Future Contract Benefits

12 Months Ended

Dec. 31, 2023

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

The following table reconciles future contract benefits (in millions) to the Consolidated Balance Sheets:


	As of December 31,
	2023		2022
Payout Annuities (1)	$	2,085	$	2,004
Traditional Life (1)	3,841		3,509
Group Protection (2)	5,689		5,462
UL and Other (3)	15,000		14,818
Other Operations (4)	9,879		9,782
Other (5)	3,371		3,251
Total future contract benefits	$	39,864	$	38,826

(1) See “LFPB” below for further information.

(2) See “Liability for Future Claims” below for further information.

(3) See “Additional Liabilities for Other Insurance Benefits” below for further information.

(4) Represents future contract benefits reported in Other Operations primarily attributable to the indemnity reinsurance agreements with Protective ($5.6 billion and $5.4 billion as of December 31, 2023, and December 31, 2022, respectively) and Swiss Re ($2.2 billion and $2.3 billion as of December 31, 2023, and December 31, 2022, respectively) that are excluded from the following tables.

(5) Represents other miscellaneous reserves that are not representative of long-duration contracts and are excluded from the following tables.

LFPB

The following table summarizes the balances of and changes in the present values of expected net premiums and LFPB (in millions, except years):


	As of or For the Year Ended December 31, 2023				As of or For the Year Ended December 31, 2022
	Payout Annuities		Traditional Life		Payout Annuities		Traditional Life

Present Value of Expected Net Premiums
Balance as of beginning-of-year	$	–	$	6,063	$	–	$	6,858
Less: Effect of cumulative changes in discount
rate assumptions	–		(582)		–		883
Beginning balance at original discount rate	–		6,645		–		5,975
Effect of changes in cash flow assumptions	–		(12)		–		(484)
Effect of actual variances from expected experience	–		(303)		–		50
Adjusted balance as of beginning-of-year	–		6,330		–		5,541
Issuances	–		579		–		1,656
Interest accrual	–		244		–		222
Net premiums collected	–		(804)		–		(765)
Flooring impact of LFPB	–		(1)		–		(9)
Ending balance at original discount rate	–		6,348		–		6,645
Effect of cumulative changes in discount rate assumptions	–		(148)		–		(582)
Balance as of end-of-year	$	–	$	6,200	$	–	$	6,063

Present Value of Expected LFPB
Balance as of beginning-of-year	$	2,004	$	9,572	$	2,512	$	11,008
Less: Effect of cumulative changes in discount
rate assumptions	(263)		(785)		266		1,561
Beginning balance at original discount rate (1)	2,267		10,357		2,246		9,447
Effect of changes in cash flow assumptions	–		(29)		–		(415)
Effect of actual variances from expected experience	1		(333)		3		69
Adjusted balance as of beginning-of-year	2,268		9,995		2,249		9,101
Issuances	109		580		122		1,655
Interest accrual	86		387		84		356
Benefit payments	(191)		(732)		(188)		(755)
Ending balance at original discount rate (1)	2,272		10,230		2,267		10,357
Effect of cumulative changes in discount rate assumptions	(187)		(189)		(263)		(785)
Balance as of end-of-year	$	2,085	$	10,041	$	2,004	$	9,572

Net balance as of end-of-year	$	2,085	$	3,841	$	2,004	$	3,509
Less: reinsurance recoverables (2)	1,617		445		3		532
Net balance as of end-of-year, net of reinsurance	$	468	$	3,396	$	2,001	$	2,977

Weighted-average duration of future policyholder
benefit liability (years)	9		9		9		10

(1) Includes DPL within Payout Annuities of $56 million, $38 million and $22 million as of December 31, 2023, December 31, 2022 and December 31, 2021, respectively.

(2) Increase in Payout Annuities reinsurance recoverables driven by the reinsurance agreement with Fortitude Re effective October 1, 2023 for certain blocks of in-force life-contingent payout fixed annuities. See Note 8 for more information on the transaction.

For the year ended December 31, 2023, Payout Annuities did not have any significant assumption updates. For the year ended December 31, 2023, Traditional Life had a favorable cash flow assumption impact from updates to mortality assumptions, partially offset by an unfavorable impact from updates to policyholder lapse behavior assumptions. For the year ended December 31, 2023, Payout Annuities and Traditional Life did not have any significantly different actual experience compared to expected.

For the year ended December 31, 2022, Payout Annuities did not have any significant assumption updates. Traditional Life had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to mortality and lapse assumptions resulting in lower projected premiums and benefits, and a corresponding increase in reserves. For the year ended December 31, 2022, Payout Annuities and Traditional Life did not have any significantly different actual experience compared to expected.

The following table summarizes the discounted and undiscounted expected future gross premiums and expected future benefit payments (in millions):


	As of December 31, 2023				As of December 31, 2022
	Undiscounted		Discounted		Undiscounted		Discounted
Payout Annuities
Expected future gross premiums	$	–	$	–	$	–	$	–
Expected future benefit payments	3,483		2,085		3,472		2,004
Traditional Life
Expected future gross premiums	14,015		9,815		13,945		9,475
Expected future benefit payments	13,894		10,041		13,640		9,572

The following table summarizes the gross premiums and interest accretion (in millions) recognized in insurance premiums and benefits, respectively, on the Consolidated Statements of Comprehensive Income (Loss):


	For the Years Ended December 31,
	2023		2022		2021
Payout Annuities
Gross premiums	$	116	$	133	$	95
Interest accretion	86		84		84
Traditional Life
Gross premiums	1,252		1,211		1,103
Interest accretion	143		134		134

The following table summarizes the weighted-average interest rates:


	For the Years Ended December 31,
	2023		2022
Payout Annuities
Interest accretion rate	3.9	%	3.9	%
Current discount rate	4.9	%	5.3	%
Traditional Life
Interest accretion rate	5.0	%	5.1	%
Current discount rate	4.6	%	5.1	%

Liability for Future Claims

The following table summarizes the balances of and changes in liability for future claims (in millions, except years):


	Group Protection
	As of or For the Years Ended December 31,
	2023		2022
Balance as of beginning-of-year	$	5,462	$	5,936
Less: Effect of cumulative changes in discount
rate assumptions	(597)		262
Beginning balance at original discount rate	6,059		5,674
Effect of changes in cash flow assumptions	(27)		15
Effect of actual variances from expected
experience	(261)		(117)
Adjusted beginning-of-year balance	5,771		5,572
New incidence	1,702		1,777
Interest	159		141
Benefit payments	(1,453)		(1,431)
Ending balance at original discount rate	6,179		6,059
Effect of cumulative changes in discount
rate assumptions	(490)		(597)
Balance as of end-of-year	5,689		5,462
Less: reinsurance recoverables	123		127
Balance as of end-of-year, net of reinsurance	$	5,566	$	5,335

Weighted-average duration of liability for future
claims (years)	5		4

For the year ended December 31, 2023, we had a favorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to long-term disability and life waiver claim termination rate assumptions, partially offset by unfavorable impacts from updates to long-term disability social security offset assumptions. For the year ended December 31, 2023, we experienced more favorable reported incidence and claim terminations than assumed.

For the year ended December 31, 2022, we had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to the long-term disability incidence and severity assumptions, partially offset by favorable impacts from updates to the life waiver termination rate assumptions. For the year ended December 31, 2022, we experienced more favorable claim terminations than assumed.

The following table summarizes the discounted and undiscounted expected future benefit payments (in millions):


	As of December 31, 2023				As of December 31, 2022
	Undiscounted		Discounted		Undiscounted		Discounted
Group Protection
Expected future benefit payments	$	7,250	$	6,179	$	7,063	$	6,059


	For the Years Ended December 31,
	2023		2022		2021
Group Protection
Gross premiums	$	3,549	$	3,393	$	3,145
Interest accretion	159		141		145

The following table summarizes the weighted-average interest rates:


	For the Years Ended December 31,
	2023		2022
Group Protection
Interest accretion rate	3.0	%	2.8	%
Current discount rate	4.7	%	5.1	%

Additional Liabilities for Other Insurance Benefits

The following table summarizes the balances of and changes in additional liabilities for other insurance benefits (in millions, except years):


	UL and Other
	As of or For the Years Ended December 31,
	2023		2022
Balance as of beginning-of-year	$	14,818	$	12,556
Less: Effect of cumulative changes in shadow
balance in AOCI	(905)		1,113
Balance as of beginning-of-year, excluding
shadow balance in AOCI	15,723		11,443
Effect of changes in cash flow assumptions	173		3,108
Effect of actual variances from expected
experience	(71)		195
Adjusted beginning-of-year balance	15,825		14,746
Issuances	–		7
Interest accrual	775		626
Net assessments collected	1,210		972
Benefit payments	(588)		(628)
Balance as of end-of-year, excluding
shadow balance in AOCI	17,222		15,723
Effect of cumulative changes in shadow
balance in AOCI	(2,222)		(905)
Balance as of end-of-year	15,000		14,818
Less: reinsurance recoverables (1)	4,708		856
Balance as of end-of-year, net of reinsurance	$	10,292	$	13,962

Weighted-average duration of additional liabilities
for other insurance benefits (years)	17		17

(1) Increase in reinsurance recoverables driven by the reinsurance agreement with Fortitude Re effective October 1, 2023 for certain blocks of in-force ULSG. See Note 8 for more information on the transaction.

For the year ended December 31, 2023, we had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to policyholder lapse behavior assumptions, partially offset by a favorable impact from updates to interest rate assumptions. For the year ended December 31, 2023, we did not have any significantly different actual experience compared to expected.

For the year ended December 31, 2022, we had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review primarily from updates to policyholder lapse behavior assumptions related to UL products with secondary guarantees in the amount of $1.9 billion, net of reinsurance, after-tax, and to a lesser extent mortality and morbidity assumptions. For the year ended December 31, 2022, we had unfavorable actual mortality experience compared to expected due to ongoing effects of the COVID-19 pandemic.

The following table summarizes the gross assessments and interest accretion (in millions) recognized in insurance premiums and benefits, respectively, on the Consolidated Statements of Comprehensive Income (Loss):


	For the Years Ended December 31,
	2023		2022		2021
UL and Other
Gross assessments	$	3,219	$	2,818	$	3,150
Interest accretion	775		626		498

The following table summarizes the weighted-average interest rates:


	For the Years Ended December 31,
	2023		2022
UL and Other
Interest accretion rate	5.3	%	5.0	%