Derivative Instruments

3 Months Ended

Mar. 31, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

We maintain an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate risk, foreign currency exchange risk, equity market risk, basis risk, commodity risk and credit risk. We assess these risks by continually identifying and monitoring changes in our exposures that may adversely affect expected future cash flows and by evaluating hedging opportunities.

Derivative activities are monitored by various management committees. The committees are responsible for overseeing the implementation of various hedging strategies that are developed through the analysis of financial simulation models and other internal and industry sources. The resulting hedging strategies are incorporated into our overall risk management strategies.

See Note 13 for additional disclosures related to the fair value of our derivative instruments.

Interest Rate Contracts

We use derivative instruments as part of our interest rate risk management strategy. These instruments are economic hedges unless otherwise noted and include:

Forward-Starting Interest Rate Swaps

We use forward-starting interest rate swaps to hedge the interest rate exposure within our annuity, life insurance and retirement products.

Interest Rate Cap Corridors

We use interest rate cap corridors to provide a level of protection from the effect of rising interest rates for certain annuity contracts and life insurance products. Interest rate cap corridors involve purchasing an interest rate cap at a specific cap rate and selling an interest rate cap with a higher cap rate. For each corridor, the amount of quarterly payments, if any, is determined by the rate at which the underlying index rate resets above the original capped rate. The corridor limits the benefit the purchaser can receive as the related interest rate index

rises above the higher capped rate. There is no additional liability to us other than the purchase price associated with the interest rate cap corridor.

Interest Rate Futures

We use interest rate futures contracts to hedge the liability exposure on certain options in variable annuity and RILA products. These futures contracts require payment between our counterparty and us on a daily basis for changes in the futures index price.

Interest Rate Swap Agreements

We use interest rate swap agreements to hedge the liability exposure on certain options in variable annuity and RILA products.

We also use interest rate swap agreements designated and qualifying as cash flow hedges to hedge the interest rate risk of floating-rate bond coupon payments on certain variable-rate long-term debt and other variable-rate bonds held by replicating a fixed-rate bond.

Finally, we use interest rate swap agreements designated and qualifying as fair value hedges to hedge against changes in the fair value of certain fixed-rate long-term debt and fixed maturity securities due to interest rate risks.

Bond Forwards and Treasury and Reverse Treasury Locks

We use treasury locks designated and qualifying as cash flow hedges to hedge the interest rate exposure related to our issuance of fixed-rate securities or the anticipated future cash flows of floating-rate fixed maturity securities due to changes in interest rates. In addition, we use bond forwards and reverse treasury locks designated and qualifying as cash flow hedges to hedge the interest rate exposure related to the anticipated purchase of fixed-rate securities or the anticipated future cash flows of floating-rate fixed maturity securities due to changes in interest rates. These derivatives are primarily structured to hedge interest rate risk inherent in the assumptions used to price certain liabilities.

Foreign Currency Contracts

We use derivative instruments as part of our foreign currency risk management strategy. These instruments are economic hedges unless otherwise noted and include:

Foreign Currency Swaps

We use foreign currency swaps to hedge foreign exchange risk of investments in fixed maturity securities denominated in foreign currencies. A foreign currency swap is a contractual agreement to exchange one currency for another at specified dates in the future at a specified exchange rate.

We also use foreign currency swaps designated and qualifying as cash flow and fair value hedges to hedge foreign exchange risk of investments in fixed maturity securities denominated in foreign currencies.

Foreign Currency Forwards

We use foreign currency forwards to hedge foreign exchange risk of investments in fixed maturity securities denominated in foreign currencies. A foreign currency forward is a contractual agreement to exchange one currency for another at specified dates in the future at a specified current exchange rate.

Equity Market Contracts

We use derivative instruments as part of our equity market risk management strategy that are economic hedges and include:

Call Options Based on the S&P 500® Index and Other Indices

We use call options to hedge the liability exposure on certain options in variable annuity, RILA, fixed indexed annuity, IUL and VUL products.

Our RILA, fixed indexed annuity and IUL contracts permit the holder to elect an interest rate return or an equity market component, where interest credited to the contracts is linked to the performance of the S&P 500 Index or other indices. Policyholders may elect to rebalance index options at renewal dates. At the end of each indexed term, which can be up to six years, we have the opportunity to re-price the indexed component by establishing participation rates, caps, spreads and specified rates, subject to contractual guarantees. We use call options that are highly correlated to the portfolio allocation decisions of our policyholders, such that we are economically hedged with respect to equity returns for the current reset period.

Consumer Price Index Swaps

We use consumer price index swaps to hedge the liability exposure on certain options in fixed annuity products. Consumer price index swaps are contracts entered into at no cost and whose payoff is the difference between the consumer price index inflation rate and the fixed-rate determined as of inception.

Equity Futures

We use equity futures contracts to hedge the liability exposure on certain options in variable annuity and RILA products. These futures contracts require payment between our counterparty and us on a daily basis for changes in the futures index price.

Put Options

We use put options to hedge the liability exposure on certain options in variable annuity, RILA and VUL products. Put options are contracts that require the buyers to pay at a specified future date the amount, if any, by which a specified equity index is less than the strike rate stated in the agreement, applied to a notional amount.

Total Return Swaps

We use total return swaps to hedge the liability exposure on certain options in variable annuity, RILA and VUL products.

In addition, we use total return swaps to hedge a portion of the liability related to our deferred compensation plans. We receive the total return on a portfolio of indexes and pay a floating-rate of interest.

Credit Contracts

We use derivative instruments as part of our credit risk management strategy that are economic hedges and include:

Credit Default Swaps – Buying Protection

We use credit default swaps (“CDSs”) to hedge the liability exposure on certain options in variable annuity products.

We buy CDSs to hedge against a drop in bond prices due to credit concerns of certain bond issuers. A CDS allows us to put the bond back to the counterparty at par upon a default event by the bond issuer. A default event is defined as bankruptcy, failure to pay, obligation acceleration or restructuring.

CDSs – Selling Protection

We use CDSs to hedge the liability exposure on certain options in variable annuity products.

We sell CDSs to offer credit protection to policyholders and investors. The CDSs hedge the policyholders and investors against a drop in bond prices due to credit concerns of certain bond issuers. A CDS allows the investor to put the bond back to us at par upon a default event by the bond issuer. A default event is defined as bankruptcy, failure to pay, obligation acceleration or restructuring.

Embedded Derivatives

We have embedded derivatives that include:

RILA, Fixed Indexed Annuity and IUL Contracts Embedded Derivatives

Our RILA, fixed indexed annuity and IUL contracts permit the holder to elect an interest rate return or an equity market component, where interest credited to the contracts is linked to the performance of the S&P 500® Index or other indices. Policyholders may elect to rebalance index options at renewal dates. At the end of each indexed term, which can be up to six years, we have the opportunity to re-price the indexed component by establishing participation rates, caps, spreads and specified rates, subject to contractual guarantees. We use options that are highly correlated to the portfolio allocation decisions of our policyholders, such that we are economically hedged with respect to equity returns for the current reset period.

Reinsurance-Related Embedded Derivatives

We have certain modified coinsurance and coinsurance with funds withheld reinsurance agreements with embedded derivatives related to the withheld assets of the related funds. These derivatives are considered total return swaps with contractual returns that are attributable to various assets and liabilities associated with these reinsurance agreements.

Primary Risks Managed by Derivatives

We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the related credit exposure. Outstanding derivative instruments with off-balance-sheet risks (in millions) were as follows:

	As of March 31, 2026						As of December 31, 2025
	Notional Amounts		Fair Value				Notional Amounts		Fair Value
			Asset		Liability				Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1,570	$	8	$	10	$	1,300	$	12	$	7
Foreign currency contracts (1)	4,974		472		87		4,922		380		125
Total cash flow hedges	6,544		480		97		6,222		392		132
Fair value hedges:
Interest rate contracts (1)	833		1		7		833		1		–
Foreign currency contracts (1)	25		–		1		25		–		2
Total fair value hedges	858		1		8		858		1		2
Non-Qualifying Hedges
Interest rate contracts (1)	88,019		124		326		84,814		64		321
Foreign currency contracts (1)	322		14		3		289		12		4
Equity market contracts (1)	164,036		12,886		4,845		238,623		15,560		5,685
Credit contracts (1)	239		–		–		17		–		–
Embedded derivatives:
Reinsurance-related (2)	–		–		92		–		–		289
RILA, fixed indexed annuity
and IUL contracts (3)	–		1,332		13,444		–		1,369		15,115
Total derivative instruments	$	260,018	$	14,837	$	18,815	$	330,823	$	17,398	$	21,548

(1) These asset and liability balances are presented on a gross basis. Amounts are reported in derivative investments and other liabilities on the Consolidated Balance Sheets after the evaluation for right of offset subject to master netting agreements.

(2) Reported in funds withheld reinsurance liabilities on the Consolidated Balance Sheets.

(3) Reported in policyholder account balances and deposit assets on the Consolidated Balance Sheets.

The maturity of the notional amounts of derivative instruments (in millions) was as follows:

	Remaining Life as of March 31, 2026
	Less Than 1 Year		1 - 5 Years		6 - 10 Years		11 - 30 Years		Over 30 Years		Total
Interest rate contracts (1)	$	18,494	$	26,227	$	16,603	$	27,298	$	1,800	$	90,422
Foreign currency contracts (2)	218		1,657		1,627		1,777		42		5,321
Equity market contracts	96,298		55,709		9,887		6		2,136		164,036
Credit contracts	–		110		129		–		–		239
Total derivative instruments
with notional amounts	$	115,010	$	83,703	$	28,246	$	29,081	$	3,978	$	260,018

(1) As of March 31, 2026, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 25, 2030.

(2) As of March 31, 2026, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was June 16, 2061.

The following amounts (in millions) were recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

	Amortized Cost of the Hedged Assets (Liabilities)				Cumulative Fair Value Hedging Adjustment Included in the Amortized Cost of the Hedged Assets (Liabilities)
	As of  March 31, 2026		As of  December 31, 2025		As of  March 31, 2026		As of  December 31, 2025
Line Item in the Consolidated Balance Sheets in
which the Hedged Item is Included
Fixed maturity AFS securities, at fair value (1)	$	642	$	645	$	19	$	21
Long-term debt (2)	(987)		(989)		(112)		(114)

(1) Includes $21 million of unamortized adjustments from discontinued hedges as of March 31, 2026, and December 31, 2025.

(2) Includes $(274) million and $(278) million of unamortized adjustments from discontinued hedges as of March 31, 2026, and December 31, 2025, respectively.

The change in our unrealized gain (loss) on derivative instruments within accumulated other comprehensive income (loss) (“AOCI”) (in millions) was as follows:

	For the Three Months Ended March 31,
	2026		2025
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	450	$	638
Other comprehensive income (loss):
Unrealized holding gains (losses):
Cash flow hedges:
Interest rate contracts	(7)		5
Foreign currency contracts	69		168
Change in foreign currency exchange rate adjustment	76		(153)
Income tax benefit (expense)	(30)		(4)
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Foreign currency contracts (1)	15		15
Interest rate contracts (2)	2		3
Foreign currency contracts (3)	1		3
Income tax benefit (expense)	(4)		(4)
Balance as of end-of-period	$	544	$	637

(1) The OCI offset is reported within net investment income on the Consolidated Statements of Comprehensive Income (Loss).

(2) The OCI offset is reported within interest and debt expense on the Consolidated Statements of Comprehensive Income (Loss).

(3) The OCI offset is reported within realized gain (loss) on the Consolidated Statements of Comprehensive Income (Loss).

The effects of qualifying and non-qualifying hedges (in millions) on the Consolidated Statements of Comprehensive Income (Loss) were as follows:

Gain (Loss) Recognized in Income For the Three Months Ended March 31,

2026

2025

Realized Gain (Loss)

Net Investment Income

Interest and Debt Expense

Realized Gain (Loss)

Net Investment Income

Interest and Debt Expense

Total Line Items in which the

Effects of Fair Value or

Cash Flow Hedges are Recorded

$

466

$

1,605

$

81

$

11

$

1,462

$

80

Qualifying Hedges

Gain or (loss) on fair value hedging

relationships:

Interest rate contracts:

Hedged items

–

(1)

(2)

–

11

(15)

Derivatives designated as hedging

instruments

–

1

2

–

(11)

15

Foreign currency contracts:

Hedged items

–

(1)

–

–

1

–

Derivatives designated as hedging

instruments

–

1

–

–

(1)

–

Gain or (loss) on cash flow hedging

relationships:

Interest rate contracts:

Amount of gain or (loss) reclassified

from AOCI into income

–

–

2

–

–

3

Foreign currency contracts:

Amount of gain or (loss) reclassified

from AOCI into income

1

15

–

3

15

–

Non-Qualifying Hedges

Interest rate contracts

27

–

–

82

–

–

Foreign currency contracts

1

–

–

(1)

–

–

Equity market contracts

(995)

–

–

(1,143)

–

–

Credit contracts

–

–

–

1

–

–

Embedded derivatives:

Reinsurance-related

197

–

–

(108)

–

–

RILA, fixed indexed annuity and IUL

contracts

1,584

–

–

1,654

–

–

As of March 31, 2026, $71 million of the deferred net gains (losses) on derivative instruments in AOCI were expected to be reclassified to earnings during the next 12 months. The reclassification is impacted by both interest rates and foreign currency forward rates, as the cash flow hedges affecting the reclassification include interest rate swaps and foreign currency swaps.

For the three months ended March 31, 2026 and 2025, there were no material reclassifications to earnings due to hedged firm commitments no longer deemed probable or due to hedged forecasted transactions that had not occurred by the end of the originally specified time period.

As of March 31, 2026, and December 31, 2025, we did not have any exposure related to CDSs for which we are the seller.

Credit Risk

We are exposed to credit losses in the event of non-performance by our counterparties on various derivative contracts and reflect assumptions regarding the credit or non-performance risk. The non-performance risk is based upon assumptions for each counterparty’s credit spread over the estimated weighted average life of the counterparty exposure, less collateral held. As of March 31, 2026, the non-performance risk adjustment was zero. The credit risk associated with such agreements is minimized by entering into agreements with financial institutions with long-standing, superior performance records. Additionally, we maintain a policy of requiring derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement. We are required to maintain minimum ratings as a matter of routine practice in negotiating ISDA agreements. Under nearly all of our ISDA agreements, our insurance subsidiaries have agreed to maintain certain financial strength ratings. A downgrade below these levels could result in termination of derivative contracts, at which time any amounts payable by us would be dependent on the market value of the underlying derivative contracts. In certain transactions, we and the counterparty have entered into a credit support annex requiring either party to post collateral when net exposures exceed pre-determined thresholds. These thresholds vary by counterparty and credit rating. The amount of such exposure is essentially the net replacement cost or market value less collateral held for such agreements with each counterparty if the net market value is in our favor. We did not have any exposure as of March 31, 2026, or December 31, 2025.

The amounts recognized (in millions) by S&P credit rating of counterparty, for which we had the right to reclaim cash collateral or were obligated to return cash collateral, were as follows:

	As of March 31, 2026				As of December 31, 2025
	Collateral Posted by Counterparty		Collateral Posted to Counterparty		Collateral Posted by Counterparty		Collateral Posted to Counterparty
S&P Credit Rating of Counterparty
AA-	$	2,072	$	(129)	$	2,868	$	(4)
A+	3,836		(182)		4,612		(15)
A	43		–		64		–
A-	401		–		240		–
Total cash collateral	$	6,352	$	(311)	$	7,784	$	(19)

Balance Sheet Offsetting

Information related to the effects of offsetting on the Consolidated Balance Sheets (in millions) was as follows:

	As of March 31, 2026
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	13,317	$	1,332	$	14,649
Gross amounts offset	(4,980)		–		(4,980)
Net amount of assets	8,337		1,332		9,669
Gross amounts not offset:
Cash collateral	(6,352)		–		(6,352)
Non-cash collateral (1)	(1,985)		–		(1,985)
Net amount	$	–	$	1,332	$	1,332
Financial Liabilities
Gross amount of recognized liabilities	$	299	$	13,536	$	13,835
Gross amounts offset	(188)		–		(188)
Net amount of liabilities	111		13,536		13,647
Gross amounts not offset:
Cash collateral (2)	(111)		–		(111)
Net amount	$	–	$	13,536	$	13,536

(1) Excludes excess non-cash collateral received of $975 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

(2) Excludes excess cash collateral pledged of $200 million and excess non-cash collateral pledged of $344 million, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.

	As of December 31, 2025
	Derivative Instruments		Embedded Derivative Instruments		Total
Financial Assets
Gross amount of recognized assets	$	15,940	$	1,369	$	17,309
Gross amounts offset	(5,995)		–		(5,995)
Net amount of assets	9,945		1,369		11,314
Gross amounts not offset:
Cash collateral	(7,784)		–		(7,784)
Non-cash collateral (1)	(2,161)		–		(2,161)
Net amount	$	–	$	1,369	$	1,369
Financial Liabilities
Gross amount of recognized liabilities	$	150	$	15,404	$	15,554
Gross amounts offset	(90)		–		(90)
Net amount of liabilities	60		15,404		15,464
Gross amounts not offset:
Cash collateral	(19)		–		(19)
Non-cash collateral	(28)		–		(28)
Net amount	$	13	$	15,404	$	15,417

(1) Excludes excess non-cash collateral received of $1.6 billion, as the collateral offset is limited to the net estimated fair value of derivatives after application of netting arrangements.