Reserve for Future Policy Benefits and Contractholder Funds

12 Months Ended

Dec. 31, 2022

Reserve for Future Policy Benefits and Contractholder Funds

Reserve for Future Policy Benefits and Contractholder Funds

Note 10 Reserve for Future Policy Benefits and Contractholder Funds

Reserve for future policy benefits
	As of December 31,
($ in millions)	2022		2021
Traditional life insurance and other	$	318	$	313
Accident and health insurance	955		960
Reserve for future policy benefits	$	1,273	$	1,273

Key assumptions generally used in calculating the reserve for future policy benefits
Product	Mortality	Interest rate	Estimation method
Traditional life insurance	Actual company experience plus loading	Interest rate assumptions range from 1.8% to 7.0%	Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims
Accident and health insurance	Actual company experience plus loading	Interest rate assumptions range from 2.0% to 7.0%	Unearned premium; additional contract reserves for mortality risk and unpaid claims

Accident and health short-duration contracts

The following presents information about incurred and paid claims development as of December 31, 2022, net of recoverables, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included in the net incurred claims amounts. See Note 2 for the accounting policy and methodology for determining reserves for future policy benefits, including both reported and IBNR claims. The Company’s accident and health claims are counted by claim number assigned to each claimant per illness, injury or death, regardless of number of services rendered for each incident. Claims closed without payment are not included in the cumulative number of reported accident and health claims. The information about incurred and paid claims development for the 2018 to 2022 years, as of December 31, 2022, is presented as required supplementary information.

Group and individual accident and health

($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables										IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										As of December 31, 2022
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018		2019		2020		2021		2022
2018	$	235	$	205	$	203	$	203	$	203	$	—	292,491
2019	—		257		239		242		242		—		311,662
2020	—		—		297		293		294		4		414,634
2021	—		—		—		424		420		12		671,483
2022	—		—		—		—		437		162		427,124
							Total		$	1,596
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018		2019		2020		2021		2022
2018	$	126	$	201	$	203	$	203	$	203
2019	—		158		234		242		242
2020	—		—		184		284		290
2021	—		—		—		272		408
2022	—		—		—		—		275
							Total		$	1,418
All outstanding liabilities before 2018, net of recoverables									—
Liabilities for claims and claim adjustment expenses, net of recoverables									$	178

Reconciliation of the net incurred and paid claims development tables above to the reserve for future policy benefits
($ in millions)	As of December 31, 2022
Net outstanding liabilities
Group and individual accident and health short-duration contracts	$	178
Other accident and health short-duration contracts	31
Long duration accident and health insurance	592
Long duration traditional life insurance and other	324
ULAE	9
Net reserve for future policy benefits	1,134
Recoverables
Group and individual accident and health short-duration contracts	35
Other accident and health short-duration contracts	—
Insurance lines other than short-duration	104
ULAE	—
Gross reserve for future policy benefits	$	1,273

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2022
	1 year		2 years		3 years		4 years		5 years
Group and individual accident and health	63.0	%	34.3	%	2.1	%	0.6	%	—	%

Contractholder funds for interest-sensitive life insurance were $847 million and $853 million as of December 31, 2022 and 2021, respectively.

Contractholder funds activity
	For the years ended December 31,
($ in millions)	2022		2021		2020
Balance, beginning of year	$	908	$	857	$	915
Deposits	133		118		121
Interest credited	32		34		33
Benefits	(21)		(41)		(34)
Surrenders and partial withdrawals	(28)		(23)		(61)
Contract charges	(121)		(107)		(123)
Other adjustments	(6)		70		6
Balance, end of year	$	897	$	908	$	857