair value of the securities held as collateral could be below the amount of cash collateral we received, and we must return some cash collateral. Additionally, we contribute the cash collateral we receive to cash management, contingent liquidity and hedging programs. In some cases, if our securities lending arrangements are terminated earlier than their maturity date, we may be required to return cash collateral earlier than anticipated, resulting in less cash available for such contributions. We also participate in a repurchase program for our investment portfolio whereby we sell fixed income securities to third-party repurchase counterparties, primarily major brokerage firms and commercial banks, with a concurrent agreement to repurchase substantially similar securities at a predetermined price and future date.

At all times during the term of the repurchase agreements, cash collateral, received and returned on a daily basis, is required to be maintained at a level that is sufficient to allow us to fund substantially all of the cost of purchasing replacement securities. In some cases, the fair value of the securities could be below the agreed repurchase price and we must provide additional cash collateral. Additionally, we invest the cash collateral we receive from the repurchase program in certain long-dated corporate bonds. If we are required to return cash

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collateral under the repurchase program earlier than expected, we may need to sell those bonds at a price lower than anticipated and may have less cash available for investing in long-dated corporate bonds. Further, we may be unable to roll over each arrangement under the repurchase program if the relevant counterparty refuses such rollover.

Under both programs, market conditions on the maturity date could limit our ability to enter into new agreements. Our inability to enter into new securities lending or repurchase agreements would require us to return the cash collateral proceeds associated with such transactions on the maturity date.

If we are required to return significant amounts of cash collateral and are forced to sell securities to meet the return obligation, we could have difficulty selling securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than we otherwise would have been able to realize under normal market conditions, or both. The repurchase and securities lending programs we manage are subject to technical and fundamental market risks which can broadly impact the finance markets. Under adverse capital market and economic conditions, liquidity could broadly deteriorate, which would further restrict our ability to sell securities and require us to provide additional collateral and sell securities for less than the price at which we recorded them, which could cause a material adverse effect on our business, results of operations, financial condition and liquidity.

Changes in the method for determining LIBOR and the continuing phase out of LIBOR and uncertainty related to LIBOR replacement rates may affect our business, results of operations, financial condition and liquidity.

We have significant assets, liabilities and obligations with interest rates tied to the London Interbank Offered Rate (“LIBOR”) for U.S. dollars and other currencies. Starting January 1, 2022, all LIBOR settings either ceased to be provided by any administrator, or are no longer representative for all non-U.S. dollar LIBOR settings and one-week and two-month U.S. dollar (“USD”) LIBOR settings, and immediately after June 30, 2023 will no longer be representative for the remaining USD LIBOR settings, absent subsequent action by the relevant authorities. In addition, while GBP and JPY LIBOR are currently being reported on a synthetic basis for certain tenors, there can be no assurance that such non-USD synthetic LIBOR or USD LIBOR will remain available in the future.

Significant recommendations as to alternative rates and as to protocols have been advanced, and continue to be advanced, by various regulators and market participants, including the Alternative Reference Rates Committee of the United States Federal Reserve (“ARRC”), the International Swaps and Derivatives Association (“ISDA”), the UK Financial Conduct Authority (“FCA”) and the U.S. Congress, and legislative action by the State of New York, but there can be no assurance that the various recommendations or legislative action will be effective at preventing or mitigating disruption as a result of the transition. In particular, for U.S. dollar LIBOR, the ARRC has selected the Secured Overnight Financing Rate (“SOFR”) as its preferred replacement benchmark and has formally recommended, in limited cases, a term rate based on SOFR. Additionally, on March 15, 2022, President Biden signed into law the “Adjustable Interest Rate (LIBOR) Act,” as part of the Consolidated Appropriations Act, 2022, which provides for a transition to a replacement rate selected by the Board of Governors of the Federal Reserve System in the event a contract referencing LIBOR does not have a fallback or replacement rate provision in effect when LIBOR is retired, or a replacement rate is not selected by a determining person as defined by the statute. Both ARRC and ISDA have taken significant steps toward implementing various fallback provisions and protocols; and for British pound sterling, relevant authorities have promoted use of Sterling Overnight Index Average (“SONIA”) as a replacement for LIBOR. However, the market transition away from LIBOR to alternative reference rates, including SOFR or SONIA, is complex and could result in disruptions, among other things, due to differences between LIBOR (an unsecured forward-looking term rate) and alternative rates that are based on historical measures of overnight secured rates; due to failure of market participants to fully accept such alternative rates; or due to difficulties in amending legacy LIBOR contracts or implementing processes for determining new alternative rates.

The consequences of LIBOR reform could adversely affect the market for LIBOR-based securities, the payment obligations under our existing LIBOR-based liabilities and our ability to issue funding agreements bearing a floating rate of interest, as well as the value of financial and insurance products tied to LIBOR, investment portfolio or the substantial amount of derivatives contracts we use to hedge our assets, insurance and other liabilities.

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Our actions taken to address the transition from LIBOR for U.S. dollar and other currencies and to mitigate potential risks include, among other things, ensuring new legal contracts, existing legal contracts if necessary and our asset and debt issuances include appropriate LIBOR fallback provisions and identifying fallback provisions in existing contracts and investments which mature after the relevant LIBOR phase-out date; updating valuation and actuarial models that utilize LIBOR; determining the impact of new accounting and tax requirements; adjusting applicable technology applications to be able to support both LIBOR and new alternative rates; and executing and monitoring trades (including test transactions) for derivatives, assets and debt issuances utilizing the new alternative reference rates. We cannot, however, be certain that these measures will effectively mitigate potential risks related to the transition from LIBOR. In addition, we anticipate there may be additional risks to our current processes and information systems that will need to be identified and evaluated by us. Uncertainty as to the nature of such potential changes, alternative reference rates or other reforms could materially and adversely affect our business, results of operations, financial condition and liquidity.

Nonperformance or defaults by counterparties may expose us to credit risk, which may materially and adversely affect the value of our investments, our profitability and sources of liquidity.

We are exposed to credit risk arising from exposures to various counterparties related to investments, derivatives, premiums receivable and reinsurance recoverables. These counterparties include, but are not limited to, issuers of fixed income and equity securities we hold, borrowers of loans we hold, customers, plan sponsors, trading counterparties, counterparties under swaps and other derivative instruments, reinsurers, joint venture partners, clearing agents, exchanges, clearing houses, custodians, brokers and dealers, commercial banks, investment banks, intra-group counterparties with respect to derivatives and other third parties, financial intermediaries and institutions, and guarantors. These counterparties may default on their obligations to us due to bankruptcy, insolvency, receivership, financial distress, lack of liquidity, adverse economic conditions, operational failure, fraud, government intervention and other reasons. In addition, for exchange-traded derivatives, such as futures, options as well as “cleared” over-the-counter derivatives, we are generally exposed to the credit risk of the relevant central counterparty clearing house and futures commission merchants through which we clear derivatives. For uncleared over-the-counter derivatives, we are also generally exposed to the credit risk of the third-party custodians at which margin collateral that we post, or is posted to us by our counterparties, is held as a result of regulatory requirements. With respect to transactions in which we acquire a security interest in collateral owned by the borrower, our credit risk could be exacerbated when the collateral cannot be realized or if we cannot offset our exposures through derivative transactions, reinsurance and underwriting arrangements, unsecured money market and prime funds and equity investments. In addition, we assume pension obligations from plan sponsors, including obligations in respect of current employees of the plan sponsor. If the plan sponsor experiences financial distress that results in bankruptcy or significant terminations or otherwise experiences substantial turnover of employees active under the plan, such employees may be entitled to rights under the pension plan, such as lump-sum payments. To the extent that a plan sponsor experiences a significant turnover event, we may not achieve the targeted return expected at the time the PRT transaction was priced. Further, we invest on a short-term basis the cash collateral pledged to us by our derivative instruments counterparties in unsecured money markets and prime funds, which exposes us to the credit risk of financial institutions where we invest funds received as collateral. Any resulting loss or impairments to the carrying value of these assets or defaults by these counterparties on their obligations to us could have a material adverse effect on our business, results of operations, financial condition and liquidity.

An insolvency of, or the appointment of a receiver to rehabilitate or liquidate, a significant competitor could negatively impact our business if such appointment were to impact consumer confidence in our products and services. Additionally, if the underlying assets supporting the structured securities we invest in are expected to default or actually default on their payment obligations, our securities may incur losses.

Our exposure to credit risk may be exacerbated in periods of market or credit stress, as derivative counterparties take a more conservative view of their acceptable credit exposure to us, resulting in reduced capacity to execute derivative-based hedges when we need it most.

Risks Relating to Business and Operations

Pricing for our products is subject to our ability to adequately assess risks and estimate losses.

We seek to price our products such that premiums, policy fees, other policy charges and future net investment income earned on assets will result in an acceptable profit in excess of expected claims driven by

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policyholder deaths and behavior (such as exercising options and guarantees in the policy or allowing their policy to lapse), assumed expenses, taxes and the cost of capital.

Our business is dependent on our ability to price our products effectively and charge appropriate fees and other policy charges. Pricing adequacy depends on a number of factors and assumptions, including proper evaluation of insurance risks, our expense levels, expected net investment income to be realized, our response to rate actions taken by competitors, our response to actions by distributors, legal and regulatory developments and long-term assumptions regarding interest rates, credit spreads, investment returns, operating costs and the expected persistency of certain products, which is the probability that a policy will remain in force from one period to the next. For example, some of our life insurance policies and annuity contracts provide management the limited right to adjust certain non-guaranteed charges or benefits and interest crediting rates if necessary, subject to guaranteed minimums or maximums, and the exercise of these rights could result in reputational and/or litigation risk.

Management establishes target returns for each product based upon these factors, certain underwriting assumptions and capital requirements, including statutory, GAAP and economic capital models. We monitor and manage pricing and sales to achieve target returns on new business, but we may not be able to achieve those returns due to the factors discussed above. Profitability from new business emerges over a period of years, depending on the nature of the product, and is subject to variability as actual results may differ from pricing assumptions.

Our profitability depends on multiple factors, including the impact of actual mortality, longevity, morbidity and policyholder behavior experience as compared to our assumptions; the adequacy of investment margins; our management of market and credit risks associated with investments, including the cost of hedging; our ability to maintain premiums and contract charges at a level adequate to cover mortality, benefits and contract administration expenses; the adequacy of contract charges and availability of revenue from providers of investment options offered in variable contracts to cover the cost of product features and other expenses; and management of operating costs and expenses. Inadequate pricing and the difference between estimated results of the above factors compared to actual results could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Guarantees within certain of our products may increase the volatility of our results.

Certain of our annuity and life insurance products include features that guarantee a certain level of benefits, including guaranteed minimum death benefits, guaranteed living benefits, including guaranteed minimum income benefits, and products with guaranteed interest crediting rates, including crediting rate guarantees tied to the performance of various market indices. Many of these features are accounted for at fair value as embedded derivatives under GAAP, and they have significant exposure to capital markets and insurance risks. An increase in valuation of liabilities associated with the guaranteed features results in a decrease in our profitability and depending on the magnitude of any such increase, could materially and adversely affect our financial condition, including our capitalization, as well as the financial strength ratings.

We employ a capital markets hedging strategy to partially offset the economic impacts of movements in equity, interest rate and credit markets, however, our hedging strategy may not effectively offset movements in our GAAP and statutory surplus and may otherwise be insufficient in relation to our obligations. Furthermore, we are subject to the risk that changes in policyholder behavior or actual levels of mortality/longevity as compared to assumptions in pricing and reserving, combined with adverse market events, could produce losses not addressed by the risk management techniques employed. These factors, individually or collectively, may have a material adverse effect on our business, results of operations, financial condition and liquidity including our ability to receive dividends from our operating companies.

Changes in interest rates result in changes to the fair value liability. All else being equal, higher interest rates generally decrease the fair value of our liabilities, which increases our earnings, while low interest rates generally increase the fair value of our liabilities, which decreases our earnings. A prolonged low interest rate environment may also subject us to increased hedging costs or an increase in the amount of statutory reserves that our insurance subsidiaries are required to hold for our liabilities, lowering their statutory surplus, which would adversely affect their ability to pay dividends. In addition, it may also increase the perceived value of our benefits to our policyholders, which in turn may lead to a higher than expected benefit utilization and persistency of those products over time.

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Differences between the change in fair value of the GAAP embedded derivatives, as well as associated statutory and tax liabilities, and the value of the related hedging portfolio may occur and can be caused by movements in the level of equity, interest rate, and credit markets, market volatility, policyholder behavior, and mortality/longevity rates that differ from our assumptions and our inability to purchase hedging instruments at prices consistent with the desired risk and return trade-off. In addition, we may sometimes choose, based on economic considerations and other factors, not to mitigate these risks. The occurrence of one or more of these events has in the past resulted in, and could in the future result in, an increase in the fair value of liabilities associated with the guaranteed benefits without an offsetting increase in the value of our hedges, or a decline in the value of our hedges without an offsetting decline in our liabilities, thus reducing our results of operations and shareholders’ equity.

Our use of derivative instruments to hedge market risks associated with our liabilities exposes us to counterparty credit risk and could adversely affect our business, results of operations, financial condition and liquidity.

Our risk management strategy seeks to mitigate the potential adverse effects of changes in capital markets, specifically changes in equity markets, foreign exchange rates and interest rates on guarantees related to variable annuities, fixed index annuities and index universal life insurance, and liability guarantees associated with our GLBs for certain products such as variable annuities, fixed index annuities and fixed annuities. The strategy primarily relies on hedging strategies using derivatives instruments and, to a lesser extent, reinsurance.

Derivative instruments primarily composed of futures, swaps, and options on equity indices and interest rates are an essential part of our hedging strategy and are selected to provide a measure of economic protection. We utilize a combination of short-term and longer-term derivative instruments to have a laddered maturity of protection and reduce rollover risk during periods of market disruption or higher volatility. As of December 31, 2021, notional amounts on our derivative instruments totaled $214 billion. We manage the potential credit exposure for derivative instruments through utilization of financial exchanges, ongoing evaluation of the creditworthiness of counterparties, the use of ISDA and collateral agreements, and master netting agreements.

In connection with our hedging program, we may determine to seek the approval of applicable regulatory authorities to permit us to increase our limits with respect to derivatives transactions used for hedging purposes consistent with those contemplated by the program. No assurance can be given that any of our requested approvals will be obtained and whether, if obtained, any such approvals will not be subject to qualifications, limitations or conditions. If our capital is depleted in the event of persistent market downturns, we may need to replenish it by holding additional capital, which we may have allocated for other uses, or purchase additional hedging protection through the use of more expensive derivatives with strike levels at then-current market levels. Under our hedging strategy, period-to-period changes in the valuation of our hedges relative to the guaranteed liabilities may result in significant volatility to certain of our profitability measures, which in certain circumstances could be more significant than has been the case historically.

In addition, hedging instruments we enter into may not effectively offset changes in economic values of the guarantees within certain of our annuity products or may otherwise be insufficient in relation to our obligations. For example, in the event that derivatives counterparties or central clearinghouses are unable or unwilling to honor their obligations, we remain liable for the guaranteed liability benefits.

The cost of our hedging program may be greater than anticipated because adverse market conditions can limit the availability and increase the costs of the derivatives we intend to employ, and such costs may not be recovered in the pricing of the underlying products we offer. Our transactions with financial and other institutions generally specify the circumstances under which either party is required to pledge collateral related to any change in the market value of the derivative instruments. The amount of collateral, or a total of initial and variation margins, we are required to post under these agreements could increase under certain circumstances, which could materially and adversely affect our business, results of operations, financial condition and liquidity.

The above factors, individually or in the aggregate, may have a material adverse effect on our financial condition and results of operations, our profitability measures as well as impact our capitalization, our distributable earnings, our ability to receive dividends from our operating companies and our liquidity. These impacts could then in turn impact our RBC ratios and our financial strength ratings.

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We may experience difficulty in marketing and distributing our Individual Retirement and Life Insurance products through our current and future distribution channels, and the use of third parties may result in additional liabilities.

Although we distribute our products through a wide variety of distribution channels in our Individual Retirement and Life Insurance segments, we maintain relationships with certain key distributors, which results in certain distributor concentration. Distributors have in the past, and may in the future, elect to renegotiate the terms of existing relationships such that those terms may not remain attractive or acceptable to us, limit the products they sell, including the types of products offered by us, or otherwise reduce or terminate their distribution relationships with us with or without cause. This could be due to various reasons, such as uncertainty related to this offering, industry consolidation of distributors or other industry changes that increase the competition for access to distributors, developments in laws or regulations that affect our business or industry, including the marketing and sale of our products and services, adverse developments in our business, the distribution of products with features that do not meet minimum thresholds set by the distributor, strategic decisions that impact our business, adverse rating agency actions or concerns about market-related risks. An interruption or reduction in certain key relationships could materially affect our ability to market our products and could have a material adverse effect on our businesses, operating results and financial condition.

Alternatively, renegotiated terms may not be attractive or acceptable to distributors, or we may terminate one or more distribution agreements due to, for example, a loss of confidence in, or a change in control of, one of the third-party distributors. An interruption or reduction in certain key relationships could materially affect our ability to market our products and could materially and adversely affect our business, results of operations, financial condition and liquidity.

We are at risk that key distribution partners could merge, consolidate, change their business models in ways that affect how our products are sold, or terminate their distribution contracts with us, or that new distribution channels could emerge and adversely impact the effectiveness of our distribution efforts. For example, in the year ended December 31, 2021, our top 10 distribution partners in our Individual Retirement business represented 57% of our sales, and our largest distribution partner represented 10% of our sales. An increase in bank, wirehouse and broker-dealer consolidation activity could increase competition for access to distributors, result in greater distribution expenses and impair our ability to market our Individual Retirement annuity products through these channels.

Also, if we are unsuccessful in attracting, retaining and training key distribution partners, or are unable to maintain our distribution relationships, our sales could decline, which could have a material adverse effect on our business, results of operations, financial condition and liquidity. In addition, substantially all of our distributors are permitted to sell our competitors’ products. If our competitors offer products that are more attractive than ours or pay higher commission rates to the distribution partners than we do, these distribution partners could concentrate their efforts in selling our competitors’ products instead of ours.

In addition, we can, in certain circumstances, be held responsible for the actions of our third-party distributors, including broker-dealers, registered representatives, insurance agents and agencies and marketing organizations, and their respective employees, agents and representatives, in connection with the marketing and sale of our products by such parties in a manner that is deemed not compliant with applicable laws and regulations. This is particularly acute with respect to unaffiliated distributors where we may not be able to directly monitor or control the manner in which our products are sold through third-party firms despite our training and compliance programs. Further, misconduct by employees, agents and representatives of our broker-dealer subsidiaries in the sale of our products could also result in violations of laws by us or our subsidiaries, regulatory sanctions and serious reputational or financial harm to us. The precautions we take to prevent and detect the foregoing activities may not be effective. If our products are distributed to customers for whom they are unsuitable or distributed in a manner deemed inappropriate, we could suffer reputational and/or other financial harm to our business.

We may experience difficulty in sales and asset retention with respect to our Group Retirement segment as a result of the highly competitive nature of the business, consolidation of plan sponsors, and the potential for redirection of plan sponsor assets to other providers.

Plan sponsors, our customers in our Group Retirement segment, have in the past, and may in the future, elect to renegotiate the terms of existing relationships such that those terms may not remain attractive or

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acceptable to us, limit the products or services they sell or offer to their plan participants, including the types of products and advisory services offered by us, or otherwise reduce or terminate their relationships with us. This could arise as a result of the consolidation of plan sponsors (most recently in the healthcare industry) or plan sponsors redirecting their assets to other providers who may provide more favorable terms. Such renegotiation or termination with respect to plans that significantly contribute to our profitability could have a greater impact on our overall profitability. In the case of employer-sponsored plans, the impact can also vary depending on whether existing plan accounts remain with us, are transferred at the direction of the plan sponsor or are transferred at the direction of individual plan participants.

Additionally, plan sponsors, both public and private, continue to experience financial difficulty and some of these institutions reduce costs through, among other actions and strategies, headcount reductions or by rebalancing their workforce in favor of part-time employees who are ineligible for retirement benefits. The financial stress on such plan sponsors is often exacerbated by reductions in governmental funding sources. Moreover, our strategies to serve our plan sponsors’ employees may not be successful.

Given these challenges, our premiums and deposits may fail to grow, which could adversely affect our business, results of operations, financial condition and liquidity.

Third parties we rely upon to provide certain business and administrative services on our behalf may not perform as anticipated, which could have an adverse effect on our business, results of operations, financial condition and liquidity.

We rely on the use of third-party providers to deliver contracted services in a broad range of areas, including, but not limited to, the administration or servicing of certain policies and contracts, investment accounting, information technology and operational functions, and investment advisory services for certain funds, plans and retail advisory programs we offer.

We periodically negotiate provisions and renewals of these domestic and international relationships, and there can be no assurance that such terms will remain acceptable to us, such third parties or regulators. If our third-party providers experience disruptions, fail to meet applicable licensure requirements, do not perform as anticipated or in compliance with applicable laws and regulations, terminate or fail to renew our relationships, or such third-party providers in turn rely on services from another third-party provider, who experiences such disruptions, licensure failures, nonperformance or noncompliance, or termination or non-renewal of its contractual relationships, we may experience operational difficulties, an inability to meet obligations (including, but not limited to, contractual, legal, regulatory or policyholder obligations), a loss of business, increased costs or reputational harm, compromises to our data integrity, or suffer other negative consequences, all of which may have a material adverse effect on our business, consolidated results of operations, liquidity and financial condition. Some of these providers are located outside the United States, which exposes us to business disruptions and political risks inherent when conducting business outside of the United States.

Third parties performing regulated activities on our behalf, such as sales, underwriting, servicing of products, claims handling, and retail and fund investment advisory services could pose a heightened risk, as we may be held accountable for third-party conduct, including conduct that is not in compliance with applicable law.

Further, we are highly dependent on third parties, including Blackstone IM, one of our significant investment managers, to maintain information technology and other operational systems to record and process its transactions with respect to the investment portfolios of our insurance company subsidiaries, which includes providing information to us to enable us to value our investment portfolio that may affect our GAAP or U.S. statutory accounting principles financial statements. Blackstone IM could experience a failure of these systems, its employees or agents could fail to monitor and implement enhancements or other modifications to a system in a timely and effective manner, or its employees or agents could fail to complete all necessary data reconciliation or other conversation controls when implementing a new software system or modifications to an existing system. The maintenance and implementation of these systems at Blackstone IM is not within our control. Should Blackstone IM’s systems fail to accurately record information pertaining to the investment portfolios of our insurance company subsidiaries, we may inadvertently include inaccurate information in our financial statements and experience a lapse in our internal control over financial reporting, and such failure could have a material adverse effect on our business, results of operations, financial condition and liquidity.

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We are exposed to certain risks if we are unable to maintain the availability of our critical technology systems and data and safeguard the confidentiality and integrity of our data, which could compromise our ability to conduct business and adversely affect our business, results of operations, financial condition and liquidity.

We use information technology systems, infrastructure and networks and other operational systems to store, retrieve, evaluate and use customer, employee, and company data and information. Our business is highly dependent on our ability to access these systems to perform necessary business functions. In the event of a natural disaster, a computer virus, unauthorized access, a terrorist attack, cyber-attack or other disruption, our systems and networks may be inaccessible to our employees, customers or business partners for an extended period of time, and we may be unable to meet our business obligations for an extended period of time if our data or systems are disabled, manipulated, destroyed or otherwise compromised. Additionally, some of our systems and networks are older, legacy-type systems that are less efficient and require an ongoing commitment of significant resources to maintain or upgrade. Supply chain disruptions or delays could prevent us from maintaining and implementing changes, updates and upgrades to our systems and networks in a timely manner or at all. System and network failures or outages could compromise our ability to perform business functions in a timely manner, which could harm our ability to conduct business, hurt our relationships with our business partners and customers and expose us to legal claims as well as regulatory investigations and sanctions, any of which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Some of these systems and networks also rely upon third-party systems, which themselves may rely on the systems of other third parties. Problems caused by, or occurring in relation to, our third-party providers and systems, including those resulting from breakdowns or other disruptions in information technology services provided by a third-party provider, failure of a third-party provider to provide current or higher volumes of required services or cyber-attacks and security breaches at a third-party provider may in the future materially and adversely affect our business, results of operations, financial condition and liquidity.

Like other companies, the systems and networks we maintain and third-party systems and networks we use have in the past been, and will likely in the future be, subject to or targets of unauthorized or fraudulent access, including physical or electronic break-ins or unauthorized tampering, as well as attempted cyber and other security threats and other computer-related penetrations such as “denial of service” attacks, phishing, untargeted but sophisticated and automated attacks, and other disruptive software. Also, like other companies, we have an increasing challenge of attracting and retaining highly qualified security personnel to assist us in combatting these security threats. The frequency and sophistication of such threats continue to increase and often become further heightened in connection with geopolitical tensions.

We continuously monitor and develop our information technology networks and infrastructure in an effort to prevent, detect, address and mitigate the risk of threats to our data, systems and networks, including malware and computer virus attacks, ransomware, unauthorized access, business e-mail compromise, misuse, denial-of-service attacks, system failures and disruptions. There is no assurance that our security measures, including information security policies, administrative, technical and physical controls and other actions designed as preventative will provide fully effective protection from such events. We maintain insurance to cover operational risks, such as cyber risk and technology outages, but this insurance may not cover all costs associated with the consequences of personal, confidential or proprietary information being compromised. In the case of a successful ransomware attack in which our data and information restore control processes are not effective, our information could be held hostage until a ransom, which may be significant, is paid for retrieval of the stolen information. In some cases, such compromise may not be immediately detected which may make it difficult to recover critical services, damage assets and compromise the integrity and security of data including our policyholder, employee, agent and other confidential information processed through our systems and networks. Additionally, since we rely heavily on information technology and systems and on the integrity and timeliness of data to run our businesses and service our customers, any such compromise or security event may impede or interrupt our business operations and our ability to service our customers, and otherwise may materially and adversely affect our business, results of operations, financial condition and liquidity.

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We are continuously evaluating and enhancing systems and processes. These continued enhancements and changes, as well as changes designed to update and enhance our protective measures to address new threats, may increase the risk of a system or process failure or the creation of a gap in the associated security measures. Any such failure or gap could materially and adversely affect our business, results of operations, financial condition and liquidity.

We routinely transmit, receive and store personal, confidential and proprietary information by email and other electronic means. Although we attempt to keep such information confidential and secure, we may be unable to do so in all events, especially with clients, vendors, service providers, counterparties and other third parties who may not have or use appropriate controls to protect personal, confidential or proprietary information. The compromise of personal, confidential or proprietary information could cause a loss of data, give rise to remediation or other expenses, expose us to liability under U.S. and international laws and regulations, and subject us to litigation, investigations, sanctions, and regulatory and law enforcement action, and result in reputational harm and loss of business, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Furthermore, certain of our business lines are subject to compliance with laws and regulations enacted by U.S. federal and state governments, the EU, UK, Bermuda or other jurisdictions or enacted by various regulatory organizations or exchanges relating to the privacy and security of the information of clients, employees or others. The variety of applicable privacy and information security laws and regulations exposes us to heightened regulatory scrutiny and requires us to incur significant technical, legal and other expenses in an effort to ensure and maintain compliance and will continue to impact our business in the future by increasing legal, operational and compliance costs. While we have taken steps to comply with privacy and information security laws, we cannot guarantee that our efforts will meet the evolving standards imposed by data protection authorities. If we are found not to be in compliance with these privacy and security laws and regulations, we may be subject to additional potential private consumer, business partner or securities litigation, regulatory inquiries, and governmental investigations and proceedings, and we may incur damage to our reputation. Any such developments may subject us to material fines and other monetary penalties and damages, divert management’s time and attention, and lead to enhanced regulatory oversight, any of which could have a material adverse effect on our business, results of operations, financial condition and liquidity. Additionally, we expect that developments in privacy and cybersecurity worldwide will increase the financial and reputational implications following a significant breach of our or our third-party suppliers’ information technology systems. New and currently unforeseen regulatory issues could also arise from the increased use of emerging technology, data and digital services. If we are found not to be in compliance with these laws and regulations concerning emerging technology, data and digital services, we could be subjected to significant civil and criminal liability and exposed to reputational harm.

In addition, the SEC recently released proposed rules enhancing disclosure requirements for publicly registered companies and for investment advisers and funds, covering cybersecurity risk and management, which, if adopted as proposed, could result in additional compliance costs. See “Business—Regulation—U.S. Regulation—Privacy, Data Protection and Cybersecurity.”

In addition, we have been required to further rely on our technology systems as a result of the fact that all non-essential staff were transitioned to a remote work environment in response to the COVID-19 pandemic and thus, the risk of a gap in our security measures and the risk of a system or process failure is heightened.

In connection with our separation from AIG, we will transition to separate information systems and will be responsible for our own cybersecurity. Any of the foregoing risks may be exacerbated by the separation and related transition.

Increasing scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding environmental, social and governance matters may adversely affect our reputation or otherwise adversely impact our business and results of operations.

There is increasing scrutiny and evolving expectations from investors, customers, regulators and other stakeholders on environmental, social and governance (“ESG”) practices and disclosures, including those related to environmental stewardship, climate change, diversity, equity and inclusion, racial justice and workplace conduct. Regulators have imposed and likely will continue to impose ESG-related rules and guidance, which may conflict with one another and impose additional costs on us or expose us to new or additional risks. In addition,

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the SEC has proposed new ESG reporting rules which would apply to us after this offering and which, if adopted as proposed, could result in additional compliance and reporting costs. See “Business—Regulation—U.S. Regulation—Climate Change.” Moreover, certain organizations that provide information to investors have developed ratings for evaluating companies on their approach to different ESG matters, and unfavorable ratings of our company or our industries may lead to negative investor sentiment and the diversion of investment to other companies or industries. If we are unable to meet these standards or expectations, whether established by us or third parties, it could result in adverse publicity, reputational harm, or loss of customer and/or investor confidence, which could adversely affect our business, results of operations, financial condition and liquidity.

Our risk management policies and procedures may prove to be ineffective and leave us exposed to unidentified or unanticipated risk, which could adversely affect our business, results of operations, financial condition and liquidity.

We have developed and continue to enhance enterprise-wide risk management policies and procedures to identify, monitor and mitigate risk to which we are exposed. Many of our methods of identifying, measuring, underwriting and managing risks are based upon our study and use of historical market, applicant, customer, employee and bad actor behavior or statistics based on historical models. As a result, these methods may not accurately predict future exposures from events such as a major financial market disruption as the result of a natural or manmade disaster like a climate-related event or terrorist attack, that could be significantly different than the historical measures indicate, and which could also result in a substantial change in policyholder behavior and claims levels not previously observed. We have and will continue to enhance our life insurance underwriting process, including, from time to time, considering and integrating newly available sources of data to confirm and refine our traditional underwriting methods. Our efforts at implementing these improvements may not, however, be fully successful, which may adversely affect our competitive position. We have also introduced new product features designed to limit our risk and taken actions on in-force business, which may not be fully successful in limiting or eliminating risk. Moreover, our hedging programs and reinsurance strategies that are designed to manage market risk and mortality risk rely on assumptions regarding our assets, liabilities, general market factors and the creditworthiness of our counterparties that could prove to be incorrect or inadequate. Our hedging programs utilize various derivative instruments, including but not limited to equity options, futures contracts, interest rate swaps and swaptions, as well as other hedging instruments, which may not effectively or completely reduce our risk; and assumptions underlying models used to measure accumulations and support reinsurance purchases may be proven inaccurate and could leave us exposed to larger than expected catastrophe losses in a given year. In addition, our current business continuity and disaster recovery plans are based upon our use of historical market experiences and models, and customer, employee and bad actors’ behavior and statistics, and accordingly may not be sufficient to reduce the impact of cyber risks, including ransomware, natural catastrophic events or fraudulent attacks, such as account take-over, that are beyond the level that historical measures indicate and greater than our anticipated thresholds or risk tolerance levels. Other risk management methods depend upon the evaluation of information regarding markets, clients, or other matters that is publicly available or otherwise accessible to us, which may not always be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risks requires, among other things, policies and procedures to record and verify large numbers of transactions and events, such as new and frequently updated regulatory requirements across the United States and internationally, primarily from the Prudential Regulation Authority (the “PRA”), the Bermuda Monetary Authority (the “BMA”) and The Bank of Ireland, each jurisdiction mandating specified requirements with respect to artificial intelligence and environmental, social and governance legal and regulatory requirements. These policies and procedures may not be fully effective. Accordingly, our risk management policies and procedures may not adequately mitigate the risks to our business, results of operations, financial condition and liquidity.

If our risk management policies and procedures are ineffective, we may suffer unexpected losses and could be materially adversely affected. As our business changes, the markets in which we operate evolve and new risks emerge, including for example risks related to climate change or meeting stakeholder expectations relating to environmental, social or governance issues, our risk management framework may not evolve at the same pace as those changes. The effectiveness of our risk management strategies may be limited, resulting in losses to us, which could materially adversely affect our business, results of operations, financial condition and liquidity. In addition, there can be no assurance that we can effectively review and monitor all risks or that all of our employees will understand and follow (or comply with) our risk management policies and procedures.

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Significant legal or regulatory proceedings may adversely affect our business, results of operations, financial condition and liquidity.

In the normal course of business, we face significant risk from regulatory and governmental investigations and civil actions, litigation and other forms of dispute resolution in various domestic and foreign jurisdictions. In addition, we are involved in litigation and arbitration concerning our rights and obligations under insurance policies issued by us and under reinsurance contracts with third parties in the normal course of our insurance operations. Additionally, from time to time, various regulatory and governmental agencies review the transactions and practices of us and our subsidiaries and in connection with industry-wide and other inquiries into, among other matters, the business practices of current and former operating insurance subsidiaries. Such investigations, inquiries or examinations have in the past developed and could in the future develop into administrative, civil or criminal proceedings or enforcement actions, in which remedies could include fines, penalties, restitution or alterations in our business practices, and could result in additional expenses, limitations on certain business activities and reputational damage.

We, our subsidiaries and their respective officers and directors are also subject to, or may become subject to, a variety of additional types of legal disputes brought by holders of our securities, customers, employees and others, alleging, among other things, breach of contractual or fiduciary duties, bad faith, indemnification and violations of federal and state statutes and regulations. Certain of these matters may also involve potentially significant risk of loss due to the possibility of significant jury awards and settlements, punitive damages or other penalties. Many of these matters are also highly complex and seek recovery on behalf of a class or similarly large number of plaintiffs. It is therefore inherently difficult to predict the size or scope of potential future losses arising from them, and developments in these matters could have a material adverse effect on our financial condition or results of operations.

For a discussion of certain legal proceedings, see Note 15 to the audited consolidated financial statements.

Our business strategy may not be effective in accomplishing our objectives, including as a result of events that can cause our fundamental business model to change and assumptions that may prove not to be accurate.

There can be no assurance that we will successfully execute our strategy. In addition, we may not be successful in increasing our earnings meaningfully or at all. Moreover, our ability to pay dividends or repurchase shares is subject to certain restrictions and limitations, including as a result of regulatory requirements, which may prevent us from returning the expected or any capital to our stockholders for the indefinite future. For these reasons, no assurances can be given that we will be able to execute our strategy or that our strategy will achieve our objectives, including our financial goals.

We have established certain financial goals that we believe measure the execution of our strategy, as set forth in “Prospectus Summary—Financial Goals” and “Business—Financial Goals.” These goals are based on certain assumptions, including assumptions regarding interest rates, geopolitical stability and market performance. While these goals are presented with numerical specificity and we believe such goals to be reasonable as of the date of this prospectus, there are significant risks that these assumptions may not be realized and, as a result, we may not achieve our financial goals in whole or in part. The results sought to be achieved by our financial goals may vary depending on various factors, including actual capital market outcomes, changes in actuarial models or emergence of actual experience, changes in regulation as well as other risks and factors that may cause actual events to adversely differ from one or more of our key assumptions. There can be no assurance that we will achieve such financial goals, nor are these goals guarantees of future performance or outcomes.

The financial goals are made only as of the date of this prospectus, and we do not undertake any obligation to update or revise any goals to reflect the occurrence of events, changes in assumptions or adjustments in such financial goals, unanticipated or otherwise, other than as may be required by law. In addition, we expect our financial goals to evolve over time to reflect changes in our business strategies and our balance sheet mix.

We face intense competition in each of our business lines and technological changes may present new and intensified challenges to our business.

Our businesses operate in highly competitive environments. Our principal competitors are major stock and mutual life insurance companies, advisory firms, broker dealers, investment management firms, retirement plan recordkeepers, mutual fund organizations, banks, investment banks and other nonbank financial institutions. The

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financial services industry, including the insurance industry in particular, is highly competitive. We compete in the United States with life and retirement insurance companies and other participants in related financial services fields. Overseas, our subsidiaries compete for business with global insurance groups, local companies and the foreign insurance operations of large U.S. insurers.

Our business competes across a number of factors, which include scale, service, product features, price, investment performance and availability of originated assets, commission structures, distribution capacity, financial strength ratings, name recognition and reputation. Our ability to continue to compete across these factors depends on delivery of our business plan, competitor actions and overall environment, all of which carry inherent risks.

For further discussion regarding competition within each of our operating segments, see “Business—Individual Retirement—Markets,” “Business—Individual Retirement—Competition,” “Business— Group Retirement—Markets,” “Business—Group Retirement—Competition,” “Business—Institutional Markets—Markets” and “Business—Institutional Markets—Competition.”

Technological advancements and innovation in the insurance, asset management, wealth management and financial planning industries, including those related to evolving customer preferences, the digitization of products and services, acceleration of automated underwriting and electronic processes present competitive risks. Technological advancements and innovation are occurring in distribution, underwriting, recordkeeping, advisory, claims and operations at a rapid pace, and that pace may increase, particularly as companies increasingly use data analytics and technology as part of their business strategy. Further, our business and results of operations could be materially and adversely affected if external technological advances limit our ability to retain existing business, write new business or appropriate terms, or impact our ability to adapt or deploy current products as quickly and effectively as our competitors. Additional costs may also be incurred in order to implement changes to automate procedures critical to our distribution channels in order to increase flexibility of access to our services and products. Moreover, upon our separation from AIG, we may not retain the employees who were working on technological implementation efforts at AIG, which may make it more difficult and expensive for us to complete and maintain such implementations. If we are unsuccessful in implementing such changes, our competitive position and distribution relationships may be harmed. In recent years, there has been an increase in activity by venture capital funded “InsureTech” start-ups in the life insurance industry, which are seeking to disrupt traditional ways of doing business and we continue to monitor this emerging competitive risk.

Catastrophes, including those associated with climate change and pandemics, may adversely affect our business and financial condition.

Any catastrophic event, such as pandemic diseases, terrorist attacks, accidents, floods, severe storms or hurricanes or cyber-terrorism, could have a material and adverse effect on our business and operations. In the event of a disaster, unanticipated problems with our business continuity plans could cause a material adverse effect on our business, results of operations, financial condition and liquidity. We could also experience a material adverse effect on our business, results of operations, financial condition and liquidity of our insurance business due to increased mortality and, in certain cases, morbidity rates and/or its impact on the economy and financial markets.

Additionally, catastrophic events could harm the financial condition of our reinsurers and thereby increase the probability of default on reinsurance recoveries. Accordingly, our ability to write new business could also be affected. Further, the impact of climate change has caused, and may continue to cause, changes in weather patterns, resulting in more severe and more frequent natural disasters such as forest fires, hurricanes, tornados, floods and storm surges, exacerbating the risks of a catastrophic event and its resulting impacts. Climate change-related risks may also adversely affect the value of the securities that we hold or lead to increased credit risk of other counterparties we transact business with, including reinsurers. There is a risk that some asset sectors could face significantly higher costs and a disorderly adjustment to asset values leading to an adverse impact on the value and future performance of investment assets as a result of climate change and regulatory or other responses. Our reputation or corporate brand could also be negatively impacted as a result of changing customer or societal perceptions of organizations that we do business with or invest in due to their actions (or lack thereof) with respect to climate change. A failure to identify and address these issues could cause a material adverse effect on the achievement of our strategies and potentially subject us to heightened regulatory scrutiny.

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Material changes to, or termination of, our significant investment advisory contracts with other parties, including Fortitude Re, could have a material adverse effect on our business, results of operations, financial condition and liquidity.

We provide investment advisory services to AIG and Fortitude Re (through AMG) with respect to significant asset portfolios. Investment advisory services currently provided to AIG are primarily rendered to AIG’s General Insurance subsidiaries. There will be a reduction in asset management services that we provide to AIG, which is expected to result in a decrease in our revenues. See “Certain Relationships and Related Party Transactions—Historical Related Party Transactions—Advisory Services.” We may be unable to reduce our expenses in a timely manner, or at all, to offset such decrease in our revenues. Additionally, beginning in June 2023, Fortitude Re will have certain rights to replace AMG as asset manager with respect to the funds withheld assets in connection with the reinsurance to Fortitude Re. If, in addition to the expected changes to the investment advisory services we currently provide to AIG, Fortitude Re were to materially change or terminate the investment management agreements in place with AMG, it could further disrupt our investment advisory capabilities, including as a result of the loss of our AUMA and investment management personnel and a reduction in management fees received by AMG, which could in turn result in a material adverse effect on our business, results of operations, financial condition and liquidity.

Changes in accounting principles and financial reporting requirements will impact our consolidated results of operations and financial condition.

Our financial statements are prepared in accordance with GAAP, which are periodically revised. Accordingly, from time to time, we are required to adopt new or revised accounting standards issued by the Financial Accounting Standards Board (“FASB”).

The FASB has revised the accounting standards for certain long-duration insurance contracts. The FASB issued Accounting Standards Update (ASU) No. 2018-12 — Targeted Improvements to the Accounting for Long-Duration Contracts, which has an effective date of January 1, 2023 and will significantly change the accounting measurements and disclosures for long-duration insurance contracts under GAAP. The most significant adjustments are expected to be (i) changes related to market risk benefits in our Individual Retirement and Group Retirement segments, including the impact of non-performance adjustments, (ii) changes to the discount rate, which will most significantly impact our Life Insurance and Institutional Markets segments, and (iii) the removal of balances recorded in AOCI related to changes in unrealized appreciation (depreciation) on investments. Changes to the manner in which we account for long-duration products has and will continue to impose special demands on us in the areas of governance, employee training, internal controls and disclosure and affect how we manage our business and our overall costs, all of which will impact our consolidated results of operations, liquidity and financial condition. In addition, implementation of the changes could impact our products, in-force management and asset liability management strategies and have other implications on operations and technology. For further discussion of the impact of these changes, see “Management’s Discussion and Analysis—Executive Summary—Significant Factors Impacting Our Results—Targeted Improvements to the Accounting for Long-Duration Contracts” and Note 2 to our audited consolidated financial statements.

We continue to evaluate the implementation of ASU No. 2018-12 and expect the adoption of this standard will impact our financial condition, results of operations, statement of cash flows and disclosures, as well as our systems, processes and controls. We currently estimate that the January 1, 2021 transition date (“Transition Date”) impact from adoption is likely to result in a decrease in the Company’s equity between approximately $1.0 billion and $3.0 billion. In addition, we expect the newly issued standard to negatively impact the level of investor interest in our sector.

Our foreign operations expose us to risks that affect our operations.

We provide individual and group life insurance, health insurance and other financial products and services to individuals and businesses in the UK, Ireland and Bermuda.

Operations outside the United States have in the past been, and may in the future be, affected by regional economic downturns, changes in foreign currency exchange rates, availability of locally denominated assets to match locally originated liabilities, political events or upheaval, nationalization and other restrictive government or regulatory actions, which could also materially and adversely affect our business, results of operations, financial condition and liquidity.

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In addition, we and our subsidiaries are subject to various extraterritorial laws and regulations, including such laws adopted by the United States that affect how we do business globally. These laws and regulations may conflict and we may incur penalties and/or reputational harm if we fail to adhere to them. For example, increased international data localization and cross-border data transfer regulatory restrictions as well as developments in economic sanctions regimes may affect how we do business globally and may cause us to incur penalties and/or suffer reputational harm.

The exact impact of market risks faced by our foreign operations is uncertain and difficult to predict and respond to, particularly in the light of the UK’s decision to withdraw its membership in the EU (“Brexit”) and potential changes to the UK regulatory regime on financial services following Brexit. Our foreign businesses could be impacted by adverse outcomes from the EU’s equivalence deliberations, legal challenge to the EU’s data adequacy decision and retaliatory action in the event of non-compliance by either party to the Trade and Co-operation Agreement, which could have a material impact on the regulatory and legal framework within which our UK and European business lines operate.

Our UK and EU subsidiaries’ business could be adversely affected as a result of Brexit and the lack of agreement on financial services between the UK and the EU.

Business or asset acquisitions and dispositions may expose us to certain risks.

We have made acquisitions in the past and may pursue further acquisitions or other strategic transactions, including reinsurance, dispositions and joint ventures, in the future. The completion of any business or asset acquisition or disposition is subject to certain risks, including those relating to the receipt of required regulatory approvals, the terms and conditions of regulatory approvals, including any financial accommodations required by regulators, our ability to satisfy such terms, conditions and accommodations, the occurrence of any event, change or other circumstances that could give rise to the termination of a transaction and the risk that parties may not be willing or able to satisfy the conditions to a transaction. As a result, there can be no assurance that any business or asset acquisition or disposition will be completed as contemplated, or at all, or regarding the expected timing of the completion of the acquisition or disposition.

Once we complete acquisitions or dispositions, there can be no assurance that we will realize the anticipated economic, strategic or other benefits of any transaction. For example, the integration of businesses we acquire may not be as successful as we anticipate, or there may be undisclosed risks present in such businesses. Acquisitions involve a number of risks, including operational, strategic, financial, accounting, legal, compliance and tax risks, including difficulties in assimilating and retaining employees and intermediaries, difficulties in retaining the existing customers of the acquired entities, unforeseen liabilities that arise in connection with the acquired businesses, unfavorable market conditions that could negatively impact our expectations for the acquired businesses, as well as difficulties in integrating and realizing the projected results of acquisitions and managing the litigation and regulatory matters to which acquired entities are party. Such difficulties in integrating an acquired business may result in the acquired business performing differently than we expected (including through the loss of customers) or in our failure to realize anticipated expense-related efficiencies. Risks resulting from future acquisitions may have a material adverse effect on our results of operations and financial condition. Similarly, dispositions of a business also involve a number of risks, including operational and technology risks of data loss, loss of talent and stranded costs, which could potentially have a negative impact on our business, results of operations, financial condition and liquidity. In connection with a business or asset disposition, we may also hold a concentrated position in securities of the acquirer as part of the consideration, which subjects us to risks related to the price of equity securities and our ability to monetize such securities. In addition, with respect to certain dispositions, we could be subject to restrictions on our use of proceeds. Strategies implemented to explore opportunities for acquisitions could also be materially and adversely affected by the increasingly competitive nature of the life insurance and annuity merger and acquisition market and the increased participation of non-traditional buyers in the life insurance and annuity merger and acquisition market. In addition, we have provided and may provide financial guarantees and indemnities in connection with the businesses we have sold or may sell, as described in greater detail in Note 15 to the audited consolidated financial statements. While we do not currently believe that claims under these indemnities will be material, it is possible that significant indemnity claims could be made against us. If such a claim or claims were successful, it could have a material adverse effect on our results of operations, cash flows and liquidity.

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Changes in U.S. federal income or other tax laws or the interpretation of tax laws could affect sales of our products and our profitability.

Changes in tax laws could reduce demand in the United States for life insurance and annuity contracts, which could reduce our income due to lower sales of these products or changes in customer behavior, including potential increased surrenders of in-force business.

Changes in tax laws could also impact the taxation of our operations. For example, recent proposals to increase corporate taxes could adversely impact our business. It remains difficult to predict whether or when tax law changes or interpretations will be issued by U.S. or foreign taxing authorities or whether any such issuances will have a material adverse effect on our business, results of operations, financial condition and liquidity.

We may not be able to protect our intellectual property and may be subject to infringement claims.

We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Effective intellectual property rights protection may be unavailable, limited, or subject to change in some countries where the Company does or plans to do business. Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property. We have, and may in the future, litigate to enforce and protect our intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and may not prove successful. Litigation to enforce our intellectual property rights may not be successful and cost a significant amount of money. The loss of intellectual property protection or the inability to secure or enforce the protection of our intellectual property assets could harm our reputation and have a material adverse effect on our business and our ability to compete. Third parties may have, or may eventually be issued, patents or other protections that could be infringed by our products, methods, processes or services or could limit our ability to offer certain product features. Consequently, we also may be subject to costly litigation in the event that another party alleges our operations or activities infringe upon their intellectual property rights, including patent rights, or violate license usage rights. Any such intellectual property claims and any resulting litigation could result in significant expense and liability for damages, and in some circumstances we could be enjoined from providing certain products or services to our customers, or utilizing and benefiting from certain patents, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, consolidated results of operations and financial condition.

Risks Relating to Regulation

Our business is heavily regulated and changes in laws and regulations may affect our operations, increase our insurance subsidiary capital requirements or reduce our profitability.

Our operations generally, and certain of our subsidiaries in particular, are subject to extensive and potentially conflicting laws and regulations in the jurisdictions in which we operate. For example, our products are subject to a complex and extensive array of state and federal tax, securities, insurance and employee benefit plan laws and regulations, which are administered and enforced by a number of different governmental and self-regulatory authorities, including state insurance regulators, banking authorities and securities administrators, including the New York Department of Financial Services (“DFS”), the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Department of Labor (the “DOL”) and the Internal Revenue Service (the “IRS”). Our business and financial condition are also subject to supervision and regulation by authorities in the various jurisdictions in which we do business. Federal, state and foreign regulators also periodically review and investigate our insurance business, including life-and-annuity-specific and industry-wide practices. The primary purpose of insurance regulation is the protection of our insurance policyholders and contract holders rather than our investors. The extent of domestic regulation on our insurance business varies, but generally is governed by state statutes that delegate regulatory, supervisory and administrative authority to state insurance departments. In addition, federal and state securities laws and regulations apply to certain of our products that are considered “securities” under such laws, including our variable annuity contracts, variable life insurance policies and the separate accounts that issue them, as well as our broker-dealer, investment adviser and mutual funds operations. The laws and regulations that apply to our business and operations generally grant regulatory agencies and/or self-regulatory organizations broad rule-making and enforcement powers, including the power to regulate the issuance, sale and distribution of our products, the manner in which we underwrite our policies, the delivery of

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our services, the nature or extent of disclosures required to be given to our customers, the compensation of our distribution partners, the manner and methods by which we handle claims on our policies and the administration of our policies and contracts, the terms of and entry into certain inter-affiliate arrangements between our insurance company subsidiaries and other affiliates, as well as the power to limit or restrict the conduct of business for failure to comply with applicable laws and regulations. We and our distributors are also subject to laws and regulations governing the standard of care applicable to sales of our products, the provision of advice to our customers and the manner in which certain conflicts of interest arising from or related to such sales or giving of advice are to be addressed. In recent years, many of these laws and regulations have been revised or reexamined while others have been newly adopted or are under consideration. These changes and/or adoptions have resulted in increased compliance obligations and costs for us and certain of our distributors or plan sponsors may require changes to existing arrangements, some or all of which could impact our business, results of operations, financial condition and liquidity. Additionally, there have been a number of investigations regarding the marketing practices of brokers and agents selling annuity and insurance and investment products and the payments they receive. Sales practices and investor protection have also increasingly become areas of focus in regulatory exams. These investigations and exams have resulted in, and may in the future result in, enforcement actions against companies in our industry and brokers and agents marketing and selling those companies’ products.

See “Business—Regulation—U.S. Regulation” for further discussion of the regulatory regimes we are subject to, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the standard of care-related regulations administered by the DOL.

Significant legislative and regulatory activity has occurred at both the U.S. federal and state levels, as well as globally, in response to the COVID-19 pandemic and its impact on insurance consumers. While some of these legislative and regulatory initiatives have expired, any resurgence of the COVID-19 virus may lead to a renewal of those initiatives. We cannot predict what form future legal and regulatory responses to concerns about COVID-19 and related public health issues will take, or how such responses will impact our business. We continue to actively monitor these developments and to cooperate fully with all government and regulatory authorities as they develop their responses.

We strive to comply with laws and regulations applicable to our business, products, operations and legal entities, including maintenance of all required licenses and approvals. The application of and compliance with such laws and regulations may be subject to interpretation, evolving industry practices and regulatory expectations that could result in increased compliance costs. The relevant authorities may not agree with our interpretation of these laws and regulations, including, for example, our implementation of new or revised requirements related to capital, accounting treatment or reserving such as those governing PBR, or with our policies and procedures adopted to underwrite or administer our policies and contracts or address evolving industry practices or meet regulatory expectations. Such authorities’ interpretation and views may also change from time to time. It is also possible that the laws, regulations and interpretations across various jurisdictions in which we do business may conflict with one another and affect how we do business in the United States and globally. If we are found not to have complied with applicable legal or regulatory requirements, these authorities could preclude or temporarily suspend us from carrying on some or all of our activities, impose substantial administrative penalties such as fines or require corrective actions to be taken, which individually or in the aggregate could interrupt our operations and materially and adversely affect our reputation, business, results of operations, financial condition and liquidity. Additionally, if such authorities’ interpretation of requirements related to new or changes in capital, accounting treatment and/or valuation manual or reserving (such as PBR) materially differs from ours, we may incur higher operating costs or sales of products subject to such requirement or treatment may be affected.

We also strive to maintain all required licenses and approvals. Licensing regulations differ as to products and jurisdictions. Regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals, and licensing regulations may be subject to interpretation as to whether certain licenses are required with respect to the manner in which we may solicit and sell some of our products in certain jurisdictions. The complexity of multiple regulatory frameworks and interpretations may be heightened in the context of products that are issued through our Institutional Markets business, including our PRT products, where one product may cover risks in multiple jurisdictions. If we do not have the required licenses and approvals, these authorities

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could preclude or temporarily suspend us from carrying on some or all of our activities or impose substantial fines. Further, insurance regulatory authorities have relatively broad discretion to issue orders of supervision, which permit them to apply enhanced supervision to the business and operations of an insurance company.

In the United States, the RBC formula is designed to measure the adequacy of an insurer’s statutory surplus in relation to the risks inherent in its business. Regulators in other jurisdictions in which we do business have adopted capital and liquidity standards applicable to insurers and reinsurers operating in their jurisdiction. Failure to comply with such RBC capital, liquidity and similar requirements set forth in law or regulation, or as otherwise may be agreed by us or one of our insurance company subsidiaries with an insurance regulator, would generally permit the insurance regulator to take certain regulatory actions that could materially impact the affected company’s operations. Those actions range from requiring an insurer to submit a plan describing how it would regain a specified RBC ratio to a mandatory regulatory takeover of the company. The NAIC and the International Association of Insurance Supervisors (the “IAIS”) are also developing and testing methodologies for assessing group-wide regulatory capital, which might evolve into more formal group-wide capital requirements on certain insurance companies and/or their holding companies that may augment state-law RBC standards, and similar international standards, that apply at the legal entity level, and such capital calculations may be made, in whole or in part, on bases other than the statutory statements of our insurance subsidiaries. We cannot predict the effect these initiatives may have on our business, results of operations, financial condition and liquidity.

Additionally, we are subject to certain laws in relation to our investment management agreements. Under such laws, most notably the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the Investment Advisers Act of 1940, as amended (the “Advisers Act”), certain of our investment management agreements require approval or consent from clients and fund shareholders, including funds registered under the Investment Company Act, in the event of an assignment of the investment management agreements or a change in control of the relevant investment adviser. If a transaction, including future sales of our common stock by AIG, resulted in an assignment or change in control, the inability to obtain consent or approval from advisory clients or shareholders of funds registered under the Investment Company Act or other investment funds could result in a significant reduction in advisory fees earned by us or a disruption in the management of the funds.

The degree of regulation and supervision in foreign jurisdictions varies. Our subsidiaries operating in the UK, Bermuda and Ireland must satisfy local regulatory requirements and it is possible that local licenses may require us to meet certain conditions. Licenses issued by foreign authorities to our subsidiaries are subject to modification and revocation. Accordingly, our insurance subsidiaries could be prevented from conducting future business. Adverse actions from foreign jurisdictions in which these subsidiaries currently operate could materially and adversely affect our business, results of operations, financial condition and liquidity, depending on the magnitude of the event and our financial exposure at that time in those jurisdictions.

See “Business—Regulation—International Regulation” for further discussion of the regulatory regimes we are subject to outside the United States.

New laws and regulations, or new interpretations of current laws and regulations, both domestically and internationally, may affect our business, results of operations, financial condition, liquidity and ability to compete effectively.

Legislators, regulators and self-regulatory organizations have in the past and may in the future periodically consider various proposals that may affect or restrict, among other things, our business practices, underwriting methods and data utilization, product designs and distribution relationships, how we market, sell or service certain products we offer, our capital, reserving and accounting requirements, price competitiveness of the products we sell and consumer demand for our products or the profitability of certain of our business lines. For example, our life insurance and annuity products provide the customer with certain federal income tax advantages. A tax law change that eliminates all or a portion of these advantages may reduce the demand from consumers for our products and change the likelihood of customers surrendering or rolling over existing contracts.

Further, new laws and regulations may even affect or significantly limit our ability to conduct certain business lines at all, including proposals relating to restrictions on the type of activities in which financial institutions, including insurance companies in particular, are permitted to engage, as well as the types of investments we hold or divest. For example, regulators have shown continued interest in how the financial

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services industry, including insurance companies, are managing climate risk within their business operations and investment portfolios. Resulting actions by governments, regulators and international standard setters could lead to additional reporting obligations concerning investment holdings that are exposed to climate change-related risk. They could also lead to substantial additional laws or regulations that limit or restrict investments in certain assets, such as thermal coal or other carbon-based investments, and impose additional compliance costs. As another example, rules on defined benefit pension plan funding may reduce the likelihood of, or delay corporate plan sponsors in, terminating their plans or engaging in transactions to partially or fully transfer pension obligations. This could affect the mix of our PRT and increase non-guaranteed funding products.

It is also difficult to predict the impact laws and regulations adopted in foreign jurisdictions may have on the financial markets generally or our business, results of operations or cash flows. It is possible such laws and regulations may significantly alter our business practices.

New proposals or changes in legislation or regulation could impose additional taxes on a limited subset of financial institutions and insurance companies (either based on size, activities, geography or other criteria), limit our ability to engage in capital or liability management, require us to raise additional capital, and impose burdensome requirements and additional costs. It is uncertain whether and how these and other such proposals, or changes in legislation or regulation, would apply to us, those who sell or service our products or our competitors or how they could impact our ability to compete effectively, as well as our business, results of operations, financial condition and liquidity.

The USA PATRIOT Act, the Foreign Corrupt Practices Act, the regulations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control and similar laws and regulations that apply to us may expose us to significant penalties.

As a company that operates internationally, we are subject to myriad regulations which govern items such as sanctions, bribery and anti-money laundering, for which failure to comply exposes us to significant penalties. The USA PATRIOT Act of 2001 requires companies to know certain information about their clients and to monitor their transactions for suspicious activities. The Foreign Corrupt Practices Act makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Also, the Department of the Treasury’s Office of Foreign Assets Control administers regulations that restrict or prohibit dealings within U.S. jurisdiction involving certain organizations, individuals, countries, and financial products. The UK, the EU and other jurisdictions maintain similar laws and regulations. Such laws may change rapidly, as demonstrated by the significant sanctions imposed against Russia, resulting from the current conflict in Ukraine, which may pose compliance challenges and adversely impact our business and the business of our customers. The laws and regulations of other jurisdictions may sometimes conflict with those of the U.S. Despite meaningful measures to ensure lawful conduct, which include training, audits and internal control policies and procedures, we may not always be able to prevent our employees or third parties acting on our behalf from violating these laws. As a result, we could be subject to criminal and civil penalties as well as disgorgement. We could be required to make changes or enhancements to our compliance measures that could increase our costs, and we could be subject to other remedial actions. Violations of these laws or allegations of such violations could disrupt our operations, cause reputational harm, cause management distraction and result in a material adverse effect on our competitive position, results of operations, financial condition or liquidity.

Risks Relating to Estimates and Assumptions

Estimates or assumptions used in the preparation of financial statements and modeled results used in various areas of our business may differ materially from actual experience.

Our financial statements are prepared in conformity with GAAP, which requires the application of accounting policies that often involve a significant degree of judgment. The accounting policies that we consider most dependent on the application of estimates and assumptions, and therefore may be viewed as critical accounting estimates, are described in Note 2 to our audited consolidated financial statements and “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Critical Accounting Estimates.” These accounting estimates require the use of assumptions, some of which are highly uncertain at the time of estimation. These estimates are based on judgment, current facts and circumstances and, when applicable, internally developed models. Therefore, actual results may differ from these estimates, possibly in the near term, and could have a material effect on our financial statements.

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In addition, we employ models to price products, calculate future policy benefits and value assets and execute hedging strategies, as well as to assess risk and determine capital requirements, among other uses. These models are complex and rely on estimates and projections that are inherently uncertain, may use incomplete, outdated or incorrect data or assumptions and may not operate properly. For example, significant changes in mortality, which could be impacted by natural or man-made disasters, or which could emerge gradually over time due to changes in the natural environment, significant changes in policyholder behavior assumptions such as lapses, surrenders and withdrawal rates as well as the amount of withdrawals, fund performance, equity market returns and volatility, interest rate levels, the health habits of the insured population, technologies and treatments for disease or disability, the economic environment, or other factors could negatively impact our assumptions and estimates. To the extent that any of our modeling practices do not accurately produce, or reproduce, data that we use to conduct any or all aspects of our business, such errors may negatively impact our business, reputation, results of operations and financial condition.

This prospectus contains reserves and cash flow projections, which are based on certain assumptions and estimates, including as to market conditions, policyholder behavior, future experience, performance of our hedging program and returns on our investment portfolio. Our actual experience in the future may deviate from our assumptions and estimates and may impact our reserves, earnings, liquidity and capitalization and may increase the volatility of our results and expose us to increased counterparty risk.

Our reserves and cash flow projections set forth in this prospectus are based on certain assumptions and estimates, including as to market conditions, policyholder behavior, future experience, performance of our hedging program and returns on our investment portfolio. These forward-looking statements are estimates and are not intended to predict the future financial performance of our variable annuity hedging program or to represent an opinion of market value.

We present a sensitivity analysis of the estimated cash flows, assets and liabilities associated with our in-force variable annuity business in this prospectus. See “Business—Our Segments—Individual Retirement—Supplemental Information on Our In-Force Variable Annuity Business.” The scenarios represented in our sensitivity analysis were selected for illustrative purposes only and they do not purport to encompass all of the many factors that may bear upon a market value and are based on a series of assumptions as to the future. It should be recognized that actual future results may differ from those shown, on account of changes in the operating and economic environments and natural variations in experience. The results shown are presented as of June 30, 2021 and have not been updated to reflect our assets, changes in interest rates, equity market movements or certain other assumptions as of December 31, 2021 or any other more current date, and any such update could result in material changes to the amounts presented. In addition, there can be no assurance that future experience will be in line with the assumptions made.

The policyholder behavior assumptions embedded in our cash flow sensitivities represent our current best estimate for our in-force business. The following policyholder options are examples of those included in our sensitivities: lapse, partial lapse, dollar-for-dollar withdrawals and voluntary annuitizations. These assumptions are dynamic and vary depending on the net annualized return of the contract and our expectation of how a customer will utilize their embedded options across the various scenarios. A change in our cash flows could result to the extent emerging experience deviates from these policyholder assumptions.

Our productivity improvement initiatives may not yield our expected expense reductions and improvements in operational and organizational efficiency.

We see opportunities to improve profitability across our businesses through operating expense reductions. We may not be able to fully realize the anticipated expense reductions and operational and organizational efficiency improvements we expect to result from our productivity improvement program and associated initiatives to, among other things, modernize our technology infrastructure, optimize our operating model, expand existing partnership arrangements, optimize our vendor relationships or rationalize our real estate footprint. In addition, we intend to evolve our investments organization, which we expect will create additional efficiencies, to reflect our relationships with key external partners, our expected implementation of BlackRock’s “Aladdin” investment management technology platform and our expected reduction in fees from AIG for asset management services. Actual costs to implement these initiatives may exceed our estimates, or we may be unable to fully implement and execute these initiatives as planned. Further, the implementation of these initiatives may harm our relationships with customers or employees or our competitive position, thereby materially and adversely affecting

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our business, results of operations, financial condition and liquidity. The successful implementation of these initiatives may require us to effect technology enhancements, business process outsourcing, rationalizations, modifications to our operating model, and other actions, which depend on a number of factors, some of which are beyond our control.

If our business lines do not perform well and/or their estimated fair values decline, we may be required to recognize an impairment of our goodwill or establish an additional valuation allowance against the deferred income tax assets, which could have a material adverse effect on our results of operations and financial condition.

Goodwill represents the excess of the amounts we paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. We test goodwill at least annually for impairment and conduct interim qualitative assessments on a periodic basis. Impairment testing is performed based upon estimates of the fair value of the “reporting unit” to which the goodwill relates. In 2021, for substantially all of the reporting units we elected to bypass the qualitative assessment of whether goodwill impairment may exist and, therefore, performed quantitative assessments that supported a conclusion that the fair value of all of the reporting units tested exceeded their book value. The fair value of the reporting unit is impacted by the performance of the business and could be adversely impacted if new business, customer retention, profitability or other drivers of performance differ from expectations, or upon the occurrence of certain events, including a significant and adverse change in regulations, legal factors, accounting standards or business climate, or an adverse action or assessment by a regulator. Our goodwill balance was $192 million as of December 31, 2021. If it is determined that goodwill has been impaired, we must write down goodwill by the amount of the impairment, with a corresponding charge to net income (loss). These write-downs could have a material adverse effect on our consolidated results of operations, liquidity and financial condition. For further discussion regarding goodwill impairment, see “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Critical Accounting Estimates—Allowance for Credit Losses and Goodwill Impairment—Goodwill Impairment” and Note 11 to the audited consolidated financial statements.

Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Deferred tax assets are assessed periodically by management to determine if they are realizable. As of December 31, 2021, we had net deferred tax assets, after valuation allowance, of $4.6 billion related to federal, foreign, and state and local jurisdictions. The performance of the business, the geographic and legal entity source of our income, tax planning strategies, and the ability to generate future taxable income from a variety of sources and planning strategies including capital gains, are factored into management’s determination. If, based on available evidence, it is more likely than not that the deferred tax asset will not be realized, then a valuation allowance must be established with a corresponding charge to profitability, which such action we have taken from time to time. Such charges could have a material adverse effect on our consolidated results of operations, liquidity and financial condition. For further discussion regarding deferred tax assets, see “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Critical Accounting Estimates—Income Taxes—Recoverability of Net Deferred Tax Asset” and Note 20 to the audited consolidated financial statements.

Risks Relating to Competition and Employees

Competition for employees in our industry is intense, and managing key employee succession is critical to our success. We may not be able to attract and retain the key employees and highly skilled people we need to support our business.

Our success depends, in large part, on our ability to attract and retain key people, which may be difficult due to the intense competition in our industry for key employees with demonstrated ability. Recruiting and retention of talent has become especially challenging in the current employment market, fueled in part by changes due to the COVID-19 pandemic. In addition, we may experience higher than expected employee turnover and difficulty attracting new employees as a result of uncertainty from strategic actions and organizational and operational changes, including our separation from AIG. Losing any of our key people, including key sales or business personnel, could also have a material adverse effect on our operations given their skills, knowledge of our business, years of industry experience and the potential difficulty of promptly finding qualified replacement employees. Additionally, we may face increased costs if, as a result of the competitive market and recent inflationary pressures, we must offer and pay a greater level of remuneration to attract or replace certain critical employees or hire contractors to fill highly skilled roles while vacant. Our business,

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consolidated results of operations, financial condition and liquidity could be materially adversely affected if we are unsuccessful in attracting and retaining key employees.

In addition, we could be adversely affected if we fail to adequately plan for the succession of our senior management and other key employees. While we have succession plans and long-term compensation plans designed to retain our employees, our succession plans may not operate effectively and our compensation plans cannot guarantee that the services of these employees will continue to be available to us.

Employee error and misconduct may be difficult to detect and prevent and may result in significant losses.

There have been a number of cases involving fraud or other misconduct by employees in the financial services industry in recent years and we are also exposed to the risk that employee misconduct could occur. Our human resources and compliance departments work collaboratively to monitor for fraud and conduct extensive training for employees. However, employee misconduct may still occur. Instances of fraud, illegal acts, errors, failure to document transactions properly or to obtain proper internal authorization, misuse of customer or proprietary information or failure to comply with regulatory requirements or our internal policies may result in losses and/or reputational damage.

Risks Relating to Our Investment Managers

We rely on our investment management or advisory agreements with Blackstone IM, and the related commitment letter, for the management of portions of certain of our life insurance companies’ investment portfolios. Limitations on our ability to terminate or amend such arrangements may also adversely affect our results of operations or financial condition.

On November 2, 2021, we entered into a commitment letter (the “Commitment Letter”) with Blackstone IM, and, for limited purposes, AIG, pursuant to which we delivered by December 31, 2021 $50 billion of our life insurance company subsidiaries’ existing investment portfolios for Blackstone to manage, with that amount increasing by $8.5 billion in each of the next five years beginning in the fourth quarter of 2022 for an aggregate of $92.5 billion by the third quarter of 2027. See “Certain Relationships and Related Party Transactions—Partnership with Blackstone.” Such arrangements are expected to lead to an increase in investment management fees payable by us, as compared to the expenses we would have historically incurred for similar services. To the extent that we fail to deliver the required assets by the requisite quarterly deadlines, we would still owe investment management fees on the full amount of the required assets.

Any of our insurance company subsidiaries may terminate any sub-manager agreement between a sub-manager and it and/or Blackstone IM (“Sub-Manager Agreement”), as applicable, or a SMA in certain specified circumstances, as described in more detail under “Certain Relationships and Related Party Transactions—Partnership with Blackstone,” without the applicable insurance company subsidiary or SAFG being required to continue paying investment management fees. In addition to these termination provisions, either Blackstone IM, on the one hand, or the applicable insurance company subsidiary, on the other hand, may terminate any individual SMA at any time upon 30 days’ advance written notice. The insurance companies do not owe any damages upon termination of an SMA, and Blackstone IM has no remedies against the insurance companies. However, in the case of termination by the applicable insurance company subsidiary for any reason not contemplated in the specified circumstances referred to above, SAFG may be required to continue paying investment management fees. SAFG may not have the funds available to pay any such fees and its insurance company subsidiaries may not be able or permitted to pay dividends or make other distributions to SAFG in an amount sufficient to pay any such fees or at all. Any requirement to pay such fees may adversely affect our business, results of operations, financial condition and liquidity.

Pursuant to agreements with our insurance regulators in Missouri, New York and Texas, we may not amend the terms of the Commitment Letter or any SMA to which any of our U.S. insurance company subsidiaries are a party, or enter into any new agreement between us or any of our U.S. insurance company subsidiaries, on the one hand, and Blackstone or its affiliates, on the other hand, affecting any U.S. insurance company subsidiary’s operations, without the prior approval of such insurance company’s domestic regulator. Accordingly, we may be limited in our ability to renegotiate terms of the SMA arrangements, which could adversely affect our business, results of operations, financial condition and liquidity.

Blackstone IM and its sub-manager affiliates depend in large part on their ability to attract and retain key people, including senior executives, finance professionals and information technology professionals. Intense

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competition exists for key employees with demonstrated ability, and Blackstone IM and its sub-manager affiliates may be unable to hire or retain such employees. Accordingly, the loss of services of one or more of the members of Blackstone IM’s or its sub-manager affiliates’ senior management could delay or prevent Blackstone IM from fully implementing our investment strategy and, consequently, significantly and negatively impact our business. The unexpected loss of members of Blackstone IM’s or its sub-managers affiliates’ senior management or other key employees could have a material adverse effect on Blackstone IM’s operations due to the loss of such management’s or employees’ skills and knowledge, and could adversely impact Blackstone IM’s ability to execute key operational functions and, accordingly, our investment portfolio and results of operations.

Our exclusive third-party investment management arrangements with Blackstone IM in relation to certain asset classes may limit our investment opportunity and disposition opportunities and prevent us from retaining investment managers that may achieve better investment results.

Under our Commitment Letter with Blackstone IM, Blackstone IM serves as the exclusive external investment manager for our life insurance company subsidiaries, other than The U.S. Life Insurance Company in the City of New York, for the following asset classes (subject to certain exclusions, including for assets subject to previously existing investment management relationships): non-agency residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”); collateralized loan obligations (“CLOs”), leveraged loans, commercial mortgage loans (“CMLs”) and residential mortgage loans (“RMLs”); asset-backed whole loans and direct lending; project finance; private high-grade assets; and alternatives (including equity real estate). Further, the Commitment Letter contemplates that any future insurance company subsidiaries of ours will also be subject to an SMA appointing Blackstone IM as the exclusive external investment manager for such asset classes. As a result, when pursuing acquisitions of insurers or blocks of insurance business, we will need to structure any such acquisition to comply with the exclusivity provisions in the Commitment Letter, which may include foregoing certain investments in assets controlled by competitors of Blackstone IM. These restrictions could limit our investment opportunities or reduce the expected benefits of pursuing such acquisitions. The Commitment Letter also provides that a change of ownership or control of a life insurance company subsidiary will not give rise to termination rights under the Commitment Letter or any SMA, which could diminish the acquisition interest of certain potential acquirers of our subsidiaries or businesses.

Blackstone IM’s ability to allocate and invest our assets across a range of suitable investment opportunities, including, where applicable, in direct investments and investments in or alongside funds managed by Blackstone or its affiliates across a range of strategies may be limited in certain circumstances due to compliance with the SMAs (including the investment and allocation guidelines thereunder) or the Commitment Letter. There is also a risk that Blackstone IM will be unable to fully invest our assets because of such limitations.

Additionally, the exclusivity provisions in the Commitment Letter may prevent our life insurance company subsidiaries from retaining other external investment managers with respect to the subject asset classes who may produce better returns on investments than Blackstone IM. These exclusivity provisions do not, however, prevent our life insurance company subsidiaries from engaging a wholly owned subsidiary of SAFG to act as investment manager with respect to the subject asset classes.

The historical performance of AMG, Blackstone IM, BlackRock or any other asset manager we engage should not be considered as indicative of the future results of our investment portfolio, our future results or any returns expected on our common shares.

Our investment portfolio’s returns have benefited historically from investment opportunities and general market conditions that may not currently exist and may not be repeated, and there can be no assurance that AMG, Blackstone IM and BlackRock will be able to avail themselves of profitable investment opportunities in the future. In addition, Blackstone IM is and BlackRock is expected to be compensated based solely on our assets which they manage, rather than by investment return targets, and as a result, Blackstone IM and BlackRock are not directly incentivized to maximize investment return targets. Accordingly, there can be no guarantee that Blackstone IM, BlackRock or AMG will be able to achieve any particular returns for our investment portfolio in the future.

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Increased regulation or scrutiny of alternative investment advisers, arrangements with such investment advisers and investment activities may affect Blackstone IM’s, BlackRock’s, AMG’s or, if engaged, any other asset manager's ability to manage our investment portfolio or affect our business reputation.

The regulatory environment for investment managers is evolving, and changes in the regulation of investment managers may adversely affect the ability of Blackstone IM, BlackRock or AMG to effect transactions that utilize leverage or pursue their strategies in managing our investment portfolio. In addition, the securities and futures markets are subject to comprehensive statutes, regulations and margin requirements. The Securities and Exchange Commission (“SEC”), other regulators and self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies. Due to our reliance on these relationships in particular to manage a significant portion of our investment portfolio, any regulatory action or enforcement against Blackstone IM, BlackRock or their sub-manager affiliates could have an adverse effect on our financial condition.

Risks Relating to Our Separation from AIG

Following the completion of this offering, we may fail to replicate or replace functions, systems and infrastructure provided by AIG or certain of its affiliates (including through shared service contracts) or lose benefits from AIG’s global contracts, and AIG may fail to perform the services provided for in the Transition Services Agreement. We also expect to incur incremental costs as a stand-alone public company.

Historically, we have received services from AIG and have provided services to AIG, including information technology and information security services, services that support financial reporting and budgeting, enterprise risk management, risk and audit management, compliance services, human resources services, insurance, corporate communications and public relations and other support services, primarily through shared services contracts with various third-party service providers. AIG currently performs or supports many important corporate functions for our operations, including finance, controllership, tax, treasury, investor relations, advertising and brand management, corporate audit, certain risk management functions, corporate insurance, corporate governance and other services. Our financial statements reflect charges for these services. Under the Transition Services Agreement, AIG will agree to continue to provide us with certain services currently provided to us by or through AIG, and we will agree to continue to provide AIG with certain services currently provided to AIG by or through us. The Transition Services Agreement will not continue indefinitely and has a term ending      . Certain contracts and services between us and AIG are not covered by the Transition Services Agreement and will continue pursuant to the terms of such contracts. In addition, we have historically received informal support from AIG, which may not be addressed in our Transition Services Agreement. The level of this informal support will diminish or be eliminated following this offering.

We will work to replicate or replace the services we will continue to need in the operation of our business that are provided currently by or through AIG or its affiliates, including those we receive through shared service contracts they have with various third-party providers, by (i) retaining certain of such services through replication of the existing agreements AIG has with such third-party providers, (ii) replacing certain of such services with comparable services from different third-party providers, or (iii) continuing to receive certain of such services under the Transition Services Agreement for applicable transitional periods. We cannot guarantee that we will be able to replicate or replace, as applicable, these services and/or obtain the services at the same or better levels, at the same or lower costs, or at the same or more favorable terms directly from our existing and new third-party providers. As a result, when AIG or its affiliates cease providing these services to us, either as a result of the termination of the Transition Services Agreement or individual services thereunder or a failure by AIG or its affiliates to perform their respective obligations under the Transition Services Agreement, our costs of procuring these services or comparable replacement services could increase, we may ultimately need to purchase comparable replacement services on less favorable commercial and legal terms, and the cessation of such services could result in service interruptions and divert management attention from other aspects of our operations, including ongoing efforts to implement technological developments and innovations. We will also need to make infrastructure investments and hire additional employees in order to operate without the same access to AIG’s existing operational and administrative infrastructure. Due to the scope and complexity of the underlying projects relative to these efforts, the amount of total costs could be materially higher than our estimate, and the timing of the incurrence of these costs may be subject to change. Conversely, we cannot assure you that we will be able to provide services at the same or better levels or at the same or lower costs, or at all, to AIG during the applicable transitional periods provided for in the Transition Services Agreement.

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There is a risk that an increase in the costs associated with replicating and replacing the services provided to us by AIG prior to the separation and under the Transition Services Agreement, or continuing to provide services to AIG once the Reorganization has occurred, and the diversion of management’s attention to these matters could have a material adverse effect on our business, results of operations, financial condition and liquidity. We may fail to replicate the services we currently receive from AIG on a timely basis or at all, which may put further constraints on our human resources, capital and other resources that are simultaneously working on the retention and replacement of the services and ongoing efforts to implement new technological developments and innovations; such additional constraints could jeopardize our ability to execute on any one of these specific workstreams. In addition, AIG will similarly be working on similar initiatives which may impact the level and quality of transition services we receive from them. Additionally, we may not be able to operate effectively if the quality of replacement services is inferior to the services we are currently receiving.

Our business has benefited from AIG’s purchasing power when procuring goods and services. Once we are no longer an affiliate of AIG, we may be unable to obtain such goods and services at comparable prices or on terms as favorable as those obtained prior to this offering and we will no longer receive certain group discounts and reduced fees that we are eligible to receive as an affiliate of AIG. This could increase our expenses and cause a material adverse effect on our business, results of operations, financial condition and cash flows.

In connection with preparing for this offering and operation as a stand-alone public company following the closing of this offering, we expect to incur one-time and recurring expenses. We estimate that our one-time expenses will be between approximately $350 million and $450 million on a pre-tax basis as from January 1, 2022. These expenses primarily relate to replicating and replacing functions, systems and infrastructure provided by AIG, rebranding and accounting advisory, consulting and actuarial fees.

These expenses, any recurring expenses, including under the Transition Services Agreement, and any additional one-time expenses we incur could be material.

Our historical financial data may not be a reliable indicator of our future results.

Our historical financial statements included in this prospectus do not necessarily reflect the results of operations, financial condition or liquidity we would have achieved as a stand-alone company during the periods presented or those we will achieve in the future. For example, we recently adjusted our capital structure to more closely align with peer U.S. public companies. As a result, financial metrics that are influenced by our capital structure, such as APTOI, AATOI and Adjusted Book Value, are not necessarily indicative of the performance we may achieve as a stand-alone company. APTOI, AATOI and Adjusted Book Value are non-GAAP measures; for additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Financial Measures and Key Operating Metrics.” For example, changes in long-term debt may impact APTOI while changes in common equity may impact Adjusted Book Value. Accordingly, historical results may not be comparable to future results. As a result of these matters and our increased costs described above, among others, it may be difficult for investors to compare our future results to historical results or to evaluate our relative performance or trends in our business.

Costs associated with rebranding could be significant.

Prior to the IPO, as a majority-owned subsidiary of AIG, we marketed our products and services using the “AIG” brand name and logo. We expect to enter into a trademark license agreement (the “Trademark License Agreement”), pursuant to which we expect to cease the use of the “AIG” brand, name and logo within 18 months (subject to such extensions as permitted under the Trademark License Agreement).

We cannot accurately predict the effect that any rebranding we undertake will have on our business, customers or employees. We expect to incur significant costs, including marketing expenses, in connection with any rebranding of our business. Any adverse effect on our ability to attract and retain customers and any costs could have a material adverse effect on our business, results of operations or financial condition.

AIG will be our principal shareholder following the completion of this offering and will retain significant rights with respect to our governance and certain corporate actions pursuant to the Separation Agreement.

Upon completion of this offering, AIG will own approximately    % of our outstanding common stock, or approximately    % if the underwriters exercise their option to purchase additional shares in full. Blackstone will continue to own a 9.9% equity interest in us. As a result, AIG will continue to be able to control

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the election of our directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. AIG will also have sufficient voting power to approve amendments to our organizational documents.

In addition, under the provisions of the separation agreement that we intend to enter into with AIG (the “Separation Agreement”), AIG will have director designation rights, information rights, participation rights with respect to equity issuances by us, consent rights with respect to certain corporate and business activities that we may undertake, and other rights, including during periods where AIG holds less than a majority of our common stock. Specifically, the Separation Agreement provides that, until the date on which AIG ceases to beneficially own at least 5% of our outstanding common stock, AIG will have the right to designate one or more members of our board of directors, with AIG entitled to representation generally proportionate to its common stock ownership, and until the date on which AIG ceases to beneficially own at least 25% of our outstanding common stock, AIG’s prior written consent is required before we may take certain corporate and business actions, whether directly or indirectly through a subsidiary, including with respect to certain mergers, acquisitions, dispositions, issuances of capital stock or other securities, incurrences of debt, amendments to our organizational documents, hiring and firing of the chief executive or chief financial officers, share repurchases and other matters.

As a result of these consent rights, AIG maintains significant control over our corporate and business activities until such rights cease. For additional discussion of AIG’s consent rights under the Separation Agreement, see “Certain Relationships and Related Party Transactions—Relationship with AIG Following this Offering—Separation Agreement.” Although AIG has announced that it intends to sell all of its interest in us over time, AIG is under no obligation to do so and retains the sole discretion to determine the timing and size of any future sales of shares of our common stock.

In addition, our amended and restated certificate of incorporation and our amended and restated bylaws also include a number of provisions that may discourage, delay or prevent a change in our management or control. These provisions not only could have a negative impact on the trading price of our common stock, but could also allow AIG to delay or prevent a corporate transaction of which the public stockholders approve.

We will be a “controlled company” within the meaning of the NYSE rules and, as a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

After the completion of this offering, AIG will continue to control a majority of the voting power of our outstanding common stock. Accordingly, we will qualify as a “controlled company” within the meaning of the NYSE corporate governance standards. Under the NYSE rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain NYSE corporate governance standards, including:

• the requirement that a majority of the board consist of independent directors;

• the requirement to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

• the requirement to have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, or otherwise have director nominees selected by vote of a majority of the independent directors; and

• the requirement for an annual performance evaluation of the nominating and governance and compensation committees.

Following this offering, we intend to avail ourselves of these exemptions. As a result, we will not have a majority of independent directors, a compensation committee or a nominating and governance committee. Additionally, we are only required to have all independent audit committee members within one year from the date of listing, and, under the terms of the Separation Agreement and the stockholders’ agreement we entered into with Blackstone, through Argon (the “Blackstone Stockholders’ Agreement”), prior to the consummation of this offering, we are only required to have three independent directors of our Board from and after the date which is five years following the date of closing of Blackstone’s purchase of a 9.9% equity interest in us, subject to the NYSE rules. If we are no longer a “controlled company,” we will need more than three independent directors, subject to relevant stock exchange transition periods. Consequently, you will not have the same

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protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance rules and requirements. Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

Following the completion of this offering, AIG will continue to control us and may have conflicts of interest with other stockholders. Conflicts of interest may arise because affiliates of our controlling stockholder have continuing agreements and business relationships with us. We may also have a conflict of interest with a third party that owns a minority investment in us.

Upon completion of this offering, AIG will beneficially own      % of our outstanding common stock. In November 2021, Blackstone, through Argon, invested $2.2 billion, subject to post-closing adjustments, for a 9.9% interest in our common stock. As a result, AIG will have sufficient voting power without the consent of our other stockholders to be able to control the election of our directors, amend our organizational documents, determine our corporate and management policies and determine the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. We have entered into the Blackstone Stockholders' Agreement and intend to enter into the Separation Agreement prior to consummation of this offering. The Separation Agreement and the Blackstone Stockholders’ Agreement will together govern the relationship between AIG, Blackstone and us following this offering, including matters related to our corporate governance, including board of director nomination rights and information rights, and including during periods where AIG beneficially owns less than a majority of our common stock. As a result of these consent rights, AIG will maintain significant control over our corporate and business activities until such rights cease.

Although AIG intends to sell all of its interest in us over time, AIG is under no obligation to do so and retains the sole discretion to determine the timing of any future sales of shares of our common stock.

Our amended and restated certificate of incorporation and our amended and restated bylaws will also include a number of provisions that may discourage, delay or prevent a change in our management or control. These provisions not only could have a negative impact on the trading price of our common stock, but could also allow AIG to delay or prevent a corporate transaction of which the public stockholders approve.

Conflicts of interest may arise between our controlling stockholder, AIG, and us. Affiliates of AIG engage in transactions with us. Further, AIG may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us, and AIG may either directly, or through affiliates, also maintain business relationships with companies that may directly compete with us. In general, AIG or its affiliates could pursue business interests or exercise their voting power as stockholders in ways that are detrimental to us but beneficial to themselves or to other companies in which they invest or with whom they have relationships. Conflicts of interest could also arise with respect to business opportunities that could be advantageous to AIG, and they may pursue acquisition opportunities that may be complementary to our business. As a result, those acquisition opportunities may not be available to us. Under the terms of our amended and restated certificate of incorporation, AIG has no obligation to offer us corporate opportunities.

As a result of these relationships, the interests of AIG may not coincide with our interests or the interests of the other holders of our common stock. So long as AIG continues to control a significant amount of the outstanding shares of our common stock, AIG will continue to be able to strongly influence or effectively control our decisions, including with respect to potential mergers or acquisitions, asset sales and other significant corporate transactions.

Conflicts of interest may arise between Blackstone and us, as it and its affiliates may in the future engage in transactions with us, including in relation to the Commitment Letter and the SMAs. Pursuant to agreements with our insurance regulators in Missouri, New York and Texas, we may not amend certain existing agreements with Blackstone and its affiliates, or enter into new agreements between us or any of our U.S. insurance company subsidiaries, on the one hand, and Blackstone or its affiliates, on the other hand, affecting any U.S. insurance company subsidiary’s operations, without the prior approval of such insurance company’s domestic regulator. Blackstone or its affiliates could nonetheless pursue business interests or exercise their voting power as stockholders in ways that are detrimental to us but beneficial to themselves or to other companies in which they invest or with whom they have a material relationship. Blackstone also may pursue acquisition opportunities that are complementary to our business. As a result, such acquisition opportunities may not be available to us.

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In addition, because of our relationship with AIG and the minority interest in us held by Blackstone, negative publicity about AIG or Blackstone could have a negative effect on us. Adverse publicity, regulator scrutiny and pending investigations by regulators or law enforcement agencies involving us, AIG or Blackstone, or any of AIG’s or Blackstone’s respective affiliates, could have a negative impact on our reputation, which could materially and adversely affect our business, results of operations, financial condition and liquidity.

After this offering, certain of our directors may have actual or potential conflicts of interest because of their AIG equity ownership or their current or former AIG positions.

A number of persons who currently are, or we expect to become, our directors have been, and will continue to be, AIG officers, directors or employees and, thus, have professional relationships with AIG’s executive officers, directors or employees. In addition, because of their current or former AIG positions, certain of our directors and executive officers own AIG common stock or other equity compensation awards. For some of these individuals, their individual holdings may be significant compared to their total assets. These relationships and financial interests may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for AIG and us. For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between AIG and us regarding the terms of the agreements governing our relationship with AIG.

We have indemnification obligations in favor of AIG.

We and AIG will enter into certain agreements, including the Separation Agreement, a registration rights agreement (the “Registration Rights Agreement”), the Trademark License Agreement, a transition services agreement (the Transition Services Agreement”) and a tax matters agreement (the “Tax Matters Agreement”), that govern our and AIG’s obligations to each other following this offering in respect of, among other things, governance rights, taxes, transition services and indemnification obligations. The amounts payable by us pursuant to such indemnification obligations could be significant. Alternatively, AIG’s failure to perform its indemnification or other obligations in favor of us could materially and adversely affect our business, results of operations, financial condition and liquidity.

Insurance holding company laws generally provide that no person, corporation or other entity may acquire control of an insurance company, which is presumed to exist if a person owns, directly or indirectly, 10% or more of the voting securities of an insurance company, without the prior approval of such insurance company’s domiciliary state insurance regulator. Persons considering an investment in our common stock should take into consideration their ownership of AIG voting securities and consult their own legal advisors regarding such laws in light of their particular circumstances.

We are subject to regulation under the insurance holding company laws of various jurisdictions. See “Business—Regulation.” Insurance holding company laws generally provide that no person, corporation or other entity may acquire control of an insurance company, or a controlling interest in any direct or indirect parent company of an insurance company, without the prior approval of such insurance company’s domiciliary state insurance regulator. Under the laws of each of the domiciliary states of our U.S. insurance subsidiaries, Missouri, New York and Texas, any person acquiring, directly or indirectly, 10% or more of the voting securities of an insurance company is presumed to have acquired “control” of the company, which may consider voting securities held at both the parent company and subsidiary collectively for these purposes. This statutory presumption of control may be rebutted by a showing that control does not exist in fact. State insurance regulators, however, may find that “control” exists in circumstances in which a person owns or controls less than 10% of the voting securities. We are a subsidiary of AIG, the common stock (its voting securities) of which trades on the NYSE. Consequently, persons considering an investment in our common stock (our voting securities) should take into consideration their ownership of AIG voting securities and consult their own legal advisors regarding such insurance holding company laws relating to the purchase and ownership of our common stock in light of their particular circumstances.

Our inability to file a single U.S. consolidated federal income tax return following separation from AIG may result in increased U.S. federal income taxes.

We will no longer be included in the U.S. federal income tax group of which AIG is the common parent (the “AIG Consolidated Tax Group”) once AIG’s ownership of our shares falls below 80% (the “Tax Deconsolidation”). In addition, we will not be permitted to join in the filing of a U.S. consolidated federal income tax return with AGC

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and its directly owned life insurance subsidiaries for the period of five full taxable years following our deconsolidation from AIG Inc. (the “five-year waiting period”). Instead, AGC and its directly owned life insurance company subsidiaries are expected to file separately as members of the AGC consolidated U.S. federal income tax return during the five-year waiting period. Our ability to utilize tax deductions for interest expense may be diminished by our inability to file a single consolidated tax return with AGC during the five-year waiting period. As a result of the foregoing, the separate AGC group and our U.S. consolidated federal income tax group may pay more cash taxes than each would have paid if a single consolidated federal income tax return were permitted. Following the five-year waiting period, AGC and its life insurance subsidiaries are expected to join our U.S. consolidated federal income tax return. Any net operating losses (“NOLs”) incurred by our non-insurance companies during the five-year waiting period generally will be unavailable to reduce the taxable income of our insurance companies following the five-year waiting period. Principles similar to the foregoing may apply to state and local income tax liabilities in jurisdictions that conform to the federal rules.

Our separation from AIG is expected to cause an “ownership change” for U.S. federal income tax purposes, which could limit our ability to utilize deferred tax assets, including tax loss and credit carryforwards, to offset future taxable income.

It is expected that we will experience an ownership change either in connection with this offering, future offerings of our stock or secondary trading of our stock which may be outside of our control. As a result, we may not be able to utilize a portion of our deferred tax assets, including NOLs and certain built-in losses and deductions, to offset future taxable income for U.S. federal income tax purposes, which could adversely affect our results of operations, financial condition and liquidity.

Under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation or its parent that is a “loss” corporation undergoes an “ownership change” (very generally defined as a greater than 50% change, by value, in the corporation’s equity ownership by certain shareholders or groups of shareholders over a rolling three-year period), the corporation’s ability to use its pre-ownership change deferred tax assets to offset its post-ownership change income may be limited. Generally, a corporation is a loss corporation if, at the date of the ownership change, the corporation has tax loss carryforwards and other built-in losses or deductions which may be used in a tax year after the ownership change (“pre-change loss”). We expect that we will meet the definition of a loss corporation.

Upon such ownership change, the amount of taxable income attributable to any post-change year which may be offset by a pre-change loss is subject to an annual limitation. Generally, the annual limitation is equal to the equity value of the corporation immediately before the ownership change, multiplied by the long-term, tax-exempt rate posted monthly by the Internal Revenue Service (subject to certain adjustments). The current year annual limitation imposed under Section 382 would be increased by the amount of any unused limitation in a prior year(s). In addition, to the extent that a company has a net unrealized built-in loss or deduction at the time of an ownership change, Section 382 of the Code limits the utilization of any such loss or deduction which is realized and recognized during the five-year period following the ownership change. We may experience further ownership changes upon future issuances of our stock or due to secondary trading of our stock which may be outside of our control, and which could result in the application of additional limitations under Section 382.

We are subject to risks associated with the Tax Matters Agreement with AIG.

We intend to enter into a Tax Matters Agreement with AIG Inc. prior to the completion of any offering that would result in our deconsolidation from the AIG Consolidated Tax Group. We expect that this agreement, among other things, will provide that we generally will remain responsible for any and all taxes arising in pre-separation periods attributable to us (excluding any tax resulting from certain transactions undertaken in connection with the separation). AIG Inc. generally will control both the tax return preparation and audits and contests relating to pre-separation tax periods, which will determine the amount of any taxes for which we are responsible. We will not, however, be liable for taxes resulting from returns filed or matters settled by AIG Inc. that did not include our prior written consent if the return or settlement position is determined to be unreasonable, taking into account the liability that we incur as well as any non-AIG tax benefit. In this context, AIG Inc. is required to use reasonable discretion in its determination of pre-separation allocations to us for pre-separation periods.

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We and certain of our subsidiaries are potentially liable for U.S. income taxes of the entire AIG Consolidated Tax Group for all taxable years or portions thereof in which we (or our subsidiaries) were members of such group and for value-added taxes in non-U.S. jurisdictions.

For certain tax years or portions thereof, we and certain of our subsidiaries were included in the AIG Consolidated Tax Group, and we and such subsidiaries did not file separate federal income tax returns. Under U.S. federal income tax laws, regardless of the contractual terms of the Tax Matters Agreement, any entity that is a member of a consolidated group at any time during a taxable year is severally liable to the Internal Revenue Service for the group’s entire federal income tax liability for the entire taxable year. Thus, notwithstanding any contractual rights to be reimbursed or indemnified by AIG Inc. pursuant to the Tax Matters Agreement, to the extent AIG Inc. or other members of the AIG Consolidated Tax Group fail to make any federal income tax payments required of them by law in respect of taxable years for which we and certain of our subsidiaries were a member of the AIG Consolidated Tax Group, we and certain of our subsidiaries would be liable. Similar principles apply for state and local income tax purposes in certain states and localities and for value-added tax in certain non-U.S. jurisdictions.

Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws could discourage, delay or prevent a change of control of our company and could affect the trading price of our common stock.

Our amended and restated certificate of incorporation and our amended and restated bylaws will include a number of provisions that could discourage, delay or prevent a change in our management or control over us that stockholders consider favorable. For example, our amended and restated certificate of incorporation and bylaws collectively will:

• authorize the issuance of shares of our common stock that could be used by our Board to create voting impediments or to frustrate persons seeking to effect a takeover or gain control;

• authorize the issuance of “blank check” preferred stock that could be used by our Board to thwart a takeover attempt;

• provide that vacancies on our Board (other than vacancies created by the removal of a director by stockholder vote), including vacancies resulting from an enlargement of our Board, may be filled only by a majority vote of directors then in office; and

• establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders.

These provisions could prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions could adversely affect the prevailing market price of our common stock if the provisions are viewed as discouraging takeover attempts in the future. See “Description of Capital Stock—Anti-Takeover Effects of Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws.”

Our amended and restated certificate of incorporation and bylaws could also make it difficult for stockholders to replace or remove our management. Furthermore, the existence of the foregoing provisions, as well as the significant amount of common stock that AIG will beneficially own following this offering, could limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions could facilitate management entrenchment that could delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.

Our amended and restated certificate of incorporation will include provisions limiting the personal liability of our directors for breaches of fiduciary duty under the Delaware General Corporation Law.

Our amended and restated certificate of incorporation will contain provisions permitted under the General Corporation Law of the State of Delaware (“DGCL”), relating to the liability of directors. These provisions eliminate a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving:

• any breach of the director’s duty of loyalty;

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• acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;

• under Section 174 of the DGCL (unlawful dividends); or

• any transaction from which the director derives an improper personal benefit.

The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL. These provisions, however, should not limit or eliminate our rights or any stockholder’s rights to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s fiduciary duty. In addition, these provisions will not alter a director’s liability under federal securities laws. The inclusion of this provision in our amended and restated certificate of incorporation may discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited us and our stockholders.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware, and the federal district courts of the United States, as the sole and exclusive forum for certain litigation that may be initiated by our stockholders and actions arising under the Securities Act, respectively, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or stockholders.

Our amended and restated bylaws will provide that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for:

• any derivative action or proceeding brought on our behalf;

• any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our current or former directors, officers or employees;

• any action asserting a claim against us, or any director, officer or employee arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws, including any suit or proceeding regarding indemnification or advancement or reimbursement of expenses; or

• any action asserting a claim that is governed by the internal affairs doctrine.

Unless we consent to an alternative forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder. Neither this provision nor the exclusive forum provision will mean that stockholders have waived our compliance with federal securities laws and the rules and regulations thereunder. By becoming a stockholder in our company, you will be deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum. The choice of forum provisions in our amended and restated certificate of incorporation will limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or any of our current or former directors, officers, other employees, agents or stockholders and may cause a stockholder to incur additional expense by having to bring a claim in a judicial forum that is distant from where the stockholder resides, which could discourage lawsuits with respect to such claims. Additionally, a court could determine that the exclusive forum provision is unenforceable. If a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable to, or unenforceable in respect of, one or more specified types of actions and proceedings, we could incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, results of operations, financial condition and liquidity.

Our amended and restated certificate of incorporation provides that we waive any interest or expectancy in corporate opportunities presented to AIG and Blackstone.

Our amended and restated certificate of incorporation provides that we, on our behalf and on behalf of our subsidiaries, renounce and waive any interest or expectancy in, or in being offered an opportunity to participate in, corporate opportunities that are from time to time presented to AIG or its respective officers, directors, agents,

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stockholders, members, partners, affiliates or subsidiaries, even if the opportunity is one that we or our subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so. None of AIG or its agents, stockholders, members, partners, affiliates or subsidiaries will generally be liable to us or any of our subsidiaries for breach of any fiduciary or other duty, as a director or otherwise, by reason of the fact that such person pursues, acquires or participates in such corporate opportunity, directs such corporate opportunity to another person or fails to present such corporate opportunity, or information regarding such corporate opportunity, to us or our subsidiaries unless, in the case of any such person who is a director or officer, such corporate opportunity is expressly offered to such director or officer in writing solely in his or her capacity as a director or officer. To the fullest extent permitted by law, by becoming a stockholder in our company, stockholders are deemed to have notice of and consented to this provision of our amended and restated certificate of incorporation. This will allow AIG to compete with us. Strong competition for investment opportunities could result in fewer such opportunities for us. We likely will not always be able to compete successfully with our competitors, including AIG, and competitive pressures or other factors could also result in significant price competition, particularly during industry downturns, which could cause a material adverse effect on our business, results of operations, financial condition and liquidity.

Risks Relating to Our Common Stock and this Offering

Fulfilling our obligations incident to being a public company, including compliance with the Exchange Act, Sarbanes-Oxley Act of 2002 and Dodd-Frank, will be expensive and time-consuming and may increase risks associated with ongoing operations. Further, any delays or difficulties in satisfying these obligations could have a material adverse effect on our future results of operations and our stock price.

In preparation for becoming a public company, we will expend significant management effort and resources, which may distract management from effectively carrying on our ongoing operations. Further, following this offering, we will be subject to the reporting, accounting and corporate governance requirements of the NYSE and the Exchange Act, Sarbanes-Oxley Act of 2002 and Dodd-Frank that apply to issuers of listed equity, which will impose certain new compliance requirements, costs and obligations upon us. The changes necessitated by being a publicly listed company require a significant commitment of additional resources and management oversight which will increase our operating costs. Further, to comply with the requirements of being a public company, we will need to undertake various actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff. If we are unable to maintain effective internal control over financial reporting, we may be unable to report our financial condition or financial results accurately or to report them within the timeframes required by the SEC.

The expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as other expenses. As a public company, we are required, among other things, to define and expand the roles and the duties of our Board and its committees and institute more comprehensive financial reporting, compliance and investor relations functions. Failure to comply with the requirements of being a public company could subject us to sanctions or investigations by the SEC, NYSE or other regulatory authorities and could potentially cause investors to lose confidence in the accuracy and completeness of our financial reports.

Our common stock has no prior public market, and the market price of our common stock could be volatile and could decline after this offering.

Prior to this offering, there has been no public market for our common stock, and an active market for our common stock may not develop or be sustained after this offering. We have applied to list on the NYSE. The price for our common stock in this offering was determined by negotiations among us, AIG and representatives of the underwriters and, therefore, it may not be indicative of the market price of our common stock following this offering. In the absence of an active public trading market, you may not be able to sell your shares.

An inactive market may also impair our ability to raise capital by selling our common stock, our ability to motivate our employees and sales representatives through equity incentive awards, and our ability to acquire other companies, products or technologies by using our common stock as consideration. In addition, the market price of our common stock may fluctuate significantly. Among the factors that could affect our stock price are:

• industry or general market conditions;

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• domestic and international economic factors unrelated to our performance;

• changes in our customers’ preferences;

• new regulatory pronouncements and changes in regulatory guidelines;

• lawsuits, enforcement actions and other claims by third parties or governmental authorities;

• adverse publicity related to us or another industry participant;

• actual or anticipated fluctuations in our operating results;

• any future issuance by us of senior or subordinated debt securities or preferred stock or other equity securities that rank senior to our common stock;

• changes in securities analysts’ estimates of our financial performance, or unfavorable or misleading research coverage and reports by industry analysts;

• lack of, or discontinuation of, research coverage and reports by industry analysts;

• action by institutional stockholders or other large stockholders (including AIG), including future sales of our common stock;

• failure to meet any guidance given by us or any change in any guidance given by us, or changes by us in our guidance practices;

• announcements by us of significant impairment charges;

• speculation in the press or investment community;

• investor perception of us and our industry;

• changes in market valuations or earnings of similar companies;

• announcements by us or our competitors of significant contracts, acquisitions, dispositions or strategic partnerships;

• war, terrorist acts and epidemic disease;

• any future sales of our common stock or other securities;

• additions or departures of key personnel; and

• misconduct or other improper actions of our employees.

In particular, we cannot assure you that you will be able to resell your shares at or above the initial public offering price. Stock markets have experienced extreme volatility in recent years that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In the past, following periods of volatility in the market price of a company’s securities, class action litigation has often been instituted against the affected company. Any litigation of this type brought against us could result in substantial costs and a diversion of our management’s attention and resources, which could materially and adversely affect our business, results of operations, financial condition and liquidity.

Future sales of shares by our existing stockholders could cause our stock price to decline.

Sales of substantial amounts of our common stock in the public market following this offering, or the perception that these sales could occur, could cause the market price of our common stock to decline. These sales, or the possibility that these sales could occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Based on shares outstanding as of           , 2022, upon the completion of this offering, we will have          outstanding shares of common stock. All of the shares sold pursuant to this offering will be immediately tradable without restriction under the Securities Act, except for any shares held by “affiliates,” as that term is defined in Rule 144 under the Securities Act (“Rule 144”).

The remaining shares of our common stock outstanding as of        , 2022 will be restricted securities within the meaning of Rule 144, but will be eligible for resale subject, in certain cases, to applicable

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volume, manner of sale, holding period and other limitations of Rule 144 or pursuant to an exception from registration under Rule 701 under the Securities Act, or “Rule 701,” subject to the terms of the lock-up agreements described below.

In connection with this offering, we, the selling stockholder and all of our directors and executive officers will enter into lock-up agreements under which, subject to certain exceptions, we and they have agreed not to sell, transfer or dispose of or hedge, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 180 days after the date of this prospectus, except with the prior written consent of      . Following the expiration of this 180-day lock-up period, approximately        shares of our common stock will be eligible for future sale, subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144 or pursuant to an exception from registration under Rule 701. As resale restrictions end, the market price of our common stock could decline if either of AIG or Blackstone sell their shares or if either is perceived by the market as intending to sell them.        may, in its sole discretion and at any time, release all or any portion of the securities subject to lock-up agreements entered into in connection with this offering. Furthermore, subject to the expiration or waiver of the lock-up agreements, AIG will have the right to require us to register shares of common stock for resale in some circumstances pursuant to the Registration Rights Agreement we will enter into with AIG. Similarly, beginning one year after completion of this offering, Blackstone will have the right to require us to register shares of common stock for resale in some circumstances pursuant to the Blackstone Stockholders’ Agreement. See “Certain Relationships and Related Party Transactions—Partnership with Blackstone—Stockholders’ Agreement.”

If AIG sells a controlling interest in our company to a third party in a private transaction, you may not realize any change of control premium on shares of our common stock and we may become subject to the control of a presently unknown third party.

Following the completion of this offering, AIG will beneficially own a substantial majority of our common stock. AIG has the ability to sell some or all of its shares of our common stock in a privately negotiated transaction. If such a transaction were to be sufficient in size, it could result in a change of control of our company. Such ability of AIG to privately sell such shares of our common stock, with no requirement for a concurrent offer to be made to acquire all of the shares of our common stock that will be publicly traded hereafter, could prevent you from realizing any change of control premium on your shares of our common stock that may otherwise accrue to AIG upon its private sale of our common stock. Additionally, if AIG privately sells a significant equity interest in us, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with the interests of other stockholders.

Applicable insurance laws could make it difficult to effect a change of control of our company.

The insurance laws and regulations of the various states in which our insurance subsidiaries are organized could delay or impede a business combination involving us. State insurance laws prohibit an entity from acquiring control of an insurance company without the prior approval of the domestic insurance regulator. Under most states’ statutes, an entity is presumed to have control of an insurance company if it owns, directly or indirectly, 10% or more of the voting stock of that insurance company or its parent company. These regulatory restrictions could delay, deter or prevent a potential merger or sale of our company, even if our Board decides that it is in the best interests of stockholders for us to merge or be sold. These restrictions could also delay sales by us or acquisitions by third parties of our insurance subsidiaries.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

This prospectus contains forward-looking statements. Forward-looking statements can be identified by the use of terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this prospectus and include, without limitation, statements regarding our intentions, beliefs, assumptions or current plans and expectations concerning, among other things, financial position and future financial condition; results of operations; expected operating and non-operating relationships; ability to meet debt service obligations and financing plans; product sales; distribution channels; retention of business; investment yields and spreads; investment portfolio and ability to manage asset-liability cash flows; financial goals and targets; prospects; growth strategies or expectations; laws and regulations; customer retention; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation; the impact of our separation from AIG; the impact of the ongoing COVID-19 pandemic; geopolitical events, including the ongoing conflict in Ukraine; and the impact of prevailing capital markets and economic conditions.

Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition, liquidity and cash flows, and the development of the markets in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this prospectus. In addition, even if our results of operations, financial condition, liquidity and cash flows, and the development of the markets in which we operate, are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:

• sustained low, declining or negative interest rates, rapidly increasing interest rates or changes to credit spreads;

• the deterioration of economic conditions, changes in market conditions, weakening in capital markets, the rise of inflation or geopolitical tensions, including the armed conflict between Ukraine and Russia;

• the impact of COVID-19, which will depend on future developments, including with respect to new variants, that are uncertain and cannot be predicted;

• declines or volatility in equity markets;

• the unpredictability of the amount and timing of insurance liability claims;

• unavailable, uneconomical or inadequate reinsurance;

• a failure by Fortitude Re to perform its obligations under its reinsurance agreements;

• acceleration of the amortization of deferred policy acquisition costs, or the recording of additional liabilities for future policy benefits by our subsidiaries due to interest rate fluctuations, increased lapses and surrenders, declining investment returns and other events;

• the realization of, or future impairments resulting from, gross unrealized losses on fixed maturity securities;

• the inaccuracy of the methodologies, estimations and assumptions underlying our valuation of investments and derivatives;

• our limited ability to access funds from our subsidiaries;

• our indebtedness and the degree to which we are leveraged;

• our potential inability to refinance all or a portion of our indebtedness to obtain additional financing;

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• our inability to generate cash to meet our needs due to the illiquidity of some of our investments;

• a downgrade in the IFS ratings of our insurance companies and a downgrade in our credit ratings;

• our exposure to liquidity and other risks due to participation in a securities lending program and a repurchase program;

• changes in the method for determining LIBOR, the upcoming phasing out of LIBOR and uncertainty related to LIBOR replacement rates such as SOFR or SONIA;

• exposure to credit risk due to nonperformance or defaults by our counterparties;

• our ability to adequately assess risks and estimate losses when pricing for our products;

• volatility of our results due to guarantees within certain of our products;

• our exposure to counterparty credit risk due to our use of derivative instruments to hedge market risks associated with our liabilities;

• difficulty in marketing and distributing products through our current and future distribution channels and the use of third parties;

• the highly competitive nature of our Group Retirement segment, consolidated plan sponsors and the potential for redirection of plan sponsor assets;

• the inadequate and unanticipated performance of third parties that we rely upon to provide certain business and administrative services on our behalf;

• our inability to maintain the availability of our critical technology systems and data and safeguard the confidentiality and integrity of our data;

• the ineffectiveness of our risk management policies and procedures;

• significant legal, governmental or regulatory proceedings;

• the ineffectiveness of new elements of our business strategy in accomplishing our objectives;

• the intense competition we face in each of our business lines and the technological changes that may present new and intensified challenges to our business;

• catastrophes, including those associated with climate change and pandemics;

• material changes to, or termination of, our significant investment advisory contracts with other parties, including Fortitude Re;

• changes in accounting principles and financial reporting requirements;

• our foreign operations, which may expose us to risks that may affect our operations;

• business or asset acquisitions and dispositions may expose us to certain risks;

• changes in U.S. federal income or other tax laws or the interpretation of tax laws;

• our inability to protect our intellectual property and our exposure to infringement claims;

• changes in laws and regulations that may affect our operations, increase our insurance subsidiary capital requirements or reduce our profitability;

• new laws and regulations, both domestically and internationally;

• our potential exposure to the USA PATRIOT Act, the Foreign Corrupt Practices Act, the regulations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control and similar laws and regulations;

• differences between actual experience and the estimates used in the preparation of financial statements and modeled results used in various areas of our business;

• differences in actual experience and the assumptions and estimates used in preparing projections for our financial goals, reserves and cash flows;

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• the ineffectiveness of our productivity improvement initiatives in yielding our expected expense reductions and improvements in operational and organizational efficiency;

• recognition of an impairment of our goodwill or the establishment of an additional valuation allowance against our deferred income tax assets as a result of our business lines underperforming or their estimated fair values declining;

• our inability to attract and retain the key employees and highly skilled people we need to support our business, including in light of current competition for talent;

• difficulties in detecting and preventing employee error and misconduct;

• the termination by Blackstone IM of the SMAs to manage portions of our investment portfolio, risks related to limitations on our ability to terminate the Blackstone IM arrangements;

• our limited ability to pursue certain investment opportunities and retain well-performing investment managers due to our exclusive investment management arrangements with Blackstone IM in relation to certain asset classes;

• the historical performance of AMG and Blackstone IM not being indicative of the future results of our investment portfolio, our future results or any returns expected on our common shares;

• ineffective management of our investment portfolio or harm to our business reputation due to increased regulation or scrutiny of alternative investment advisers and certain trading methods;

• our failure to replicate or replace functions, systems and infrastructure provided by AIG or certain of its affiliates (including through shared service contracts) or our loss of benefits from AIG’s global contracts, and AIG’s failure to perform the services provided for in the Transition Services Agreement, as well as incremental costs we expect to incur as a stand-alone public company;

• the unreliability of our historical consolidated financial data as an indicator of our future results;

• costs associated with rebranding;

• additional expenses requiring us to implement future operational and organizational efficiencies due to our restructuring initiatives in connection with our separation from AIG;

• the significant influence that AIG has over us;

• our status as a “controlled company” within the meaning of the NYSE rules;

• conflicts of interest that may arise because affiliates of our controlling stockholder have continuing agreements and business relationships with us, or conflicts of interest with a third party that owns a minority investment in us;

• actual or potential conflicts of interest with certain of our directors because of their AIG equity ownership or their current or former AIG positions;

• our indemnification obligations in favor of AIG;

• the interpretation of insurance holding company laws which may deem that investors in AIG “control” us following their investment in our common stock;

• potentially higher U.S. federal income taxes due to our inability to file a single U.S. consolidated federal income tax return following our separation from AIG;

• our separation from AIG causing an “ownership change” for U.S. federal income tax purposes;

• risks associated with the Tax Matters Agreement with AIG;

• our potential liability for U.S. income taxes of the entire AIG Consolidated Tax Group for all taxable years or portions thereof in which we (or our subsidiaries) were members of such group;

• the discouragement, delay or prevention of a change of control of our company and the impact on the trading price of our common stock as a result of anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws;

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• limitations on personal liability of our directors for breach of fiduciary duty under the DGCL;

• the exclusive forum provisions for certain litigation in our amended and restated certificate of incorporation;

• risks associated with our ability to waive any interest or expectancy in corporate opportunities presented to AIG and Blackstone;

• the increased expense and time associated with fulfilling our obligations incident to being a public company, including compliance with the Exchange Act, Sarbanes-Oxley Act of 2002 and Dodd-Frank, and risks associated with delays or difficulties in satisfying such obligations;

• the lack of a prior public market for our common stock and the potential that the market price of our common stock could decline;

• the potential that the market price of our common stock could decline due to future sales of shares by our existing stockholders, including AIG or Blackstone;

• the potential inability of our stockholders to realize a control premium if AIG sells a controlling interest in us to a third party in a private transaction; and

• applicable insurance laws, which could make it difficult to effect a change of control of our company.

Other risks, uncertainties and factors, including those discussed in “Risk Factors,” could cause our actual results to differ materially from those projected in any forward-looking statements we make. You should read carefully the factors described in “Risk Factors” to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.

You should read this prospectus completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this prospectus are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this prospectus, and we do not undertake any obligation to update or revise any forward-looking statements to reflect the occurrence of events, unanticipated or otherwise, other than as may be required by law.

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USE OF PROCEEDS

The selling stockholder is selling all of the shares of our common stock in this offering, and we will not receive any proceeds from the sale of our common stock in the offering.

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DIVIDEND POLICY

We intend to pay quarterly cash dividends on our common stock at an initial amount of between $400 million and $600 million per year, although any declaration of dividends will be at the discretion of our Board and will depend on our financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by Delaware law, general business conditions and any other factors that our Board deems relevant in making such a determination. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock, or as to the amount of any such dividends.

We also may consider share repurchase programs in the future to supplement our dividend policy. Our Board will need to approve any share repurchase program in the future, and it has not approved any such program at this time.

Delaware law requires that dividends be paid only out of “surplus,” which is defined as the fair market value of our net assets, minus our stated capital, or out of the current or the immediately preceding year’s earnings. SAFG is a holding company and has no direct operations. All of our business operations are conducted through our subsidiaries. Any dividends we pay will depend upon the funds legally available for distribution, including dividends or distributions from our subsidiaries to us. The states in which our insurance subsidiaries are domiciled impose certain restrictions on our insurance subsidiaries’ ability to pay dividends to their parent companies. These restrictions are based in part on the prior year’s statutory income and surplus, as well as earned surplus. Such restrictions, or any future restrictions adopted by the states in which our insurance subsidiaries are domiciled, could have the effect, under certain circumstances, of significantly reducing dividends or other amounts payable by our subsidiaries without affirmative approval of state regulatory authorities. See “Risk Factors—Our ability to access funds from our subsidiaries is limited and our liquidity may be insufficient to meet our needs.” As a holding company, SAFG depends on the ability of its subsidiaries to meet its obligations and liquidity needs. For a discussion of the dividend capacity for 2021, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity and Capital Resources of SAFG Insurance Subsidiaries—Insurance Companies.”

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THE REORGANIZATION TRANSACTIONS

Summary of Reorganization

We are in the process of undertaking an internal reorganization, which is expected to be completed prior to the consummation of this offering, as described generally below. The Reorganization’s primary goals are to ensure that, prior to the consummation of this offering, we will hold all of AIG Group’s life and retirement business and substantially all of AIG Group’s investment management operations.

Prior to, and following, the completion of this offering, we will be controlled by AIG and approximately 9.9% of our common stock will be owned by Blackstone.

Transfer of Investment Management Business

We and our subsidiaries currently conduct all of AIG Group’s life and retirement operations and, as of December 31, 2021, substantially all of AIG Group's investment management operations. In connection with this offering, we and AIG entered into agreements to effectuate, through a series of steps, a contribution of substantially all of the entities that conduct AIG Group’s investment management operations from AIG to us. Specifically, AIG formed a new investment management holding company, SAFG Capital LLC, to which it transferred subsidiaries which conduct its investment management operations, subject to certain limited exceptions. Following the transfer of subsidiaries, SAFG Capital LLC was contributed to us, effective December 31, 2021. The change of control of certain of these investment management subsidiaries resulting from the transfer and contribution described above was subject to receipt of certain regulatory approvals from FINRA and the FCA, all of which were received in December 2021.

In connection with the Reorganization, we also have formed a new market-facing entity, SAFG Markets, LLC (“SAFG Markets”), that will allow our subsidiaries to have access to the consolidation and intermediation benefits of having one market-facing entity when entering into derivatives, hedging and other similar capital markets transactions. These functions are currently fulfilled by AIGM, which is not expected to be contributed to us in the Reorganization. AIGM has historically entered into derivatives, hedging and other similar capital markets transactions for AIG’s and our asset and liability portfolios. We may incur both one-time and ongoing costs associated with establishing SAFG Markets and transitioning to SAFG Market's derivatives, hedging and other similar capital markets transactions previously entered into by AIGM on behalf of us.

Transfer of Fortitude Re Interests

On October 1, 2021, AIG contributed to us its entire 3.5% ownership interest in Fortitude Re Bermuda, the parent entity of Fortitude Group Holdings, LLC, of which Fortitude Re is a wholly owned subsidiary. Following such contribution, we have limited rights to influence the operations of Fortitude Group Holdings, LLC or Fortitude Re.

Transfer of AIG Technologies, Inc. and Eastgreen, Inc.

In connection with the Reorganization, we and AIG entered into agreements under which we purchased AIGT and Eastgreen from AIG affiliates on February 28, 2022 for total consideration of $106.5 million. AIGT provides data processing, technology and infrastructure services to AIG entities in the United States, including management of AIG hardware and networks. AIGT utilizes two data centers to provide its services. The real estate related to the two data centers is owned by Eastgreen. We intend to rely on the infrastructure within the two data centers as the backbone for our IT ecosystem. To the extent needed, AIGT will continue to provide services to AIG for a transition period.

European Insurance Entities

In anticipation of this offering, AIG Group previously undertook a series of transactions to transfer AIG Life UK and Laya to us. Effective May 1, 2021, AIG Life UK and Laya are both direct subsidiaries of SAFG.

Separation Arrangements

In addition, immediately prior to the completion of this offering, we and AIG intend to enter into certain agreements that will provide a framework for our ongoing relationship with AIG, including the provision of services being provided to AIG by our investment management business transferred to us as part of the Reorganization. For a description of these agreements, see “Certain Relationships and Related Party Transactions—Relationship with AIG Following This Offering.”

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RECAPITALIZATION

We have historically operated with a capital structure that reflected our status as a wholly owned subsidiary of AIG, prior to Blackstone’s investment in us in November 2021. To prepare for this offering and operation as a stand-alone public company, we will undertake the Recapitalization. In undertaking the Recapitalization, we are focused on several goals:

• Maintaining our stand-alone credit ratings;

• Targeting a financial leverage ratio of between approximately 25% to 30%. Financial leverage ratio is the ratio of financial debt to the sum of financial debt plus Adjusted Book Value plus non-redeemable non-controlling interests;

• Liquidity at our holding company, SAFG, sufficient to cover one year of its expenses; and

• Entering into new financing arrangements that are supported solely on the basis of our stand-alone credit profile.

There can be no assurances that we will reach these goals. See “Risk Factors—Our business strategy may not be effective in accomplishing our objectives, including as a result of events that can cause our fundamental business model to change and assumptions that may prove not to be accurate.”

Financing Activities Prior to this Offering

Prior to the consummation of this offering, we expect to enter into the bank facilities described below as part of our efforts to align our capital structure more closely with other U.S. public companies and achieve the goals described above:

• Letters of credit with an aggregate principal amount of approximately $   , which are expected to be used to support statutory recognition of ceded reinsurance by one of our U.S. life and retirement subsidiaries to an affiliate, and for our life insurance business in the UK; and

• A revolving credit facility of approximately $2.5 billion.

Depending on market conditions and other factors, we currently anticipate issuing most of the debt securities anticipated to be issued in connection with our separation from AIG prior to the consummation of this offering, with the remainder to be completed within approximately 12 months to 18 months thereafter. The net proceeds from these anticipated transactions are to be used to repay the outstanding principal balance of and interest on the $8.3 billion intercompany short-term note owed by us to AIG that was entered into during the fourth quarter of 2021, or if drawn, to repay the Facilities (as defined under “Delayed Draw Term Loan” below). Any residual amount of net proceeds in excess of the $8.3 billion payment to AIG and the repayment of any amount drawn on the Facilities is intended to be retained by SAFG as part of its liquidity pool. There can be no assurance that we will be able to complete any such debt offering. The Facilities would be drawn prior to this offering in the event that any portion of the anticipated new capital structure is not in place prior to this offering. This would be a temporary bridge until these anticipated issuances are complete.

Delayed Draw Term Loan

On February 25, 2022, we entered into an unsecured 18-Month Delayed Draw Term Loan Agreement (the “18-Month DDTL Agreement”) among SAFG, as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, and an unsecured Three-Year Delayed Draw Term Loan Agreement (the “Three-Year DDTL Agreement,” and together with the 18-Month DDTL Agreement, the “Facilities”) among SAFG, as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

The Facilities provide us with committed delayed draw term loan facilities in the aggregate principal amount of $6 billion and $3 billion, respectively. The ability to borrow under the Facilities is subject to, among other conditions, our confirmation to the administrative agent that this offering is expected to be consummated within five business days following such borrowing (or a longer period with the consent of the initial lenders). Any commitments under the 18-Month DDTL Agreement that remain undrawn will automatically terminate upon the consummation of this offering. Commitments under the Three-Year DDTL Agreement will remain available for borrowing until December 30, 2022 subject to the terms and conditions thereof. The proceeds of the Facilities may be used for general corporate purposes, including the repayment of the promissory note previously issued by us to AIG in the amount of $8.3 billion, which will be required to be paid to AIG prior to this offering.

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Borrowings under each Facility will bear interest at a rate per annum equal to Term Secured Overnight Financing Rate (as defined in the Facilities) plus an applicable credit spread adjustment plus a margin that varies from 0.750% to 1.250% based on the then-applicable credit ratings of our senior long-term unsecured debt. Undrawn commitments will accrue commitment fees at a rate that varies from 0.080% to 0.175% based on such credit ratings, commencing 120 days after the date of the Facilities. Loans under the 18-Month DDTL Agreement and Three-Year DDTL Agreement will mature on August 25, 2023 or February 25, 2025, respectively, unless our initial public offering has not occurred on or prior to December 30, 2022 in which case the loans under both Facilities will mature on such date. Each of the Facilities is subject to mandatory prepayment (or, to the extent undrawn, permanent commitment reductions) to the extent of any net cash proceeds received by us from incurring debt for borrowed money or issuing hybrid securities, in each case, subject to certain exceptions including an exception for up to $500 million of debt or hybrid securities in the aggregate.

The Facilities require us to maintain a minimum consolidated net worth of $11.7 billion and subject us to a specified maximum ratio of total consolidated debt to total consolidated capitalization of 40%, subject to certain limitations and exceptions. In addition, the Facilities contain certain customary representations and warranties and affirmative and negative covenants, including limitations with respect to:

• liens that we may create, incur, assume, or permit in respect of our properties, assets or certain equity interests of certain of our subsidiaries, subject to exceptions;

• our ability to effect any merger, consolidation, disposal of all or substantially all of our assets, or to liquidate or dissolve, subject to exceptions;

• engage in any business other than the businesses of the type we and our subsidiaries currently conduct; and

• activities which may cause us to violate any laws or regulations governing sanctions, bribery and anti-corruption.

Amounts due under the Facilities may be accelerated upon an “event of default,” as defined in the Facilities, such as failure to pay amounts owed thereunder when due, breach of a covenant, material inaccuracy of a representation, or occurrence of bankruptcy or insolvency, subject in some cases to cure periods. This description is qualified by reference to Exhibits 10.19 and 10.20 filed with the registration statement of which this prospectus forms a part.

Indebtedness Remaining Outstanding Following this Offering

Our existing indebtedness that will remain outstanding following this offering is described below. Historically, much of our financing has been through certain intercompany arrangements with AIG and certain of its affiliates. While we have recently taken steps to replace certain of these arrangements with stand-alone financing in contemplation of this offering, we may retain direct financing and guarantee arrangements with AIG and certain of its affiliates for some period of time following this offering.

As of December 31, 2021, our subsidiary, AIGLH, had outstanding $427 million aggregate principal amount, consisting of $227 million of junior subordinated debt due between 2030 and 2046 and $200 million of notes due between 2025 and 2029. Prior to consummation of this offering, we will enter into a collateral agreement with AIG to secure its existing guarantee with respect to this principal amount.

For further information regarding our junior subordinated debt and notes due, see “Certain Relationships and Related Party Transactions—Historical Related Party Transactions—Guarantees.”

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CAPITALIZATION

The following table sets forth our cash and capitalization as of December 31, 2021 on an actual basis and on a pro forma basis giving effect to the items described in “Unaudited Condensed Pro Forma Financial Information.” The selling stockholder is selling all of the shares of our common stock in this offering, and we will not receive any proceeds from the sale of shares.

You should read this table in conjunction with “Recapitalization,” “The Reorganization Transactions,” “Summary Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Condensed Consolidated Financial Information” and our consolidated financial statements included elsewhere in this prospectus.

	As of December 31, 2021
(dollars in millions, except share amounts)	Actual	Pro Forma
Cash	$537	1,220
Debt(1):
Short-term debt	8,317	—
Long-term debt	427	9,427
Debt of consolidated investment entities	6,936	6,936
Total debt	$15,680	$16,363
Redeemable noncontrolling interest(2)	83	83
Equity:
Common stock class A, $1.00 par value;     shares authorized;     shares issued(3)	—	—
Common stock class B, $1.00 par value;     shares authorized;     shares issued(3)	—	—
Additional paid-in capital	8,060	8,060
Retained earnings	8,859	8,750
Accumulated other comprehensive income	10,167	10,452
Total SAFG Shareholder’s equity	27,086	27,262
Nonredeemable noncontrolling interest	1,759	1,759
Total equity	28,845	29,021
Total capitalization	$44,525	45,384

(1)
See “Recapitalization.”

(2)
Redeemable noncontrolling interest has been excluded from the total capitalization of SAFG. See Note 16 to the audited consolidated financial statements.

(3)
Adjusted to give effect to the     -for-     stock split on our common stock to be effected prior to this offering.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The unaudited pro forma condensed consolidated financial information consists of the unaudited pro forma condensed consolidated balance sheet as of December 31, 2021, and unaudited pro forma condensed consolidated statement of income (loss) for the year ended December 31, 2021. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the information included under “Summary Historical Consolidated Financial Data,” “Recapitalization,” “The Reorganization Transactions,” “Certain Relationships and Related Party Transactions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements included elsewhere in this prospectus. We believe the unaudited pro forma condensed consolidated financial information presented below is useful to investors because it presents our historical results of operations for the periods presented giving effect to the Recapitalization (as defined below), disposition of the affordable housing portfolio, Tax Deconsolidation, Investment Management, including our Strategic Partnership with Blackstone, and other costs expected to be incurred as part of the Separation, as if they had occurred or were incurred as of the dates indicated below. The unaudited pro forma condensed consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X under the Securities Act. As discussed in more detail below, certain adjustments do not qualify as transactional accounting adjustments (“Transactional Accounting Adjustments”) or autonomous entity adjustments (“Autonomous Entity Adjustments”) under Article 11 of Regulation S-X under the Securities Act and are therefore excluded from the unaudited pro forma condensed consolidated financial information.

The following unaudited pro forma condensed consolidated financial information presents the historical financial statements of the Company as if these transactions had been completed as of December 31, 2021 for purposes of the unaudited pro forma condensed consolidated balance sheet, and as of January 1, 2021 for purposes of the unaudited pro forma condensed consolidated statement of income (loss).

The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and does not purport to represent our financial condition or our results of operations had these transactions occurred on or as of the dates noted above or to project the results for any future date or period. Actual results may differ from the unaudited pro forma condensed consolidated financial information.

The unaudited pro forma condensed consolidated financial information has been prepared to reflect adjustments to SAFG’s historical consolidated financial information for the following:

Transactional Accounting Adjustments

Recapitalization

Depending on market conditions and other factors, we currently anticipate issuing most of the debt securities anticipated to be issued in connection with the Separation prior to the consummation of this offering with the remainder to be completed within approximately 12 to 18 months thereafter. See “Recapitalization.” The unaudited pro forma condensed consolidated balance sheet includes adjustments related to the Recapitalization transactions which are expected to consist of senior unsecured debt (“Senior Notes”) and hybrid debt securities (“Hybrid Notes”). The net proceeds from these anticipated transactions are to be used to repay the outstanding principal balance of and interest on the $8.3 billion intercompany short-term note owed by us to AIG that was entered into during the fourth quarter of 2021, or if drawn, to repay the DDTL facilities described below. Any residual amount of net proceeds in excess of the $8.3 billion payment to AIG is intended to be retained by SAFG as part of its liquidity pool.

We have entered into two delayed draw term loan (“DDTL”) facilities. For a description of the DDTL facilities, see “Recapitalization—Delayed Draw Term Loan.” The DDTL facilities would be drawn prior to this offering in the event that any portion of the anticipated new capital structure is not in place prior to this offering. This would be a temporary bridge until these anticipated issuances are complete. For purposes of preparing the pro forma condensed consolidated financial information, we have assumed that all anticipated components of the new capital structure are in place prior to this offering (although the issuance of Hybrid Notes may be effected after this offering), and therefore assumes no drawdowns under the DDTL facilities.

The unaudited pro forma condensed consolidated statement of income (loss) reflects estimated interest expense related to the recapitalization transactions for the year ended December 31, 2021.

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Affordable Housing

The unaudited pro forma condensed consolidated financial information includes adjustments to reflect the elimination of the historical results of the affordable housing portfolio sold to BREIT in the fourth quarter of 2021. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Factors Impacting Our Results—Affordable Housing Sale” and Note 1 to our audited consolidated financial statements.

Tax Deconsolidation

The unaudited pro forma condensed consolidated financial information reflects the expected tax impacts associated with the Company Tax Deconsolidation. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Factors Impacting our Results—Tax Impact from Separation.”

Autonomous Entity Adjustments

Investment Management

The Autonomous Entity Adjustment for the Blackstone IM SMA only reflects the fees to be paid under the SMA during the year ended December 31, 2022 (as if those fees were paid for the year ended December 31, 2021). As discussed in more detail below and under Business—Investment Management—Our Strategic Partnership with Blackstone, the fees paid to Blackstone IM will increase as the assets managed by Blackstone IM increase over time and the initial $50 billion of assets mature or are sold and replaced with new assets primarily originated by Blackstone IM. Furthermore, the Autonomous Entity Adjustments do not reflect expected improvements in our investment returns for the increase in allocation to Blackstone IM eligible assets.

Historically, our investments have largely been managed by affiliated asset managers. In the future, we expect to make increasing use of third-party asset managers for various asset classes where we can increase our access to attractive assets and benefit from scale and market-leading capabilities. For example, we have entered into the BlackRock Arrangement as described in “Business—Investment Management—Our Expected Investment Management Agreement with BlackRock.” Other than the Blackstone IM SMA discussed above, our unaudited pro forma condensed consolidated financial information does not consider the use of additional third-party asset managers, such as under the BlackRock Arrangement, and the related impact that would have on our cost structure. Additionally, there will be a reduction in asset management services that we provide to AIG and there could be a reduction in asset mangement services that we provide to Fortitude Re over time resulting in a loss of revenue for SAFG. As a result, we intend to evolve our internal asset management operations to address the anticipated impact of the changing mandates and needs although no assurance can be given that such effort to address that impact will be effective. To aid in this effort, we are preparing to implement BlackRock’s “Aladdin”, an investment management technology platform that will provide an end-to-end investment solution spanning trade capture, analytics, back-office capabilities and other services which are currently performed across multiple systems at AIG. Potential costs and savings associated with this effort and revenue loss related to the reduction in asset management services rendered to AIG are not reflected in the unaudited pro forma condensed consolidated financial information.

Other Costs

We expect to incur certain additional costs related to becoming a standalone public company, including costs incurred under the Transition Service Agreement (“TSA”), which will be executed prior to the consummation of this offering. For a description of the TSA, see “Certain Relationships and Related Party Transactions—Relationship with AIG Following this Offering—Transition Services Agreement.” These costs are expected to be partially offset by fees associated with reverse transition services provided to AIG under the TSA. We also expect to incur additional costs associated with employees transferred to the Company as part of the Separation. The unaudited pro forma condensed consolidated financial information has been adjusted to depict these incremental expenses expected to be incurred by the Company as an autonomous entity, as reduced by the fees expected to be received from the reverse transition services provided to AIG. A portion of these costs relate to AIGT and Eastgreen, which were purchased by us on February 28, 2022. The unaudited pro forma condensed consolidated statement of income (loss) reflects the incremental expenses expected to be incurred by the Company in the “other costs” pro forma adjustment. No pro forma adjustments have been made in the unaudited pro forma condensed balance sheet as these adjustments were determined to be immaterial. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Factors Impacting Our Results—Separation Costs.”

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The unaudited condensed pro forma financial information excludes any potential future benefits associated with expense reduction programs we intend to undertake to mitigate the impact of the higher costs as a standalone public company, although no assurance can be given that such cost savings will be realized in full or in part. See “Prospectus Summary—Our Strategy” and “Risk Factors—Risks Relating to Our Business and Operations—Our productivity improvement initiatives may not yield our expected expense reductions and improvements in operational and organizational efficiency.”

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Unaudited Pro Forma Condensed Consolidated Balance Sheet

as of December 31, 2021

		Transaction Accounting Adjustments			Autonomous Entity Adjustments
	Historical	Recapitalization	Affordable Housing	Tax Deconsolidation	Investment Management	Other Costs	Pro Forma
(in millions, except for share data)
Assets:
Investments:
Fixed maturity securities:
Bonds available for sale	$198,568	—	—	—	—	—	$198,568
Other bond securities	2,082	—	—	—	—	—	2,082
Equity securities	242	—	—	—	—	—	242
Mortgage and other loans receivable	39,388	—	—	—	—	—	39,388
Other invested assets	10,567	—	—	—	—	—	10,567
Short-term investments	5,471	—	—	—	—	—	5,471
Total Investments	256,318	—	—	—	—	—	256,318
Cash	537	683 (a)	—	—	—	—	1,220
Accrued investment income	1,760	—	—	—	—	—	1,760
Premiums and other receivables	884	—	—	—	—	—	884
Reinsurance assets - Fortitude Re	28,472	—	—	—	—	—	28,472
Reinsurance assets - other	2,932	—	—	—	—	—	2,932
Deferred income taxes	4,837	—	—	(109) (b)	—	—	4,728
Deferred policy acquisition costs and value of business acquired	8,058	—	—	—	—	—	8,058
Other assets	3,303	285 (a)	—	—	—	—	3,588
Separate account assets	109,111	—	—	—	—	—	109,111
Total assets	$416,212	968	—	(109)	—	—	$417,071
Liabilities:
Future policy benefits for life and accident and health insurance contracts	$57,751	—	—	—	—	—	$57,751
Policyholder contract deposits	156,846	—	—	—	—	—	156,846
Other policyholder funds	2,849	—	—	—	—	—	2,849
Fortitude Re funds withheld payable	35,144	—	—	—	—	—	35,144
Other liabilities	9,903	—	—	—	—	—	9,903
Short-term debt	8,317	(8,317) (a)	—	—	—	—	—
Long-term debt	427	9,000 (a)	—	—	—	—	9,427
Debt of consolidated investment entities	6,936	—	—	—	—	—	6,936
Separate account liabilities	109,111	—	—	—	—	—	109,111
Total liabilities	$387,284	683	—	—	—	—	$387,967
Redeemable noncontrolling interest	$83						$83
SAFG Shareholders' equity
Class A Common stock, $1.00 par value, 180,000 shares authorized; 90,100 shares issued	—	—	—	—	—	—	—
Class B Common stock, $1.00 par value, 20,000 shares authorized; 9,900 shares issued	—	—	—	—	—	—	—
Additional paid-in capital	8,060	—	—	—	—	—	8,060
Retained earnings	8,859	—	—	(109) (b)	—	—	8,750
Accumulated other comprehensive income (loss)	10,167	285 (a)	—	—	—	—	10,452
Total SAFG Shareholders' equity	27,086	285	—	(109)	—	—	27,262
Non-redeemable noncontolling interests	1,759	—	—	—	—	—	1,759
Total Equity	$28,845	$285	—	(109)	—	—	$29,021
Total Liabilities, redeemable noncontrolling interest and equity	$416,212	968	—	(109)	—	—	$417,071

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Unaudited Pro Forma Condensed Consolidated Statement of Income (Loss)

for the Year Ended December 31, 2021

		Transaction Accounting Adjustments			Autonomous Entity Adjustments
	Historical	Recapitalization	Affordable Housing	Tax Deconsolidation	Investment Management	Other Costs	Pro Forma
(dollars in millions, except per common share data)
Revenues:
Premiums	$5,637	—	—	—	—	—	5,637
Policy Fees	3,051	—	—	—	—	—	3,051
Net Investment Income:
Net investment income: excluding Fortitude Re funds withheld assets	9,897	—	(309) (c)	—	(147) (d)	—	9,441
Net investment income: Fortitude Re funds withheld assets	1,775	—	—	—	—	—	1,775
Total net investment income	$11,672	$—	$(309)	$—	$(147)	$—	$11,216
Net Realized gains (losses):
Net realized gains (losses) excluding Fortitude Re funds withheld assets and embedded derivative	1,618	—	—	—	—	—	1,618
Net realized gains (losses) on Fortitude Re funds withheld assets	924	—	—	—	—	—	924
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative	(687)	—	—	—	—	—	(687)
Total Net realized gains (losses)	1,855	—	—	—	—	—	1,855
Advisory fee income	597	—	—	—	—	—	597
Other income	578	—	—	—	—	—	578
Total Revenues	$23,390	—	(309)	$—	$(147)	$—	$22,934
Benefits and expenses:
Policyholder benefits	8,050	—	—	—	—	—	8,050
Interest credited to policyholder account balances	3,549	—	—	—	—	—	3,549
Amortization of deferred policy acquisition costs and value of business acquired	1,057	—	—	—	—	—	1,057
Non-deferrable insurance commissions	680	—	—	—	—	—	680
Advisory fee expenses	322	—	—	—	—	—	322
General operating	2,104	—	(16) (c)	—	—	103 (e)	2,191
Interest expense	389	373 (a)	(107) (c)	—	—	—	655
Loss on extinguishment of debt	219	—	—	—	—	—	219
Net (gain) loss on divestitures	(3,081)	—	—	—	—	—	(3,081)
Loss on Fortitude Re Reinsurance Contract	(26)	—	—	—	—	—	(26)
Total benefits and expenses	$13,263	$373	$(123)	$—	$—	$103	$13,616
Income (loss) before income tax expense	10,127	(373)	(186)	—	(147)	(103)	9,318
Income tax expense (benefit):
Current	1,946	(78) (g)	(40) (g)	138 (b)	(31) (g)	(22) (g)	1,913
Deferred	(103)	—	—	—	—	—	(103)
Income tax expense (benefit):	$1,843	$(78)	$(40)	$138	$(31)	$(22)	$1,810
Net income (loss)	$8,284	$(295)	$(146)	$(138)	$(116)	$(81)	$7,508
Less:
Net income (loss) attributable to noncontrolling interests	$929	$—	$(68) (c)	—	—	—	$861
Net income (loss) attributable to SAFG	$7,355	$(295)	$(78)	$(138)	$(116)	$(81)	$6,647

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		Transaction Accounting Adjustments			Autonomous Entity Adjustments
	Historical	Recapitalization	Affordable Housing	Tax Deconsolidation	Investment Management	Other Costs	Pro Forma
(dollars in millions, except per common share data)
Income (loss) per common share attributable to SAFG common shareholders:
Class A - Basic and diluted	$ (f)	$
Class B - Basic and diluted	$ (f)	$
Weighted average shares outstanding:
Class A - Basic and diluted	(f)
Class B - Basic and diluted	(f)

Notes to the Unaudited Pro Forma Financial Information

(a)
The unaudited pro forma condensed balance sheet reflects our planned Recapitalization, which, depending on market conditions and other factors, we currently anticipate issuing a portion of the debt securities prior to the consummation of this offering with the remainder to be completed within approximately 12 to 18 months thereafter. SAFG intends to use the net proceeds from these anticipated financings to repay the outstanding principal balance and interest on the $8.3 billion owed by us to AIG Inc., or if drawn, to repay the DDTL facilities, with any excess to be retained by SAFG as part of its liquidity pool.

Facility	Principal amounts outstanding
	($ millions)
Affiliated senior promissory note with AIG, Inc.	$8,317
Senior Notes	$6,000
Hybrid Notes	$3,000
Repayment of Affiliated senior promissory note with AIG, Inc.	($8,317)
AIGLH notes and bonds payable	$200
AIGLH junior subordinated debt	$227
Total Pro Forma long-term debt	$9,427

We have entered into two DDTL facilities. For a description of the DDTL facilities, see “Recapitalization-Delayed Draw Term Loan.” The DDTL facilities would be drawn prior to this offering in the event that any portion of the anticipated new capital structure is not in place prior to the offering. This would be a temporary bridge until these anticipated issuances are complete. For purposes of preparing the pro forma condensed consolidated financial information, we have assumed that all anticipated components of our new capital structure are in place prior to this offering, and therefore assumed no drawdowns under the DDTL facilities (although the issuance of Hybrid Notes may be effected after this offering).

The Senior Notes are expected to have a range of maturities between three and 30 years and to have a weighted average yield to maturity of 3.5%, after giving consideration to the interest rate risk hedges discussed below. The Hybrid Notes are expected to be long-dated subordinated debt with a weighted average yield to maturity of 6.1%. The pro forma condensed consolidated statement of income (loss) reflects the elimination of the $17 million interest expense recognized in 2021 related to the affiliated senior promissory note with AIG, Inc. and estimated interest expense of $390 million related to the Senior Notes and Hybrid Notes for the year ended December 31, 2021. The pro forma interest expense assumes that the Senior Notes and the Hybrid Notes were issued on January 1, 2021. Interest expense was calculated assuming constant debt levels throughout the periods presented. A 1/8% change to the annual weighted average interest rate would change interest expense by approximately $11 million for the year ended December 31, 2021. The actual weighted average interest rate will be dependent on market and other conditions at the time of issuance and may differ, potentially materially, from such assumed weighted average interest rate. However, we have entered into a series of forward starting

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swaps in order to hedge the interest rate risk associated with the forecasted issuance of the Senior Notes, and such hedges have qualified as an effective cash flow hedge for accounting purposes. The pro forma adjustments above reflect a $285 million value of the forward starting swaps which have been reported in other assets and accumulated other comprehensive income. This is based upon the valuation of the forward starting swaps as of March 22, 2022. This amount is subject to change.

(b)
We are currently included in the AIG Consolidated Tax Group. However, upon AIG’s ownership interest in SAFG decreasing below 80%, we will no longer be included in the AIG Consolidated Tax Group. This Tax Deconsolidation is expected to occur upon completion of this offering. In addition, we will not be permitted to join in the filing of a U.S. consolidated federal income tax return with AGC and its directly owned life insurance subsidiaries for the five-year waiting period. Instead, AGC and its directly owned life insurance company subsidiaries are expected to file separately as members of the AGC consolidated U.S. federal income tax return during the five-year waiting period. See “Risk Factors—Risks Relating to Our Separation from AIG—Our inability to file a single U.S. consolidated federal income tax return following separation from AIG may result in increased U.S. federal income taxes.” Upon the Tax Deconsolidation from the AIG Consolidated Tax Group, absent any tax planning strategies, our net operating losses and foreign tax credit carryforwards generated by the non-life insurance companies will more-likely-than-not expire unutilized. Additionally, based on the positive and negative evidence that exists as of December 31, 2021, an additional valuation allowance of $109 million is expected to be established with respect to such tax attribute carryforwards and is reflected in the pro forma adjustments. Following the five-year waiting period, AGC and its life insurance subsidiaries are expected to join our U.S. consolidated federal income tax return. Principles similar to the foregoing may apply to state and local income tax liabilities in jurisdictions that conform to federal rules.

(c)
Reflects the elimination of the historical results of the affordable housing portfolio sold to BREIT in the fourth quarter of 2021. The $309 million of net investment income, $16 million of general operating and other expenses, $107 million of interest expense, $40 million of income tax and $68 million of net income attributable to non-controlling interests eliminated in the unaudited pro forma condensed consolidated statement of income (loss) will not recur in our income beyond 12 months after the transaction. Additionally, the unaudited pro forma condensed consolidated statement of income (loss) reflects the pre-tax gain of $3.0 billion that we incurred related to the sale of the affordable housing portfolio. While this gain has been presented in the unaudited pro forma condensed consolidated statement of income (loss) as the statement is prepared as if the transaction occurred as of January 1, 2021, this gain will not recur in our income beyond 12 months after the transaction. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Factors Impacting Our Results—Affordable Housing Sale” and Note 1 to our audited consolidated financial statements.

(d)
Pursuant to our Commitment Letter with Blackstone IM and the SMAs, Blackstone IM serves as the exclusive external investment manager for certain asset classes in the majority of our life insurance company subsidiaries. As of December 31, 2021, Blackstone IM manages an initial $50 billion of our existing investment portfolio. Pursuant to the Commitment Letter, we must use commercially reasonable efforts to transfer certain minimum amounts of assets to Blackstone IM for management each quarter for the next five years beginning in the fourth quarter of 2022, such that the amount under Blackstone IM’s management is expected to increase by increments of $8.5 billion per year to an aggregate of $92.5 billion by the third quarter of 2027.

Blackstone IM earns an investment management fee of 0.30% per annum on all assets with respect to the initial $50 billion of assets delivered by our insurance company subsidiaries to Blackstone IM for investment management. That fee will increase to 0.45% per annum with respect to additional assets delivered for investment management by Blackstone IM, and with respect to the initial $50 billion of assets as such amount is re-invested over time. Such fee does not apply in the case of investments made in funds or structures where Blackstone IM or its affiliate is the sponsor or is otherwise entitled

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to other fees. To the extent that our insurance company subsidiaries fail to deliver the additional amounts by specified quarterly deadlines beginning in the fourth quarter of 2022 to Blackstone IM for investment management, we would still owe investment management fees on the full amount of assets expected to be managed by Blackstone.

Accordingly, the unaudited pro forma condensed consolidated financial information has been adjusted to depict these incremental expenses expected to be incurred by the Company as an autonomous entity. The additional expenses have been estimated based on assumptions that management believes are reasonable. These assumptions are based upon the estimated approximate fees to be incurred in 2022 and such adjustments thus reflect only the investment management fee of 0.30% per annum with respect to such initial $50 billion of assets. However, actual additional costs that will be incurred could be different from our estimates and would depend on several factors, including the economic environment and strategic decisions.

The Autonomous Entity Adjustments do not reflect expected improvements in our investment returns for the increase in allocation to Blackstone eligible assets.

Historically, our investments have largely been managed by affiliated asset managers. In the future, we expect to make increasing use of third-party asset managers for various asset classes where we can increase our access to attractive assets and benefit from scale and market-leading capabilities. For example, we have entered into the BlackRock Arrangement, prior to this offering, as described in “Business—Our Segments—Investment Management—Our Expected Investment Management Arrangement with BlackRock.” Other than the Blackstone SMA discussed above, our unaudited pro forma condensed consolidated financial information does not consider the use of additional third-party asset managers, such as under the BlackRock Arrangement, and the related impact that would have on our cost structure. Additionally, there will be a reduction in asset management services that we provide to AIG and there could be a reduction in asset management services that we provide to Fortitude Re over time resulting in a loss of revenue for SAFG. As a result, we intend to restructure our internal asset management operations to address the anticipated impact of the changing mandates and needs although no assurance can be given that such effort to address such impact will be effective. To aid in this effort, we are preparing to implement BlackRock’s “Aladdin”, an investment management technology platform that will provide an end-to-end investment solution spanning trade capture, analytics, back-office capabilities and other services which are currently performed across multiple systems at AIG. Costs associated with this effort are not reflected in the unaudited pro forma condensed consolidated financial information. See “Business—Investment Management—Overview.”

(e)
We expect to incur certain additional costs related to becoming a standalone public company, including costs incurred under the TSA, which will be executed prior to the consummation of this offering. These costs are expected to be partially offset by fees associated with reverse transition services provided to AIG under the TSA. We also expect to incur additional costs associated with employees transferred to us from AIG. Accordingly, the unaudited pro forma condensed consolidated financial information has been adjusted to reflect the net difference between the expenses expected to be incurred by the Company as an autonomous entity and the allocated expenses from AIG as reflected in the Company’s 2021 audited consolidated financial statements. A portion of these other costs relate to AIGT and Eastgreen, which were purchased by us on February 28, 2022. While the unaudited pro forma condensed consolidated statement of income (loss) reflects these costs, no pro forma adjustments have been made in the unaudited pro forma condensed balance sheet as these adjustments were determined to be immaterial. The additional expenses have been estimated based on assumptions that management believes are reasonable. However, actual additional costs that will be incurred could be different, potentially materially, from our estimates and would depend on several factors, including the economic environment and strategic decisions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Separation Costs.”

Additionally, management expects to enter into a cost savings program to mitigate the increase in the cost base, although no assurance can be given that such cost savings will be realized in full or in part. See “Prospectus Summary—Our Strategy” and “Risk Factors—Risks Relating to Our Business and Operations—Our productivity improvement initiatives may not yield our expected expense reductions and improvements in operational and organizational efficiency.”

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(f)
The number of SAFG shares used to compute basic and diluted earnings per share for the year ended December 31, 2021 contemplates a stock split of    to 1 share to be effectuated prior to the consummation of this offering.

(g)
Reflects the tax effects of the pro forma adjustments at the applicable statutory income tax rates.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements included elsewhere in this prospectus, “Unaudited Pro Forma Condensed Consolidated Financial Information” and “—Use of Non-GAAP Financial Measures and Key Operating Measures.” The following discussion may contain forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this information statement. See “Risk Factors” and “Special Note Regarding Forward-Looking Statements and Information.”

The following financial information is derived from our consolidated financial statements as of the dates and for each of the periods indicated. The financial information as of December 31, 2021 and 2020 and for each of the years ended December 31, 2021, 2020 and 2019, set forth below have been derived from our audited financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected for any future period.

Executive Summary

Overview

We are one of the largest providers of retirement solutions and insurance products in the United States, committed to helping individuals plan, save for and achieve secure financial futures. We offer a broad set of products and services through our market-leading Individual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses, each of which features capabilities and industry experience we believe are difficult to replicate. These four businesses collectively seek to enhance stockholder returns while maintaining our attractive risk profile, which has historically resulted in consistent and strong cash flow generation.

Revenues

Our revenues come from five principal sources:

• Premiums are principally derived from our traditional life insurance and certain annuity products including PRT transactions and structured settlements with life contingencies. Our premium income is driven by growth in new policies and contracts written and persistency of our in-force policies, both of which are influenced by a combination of factors including our efforts to attract and retain customers and market conditions that influence demand for our products;

• Policy fees are principally derived from our individual retirement, group retirement, universal life insurance, COLI-BOLI and SVW products. Our policy fees typically vary directly with the underlying account value or benefit base of our annuities. Account value and benefit base are influenced by changes in economic conditions, primarily equity market returns, as well as net flows;

• Net investment income from our investment portfolio varies as a result of the yield, allocation and size of our investment portfolio, which are, in turn, a function of capital market conditions and net flows into our total investments, as well as the expenses associated with managing our investment portfolio;

• Net realized gains (losses), include changes in the Fortitude Re funds withheld embedded derivative, risk management related derivative activities, changes in the fair value of embedded derivatives in certain of our insurance products and trading activity within our investment portfolio, including trading activity related to the Fortitude Re modco. Net realized gains (losses) vary due to the timing of sales of investments as well as changes in the fair value of embedded derivatives in certain of our insurance products and derivatives utilized to hedge certain insurance liabilities; and

• Advisory fee income and other income includes fees from registered investment advisory services, 12b-1 fees (marketing and distribution fees paid by mutual funds), other asset management fee income, and commission-based broker dealer services.

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Benefits and Expenses

Our benefits and expenses come from five principal sources:

• Policyholder benefits are driven primarily by customer withdrawals and surrenders which change in response to changes in capital market conditions, changes in policy reserves as well as updates to assumptions related to future policyholder behavior, mortality and longevity;

• Interest credited to policyholder account balances varies in relation to the amount of the underlying account value or benefit base and also includes changes in the fair value of certain embedded derivatives related to our insurance products;

• Amortization of DAC and value of business acquired. DAC and value of business acquired (“VOBA”) for traditional life insurance products are amortized, with interest, over the premium paying period. DAC and VOBA related to investment-oriented contracts, such as universal life insurance, and fixed, fixed index and variable annuities, are amortized, with interest, in relation to the estimated gross profits to be realized over the estimated lives of the contracts;

• General operating and other expenses include expenses associated with conducting our business, including salaries, other employee-related compensation, and other operating expenses such as professional services or travel; and

• Interest expense represents the charges associated with our external debt obligations, including debt of consolidated investment entities. This expense varies based on the amount of debt on our balance sheet, as well as the rates of interest associated with those obligations. Interest expense related to consolidated investment entities principally relates to variable interest entities (“VIEs”) for which we are the primary beneficiary, however, creditors or beneficial interest holders of VIEs generally only have recourse to the assets and cash flows of the VIEs and do not have recourse to us except in limited circumstances when we have provided a guarantee to the VIE’s interest holders.

Significant Factors Impacting Our Results

The following significant factors have impacted, and may in the future impact, our business, results of operations, financial condition, and liquidity.

Impact of Fortitude Re

In 2018, AIG established Fortitude Re, a wholly owned subsidiary of Fortitude Group Holdings, LLC (“Fortitude Holdings”), in a series of reinsurance transactions related to certain of AIG’s legacy operations. In February 2018, AGL, VALIC and USL entered into modco agreements with Fortitude Re, a registered Class 4 and Class E reinsurer in Bermuda. Additionally, AIG Bermuda novated its assumption of certain long-duration contracts from an affiliated entity to Fortitude Re.

In the modco arrangement, the investments supporting the reinsurance agreements, which reflect the majority of the consideration that would be paid to the reinsurer for entering into the transaction, are withheld by, and therefore continue to reside on the balance sheet of, the ceding company (i.e., AGL, VALIC and USL) thereby creating an obligation for the ceding company to pay the reinsurer (i.e., Fortitude Re) at a later date. Additionally, since we maintain ownership of these investments, we reflect our existing accounting for these assets, which consist mostly of available for sale securities (e.g., the changes in fair value of available for sale securities will be recognized within OCI) on our balance sheet. We have established a funds withheld payable to Fortitude Re while simultaneously establishing a reinsurance asset representing reserves for the insurance coverage that Fortitude Re has assumed. The funds withheld payable contains an embedded derivative and changes in fair value of this derivative are recognized in net realized gains (losses) on Fortitude Re funds withheld embedded derivative. This embedded derivative is considered a total return swap with contractual returns that are attributable to various assets, primarily available for sale securities, associated with these reinsurance agreements. As the majority of the invested assets supporting the modco are fixed income securities that are available for sale, there is a mismatch between the accounting for the embedded derivative as its changes in fair value are recorded through net income while changes in the fair value of the fixed maturity securities available for sale are recorded through OCI.

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On July 1, 2020, AGL and USL amended the modco agreements. Under the terms of the amendment, certain business ceded to Fortitude Re was recaptured by the Company and certain additional business was ceded by the Company to Fortitude Re. We recorded an additional non-recurring $91 million loss related entirely to the amendments to the modco agreements.

We do not expect to incur any future loss recognition events related to business ceded to Fortitude Re, absent any decisions by the Company to recapture the business. Our accounting policy is to include reinsurance balances when performing loss recognition testing and as there will be no future profits recognized on this business there will be no future loss recognition.

On June 2, 2020, AIG completed the Majority Interest Fortitude Sale. Following closing of the Majority Interest Fortitude Sale AIG contributed $135 million of its proceeds from the Majority Interest Fortitude Sale to USL. On October 1, 2021, AIG contributed its remaining 3.5% interest in Fortitude Holdings to us. As of December 31, 2021, $33.4 billion of reserves related to business written by multiple wholly owned AIG subsidiaries, including $28.5 billion of reserves related to SAFG, had been ceded to Fortitude Re. As of closing of the Majority Interest Fortitude Sale on June 2, 2020, these reinsurance transactions were no longer considered affiliated transactions.

In addition to the loss incurred from the amendments of the Fortitude Re reinsurance agreements, our net income experiences ongoing volatility as a result of the reinsurance agreements, which as described above, give rise to a funds withheld payable that contains an embedded derivative. However, this net income volatility is almost entirely offset with a corresponding change in OCI, which reflects the fair value change from the investment portfolio supporting the funds withheld payable, which is primarily available for sale securities, resulting in minimal impact to our comprehensive income (loss) and equity attributable to SAFG. Beginning in the fourth quarter of 2021, the Company has begun to elect the fair value option on the acquisition of certain new fixed maturity securities which will help reduce this mismatch over time.

Fortitude Re funds withheld impact:

	Years Ended December 31,
(in millions)	2021	2020	2019
Net investment income - funds withheld assets	$1,775	$1,427	$1,598
Net realized gains (losses) on Fortitude Re funds withheld assets:
Net realized gains - funds withheld assets	924	1,002	262
Net realized losses - embedded derivatives	(687)	(3,978)	(5,167)
Net realized gains (losses) on Fortitude Re funds withheld assets	237	(2,976)	(4,905)
Income (loss) before income tax benefit (expense)	2,012	(1,549)	(3,307)
Income tax benefit (expense)*	(423)	325	694
Net income (loss)	1,589	(1,224)	(2,613)
Change in unrealized appreciation (depreciation) of the invested assets supporting the Fortitude Re modco arrangement classified as available for sale*	(1,488)	1,165	2,479
Comprehensive income (loss)	$101	$(59)	$(134)

*
The income tax expense (benefit) and the tax impact in OCI was computed using SAFG’s U.S. statutory tax rate of 21%.

Various assets supporting the Fortitude Re funds withheld arrangements are reported at amortized cost, and as such, changes in the fair value of these assets are not reflected in the financial statements. However, changes in the fair value of these assets are included in the embedded derivative in the Fortitude Re funds withheld arrangement and the appreciation of the assets is the primary driver of the comprehensive (loss) reflected above.

For further details on this transaction, see Note 7 to our audited consolidated financial statements.

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Impact of GMWB Riders and Hedging

Our Individual Retirement and Group Retirement businesses offer variable annuity products with Guaranteed Minimum Withdrawal Benefit (“GMWB”) riders that provide guaranteed living benefit features. The liabilities for GMWBs are accounted for as embedded derivatives and measured at fair value. The fair value of the embedded derivatives may fluctuate significantly based on market interest rates, equity prices, credit spreads, market volatility, policyholder behavior and other factors.

In addition to risk-mitigating features in our variable annuity product design, we have an economic hedging program designed to manage market risk from GMWB, including exposures to changes in interest rates, equity prices, credit spreads and volatility. The hedging program utilizes derivative instruments, including but not limited to equity options, futures contracts and interest rate swap and swaption contracts, as well as fixed maturity securities.

Differences in Valuation of Embedded Derivatives and Economic Hedge Target

Our variable annuity hedging program utilizes an economic hedge target, which represents an estimate of the underlying economic risks in our GMWB riders. The economic hedge target differs from the GAAP valuation of the GMWB embedded derivatives, creating volatility in our net income (loss) primarily due to the following:

• the economic hedge target includes 100% of rider fees in present value calculations; the GAAP valuation reflects only those fees attributed to the embedded derivative such that the initial value at contract issue equals zero;

• the economic hedge target uses best estimate actuarial assumptions and excludes explicit risk margins used for GAAP valuation, such as margins for policyholder behavior, mortality and volatility; and

• the economic hedge target excludes the non-performance, or “own credit” risk adjustment used in the GAAP valuation, which reflects a market participant’s view of our claims-paying ability by incorporating a different spread (the “NPA spread”) to the curve used to discount projected benefit cash flows. Because the discount rate includes the NPA spread and other explicit risk margins, the GAAP valuation has different sensitivities to movements in interest rates and other market factors, and to changes from actuarial assumption updates, than the economic hedge target. For more information on our valuation methodology for embedded derivatives within policyholder contract deposits, see Note 4 to our audited consolidated financial statements.

The market value of the hedge portfolio compared to the economic hedge target at any point in time may be different and is not expected to be fully offsetting. In addition to the derivatives held in conjunction with the variable annuity hedging program, we generally have cash and invested assets available to cover future claims payable under these guarantees. The primary sources of difference between the change in the fair value of the hedging portfolio and the economic hedge target include:

• basis risk due to the variance between expected and actual fund returns, which may be either positive or negative;

• realized volatility versus implied volatility;

• actual versus expected changes in the hedge target driven by assumptions not subject to hedging, particularly policyholder behavior; and

• risk exposures that we have elected not to explicitly or fully hedge.

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The following table presents the net increase (decrease) to consolidated pre-tax income (loss) from changes in the fair value of the GMWB embedded derivatives and related hedges, excluding related DAC amortization:

	Years Ended December 31,
(in millions)	2021	2020	2019
Change in fair value of embedded derivatives, excluding update of actuarial assumptions and NPA(a)(b)	$2,422	$(1,149)	$(195)
Change in fair value of variable annuity hedging portfolio:
Fixed maturity securities(c)	56	44	194
Interest rate derivative contracts	(600)	1,342	1,029
Equity derivative contracts	(1,217)	(679)	(1,274)
Change in fair value of variable annuity hedging portfolio	(1,761)	707	(51)
Change in fair value of embedded derivatives excluding update of actuarial assumptions and NPA, net of hedging portfolio	661	(442)	(246)
Change in fair value of embedded derivatives due to NPA spread	(68)	50	(314)
Change in fair value of embedded derivatives due to change in NPA volume	(383)	404	202
Change in fair value of embedded derivatives due to update of actuarial assumptions	(60)	194	219
Total change due to update of actuarial assumptions and NPA	(511)	648	107
Net impact on pre-tax income (loss)	150	206	(139)
Impact to Consolidated Income Statement line
Net investment income, net of related interest credited to policyholder account balances	56	44	194
Net realized gains (losses)	94	162	(333)
Net impact on pre-tax income (loss)	150	206	(139)
Net change in value of economic hedge target and related hedges
Net impact on economic gains	$109	$295	$261

(a)
The non-performance risk adjustment (“NPA”) adjusts the valuation of derivatives to account for our own nonperformance risk in the fair value measurement of all derivative net liability positions.

(b)
The 2020 and 2019 change in fair value of embedded derivatives, excluding update of actuarial assumptions and NPA was revised from $(1,145) million to $(1,149) million and from $(156) million to $(195) million for 2020 and 2019, respectively. These revisions have no impact on SAFG’s consolidated financial statements and are not considered material to the previously issued financial statements.

(c)
Beginning in July 2019, the fixed maturity securities portfolio used in the hedging program was rebalanced to reposition the portfolio from a duration and issuer perspective. As part of this rebalancing, fixed maturity securities where we elected the fair value option were sold. Later in the quarter, as new fixed maturity securities were purchased, they were classified as available for sale. The change in fair value of available-for-sale fixed maturity securities recognized as a component of OCI was $(122) million, and $217 million for the years ended December 31, 2021 and 2020, respectively. 2021 reflected losses due to higher interest rates. The gain in 2020 reflected the impact of decreases in interest rates, and tightening credit spreads.

Year Ended December 31, 2021

The net impact on pre-tax income of $150 million from the GMWB embedded derivatives and related hedges in 2021 was driven by gains from higher equity markets, impact of higher interest rates on the change in the fair value of embedded derivatives excluding NPA, net of the hedging portfolio, offset by the tightening of NPA credit spreads, impact of higher interest rates that resulted in NPA volume losses from lower expected GMWB payments, and losses from the review and update of actuarial assumptions.

The change in the fair value of the GMWB embedded derivatives, excluding NPA and update of actuarial assumptions in 2021 reflected gains from higher interest rates and equity markets.

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Fair value gains or losses in the hedging portfolio are typically not fully offset by increases or decreases in liabilities on a GAAP basis, due to the NPA and other risk margins used for GAAP valuation that cause the embedded derivatives to be less sensitive to changes in market rates than the hedge portfolio. On an economic basis, the changes in the fair value of the hedge portfolio were partially offset by the changes in the economic hedge target. In 2021, we had a net mark to market gain of approximately $109 million from our hedging activities compared to our economic hedge target primarily driven by higher equity markets, partially offset by losses from the review and update of actuarial assumptions.

Year Ended December 31, 2020

The net impact on pre-tax income of $206 million from the GMWB embedded derivatives and related hedges in 2020 was driven by the widening of NPA credit spreads, impact of lower interest rates that resulted in NPA volume gains from higher expected GMWB payments, gains from higher equity markets, and gains from the review and update of actuarial assumptions, partially offset by the impact of lower interest rates on the change in the fair value of embedded derivatives excluding NPA, net of the hedging portfolio.

The change in the fair value of the GMWB embedded derivatives, excluding NPA and update of actuarial assumptions, in 2020 reflected losses from lower interest rates, partially offset by gains from higher equity markets.

On an economic basis, in 2020, we recorded a net mark to market gain of $295 million from our hedging activities related to our economic hedge target, primarily driven by gains from higher equity markets and gains from the review and update of actuarial assumptions offset by tightening credit spreads.

Year Ended December 31, 2019

In 2019, the net impact on pre-tax loss of $139 million was driven by the impact of tightening of credit spreads on the NPA spread, and impact of lower interest rates on the change in the fair value of embedded derivatives excluding NPA, net of the hedging portfolio, offset by the impact of lower interest rates that resulted in NPA volume gains from higher expected GMWB payments, and gains from the review and update of actuarial assumptions.

The change in the fair value of the GMWB embedded derivatives, excluding NPA and update of actuarial assumptions, reflected losses from lower interest rates, partially offset by gains from higher equity markets.

On an economic basis, in 2019, we recorded a net mark to market gain of $261 million from our hedging activities related to our economic hedge target, primarily driven by gains from the review and update of actuarial assumptions and modeling refinements, offset by tightening credit spreads.

Embedded Derivatives for Variable Annuity, Fixed Index Annuity and Index Universal Life Products

Certain of our variable annuity contracts contain GMWBs and are accounted for as embedded derivatives. Additionally, certain fixed index annuity contracts contain GMWBs or indexed interest credits which are accounted for as embedded derivatives and our index universal life insurance products also contain embedded derivatives. Policyholders may elect to rebalance among the various accounts within the product at specified renewal dates. At the end of each index term, we generally have the opportunity to re-price the indexed component by establishing different participation rates or caps on equity indexed credited rates. The index crediting feature of these products results in the recognition of an embedded derivative that is required to be bifurcated from the host contract and carried at fair value with changes in the fair value of the liabilities recorded in Realized gains (losses). Option pricing models are used to estimate fair value, taking into account assumptions for future equity index growth rates, volatility of the equity index, future interest rates, and our ability to adjust the participation rate and the cap on equity indexed credited rates in light of market conditions and policyholder behavior assumptions.

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The following table summarizes the fair values of the embedded derivatives for variable annuities, fixed index annuity and index universal life products:

At December 31, (in millions)	2021	2020
Variable annuities GMWB	$2,472	$3,702
Fixed index annuities, including certain GMWB	6,445	5,631
Index Life	765	649

Actuarial Assumption Changes

Most of the fixed annuities, fixed index annuities, variable annuity products and universal life insurance products we offer maintain policyholder deposits that are reported as liabilities and classified within either separate account liabilities or policyholder contract deposits. Our products and riders also impact liabilities for future policyholder benefits and unearned revenues and assets for DAC and deferred sales inducements. The valuation of these assets and liabilities (other than deposits) is based on differing accounting methods depending on the product, each of which requires numerous assumptions and considerable judgment. The accounting guidance applied in the valuation of these assets and liabilities includes, but is not limited to, the following: (i) traditional life insurance products for which assumptions are locked in at inception; (ii) universal life insurance secondary guarantees for which benefit liabilities are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments; (iii) certain product guarantees for which benefit liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments; and (iv) certain product guarantees reported as embedded derivatives which are carried at fair value.

At least annually, typically in the third quarter, we conduct a comprehensive review of the underlying assumptions within our actuarially determined assets and liabilities. These assumptions include, but are not limited to, policyholder behavior, mortality, expenses, investment returns and policy crediting rates. Changes in assumptions can result in a significant change to the carrying value of product liabilities and assets and, consequently, the impact could be material to earnings in the period of the change. For further details of our accounting policies and related judgments pertaining to assumption updates, see Note 2 to our audited consolidated financial statements included elsewhere in this prospectus and “—Critical Accounting Estimates—Future Policy Benefits for Life and Accident and Health Insurance Contracts.”

The following table presents the increase (decrease) in pre-tax income resulting from the annual update of actuarial assumptions, which occurs in the third quarter of each year, by financial statement line item as reported in the Consolidated Statements of Income:

	Years Ended December 31,
(in millions)	2021	2020	2019
Premiums	$(41)	$—	$—
Policy fees	(74)	(106)	(24)
Interest credited to policyholder account balances	(54)	(6)	19
Amortization of deferred policy acquisition costs	(143)	225	194
Policyholder benefits	86	(246)	(147)
Increase (Decrease) in adjusted pre-tax operating income	(226)	(133)	42
Change in DAC related to net realized gains (losses)	32	(44)	(17)
Net realized gains	50	142	180
Increase (Decrease) in pre-tax income	$(144)	$(35)	$205

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The following table presents the increase (decrease) in adjusted pre-tax operating income resulting from the annual update of actuarial assumptions, which occurs in the third quarter of each year, by segment and product line:

(in millions)	Years Ended December 31,
	2021	2020	2019
Individual Retirement:
Fixed annuities	$(267)	$(77)	$82
Variable annuities	7	13	(5)
Fixed index annuities	(60)	(30)	(140)
Total Individual Retirement	(320)	(94)	(63)
Group Retirement	(5)	68	(17)
Life Insurance	99	(108)	122
Institutional Markets	—	1	—
Total increase (decrease) in adjusted pre-tax operating income from update of assumptions*	$(226)	$(133)	$42

*
Liabilities ceded to Fortitude Re are reported in Corporate and Other. There was no impact to adjusted pre-tax operating income due to the annual update of actuarial assumptions as these liabilities are 100 percent ceded.

As discussed in more detail below, upon adoption of long-duration targeted improvements in 2023, we intend to review and if necessary, update the future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and separate presentation of any resulting re-measurement gain or loss (except for discount rate changes) in the income statement. This is anticipated to lead to additional volatility as these future policy benefits have “locked-in” assumptions under current GAAP. However, it is expected that there will be less volatility related to DAC as long duration targeted improvements simplifies the amortization of DAC to a constant level basis over the expected term of the related contracts with adjustments for unexpected terminations. The adoption of the targeted improvements to the accounting for long duration contracts will have no impact on our insurance companies statutory results.

Targeted Improvements to the Accounting for Long-Duration Contracts

In August 2018, the FASB issued an accounting standard update with the objective of making targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity.

The Company will adopt the standard on January 1, 2023. We continue to evaluate and expect the adoption of this standard will impact our financial condition, results of operations, statement of cash flows and disclosures, as well as systems, processes and controls.

The Company will adopt the standard using the modified retrospective transition method relating to liabilities for traditional and limited payment contracts and deferred policy acquisition costs associated therewith. The Company will adopt the standard in relation to market risk benefits (“MRBs”) on a retrospective basis. Based upon this transition method, the Company currently estimates that the Transition Date impact from adoption is likely to result in a decrease in the Company’s equity between approximately $1.0 billion and $3.0 billion. The most significant drivers of the transition adjustment are expected to be (1) changes related to market risk benefits in our Individual Retirement and Group Retirement segments, including the impact of non-performance adjustments, (2) changes to the discount rate which will most significantly impact our Life Insurance and Institutional Markets segments and (3) the removal of balances recorded in AOCI related to changes in unrealized appreciation (depreciation) on investments.

Market risk benefits: The standard requires the measurement of all MRBs associated with deposit (or account balance) contracts at fair value at each reporting period. Changes in fair value compared to prior periods will be recorded and presented separately within the income statement, with the exception of instrument-specific credit risk changes (non-performance adjustments), which will be recognized in other comprehensive income. MRBs will impact both retained earnings and AOCI upon transition.

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As MRBs are required to be accounted for at fair value, the quarterly valuation of these items will result in variability and volatility in the Company’s results following adoption.

Discount rate assumption: The standard requires the discount rate assumption for the liability for future policy benefits to be updated at the end of each reporting period using an upper-medium grade (low credit risk) fixed income instrument yield that maximizes the use of observable market inputs. Upon transition, the Company currently estimates an adjustment to AOCI due to the fact that the market upper-medium grade (low credit risk) interest rates as of the Transition Date differ from reserve interest accretion rates. Lower interest rates result in a higher liability for future policy benefits, and are anticipated to more significantly impact our Life Insurance and Institutional Markets segments.

Following adoption, the impact of changes to discount rates will be recognized through other comprehensive income. Changes resulting from unlocking the discount rate each reporting period will primarily impact term life insurance and other traditional life insurance products, as well as pension risk transfer and structured settlement products.

Removal of balances related to changes in unrealized appreciation (depreciation) on investments:Under the standard, the majority of balances recorded in AOCI related to changes in unrealized appreciation (depreciation) on investments will be eliminated.

In addition to the above, the standard also:

• Requires the review and if necessary, update of future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and separate presentation of any resulting re-measurement gain or loss (except for discount rate changes as noted above) in the income statement.

• Simplifies the amortization of DAC to a constant level basis over the expected term of the related contracts with adjustments for unexpected terminations, but no longer requires an impairment test.

• Increased disclosures of disaggregated roll-forwards of several balances, including: liabilities for future policy benefits, deferred acquisition costs, account balances, market risk benefits, separate account liabilities and information about significant inputs, judgments and methods used in measurement and changes thereto and impact of those changes.

We expect that the accounting for Fortitude Re will continue to remain largely unchanged. With respect to Fortitude Re, the reinsurance assets, including the discount rates, will continue to be calculated using the same methodology and assumptions as the direct policies.

The Company has created a governance framework and a plan to support implementation of the updated standard. As part of its implementation plan, the Company has also advanced the modernization of its actuarial technology platform to enhance its modeling, data management, experience study and analytical capabilities, increase the end-to-end automation of key reporting and analytical processes and optimize its control framework. The Company has designed and begun implementation and testing of internal controls related to the new processes created as part of implementing the updated standard and will continue to refine these internal controls until the formal implementation in the first quarter of 2023.

Our Strategic Partnership with Blackstone

We recently entered into a strategic partnership with Blackstone that we believe has the potential to yield significant economic and strategic benefits over time. We believe that Blackstone’s ability to originate, and our enhanced ability to invest in, attractive and privately sourced, fixed-income oriented assets, will be accretive to our businesses and provide us with an enhanced competitive advantage.

Pursuant to the partnership, Blackstone manages $50 billion of assets in our investment portfolio, with that amount increasing by $8.5 billion in each of the next five years beginning in the fourth quarter of 2022 for an aggregate of $92.5 billion by the third quarter of 2027. We expect Blackstone to invest these assets primarily in Blackstone-originated investments across a range of asset classes, including private and structured credit. Blackstone’s credit and lending strategy is to control all significant components of the underwriting and pricing processes and to facilitate bespoke opportunities with strong credit protection and attractive risk-adjusted returns. Blackstone seeks to capture enhanced economics to those available in the traditional fixed income markets by going directly to the lending source.

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Blackstone will manage a portfolio of private and structured credit assets as described above, where we believe Blackstone is well-positioned to add value and drive new originations. We continue to manage asset allocation and portfolio-level risk management decisions with respect to any assets managed by Blackstone, ensuring that we maintain a consistent level of oversight across our entire investment portfolio.

Beginning in 2022, Blackstone started investing our money primarily in Blackstone-originated investments. The investments underlying the original $50 billion mandate with Blackstone are expected to run-off and be reinvested over a seven-year period. While over time the benefits of the partnership with Blackstone are expected to become accretive to our businesses, we do not expect the partnership to be immediately accretive to earnings. As part of our partnership, Blackstone acquired a 9.9% position in our common stock, aligning its economic interests with our stockholders.

See “Certain Relationships and Related Party Transactions—Partnership with Blackstone.”

Our Expected Investment Management Arrangement with BlackRock

We expect the BlackRock Arrangement will provide us with access to market-leading capabilities, including portfolio management, research and tactical strategies in addition to a larger pool of investment professionals. We expect to transfer the management of up to $90 billion of liquid fixed income and other certain private placement in the aggregate to BlackRock over a period of 12 months in connection with the BlackRock Arrangement. The investment management agreements will contain detailed investment guidelines and reporting requirements. These agreements will also contain reasonable and customary representations and warranties, standard of care, expense reimbursement, liability, indemnity and other provisions.

Affordable Housing Sale

On December 15, 2021, SAFG and Blackstone Real Estate Income Trust (“BREIT”), a long-term, perpetual capital vehicle affiliated with Blackstone, completed the acquisition by BREIT of SAFG’s interests in a U.S. affordable housing portfolio for $4.9 billion, in an all-cash transaction, resulting in a pre-tax gain of $3.0 billion.

Fair Value Option Bond Securities

We elect the fair value option on certain bond securities. When the fair value option is elected the realized and unrealized gains and losses on these securities are reported in Net investment income. We recorded net investment income (losses) of $26 million, $72 million and $429 million, for the years ended December 31, 2021, 2020 and 2019 respectively.

Tax Impact from Separation

We will no longer be included in the AIG Consolidated Tax Group after the tax deconsolidation, which is expected to occur upon completion of this offering. In addition, we will not be permitted to join in the filing of a U.S. consolidated federal income tax return with AGC and its directly owned life insurance subsidiaries for the five-year waiting period. Instead, AGC and its directly owned life insurance company subsidiaries are expected to file separately as members of the AGC consolidated U.S. federal income tax return during the five-year waiting period. Upon the tax deconsolidation from the AIG Consolidated Tax Group, absent any prudent and feasible tax planning strategies, our net operating losses and foreign tax credit carryforwards generated by the non-life insurance companies will more-likely-than-not expire unutilized. Accordingly, based on the positive and negative evidence that exists as of December 31, 2021, an additional valuation allowance of $109 million is expected to be established with respect to such tax attribute carryforwards. Following the five-year waiting period, AGC and its life insurance subsidiaries are expected to join our U.S. consolidated federal income tax return. Principles similar to the foregoing may apply to state and local income tax liabilities in jurisdictions that conform to federal rules.

Sale of Certain Assets of Our Retail Mutual Funds Business

On February 8, 2021, we announced the execution of a definitive agreement with Touchstone Investments, Inc. (“Touchstone”), an indirect wholly-owned subsidiary of Western & Southern Financial Group, to sell certain assets of our retail mutual funds business. This sale consisted of the reorganization of twelve of the retail mutual funds managed by our subsidiary SunAmerica Asset Management, LLC (“SAAMCo”) into certain Touchstone funds and was subject

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to certain conditions, including approval of the fund reorganizations by the retail mutual fund boards of directors/trustees and fund shareholders. The transaction closed on July 16, 2021, at which time we received initial proceeds and recognized a gain on the sale of $103 million. Concurrently, the twelve retail mutual funds managed by SAAMCo, with $6.8 billion in assets, were reorganized into Touchstone funds. Additional consideration may be earned over a three-year period based on asset levels in certain reorganized funds. Six retail mutual funds managed by SAAMCo and not included in the transaction were liquidated. We continue to retain our fund management platform and capabilities dedicated to our variable annuity insurance products.

Separation Costs

In connection with our separation from AIG, we have incurred and expect to continue to incur one-time expenses. We estimate that our one-time expenses will be between approximately $350 million and $450 million on a pre-tax basis as from January 1, 2022. These expenses primarily relate to replicating and replacing functions, systems and infrastructure provided by AIG, rebranding and accounting advisory, consulting and actuarial fees.

In addition to these separation costs, we expect to incur costs related to the evolution of our investments organization to reflect our strategic partnerships with key external managers, our implementation of BlackRock’s “Aladdin” investment management technology platform and our expected reduction in fees from AIG for asset management services.

We also expect to incur a one-time expense of $200 million on a pre-tax basis to achieve an annual run rate expense reduction of $200 million to $300 million on a pre-tax basis within three years of this offering. See “Prospectus Summary—Our Strategy—Drive further cost reduction and productivity improvement across the organization.”

Macroeconomic, Industry and Regulatory Trends

Our business is affected by industry and economic factors such as interest rates, geopolitical stability (including the armed conflict between Ukraine and Russia and corresponding sanctions imposed by the United States and other countries), credit and equity market conditions, currency exchange rates, regulation, tax policy, competition, and general economic, market and political conditions. We continued to operate under challenging market conditions in 2021, characterized by factors such as the impact of COVID-19 and the related governmental and societal responses, interest rate volatility, inflationary pressures, an uneven global economic recovery and global trade tensions. Responses by central banks and monetary authorities with respect to inflation, growth concerns and other macroeconomic factors have also affected global exchange rates and volatility.

Below is a discussion of certain industry and economic factors impacting our business:

Impact of COVID-19

We are continually assessing the impact on our business, operations and investments of COVID-19 and the resulting ongoing economic and societal disruption. These impacts initially included a global economic contraction, disruptions in financial markets, increased market volatility and declines in certain equity and other asset prices that had negative effects on our investments, our access to liquidity, our ability to generate new sales and the costs associated with claims. While global financial markets appear to have recovered in 2021, there remains a risk that the disruptions previously experienced could return and new ones emerge as COVID-19 persists or new variants continue to arise. In addition, in response to the pandemic, new governmental, legislative and regulatory actions have been taken and continue to be developed that have resulted and could continue to result in additional restrictions and requirements, or court decisions rendered, relating to or otherwise affecting our policies that may have a negative impact on our business, operations and capital.

The most significant impacts relating to COVID-19 have been the impact of interest rate and equity market levels on spread and fee income, deferred acquisition cost amortization and increased mortality. We are actively monitoring the mortality rates and the potential direct and indirect impacts that COVID-19 may have across our businesses. The impact on the results for the year 2021 with respect to COVID-19 is primarily, but not limited to, COVID-19-related mortality. In 2020, our results include COVID-19 related impacts primarily on DAC/DSI amortization, mortality, reserves and investment returns and the volatility of achievable spreads. In 2020, we also experienced significant decreases in our premiums and deposits primarily due to distribution channel disruptions

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related to COVID-19 and low interest rates. Our estimated pre-tax income and APTOI impact in the U.S. and UK from COVID-19 was $408 million and $259 million for 2021 and 2020 respectively. Actual data related to cause of death is not always available for all claims paid, and such cause of death data does not always capture the existence of comorbid conditions. As a result, COVID-19 pre-tax income and APTOI impacts are estimates of the total impact of COVID-19 related claim activity based on available data. The regulatory approach to the pandemic and impact on the insurance industry is continuing to evolve and its ultimate impact remains uncertain. Prospectively in the U.S., we estimate a reduction in pre-tax income and APTOI of $65 million to $75 million for every 100,000 population deaths.

We have a diverse investment portfolio with material exposures to various forms of credit risk. The far-reaching economic impacts of COVID-19 have been largely offset, to date, by intervention taken by governments and monetary authorities and equity market rebound resulting in a minimal impact on the value of the portfolio. At this point in time, uncertainty surrounding the duration and severity of the COVID-19 pandemic makes the long-term financial impact difficult to quantify.

COVID-19 is expected to have an impact into 2022. The future impact of COVID-19 is dependent on many unknown factors, such as transmissibility and fatality of any future variants. Circumstances resulting from the COVID-19 pandemic, in addition to an increase in claims, may also impact utilization of benefits, lapses or surrenders of policies and payments of insurance premiums, all of which have impacted and could further impact the revenues and expenses associated with our products.

For additional information, see “Risk Factors—COVID-19 has adversely affected, and is expected to continue to adversely affect, our business, results of operations, financial condition and liquidity, and its ultimate impact will depend on future developments, including with respect to new variants, that are uncertain and cannot be predicted.”

Demographics

We expect our target market of individuals planning for retirement to continue to grow with the size of the U.S. population age 65 and over that is expected to increase by approximately 30% by 2030 from 2020. In addition, we believe that reduced employer-paid retirement benefits will drive an increasing need for our individual retirement solutions. Further, consumers in the United States continue to prefer purchasing life insurance and retirement products through an agent or advisor, which positions us favorably given our broad distribution platform and in-house advisory capabilities. We continue to seek opportunities to develop new products and adapt our existing products to the growing needs of individuals to plan, save for and achieve secure financial futures.

Equity Markets

Our financial results are impacted by the performance of equity markets. For instance, our variable annuities earn fees based on the account value, which fluctuates with the equity markets. Our hedging costs could also be significantly impacted by fluctuations in the equity markets. For instance, our hedging costs may increase in periods of high volatility creating the need to increase costs of rebalancing the hedging program. For additional information, see “Risk Factors—Equity market declines or volatility may materially and adversely affect our business, results of operations, financial condition or liquidity.”

Impact of Changes in the Interest Rate Environment

Key U.S. benchmark rates have been volatile in 2021 as investors form opinions over elevated inflation measures. While key rates have recently increased, they are still historically low.

The low interest rate environment negatively affects sales of interest rate sensitive products in our industry and negatively impacts the profitability of our existing business as we reinvest cash flows from investments, including increased calls and prepayments of fixed maturity securities and mortgage loans, at rates below the average yield of our existing portfolios. We actively manage our exposure to the interest rate environment through portfolio selection and asset-liability management, including spread management strategies for our investment-oriented products and economic hedging of interest rate risk from guarantee features in our variable and fixed index annuities. We may not be able to fully mitigate our interest rate risk by matching exposure of our assets relative to our liabilities. A low interest rate environment could also impair our ability to earn the returns assumed in the pricing and the reserving of our products at the time they were sold and issued.

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Annuity Sales and Surrenders

The sustained low interest rate environment has a significant impact on the annuity industry. Low long-term interest rates put pressure on investment returns and customer facing rates, which may negatively affect sales of interest rate sensitive products and reduce future profits on certain existing fixed rate products. However, our disciplined pricing has helped to mitigate some of the pressure on investment spreads and remain competitive. Rapidly rising interest rates could create the potential for increased sales but may also drive higher surrenders. Fixed annuities have surrender charge periods, generally in the three-to-seven-year range. Index annuities have surrender charge periods, generally in the five-to-ten-year range, and within our Group Retirement segment, certain of our fixed investment options are subject to other withdrawal restrictions, which may help mitigate increased early surrenders in a rising rate environment. In addition, older contracts that have higher minimum interest rates and continue to be attractive to contract holders have driven better than expected persistency in fixed annuities, although the reserves for such contracts have continued to decrease over time in amount and as a percentage of the total annuity portfolio. We closely monitor surrenders of fixed annuities as contracts with lower minimum interest rates come out of the surrender charge period. Changes in interest rates significantly impact the valuation of our liabilities for annuities with guaranteed living benefit features and the value of the related hedging portfolio.

Reinvestment and Spread Management

We actively monitor fixed income markets, including the level of interest rates, credit spreads and the shape of the yield curve. We also frequently review our interest rate assumptions and actively manage the crediting rates used for new and in-force business. Business strategies continue to evolve and attempt to maintain profitability of the overall business in light of the interest rate environment. A low interest rate environment puts margin pressure on pricing of new business and on existing products, due to the challenge of investing new money or recurring premiums and deposits, and reinvesting investment portfolio cash flows, in the low interest rate environment. In addition, there is investment risk associated with future premium receipts from certain in-force business. Specifically, the investment of these future premium receipts may be at a yield below that required to meet future policy liabilities.

The contractual provisions for renewal of crediting rates and guaranteed minimum crediting rates included in our products has reduced spreads in a sustained low interest rate environment and thus reduces future profitability. For additional information on our investment and asset-liability management strategies, see “—Investments—.”

For investment-oriented products, including universal life insurance, and variable, fixed and fixed index annuities, in each of our operating and reportable segments, our spread management strategies include disciplined pricing and product design for new business, modifying or limiting the sale of products that do not achieve targeted spreads, using asset-liability management to match assets to liabilities to the extent practicable, and actively managing crediting rates to help mitigate some of the pressure on investment spreads. Renewal crediting rate management is done under contractual provisions that were designed to allow crediting rates to be reset at pre-established intervals in accordance with state and federal laws and subject to minimum crediting rate guarantees. We expect to continue to adjust crediting rates on in-force business, as appropriate, to mitigate the pressure on spreads from declining base yields, but our ability to lower crediting rates may be limited by the competitive environment, contractual minimum crediting rates, and provisions that allow rates to be reset only at pre-established intervals or under certain conditions. If and as interest rates rise, we may need to raise crediting rates on in-force business for competitive and other reasons, potentially offsetting a portion of the additional investment income resulting from investing in a higher interest rate environment.

Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products, 68% and 67% were crediting at the contractual minimum guaranteed interest rate at December 31, 2021 and December 31, 2020 respectively. The percentage of fixed account values of our annuity products that are currently crediting at rates above 1% were 58% and 59% at December 31, 2021 and December 31, 2020, respectively. In the universal life insurance products in our Life Insurance business, 67% and 68% of the account values were crediting at the contractual minimum guaranteed interest rate at December 31, 2021 and December 31, 2020 respectively. These businesses continue to focus on pricing discipline and strategies to manage the minimum guaranteed interest crediting rates offered on new sales in the context of regulatory requirements and competitive positioning. For additional information on our investment and asset-liability management strategies, see Note 5 to the audited consolidated financial statements.

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Impact of Currency Volatility

In our life insurance business, we have international locations in the UK and Ireland, whose local currency is the British Pound and Euro, respectively. Trends in revenue and expense reported in U.S. dollars can differ significantly from those measured in original currencies. While currency volatility affects financial statement line item components of income and expenses, since our international businesses transact in local currencies, the impact is significantly mitigated.

These currencies may continue to fluctuate, in either direction, and such fluctuations may affect premiums, fees and expenses reported in U.S. dollars, as well as financial statement line item comparability.

Use of Non-GAAP Financial Measures and Key Operating Metrics

Non-GAAP Financial Measures

Throughout this MD&A, we present our financial condition and results of operations in the way we believe will be most meaningful and representative of our business results. Some of the measurements we use are “non-GAAP financial measures” under SEC rules and regulations. We believe presentation of these non-GAAP financial measures allows for a deeper understanding of the profitability drivers of our business, results of operations, financial condition and liquidity. These measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with GAAP and should not be viewed as a substitute for GAAP measures. The non-GAAP financial measures we present may not be comparable to similarly-named measures reported by other companies. Reconciliations of non-GAAP financial measures for future periods are not provided as we do not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliations.

Adjusted revenues exclude Net realized gains (losses) except for gains (losses) related to the disposition of real estate investments, income from non-operating litigation settlements (included in Other income for GAAP purposes) and Changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes).

The following table presents a reconciliation of Total revenues to Adjusted revenues:

	Years Ended December 31,
(in millions)	2021	2020	2019
Total revenues	$23,390	$15,062	$13,210
Fortitude Re related items:
Net investment income on Fortitude Re funds withheld assets	(1,775)	(1,427)	(1,598)
Net realized (gains) on Fortitude Re funds withheld assets	(924)	(1,002)	(262)
Net realized losses on Fortitude Re funds withheld embedded derivative	687	3,978	5,167
Subtotal - Fortitude Re related items	(2,012)	1,549	3,307
Other non-Fortitude Re reconciling items:
Changes in fair value of securities used to hedge guaranteed living benefits	(60)	(56)	(228)
Non-operating litigation reserves and settlements	—	(12)	—
Other (income) - net	(37)	(53)	(42)
Net realized (gains) losses(a)	(791)	916	551
Subtotal - Other non-Fortitude Re reconciling items	(888)	795	281
Total adjustments	(2,900)	2,344	3,588
Adjusted revenues	$20,490	$17,406	$16,798

(a)
Represents all net realized gains and losses except gains (losses) related to the disposition of real estate investments and earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income for non-qualifying (economic) hedging or for asset replication is reclassified from net realized gains and losses to specific APTOI line items (e.g., net investment income and interest credited to policyholder account balances) based on the economic risk being hedged.

Adjusted pre-tax operating income (“APTOI”) is derived by excluding the items set forth below from income from operations before income tax. These items generally fall into one or more of the following broad categories:

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legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and recording adjustments to APTOI that we believe to be common in our industry. However, we believe the adjustments to pre-tax income are useful for gaining an understanding of our overall results of operations.

APTOI excludes the impact of the following items:

Fortitude Related Adjustments:

The modco reinsurance agreements with Fortitude Re transfer the economics of the invested assets supporting the reinsurance agreements to Fortitude Re. Accordingly, the net investment income on Fortitude Re funds withheld assets and the net realized gains (losses) on Fortitude Re funds withheld assets are excluded from APTOI. Similarly, changes in the Fortitude Re funds withheld embedded derivative are also excluded from APTOI.

As a result of entering into the reinsurance agreements with Fortitude Re we recorded a loss which was primarily attributed to the write-off of DAC, VOBA and deferred cost of reinsurance assets. The total loss and the ongoing results associated with the reinsurance agreement with Fortitude Re have been excluded from APTOI as these are not indicative of our ongoing business operations.

Investment-Related Adjustments:

APTOI excludes “Net realized gains (losses),” including changes in the allowance for credit losses on available for sale securities and loans, as well as gains or losses from sales of securities, except for gains (losses) related to the disposition of real estate investments. Net realized gains (losses), except for gains (losses) related to the disposition of real estate investments, are excluded as the timing of sales on invested assets or changes in allowances depend largely on market credit cycles and can vary considerably across periods. In addition, changes in interest rates may create opportunistic scenarios to buy or sell invested assets. Our derivative results, including those used to economically hedge insurance liabilities, also included in net realized gains (losses) are similarly excluded from APTOI except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedges or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTOI line items based on the economic risk being hedged (e.g., net investment income and interest credited to policyholder account balances).

Our investment-oriented contracts, such as universal life insurance, and fixed, fixed index and variable annuities, are also impacted by net realized gains (losses), and these secondary impacts are also excluded from APTOI. Specifically, the changes in benefit reserves and DAC, VOBA, and sales inducement assets (“DSI”) related to net realized gains (losses) are excluded from APTOI.

Variable, Fixed Index Annuities and Index Universal Life Insurance Products Adjustments:

Certain of our variable annuity contracts contain GMWBs and are accounted for as embedded derivatives. Additionally, certain fixed index annuity contracts contain GMWB or indexed interest credits which are accounted for as embedded derivatives and our index universal life insurance products also contain embedded derivatives. Changes in the fair value of these embedded derivatives, including rider fees attributed to the embedded derivatives, are recorded through “Net realized gains (losses)” and are excluded from APTOI.

Changes in the fair value of securities used to hedge guaranteed living benefits are excluded from APTOI.

Other Adjustments:

Other adjustments represent all other adjustments that are excluded from APTOI. The excluded adjustments include:

• net pre-tax income (losses) from noncontrolling interests related to consolidated investment entities;

• restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization;

• non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles;

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• integration and transaction costs associated with acquiring or divesting businesses;

• non-operating litigation reserves and settlements;

• loss (gain) on extinguishment of debt;

• losses from the impairment of goodwill, if any; and

• income and loss from divested or run-off business, if any.

Adjusted after-tax operating income attributable to our common shareholders (“Adjusted After-tax Operating Income” or “AATOI”) is derived by excluding the tax effected APTOI adjustments described above, as well as the following tax items from net income attributable to us:

• changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and

• deferred income tax valuation allowance releases and charges.

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The following tables present a reconciliation of pre-tax income (loss)/net income (loss) attributable to SAFG to adjusted pre-tax operating income (loss)/adjusted after-tax operating income (loss) attributable to SAFG:

	2021				2020				2019
Years Ended December 31, (in millions)	Pre-Tax	Total Tax (Benefit) Charge	Non- controlling Interests	After Tax	Pre-Tax	Total Tax (Benefit) Charge	Non- controlling Interests	After Tax	Pre-Tax	Total Tax (Benefit) Charge	Non- controlling Interests	After Tax
Pre-tax income (loss)/net income (loss) including noncontrolling interests	$10,127	$1,843	$—	$8,284	$851	$(15)	$—	$866	$139	$(168)	$—	$307
Noncontrolling interests	—	—	(929)	(929)	—	—	(224)	(224)	—	—	(257)	(257)
Pre-tax income (loss) / net income attributable to SAFG	10,127	1,843	(929)	7,355	851	(15)	(224)	642	139	(168)	(257)	50
Fortitude Re related items:
Net investment income on Fortitude Re funds withheld assets	(1,775)	(373)	—	(1,402)	(1,427)	(300)	—	(1,127)	(1,598)	(335)	—	(1,263)
Net realized (gains) losses on Fortitude Re funds withheld assets	(924)	(194)	—	(730)	(1,002)	(210)	—	(792)	(262)	(55)	—	(207)
Net realized losses on Fortitude Re funds withheld embedded derivative	687	144	—	543	3,978	835	—	3,143	5,167	1,085	—	4,082
Net (gains) losses on Fortitude Re transactions	(26)	(5)	—	(21)	91	19	—	72	—	—	—	—
Subtotal – Fortitude Re related items	(2,038)	(428)	—	(1,610)	1,640	344	—	1,296	3,307	695	—	2,612
Other reconciling items:
Changes in uncertain tax positions and other tax adjustments	—	174	—	(174)	—	119	—	(119)	—	88	—	(88)
Deferred income tax valuation allowance (release) charges	—	(26)	—	26	—	—	—	—	—	—	—	—
Changes in fair value of securities used to hedge guaranteed living benefits	(56)	(12)	—	(44)	(44)	(9)	—	(35)	(194)	(41)	—	(153)
Changes in benefit reserves and DAC, VOBA and DSI related to net realized (gains) losses	101	21	—	80	(60)	(13)	—	(47)	(34)	(7)	—	(27)
Loss on extinguishment of debt	219	46	—	173	10	2	—	8	32	7	—	25
Net realized (gains) losses(a)	(813)	(171)	68	(574)	895	190	30	735	529	111	27	445
Non-operating litigation reserves and settlements	—	—	—	—	(12)	(3)	—	(9)	4	1	—	3
Integration and transaction costs associated with acquiring or divesting businesses	—	—	—	—	—	—	—	—	3	1	—	2
Restructuring and other costs	44	9	—	35	63	13	—	50	21	4	—	17
Non-recurring costs related to regulatory or accounting changes	31	7	—	24	45	10	—	35	7	1	—	6
Net (gain) loss on divestiture	(3,081)	(710)	—	(2,371)	—	—	—	—	—	—	—	—
Pension expense - non operating	12	3	—	9	—	—	—	—	—	—	—	—
Noncontrolling interests (b)	(861)	—	861	—	(194)	—	194	—	(230)	—	230	—
Subtotal - Other non-Fortitude Re reconciling items	(4,404)	(659)	929	(2,816)	703	309	224	618	138	165	257	230
Total adjustments	(6,442)	(1,087)	929	(4,426)	2,343	653	224	1,914	3,445	860	257	2,842
Adjusted pre-tax operating income (loss)/Adjusted after-tax operating income (loss)	$3,685	$756	$—	$2,929	$3,194	$638	$—	$2,556	$3,584	$692	$—	$2,892

(a)
Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Additionally, gains (losses) related to the disposition of real estate investments are also excluded from this adjustment.

(b)
The presentation of adjustments for 2020 and 2019 for noncontrolling interests has been revised from $(153) million to $(194) million and from $(182) million to $(230) million in 2020 and 2019, respectively; and to remove the total tax (benefit) charge from noncontrolling interests of $(41) million and $(48) million for 2020 and 2019, respectively. These revisions have no impact on SAFG's consolidated financial statements and are not considered material to the previously issued financial statements.

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The following table presents a reconciliation of the GAAP tax rate to the adjusted tax rate:

Years Ended December 31,	GAAP			Non-GAAP Adjustments		Adjusted
(in millions)	Pre-tax Income	Tax	Rate	Pre-tax Adjustments	Tax	APTOI	Tax	Rate
2021
U.S. federal income tax at statutory	$10,127	$2,127	$21.0%	$(6,442)	$(1,353)	$3,685	$774	$21.0%
Rate Adjustments:
Uncertain Tax Positions	—	(69)	(0.7)	—	66	—	(3)	(0.1)
Reclassifications from accumulated other comprehensive income	—	(108)	(1.1)	—	108	—	—	—
Non-controlling Interest(a)	—	(197)	(1.9)	—	181	—	(16)	(0.4)
Dividends received deduction	—	(37)	(0.4)	—	—	—	(37)	(1.0)
State and local income taxes	—	105	1.0	—	(55)	—	50	1.4
Other	—	(5)	—	—	(12)	—	(17)	(0.5)
Adjustments to prior year tax returns	—	(3)	—	—	4	—	1	—
Share based compensation payments excess tax deduction	—	4	—	—	—	—	4	0.1
Valuation allowance:
Continuing operations	—	26	0.3	—	(26)	—	—	—
Amount Attributable to SAFG	$10,127	$1,843	18.2%	$(6,442)	$(1,087)	$3,685	$756	20.5%
2020
U.S. federal income tax at statutory	$851	$178	21.0%	$2,343	$493	$3,194	$671	21.0%
Rate Adjustments:
Uncertain Tax Positions	—	17	2.0	—	4	—	21	0.7
Reclassifications from accumulated other comprehensive income	—	(100)	(11.8)	—	100	—	—	—
Non-controlling Interest(a)	—	(47)	(5.5)	—	41	—	(6)	(0.2)
Dividends received deduction	—	(39)	(4.6)	—	—	—	(39)	(1.2)
State and local income taxes	—	(4)	(0.5)	—	—	—	(4)	(0.1)
Other	—	1	0.1	—	(3)	—	(2)	(0.1)
Adjustments to prior year tax returns	—	(27)	(3.2)	—	14	—	(13)	(0.4)
Share based compensation payments excess tax deduction	—	10	1.2	—	—	—	10	0.3
Valuation allowance:
Continuing operations	—	(4)	(0.5)	—	4	—	—	—
Amount Attributable to SAFG	$851	$(15)	(1.8)%	$2,343	$653	$3,194	$638	20.0%
2019
U.S. federal income tax at statutory	$139	$29	21.0%	$3,445	$724	$3,584	$753	21.0%
Rate Adjustments:
Uncertain Tax Positions	—	35	25.2	—	(29)	—	6	0.2
Reclassifications from accumulated other comprehensive income	—	(114)	(82.0)	—	114	—	—	—
Non-controlling Interest(a)	—	(52)	(37.4)	—	48	—	(4)	(0.1)
Dividends received deduction	—	(40)	(28.8)	—	—	—	(40)	(1.1)
State and local income taxes	—	14	10.0	—	—	—	14	0.4
Other	—	5	3.6	—	—	—	5	0.1
Adjustments to prior year tax returns	—	(49)	(35.3)	—	—	—	(49)	(1.4)
Share Based Compensation payments excess tax deduction	—	7	5.0	—	—	—	7	0.2
Valuation allowance:
Continuing operations	—	(3)	(2.2)	—	3	—	—	—
Amount Attributable to SAFG	$139	$(168)	(120.9)%	$3,445	860	$3,584	$692	19.3%

(a)
The presentation of adjustments for 2020 and 2019 for noncontrolling interests has been revised from $(47) million to $(41) million and from $(52) million to $(48) million for 2020 and 2019, respectively; and to remove the total tax (benefit) charge from noncontrolling interests of $(6) million and $(4) million for 2020 and 2019, respectively. These revisions have no impact on SAFG's consolidated financial statements and are not considered material to the previously issued financial statements.

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Book value, excluding AOCI, adjusted for the cumulative unrealized gains and losses related to Fortitude Re’s funds withheld assets (“Adjusted Book Value”) is used to eliminate the asymmetrical impactresulting from changes in fair value of our available for sale securities portfolio where there is largely no offsetting impact for certain related insurance liabilities that are not recorded at fair value. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re’s funds withheld assets since these fair value movements are economically transferred to Fortitude Re.

The following table presents the reconciliation of Adjusted Book Value:

At December 31, (in millions)	2021	2020	2019
Total SAFG Shareholders’ equity	$27,086	$37,232	$31,805
Less: Accumulated other comprehensive income	10,167	14,653	9,329
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets	2,629	4,225	2,970
Adjusted Book Value	$19,548	$26,804	$25,446

Adjusted Return on Average Equity (“Adjusted ROAE”) – is derived by dividing Adjusted After-Tax Operating Income by average Adjusted Book Value and is used by management to evaluate our recurring profitability and evaluate trends in our business. We believe this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value of our available for sale securities portfolio and foreign currency translation adjustments. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio for which there is largely no offsetting impact for certain related insurance liabilities. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re.

The following table presents the reconciliation of Adjusted ROAE.

	December 31,
(in millions)	2021	2020	2019
Net income (loss) attributable to SAFG shareholders (a)	$7,355	$642	$50
Adjusted after-tax operating income attributable to SAFG shareholders (b)	$2,929	$2,556	$2,892
Average SAFG Shareholders' equity (c)	$32,159	$34,519	$29,098
Less: Average AOCI	12,410	11,991	5,875
Add: Average cumulative unrealized gains and losses related to Fortitude Re funds withheld assets	3,427	3,598	1,771
Average Adjusted Book Value (d)	$23,176	$26,125	$24,994
Return on Average Equity (a / c)	22.9%	1.9%	0.2%
Adjusted ROAE (b / d)	12.6%	9.8%	11.6%

Operating EPS— AATOI divided by weighted average diluted shares.

Premiums and deposits is a non-GAAP financial measure that includes direct and assumed premiums received and earned on traditional life insurance policies, group benefit policies and life-contingent payout annuities, as well as deposits received on universal life insurance, investment-type annuity contracts, and GICs. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.

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The following table presents the premiums and deposits:

	Years Ended December 31,
(in millions)	2021	2020	2019
Individual Retirement
Premiums	$191	$151	$104
Deposits(b)	13,473	9,492	13,530
Other(a)	(7)	(9)	(9)
Premiums and deposits	13,657	9,634	13,625
Group Retirement
Premiums	22	19	16
Deposits	7,744	7,477	8,330
Premiums and deposits(c)(d)	7,766	7,496	8,346
Life Insurance
Premiums	1,573	1,526	1,438
Deposits	1,635	1,648	1,667
Other(a)	1,020	873	827
Premiums and deposits	4,228	4,047	3,932
Institutional Markets
Premiums	3,774	2,564	1,877
Deposits	1,158	2,284	931
Other(a)	25	25	27
Premiums and deposits	4,957	4,873	2,835
Total
Premiums	5,560	4,260	3,435
Deposits	24,010	20,901	24,458
Other(a)	1,038	889	845
Premiums and deposits	$30,608	$26,050	$28,738

(a)
Other principally consists of ceded premiums, in order to reflect gross premiums and deposits.

(b)
Excludes deposits from the assets of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale. Deposits from these retail mutual funds were $259 million, $736 million and $1.3 billion for years ended December 31, 2021, 2020 and 2019, respectively.

(c)
Excludes client deposits into advisory and brokerage accounts of $2.5 billion, $1.4 billion and $1.2 billion for years ended December 31, 2021, 2020 and 2019, respectively.

(d)
Includes $3.1 billion, $3.0 billion and $2.9 billion of premiums and deposits related to in-plan mutual funds for years ended December 31, 2021, 2020 and 2019, respectively.

Normalized distributions are defined as Dividends paid by the Life Fleet subsidiaries as well as the international insurance subsidiaries, less non-recurring dividends, plus dividend capacity that would have been available to SAFG absent strategies that resulted in utilization of tax attributes.

The following table presents a reconciliation of Dividends to Normalized distributions:

	Years Ended December 31,
(in millions)	2021	2020	2019
Subsidiary dividends paid	$1,564	$540	$ 1,535
Less: Non-recurring dividends	(295)	600	(400)
Tax sharing payments related to utilization of tax attributes	902	1,026	954
Normalized distributions	$2,171	$2,166	$2,089

ULSG Net Liability – represents the gross liability for universal life policies with secondary guarantees (“ULSG”) and for universal life policies with similar expected benefit patterns liability adjusted to include the impacts of DAC, unearned revenue reserve (“URR”), and other guaranteed benefits less unrealized capital gains (losses).

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The following table presents a reconciliation of the liability for ULSG and similar features to the ULSG Net Liability.

	Years Ended December 31,
	2021	2020	2019
	($ millions)
Liability for ULSG and similar features	$4,505	$4,751	$3,794
Deferred Acquisition Costs	(2,822)	(2,708)	(2,417)
Unearned Revenue Reserves	1,848	1,660	1,431
Impact of Unrealized Capital Gains (Losses) from Investments	(1,135)	(1,495)	(1,099)
Other Guaranteed Benefits	419	421	527
Other Ceded Guaranteed Benefits	(256)	(266)	(294)
ULSG Net Liability	$2,559	$2,363	$1,942

Net insurance liabilities - represents the gross liabilities for our insurance businesses, including the future policy benefits, policyholder contract deposits, other policyholder fund and the separate account liabilities, less reinsurance assets.

The following table presents a reconciliation of the gross liabilities to the net insurance liabilities.

($ billions)	For the year ended December 31, 2021
Future policy benefits for life and accident and health contracts	$57.8
Policyholder contract deposits	156.8
Other policyholder funds	2.9
Separate account liabilities	109.1
Less: Direct liabilities related to the Corporate and Other segment and other balances (a)	(29.7)
Less: Reinsurance assets (b)	(2.0)
Net insurance liabilities	$294.9

(a)
Other balances primarily includes unearned revenue reserves which are recorded in other policyholder funds.

(b)
Reinsurance assets includes recoverables related to future policy benefits and policyholder contract deposits. Recoverables related to paid claims are excluded.

Key Operating Metrics

Assets Under Management and Administration

Assets Under Management (“AUM”) include assets in the general and separate accounts of our subsidiaries that support liabilities and surplus related to our life and annuity insurance products.

Assets Under Administration (“AUA”) include Group Retirement mutual fund assets and other third-party assets that we sell or administer and the notional value of SVW contracts.

Assets Under Management and Administration (“AUMA”) is the cumulative amount of AUM and AUA.

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The following table presents a summary of our AUMA:

At December 31, (in billions)	2021	2020	2019
Individual Retirement
AUM	$160.2	$157.3	$145.3
AUA(a)	—	—	—
Total Individual Retirement AUMA	160.2	157.3	145.3
Group Retirement
AUM	97.2	94.5	87.3
AUA	42.6	35.6	30.9
Total Group Retirement AUMA	139.8	130.1	118.2
Life Insurance
AUM	34.4	34.8	32.0
AUA	—	—	—
Total Life Insurance AUMA	34.4	34.8	32.0
Institutional Markets
AUM	32.7	30.4	26.6
AUA	43.8	43.3	39.9
Total Institutional Markets AUMA	76.5	73.7	66.5
Total AUMA	$410.9	$395.9	$362.0

(a)
Excludes AUA from the assets of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale. AUA related to these retail mutual funds were $7.8 billion, and $12.0 billion as of December 31, 2020 and 2019, respectively.

Fee and Spread Income and Underwriting Margin

Fee income is defined as policy fees plus advisory fees plus other fee income.

Spread income is defined as net investment income less interest credited to policyholder account balances, exclusive of amortization of sales inducement assets.

Underwriting margin for our Life Insurance segment includes premiums, policy fees, advisory fee income, net investment income, less interest credited to policyholder account balances, policyholder benefits and excludes the annual assumption update. For our Institutional Markets segment, select products utilize underwriting margin which includes premiums, policy fees, net investment income, non-SVW fee and advisory fee income, less interest credited, policyholder benefits and excludes the annual assumption update.

The following table presents a summary of our fee income, spread income and underwriting margin:

	Years Ended December 31,
(in millions)	2021	2020	2019
Individual Retirement
Fee Income(a)	$1,500	$1,321	$1,254
Spread Income	2,650	2,430	2,500
Total Individual Retirement(a)	4,150	3,751	3,754
Group Retirement
Fee Income	859	715	690
Spread Income	1,275	1,088	1,133
Total Group Retirement	2,134	1,803	1,823
Life Insurance
Underwriting margin	1,067	1,261	1,473
Total Life Insurance	1,067	1,261	1,473

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	Years Ended December 31,
(in millions)	2021	2020	2019
Institutional Markets(b)
Fee Income	61	62	68
Spread Income	478	290	251
Underwriting margin	102	75	75
Total Institutional Markets	641	427	394
Total
Fee Income	2,420	2,098	2,012
Spread Income	4,403	3,808	3,884
Underwriting margin	1,169	1,336	1,548
Total	$7,992	$7,242	$7,444

(a)
Excludes fee income of $54 million, $111 million and $163 million for the years ended December 31, 2021, 2020 and 2019, respectively related to the assets of our Retail Mutual Funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale.

(b)
Fee income for Institutional Markets includes only SVW fee income, while underwriting margin includes fee and advisory income on products other than SVW.

Net Flows

Net flows for annuity products in Individual Retirement and Group Retirement represent premiums and deposits less death, surrender and other withdrawal benefits. Net flows for mutual funds represent deposits less withdrawals. For Group Retirement, client deposits into advisory and brokerage accounts less total client withdrawals from advisory and brokerage accounts, are not included in net flows.

The following table presents a summary of our Net Flows:

(in millions)	Years Ended December 31,
	2021	2020	2019
Individual Retirement
Fixed Annuities	$(2,396)	$(2,504)	$(711)
Fixed Index Annuities	4,072	2,991	4,657
Variable Annuities	(864)	(1,554)	(1,973)
Subtotal - Individual Retirement	812	(1,067)	1,973
Group Retirement	(3,208)	(1,940)	(2,646)
Total Net Flows(a)	$(2,396)	$(3,007)	$(673)

(a)
Excludes net flows of ($1.4 billion), ($3.7 billion) and ($3.4 billion) for the years ended December 31, 2021, 2020 and 2019, respectively, related to the assets of our Retail Mutual Funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale.

Consolidated Results of Operations

The following section provides a comparative discussion of our Consolidated Results of Operations on a reported basis for each of the years in the three-year period ended December 31, 2021. For factors that relate primarily to a specific business, see “—Segment Operations—.”

(dollars in millions, except per common share data)	Years Ended December 31,
	2021	2020	2019
Revenues:
Premiums	$5,637	$4,341	$3,501
Policy fees	3,051	2,874	2,930
Net investment income	11,672	10,516	10,774
Net realized gains (losses)	1,855	(3,741)	(5,064)

109

(dollars in millions, except per common share data)	Years Ended December 31,
	2021	2020	2019
Advisory fee and other income	1,175	1,072	1,069
Total revenues	23,390	15,062	13,210
Benefits and expenses:
Policyholder benefits	8,050	6,602	5,335
Interest credited to policyholder account balances	3,549	3,528	3,614
Amortization of deferred policy acquisition costs and value of business acquired	1,057	543	674
Non-deferrable insurance commissions	680	604	564
Advisory fee expenses	322	316	322
General operating expenses	2,104	2,027	1,975
Interest expense	389	490	555
Loss on extinguishment of debt	219	10	32
Net (gain) loss on divestitures	(3,081)	—	—
Net (gains) losses on Fortitude Re transactions	(26)	91	—
Total benefits and expenses	13,263	14,211	13,071
Income before income tax expense (benefit)	10,127	851	139
Income tax expense (benefit)	1,843	(15)	(168)
Net income	8,284	866	307
Less: Net income attributable to noncontrolling interests	929	224	257
Net income attributable to SAFG	$7,355	$642	$50
Income (loss) per common share attributable to SAFG common shareholders:
Class A - Basic and diluted	$76,127	$6,420	$500
Class B - Basic and diluted	$50,101	$6,420	$500
Weighted average shares outstanding:
Class A - Basic and diluted	90,100	90,100	90,100
Class B - Basic and diluted	9,900	9,900	9,900

Financial Highlights of 2021 and Comparison of Results for 2021 and 2020

Financial Highlights – 2021

Our pre-tax income for the year ended December 31, 2021 was driven by a lower decrease in the fair value of our embedded derivatives related to the Fortitude Re funds withheld assets, gains associated with the sale of our affordable housing portfolio as well as certain assets associated with the retail mutual fund business. Additionally, our net investment income continues to deliver strong returns particularly in our alternative investment portfolio, including private equity investments. Continued growth in the equity markets also drove higher policy fees. These gains were slightly offset by higher mortality.

2021 to 2020 Net income – Annual Comparison

Income loss before income tax expense benefit

We recorded pre-tax income of $10.1 billion in 2021 compared to pre-tax income of $851 million in 2020. The change in pre-tax income was primarily due to:

• higher realized gains of $5.6 billion primarily driven by a lower decrease in the fair value of our embedded derivatives related to the Fortitude Re funds withheld assets and higher realized gains on sales of real estate investments and available for sale securities;

• the recognition of a $3.1 billion gain on the closing of the affordable housing sale to Blackstone in 2021 and the sale of certain assets of the Retail Mutual Funds business to Touchstone in 2021;

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• increase in net investment income of $1.2 billion primarily driven by higher returns on the alternative investment portfolio due to gains on private equity investments; and

• higher policy fees of $177 million primarily due to higher average variable annuity separate account assets driven by equity market performance.

Partially offset by:

• higher amortization of DAC of $514 million principally driven by the impact of the review and update of actuarial assumptions and equity market performance; and

• higher loss on extinguishment of debt of $209 million primarily due to the extinguishment of debt of certain consolidated investment entities and the partial extinguishment of AIGLH debt.

Income tax expense (benefit)

For the year ended December 31, 2021, there was a tax expense of $1.8 billion on income from operations, resulting in an effective tax rate on income from operations of 18.2%. Refer to the reconciliation of the GAAP tax rate to the adjusted tax rate presented in “––Use of Non-GAAP Financial Measures and Key Operating Metrics” presented herein.

Financial Highlights of 2020 and Comparison of Results for 2020 and 2019

Financial Highlights – 2020

Our pre-tax income for the year ended December 31, 2020 was driven by strong returns from our investment portfolio, including private equity returns and favorable impacts from lower interest rates and tightening credit spreads resulting in higher prepayment income from invested assets, offset by impacts from COVID-19 mortality claims.

2020 to 2019 Net income – Annual Comparison

Income (loss) before income tax (expense) benefit

We recorded pre-tax income of $851 million in 2020 compared to pre-tax income of $139 million in 2019. The change in pre-tax income was primarily due to:

• lower realized losses of $1.3 billion primarily driven by the lower realized loss on the embedded derivative related to the Fortitude Re funds withheld asset; and

• lower amortization of DAC of $131 million principally driven by the impact of the review and update of actuarial assumptions and equity market performance.

Partially offset by:

• lower net investment income of $258 million primarily due to lower gains on securities for which the fair value option was elected as well as yield compression driven by lower interest rates;

• $240 million unfavorable comparative net impact from life premiums and policy fees net of policyholder benefits (which excludes actuarial assumption updates), driven by higher mortality (which includes COVID-19 impacts);

• an additional loss of $91 million related to an amendment on the Fortitude Re reinsurance contract;

• higher general operating expenses of $51 million primarily due to an increase in costs related to regulatory and accounting changes; and

• higher non-deferrable commission expense of $41 million due to increased sales.

Income tax expense (benefit)

For the year ended December 31, 2020, there was a tax benefit on income from operations of ($15 million), resulting in an effective tax rate on income from operations of 1.8%. Refer to the reconciliation of the GAAP tax rate to the adjusted tax rate presented in “––Use of Non-GAAP Financial Measures and Key Operating Metrics” presented herein.

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Adjusted Pre-Tax Operating Income

The following table presents a reconciliation of pre-tax income (loss) attributable to SAFG to APTOI:

(in millions)	Years Ended December 31,
	2021	2020	2019
Pre-tax income attributable to SAFG	$10,127	$851	$139
Reconciling items to APTOI:
Fortitude Re related items	(2,038)	1,640	3,307
Non-Fortitude Re related items	(4,404)	703	138
Adjusted pre-tax operating income	$3,685	$3,194	$3,584

The following table presents total SAFG’s adjusted pre-tax operating income:

(in millions)	Years Ended December 31,
	2021	2020	2019
Premiums	$5,646	$4,334	$3,493
Policy fees	3,051	2,874	2,931
Net investment income	9,917	9,084	9,021
Net realized gains(a)	701	54	285
Advisory fee and other income	1,175	1,060	1,068
Total adjusted revenues	20,490	17,406	16,798
Policyholder benefits	8,028	6,590	5,336
Interest credited to policyholder account balances	3,569	3,552	3,603
Amortization of deferred policy acquisition costs	$975	$601	$706
Non-deferrable insurance commissions	680	604	564
Advisory fee expenses	322	316	322
General operating expenses	2,016	1,920	1,942
Interest expense	354	435	511
Total benefits and expenses	15,944	14,018	12,984
Noncontrolling interests	(861)	(194)	(230)
Adjusted pre-tax operating income	$3,685	$3,194	$3,584

(a)
Net realized gains (losses) includes the gains (losses) related to the disposition of real estate investments.

2021 to 2020 APTOI Annual Comparison

APTOI increased $491 million primarily due to:

• higher net investment income of $833 million primarily driven by higher private equity income and higher gains on call and tender activity; and

• higher policy fees, advisory fee and other income of $292 million primarily driven by higher average separate account assets.

Partially offset by:

• higher DAC amortization of $374 million principally impacted by the review and update of actuarial assumptions and equity market performance; and

• higher non-deferrable insurance commissions of $76 million primarily driven by growth in variable annuity separate account assets and higher advisory fee expenses driven by increased sales.

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2020 to 2019 APTOI Annual Comparison

APTOI decreased $390 million primarily due to:

• an increase in policyholder benefits of $1.3 billion primarily driven by $712 million from new Institutional Markets business, including changes from new PRT transactions; and

• higher net unfavorable impacts from higher mortality driven by COVID-19 and the review and update of actuarial assumptions compared to prior year of $113 million.

Partially offset by:

• an increase in premiums of $841 million primarily driven by $687 million from new Institutional Markets business, including new PRT transactions; and

• lower DAC amortization of $102 million principally impacted by the review and update of actuarial assumptions and equity market performance.

Segment Operations

Our business operations consist of five reportable segments:

• Individual Retirement – consists of fixed annuities, fixed index annuities, variable annuities and retail mutual funds. On February 8, 2021, we announced the execution of a definitive agreement with Touchstone to sell certain assets of our Retail Mutual Funds business. This Touchstone transaction closed on July 16, 2021. For further information on this sale see Note 1.

• Group Retirement – consists of record-keeping, plan administrative and compliance services, financial planning and advisory solutions offered to employer defined contribution plans and their participants, along with proprietary and non-proprietary annuities, advisory and brokerage products offered outside of plan.

• Life Insurance – primary products in the United States include term life and universal life insurance. The International business issues individual life, whole life and group life insurance in the United Kingdom, and distributes medical insurance in Ireland.

• Institutional Markets – consists of SVW products, structured settlement and PRT annuities, corporate- and bank-owned life insurance, high net worth products and GICs.

• Corporate and Other – consists primarily of:

–
Corporate expenses not attributable to our other segments;

–
Interest expense on financial debt;

–
Results of our consolidated investment entities;

–
Institutional asset management business, which includes managing assets for non-consolidated affiliates; and

–
Results of our legacy insurance lines ceded to Fortitude Re.

The following tables summarize adjusted pre-tax operating income (loss) from our segments. See Note 3 to our audited consolidated financial statements.

(in millions)	Years Ended December 31,
	2021	2020	2019
Individual Retirement	$1,895	$1,942	$2,010
Group Retirement	1,273	975	958
Life Insurance	96	146	522
Institutional Markets	584	367	322
Corporate and Other	(161)	(234)	(227)
Consolidation and elimination	(2)	(2)	(1)
Adjusted pre-tax operating income	$3,685	$3,194	$3,584

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Discussion of Segment Results

Individual Retirement

Individual Retirement Results

(in millions)	Years Ended December 31,
	2021	2020	2019
Revenues:
Premiums	$191	$151	$104
Policy fees	962	861	811
Net investment income	4,334	4,105	4,163
Advisory fee and other income*	592	571	606
Total adjusted revenues	6,079	5,688	5,684
Benefits and expenses:
Policyholder benefits	580	411	391
Interest credited to policyholder account balances	1,791	1,751	1,726
Amortization of deferred policy acquisition costs	744	556	480
Non-deferrable insurance commissions	397	334	318
Advisory fee expenses	189	205	219
General operating expenses	437	427	468
Interest expense	46	62	72
Total benefits and expenses	4,184	3,746	3,674
Adjusted pre-tax operating income	$1,895	$1,942	$2,010

*
Includes advisory fee income from registered investment services, 12b-1 fees (i.e., marketing and distribution fee income), and other asset management fee income.

Individual Retirement Sources of Earnings

The following table presents the sources of earnings of the Individual Retirement segment. We believe providing the APTOI using this view as it is useful for gaining an understanding of our overall results of operations and the significant drivers of our earnings.

	Years Ended December 31,
(in millions)	2021	2020	2019
Fee income(a)	$1,500	$1,321	$1,254
Spread income(b)	2,650	2,430	2,500
Policyholder benefits, net of premiums	(389)	(260)	(287)
Non-deferrable insurance commissions	(397)	(334)	(318)
Amortization of DAC and SIA	(851)	(632)	(543)
General operating expenses	(437)	(427)	(468)
Other(c)	(181)	(156)	(128)
Adjusted pre-tax operating income	$1,895	$1,942	$2,010

(a)
Fee income represents policy fees plus advisory fee and other income. Fee income excludes fee income of $54 million, $111 million, and $163 million for the year ended December 31, 2021, 2020 and 2019, respectively, related to assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale.

(b)
Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of sales inducements of $107 million, $76 million, $63 million.

(c)
Other represents advisory fee expenses, interest expense and fee income related to assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale.

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Financial Highlights

2021 to 2020 APTOI Annual Comparison

APTOI decreased $47 million primarily due to:

• unfavorable impact from the review and update of actuarial assumptions of $320 million compared to $94 million unfavorable in the prior year;

• increase in DAC amortization and policyholder benefits net of premiums, excluding the actuarial assumptions updates of $130 million primarily due to higher growth in Index Annuities, coupled with the impact of lower portfolio yields on policyholder benefits; and

• an increase in non-deferrable insurance commissions of $63 million primarily due to growth in variable annuity separate account assets.

Partially offset by:

• higher net investment income of $229 million primarily driven by higher private equity income of $257 million, higher commercial mortgage loan prepayment income, and higher call and tender income; and

• higher policy and advisory fee income, net of advisory fee expenses of $138 million, primarily due to an increase in variable annuity separate account assets driven by robust equity market performance.

2020 to 2019 APTOI Annual Comparison

APTOI decreased $68 million primarily due to:

• net investment income was lower by $58 million primarily due to lower gains on securities for which the fair-value option was elected, and lower base portfolio income primarily driven by lower interest rates resulting in spread compression, partially offset by higher call and tender income from invested assets and higher alternative income due to private equity returns;

• excluding the net impact from our annual review and update of actuarial assumptions, DAC amortization and policyholder benefits net of premiums was $56 million higher due to lower variable annuity separate account returns, and fixed index annuities growth; and

• unfavorable impact from the review and update of actuarial assumptions of $94 million compared to $63 million unfavorable in the prior year.

Partially offset by:

• $41 million of lower general operating expenses primarily due to lower travel as a result of COVID-19 and other employee related expenses; and

• $29 million of higher policy fees and advisory fee and other income, net of advisory fee expenses, driven by higher fees from fixed index and fixed annuity products with guaranteed living benefits.

AUMA

The following table presents Individual Retirement AUMA by product:

(in billions)	Years Ended December 31,
	2021	2020	2019
Fixed annuities	$57.8	$60.5	$60.4
Fixed index annuities	31.8	27.9	22.1
Variable annuities	70.6	68.9	62.8
Total*	$160.2	$157.3	$145.3

*
Excludes assets of the Retail Mutual Funds business that were sold to Touchstone on July 16, 2021, or were otherwise liquidated, in connection with the sale. AUA related to these retail mutual funds were $7.8 billion, and $12 billion as of December 31, 2020 and 2019, respectively.

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2021 to 2020 AUMA Comparison

AUMA increased $2.9 billion driven by higher variable annuities separate account assets of $4.4 billion due to equity market growth. A decrease of $1.5 billion in the general account was driven by higher interest rates resulting in lower unrealized gains from fixed maturity securities, partially offset by positive net flows into the general account.

2020 to 2019 AUMA Comparison

AUMA increased $12.0 billion driven by higher variable annuities separate account assets of $3.8 billion, and an increase of $8.3 billion in the general account was driven by lower interest rates, partially offset by a widening of credit spreads, resulting in higher unrealized gains from fixed maturity securities, and negative net flows into the general account.

Fee and Spread Income

The following table presents Individual Retirement fee and spread income:

(in millions)	Years Ended December 31,
	2021	2020	2019
Fee income:
Fixed annuities	$44	$37	$24
Fixed index annuities	140	118	75
Variable annuities(a)(b)	1,316	1,166	1,155
Total fee income	1,500	1,321	1,254
Policy fees	962	861	811
Advisory fees and other income(b)	538	460	443
Total fee income	$1,500	$1,321	$1,254
Spread income:
Fixed annuities	1,309	1,276	1,375
Fixed index annuities	843	725	668
Variable annuities	498	429	457
Total spread income	$2,650	$2,430	$2,500
Net investment income	4,334	4,105	4,163
Interest credited to policyholder account balances	(1,684)	(1,675)	(1,663)
Total spread income(c)	$2,650	$2,430	$2,500

(a)
Includes SAAMCo related fee income of $193 million, $165 million, and $159 million for the year ended December 31, 2021, 2020 and 2019, respectively. Includes SAAMCo related spread income of $3 million for the year ended December 31, 2019.

(b)
Excludes fee income of $54 million, $111 million, and $163 million for the year ended December 31, 2021, 2020 and 2019, respectively, related to assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale.

(c)
Excludes amortization of sales inducement assets of $107 million, $76 million, and $63 million for the year ended December 31, 2021, 2020 and 2019, respectively.

	Years Ended December 31,
	2021	2020	2019
Fixed annuities base net investment spread:
Base yield(a)	3.94%	4.16%	4.54%
Cost of funds	2.58	2.63	2.68
Fixed annuities base net investment spread	1.36	1.53	1.86
Fixed index annuities base net investment spread:
Base yield(a)	3.78	3.97	4.46
Cost of funds	1.30	1.28	1.26
Fixed index annuities base net investment spread	2.48	2.69	3.20

116

	Years Ended December 31,
	2021	2020	2019
Variable annuities base net investment spread:
Base yield(a)	3.96	3.86	4.32
Cost of funds	1.42	1.42	1.63
Variable annuities base net investment spread	2.54	2.44	2.69
Total Individual Retirement base net investment spread:
Base yield(a)	3.89	4.07	4.50
Cost of funds	2.08	2.15	2.25
Total Individual Retirement base net investment spread:	1.81%	1.92%	2.25%

(a)
Includes returns from base portfolio including accretion and income (loss) from certain other invested assets.

2021 to 2020 Annual Comparison

• Fee income increased $179 million, primarily due to an increase in mortality and expense (“M&E”) fees of $95 million and other fee income of $78 million due to higher variable annuity separate account assets driven by robust equity market performance.

• Spread income increased $220 million driven by higher private equity income of $257 million, higher commercial mortgage loan prepayment income, and higher call and tender income, partially offset by lower base portfolio income driven by low interest rates resulting in spread compression.

2020 to 2019 Annual Comparison

• Fee income increased $67 million driven by higher fees from products with guaranteed living benefits of $35 million, mostly from fixed index and fixed annuity products and an increase in M&E fees of $12 million and other fee income of $17 million due to higher variable annuity separate account assets driven by equity market growth.

• Spread income decreased $70 million primarily due to lower net investment income of $58 million primarily due to lower gains on securities for which the fair-value option was elected, and lower base portfolio income primarily driven by lower interest rates resulting in spread compression, partially offset by higher call and tender income from invested assets and higher alternative income due to private equity returns.

Premiums and Deposits and Net Flows

For Individual Retirement, premiums primarily represent amounts received on life-contingent payout annuities, while deposits represent sales on investment-oriented products.

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Net flows for annuity products in Individual Retirement represent premiums and deposits less death, surrender and other withdrawal benefits.

Premiums and Deposits (in millions)	Years Ended December 31,
	2021	2020	2019
Fixed annuities	$3,011	$2,535	$5,280
Fixed index annuities	5,621	4,096	5,466
Variable annuities	5,025	3,003	2,879
Total(a)	$13,657	$9,634	$13,625

(a)
Excludes assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale. Deposits from retail mutual funds were $259 million, $736 million, and $1.3 billion for years ended December 31, 2021, 2020 and 2019, respectively.

Net Flows (in millions)	Years Ended December 31,
	2021	2020	2019
Fixed annuities	$(2,396)	$(2,504)	$(711)
Fixed index annuities	4,072	2,991	4,657
Variable annuities	(864)	(1,554)	(1,973)
Total(a)	$812	$(1,067)	$1,973

(a)
Excludes net flows related to the assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale. Net flows from retail mutual funds were ($1.4 billion), ($3.7 billion), and ($3.4 billion) for the years ended December 31, 2021, 2020 and 2019, respectively. Net flows for retail mutual funds represent deposits less withdrawals.

2021 to 2020 Annual Comparison

Fixed Annuities Net flows remained negative but improved by $108 million due to higher premiums and deposits of $476 million, and lower death benefits of $222 million, offset by higher surrenders and withdrawals of $589 million due to higher interest rates. The premium and deposit growth was driven in part due to prior year impact from distribution channel disruptions related to COVID-19.

Fixed Index Annuities Net flows increased by $1.1 billion primarily due to higher premiums and deposits of $1.5 billion offset by higher surrenders and withdrawals of $365 million, and death benefits of $79 million. The premium and deposit growth was driven in part due to fewer disruptions related to COVID-19. The increase in surrenders and withdrawals were due to increased competition and aging of the policies.

Variable Annuities Net flows improved by $690 million primarily due to higher premium and deposits of $2.0 billion offset by higher surrenders and withdrawals of $1.1 billion, and higher death benefits of $208 million. The premium and deposit growth was driven in part due to prior year impact from distribution channel disruptions related to COVID-19. The increase in surrenders and withdrawals was due toan increase inthe number of policies coming out of surrender charge, and increase in lapses of policies with guaranteed minimum withdrawal benefits that are out of the money.

Retail Mutual Funds Net flows remained negative but improved by $2.3 billion due to lower surrenders and withdrawals of $2.7 billion partially offset by lower premiums and deposits of $477 million due to investors’ continued preference for passive, low fee investment vehicles, and the distribution channel disruptions related to COVID-19. Retail mutual funds net flows reflect customer activity and in 2021, it excludes $7.0 billion of funds (i) transferred as part of the Touchstone sale or (ii) liquidated. For further information regarding the July 2021 sale of certain assets of our retail mutual funds businesses to Touchstone, see Note 1 to our audited consolidated financial statements.

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2020 to 2019 Annual Comparison

Fixed Annuities Net flows remained negative and deteriorated by $1.8 billion primarily driven by lower premiums and deposits of $2.7 billion due to distribution channel disruptions related to COVID-19 and a sustained low interest rate environment. This was offset by lower surrenders and withdrawals of $661 million and lower death benefits of $288 million.

Fixed Index Annuities Net flows deteriorated by $1.7 billion, primarily due to lower premiums and deposits of $1.4 billion driven by the low interest rate environment and heightened market competition. In addition, higher surrenders and withdrawals of $249 million, as well as higher death benefits of $47 million, also drove lower net flows.

Variable Annuities Net flows remained negative but improved by $419 million, due to lower surrenders and withdrawals of $407 million and higher premiums and deposits of $124 million partially offset by higher death benefits of $112 million. The premium and deposit growth was driven by sales in independent and regional broker-dealers.

Retail Mutual Funds Net flows remained negative and deteriorated by $245 million, primarily driven by lower premiums and deposits of $538 million partially offset by lower surrenders of $293 million. Negative industry trends in U.S. actively managed equity funds and disruptions caused by COVID-19 continue to put pressure on the net flows.

Surrenders

The following table presents surrenders as a percentage of average reserves:

	Years Ended December 31,
	2021	2020	2019
Fixed annuities	7.2%	5.9%	7.2%
Fixed index annuities	4.6	4.0	3.8
Variable annuities	7.3	6.2	7.2

The following table presents reserves for fixed annuities, fixed index annuities and variable annuities by surrender charge category:

At December 31, (in millions)	2021			2020
	Fixed Annuities	Fixed Index Annuities	Variable Annuities	Fixed Annuities	Fixed Index Annuities	Variable Annuities
No surrender charge	$26,419	$2,009	$34,030	$27,103	$1,423	$29,594
Greater than 0% – 2%	2,091	1,681	10,925	2,297	1,129	10,542
Greater than 2% – 4%	2,424	4,195	9,884	2,757	3,427	11,966
Greater than 4%	16,443	22,489	13,219	16,159	19,685	12,647
Non-surrenderable	2,373	—	—	2,214	—	—
Total reserves	$49,750	$30,374	$68,058	$50,530	$25,664	$64,749

Individual Retirement annuities are typically subject to a three-to-seven-year surrender charge period, depending on the product. For fixed annuities, the proportion of reserves subject to surrender charge at December 31, 2021 increased compared to December 31, 2020. The increase in reserves with no surrender charge for variable and index annuities as of December 31, 2021 compared to December 31, 2020 was principally due to normal aging of business.

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Group Retirement

Group Retirement Results

	Years Ended December 31,
(in millions)	2021	2020	2019
Revenues:
Premiums	$22	$19	$16
Policy fees	522	443	429
Net investment income	2,413	2,213	2,262
Advisory fee and other income(a)	337	272	261
Total adjusted revenues	3,294	2,947	2,968
Benefits and expenses:
Policyholder benefits	76	74	63
Interest credited to policyholder account balances	1,150	1,125	1,147
Amortization of deferred policy acquisition costs	61	15	81
Non-deferrable insurance commissions	121	117	113
Advisory fee expenses	133	111	103
General operating expenses	445	488	459
Interest expense	35	42	44
Total benefits and expenses	2,021	1,972	2,010
Adjusted pre-tax operating income	$1,273	$975	$958

(a)
Includes advisory fee income from registered investment services, 12b-1 fees (i.e., marketing and distribution fee income), and other asset management fee income, and commission-based broker-dealer services.

Group Retirement Sources of Earnings

The following table presents the sources of earnings of the Group Retirement segment. We believe providing the APTOI using this view as it is useful for gaining an understanding of our overall results of operations and the significant drivers of our earnings.

	Years Ended December 31,
(in millions)	2021	2020	2019
Fee income(a)	$859	715	$690
Spread income(b)	1,275	1,088	1,133
Policyholder benefits, net of premiums	(54)	(55)	(47)
Non-deferrable insurance commissions	(121)	(117)	(113)
Amortization of DAC and SIA	(73)	(15)	(99)
General operating expenses	(445)	(488)	(459)
Other(c)	(168)	(153)	(147)
Adjusted pre-tax operating income	$1,273	$975	$958

(a)
Fee income represents policy fee and advisory fee and other income.

(b)
Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortziation of sales inducments of $12 million, $0 million and $18 million.

(c)
Other consists of advisory fee expenses and interest expense.

Financial Highlights

2021 to 2020 APTOI Annual Comparison

APTOI increased $298 million, primarily due to:

• net investment income, net of interest credited was $175 million higher primarily driven by higher gains on private equity income and higher call and tender income, partially offset by lower base portfolio income net of interest credited driven by decreased reinvestment yields;

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• $122 million of higher policy and advisory fee income, net of advisory fee expenses due to an increase in separate account, mutual fund, and advisory average assets; and

• lower general operating expenses of $43 million primarily due to decreased regulatory expenses.

Partially offset by:

• unfavorable impact from the review and update of actuarial assumptions of $5 million in 2021 compared to $68 million favorable in prior year.

2020 to 2019 APTOI Annual Comparison

APTOI increased $17 million, primarily due to:

• favorable impact from the review and update of actuarial assumptions of $68 million in 2020 compared to $17 million unfavorable in prior year; and

• $17 million of higher policy fees and advisory fee and other income, net of advisory fee expenses due to an increase in separate account and mutual fund average assets.

Partially offset by:

• higher general operating expenses of $29 million primarily due to increased regulatory expenses, partially offset by lower travel (as a result of COVID-19) and other employee related expenses;

• increases in variable annuity DAC amortization and reserves excluding the actuarial assumption of $19 million due to lower equity market performance compared to the prior year; and

• net investment income, net of interest credited was $49 million lower due principally lower reinvestment yields partially offset by higher average invested assets and lower interest credited, as well as higher gains on private equity income as well as prepayment income on invested assets.

AUMA

The following table presents Group Retirement AUMA by product:

	For the years ended December 31
	2021	2020	2019
	$	$	$
	($ in billions)
AUMA by asset type
In-plan spread based	$32.5	$33.4	$31.4
In-plan fee based	60.3	53.9	48.1
Total in-plan AUMA(1)	$92.8	$87.3	$79.5
Out-of-plan proprietary fixed annuity and fixed index annuities	9.6	9.3	8.4
Out-of-plan proprietary variable annuities	23.6	22.9	21.1
Total out-of-plan proprietary annuities(2)	33.2	32.2	29.5
Advisory and brokerage	13.8	10.6	9.2
Total out-of-plan AUMA	$47.0	$42.8	$38.7
Total AUMA	$139.8	$130.1	$118.2

(1)
Includes $15.1 billion, $14.3 billion and $13.5 billion of AUMA for the years ended December 31, 2021, 2020 and 2019, respectively, that is associated with our in-plan investment advisory service that we offer to participants at an additional fee.

(2)
Includes $4.9 billion, $4.3 billion and $3.8 billion of AUMA for the years ended December 31, 2021, 2020 and 2019, respectively, in our proprietary advisory variable annuity. Together with our out-of-plan advisory and brokerage assets shown in the table above, we had a total of $18.7 billion, $15.0 billion and $13.0 billion of out-of-plan advisory assets for the years ended December 31, 2021, 2020 and 2019, respectively.

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2021 to 2020 AUMA Comparison

In-plan AUMA increased $5.5 billion due to a $6.4 billion increase related to in-plan fee-based products due to equity market growth, which was offset by a $0.9 billion reduction related to in-plan spread-based AUMA due to negative net flows and decreases in the unrealized gains on the fixed maturity securities due to higher interest rates. Out-of-plan proprietary annuity assets increased $1.0 billion, primarily driven by equity market growth in the period. Increase in advisory and brokerage assets of $3.2 billion, or 30%, was driven by strong net new client deposits along with favorable equity markets.

2020 to 2019 AUMA Comparison

In-plan assets increased by $7.8 billion, primarily driven by equity market growth and change in unrealized gains on invested assets. Out-of-plan assets increased by $4.1 billion, benefiting from the same drivers as described for in-plan assets, as well as net new client deposits in advisory and brokerage. Both in-plan and out-of-plan advisory assets increased, driven by equity market growth and client needs towards advisory services.

Fee and Spread Income

The following table presents Group Retirement fee and spread income:

	Years Ended December 31,
(in millions)	2021	2020	2019
Total fee income	$859	$715	$690
Net investment income	$2,413	$2,213	$2,262
Interest credited to policyholder account balances	(1,138)	(1,125)	(1,129)
Total spread income(a)	$1,275	$1,088	$1,133

(a)
Excludes amortization of sales inducement assets of $12 million, $0 million, and $18 million for the years ended December 31, 2021, 2020 and 2019, respectively.

	Years Ended December 31,
	2021	2020	2019
Base net investment spread:
Base yield(a)	4.11%	4.26%	4.53%
Cost of funds	2.61	2.65	2.72
Base net investment spread	1.50%	1.61%	1.81%

(a)
Includes returns from base portfolio including accretion and income (loss) from certain other invested assets.

2021 to 2020 Annual Comparison

Fee income increased compared to prior period primarily due to increase in AUMA. Spread income increased primarily due to favorable returns on alternatives and higher yield enhancements during the period of $218 million, partially offset by reduction in base spreads of $31 million.

2020 to 2019 Annual Comparison

Fee income increased compared to prior year primarily due to the increase in AUMA. Spread income decreased primarily due to a reduction in base spreads of $59 million and lower yield enhancements of $27 million, partially offset by favorable returns on alternatives of $41 million.

Premiums and Deposits and Net Flows

For Group Retirement, premiums primarily represent amounts received on life-contingent payout annuities while deposits represent sales on investment-oriented products.

Net flows for annuity products included in Group Retirement represent premiums and deposits less death, surrender and other withdrawal benefits. Net flows for mutual funds represent deposits less withdrawals. For Group Retirement, client deposits into advisory and brokerage accounts less total client withdrawals from advisory and brokerage accounts, are not included in net flows. Net new assets into these products contribute to growth in AUA rather than AUM.

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Group Retirement Premiums and Deposits and Net Flows (in millions)	Years Ended December 31,
	2021	2020	2019
In-plan(a)(b)	$5,911	$5,412	$5,539
Out-of-plan proprietary variable annuity	1,288	1,420	1,630
Out-of-plan proprietary fixed & fixed index annuities	567	664	1,177
Premiums and deposits(c)	7,766	7,496	8,346
Net Flows	$(3,208)	$(1,940)	$(2,646)

(a)
In-plan premium and deposits include sales of variable and fixed annuities as well as mutual funds.

(b)
Includes $3.1 billion, $3.0 billion and $2.9 billion of premiums and deposits related to in-plan mutual funds for years ended December 31, 2021, 2020 and 2019, respectively.

(c)
Excludes client deposits into advisory and brokerage accounts of $2.5 billion, $1.4 billion and $1.2 billion for the years ending December 31, 2021, 2020 and 2019, respectively.

2021 to 2020 Annual Comparison

Net flows remained negative and deteriorated by $1.3 billion primarily due to:

• higher individual surrenders, withdrawals and death benefits driven mainly by higher customer account values of $1.6 billion.

Partially offset by:

• large plan acquisitions and surrenders also contributed to the year over year volatility. In 2021, large group activity contributed net negative flows of $0.1 billion compared to $0.4 billion of net negative flows in the same period in the prior year.

2020 to 2019 Annual Comparison

Net flows remained negative but improved by $0.7 billion primarily due to:

• lower individual surrenders, withdrawals and death benefits of $1.2 billion; and

• large plan acquisitions and surrenders also contributed to the year over year volatility. In 2020, large group activity contributed net negative flows of $0.4 billion compared to $0.9 billion of net negative flows in the same period in the prior year.

Partially offset by:

• decreased individual deposits of $1.0 billion.

Surrenders

The following table presents Group Retirement surrenders as a percentage of average reserves and mutual funds under administration:

Years Ended December 31,	2021	2020	2019
Surrenders as a percentage of average reserves and mutual funds	8.8%	8.6%	10.7%

The following table presents reserves for Group Retirement annuities by surrender charge category:

At December 31, (in millions)	2021(a)	2020(a)
No surrender charge(b)	$81,132	$77,507
Greater than 0% - 2%	716	565
Greater than 2% - 4%	857	829
Greater than 4%	6,197	6,119
Non-surrenderable	810	616
Total reserves	$89,712	$85,636

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(a)
Excludes mutual fund assets under administration of $28.8 billion and $25.0 billion at December 31, 2021 and 2020, respectively.

(b)
Certain general account reserves in this category are subject to either participant level or plan level withdrawal restrictions, where withdrawals are limited to 20% per year.

Group Retirement annuity deposits are typically subject to a five to seven-year surrender charge period, depending on the product. In addition, for annuity assets held within an employer defined contribution plan, participants can only withdraw funds in certain circumstances, such as separation from service, without incurring tax penalties, regardless of surrender charge. At December 31, 2021, Group Retirement annuity reserves with no surrender charge increased compared to December 31, 2020 primarily due to growth in assets under management.

Life Insurance

Life Insurance Results

	Years Ended December 31,
(in millions)	2021	2020	2019
Revenues:
Premiums	$1,573	$1,526	$1,438
Policy fees	1,380	1,384	1,503
Net investment income	1,621	1,532	1,503
Other income	110	94	86
Total adjusted revenues	4,684	4,536	4,530
Benefits and expenses:
Policyholder benefits	3,231	3,219	2,708
Interest credited to policyholder account balances	354	373	374
Amortization of deferred policy acquisition costs	164	25	140
Non-deferrable insurance commissions	132	119	99
General operating expenses	682	624	657
Interest expense	25	30	30
Total benefits and expenses	4,588	4,390	4,008
Adjusted pre-tax operating income	$96	$146	$522

Life Insurance Sources of Earnings

The following table presents the sources of earnings of the Life Insurance segment. We believe providing the APTOI using this view as it is useful for gaining an understanding of our overall results of operations and the significant drivers of our earnings.

	Years Ended December 31,
(in millions)	2021	2020	2019
Underwriting margin(a)	$1,067	$1,261	$1,473
General operationg expenses	(682)	(624)	(657)
Non-deferrable insurance commissions	(132)	(119)	(99)
Amortization of DAC, excluding impact of annual actuarial assumption update	(231)	(234)	(287)
Impact of annual actuarial assumption update	99	(108)	122
Interest expense	(25)	(30)	(30)
Adjusted pre-tax operating income	$96	$146	$522

(a)
Underwriting margin represents premiums, policy fees, net investment income and other income, less policyholder benefits and interest credited to policyholder account balances. Underwriting margin is also exclusive of the impacts from the annual assumption update.

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Financial Highlights

2021 to 2020 APTOI Annual Comparison

APTOI decreased $50 million, primarily due to:

• $194 million unfavorable underwriting margin, driven by higher mortality, partially offset by higher net investment income primarily driven by higher gains on calls and alternative investments.

Partially offset by:

• favorable impact from the review and update of actuarial assumptions of $99 million in 2021 compared to $108 million unfavorable in prior year.

2020 to 2019 APTOI Annual Comparison

APTOI decreased $376 million primarily due to:

• unfavorable impact from the review and update of actuarial assumptions of $108 million in 2020 compared to $122 million favorable in the prior year; and

• $212 million unfavorable underwriting margin, driven by higher mortality, partially offset by higher net investment income primarily driven by higher gains on calls and alternative investments.

Partially offset by:

• $33 million lower general operating expenses.

AUMA

The following table presents Life Insurance AUMA:

At December 31, (in billions)	2021	2020	2019
Total AUMA	$34.4	$34.8	$32.0

2021 to 2020 AUMA Comparison

AUMA decreased $0.4 billion in the year ended December 31, 2021 compared to the prior year as net unrealized losses from fixed maturity securities driven by higher rates were only partially offset by growth in the Life Insurance businesses.

2020 to 2019 AUMA Comparison

AUMA increased $2.8 billion in the year ended December 31, 2020 compared to the prior year primarily due to net unrealized gains from fixed maturity securities driven by lower rates partially offset by a widening of credit spreads, and growth in the Life Insurance businesses.

Underwriting Margin

The following table presents Life Insurance underwriting margin:

	Years Ended December 31,
(in millions)	2021	2020	2019
Premiums	$1,573	$1,526	$1,438
Policy fees	1,380	1,384	1,503
Net investment income	1,621	1,532	1,503
Other income	110	94	86
Policyholder benefits	(3,231)	(3,219)	(2,708)
Interest credited to policyholder account balances	(354)	(373)	(374)
Less: Impact of actuarial assumptions update	(32)	317	25
Underwriting margin	$1,067	$1,261	$1,473

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2021 to 2020 Annual Comparison

Underwriting margin decreased $194 million primarily due to:

• $284 million unfavorable comparative net impact from premiums and policy fees net of policyholder benefits (which excludes actuarial assumptions updates), driven by higher mortality.

Partially offset by:

• $89 million of higher net investment income primarily driven by higher gains on calls and alternative investments.

2020 to 2019 Annual Comparison

Underwriting margin decreased $212 million primarily due to:

• $240 million unfavorable comparative net impact from premiums and policy fees net of policyholder benefits (which excludes actuarial assumptions updates) driven by higher mortality.

Partially offset by:

• $29 million in higher net investment income primarily driven by higher gains on calls and alternative investments.

Premiums and Deposits

Premiums and Deposits for Life Insurance represent amounts received on life and health policies. Premiums generally represent amounts received on traditional life products, while deposits represent amounts received on universal life products.

	Years Ended December 31,
(in millions)	2021	2020	2019
Traditional Life	$1,737	$1,696	$1,683
Universal Life	1,635	1,649	1,666
Other(a)	67	76	97
Total U.S.	3,439	3,421	3,446
International	789	626	486
Premiums and deposits	$4,228	$4,047	$3,932

(a)
Other includes Accident and Health business as well as Group benefits.

2021 to 2020 Annual Comparison

Premiums and deposits increased $181 million in 2021 compared to the prior year primarily due to growth in international life premiums.

2020 to 2019 Annual Comparison

Premiums and deposits increased $115 million in 2020 compared to the prior year primarily due to growth in international life premiums.

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Institutional Markets

Institutional Markets Results

	Years Ended December 31,
(in millions)	2021	2020	2019
Revenues:
Premiums	$3,774	$2,564	$1,877
Policy fees	187	186	188
Net investment income	1,155	931	902
Other income	2	1	1
Total adjusted revenues	5,118	3,682	2,968
Benefits and expenses:
Policyholder benefits	4,141	2,886	2,174
Interest credited to policyholder account balances	274	303	356
Amortization of deferred policy acquisition costs	6	5	5
Non-deferrable insurance commissions	27	31	31
General operating expenses	77	79	69
Interest expense	9	11	11
Total benefits and expenses	4,534	3,315	2,646
Adjusted pre-tax operating income	$584	$367	$322

Institutional Markets Sources of Earnings

The following table presents the sources of earnings of the Institutional Markets segment. We believe providing the APTOI using this view as it is useful for gaining an understanding of our overall results of operations and the significant drivers of our earnings.

	Years Ended December 31,
(in millions)	2021	2020	2019
Fee income(a)	$61	$62	$68
Spread income(b)	478	290	251
Underwriting margin(c)	102	75	75
Non-deferrable insurance commissions	(27)	(31)	(31)
General operating expenses	(77)	(79)	(69)
Other	47	50	28
Adjusted pre-tax operating income	$584	$367	$322

(a)
Represents fee income on SVW products.

(b)
Represents spread income on GIC, PRT and structured settlement products.

(c)
Represents underwriting margin from Corporate Markets products, including private placement variable universal life insurance and private placement variable annuity products.

Financial Highlights

2021 to 2020 APTOI Annual Comparison

APTOI increased $217 million primarily due to:

• $1.2 billion increase in premiums, primarily on PRT, driven by higher sales;

• $224 million of higher net investment income primarily due to favorable returns on alternatives, higher call/tender income and higher base portfolio income driven by growth in average invested assets; and

• $29 million of lower interested credited to policyholder account balances primarily due to interest rate impacts on certain GICs and hedging instruments as well as fair value changes.

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Partially offset by:

• $1.3 billion increase in policyholder benefits (including interest accretion), primarily on PRT, driven by higher sales.

2020 to 2019 APTOI Annual Comparison

APTOI increased $45 million primarily due to:

• $687 million increase in premiums, primarily on PRT, driven by higher sales;

• $53 million of lower interest credited to policyholder account balances primarily due to interest rate impacts on certain GICs and hedging instruments, partially offset by fair value changes; and

• $29 million higher net investment income primarily due to higher private equity returns.

Partially offset by:

• $712 million increase in policyholder benefits (including interest accretion), primarily on PRT, driven by higher sales; and

• $10 million of higher general operating expenses.

AUMA

The following table presents Institutional Markets AUMA:

At December 31, (in billions)	2021	2020	2019
Total AUMA	$76.5	$73.7	$66.5

2021 to 2020 AUMA Comparison

AUMA increased $2.8 billion, including $2.3 billion and $0.5 billion in AUM and AUA, respectively. The increase in AUM was due to premiums and deposits of $5.0 billion, primarily from PRT and GIC products, and asset growth of $0.1 billion, partially offset by benefit payments, contract maturities and other outflows of $2.7 billion. The increase in AUA was due to higher SVW notional driven by growth in underlying assets of $0.8 billion, partially offset by net outflows from plan sponsors and plan participants of $0.3 billion.

2020 to 2019 AUMA Comparison

AUMA increased $7.2 billion, including $3.8 billion and $3.4 billion growth in AUM and AUA, respectively. The increase in AUM was due to premiums and deposits of $4.9 billion, primarily from PRT and GIC products, and asset growth of $1.6 billion, partially offset by benefit payments, contract maturities and other outflows of $2.7 billion. The increase in AUA was due to higher SVW notional driven by net inflows from plan sponsors and plan participants of $2.4 billion and growth in underlying assets of $1.0 billion.

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Fee Income, Spread Income and Underwriting Margin

The following table presents Institutional Markets fee income, spread income and underwriting margin:

	Years Ended December 31,
(in millions)	2021	2020	2019
SVW fees	$61	$62	$68
Total fee income	$61	$62	$68
Net investment income	969	777	750
Interest credited to policyholder account balances	(166)	(195)	(250)
Policyholder benefits	(325)	(292)	(249)
Total spread income(a)	$478	$290	$251
Premiums	$(35)	$(36)	$(35)
Policy fees (excluding SVW)	126	124	120
Net investment income	175	147	144
Advisory fee income	1	1	1
Policyholder benefits	(57)	(53)	(50)
Interest credited to policyholder account balances	(108)	(108)	(105)
Total underwriting margin(b)	$102	$75	$75

(a)
Represents spread income from GIC, PRT and structured settlement products.

(b)
Represents underwriting margin from Corporate Markets products, including private placement variable universal life insurance and private placement variable annuity products.

2021 to 2020 Annual Comparison

Fee income was in line with the prior year period.

Spread income increased $188 million primarily due to:

• $192 million of higher net investment income primarily due to higher private equity returns of $118 million, higher call/tender income and other yield enhancements of $35 million and higher base portfolio income of $39 million driven by growth in average invested assets; and

• $29 million of lower interest credited to policyholder account balances due to the interest rate impacts of certain GICs and hedging instruments as well as fair value changes.

Partially offset by:

• $33 million increase in policyholder benefits due to interest accretion on PRT, driven by sales.

Underwriting margin increased $27 million primarily due to:

• $28 million of higher net investment income in the corporate- and bank-owned life insurance and high net worth businesses, including higher call/tender income and other yield enhancements of $21 million and private equity returns of $8 million.

2020 to 2019 Annual Comparison

Fee income decreased $6 million due to fee compression on SVW products.

Spread income increased $39 million primarily due to:

• $57 million of lower interest credited to policyholder account balances due to the interest rate impacts of certain GICs and hedging instruments, partially offset by fair value changes; and

• $29 million of higher net investment income primarily due to private equity returns.

Partially offset by:

• $46 million increase in policyholder benefits due to interest accretion on PRT, driven by sales.

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Underwriting margin was generally in line with the prior year.

Premiums and Deposits

The following table presents the Institutional Markets GAAP premiums and deposits:

	Years Ended December 31,
(in millions)	2021	2020	2019
PRT	$3,667	$2,344	$1,677
GICs	1,000	2,124	717
Other(a)	290	405	441
Premiums and deposits	$4,957	$4,873	$2,835

(a)
Other principally consists of structured settlements, high net worth and SVW products.

2021 to 2020 Annual Comparison

Premiums and deposits increased in 2021 compared to prior year by $84 million, primarily due to higher sales of PRT annuities of $1.3 billion, partially offset by lower issuance of GICs of $1.1 billion and lower structured settlements of $116 million.

2020 to 2019 Annual Comparison

Premiums and deposits increased in 2020 compared to the prior year by $2.0 billion, primarily due to higher issuance of GICs of $1.4 billion and higher sales of PRT annuities of $667 million.

Corporate and Other

Corporate and Other primarily consists of interest expense on financial debt, corporate expenses not attributable to other segments, institutional asset management operations, which includes managing assets for non-consolidated affiliates, results of our consolidated investment entities, results of our legacy insurance lines ceded to Fortitude Re and intercompany eliminations.

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Corporate and Other Results

	Years Ended December 31,
(in millions)	2021	2020	2019
Revenues:
Premiums(a)	$86	$74	$58
Net investment income	443	346	211
Net realized gains on real estate investments	701	54	285
Other income	134	122	114
Total adjusted revenues	1,364	596	668
Benefits and expenses:
Non-deferrable insurance commissions	3	3	3
General operating expenses:
Corporate and Other(a)(b)	220	179	169
Asset Management(c)	155	130	126
Total General operating expenses	375	309	295
Interest expense:
Corporate and Other	66	59	49
Asset Management(d)	220	265	318
Total interest expense	286	324	367
Total benefits and expenses	664	636	665
Non-controlling interest(e)	(861)	(194)	(230)
Adjusted pre-tax operating loss before consolidation and eliminations	(161)	(234)	(227)
Consolidations and eliminations	(2)	(2)	(1)
Adjusted pre-tax operating loss	$(163)	$(236)	$(228)

(a)
Premiums include an expense allowance associated with Fortitude Re which is entirely offset in general and operating expenses – Corporate and other.

(b)
General and operating expenses – Corporate and other include expenses incurred by AIG which were not billed to SAFG of $143 million, $103 million and $85 million in the years ended 2021, 2020 and 2019, respectively.

(c)
General operating expenses – Asset management primarily represent the costs to manage the investment portfolio for affiliates that are not included in the consolidated financial statements of SAFG.

(d)
Interest – Asset Management relates to consolidated investment entities, the VIEs, for which we are the primary beneficiary, however, creditors or beneficial interest holders of VIEs generally only have recourse to the assets and cash flows of the VIEs and do not have recourse to us except in limited circumstances when we have provided a guarantee to the VIE’s interest holders. As of December 31, 2021, the VIEs for which SAFG previously provided guarantees have been terminated. Interest expense on consolidated investment entities was $216 million, $257 million and $304 million for the years ended 2021, 2020 and 2019, respectively.

(e)
Noncontrolling interests represent the third party or SAFG affiliated interest in internally managed consolidated investment vehicles and is almost entirely offset within net investment income, net realized gains (losses) and interest expense. The retained interest for internal funds consolidated by entities within asset management entities in Corporate and Other is immaterial.

131

Corporate and Other Sources of Earnings

The following table presents the sources of earnings of the Corporate and Other segment. We believe providing the APTOI using this view as it is useful for gaining an understanding of our overall results of operations and the significant drivers of our earnings.

	Years Ended December 31,
(in millions)	2021	2020	2019
Parent Expenses(a)	$(143)	$(103)	$(85)
Interest Expense on Financial Debt	(66)	(59)	(50)
Asset Management	30	(15)	34
Consolidated Investment Entities(b)	19	(62)	(105)
Fortitude Re	7	8	(16)
Other	(10)	(5)	(6)
Adjusted pre-tax operating income	$(163)	$(236)	$(228)

(a)
Represents expenses incurred by AIG which were not billed to SAFG.

(b)
Includes $(25) million, $(88) million and $(111) million of APTOI attributable to six transactions AIG entered into between 2012 and 2014 which securitized portfolios of certain debt securities, the majority of which were previously owned by SAFG. During the year ended December 31, 2021, all six transactions were terminated. See Note 9 to the audited consolidated financial statements.

Financial Highlights

2021 to 2020 APTOI Annual Comparison

Adjusted pre-tax operating loss of $163 million in 2021 compared to an adjusted pre-tax operating loss of $236 million in 2020; this favorable change of $73 million was primarily due to:

• higher income from Consolidated Investment entities of $97 million primarily from lower interest expense on certain consolidated investment entities which were terminated during 2021 as well as gains in certain consolidated real estate investment funds; and

• higher income from legacy investments held outside of the investment insurance companies.

Partially offset by:

• higher parent expenses of $40 million primarily due to an increase in expenses related to AIG which were not billed to SAFG.

2020 to 2019 APTOI Annual Comparison

Adjusted pre-tax operating loss of $236 million in 2020 compared to $228 million in 2019; this unfavorable change of $8 million was primarily due to:

• lower income from legacy investments held outside of the investment insurance companies; and

• higher parent expenses of $18 million primarily due to an increase in expenses related to AIG which were not billed to SAFG.

Partially offset by:

• higher income from Consolidated Investment Entities of $43 million primarily due to lower interest expense on certain consolidated investment entities; and

• higher income from Fortitude Re related to amended modco agreement terms AGL and USL entered into with Fortitude Re on July 1, 2020.

Investments

Overview

Our investment strategies are tailored to the specific business needs of each operating unit by targeting an asset allocation mix that supports estimated cash flows of our outstanding liabilities and provides diversification

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from an asset class, sector, issuer, and geographic perspective. The primary objectives are generation of investment income, preservation of capital, liquidity management and growth of surplus. The majority of assets backing our insurance liabilities consist of fixed maturity securities, RMBS, CMBS, CLOs, other ABS and fixed maturity securities issued by government sponsored entities and corporate entities. See “Business—Our Segments—Investment Management” for further information, including current and future management of our investment portfolio.

Key Investment Strategies

Investment strategies are assessed at the segment level and involve considerations that include local and general market conditions, duration and cash flow management, risk appetite and volatility constraints, rating agency and regulatory capital considerations, and tax and legal investment limitations.

Blackstone is managing an initial $50 billion of assets in our investment portfolio, with that amount increasing by $8.5 billion in each of the next five years beginning in the fourth quarter of 2022 for an aggregate of $92.5 billion by the third quarter of 2027. We expect Blackstone to invest these assets primarily in Blackstone-originated investments across a range of asset classes, including private and structured credit. Blackstone’s credit and lending strategy is to control all significant components of the underwriting and pricing processes and to facilitate bespoke opportunities with strong credit protection and attractive risk-adjusted returns. Blackstone seeks to capture enhanced economics to those available in the traditional fixed income markets by going directly to the lending source, disintermediating traditional originators, banks and the securitization markets.

In connection with the BlackRock Arrangement, we expect to transfer the management of up to $90 billion of liquid fixed income and certain private placement assets in the aggregate to BlackRock over a period of 12 months. The investment management agreements will contain detailed investment guidelines and reporting requirements. These agreements will also contain reasonable and customary representations and warranties, standard of care, expense reimbursement, liability, indemnity and other provisions.

Some of our key investment strategies are as follows:

• our fundamental strategy across the portfolios is to seek investments with characteristics similar to the associated insurance liabilities to the extent practicable;

• we seek to invest in a portfolio of investments that offer enhanced yield through illiquidity premiums, such as private placements and commercial mortgage loans, which also add portfolio diversification. These assets typically afford stronger credit protections through financial covenants, ability to customize structures that meet our insurance liability needs, and deeper due diligence;

• we have access to investments that provide diversification from local markets. To the extent we purchase these investments, we generally hedge any currency risk using derivatives, which could provide opportunities to earn higher risk adjusted returns compared to assets in the functional currency;

• we actively manage our assets and liabilities, counterparties and duration. Our liquidity sources are held primarily in the form of cash, short-term investments and publicly traded, investment grade rated fixed maturity securities that can be readily monetized through sales or repurchase agreements. This strategy allows us to both diversify our sources of liquidity and reduce the cost of maintaining sufficient liquidity;

• within the United States, investments are generally split between reserve-backing and surplus portfolios; and

—
Insurance reserves are backed by mainly investment grade fixed maturity securities that meet our duration, risk-return, tax, liquidity, credit quality and diversification objectives. We assess asset classes based on their fundamental underlying risk factors, including credit (public and private), commercial real estate, and residential real estate regardless of whether such investments are bonds, loans, or structured products.

—
Surplus investments seek to enhance portfolio returns and generally comprise a mix of fixed

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maturity investment grade and below investment grade securities and various alternative asset classes, including private equity, real estate equity, and hedge funds. Over the past few years, hedge fund investments have been reduced with more emphasis given to private equity, real estate and below investment grade credit.

• outside of the United States, fixed maturity securities held by insurance companies consist primarily of investment-grade securities generally denominated in the currencies of the countries in which we operate.

Asset Liability Management

Our investment strategy is to provide net investment income to back policyholder benefit and deposit liabilities that result in stable distributable earnings and enhance portfolio value, subject to asset-liability management, capital, liquidity and regulatory constraints.

We use asset-liability management as a primary tool to monitor and manage interest and duration risk in our businesses. We maintain a diversified, high-to-medium quality portfolio of fixed maturity securities issued by corporations, municipalities, and other governmental agencies; structured securities collateralized by, among other assets, residential and commercial real estate; and commercial mortgage loans that, to the extent practicable, match the duration characteristics of the liabilities. We seek to diversify the portfolio across asset classes, sectors and issuers to mitigate idiosyncratic portfolio risks. The investment portfolio of each product line is tailored to the specific characteristics of its insurance liabilities, and as a result, duration varies between distinct portfolios. The interest rate environment has a direct impact on the asset liability management profile of the businesses, and an extended low interest rate environment may result in a lengthening of liability durations from initial estimates, primarily due to lower lapses, which may require us to further extend the duration of the investment portfolio. We expect to assess further lengthening of the portfolio in the context of available market opportunities, as longer duration markets may not provide similar diversification benefits as shorter duration markets.

Fixed maturity securities of our domestic operations have an average duration of nine years as of December 31, 2021.

In addition, we seek to enhance surplus portfolio returns through investments in a diversified portfolio of alternative investments. Although these alternative investments are subject to earnings fluctuations, they have historically achieved accumulative returns over time in excess of the fixed maturity portfolio returns.

Investment Portfolio

The following table presents carrying amounts of our total investments:

(in millions)	Excluding Fortitude Re Funds Withheld Assets	Fortitude Re Funds Withheld Assets	Total
At December 31, 2021
Bonds available for sale:
U.S. government and government sponsored entities	$1,255	$457	$1,712
Obligations of states, municipalities and political subdivisions	7,240	1,436	8,676
Non-U.S. governments	5,579	818	6,397
Corporate debt	118,715	21,348	140,063
Mortgage-backed, asset-backed and collateralized:
RMBS	13,850	1,108	14,958
CMBS	10,311	989	11,300
CLO/ABS	14,438	1,024	15,462
Total mortgage-backed, asset-backed and collateralized	38,599	3,121	41,720
Total bonds available for sale	171,388	27,180	198,568
Other bond securities	489	1,593	2,082
Total fixed maturities	171,877	28,773	200,650

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(in millions)	Excluding Fortitude Re Funds Withheld Assets	Fortitude Re Funds Withheld Assets	Total
Equity securities	241	1	242
Mortgage and other loans receivable:
Residential mortgages	4,671	—	4,671
Commercial mortgages	27,176	2,929	30,105
Life insurance policy loans	1,452	380	1,832
Commercial loans, other loans and notes receivable	2,530	250	2,780
Total Mortgage and other loans receivable*	35,829	3,559	39,388
Other invested assets	8,760	1,807	10,567
Short term investments	5,421	50	5,471
Total	$222,128	$34,190	$256,318
At December 31, 2020
Bonds available for sale:
U.S. government and government sponsored entities	$1,408	$488	$1,896
Obligations of states, municipalities and political subdivisions	7,934	1,635	9,569
Non-U.S. governments	4,952	786	5,738
Corporate debt	113,836	23,578	137,414
Mortgage-backed, asset-backed and collateralized:
RMBS	16,247	1,614	17,861
CMBS	9,902	1,457	11,359
CLO/ABS	13,162	942	14,104
Total mortgage-backed, asset-backed and collateralized	39,311	4,013	43,324
Total bonds available for sale	167,441	30,500	197,941
Other bond securities	659	121	780
Total fixed maturities	168,100	30,621	198,721
Equity securities	609	—	609
Mortgage and other loans receivable:
Residential mortgages	3,583	—	3,583
Commercial mortgages	27,489	2,995	30,484
Life insurance policy loans	1,559	413	1,972
Commercial loans, other loans and notes receivable	2,079	196	2,275
Total Mortgage and other loans receivable*	34,710	3,604	38,314
Other invested assets	11,869	1,526	13,395
Short term investments	9,201	34	9,235
Total	$224,489	$35,785	$260,274

*
Net of total allowance for credit losses of $496 million and $657 million at December 31, 2021 and December 31, 2020, respectively.

Credit Ratings

At December 31, 2021, nearly all our fixed maturity securities were held by our U.S. entities. 90% of these securities were rated investment grade by one or more of the principal rating agencies. Our investment decision process relies primarily on internally generated fundamental analysis and risk ratings. Third-party rating services’ ratings and opinions provide one source of independent perspective for consideration in the internal analysis.

Moody’s Investors Service Inc. (“Moody’s”), Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc. (“S&P”), Fitch Ratings Inc. (“Fitch”), or similar foreign rating services rate a significant

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portion of our foreign entities’ fixed maturity securities portfolio. Rating services are not available for some foreign-issued securities. Our Investments team, with oversight from credit risk management, closely reviews the credit quality of the foreign portfolio’s non-rated fixed maturity securities.

NAIC Designations of Fixed Maturity Securities

The Securities Valuation Office (“SVO”) of the NAIC evaluates the investments of U.S. insurers for statutory reporting purposes and assigns fixed maturity securities to one of six categories called ‘NAIC Designations’. In general, NAIC Designations of ‘1’ highest quality, or ‘2’ high quality, include fixed maturity securities considered investment grade, while NAIC Designations of ‘3’ through ‘6’ generally include fixed maturity securities referred to as below investment grade. NAIC Designations for non-agency RMBS and CMBS are calculated using third-party modeling results provided through the NAIC. These methodologies result in an improved NAIC Designation for such securities compared to the rating typically assigned by the three major rating agencies. The following tables summarize the ratings distribution of our subsidiaries’ fixed maturity security portfolio by NAIC Designation, and the distribution by composite our credit rating, which is generally based on ratings of the three major rating agencies. As of December 31, 2021 and December 31, 2020, 92% and 92%, respectively, of our fixed maturity security portfolio, excluding Fortitude Re Funds Withheld Assets, were investment grade. Excluding $3.5 billion and $2.1 billion of NAIC 4 and 5 securities as of December 31, 2021 and 2020 related to collaterialized loan obligations within consolidated investment entities, which do not represent direct investments of SAFG’s insurance subsidiaries, our fixed maturity security portfolio, excluding Fortitude Re Funds Withheld Assets would be 94% and 94% investment grade, respectively. The remaining below investment grade securities that are not included in consolidated investment entities primarily relate to middle market and high yield bank loans securities. See Note 9 to the audited consolidated financial statements.

The following tables present the fixed maturity security portfolio categorized by NAIC Designation, at fair value:

NAIC Designation Excluding Fortitude Re Funds Withheld Assets (in millions)	1	2	Total Investment Grade	3	4(a)	5(a)	6	Total Below Investment Grade	Total
At December 31, 2021
Other fixed maturity securities	$59,367	$60,131	$119,498	$5,743	$6,698	$803	$58	$13,302	$132,800
Mortgage-backed, asset-backed and collateralized	35,241	3,402	38,643	146	88	20	180	434	39,077
Total	$94,608	$63,533	$158,141	$5,889	$6,786	$823	$238	$13,736	$171,877
Fortitude Re funds withheld assets									$28,773
Total fixed maturities									$200,650
At December 31, 2020
Other fixed maturity securities	$56,674	$58,321	$114,995	$6,878	$5,042	$1,117	$83	$13,120	$128,115
Mortgage-backed, asset-backed and collateralized	37,004	2,478	39,482	193	54	28	213	488	39,970
Total(b)	$93,678	$60,799	$154,477	$7,071	$5,096	$1,145	$296	$13,608	$168,085
Fortitude Re funds withheld assets									$30,621
Total Fixed Maturities									$198,706

(a)
Includes $3.4 billion and $50 million of consolidated collateralized loan obligations that are rated NAIC 4 and 5 as of December 31, 2021 and $2.0 billion and $88 million of NAIC 4 and 5 securities as of December 31, 2020. These are assets of consolidated investment entities and do not represent direct investment of SAFG’s insurance subsidiaries.

(b)
Excludes $15 million of fixed maturity securities for which no NAIC Designation is available at December 31, 2020.

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Composite SAFG Credit Ratings

With respect to our fixed maturity securities, the credit ratings in the table below and in subsequent tables reflect: (i) a composite of the ratings of the three major rating agencies, or when agency ratings are not available, the rating assigned by the NAIC SVO (99% of total fixed maturity securities), or (ii) our equivalent internal ratings when these investments have not been rated by any of the major rating agencies or the NAIC. The “Non-rated” category in those tables consists of fixed maturity securities that have not been rated by any of the major rating agencies, the NAIC or us.

The following tables present the fixed maturity security portfolio categorized by composite SAFG credit rating (as described below), at fair value:

Composite SAFG Credit Rating Excluding Fortitude Re Funds Withheld Assets (in millions)	AAA/ AAA	BBB	Total Investment Grade	BB	B	CCC and Lower	Total Below Investment Grade(a)(b)	Total
At December 31, 2021
Other fixed maturity securities	$61,496	$58,049	$119,545	$5,767	$5,014	$2,474	$13,255	$132,800
Mortgage-backed, asset-backed and collateralized	30,363	3,876	34,239	375	359	4,104	4,838	39,077
Total	$91,859	$61,925	$153,784	$6,142	$5,373	$6,578	$18,093	$171,877
Fortitude Re funds withheld assets								$28,773
Total fixed maturities								$200,650
At December 31, 2020
Other fixed maturity securities	$58,358	$56,711	$115,069	$6,491	$4,848	$1,707	$13,046	$128,115
Mortgage-backed, asset-backed and collateralized	31,678	2,698	34,376	451	257	4,886	5,594	39,970
Total(c)	$90,036	$59,409	$149,445	$6,942	$5,105	$6,593	$18,640	$168,085
Fortitude Re funds withheld assets								$30,621
Total fixed maturities								$198,706

(a)
Includes $4.1 billion and $5.1 billion at December 31, 2021 and December 31, 2020, respectively, of certain RMBS that had experienced deterioration in credit quality since their origination but prior to SAFG’s acquisition. These securities are currently rated as investment grade under the NAIC SVO framework. For additional discussion on Purchased Credit Impaired Securities see Note 5 to our audited consolidated financial statements.

(b)
Includes $3.7 billion of consolidated collateralized loan obligations as of December 31, 2021 and $2.3 billion as of December 31, 2020. These are assets of consolidated investment entities and do not represent direct investment of SAFG’s insurance subsidiaries.

(c)
Excludes $15 million of fixed maturity securities for which no NAIC Designation is available at December 31, 2020.

For a discussion of credit risks associated with Investments see “Business—Our Segments—Investment Management—Credit Risk.”

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The following tables present the composite SAFG credit ratings of our fixed maturity securities calculated based on their fair value:

At December 31, Excluding Fortitude Re Funds Withheld Assets (in millions)	Available for Sale		Fair Value Option		Total
	2021	2020	2021	2020	2021	2020
Rating:
Other fixed maturity securities
AAA	$3,516	$3,653	$—	$—	$3,516	$3,653
AA	23,214	20,258	—	—	23,214	20,258
A	34,766	34,447	—	—	34,766	34,447
BBB	58,045	56,711	4	—	58,049	56,711
Below investment grade	11,677	12,340	7	—	11,684	12,340
Non-rated	1,571	721	—	—	1,571	721
Total	$132,789	$128,130	$11	$—	$132,800	$128,130
Mortgage-backed, asset- backed and collateralized
AAA	$13,002	$15,816	$26	$112	$13,028	$15,928
AA	12,173	11,228	83	126	12,256	11,354
A	4,957	4,267	122	129	5,079	4,396
BBB	3,820	2,638	56	60	3,876	2,698
Below investment grade	4,634	5,340	151	200	4,785	5,540
Non-rated	13	22	40	32	53	54
Total	$38,599	$39,311	$ 478	$659	$39,077	$39,970
Total
AAA	$16,518	$19,469	$26	$112	$16,544	$19,581
AA	35,387	31,486	83	126	35,470	31,612
A	39,723	38,714	122	129	39,845	38,843
BBB	61,865	59,349	60	60	61,925	59,409
Below investment grade	16,311	17,680	158	200	16,469	17,880
Non-rated	1,584	743	40	32	1,624	775
Total	$171,388	$167,441	$ 489	$659	$171,877	$168,100

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At December 31, Fortitude Re Funds Withheld Assets (in millions)	Available for Sale		Fair Value Option		Total
	2021	2020	2021	2020	2021	2020
Rating:
Other fixed maturity securities securities
AAA	$720	$861	$31	$—	$751	$861
AA	5,444	5,609	227	—	5,671	5,609
A	6,359	7,785	109	—	6,468	7,785
BBB	9,873	10,805	384	—	10,257	10,805
Below investment grade	1,663	1,427	305	—	1,968	1,427
Non-rated	—	—	—	—	—	—
Total	$24,059	$26,487	$1,056	$—	$25,115	$26,487
Mortgage-backed, asset- backed and collateralized
AAA	$517	$1,043	$31	$10	$548	$1,053
AA	945	1,086	314	19	1,259	1,105
A	367	437	59	10	426	447
BBB	447	379	60	10	507	389
Below investment grade	838	1,060	72	69	910	1,129
Non-rated	7	8	1	3	8	11
Total	$3,121	$4,013	$537	$121	$3,658	$4,134
Total
AAA	$1,237	$1,904	$62	$10	$1,299	$1,914
AA	6,389	6,695	541	19	6,930	6,714
A	6,726	8,222	168	10	6,894	8,232
BBB	10,320	11,184	444	10	10,764	11,194
Below investment grade	2,501	2,487	377	69	2,878	2,556
Non-rated	7	8	1	3	8	11
Total	$27,180	$30,500	$1,593	$121	$28,773	$30,621

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At December 31, Total (in millions)	Available for Sale		Fair Value Option		Total
	2021	2020	2021	2020	2021	2020
Rating:
Other fixed maturity securities
AAA	$4,236	$4,514	$31	$—	$4,267	$4,514
AA	28,658	25,867	227	—	28,885	25,867
A	41,125	42,232	109	—	41,234	42,232
BBB	67,918	67,516	388	—	68,306	67,516
Below investment grade	13,340	13,767	312	—	13,652	13,767
Non-rated	1,571	721	—	—	1,571	721
Total	$156,848	$154,617	$1,067	$—	$157,915	$154,617
Mortgage-backed, asset- backed and collateralized
AAA	$13,519	$16,859	$57	$122	$13,576	$16,981
AA	13,118	12,314	397	145	13,515	12,459
A	5,324	4,704	181	139	5,505	4,843
BBB	4,267	3,017	116	70	4,383	3,087
Below investment grade	5,472	6,400	223	269	5,695	6,669
Non-rated	20	30	41	35	61	65
Total	$41,720	$43,324	$1,015	$780	$42,735	$44,104
Total
AAA	$17,755	$21,373	$88	$122	$17,843	$21,495
AA	41,776	38,181	624	145	42,400	38,326
A	46,449	46,936	290	139	46,739	47,075
BBB	72,185	70,533	504	70	72,689	70,603
Below investment grade	18,812	20,167	535	269	19,347	20,436
Non-rated	1,591	751	41	35	1,632	786
Total	$198,568	$197,941	$2,082	$780	$200,650	$198,721

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The following table presents the fair value of our aggregate credit exposures to non-U.S. governments for our fixed maturity securities:

At December 31, (in millions)	2021			2020
	Excluding Fortitude Re Funds Withheld Assets	Fortitude Re Funds Withheld Assets	Total	Excluding Fortitude Re Funds Withheld Assets	Fortitude Re Funds Withheld Assets	Total
Indonesia	$472	$50	$522	$421	$42	$463
Chile	443	28	471	341	29	370
United Arab Emirates	372	19	391	380	21	401
Qatar	276	113	389	273	124	397
Mexico	299	74	373	213	51	264
United Kingdom	346	—	346	75	—	75
Saudi Arabia	258	29	287	81	23	104
France	225	36	261	163	53	216
Panama	206	34	240	208	33	241
Norway	225	—	225	236	22	258
Other*	2,457	452	2,909	2,561	388	2,949
Total	$5,579	$835	$6,414	$4,952	$786	$5,738

*
Our credit exposure to fixed maturity securities issued by the Russian Federation was $141 million and $131 million at December 31, 2021 and December 31, 2020, respectively, which represents 2% of our aggregate credit exposures to non-U.S. governments for our fixed maturity securities for both years. Subsequent to December 31, 2021, we have sold approximately $103 million of our fixed maturity securities issued by the Russian Federation. Our credit exposure to fixed maturity securities issued by Ukraine is immaterial for both periods.

Investments in Corporate Debt Securities

The following table presents the industry categories of our available for sale corporate debt securities:

At December 31, (in millions)	2021			2020
	Excluding Fortitude Re Funds Withheld Assets	Fortitude Re Funds Withheld Assets	Total	Excluding Fortitude Re Funds Withheld Assets	Fortitude Re Funds Withheld Assets	Total
Industry Category:
Financial Institutions	$29,317	$4,231	$33,548	$27,596	$4,324	$31,920
Utilities	17,194	4,161	21,355	16,105	4,665	20,770
Communications	7,653	1,555	9,208	7,432	1,756	9,188
Consumer noncyclical	16,870	2,906	19,776	16,929	3,593	20,522
Capital goods	5,869	884	6,753	6,207	1,023	7,230
Energy	9,626	1,797	11,423	9,685	1,833	11,518
Consumer cyclical	8,605	946	9,551	8,824	1,209	10,033
Basic materials	4,210	820	5,030	3,965	1,005	4,970
Other	19,371	4,048	23,419	17,093	4,170	21,263
Total*	$118,715	$21,348	$140,063	$113,836	$23,578	$137,414

*
At December 31, 2021 and December 31, 2020, 90% of these investments were rated investment grade.

Our investments in the energy category, as a percentage of total investments in available-for-sale fixed maturities, were 8% and 8% at December 31, 2021 and December 31, 2020, respectively. While the energy investments are primarily investment grade and are actively managed, the category continues to experience volatility that could adversely affect credit quality and fair value.

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Investments in RMBS

The following table presents our RMBS available for sale securities:

At December 31, (in millions)	2021		2020
	Fair Value	Percent of Total	Fair Value	Percent of Total
Agency RMBS	$5,909	43%	$7,420	46%
AAA	5,736		7,248
AA	173		172
A	—		—
BBB	—		—
Below investment grade	—		—
Non-rated	—		—
Alt-A RMBS	3,523	25%	4,137	25%
AAA	4		13
AA	828		932
A	40		42
BBB	63		67
Below investment grade	2,588		3,083
Non-rated	—		—
Subprime RMBS	1,522	11%	1,583	10%
AAA	—		14
AA	37		32
A	99		76
BBB	61		72
Below investment grade	1,325		1,389
Non-rated	—		—
Prime Non-Agency	1,851	13%	2,088	13%
AAA	290		514
AA	838		733
A	207		155
BBB	191		126
Below investment grade	325		560
Non-rated	—		—
Other Housing Related(a)	1,045	8%	1,019	6%
AAA	319		293
AA	497		479
A	196		197
BBB	23		25
Below investment grade	8		24
Non-rated	2		1
Total RMBS Excluding Fortitude Re Funds Withheld Assets	13,850	100%	16,247	100%
Total RMBS Fortitude Re Funds Withheld Assets	1,108		1,614
Total RMBS(a)(b)	$14,958		$17,861

(a)
Includes $4.1 billion and $5.1 billion at December 31, 2021 and December 31, 2020, respectively, of certain RMBS that had experienced deterioration in credit quality since their origination but prior to SAFG’s acquisition. These securities are currently rated as investment grade under the NAIC SVO framework. For additional discussion on Purchased Credit Impaired Securities see Note 5 to our audited consolidated financial statements.

(b)
The weighted-average expected life was five years at December 31, 2021 and five years at December 31, 2020.

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Our underwriting principles for investing in RMBS, other ABS and CLOs take into consideration the quality of the originator, the manager, the servicer, security credit ratings, underlying characteristics of the mortgages, borrower characteristics and the level of credit enhancement in the transaction.

Investments in CMBS

The following table presents our CMBS available for sale securities:

At December 31, (in millions)	2021		2020
	Fair Value	Percent of Total	Fair Value	Percent of Total
CMBS (traditional)	$8,333	81%	$7,646	77%
AAA	4,447		4,806
AA	2,675		2,112
A	446		323
BBB	408		181
Below investment grade	357		224
Non-rated	—		—
Agency	1,309	13%	1,574	16%
AAA	619		666
AA	676		894
A	—		—
BBB	14		14
Below investment grade	—		—
Non-rated	—		—
Other	669	6%	682	7%
AAA	91		89
AA	143		182
A	309		291
BBB	116		101
Below investment grade	1		1
Non-rated	9		18
Total Excluding Fortitude Re Funds Withheld Assets	10,311	100%	9,902	100%
Total Fortitude Re Funds Withheld Assets	989		1,457
Total	$11,300		$11,359

The fair value of CMBS holdings remained stable throughout 2021. The majority of our investments in CMBS are in tranches that contain substantial protection features through collateral subordination. The majority of CMBS holdings are traditional conduit transactions, broadly diversified across property types and geographical areas.

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Investments in ABS/CLOs

The following table presents our ABS/CLO available for sale securities by collateral type:

At December 31, (in millions)	2021		2020
	Fair Value	Percent of Total	Fair Value	Percent of Total
CDO - Bank Loan (CLO)	$6,318	44%	$6,569	50%
AAA	1,078		1,941
AA	3,599		3,360
A	1,494		1,192
BBB	142		76
Below investment grade	5		—
Non-rated	—		—
CDO - Other	845	6%	1,040	8%
AAA	—		—
AA	824		1,031
A	—		—
BBB	—		—
Below investment grade	21		8
Non-rated	—		1
ABS	7,275	50%	5,553	42%
AAA	418		232
AA	1,883		1,301
A	2,166		1,991
BBB	2,802		1,976
Below investment grade	4		51
Non-rated	2		2
Total Excluding Fortitude Re Funds Withheld Assets	14,438	100%	13,162	100%
Total Fortitude Re Funds Withheld Assets	1,024		942
Total	$15,462		$14,104

Unrealized Losses of Fixed Maturity Securities

The following tables show the aging of the unrealized losses on fixed maturity securities, the extent to which the fair value is less than amortized cost or cost, and the number of respective items in each category:

	Less Than or Equal to 20% of Cost(b)			Greater Than 20% to 50% of Cost(b)			Greater Than 50% of Cost(b)			Total
	Unrealized			Unrealized			Unrealized			Unrealized
Aging(a) (dollars in millions)	Cost(c)	Loss	Items(e)	Cost(c)	Loss	Items(e)	Cost(c)	Loss	Items(e)	Cost(c)	Loss(d)	Items(e)
At December 31, 2021
Investment grade bonds
0-6 months	$22,675	$476	2,549	$14	$5	3	$1	$1	1	$22,690	$482	2,553
7-11 months	1,398	69	196	4	1	2	1	1	1	1,403	71	199
12 months or more	4,932	276	684	28	8	9	—	—	—	4,960	284	693
Total	$29,005	$821	3,429	$46	$14	14	$2	$2	2	$29,053	$837	3,445
Below investment grade bonds
0-6 months	$3,902	$76	1,385	$11	$4	12	$4	$3	7	$3,917	$83	1,404
7-11 months	972	23	440	20	5	6	1	1	1	993	29	447
12 months or more	1,624	66	417	202	51	26	51	35	18	1,877	152	461
Total	$6,498	$165	2,242	$233	$60	44	$56	$39	26	$6,787	$264	2,312

144

	Less Than or Equal to 20% of Cost(b)			Greater Than 20% to 50% of Cost(b)			Greater Than 50% of Cost(b)			Total
	Unrealized			Unrealized			Unrealized			Unrealized
Aging(a) (dollars in millions)	Cost(c)	Loss	Items(e)	Cost(c)	Loss	Items(e)	Cost(c)	Loss	Items(e)	Cost(c)	Loss(d)	Items(e)
Total bonds
0-6 months	$26,577	$552	3,934	$25	$9	15	$5	$4	8	$26,607	$565	3,957
7-11 months	2,370	92	636	24	6	8	2	2	2	2,396	100	646
12 months or more	6,556	342	1,101	230	59	35	51	35	18	6,837	436	1,154
Total Excluding Fortitude Re Funds Withheld Assets	$35,503	$986	5,671	$279	$74	58	$58	$41	28	$35,840	$1,101	5,757
Total Fortitude Re Funds Withheld Assets										$4,856	$174	556
Total										$40,696	$1,275	6,313
At December 31, 2020
Investment grade bonds
0-6 months	$7,102	$130	639	$—	$—	—	$—	$—	—	$7,102	$130	639
7-11 months	2,560	$84	253	16	7	4	—	—	—	2,576	91	257
12 months or more	2,811	$77	247	37	14	8	2	1	1	2,850	92	256
Total	$12,473	$291	1,139	$53	$21	12	$2	$1	1	$12,528	$313	1,152
Below investment grade bonds
0-6 months	$779	$24	289	$9	$3	11	$6	$8	6	$794	$35	306
7-11 months	3,647	117	819	16	4	5	—	—	—	3,663	121	824
12 months or more	943	55	351	168	44	14	20	15	12	1,131	114	377
Total	$5,369	$196	1,459	$193	$51	30	$26	$23	18	$5,588	$270	1,507
Total bonds
0-6 months	$7,881	$154	928	$9	$3	11	$6	$8	6	$7,896	$165	945
7-11 months	6,207	201	1,072	32	11	9	—	—	—	6,239	212	1,081
12 months or more	3,754	132	598	205	58	22	22	16	13	3,981	206	633
Total Excluding Fortitude Re Funds Withheld Assets	$17,842	$487	2,598	$246	$72	42	$28	$24	19	$18,116	$583	2,659
Total Fortitude Re Funds Withheld Assets										$1,324	$61	198
Total										$19,440	$644	2,857

(a)
Represents the number of consecutive months that fair value has been less than amortized cost or cost by any amount.

(b)
Represents the percentage by which fair value is less than amortized cost or cost at December 31, 2021 and December 31, 2020.

(c)
For bonds, represents amortized cost net of allowance.

(d)
The effect on Net income of unrealized losses after taxes may be mitigated upon realization because certain realized losses may result in current decreases in the amortization of certain DAC.

(e)
Item count is by CUSIP by subsidiary.

The allowance for credit losses was $5 million and $9 million for investment grade bonds, and $73 million and $122 million for below investment grade bonds as of December 31, 2021 and December 31, 2020, respectively.

Change in Unrealized Gains and Losses on Investments

The change in net unrealized gains and losses on investments in 2021 was primarily attributable to movements in interest rates and spreads. For 2021, net unrealized losses related to fixed maturity securities were $7.5 billion due primarily to an increase in interest rates.

145

The change in net unrealized gains and losses on investments in the year 2020 was primarily attributable to increases in the fair value of fixed maturity securities. For 2020, net unrealized gains related to fixed maturity securities were $8.9 billion due primarily to lower rates partially offset by a widening of credit spreads.

For further discussion of our investment portfolio, see Notes 4 and 5 to our audited consolidated financial statements.

Commercial Mortgage Loans

At December 31, 2021 and December 31, 2020, we had direct commercial mortgage loan exposure of $30.5 billion and $31 billion, respectively. At December 31, 2021 and December 31, 2020, we had an allowance for credit losses of $423 million and $546 million, respectively.

The following tables present the commercial mortgage loan exposure by location and class of loan based on amortized cost:

Excluding Fortitude Re Funds Withheld Assets (dollars in millions)	Number of Loans	Class						Total	Percent of Total
		Apartments	Offices	Retail	Industrial	Hotel	Others
At December 31, 2021
State:
New York	66	$1,857	$3,645	$254	$359	$71	$—	$6,186	23%
New Jersey	35	1,782	22	344	201	8	22	2,379	9
California	45	363	813	172	449	633	13	2,443	9
Texas	38	458	811	150	158	143	—	1,720	6
Florida	48	271	152	217	165	261	—	1,066	4
Illinois	15	468	348	9	45	—	21	891	3
Massachusetts	11	425	203	485	16	—	—	1,129	4
Pennsylvania	19	78	105	337	66	25	—	611	2
District of Columbia	7	344	53	—	—	12	—	409	1
Ohio	18	83	7	88	160	—	—	338	1
Other states	113	1,323	433	656	394	305	—	3,111	11
Foreign	56	3,925	1,228	714	845	315	245	7,272	27
Total*	471	$11,377	$7,820	$3,426	$2,858	$1,773	$301	$27,555	100%
Fortitude Re funds withheld assets								$2,973
Total commercial mortgages								$30,528
At December 31, 2020
State:
New York	78	$2,243	$4,200	$257	$329	$72	$—	$7,101	25%
New Jersey	35	1,496	23	318	85	8	24	1,954	7
California	49	375	839	178	438	643	32	2,505	8
Texas	39	422	825	153	88	144	—	1,632	6
Florida	59	247	153	298	167	217	—	1,082	4
Illinois	15	425	304	10	18	—	21	778	2
Massachusetts	12	426	169	497	16	—	—	1,108	4
Pennsylvania	18	79	17	344	67	25	—	532	2
District of Columbia	7	287	54	—	—	12	—	353	2
Ohio	18	84	7	92	145	—	—	328	2
Other states	144	1,343	553	830	431	374	—	3,531	14
Foreign	61	3,698	1,034	739