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Derivative Financial Instruments and Off-balance sheet Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2013
Derivative Financial Instruments and Off-balance sheet Financial Instruments  
Volume and fair value positions of derivative instruments and location in the Consolidated Statement of Financial Position

The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Consolidated Statement of Financial Position as of December 31, 2013.

($ in millions, except number of contracts)
   
   
   
   
   
   
 
 
   
  Volume (1)    
   
   
 
 
  Balance sheet location   Notional
amount
  Number
of
contracts
  Fair
value,
net
  Gross
asset
  Gross
liability
 

Asset derivatives

                                   

Derivatives designated as accounting hedging instruments

                                   

Foreign currency swap agreements

  Other investments   $ 16     n/a   $ 1   $ 1   $  
                           

Derivatives not designated as accounting hedging instruments

                                   

Interest rate contracts

                                   

Interest rate swaption agreements

  Other investments     1,420     n/a              

Interest rate cap agreements

  Other investments     61     n/a     2     2      

Financial futures contracts

  Other assets         550              

Equity and index contracts

                                   

Options and warrants (2)

  Other investments     3     10,035     263     263      

Financial futures contracts

  Other assets         1,432     1     1      

Foreign currency contracts

                                   

Foreign currency forwards

  Other investments     161     n/a     10     10      

Embedded derivative financial instruments

                                   

Credit default swaps

  Fixed income securities     12     n/a     (12 )       (12 )

Other embedded derivative financial instruments

  Other investments     1,000     n/a              

Credit default contracts

                                   

Credit default swaps – buying protection

  Other investments     2     n/a              

Credit default swaps – selling protection

  Other investments     105     n/a     2     2      

Other contracts

                                   

Other contracts

  Other assets     4     n/a              
                           

Subtotal

        2,768     12,017     266     278     (12 )
                           

Total asset derivatives

      $ 2,784     12,017   $ 267   $ 279   $ (12 )
                           
                           

Liability derivatives

                                   

Derivatives designated as accounting hedging instruments

                                   

Foreign currency swap agreements

  Other liabilities & accrued expenses   $ 132     n/a   $ (15 ) $   $ (15 )
                           

Derivatives not designated as accounting hedging instruments

                                   

Interest rate contracts

                                   

Interest rate swap agreements

  Other liabilities & accrued expenses     85     n/a     4     4      

Interest rate swaption agreements

  Other liabilities & accrued expenses     4,570     n/a     1     1      

Interest rate cap agreements

  Other liabilities & accrued expenses     262     n/a     4     4      

Equity and index contracts

                                   

Options

  Other liabilities & accrued expenses     55     10,035     (165 )   2     (167 )

Foreign currency contracts

                                   

Foreign currency forwards

  Other liabilities & accrued expenses     148     n/a     (3 )   2     (5 )

Embedded derivative financial instruments

                                   

Guaranteed accumulation benefits

  Contractholder funds     738     n/a     (43 )       (43 )

Guaranteed withdrawal benefits

  Contractholder funds     506     n/a     (13 )       (13 )

Equity-indexed and forward starting options in life and annuity product contracts

  Contractholder funds     1,693     n/a     (247 )       (247 )

 

  Liabilities held for sale     2,363     n/a     (246 )       (246 )

Other embedded derivative financial instruments

  Contractholder funds     85     n/a     (4 )       (4 )

Credit default contracts

                                   

Credit default swaps – buying protection

  Other liabilities & accrued expenses     397     n/a     (6 )       (6 )

Credit default swaps – selling protection

  Other liabilities & accrued expenses     185     n/a     (13 )   2     (15 )
                           

Subtotal

        11,087     10,035     (731 )   15     (746 )
                           

Total liability derivatives

        11,219     10,035     (746 ) $ 15   $ (761 )
                           
                           

Total derivatives

      $ 14,003     22,052   $ (479 )            
                               
                               

(1)
Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable)
(2)
In addition to the number of contracts presented in the table, the Company held 6,160 stock rights and 1,232,420 stock warrants. Stock rights and warrants can be converted to cash upon sale of those instruments or exercised for shares of common stock.

       The following table provides a summary of the volume and fair value positions of derivative instruments as well as their reporting location in the Consolidated Statement of Financial Position as of December 31, 2012.

($ in millions, except number of contracts)
   
   
   
   
   
   
 
 
   
  Volume (1)    
   
   
 
 
  Balance sheet location   Notional
amount
  Number
of
contracts
  Fair
value,
net
  Gross
asset
  Gross
liability
 

Asset derivatives

                                   

Derivatives designated as accounting hedging instruments

                                   

Foreign currency swap agreements

  Other investments   $ 16     n/a   $ 2   $ 2   $  
                           

Derivatives not designated as accounting hedging instruments

                                   

Interest rate contracts

                                   

Interest rate swap agreements

  Other investments     5,541     n/a     19     28     (9 )

Interest rate cap agreements

  Other investments     372     n/a     1     1      

Financial futures contracts

  Other assets     n/a     2              

Equity and index contracts

                                   

Options and warrants (2)

  Other investments     146     12,400     125     125      

Financial futures contracts

  Other assets     n/a     1,087     5     5      

Foreign currency contracts

                                   

Foreign currency forwards and options

  Other investments     258     n/a     6     6      

Embedded derivative financial instruments

                                   

Conversion options

  Fixed income securities     5     n/a              

Equity-indexed call options

  Fixed income securities     90     n/a     9     9      

Credit default swaps

  Fixed income securities     12     n/a     (12 )       (12 )

Other embedded derivative financial instruments

  Other investments     1,000     n/a              

Credit default contracts

                                   

Credit default swaps – buying protection

  Other investments     209     n/a         2     (2 )

Credit default swaps – selling protection

  Other investments     308     n/a     2     3     (1 )

Other contracts

                                   

Other contracts

  Other assets     4     n/a     1     1      
                           

Subtotal

        7,945     13,489     156     180     (24 )
                           

Total asset derivatives

      $ 7,961     13,489   $ 158   $ 182   $ (24 )
                           
                           

Liability derivatives

                                   

Derivatives designated as accounting hedging instruments

                                   

Foreign currency swap agreements

  Other liabilities & accrued expenses   $ 135     n/a   $ (19 ) $   $ (19 )
                           

Derivatives not designated as accounting hedging instruments

                                   

Interest rate contracts

                                   

Interest rate swap agreements

  Other liabilities & accrued expenses     1,185     n/a     16     18     (2 )

Interest rate swaption agreements

  Other liabilities & accrued expenses     250     n/a              

Interest rate cap agreements

  Other liabilities & accrued expenses     429     n/a     1     1      

Financial futures contracts

  Other liabilities & accrued expenses         357              

Equity and index contracts

                                   

Options and futures

  Other liabilities & accrued expenses         12,262     (58 )       (58 )

Foreign currency contracts

                                   

Foreign currency forwards and options

  Other liabilities & accrued expenses     139     n/a     (1 )   1     (2 )

Embedded derivative financial instruments

                                   

Guaranteed accumulation benefits

  Contractholder funds     820     n/a     (86 )       (86 )

Guaranteed withdrawal benefits

  Contractholder funds     554     n/a     (39 )       (39 )

Equity-indexed and forward starting options in life and annuity product contracts

  Contractholder funds     3,916     n/a     (419 )       (419 )

Other embedded derivative financial instruments

  Contractholder funds     85     n/a     (9 )       (9 )

Credit default contracts

                                   

Credit default swaps — buying protection

  Other liabilities & accrued expenses     420     n/a     (3 )   2     (5 )

Credit default swaps — selling protection

  Other liabilities & accrued expenses     285     n/a     (29 )   1     (30 )
                           

Subtotal

        8,083     12,619     (627 )   23     (650 )
                           

Total liability derivatives

        8,218     12,619     (646 ) $ 23   $ (669 )
                           
                           

Total derivatives

      $ 16,179     26,108   $ (488 )            
                               
                               

(1)
Volume for OTC derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable)
(2)
In addition to the number of contracts presented in the table, the Company held 34,634 stock rights and 879,158 stock warrants. Stock rights and warrants can be converted to cash upon sale of those instruments or exercised for shares of common stock.
Schedule of gross and net amount for the Company's OTC derivatives subject to enforceable master netting arrangements
($ in millions)
   
  Offsets    
   
   
 
 
   
   
  Securities
collateral
(received)
pledged
   
 
 
  Gross
amount
  Counter-party
netting
  Cash collateral
(received)
pledged
  Net amount on
balance sheet
  Net amount  

December 31, 2013

                                     

Asset derivatives

  $ 28   $ (15 ) $ (9 ) $ 4   $ (4 ) $  

Liability derivatives

    (41 )   15     (4 )   (30 )   23     (7 )

December 31, 2012

                                     

Asset derivatives

  $ 66   $ (35 ) $ (22 ) $ 9   $ (4 ) $ 5  

Liability derivatives

    (70 )   35     (2 )   (37 )   25     (12 )
Impacts on operations and AOCI from foreign currency contracts, cash flow hedges
($ in millions)

  2013   2012   2011  

Gain (loss) recognized in OCI on derivatives during the period

  $ 3   $ (6 ) $ 4  

Loss recognized in OCI on derivatives during the term of the hedging relationship

    (18 )   (22 )   (17 )

Loss reclassified from AOCI into income (net investment income)

    (1 )        

Loss reclassified from AOCI into income (realized capital gains and losses)

        (1 )   (1 )
Gains and losses from valuation, settlements, and hedge ineffectiveness, fair value hedges and derivatives not designated as hedges
($ in millions)
  2013  
 
  Realized
capital
gains and
losses
  Life and
annuity
contract
benefits
  Interest
credited to
contractholder
funds
  Operating
costs and
expenses
  Loss on
disposition
of
operations
  Total gain
(loss)
recognized
in net
income on
derivatives
 

Interest rate contracts

  $ 4   $   $   $   $ (6 ) $ (2 )

Equity and index contracts

    (12 )       94     34         116  

Embedded derivative financial instruments

    (1 )   74     (75 )           (2 )

Foreign currency contracts

    (9 )           7         (2 )

Credit default contracts

    8                     8  

Other contracts

            (3 )           (3 )
                           

Total

  $ (10 ) $ 74   $ 16   $ 41   $ (6 ) $ 115  
                           
                           


 

 
  2012  
 
  Net
investment
income
  Realized
capital
gains and
losses
  Life and
annuity
contract
benefits
  Interest
credited to
contractholder
funds
  Operating
costs and
expenses
  Total gain
(loss)
recognized
in net
income on
derivatives
 

Derivatives in fair value accounting hedging relationships

                                     

Interest rate contracts

  $ (1 ) $   $   $   $   $ (1 )
                           

Derivatives not designated as accounting hedging instruments

                                     

Interest rate contracts

        (1 )               (1 )

Equity and index contracts

        (4 )       56     17     69  

Embedded derivative financial instruments

        21     36     134         191  

Foreign currency contracts

        (1 )           7     6  

Credit default contracts

        9                 9  

Other contracts

                3         3  
                           

Subtotal

        24     36     193     24     277  
                           

Total

  $ (1 ) $ 24   $ 36   $ 193   $ 24   $ 276  
                           
                           


 

 
  2011  
 
  Net
investment
income
  Realized
capital
gains and
losses
  Life and
annuity
contract
benefits
  Interest
credited to
contractholder
funds
  Operating
costs and
expenses
  Total gain
(loss)
recognized
in net
income on
derivatives
 

Derivatives in fair value accounting hedging relationships

                                     

Interest rate contracts

  $ (2 ) $ (8 ) $   $ (5 ) $   $ (15 )

Foreign currency and interest rate contracts

                (32 )       (32 )
                           

Subtotal

    (2 )   (8 )       (37 )       (47 )
                           

Derivatives not designated as accounting hedging instruments

                                     

Interest rate contracts

        (304 )               (304 )

Equity and index contracts

        (43 )       (2 )   (3 )   (48 )

Embedded derivative financial instruments

        (37 )   (32 )   (38 )       (107 )

Foreign currency contracts

        (12 )           2     (10 )

Credit default contracts

        8                 8  

Other contracts

                7         7  
                           

Subtotal

        (388 )   (32 )   (33 )   (1 )   (454 )
                           

Total

  $ (2 ) $ (396 ) $ (32 ) $ (70 ) $ (1 ) $ (501 )
                           
                           
Impact on operations, changes in fair value, fair value hedges
($ in millions)
  Gain (loss) on derivatives   Gain (loss) on hedged risk  
Location of gain or (loss) recognized
in net income on derivatives
  Interest
rate
contracts
  Foreign
currency &
interest rate
contracts
  Contractholder
funds
  Investments  

2012

                         

Net investment income

  $ 3   $   $   $ (3 )
                   

Total

  $ 3   $   $   $ (3 )
                   
                   

2011

                         

Interest credited to contractholder funds

  $ (7 ) $ (34 ) $ 41   $  

Net investment income

    26             (26 )

Realized capital gains and losses

    (8 )            
                   

Total

  $ 11   $ (34 ) $ 41   $ (26 )
                   
                   
Counterparty credit exposure by counterparty credit rating
($ in millions)
  2013   2012  
Rating (1)
  Number
of
counter-
parties
  Notional
amount 
(2)
  Credit
exposure 
(2)
  Exposure,
net of
collateral 
(2)
  Number
of
counter-
parties
  Notional
amount 
(2)
  Credit
exposure 
(2)
  Exposure,
net of
collateral 
(2)
 

A+

    1   $ 22   $ 1   $ 1     2   $ 29   $ 1   $ 1  

A

    5     1,628     9     2     4     2,450     13     2  

A-

    1     24     1         3     797     8     2  

BBB+

    1     33     3         1     3,617     11      

BBB

    1     76     1                      
                                   

Total

    9   $ 1,783   $ 15   $ 3     10   $ 6,893   $ 33   $ 5  
                                   
                                   

(1)
Rating is the lower of S&P or Moody's ratings.
(2)
Only OTC derivatives with a net positive fair value are included for each counterparty.
Derivative instruments with credit features in a liability position, including fair value of assets and collateral netted against the liability
($ in millions)
  2013   2012  

Gross liability fair value of contracts containing credit-risk-contingent features

  $ 28   $ 65  

Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs

    (11 )   (31 )

Collateral posted under MNAs for contracts containing credit-risk-contingent features

    (14 )   (25 )
           

Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently

  $ 3   $ 9  
           
           
CDS notional amounts by credit rating and fair value of protection sold
  Notional amount    
 
($ in millions)
    

   
 
   
   
   
   
  BB and
lower
   
  Fair
value
 
 
  AAA   AA   A   BBB   Total  

December 31, 2013

                                           

Single name

                                           

Investment grade corporate debt (1)

  $   $ 20   $ 25   $ 65   $   $ 110   $ 2  

Baskets

                                           

First-to-default

                                           

Municipal

            100             100     (15 )

Index

                                           

Investment grade corporate debt (1)

        1     20     55     4     80     2  
                               

Total

  $   $ 21   $ 145   $ 120   $ 4   $ 290   $ (11 )
                               
                               

December 31, 2012

                                           

Single name

                                           

Investment grade corporate debt (1)

  $ 5   $ 20   $ 53   $ 80   $ 10   $ 168   $  

Municipal

        25                 25     (3 )
                               

Subtotal

    5     45     53     80     10     193     (3 )

Baskets

                                           

First-to-default

                                           

Municipal

            100             100     (26 )

Index

                                           

Investment grade corporate debt (1)

        3     79     204     14     300     2  
                               

Total

  $ 5   $ 48   $ 232   $ 284   $ 24   $ 593   $ (27 )
                               
                               

(1)
Investment grade corporate debt categorization is based on the rating of the underlying name(s) at initial purchase.
Contractual amounts of off-balance-sheet financial instruments
($ in millions)
  2013   2012  

Commitments to invest in limited partnership interests

  $ 2,846   $ 2,080  

Commitments to extend mortgage loans

    1     67  

Private placement commitments

    43     54  

Other loan commitments

    26     7