Future Policy Benefits (Tables)

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Liability for Future Policy Benefit, Activity

Liability for Future Policy Benefits – Traditional Business

The following tables provide the balances of and changes in the Company’s liability for future policy benefits for long-duration reinsurance contracts for its Traditional business, which primarily consists of individual life, group life and critical illness reinsurance for the three months ended March 31, 2023 and 2022 (dollars in millions):

Three months ended March 31, 2023:	U.S. and Latin America – Traditional			Canada – Traditional			Europe, Middle East and Africa – Traditional			Asia Pacific – Traditional
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate	$	74,207		$	21,330		$	14,244		$	40,506
Effect of changes in cash flow assumptions	—			—			—			(8)
Effect of actual variances from expected experience	(103)			97			(256)			128
Adjusted balance, beginning of year	74,104			21,427			13,988			40,626
Issuances (1)	1,016			110			382			619
Interest accrual (2)	851			182			119			256
Net premiums collected (3)	(1,229)			(231)			(344)			(490)
Derecognition (4)	(35)			—			—			—
Foreign currency translation	—			46			184			(113)
Ending balance at original discount rate	74,707			21,534			14,329			40,898
Effect of changes in discount rate assumptions	(4,074)			(4,376)			(2,515)			(11,029)
Balance, end of period	$	70,633		$	17,158		$	11,814		$	29,869
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate	$	85,285		$	24,655		$	15,454		$	44,785
Effect of changes in cash flow assumptions	—			—			—			(8)
Effect of actual variances from expected experience	(79)			98			(258)			121
Adjusted balance, beginning of year	85,206			24,753			15,196			44,898
Issuances (1)	1,018			110			382			619
Interest accrual (2)	981			233			127			293
Benefit payments (5)	(1,486)			(256)			(331)			(458)
Derecognition (4)	(54)			—			—			—
Foreign currency translation	1			56			201			(125)
Ending balance at original discount rate	85,666			24,896			15,575			45,227
Effect of changes in discount rate assumptions	(5,188)			(3,607)			(2,686)			(12,914)
Balance, end of period	$	80,478		$	21,289		$	12,889		$	32,313
Liability for future policy benefits	$	9,845		$	4,131		$	1,075		$	2,444
Less: reinsurance recoverable	(417)			(277)			(37)			(99)
Net liability for future policy benefits	$	9,428		$	3,854		$	1,038		$	2,345
Weighted-average duration of the liability (in years)	12			15			8			16
Weighted-average interest accretion rate	4.7		%	3.6		%	3.4		%	2.6		%
Weighted-average current discount rate	4.9		%	4.7		%	5.4		%	4.3		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

Three months ended March 31, 2022:	U.S. and Latin America – Traditional			Canada – Traditional			Europe, Middle East and Africa – Traditional			Asia Pacific – Traditional
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate	$	73,447		$	21,989		$	14,440		$	37,943
Effect of changes in cash flow assumptions	—			—			—			—
Effect of actual variances from expected experience	(33)			166			90			(1,504)
Adjusted balance, beginning of year	73,414			22,155			14,530			36,439
Issuances (1)	832			206			297			2,217
Interest accrual (2)	845			194			127			239
Net premiums collected (3)	(1,207)			(248)			(337)			(502)
Derecognition (4)	—			—			—			—
Foreign currency translation	3			235			(234)			(549)
Ending balance at original discount rate	73,887			22,542			14,383			37,844
Effect of changes in discount rate assumptions	6,120			(2,933)			(234)			(7,976)
Balance, end of period	$	80,007		$	19,609		$	14,149		$	29,868
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate	$	84,075		$	25,440		$	15,664		$	41,971
Effect of changes in cash flow assumptions	—			—			—			—
Effect of actual variances from expected experience	72			174			88			(1,501)
Adjusted balance, beginning of year	84,147			25,614			15,752			40,470
Issuances (1)	833			206			297			2,162
Interest accrual (2)	970			250			135			272
Benefit payments (5)	(1,628)			(299)			(346)			(506)
Derecognition (4)	—			—			—			—
Foreign currency translation	4			271			(264)			(563)
Ending balance at original discount rate	84,326			26,042			15,574			41,835
Effect of changes in discount rate assumptions	7,446			(1,621)			(197)			(9,362)
Balance, end of period	$	91,772		$	24,421		$	15,377		$	32,473
Liability for future policy benefits	$	11,765		$	4,812		$	1,228		$	2,605
Less: reinsurance recoverable	(572)			(322)			(36)			(115)
Net liability for future policy benefits	$	11,193		$	4,490		$	1,192		$	2,490
Weighted-average duration of the liability (in years)	13			16			10			16
Weighted-average interest accretion rate	4.7		%	3.7		%	3.5		%	2.6		%
Weighted-average current discount rate	3.9		%	4.1		%	3.7		%	3.9		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

Significant assumptions used to compute the liability for future policy benefits for the Traditional business include mortality, morbidity, lapse rates and discount rates (both accretion and current). The Company updated the underlying market data used to determine the current discount rate resulting in changes to the discount rate assumption used to measure the net liability for future policy benefits each period. The Company’s Traditional business actual-to-expected variances and the effects of changes in discount rate assumption for the three months ending March 31, 2023 and 2022 are summarized in the tables below:

Three months ended March 31, 2023:
Segment	Net liability for future policy benefits at original discount rate	Actual-to-expected variance	Impact of updating discount rate recognized in OCI	Commentary
U.S. and Latin America – Traditional	$11.0 billion	$24 million	$490 million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	1.1% decrease	0.2% increase	4.4% increase
Canada – Traditional	$3.4 billion	$1 million	$143 million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	1.1% increase	0.0% increase	4.3% increase
Europe, Middle East and Africa – Traditional	$1.2 billion	$(2) million	$(2) million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any material changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	3.0% increase	0.2% decrease	0.2% decrease
Asia Pacific – Traditional	$4.3 billion	$(7) million	$46 million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any material changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	1.2% increase	0.2% decrease	1.1% increase

Three months ended March 31, 2022:
Segment	Net liability for future policy benefits at original discount rate	Actual-to-expected variance	Impact of updating discount rate recognized in OCI	Commentary
U.S. and Latin America – Traditional	$10.4 billion	$105 million	$(2,088) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. The actual-to-expected variance was predominately related to COVID-19.
	1.8% decrease	1.0% increase	19.6% decrease
Canada – Traditional	$3.5 billion	$8 million	$(792) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	1.4% increase	0.2% increase	22.9% decrease
Europe, Middle East and Africa – Traditional	$1.2 billion	$(2) million	$(128) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	2.7% decrease	0.2% decrease	10.5% decrease
Asia Pacific – Traditional	$4.0 billion	$3 million	$(369) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	0.9% decrease	0.1% increase	9.2% decrease

Liability for Future Policy Benefits – Financial Solutions Business

The deferred profit liability related to the longevity business is presented together with the liability for future policy benefits. The following tables provide the balances of and changes in the Company’s liability for future policy benefits for its Financial Solutions business, which primarily consists of longevity reinsurance, asset-intensive products, primarily annuities and financial reinsurance for the three months ending March 31, 2023 and 2022 (dollars in millions):

Three months ended March 31, 2023:	U.S. and Latin America – Financial Solutions			Canada – Financial Solutions			Europe, Middle East and Africa – Financial Solutions			Asia Pacific – Financial Solutions
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate	$	1,671		$	3,394		$	38,782		$	1,605
Effect of changes in cash flow assumptions	—			—			—			—
Effect of actual variances from expected experience	(7)			(2)			42			—
Adjusted balance, beginning of year	1,664			3,392			38,824			1,605
Issuances (1)	146			—			3,681			1,244
Interest accrual (2)	13			27			185			6
Net premiums collected (3)	(186)			(84)			(764)			(1,260)
Derecognition (4)	—			—			—			—
Foreign currency translation	—			9			742			(21)
Ending balance at original discount rate	1,637			3,344			42,668			1,574
Effect of changes in discount rate assumptions	(223)			(336)			(8,323)			74
Balance, end of period	$	1,414		$	3,008		$	34,345		$	1,648
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate	$	5,823		$	3,447		$	44,330		$	6,561
Effect of changes in cash flow assumptions	—			—			—			—
Effect of actual variances from expected experience	(11)			(6)			31			(1)
Adjusted balance, beginning of year	5,812			3,441			44,361			6,560
Issuances (1)	154			—			3,681			1,289
Interest accrual (2)	56			28			225			18
Benefit payments (5)	(138)			(83)			(858)			(68)
Derecognition (4)	—			—			—			—
Foreign currency translation	(16)			8			852			(77)
Ending balance at original discount rate	5,868			3,394			48,261			7,722
Effect of changes in discount rate assumptions	(460)			(332)			(9,191)			(250)
Balance, end of period	$	5,408		$	3,062		$	39,070		$	7,472
Liability for future policy benefits	$	3,994		$	54		$	4,725		$	5,824
Less: reinsurance recoverable	—			—			—			—
Net liability for future policy benefits	$	3,994		$	54		$	4,725		$	5,824
Weighted-average duration of the liability (in years)	8			7			9			15
Weighted-average interest accretion rate	3.5		%	3.3		%	1.9		%	1.3		%
Weighted-average current discount rate	5.0		%	4.7		%	4.7		%	1.5		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

Three months ended March 31, 2022:	U.S. and Latin America – Financial Solutions			Canada – Financial Solutions			Europe, Middle East and Africa – Financial Solutions			Asia Pacific – Financial Solutions
Present Value of Expected Net Premiums
Beginning of year balance at original discount rate	$	228		$	3,329		$	31,973		$	1,051
Effect of changes in cash flow assumptions	—			—			—			—
Effect of actual variances from expected experience	(3)			(7)			111			47
Adjusted balance, beginning of year	225			3,322			32,084			1,098
Issuances (1)	—			581			10,932			1,325
Interest accrual (2)	1			26			185			6
Net premiums collected (3)	(7)			(88)			(799)			(613)
Derecognition (4)	—			—			—			—
Foreign currency translation	—			41			(1,175)			(77)
Ending balance at original discount rate	219			3,882			41,227			1,739
Effect of changes in discount rate assumptions	(36)			(193)			(3,365)			187
Balance, end of period	$	183		$	3,689		$	37,862		$	1,926
Present Value of Expected Future Policy Benefits
Beginning of year balance at original discount rate	$	4,628		$	3,393		$	38,196		$	6,062
Effect of changes in cash flow assumptions	—			—			—			—
Effect of actual variances from expected experience	(23)			(12)			103			48
Adjusted balance, beginning of year	4,605			3,381			38,299			6,110
Issuances (1)	—			581			10,932			1,325
Interest accrual (2)	47			27			228			17
Benefit payments (5)	(111)			(87)			(895)			(50)
Derecognition (4)	—			—			—			—
Foreign currency translation	—			42			(1,354)			(346)
Ending balance at original discount rate	4,541			3,944			47,210			7,056
Effect of changes in discount rate assumptions	107			(184)			(3,472)			51
Balance, end of period	$	4,648		$	3,760		$	43,738		$	7,107
Liability for future policy benefits	$	4,465		$	71		$	5,876		$	5,181
Less: reinsurance recoverable	—			—			—			—
Net liability for future policy benefits	$	4,465		$	71		$	5,876		$	5,181
Weighted-average duration of the liability (in years)	10			8			10			16
Weighted-average interest accretion rate	3.0		%	2.9		%	2.1		%	1.4		%
Weighted-average current discount rate	3.9		%	3.9		%	2.8		%	1.3		%

(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts.

(2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate.

(3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments.

(4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model.

(5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions.

Significant assumptions used to compute the liability for future policy benefits for the Financial Solutions business include mortality, morbidity, lapse rates and discount rates (both accretion and current). The Company updated the underlying market data used to determine the current discount rate resulting in changes to the discount rate assumption used to measure the net liability for future policy benefits. The Company’s Financial Solutions business actual-to-expected variances and the effects of changes in discount rate assumption for the three months ending March 31, 2023 and 2022 are summarized in the tables below:

Three months ended March 31, 2023:
Segment	Net liability for future policy benefits at original discount rate	Actual-to-expected variance	Impact of updating discount rate recognized in OCI	Commentary
U.S. and Latin America – Financial Solutions	$4.2 billion	$(4) million	$96 million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	1.9% increase	0.1% decrease	2.3% increase
Canada – Financial Solutions	$0.1 billion	$(4) million	$3 million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	5.7% decrease	7.5% decrease	5.7% increase
Europe, Middle East and Africa – Financial Solutions	$5.6 billion	$(11) million	$46 million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	0.8% increase	0.2% decrease	0.8% increase
Asia Pacific – Financial Solutions	$6.1 billion	$(1) million	$136 million	During the first quarter of 2023, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	24.1% increase	0.0% decrease	2.7% increase

For the three months ended March 31, 2022:
Segment	Net liability for future policy benefits at original discount rate	Actual-to-expected variance	Impact of updating discount rate recognized in OCI	Commentary
U.S. and Latin America – Financial Solutions	$4.3 billion	$(20) million	$(404) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	1.8% decrease	0.5% decrease	9.2% decrease
Canada – Financial Solutions	$0.1 billion	$(5) million	$(8) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	3.1% decrease	7.8% decrease	12.5% decrease
Europe, Middle East and Africa – Financial Solutions	$6.0 billion	$(8) million	$(613) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	3.9% decrease	0.1% decrease	9.9% decrease
Asia Pacific – Financial Solutions	$5.3 billion	$1 million	$(139) million	During the first quarter of 2022, the Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions.
	6.1% increase	0.0% increase	2.8% decrease

Future Policy Benefits Reconciliation To Balance Sheet

Reconciliation and Other Disclosures

The reconciliation of the rollforward of the liability for future policy benefits to the condensed consolidated balance sheets as of March 31, 2023 and 2022 is as follows (dollars in millions):

	March 31,
	2023		2022
Liability for future policy benefits included in the rollforwards:
Traditional:
U.S. and Latin America	$	9,845	$	11,765
Canada	4,131		4,812
Europe, Middle East and Africa	1,075		1,228
Asia Pacific	2,444		2,605
Financial Solutions:
U.S. and Latin America	3,994		4,465
Canada	54		71
Europe, Middle East and Africa	4,725		5,876
Asia Pacific	5,824		5,181
Other long-duration contracts	181		177
Claims liability and incurred but not reported claims	5,417		5,659
Unearned revenue liability	532		567
Total liability for future policy benefits	$	38,222	$	42,406

Undiscounted and Discounted Future Gross Premiums and Expected Future Benefits

The amount of undiscounted and discounted expected future gross premiums and expected future benefit payments for the liability for future policy benefits included in the rollforwards as of March 31, 2023 and 2022 is as follows (dollars in millions):

	March 31,
	2023				2022
	Undiscounted		Discounted		Undiscounted		Discounted
Expected future gross premiums
Traditional:
U.S. and Latin America	$	172,081	$	82,288	$	172,097	$	93,268
Canada	53,244		21,317		56,648		24,355
Europe, Middle East and Africa	24,591		13,611		25,517		16,254
Asia Pacific	92,305		37,986		84,355		38,094
Financial Solutions:
U.S. and Latin America	3,112		1,975		972		686
Canada	4,738		3,149		5,506		3,843
Europe, Middle East and Africa	64,424		37,636		56,874		41,655
Asia Pacific	2,977		2,478		3,280		2,840
Expected future benefit payments
Traditional:
U.S. and Latin America	$	181,123	$	80,478	$	181,789	$	91,772
Canada	56,223		21,289		60,162		24,421
Europe, Middle East and Africa	24,150		12,889		24,939		15,377
Asia Pacific	88,496		32,313		82,052		32,473
Financial Solutions:
U.S. and Latin America	9,214		5,408		7,360		4,648
Canada	4,602		3,062		5,387		3,760
Europe, Middle East and Africa	66,775		39,070		59,907		43,738
Asia Pacific	10,144		7,472		9,175		7,107

Gross Premiums And Interest Expense Liability Future Policy Benefits

The amount of gross premiums and interest expense recognized in the consolidated statements of income for the liability for future policy benefits included in the rollforwards for the three months ended March 31, 2023 and 2022 is as follows (dollars in millions):

	Gross Premiums				Interest Expense
	March 31,				March 31,
	2023		2022		2023		2022
Traditional:
U.S. and Latin America	$	1,422	$	1,397	$	130	$	125
Canada	262		272		51		56
Europe, Middle East and Africa	355		361		8		8
Asia Pacific	620		629		37		33
Financial Solutions:
U.S. and Latin America	156		8		43		46
Canada	23		23		1		1
Europe, Middle East and Africa	161		163		40		43
Asia Pacific	63		43		12		11
Total	$	3,062	$	2,896	$	322	$	323

There were no material charges incurred for the three months ended March 31, 2023 and 2022, resulting from net premiums exceeding gross premiums.