Reinsurance (Tables)

6 Months Ended

Jun. 30, 2023

Reinsurance Impact on Statements of Financial Position

Reinsurance amounts included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as of June 30, 2023 and December 31, 2022 were as follows:


	June 30, 2023		December 31, 2022
	(in thousands)
Reinsurance recoverables(1)	$	37,667,480	$	37,096,562
Policy loans	(1,054,894)		(1,011,112)
Deferred policy acquisition costs(1)	(3,270,979)		(3,343,270)
Deferred sales inducements(1)	(36,745)		(38,146)
Market risk benefit assets(1)	1,174,612		543,177
Other assets(1)	1,648,435		1,146,794
Policyholders’ account balances(1)	6,245,990		7,157,639
Future policy benefits(1)	6,747,348		6,320,863
Market risk benefit liabilities(1)	230,773		120,916
Other liabilities(1)	3,793,074		2,891,433

(1) Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Unaffiliated reinsurance amounts included in the table above and in the Company's Unaudited Interim Consolidated Statements of Financial Position were as follows:


	June 30, 2023		December 31, 2022
	(in thousands)
Deferred policy acquisition costs(1)	$	84,646	$	111,379
Market risk benefit assets(1)	752,567		64,738
Other assets	1,540,310		1,034,000
Policyholders’ account balances(1)	1,986,974		2,771,961
Future policy benefits	315		0
Market risk benefit liabilities(1)	118,963		40,731
Other liabilities	1,656,479		820,185

(1) Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Reinsurance Recoverable by Counterparty

Reinsurance recoverables by counterparty are broken out below:


	June 30, 2023		December 31, 2022(1)
	(in thousands)
PAR U	$	15,418,859	$	15,051,337

PURC	7,228,567		6,928,950
PARCC	2,360,934		2,437,589
GUL Re	3,133,194		3,124,697
PAR Term	2,008,158		2,040,599
Prudential Insurance	1,121,635		986,013

Term Re	1,938,351		1,830,197
Lotus Re	2,007,253		1,952,215
DART	670,394		578,462

Unaffiliated	1,780,135		2,166,503
Total reinsurance recoverables	$	37,667,480	$	37,096,562

(1) Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Reinsurance Impact on Statements of Operations and Comprehensive Income (Loss)

Reinsurance amounts, included in the Company’s Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Premiums:
Direct(1)	$	476,472	$	470,923	$	938,539	$	944,344
Assumed	34		(9,474)		(122)		(8,077)
Ceded(1)	(386,541)		(407,125)		(771,796)		(812,438)
Net premiums(1)	89,965		54,324		166,621		123,829
Policy charges and fee income:
Direct(1)	749,037		757,637		1,484,975		1,548,536
Assumed(1)	148,479		158,744		301,079		305,550
Ceded(1)	(533,980)		(517,626)		(1,036,027)		(1,366,151)
Net policy charges and fee income(1)	363,536		398,755		750,027		487,935


	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Net investment income:
Direct	402,761	195,480	753,084	390,991
Assumed	343	365	686	818
Ceded	(10,029)	(3,717)	(11,245)	(20,381)
Net investment income	393,075	192,128	742,525	371,428
Asset administration fees:
Direct	80,952	88,655	161,308	186,112
Assumed	0	0	0	0
Ceded	(24,164)	(16,865)	(40,318)	(35,090)
Net asset administration fees	56,788	71,790	120,990	151,022
Other income (loss):
Direct	79,657	(325,563)	305,391	(674,251)
Assumed	(56)	(2,548)	(349)	(2,509)
Ceded(1)	25,857	21,472	45,263	43,038

Net Other income (loss)(1)	105,458	(306,639)	350,305	(633,722)
Realized investment gains (losses), net:
Direct(1)	(88,715)	614,376	(334,638)	1,125,198
Assumed(1)	82,278	(281,646)	220,944	(485,630)
Ceded(1)	14,131	27,489	709	73,932
Realized investment gains (losses), net(1)	7,694	360,219	(112,985)	713,500
Change in value of market risk benefits, net of related hedging gain (loss):
Direct(1)	174,084	(556,282)	207,204	(727,637)
Assumed(1)	2,774	0	(3,443)	0
Ceded(1)	(215,745)	(161,187)	(222,446)	(427,700)
Net change in value of market risk benefits, net of related hedging gain (loss)(1)	(38,887)	(717,469)	(18,685)	(1,155,337)
Policyholders’ benefits (including change in reserves):
Direct(1)	848,495	726,165	1,727,280	1,580,324
Assumed(1)	332,048	326,171	649,335	579,208
Ceded(1)	(1,033,582)	(957,887)	(2,124,472)	(1,879,674)
Net policyholders’ benefits (including change in reserves)(1)	146,961	94,449	252,143	279,858
Change in estimates of liability for future policy benefits:
Direct(1)	31,146	1,828,707	(17,355)	1,818,725
Assumed(1)	23,844	707,485	25,651	689,394
Ceded(1)	(56,123)	(2,487,545)	(13,831)	(2,462,319)
Net change in estimates of liability for future policy benefits(1)	(1,133)	48,647	(5,535)	45,800
Interest credited to policyholders’ account balances:
Direct(1)	215,973	188,115	438,548	333,985
Assumed	27,957	29,601	66,463	102,103
Ceded(1)	(100,114)	(108,798)	(200,973)	(215,151)
Net interest credited to policyholders’ account balances(1)	143,816	108,918	304,038	220,937
Reinsurance expense allowances and general and administrative expenses, net of capitalization and amortization(1)	(105,195)	(101,295)	(223,025)	(218,652)

(1) Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Unaffiliated reinsurance assumed and ceded amounts included in the table above and in the Company's Unaudited Interim Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022(1)		2023		2022(1)
	(in thousands)
Premiums:
Assumed(2)	$	34	$	(13,448)	$	(132)	$	(13,408)
Ceded(2)	(16,802)		(11,048)		(33,377)		(22,570)

Policy charges and fee income:
Assumed	383		11,421		923		11,421
Ceded	(38,338)		(19,959)		(62,276)		(38,257)

Net investment income:
Ceded	1,993		8,650		12,913		4,317

Asset administration fees:
Ceded	(7,740)		0		(7,740)		0

Other income (loss):
Assumed	55		(2,549)		(238)		(2,510)
Ceded	8,031		0		9,653		0

Realized investment gains (losses), net:
Assumed	82,278		(281,645)		220,944		(281,645)
Ceded(2)	13,952		26,826		(629)		72,776

Change in value of market risk benefits, net of related hedging gain (loss):
Assumed(2)	2,774		0		(3,443)		0
Ceded(2)	(75,325)		(35,629)		(80,098)		(86,502)

Policyholders’ benefits (including change in reserves):
Assumed	189		1,245		280		1,354
Ceded(2)	(36,118)		(24,551)		(63,820)		(43,042)

Change in estimates of liability for future policy benefits:
Ceded	(416)		(6,594)		(416)		(6,594)

Interest credited to policyholders’ account balances:
Assumed	(2,370)		(2,781)		5,099		(2,781)
Ceded	(85)		0		(85)		0

(1) Prior period has been reclassified to conform to the current period presentation

(2) Prior period amounts adjusted for the implementation of ASU 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts.

Gross and Net Life Insurance in Force

The gross and net amounts of life insurance face amount in force as of June 30, 2023 and 2022 were as follows:


	2023		2022
	(in thousands)
Direct gross life insurance face amount in force	$	1,107,571,392	$	1,086,899,612
Assumed gross life insurance face amount in force	36,059,164		37,151,725
Reinsurance ceded	(1,015,213,859)		(1,012,351,998)
Net life insurance face amount in force	$	128,416,697	$	111,699,339