Insurance Liabilities

12 Months Ended

Dec. 31, 2024

3. Insurance Liabilities

Liability for Future Policy Benefits

Information regarding LFPBs for non-participating traditional and limited-payment contracts was as follows:


	Years Ended December 31,
	2024									2023									2022
	Term and Whole Life Insurance			Income Annuities			Structured Settlement and Pension Risk Transfer Annuities			Term and Whole Life Insurance			Income Annuities			Structured Settlement and Pension Risk Transfer Annuities			Term and Whole Life Insurance			Income Annuities			Structured Settlement and Pension Risk Transfer Annuities
	(Dollars in millions)
Present value of expected net premiums:
Balance, beginning of year	$	2,899		$	—		$	—		$	2,804		$	—		$	—		$	3,212		$	—		$	—
Beginning balance at original discount rate	3,162			—			—			3,146			—			—			2,964			—			—
Effect of model refinements	4			—			—			—			—			—			121			—			—
Effect of changes in cash flow assumptions	146			—			—			206			—			—			159			—			—
Effect of actual variances from expected experience	8			—			—			(17)			—			—			114			—			—
Adjusted beginning of year balance	3,320			—			—			3,335			—			—			3,358			—			—
Issuances	67			—			—			93			—			—			93			—			—
Interest accrual	110			—			—			108			—			—			112			—			—
Net premiums collected	(387)			—			—			(374)			—			—			(417)			—			—
Ending balance at original discount rate	3,110			—			—			3,162			—			—			3,146			—			—
Effect of changes in discount rate assumptions	(352)			—			—			(263)			—			—			(342)			—			—
Balance, end of year	$	2,758		$	—		$	—		$	2,899		$	—		$	—		$	2,804		$	—		$	—
Present value of expected future policy benefits:
Balance, beginning of year	$	5,385		$	3,719		$	6,697		$	5,172		$	3,469		$	6,793		$	6,253		$	4,283		$	10,171
Beginning balance at original discount rate	5,905			3,993			7,085			5,816			3,848			7,410			5,682			3,817			8,165
Effect of model refinements	10			—			—			—			—			—			134			—			(278)
Effect of changes in cash flow assumptions	235			(23)			82			296			—			—			179			55			(157)
Effect of actual variances from expected experience	(5)			—			(10)			(15)			(21)			(47)			150			(21)			(23)
Adjusted beginning of year balance	6,145			3,970			7,157			6,097			3,827			7,363			6,145			3,851			7,707
Issuances	72			400			—			99			369			—			101			220			—
Interest accrual	213			148			305			211			139			314			216			144			327
Benefit payments	(522)			(397)			(586)			(502)			(342)			(592)			(646)			(367)			(624)
Ending balance at original discount rate	5,908			4,121			6,876			5,905			3,993			7,085			5,816			3,848			7,410
Effect of changes in discount rate assumptions	(663)			(393)			(758)			(520)			(274)			(388)			(644)			(379)			(617)
Balance, end of year	$	5,245		$	3,728		$	6,118		$	5,385		$	3,719		$	6,697		$	5,172		$	3,469		$	6,793
Net liability for future policy benefits, end of year	$	2,487		$	3,728		$	6,118		$	2,486		$	3,719		$	6,697		$	2,368		$	3,469		$	6,793
Less: Reinsurance recoverable, end of year	19			31			59			24			30			65			32			25			68
Net liability for future policy benefits, after reinsurance recoverable	$	2,468		$	3,697		$	6,059		$	2,462		$	3,689		$	6,632		$	2,336		$	3,444		$	6,725
Weighted-average duration of liability	7.6 years			7.9 years			11.6 years			8.8 years			8.2 years			11.6 years			8.5 years			8.5 years			11.6 years
Weighted-average interest accretion rate	3.92		%	4.04		%	4.46		%	3.91		%	3.99		%	4.46		%	3.94		%	3.89		%	4.45		%
Current discount rate	5.42		%	5.48		%	5.64		%	4.94		%	4.95		%	5.03		%	5.26		%	5.27		%	5.32		%
Gross premiums or assessments recognized during period	$	563		$	485		$	—		$	595		$	472		$	—		$	625		$	243		$	—
Expected future gross premiums, undiscounted	$	5,714		$	—		$	—		$	5,999		$	—		$	—		$	6,535		$	—		$	—
Expected future gross premiums, discounted	$	4,244		$	—		$	—		$	4,535		$	—		$	—		$	4,875		$	—		$	—
Expected future benefit payments, undiscounted	$	8,031		$	5,759		$	13,336		$	8,148		$	5,616		$	13,767		$	8,015		$	5,434		$	14,418
Expected future benefit payments, discounted	$	5,908		$	4,121		$	6,876		$	5,905		$	3,993		$	7,085		$	5,816		$	3,848		$	7,410

The measurement of LFPBs can be significantly impacted by changes in assumptions for policyholder behavior. As part of the 2024 and 2023 annual actuarial reviews (“AAR”), the Company updated assumptions regarding mortality and lapses for term and non-participating whole life insurance. The impact from changes in assumptions is presented in effect of changes in cash flow assumptions in the table above.

Information regarding the additional insurance liabilities for universal life-type contracts with secondary guarantees was as follows:


	Years Ended December 31,
	2024			2023			2022
	(Dollars in millions)
Balance, beginning of year	$	7,607		$	6,935		$	7,168
Beginning balance before the effect of unrealized gains and losses	7,784			7,175			6,731
Effect of changes in cash flow assumptions	895			52			(37)
Effect of actual variances from expected experience	167			145			179
Adjusted beginning of year balance	8,846			7,372			6,873
Interest accrual	406			357			333
Net assessments collected	446			414			416
Benefit payments	(421)			(359)			(447)

Ending balance before the effect of unrealized gains and losses	9,277			7,784			7,175
Effect of unrealized gains and losses	(291)			(177)			(240)
Balance, end of year	8,986			7,607			6,935
Less: Reinsurance recoverable, end of year	1,535			1,438			1,384
Net additional liability, after reinsurance recoverable	$	7,451		$	6,169		$	5,551
Weighted-average duration of liability	6.6 years			6.7 years			6.7 years
Weighted-average interest accretion rate	4.94		%	4.92		%	4.90		%
Gross assessments recognized during period	$	1,083		$	1,064		$	1,070

The measurement of liabilities for secondary guarantees can be significantly impacted by changes in assumptions for policyholder behavior, as well as the expected general account rate of return, which is driven by the Company’s assumption for long-term treasury yields. The Company’s practice of projecting treasury yields uses a mean reversion approach that assumes that long-term interest rates are less influenced by short-term fluctuations and are only changed when sustained interim deviations are expected. As part of the 2024 and 2023 AARs, the Company updated assumptions regarding policyholder behavior, including mortality, premium persistency, lapses and withdrawals. In 2024, the Company also increased the long-term general account earned rate, driven by an increase in the mean reversion rate, from 3.75% to 4.00%. The impact from changes in assumptions, excluding the effects on the ULSG liability for profits followed by losses, is presented in effect of changes in cash flow assumptions in the table above.

A reconciliation of the net LFPBs for non-participating traditional and limited-payment contracts and the additional insurance liabilities for universal life-type contracts with secondary guarantees reported in the preceding rollforward tables to LFPBs on the consolidated balance sheets was as follows at:


	December 31,
	2024		2023
	(In millions)
Liabilities reported in the preceding rollforward tables	$	21,319	$	20,509
Long-term care insurance (1)	5,190		5,581
ULSG liabilities, including liability for profits followed by losses	875		2,427
Participating whole life insurance (2)	2,969		2,849
Deferred profit liabilities	428		475
Other	304		308
Total liability for future policy benefits	$	31,085	$	32,149

_______________

(1)Includes liabilities related to fully reinsured individual long-term care insurance. See Notes 2 and 7.

(2)Participating whole life insurance uses an interest assumption based on the non-forfeiture interest rate, ranging from 3.5% to 4.0%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and also includes a liability for terminal dividends. Participating whole life insurance represented 3% of the Company’s life insurance in-force at both December 31, 2024 and 2023, and 39% and 40% of gross traditional life insurance premiums for the years ended December 31, 2024 and 2023, respectively.

Policyholder Account Balances

Information regarding policyholder account balances was as follows:


	Universal Life Insurance			Variable Annuities (1)			Index-linked Annuities			Fixed Rate Annuities			ULSG			Company-Owned Life Insurance (1)
	(Dollars in millions)
Year Ended December 31, 2024
Balance, beginning of year	$	1,980		$	4,111		$	41,627		$	14,672		$	5,052		$	653
Premiums and deposits	229			73			8,228			1,127			645			—
Surrenders and withdrawals	(56)			(616)			(5,532)			(1,356)			(23)			—
Benefit payments	(46)			(93)			(324)			(345)			(70)			(9)
Net transfers from (to) separate account	32			102			—			—			—			500
Interest credited	82			109			673			567			163			29
Policy charges	(193)			(19)			(23)			—			(988)			(7)
Changes related to embedded derivatives	—			—			3,956			—			—			—

Balance, end of year	$	2,028		$	3,667		$	48,605		$	14,665		$	4,779		$	1,166
Weighted-average crediting rate (2)	4.10		%	2.81		%	1.79		%	3.84		%	3.32		%	3.63		%
Year Ended December 31, 2023
Balance, beginning of year	$	2,100		$	4,664		$	33,897		$	14,274		$	5,307		$	641
Premiums and deposits	210			75			7,183			2,694			660			—
Surrenders and withdrawals	(129)			(647)			(3,732)			(2,405)			(23)			—
Benefit payments	(59)			(101)			(240)			(377)			(85)			(8)
Net transfers from (to) separate account	18			14			—			—			—			1
Interest credited	40			129			445			486			208			28
Policy charges	(200)			(23)			(11)			—			(1,015)			(9)
Changes related to embedded derivatives	—			—			4,085			—			—			—

Balance, end of year	$	1,980		$	4,111		$	41,627		$	14,672		$	5,052		$	653
Weighted-average crediting rate (2)	2.03		%	2.91		%	1.47		%	3.31		%	4.02		%	4.33		%
Year Ended December 31, 2022
Balance, beginning of year	$	2,134		$	4,475		$	32,000		$	11,849		$	5,569		$	646
Premiums and deposits	199			145			6,632			3,676			697			—
Surrenders and withdrawals	(49)			(453)			(2,220)			(904)			(32)			—
Benefit payments	(59)			(104)			(180)			(345)			(84)			(8)
Net transfers from (to) separate account	21			131			—			—			—			(13)
Interest credited	56			493			392			(2)			197			23
Policy charges	(202)			(23)			(8)			—			(1,040)			(7)
Changes related to embedded derivatives	—			—			(2,719)			—			—			—

Balance, end of year	$	2,100		$	4,664		$	33,897		$	14,274		$	5,307		$	641
Weighted-average crediting rate (2)	2.65		%	10.91		%	1.16		%	(0.02)		%	3.62		%	3.41		%

_______________

(1)Includes liabilities related to separate account products where the contract holder elected a general account investment option.

(2)Excludes the effects of embedded derivatives related to index-linked crediting rates.

A reconciliation of policyholder account balances reported in the preceding rollforward table to the liability for policyholder account balances on the consolidated balance sheets was as follows at:


	December 31,
	2024		2023
	(In millions)
Policyholder account balances reported in the preceding rollforward table	$	74,910	$	68,095
Funding agreements classified as investment contracts	11,002		11,115
Institutional group annuities	370		—
Other investment contract liabilities	880		983
Total policyholder account balances	$	87,162	$	80,193

The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums was as follows at:


Range of Guaranteed Minimum Crediting Rate	At Guaranteed Minimum		1 to 50 Basis Points Above		51 to 150 Basis Points Above		Greater than 150 Basis Points Above		Total
	(In millions)
December 31, 2024
Annuities (1):
Less than 2.00%	$	516	$	112	$	230	$	8,749	$	9,607
2.00% to 3.99%	6,633		439		416		334		7,822
Greater than 3.99%	781		—		—		—		781
Total	$	7,930	$	551	$	646	$	9,083	$	18,210
Life insurance (2) (3):
Less than 2.00%	$	—	$	—	$	—	$	308	$	308
2.00% to 3.99%	—		471		47		128		646
Greater than 3.99%	1,020		—		—		—		1,020
Total	$	1,020	$	471	$	47	$	436	$	1,974
ULSG (3):
Less than 2.00%	$	—	$	—	$	—	$	—	$	—
2.00% to 3.99%	1,052		1,386		1,602		238		4,278
Greater than 3.99%	484		—		—		—		484
Total	$	1,536	$	1,386	$	1,602	$	238	$	4,762
December 31, 2023
Annuities (1):
Less than 2.00%	$	645	$	204	$	301	$	7,632	$	8,782
2.00% to 3.99%	8,125		233		201		307		8,866
Greater than 3.99%	872		—		—		—		872
Total	$	9,642	$	437	$	502	$	7,939	$	18,520
Life insurance (2) (3):
Less than 2.00%	$	—	$	—	$	—	$	236	$	236
2.00% to 3.99%	—		441		49		132		622
Greater than 3.99%	1,077		—		—		—		1,077
Total	$	1,077	$	441	$	49	$	368	$	1,935
ULSG (3):
Less than 2.00%	$	—	$	—	$	—	$	—	$	—
2.00% to 3.99%	1,134		1,485		1,663		254		4,536
Greater than 3.99%	506		—		—		—		506
Total	$	1,640	$	1,485	$	1,663	$	254	$	5,042

_______________

(1)Includes policyholder account balances for fixed rate annuities and the fixed account portion of variable annuities.

(2)Includes policyholder account balances for retained asset accounts, universal life policies and the fixed account portion of universal variable life insurance policies.

(3)Amounts are gross of policy loans.

See Note 5 for information regarding net amount at risk and cash surrender values.

Obligations Under Funding Agreements

Institutional Spread Margin Business

Brighthouse Life Insurance Company has issued unsecured fixed and floating rate funding agreements to certain special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. The Company had obligations outstanding under these funding agreements of $5.5 billion at both December 31, 2024 and 2023.

Brighthouse Life Insurance Company established a secured funding agreement-backed repurchase agreement program in January 2024. Brighthouse Life Insurance Company may enter into repurchase agreements with bank counterparties and the proceeds of the repurchase agreements are then used by a special purpose entity to purchase funding agreements from Brighthouse Life Insurance Company. The Company had obligations under this program of $500 million at December 31, 2024.

Brighthouse Life Insurance Company has a secured funding agreement program with the Federal Home Loan Bank (“FHLB”) of Atlanta and the Federal Agricultural Mortgage Corporation and its affiliate Farmer Mac Mortgage Securities Corporation (“Farmer Mac”). Funding agreements are issued to FHLB and Farmer Mac in exchange for cash, for which these programs have been granted liens on certain assets, some of which are in their custody to collateralize the Company’s obligations under the funding agreements. Upon any event of default by the Company, the program recovery on the collateral is limited to the amount of the Company’s liabilities to FHLB and Farmer Mac, respectively. The Company had obligations outstanding under these programs of $5.0 billion and $5.1 billion at December 31, 2024 and 2023, respectively.

See Note 8 for information on invested assets pledged as collateral in connection with funding agreements.

Inactive Funding Agreement Programs

Brighthouse Life Insurance Company had obligations outstanding under inactive funding agreement programs of $25 million and $525 million at December 31, 2024 and 2023, respectively.