Future Contract Benefits

9 Months Ended

Sep. 30, 2024

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 September 30,		As of December 31,
	2024		2023
Payout Annuities (1)	$	2,118	$	2,084
Traditional Life (1)	3,660		3,553
Group Protection (2)	5,773		5,689
UL and Other (3)	17,214		15,752
Other Operations (4)	9,354		9,753
Other (5)	3,290		3,343
Total future contract benefits	$	41,409	$	40,174

(1) See liability for future policy benefits (“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 as of September 30, 2024, and December 31, 2023) and Swiss Re ($1.8 billion and $2.1 billion as of September 30, 2024, and December 31, 2023, 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 Nine Months Ended September 30, 2024				As of or For the Nine Months Ended September 30, 2023
	Payout Annuities		Traditional Life		Payout Annuities		Traditional Life

Present Value of Expected Net Premiums
Balance as of beginning-of-year	$	–	$	6,084	$	–	$	5,896
Less: Effect of cumulative changes in discount
rate assumptions	–		(152)		–		(584)
Beginning balance at original discount rate	–		6,236		–		6,480
Effect of changes in cash flow assumptions	–		(3)		–		(5)
Effect of actual variances from expected experience	–		(29)		–		(262)
Adjusted balance as of beginning-of-year	–		6,204		–		6,213
Issuances	–		289		–		460
Interest accrual	–		184		–		176
Net premiums collected	–		(581)		–		(588)
Flooring impact of LFPB	–		1		–		3
Ending balance at original discount rate	–		6,097		–		6,264
Effect of cumulative changes in discount
rate assumptions	–		(23)		–		(527)
Balance as of end-of-period	$	–	$	6,074	$	–	$	5,737

Present Value of Expected LFPB
Balance as of beginning-of-year	$	2,084	$	9,637	$	2,003	$	9,086
Less: Effect of cumulative changes in discount
rate assumptions	(187)		(202)		(263)		(793)
Beginning balance at original discount rate (1)	2,271		9,839		2,266		9,879
Effect of changes in cash flow assumptions	–		(105)		17		(21)
Effect of actual variances from expected experience	3		(41)		(1)		(289)
Adjusted balance as of beginning-of-year	2,274		9,693		2,282		9,569
Issuances	78		289		83		460
Interest accrual	65		285		64		270
Benefit payments	(152)		(530)		(142)		(479)
Ending balance at original discount rate (1)	2,265		9,737		2,287		9,820
Effect of cumulative changes in discount
rate assumptions	(147)		(3)		(344)		(831)
Balance as of end-of-period	$	2,118	$	9,734	$	1,943	$	8,989

Net balance as of end-of-period	$	2,118	$	3,660	$	1,943	$	3,252
Less: reinsurance recoverables (2)	1,590		215		11		232
Net balance as of end-of-period, net of reinsurance	$	528	$	3,445	$	1,932	$	3,020

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

(1) Includes deferred profit liability within Payout Annuities of $60 million and $38 million as of September 30, 2024 and 2023, respectively.

(2) Increase in Payout Annuities reinsurance recoverables driven by the fourth quarter 2023 reinsurance transaction. See Note 7 for additional information.

For the nine months ended September 30, 2024, Payout Annuities did not have a significant cash flow assumption impact to net income (loss) attributable to the annual assumption review, and Traditional Life had a favorable cash flow assumption impact from updates to mortality assumptions, partially offset by an unfavorable impact from updates to policyholder behavior assumptions. For the nine months ended September 30, 2024, Payout Annuities and Traditional Life did not have any significantly different actual experience compared to expected.

For the nine months ended September 30, 2023, Payout Annuities had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review from updates to mortality assumptions, and 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 nine months ended September 30, 2023, 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 September 30, 2024				As of September 30, 2023
	Undiscounted		Discounted		Undiscounted		Discounted
Payout Annuities
Expected future gross premiums	$	–	$	–	$	–	$	–
Expected future benefit payments	3,436		2,118		3,552		1,943
Traditional Life
Expected future gross premiums	13,610		9,559		13,410		8,802
Expected future benefit payments	13,932		9,734		14,077		8,989

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 Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Payout Annuities
Gross premiums	$	40	$	16	$	84	$	88
Interest accretion	22		22		65		64
Traditional Life
Gross premiums	296		293		895		885
Interest accretion	34		31		101		94

The following table summarizes the weighted-average interest rates:


	For the Nine Months Ended September 30,
	2024		2023
Payout Annuities
Interest accretion rate	4.0	%	3.9	%
Current discount rate	4.7	%	5.8	%
Traditional Life
Interest accretion rate	5.0	%	5.0	%
Current discount rate	4.4	%	5.6	%

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 Nine Months Ended September 30,
	2024		2023
Balance as of beginning-of-year	$	5,689	$	5,462
Less: Effect of cumulative changes in discount
rate assumptions	(490)		(597)
Beginning balance at original discount rate	6,179		6,059
Effect of changes in cash flow assumptions	(2)		(27)
Effect of actual variances from expected experience	(278)		(233)
Adjusted beginning-of-year balance	5,899		5,799
New incidence	1,236		1,267
Interest	138		122
Benefit payments	(1,125)		(1,095)
Ending balance at original discount rate	6,148		6,093
Effect of cumulative changes in discount
rate assumptions	(375)		(720)
Balance as of end-of-period	5,773		5,373
Less: reinsurance recoverables (1)	4,153		117
Balance as of end-of-period, net of reinsurance	$	1,620	$	5,256

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

(1) Increase in reinsurance recoverables driven by the second quarter 2024 reinsurance transaction. See Note 7 for additional information.

For the nine months ended September 30, 2024, we did not have a significant cash flow assumption impact to net income (loss) attributable to the annual assumption review. For the nine months ended September 30, 2024, we experienced more favorable reported incidence and claim terminations than assumed.

For the nine months ended September 30, 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 nine months ended September 30, 2023, we experienced more favorable reported incidence and claim terminations than assumed.

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


	As of September 30, 2024				As of September 30, 2023
	Undiscounted		Discounted		Undiscounted		Discounted
Group Protection
Expected future benefit payments	$	7,154	$	5,773	$	7,148	$	5,373


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Group Protection
Gross premiums	$	887	$	874	$	2,676	$	2,645
Interest accretion	45		39		138		122

The following table summarizes the weighted-average interest rates:


	For the Nine Months Ended September 30,
	2024		2023
Group Protection
Interest accretion rate	3.3	%	3.0	%
Current discount rate	4.4	%	5.7	%

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 Nine Months Ended September 30,
	2024		2023
Balance as of beginning-of-year	$	15,752	$	14,777
Less: Effect of cumulative changes in shadow
balance in AOCI	(853)		(905)
Balance as of beginning-of-year, excluding
shadow balance in AOCI	16,605		15,682
Effect of changes in cash flow assumptions	207		173
Effect of actual variances from expected experience	170		(28)
Adjusted beginning-of-year balance	16,982		15,827
Interest accrual	623		573
Net assessments collected	946		334
Benefit payments	(718)		(473)
Balance as of end-of-period, excluding shadow
balance in AOCI	17,833		16,261
Effect of cumulative changes in shadow
balance in AOCI	(619)		(1,362)
Balance as of end-of-period	17,214		14,899
Less: reinsurance recoverables (1)	10,499		1,897
Balance as of end-of-period, net of reinsurance	$	6,715	$	13,002

Weighted-average duration of additional liabilities
for other insurance benefits (years)	16		17

(1) Increase in reinsurance recoverables driven by the fourth quarter 2023 reinsurance transaction, for certain blocks of in-force ULSG. See Note 7 for additional information.

For the nine months ended September 30, 2024, we had an unfavorable cash flow assumption impact to net income (loss) attributable to the annual assumption review for updates to policyholder behavior and mortality assumptions that were partially offset by updates to capital market assumptions. For the nine months ended September 30, 2024, we had unfavorable actual mortality experience compared to expected on reinsured and retained business.

For the nine months ended September 30, 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 nine months ended September 30, 2023, we did not have any significantly different actual experience compared to expected.

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 Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
UL and Other
Gross assessments	$	751	$	337	$	2,290	$	1,794
Interest accretion	213		197		623		573

The following table summarizes the weighted-average interest rates:


	For the Nine Months Ended September 30,
	2024		2023
UL and Other
Interest accretion rate	5.4	%	5.1	%