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Reserve for Future Policy Benefits and Contractholder Funds
 12 Months Ended
Dec. 31, 2024
Reserve for Future Policy Benefits and Contractholder Funds  
Reserve for Future Policy Benefits and Contractholder Funds
Note 11Reserve for Future Policy Benefits and Contractholder Funds
Rollforward of reserve for future policy benefits
For the years ended December 31,
Accident and
health		Traditional
life		Total
($ in millions)202420232022202420232022202420232022
Present value of expected net premiums
Beginning balance$1,688 $1,464 $1,785 $325 $238 $254 $2,013 $1,702 $2,039 
Beginning balance at original discount rate1,737 1,549 1,604 330 246 215 2,067 1,795 1,819 
Effect of changes in cash flow assumptions(88)(12)— (13)34 — (101)22 — 
Effect of actual variances from expected experience34 (10)(137)6 2 36 40 (8)(101)
Adjusted beginning balance1,683 1,527 1,467 323 282 251 2,006 1,809 1,718 
Issuances (1)
624 501 371 83 89 34 707 590 405 
Interest accrual91 69 48 15 11 4 106 80 52 
Net premiums collected(385)(360)(337)(67)(52)(43)(452)(412)(380)
Ending balance at original discount rate2,013 1,737 1,549 354 330 246 2,367 2,067 1,795 
Effect of changes in discount rate assumptions(54)(49)(85)(11)(5)(8)(65)(54)(93)
Reclassified to liabilities held for sale
(1,247)— — (337)— — (1,584)— — 
Ending balance$712 $1,688 $1,464 $6 $325 $238 $718 $2,013 $1,702 
Present value of expected future policy benefits
Beginning balance$2,453 $2,229 $2,796 $657 $524 $673 $3,110 $2,753 $3,469 
Beginning balance at original discount rate2,495 2,316 2,426 656 534 511 3,151 2,850 2,937 
Effect of changes in cash flow assumptions(11)21 (44)(10)30 — (21)51 (44)
Effect of actual variances from expected experience(17)(33)(116)(1)1 24 (18)(32)(92)
Adjusted beginning balance2,467 2,304 2,266 645 565 535 3,112 2,869 2,801 
Issuances
609 486 360 83 102 42 692 588 402 
Interest accrual119 103 76 31 25 12 150 128 88 
Benefit payments(437)(398)(386)(32)(36)(55)(469)(434)(441)
Ending balance at original discount rate2,758 2,495 2,316 727 656 534 3,485 3,151 2,850 
Effect of changes in discount rate assumptions(58)(42)(87)(29)1 (10)(87)(41)(97)
Reclassified to liabilities held for sale
(1,943)— — (685)— — (2,628)— — 
Ending balance$757 $2,453 $2,229 $13 $657 $524 $770 $3,110 $2,753 
Net reserve for future policy benefits (1)
$45 $765 $765 $7 $332 $286 $52 $1,097 $1,051 
Less: reinsurance recoverables (2)
— 81 76 — 2 1 — 83 77 
Net reserve for future policy benefits, after reinsurance recoverables
$45 $684 $689 $7 $330 $285 $52 $1,014 $974 
(1)Excludes $217 million, $250 million and $271 million of reserves related to short-duration and other contracts as of December 31, 2024, 2023, and 2022, respectively.
(2)Classified as held for sale as of December 31, 2024.
Revenue and interest recognized in the Consolidated Statements of Operations
($ in millions)For the years ended December 31,
202420232022
Revenues (1)
Accident and health$820 $814 $838 
Traditional life144 106 94 
Total$964 $920 $932 
Interest expense (2)
Accident and health$28 $34 $28 
Traditional life16 14 8 
Total$44 $48 $36 
(1)Total revenues reflects gross premiums used in the calculation for reserve for future policy benefits. Revenues included in accident and health insurance premiums and contract charges on the Consolidated Statements of Operations reflect premium revenue recognized for traditional life insurance and long-duration and short-duration accident and health insurance contracts.
(2)Total interest expense presented as part of accident, health and other policy benefits on the Consolidated Statements of Operations.
The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts, including those that are classified as held for sale as of December 31, 2024.
As of December 31,
202420232022
($ in millions)UndiscountedDiscountedUndiscountedDiscountedUndiscountedDiscounted
Accident and health
Expected future gross premiums$5,696 $3,870 $5,339 $3,744 $4,919 $3,517 
Expected future benefits and expenses4,049 2,700 3,578 2,453 3,243 2,229 
Traditional life
Expected future gross premiums1,028 716 896 623 679 465 
Expected future benefits and expenses1,379 698 1,301 657 978 524 
The following table provides the weighted-average duration and weighted-average interest rates for the reserve for future policy benefits, including those that are classified as held for sale as of December 31, 2024.
As of December 31,
Accident and healthTraditional life
2024202320242023
Weighted-average duration (in years)8.04.014.915.0
Weighted-average interest rates
Interest accretion rate (discount rate at contract issuance)5.04 %5.83 %5.35 %5.41 %
Current discount rate (upper-medium grade fixed income yield)5.18 4.77 5.36 4.97 
Significant assumptions To determine mortality and morbidity assumptions, the Company uses a combination of its historical experience and industry data. Mortality and morbidity are monitored throughout the year. Historical experience is obtained through annual Company experience studies in the third quarter that consider its historical claim patterns. The lapse assumption is determined based on historical lapses of the Company’s insurance contracts.
The Company’s annual review of the mortality, morbidity and lapse experience assumptions in 2024, 2023, and 2022 resulted in an increase of $1 million, an increase of less than $1 million and a decrease of $4 million respectively, to the reserve for future policy benefits.
For the year ended December 31, 2024, actual experience for morbidity in accident and health products was higher than expected. For the year ended December 31, 2023, actual experience for morbidity in accident and health products was lower than expected.
For the year ended December 31, 2024, actual experience for lapses in accident and health products was not materially different than expected. For the year ended December 31, 2023, actual experience for lapses in accident and health products was higher than expected.
For the years ended December 31, 2024 and 2023, actual experience for mortality in traditional life products was lower than expected.
For the year ended December 31, 2024, actual experience for lapses in traditional life products was higher than expected. For the year ended December 31, 2023, actual experience for lapses in traditional life products was lower than expected.
Contractholder funds
As of December 31, 2024, all contractholder funds are classified as held for sale.
Contractholder funds activity
For the years ended December 31,
($ in millions)202420232022
Beginning balance$888 $879 $890 
Deposits129 130 133 
Interest credited34 34 32 
Benefits(13)(14)(21)
Surrenders and partial withdrawals(25)(21)(28)
Contract charges(118)(119)(117)
Other adjustments(5)(1)(10)
Ending balance$890 $888 $879 
Components of contractholder funds
Interest-sensitive life insurance$851 $842 $829 
Fixed annuities39 46 50 
Total$890 $888 $879 
Weighted-average crediting rate4.23 %4.21 %4.28 %
Net amount at risk (1)
$10,735 $11,359 $11,610 
Cash surrender value740 726 719 
(1)Guaranteed benefit amounts in excess of the current account balances.
Accident and health short-duration contracts
The following presents information about incurred and paid claims development as of December 31, 2024, net of recoverables, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included in the net incurred claims amounts. See Note 2 for the accounting policy and methodology for determining reserves for future policy benefits, including both reported and IBNR claims. The Company’s accident and health claims are counted by claim number assigned to each claimant per illness, injury or death, regardless of number of services rendered for each incident. Claims closed without payment are not included in the cumulative number of reported accident and health claims. The information about incurred and paid claims development for the 2020 to 2024 years, and the average annual percentage payout of incurred claims by age as of December 31, 2024, is presented as required supplementary information.
Group and individual accident and health
($ 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 (in thousands)
For the years ended December 31,As of December 31, 2024
(unaudited)(unaudited)(unaudited)(unaudited)
Accident year20202021202220232024
2020$297 $293 $294 $291 $290 $— 415 
2021— 424 420 415 417 — 679 
2022— — 437 402 399 1 590 
2023— — — 476 455 10 582 
2024— — — — 537 175 456 
Total$2,098 
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
For the years ended December 31,
(unaudited)(unaudited)(unaudited)(unaudited)
Accident year20202021202220232024
2020$184 $284 $290 $290 $290 
2021— 272 408 413 416 
2022— 275 393 398 
2023— — — 312 446 
2024— — — — 362 
Total$1,912 
All outstanding liabilities before 2020, net of recoverables— 
Liabilities for claims and claim adjustment expenses, net of recoverables$186 
Reconciliation of the net incurred and paid claims development tables above to the reserve for future policy benefits
($ in millions)As of December 31, 2024
Net outstanding liabilities
Group and individual accident and health short-duration contracts$186 
Long-duration accident and health insurance
45 
Long-duration traditional life insurance
7 
Other contracts
5 
ULAE9 
Net reserve for future policy benefits252 
Recoverables
Group and individual accident and health short-duration contracts17 
Gross reserve for future policy benefits$269 

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2024
1 year2 years3 years4 years5 years
Group and individual accident and health65.3 %32.3 %1.6 %0.6 %0.2 %