See Note 2 – “Significant Accounting Policies and Pronouncements” for a detailed discussion of the accounting treatment for derivative instruments, including embedded derivatives. See Note 13 – “Fair Value of Assets and Liabilities” for additional disclosures related to the fair value hierarchy for derivative instruments, including embedded derivatives.

Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates, to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches) and to manage the risk of cash flows of liabilities that are variable based on a benchmark rate. With an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between two rates, which can be either fixed-rate or floating-rate interest amounts, tied to an agreed-upon notional principal amount. These transactions are executed pursuant to master agreements that provide for a single net payment or individual gross payments at each due date.

Total return swaps are used by the Company to exchange, at specified intervals, the difference between the economic risk and calculated rate of return of an asset or a market index and a benchmark interest rate, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches).

Interest rate futures are used primarily to hedge minimum guarantees embedded in certain variable annuity products reinsured by the Company. With exchange-traded interest rate futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by different classes of interest rate securities. The Company posts variation margin on a daily basis in an amount equal to the difference between the daily estimated fair values of those contracts. The Company enters into exchange-traded interest rate futures with regulated futures commission merchants that are members of the exchange.

Forward bond purchase commitments are used by the Company to hedge against the variability in the anticipated cash flows required to purchase securities. With forward bond purchase commitments, the forward price is agreed upon at the time of the contract and payment for such contract is made at the future specified settlement date of the securities.

Foreign currency swaps are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. With a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a forward exchange rate calculated by reference to an agreed upon principal amount. The principal amount of each currency is exchanged at the termination of the currency swap by each party.

Foreign currency forwards are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. With a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made in a different currency at the specified future date.

Foreign currency options are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. With a foreign currency option transaction, the Company purchases an option contract that gives it the right, but not the obligation, to exchange a specified amount of one currency for a specified amount of a different currency on or before a specific date. The contracts may also be net settled in cash, based on differentials in the foreign currency exchange rate and the strike price.

Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products and as well as indexed universal life products. To hedge against adverse changes in equity indices, the Company buys put and sells index options. The contracts are net settled in cash based on differentials in the indices at the time of exercise and the strike price.

Equity futures are used primarily to economically hedge liabilities embedded in certain variable annuity products. With exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the relevant stock indices. The Company posts variation margin on a daily basis in an amount equal

The Company sells protection under single name credit default swaps and credit default swap index tranches, as well as other credit derivatives, to diversify its credit risk exposure in certain portfolios and, in combination with purchasing securities, to replicate characteristics of similar investments based on the credit quality and term of the credit default swap. Credit default triggers for indexed reference entities and single name reference entities are defined in the contracts. The Company’s maximum exposure to credit loss equals the notional value for credit default swaps. In the event of default of a referencing entity, the Company is typically required to pay the protection holder the full notional value less a recovery amount determined at auction.

The Company entered into a financial solutions transaction structured as a derivative (“other swaps”) and an offsetting non-payment insurance contract, also accounted for as a derivative, to support capital relief solutions for customers with credit risk to various reference entities. The Company’s maximum exposure to credit loss equals the notional value of the derivative. In the event of default of a referencing entity, the Company is typically required to pay the protection holder the full notional value less a recovery amount up to a contractual detachment point from the non-payment insurance.

Consumer price index (“CPI”) swaps are used by the Company primarily to economically hedge liabilities embedded in certain insurance products where value is directly affected by changes in a designated benchmark consumer price index. With a CPI swap transaction, the Company agrees with another party to exchange the actual amount of inflation realized over a specified period of time for a fixed amount of inflation determined at inception. These transactions are executed pursuant to master agreements that provide for a single net payment or individual gross payments to be made by the counterparty at each due date. Most of these swaps will require a single payment to be made by one counterparty at the maturity date of the swap.

The Company sells fee-based synthetic guaranteed investment contracts (“GICs”) to retirement plans that include investment-only, stable value contracts. The assets are owned by the trustees of such plans, who invest the assets under the terms of investment guidelines to which the Company agrees. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements. These contracts are reported as derivatives and recorded at fair value.

The Company has certain embedded derivatives that are required to be separated from their host contracts and reported as derivatives. Host contracts include reinsurance treaties structured on a modco or funds withheld basis. Additionally, the Company reinsures insurance products with benefits that are considered embedded derivatives. The changes in fair values of embedded derivatives on insurance products described below relate to changes in the fair value associated with capital market and other related assumptions.

Freestanding derivatives, except for other swaps, are included in other invested assets or other liabilities, at fair value. Other swaps are included on the consolidated balance sheets in other assets or other liabilities, at fair value. Embedded derivative assets and liabilities on modco or funds withheld arrangements are included on the consolidated balance sheets with the host contract in funds withheld at interest or funds withheld payable, at fair value. Embedded derivative liabilities on indexed products are included on the consolidated balance sheets with the host contract in interest-sensitive contract liabilities, at fair value. The following table presents the notional amounts and gross fair value of derivative instruments prior to taking into account the netting effects of master netting agreements as of December 31, 2024 and 2023 (dollars in millions):


		December 31, 2024						December 31, 2023
	Primary Underlying Risk	Notional		Carrying Value/Fair Value				Notional		Carrying Value/Fair Value
		Amount		Assets		Liabilities		Amount		Assets		Liabilities
Derivatives not designated as hedging instruments:
Interest rate swaps	Interest rate	$	1,848	$	6	$	20	$	1,609	$	4	$	3
Interest rate options	Interest rate	1,773		1		—		5,555		7		—
Total return swaps	Interest rate	956		—		14		500		24		—
Interest rate futures	Interest rate	—		—		—		97		—		—
Foreign currency swaps	Foreign currency	150		47		—		150		27		—
Foreign currency forwards	Foreign currency	1,148		9		37		809		36		—
Foreign currency options	Foreign currency	430		1		—		—		—		—
Equity options	Equity	255		5		1		253		8		—
Equity futures	Equity	209		—		—		255		—		—
Credit default swaps	Credit	2,661		4		6		1,475		5		1
Other swaps	Credit	1,300		2		2		—		—		—
CPI swaps	CPI	408		6		2		468		11		3
Synthetic GICs	Interest rate	15,362		—		—		16,135		—		—
Embedded derivatives in:
Modco or funds withheld arrangements		—		283		338		—		356		527
Indexed products		—				435		—		—		415

Total non-designated derivatives		26,500		364		855		27,306		478		949
Derivatives designated as hedging instruments:
Interest rate swaps	Interest rate	3,336		5		103		1,770		9		86
Forward bond purchase commitments	Interest rate	2,020		—		206		1,076		11		80
Foreign currency swaps	Foreign currency	2,008		7		159		809		7		64
Foreign currency forwards	Foreign currency	1,966		94		—		1,143		5		17
Total hedging derivatives		9,330		106		468		4,798		32		247
Total derivatives		$	35,830	$	470	$	1,323	$	32,104	$	510	$	1,196

The Company designates and reports the following as fair value hedges when they meet the requirements of the general accounting principles for Derivatives and Hedging: (i) certain foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets; and (ii) interest rate swaps to convert fixed rate liabilities to floating rate liabilities. The gain or loss on the hedged item attributable to a change in interest rates or foreign currency and the offsetting gain or loss on the related interest rate or foreign currency swaps for the years ended December 31, 2024, 2023 and 2022 were as follows (dollars in millions):


Derivative Type	Hedged Item	Investment Related Gains (Losses), Net				Claims and Other Policy Benefits				Interest Credited
		Derivatives		Hedged Items		Derivatives		Hedged Items		Derivatives		Hedged Items
For the Year Ended December 31, 2024:
Foreign currency swaps	Foreign-denominated fixed maturity securities	$	2	$	(4)	$	—	$	—	$	—	$	—
Interest rate swaps	Future policy benefits	—		—		(13)		7		—		—
Interest rate swaps	Interest-sensitive contract liabilities	—		—		—		—		(18)		12
For the Year Ended December 31, 2023:
Foreign currency swaps	Foreign-denominated fixed maturity securities	(2)		(2)		—		—		—		—


For the Year Ended December 31, 2022:
Foreign currency swaps	Foreign-denominated fixed maturity securities	(1)		7		—		—		—		—


Hedged Item	Carrying Amount of the Hedged Assets / (Liabilities)				Cumulative Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets / (Liabilities)		Discontinued Fair Value Hedge Adjustments Included in the Cumulative Adjustments
	December 31, 2024		December 31, 2023		December 31, 2024	December 31, 2023	December 31, 2024	December 31, 2023
Foreign-denominated fixed maturity securities	$	—	$	89	n/a	n/a	n/a	n/a
Future policy benefits	(508)		—		7	—	—	—
Interest-sensitive contract liabilities	(1,111)		(25)		11	(1)	—	1

Certain derivative instruments are designated as cash flow hedges when they meet the requirements of the general accounting principles for Derivatives and Hedging. The Company designates and accounts for the following as cash flow hedges: (i) certain interest rate swaps, in which the cash flows of assets and liabilities are variable based on a benchmark rate; (ii) certain interest rate swaps, in which floating rate assets are converted to fixed rate assets; (iii) forward bond purchase commitments; and (iv) certain foreign currency swaps, in which the cash flows of assets are denominated in different currencies, commonly referred to as cross-currency swaps.


	Amounts Included in AOCI
Balance December 31, 2021	$	(22)
Gains (losses), net deferred in other comprehensive income (loss)	(192)

Amounts reclassified to net investment income	8
Amounts reclassified to interest expense	1
Balance December 31, 2022	(205)
Gains (losses), net deferred in other comprehensive income (loss)	(26)

Amounts reclassified to net investment income	23
Amounts reclassified to interest expense	(10)
Balance December 31, 2023	(218)
Gains (losses), net deferred in other comprehensive income (loss)	(328)

Amounts reclassified to net investment income	62
Amounts reclassified to interest expense	(11)
Balance December 31, 2024	$	(495)

As of December 31, 2024, approximately $74 million of before-tax deferred net losses on derivative instruments recorded in AOCI are expected to be reclassified to net investment income during the next twelve months. For the same time period, approximately $7 million of before-tax deferred net gains on derivative instruments recorded in AOCI are expected to be reclassified to interest expense during the next twelve months.


Derivative Type	Gains (Losses) Deferred in OCI		Gains (Losses) Reclassified into Income from AOCI
For the year ended December 31, 2024:			Net Investment Income		Interest Expense
Interest rate	$	(180)	$	(11)	$	11
Foreign currency	(148)		(51)		—

Total	$	(328)	$	(62)	$	11

For the year ended December 31, 2023:
Interest rate	$	18	$	(7)	$	10
Foreign currency	(44)		(16)		—

Total	$	(26)	$	(23)	$	10

For the year ended December 31, 2022:
Interest rate	$	(187)	$	—	$	(1)
Foreign currency	(5)		(8)		—

Total	$	(192)	$	(8)	$	(1)

For the years ended December 31, 2024, 2023 and 2022, there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

The Company uses foreign currency forwards to hedge a portion of its net investment in certain foreign operations against adverse movements in exchange rates. The following table illustrates the Company’s net investments in foreign operations (“NIFO”) hedges and the gains (losses) deferred in OCI for the years ended December 31, 2024, 2023 and 2022 (dollars in millions):

in AOCI would be reclassified to the consolidated statements of income. A pro rata portion would be reclassified upon partial sale of a hedged foreign operation. There were no sales or substantial liquidations of net investments in foreign operations that would have required the reclassification of gains or losses from AOCI into investment income during the periods presented.

The Company uses various other derivative instruments for risk management purposes that either do not qualify or have not been elected for hedge accounting treatment. The gain or loss related to the change in fair value for these derivative instruments is recognized in investment related gains (losses), net, except where otherwise noted.


		Gains (Losses) for the years ended December 31,
Type of Non-qualifying Derivative	Income Statement Location of Gains (Losses)	2024		2023		2022
Interest rate swaps	Investment related gains (losses), net	$	(49)	$	(15)	$	(131)
Interest rate options	Investment related gains (losses), net	(6)		(33)		3
Total return swaps	Investment related gains (losses), net	(7)		14		21
Interest rate futures	Investment related gains (losses), net	2		1		6
Foreign currency swaps	Investment related gains (losses), net	29		17		21
Foreign currency forwards	Investment related gains (losses), net	(167)		(98)		(93)
Foreign currency options	Investment related gains (losses), net	(7)		—		—
Equity options	Investment related gains (losses), net	(5)		(28)		14
Equity futures	Investment related gains (losses), net	(28)		(31)		22
Credit default swaps	Investment related gains (losses), net	15		42		(66)

CPI swaps	Investment related gains (losses), net	(4)		6		31


Subtotal		(227)		(125)		(172)
Embedded derivatives in:
Modco or funds withheld arrangements	Investment related gains (losses), net	116		(163)		(173)

Indexed products	Interest credited	(22)		17		98
Total non-qualifying derivatives		$	(133)	$	(271)	$	(247)


	2024					2023
Rating Agency Designation of Referenced Credit Obligations (1)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps (2)		Weighted Average Years to Maturity (3)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps (2)		Weighted Average Years to Maturity (3)
AAA/AA/A
Single name credit default swaps	$	(5)	$	410	17.5	$	2	$	420	18.1


BBB
Single name credit default swaps	3		150		2.3	4		165		2.8
Credit default swaps referencing indices	—		2,086		5.1	(1)		880		5.0
Subtotal	3		2,236		4.9	3		1,045		4.7
BB
Single name credit default swaps	—		5		1.5	(1)		10		2.2
B
Single name credit default swaps	—		10		1.2	—		—		0.0

Total	$	(2)	$	2,661	6.8	$	4	$	1,475	8.5

The Company has elected to include all freestanding derivatives in the table below, irrespective of whether they are subject to an enforceable master netting arrangement or a similar agreement. See Note 11 – “Investments” for information regarding the Company’s securities borrowing, lending, and repurchase/reverse repurchase agreements. See “Embedded Derivatives” above for information regarding the Company’s bifurcated embedded derivatives.


	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments/Collateral (1)		Net Amount
December 31, 2024:
Derivative assets	$	187	$	(64)	$	123	$	(123)	$	—
Derivative liabilities	550		(64)		486		(486)		—

December 31, 2023:
Derivative assets	$	154	$	(57)	$	97	$	(97)	$	—
Derivative liabilities	254		(57)		197		(197)		—

The Company may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. Generally, the credit exposure of the Company’s derivative contracts is limited to the fair value and accrued interest of non-collateralized derivative contracts in an asset position at the reporting date. As of December 31, 2024, the Company had credit exposure of $15 million.

Derivatives may be exchange-traded or they may be privately negotiated contracts, which are referred to as over-the-counter (“OTC”) derivatives. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC cleared”) and others are bilateral contracts between two counterparties. Additionally, the Company is required to pledge initial margin for certain OTC-bilateral derivative transactions. The Company manages its credit risk related to OTC derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master netting agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. The Company is only exposed to the default of the central clearing counterparties for OTC cleared derivatives, and these transactions require initial and daily variation margin collateral postings. Exchange-traded derivatives are settled on a daily basis, thereby reducing the credit risk exposure in the event of non-performance by counterparties to such financial instruments.