Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

2. Segment Information

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

Annuities

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

Life

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

Run-off

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

Corporate & Other

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

Financial Measures and Segment Accounting Policies

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

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

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

•Net investment gains (losses);

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

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

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

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

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

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

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

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

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

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

	Three Months Ended March 31, 2022
	Annuities		Life		Run-off		Corporate & Other		Total
	(In millions)
Pre-tax adjusted earnings	$	374	$	39	$	19	$	(39)	$	393
Provision for income tax expense (benefit)	71		8		4		(5)		78
Post-tax adjusted earnings	303		31		15		(34)		315
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—		—
Adjusted earnings	$	303	$	31	$	15	$	(34)	315
Adjustments for:
Net investment gains (losses)									(67)
Net derivative gains (losses)									555
Other adjustments to net income (loss)									(38)
Provision for income tax (expense) benefit									(94)
Net income (loss) attributable to Brighthouse Life Insurance Company									$	671
Interest revenue	$	553	$	140	$	401	$	47
Interest expense	$	—	$	—	$	—	$	17

	Three Months Ended March 31, 2021
	Annuities		Life		Run-off		Corporate & Other		Total
	(In millions)
Pre-tax adjusted earnings	$	396	$	141	$	85	$	(66)	$	556
Provision for income tax expense (benefit)	75		29		9		(12)		101
Post-tax adjusted earnings	321		112		76		(54)		455
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—		—
Adjusted earnings	$	321	$	112	$	76	$	(54)	455
Adjustments for:
Net investment gains (losses)									12
Net derivative gains (losses)									(1,387)
Other adjustments to net income (loss)									225
Provision for income tax (expense) benefit									242
Net income (loss) attributable to Brighthouse Life Insurance Company									$	(453)
Interest revenue	$	547	$	150	$	463	$	14
Interest expense	$	—	$	—	$	—	$	17

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

	Three Months Ended March 31,
	2022		2021
	(In millions)
Annuities	$	1,135	$	1,147
Life	276		324
Run-off	562		628
Corporate & Other	66		35
Adjustments	540		(1,320)
Total	$	2,579	$	814

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

	March 31, 2022		December 31, 2021
	(In millions)
Annuities	$	163,983	$	174,489
Life	17,600		18,190
Run-off	34,059		37,069
Corporate & Other	17,864		17,507
Total	$	233,506	$	247,255