See Note 2 – “Significant Accounting Policies and Pronouncements” of the Company’s 2024 Annual Report for a detailed discussion of the accounting treatment for derivative instruments, including embedded derivatives. See Note 12 – “Fair Value of Assets and Liabilities” for additional disclosures related to the fair value hierarchy for derivative instruments, including embedded derivatives.

Commonly used derivative instruments include, but are not necessarily limited to: interest rate swaps, interest rate options, total return swaps, interest rate futures, foreign currency swaps, foreign currency forwards, foreign currency options, equity options, equity futures, credit default swaps (single name and index), options on credit default index swaps, consumer price index (“CPI”) swaps, forward bond purchase commitments, synthetic guaranteed investment contracts (“GICs”), other derivatives and embedded derivatives. For detailed information on these derivative instruments and the related strategies, see Note 12 – “Derivative Instruments” of the Company’s 2024 Annual Report.

Freestanding derivatives, except for other swaps, are included in other invested assets or other liabilities, at fair value. Other swaps are included on the condensed 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 condensed 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 condensed 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 March 31, 2025 and December 31, 2024 (dollars in millions):


		March 31, 2025						December 31, 2024
	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	$	1,886	$	6	$	14	$	1,848	$	6	$	20
Interest rate options	Interest rate	2,273		3		—		1,773		1		—
Total return swaps	Interest rate	865		—		25		956		—		14

Foreign currency swaps	Foreign currency	150		42		—		150		47		—
Foreign currency forwards	Foreign currency	1,101		3		20		1,148		9		37
Foreign currency options	Foreign currency	430		—		—		430		1		—
Equity options	Equity	669		11		2		255		5		1
Equity futures	Equity	223		—		—		209		—		—
Credit default swaps	Credit	4,165		2		21		2,661		4		6
Credit default index swaps options	Credit	250		—		—		—		—		—
Other swaps	Credit	1,300		1		1		1,300		2		2
CPI swaps	CPI	394		4		5		408		6		2
Synthetic GICs	Interest rate	16,176		—		—		15,362		—		—
Embedded derivatives in:
Modco or funds withheld arrangements		—		285		351		—		283		338
Indexed products		—		—		383		—		—		435
Total non-designated derivatives		29,882		357		822		26,500		364		855
Derivatives designated as hedging instruments:
Interest rate swaps	Interest rate	3,301		27		72		3,336		5		103
Forward bond purchase commitments	Interest rate	2,507		3		202		2,020		—		206
Foreign currency swaps	Foreign currency	2,008		6		160		2,008		7		159
Foreign currency forwards	Foreign currency	1,933		47		5		1,966		94		—
Total hedging derivatives		9,749		83		439		9,330		106		468
Total derivatives		$	39,631	$	440	$	1,261	$	35,830	$	470	$	1,323

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 three months ended March 31, 2025 and 2024 are 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 three months ended March 31, 2025:
Foreign currency swaps	Foreign-denominated fixed maturity securities	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate swaps	Future policy benefits	—		—		13		(13)		—		—
Interest rate swaps	Interest-sensitive contract liabilities	—		—		—		—		20		(25)
For the three months ended March 31, 2024:
Foreign currency swaps	Foreign-denominated fixed maturity securities	(1)		—		—		—		—		—
Interest rate swaps	Future policy benefits	—		—		—		—		—		—
Interest rate swaps	Interest-sensitive contract liabilities	—		—		—		—		(2)		1


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
	March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024

Future policy benefits	$	(580)	$	(508)	$	(6)	$	7	$	8	$	—
Interest-sensitive contract liabilities	(998)		(1,111)		(14)		11		10		—

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.

As of March 31, 2025, approximately $75 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
			Net Investment Income		Interest Expense
For the three months ended March 31, 2025:
Interest rate	$	12	$	(1)	$	2
Foreign currency	(18)		(17)		—
Total	$	(6)	$	(18)	$	2
For the three months ended March 31, 2024:
Interest rate	$	(57)	$	(3)	$	3
Foreign currency	(29)		(5)		—
Total	$	(86)	$	(8)	$	3

For the three months ended March 31, 2025 and 2024, 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 three months ended March 31, 2025 and 2024 (dollars in millions):

The cumulative foreign currency translation gain recorded in AOCI related to these hedges was $298 million and $313 million as of March 31, 2025 and December 31, 2024, respectively. If a hedged foreign operation was sold or substantially liquidated, the amounts in AOCI would be reclassified to the condensed 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 three months ended March 31,
Type of Non-qualifying Derivative	Income Statement Location of Gains (Losses)	2025		2024
Interest rate swaps	Investment related gains (losses), net	$	6	$	(31)
Interest rate options	Investment related gains (losses), net	—		(3)
Total return swaps	Investment related gains (losses), net	(6)		4
Interest rate futures	Investment related gains (losses), net	—		1
Foreign currency swaps	Investment related gains (losses), net	(3)		14
Foreign currency forwards	Investment related gains (losses), net	22		(64)
Foreign currency options	Investment related gains (losses), net	(1)		—
Equity options	Investment related gains (losses), net	(6)		(4)
Equity futures	Investment related gains (losses), net	9		(17)
Credit default swaps	Investment related gains (losses), net	(18)		2


CPI swaps	Investment related gains (losses), net	(5)		—



Subtotal		(2)		(98)
Embedded derivatives in:
Modco or funds withheld arrangements	Investment related gains (losses), net	(11)		77

Indexed products	Interest credited	24		(20)
Total non-qualifying derivatives		$	11	$	(41)


	March 31, 2025					December 31, 2024
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	$	(21)	$	410	17.3	$	(5)	$	410	17.5

BBB
Single name credit default swaps	3		155		2.2	3		150		2.3
Credit default swaps referencing indices	(1)		3,585		5.2	—		2,086		5.1
Subtotal	2		3,740		5.1	3		2,236		4.9
BB
Single name credit default swaps	—		5		1.2	—		5		1.5
B
Single name credit default swaps	—		10		1.0	—		10		1.2

Total	$	(19)	$	4,165	6.3	$	(2)	$	2,661	6.8

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 10 – “Investments” for information regarding the Company’s securities borrowing, lending and repurchase/reverse repurchase agreements.


	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments/Collateral (1)		Net Amount
March 31, 2025:
Derivative assets	$	155	$	(39)	$	116	$	(116)	$	—
Derivative liabilities	527		(39)		488		(488)		—
December 31, 2024:
Derivative assets	$	187	$	(64)	$	123	$	(123)	$	—
Derivative liabilities	550		(64)		486		(486)		—

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 March 31, 2025, 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.