☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 80-0873306 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
6620 West Broad Street Richmond, Virginia | 23230 (Zip Code) | |
(Address of principal executive offices) |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Title of Each Class | Trading Symbol | Symbol | Name of each exchange | |||
Class A Common Stock, par value $.001 per share | GNW | New York Stock Exchange |
Page | ||||||||||
PART I—FINANCIAL INFORMATION | ||||||||||
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| 8 | |||||||||
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Item 2. | ||||||||||
Item 4. | 161 | |||||||||
PART II—OTHER INFORMATION | ||||||||||
5. | 162 | |||||||||
Item 6. | 163 | |||||||||
Signatures | ||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||
(As adjusted) | September 30, 2023 | December 31, 2022 | ||||||||||||||
(As adjusted) | ||||||||||||||||
Assets | ||||||||||||||||
Investments: | ||||||||||||||||
Fixed maturity securities available-for-sale, | $ | 47,381 | $ | 46,583 | ||||||||||||
Fixed maturity securities available-for-sale, | $ | 43,968 | $ | 46,583 | ||||||||||||
Equity securities, at fair value | 364 | 319 | 363 | 319 | ||||||||||||
Commercial mortgage loans (net of unamortized balance of loan origination fees and costs of $4 as of March 31, 2023 and December 31, 2022) | 6,915 | 7,032 | ||||||||||||||
Commercial mortgage loans (net of unamortized balance of loan origination fees and costs of $4 as of September 30, 2023 and December 31, 2022) | 6,818 | 7,032 | ||||||||||||||
Less: Allowance for credit losses | (24 | ) | (22 | ) | (25 | ) | (22 | ) | ||||||||
Commercial mortgage loans, net | 6,891 | 7,010 | 6,793 | 7,010 | ||||||||||||
Policy loans | 2,133 | 2,139 | 2,233 | 2,139 | ||||||||||||
Limited partnerships | 2,456 | 2,331 | 2,699 | 2,331 | ||||||||||||
Other invested assets | 617 | 566 | 645 | 566 | ||||||||||||
Total investments | 59,842 | 58,948 | 56,701 | 58,948 | ||||||||||||
Cash, cash equivalents and restricted cash | 1,752 | 1,799 | 1,993 | 1,799 | ||||||||||||
Accrued investment income | 700 | 643 | 620 | 643 | ||||||||||||
Deferred acquisition costs | 2,150 | 2,211 | 2,042 | 2,211 | ||||||||||||
Intangible assets | 203 | 203 | 199 | 203 | ||||||||||||
Reinsurance recoverable | 19,606 | 19,059 | 17,623 | 19,059 | ||||||||||||
Less: Allowance for credit losses | (64 | ) | (63 | ) | (28 | ) | (63 | ) | ||||||||
Reinsurance recoverable, net | 19,542 | 18,996 | 17,595 | 18,996 | ||||||||||||
Other assets | 478 | 488 | 453 | 488 | ||||||||||||
Deferred tax asset | 2,004 | 1,968 | 1,580 | 1,983 | ||||||||||||
Market risk benefit assets | 28 | 26 | 39 | 26 | ||||||||||||
Separate account assets | 4,479 | 4,417 | 4,244 | 4,417 | ||||||||||||
Total assets | $ | 91,178 | $ | 89,699 | $ | 85,466 | $ | 89,714 | ||||||||
Liabilities and equity | ||||||||||||||||
Liabilities: | ||||||||||||||||
Future policy benefits | $ | 57,558 | $ | 55,349 | $ | 51,740 | $ | 55,407 | ||||||||
Policyholder account balances | 16,202 | 16,564 | 15,590 | 16,564 | ||||||||||||
Market risk benefit liabilities | 761 | 748 | 579 | 748 | ||||||||||||
Liability for policy and contract claims | 665 | 683 | 631 | 683 | ||||||||||||
Unearned premiums | 189 | 203 | 162 | 203 | ||||||||||||
Other liabilities | 1,492 | 1,675 | 2,038 | 1,687 | ||||||||||||
Long-term borrowings | 1,600 | 1,611 | 1,602 | 1,611 | ||||||||||||
Separate account liabilities | 4,479 | 4,417 | 4,244 | 4,417 | ||||||||||||
Liabilities related to discontinued operations | 7 | 8 | 2 | 8 | ||||||||||||
Total liabilities | 82,953 | 81,258 | 76,588 | 81,328 | ||||||||||||
Commitments and contingencies | ||||||||||||||||
Commitments and contingencies (Note 19) | ||||||||||||||||
Equity: | ||||||||||||||||
Class A common stock, $0.001 par value; 1.5 billion shares authorized; 603 million and 600 million shares issued as of March 31, 2023 and December 31, 2022, respectively; 487 million and 495 million shares outstanding as of March 31, 2023 and December 31, 2022, respectively | 1 | 1 | ||||||||||||||
Class A common stock, $0.001 par value; 1,500,000,000 shares authorized; 603,151,611 and 600,036,269 shares issued as of September 30, 2023 and December 31, 2022, respectively; 452,722,552 and 495,446,960 shares outstanding as of September 30, 2023 and December 31, 2022, respectively | 1 | 1 | ||||||||||||||
Additional paid-in capital | 11,863 | 11,869 | 11,877 | 11,869 | ||||||||||||
Accumulated other comprehensive income (loss) | (2,858 | ) | (2,617 | ) | (2,220 | ) | (2,614 | ) | ||||||||
Retained earnings | 1,259 | 1,197 | 1,426 | 1,139 | ||||||||||||
Treasury stock, at cost (116 million and 105 million shares as of March 31, 2023 and December 31, 2022, respectively) | (2,833 | ) | (2,764 | ) | ||||||||||||
Treasury stock, at cost (150,429,059 and 104,589,309 shares as of September 30, 2023 and December 31, 2022, respectively) | (3,028 | ) | (2,764 | ) | ||||||||||||
Total Genworth Financial, Inc.’s stockholders’ equity | 7,432 | 7,686 | 8,056 | 7,631 | ||||||||||||
Noncontrolling interests | 793 | 755 | 822 | 755 | ||||||||||||
Total equity | 8,225 | 8,441 | 8,878 | 8,386 | ||||||||||||
Total liabilities and equity | $ | 91,178 | $ | 89,699 | $ | 85,466 | $ | 89,714 | ||||||||
Three months ended March 31, | ||||||||||||||||||||||||
2023 | 2022 | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(As adjusted) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(As Adjusted) | (As Adjusted) | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Premiums | $ | 915 | $ | 917 | $ | 915 | $ | 929 | $ | 2,732 | $ | 2,762 | ||||||||||||
Net investment income | 787 | 764 | 801 | 808 | 2,373 | 2,359 | ||||||||||||||||||
Net investment gains (losses) | (11 | ) | 42 | (43 | ) | (58 | ) | (15 | ) | 3 | ||||||||||||||
Policy fees and other income | 163 | 170 | 158 | 169 | 487 | 504 | ||||||||||||||||||
Total revenues | 1,854 | 1,893 | 1,831 | 1,848 | 5,577 | 5,628 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Benefits and other changes in policy reserves | 1,172 | 1,165 | 1,199 | 1,159 | 3,550 | 3,094 | ||||||||||||||||||
Liability remeasurement (gains) losses | 22 | (41 | ) | 116 | 17 | 171 | (23 | ) | ||||||||||||||||
Changes in fair value of market risk benefits and associated hedges | 17 | (41 | ) | (24 | ) | (27 | ) | (26 | ) | (48 | ) | |||||||||||||
Interest credited | 126 | 125 | 127 | 128 | 379 | 379 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals | 283 | 280 | 228 | 245 | 694 | 1,060 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles | 72 | 88 | 65 | 80 | 201 | 252 | ||||||||||||||||||
Interest expense | 29 | 26 | 30 | 26 | 88 | 78 | ||||||||||||||||||
Total benefits and expenses | 1,721 | 1,602 | 1,741 | 1,628 | 5,057 | 4,792 | ||||||||||||||||||
Income from continuing operations before income taxes | 133 | 291 | 90 | 220 | 520 | 836 | ||||||||||||||||||
Provision for income taxes | 39 | 68 | 30 | 54 | 140 | 200 | ||||||||||||||||||
Income from continuing operations | 94 | 223 | 60 | 166 | 380 | 636 | ||||||||||||||||||
Loss from discontinued operations, net of taxes | — | (2 | ) | |||||||||||||||||||||
Income from discontinued operations, net of taxes | — | 5 | 2 | 2 | ||||||||||||||||||||
Net income | 94 | 221 | 60 | 171 | 382 | 638 | ||||||||||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 32 | 30 | 31 | 35 | 94 | 103 | ||||||||||||||||||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 191 | $ | 29 | $ | 136 | $ | 288 | $ | 535 | ||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 193 | $ | 29 | $ | 131 | $ | 286 | $ | 533 | ||||||||||||
Loss from discontinued operations available to Genworth Financial, Inc.’s common stockholders | — | (2 | ) | |||||||||||||||||||||
Income from discontinued operations available to Genworth Financial, Inc.’s common stockholders | — | 5 | 2 | 2 | ||||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 191 | $ | 29 | $ | 136 | $ | 288 | $ | 535 | ||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | $ | 0.13 | $ | 0.38 | $ | 0.06 | $ | 0.26 | $ | 0.60 | $ | 1.05 | ||||||||||||
Diluted | $ | 0.12 | $ | 0.37 | $ | 0.06 | $ | 0.26 | $ | 0.59 | $ | 1.04 | ||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | $ | 0.13 | $ | 0.38 | $ | 0.06 | $ | 0.27 | $ | 0.61 | $ | 1.05 | ||||||||||||
Diluted | $ | 0.12 | $ | 0.37 | $ | 0.06 | $ | 0.27 | $ | 0.60 | $ | 1.04 | ||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||||||
Basic | 492.3 | 508.3 | 460.5 | 503.8 | 475.3 | 507.0 | ||||||||||||||||||
Diluted | 500.1 | 517.4 | 466.0 | 509.3 | 481.4 | 513.6 | ||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||||||
2023 | 2022 | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(As adjusted) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(As adjusted) | (As adjusted) | |||||||||||||||||||||||
Net income | $ | 94 | $ | 221 | $ | 60 | $ | 171 | $ | 382 | $ | 638 | ||||||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||||||||||||
Net unrealized gains (losses) on securities without an allowance for credit losses | 925 | (3,967 | ) | (1,732 | ) | (2,517 | ) | (1,374 | ) | (10,181 | ) | |||||||||||||
Net unrealized gains (losses) on securities with an allowance for credit losses | (6 | ) | — | — | — | — | — | |||||||||||||||||
Derivatives qualifying as hedges | 74 | (236 | ) | (427 | ) | (135 | ) | (473 | ) | (715 | ) | |||||||||||||
Change in the discount rate used to measure future policy benefits | (1,227 | ) | 5,482 | |||||||||||||||||||||
Change in discount rate used to measure future policy benefits | 2,790 | 3,282 | 2,229 | 14,033 | ||||||||||||||||||||
Change in instrument-specific credit risk of market risk benefits | 1 | 2 | 3 | 1 | 4 | 4 | ||||||||||||||||||
Foreign currency translation and other adjustments | 4 | (5 | ) | (3 | ) | — | 5 | (12 | ) | |||||||||||||||
Total other comprehensive income (loss) | (229 | ) | 1,276 | 631 | 631 | 391 | 3,129 | |||||||||||||||||
Total comprehensive income (loss) | (135 | ) | 1,497 | |||||||||||||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests | 44 | (11 | ) | |||||||||||||||||||||
Total comprehensive income | 691 | 802 | 773 | 3,767 | ||||||||||||||||||||
Less: comprehensive income attributable to noncontrolling interests | 21 | 10 | 91 | 9 | ||||||||||||||||||||
Total comprehensive income (loss) available to Genworth Financial, Inc.’s common stockholders | $ | (179 | ) | $ | 1,508 | |||||||||||||||||||
Total comprehensive income available to Genworth Financial, Inc.’s common stockholders | $ | 670 | $ | 792 | $ | 682 | $ | 3,758 | ||||||||||||||||
Three months ended March 31, 2023 | ||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock, at cost | Total Genworth Financial, Inc.’s stockholders’ equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||
Balances as of December 31, 2022 (as adjusted) | $ | 1 | $ | 11,869 | $ | (2,617 | ) | $ | 1,197 | $ | (2,764 | ) | $ | 7,686 | $ | 755 | $ | 8,441 | ||||||||||||||
Repurchase of subsidiary shares | — | — | — | — | — | — | (4 | ) | (4 | ) | ||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 62 | — | 62 | 32 | 94 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | (241 | ) | — | — | (241 | ) | 12 | (229 | ) | |||||||||||||||||||||
Total comprehensive income (loss) | (179 | ) | 44 | (135 | ) | |||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | — | — | — | — | (69 | ) | (69 | ) | — | (69 | ) | |||||||||||||||||||||
Dividends to noncontrolling interests | — | — | — | — | — | — | (4 | ) | (4 | ) | ||||||||||||||||||||||
Stock-based compensation expense and exercises and other | — | (6 | ) | — | — | — | (6 | ) | 2 | (4 | ) | |||||||||||||||||||||
Balances as of March 31, 2023 | $ | 1 | $ | 11,863 | $ | (2,858 | ) | $ | 1,259 | $ | (2,833 | ) | $ | 7,432 | $ | 793 | $ | 8,225 | ||||||||||||||
Three months ended March 31, 2022 | ||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock, at cost | Total Genworth Financial, Inc.’s stockholders’ equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||
Balances as of December 31, 2021 (as adjusted) | $ | 1 | $ | 11,858 | $ | (5,881 | ) | $ | 199 | $ | (2,700 | ) | $ | 3,477 | $ | 756 | $ | 4,233 | ||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 191 | — | 191 | 30 | 221 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | 1,317 | — | — | 1,317 | (41 | ) | 1,276 | |||||||||||||||||||||||
Total comprehensive income (loss) | 1,508 | (11 | ) | 1,497 | ||||||||||||||||||||||||||||
Stock-based compensation expense and exercises and other | — | (1 | ) | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||||||||
Balances as of March 31, 2022 (as adjusted) | $ | 1 | $ | 11,857 | $ | (4,564 | ) | $ | 390 | $ | (2,700 | ) | $ | 4,984 | $ | 745 | $ | 5,729 | ||||||||||||||
Three months ended September 30, 2023 | ||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock, at cost | Total Genworth Financial, Inc.’s stockholders’ equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||
Balances as of June 30, 2023 | $ | 1 | $ | 11,869 | $ | (2,861 | ) | $ | 1,398 | $ | (2,947 | ) | $ | 7,460 | $ | 807 | $ | 8,267 | ||||||||||||||
Repurchase of subsidiary shares | — | — | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 29 | — | 29 | 31 | 60 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | 641 | — | — | 641 | (10 | ) | 631 | |||||||||||||||||||||||
Total comprehensive income | 670 | 21 | 691 | |||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | — | — | — | — | (81 | ) | (81 | ) | — | (81 | ) | |||||||||||||||||||||
Dividends to noncontrolling interests | — | — | — | — | — | — | (5 | ) | (5 | ) | ||||||||||||||||||||||
Stock-based compensation expense and exercises and other | — | 8 | — | (1 | ) | — | 7 | — | 7 | |||||||||||||||||||||||
Balances as of September 30, 2023 | $ | 1 | $ | 11,877 | $ | (2,220 | ) | $ | 1,426 | $ | (3,028 | ) | $ | 8,056 | $ | 822 | $ | 8,878 | ||||||||||||||
Three months ended September 30, 2022 | ||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock, at cost | Total Genworth Financial, Inc.’s stockholders’ equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||
Balances as of June 30, 2022 (as adjusted) | $ | 1 | $ | 11,859 | $ | (3,288 | ) | $ | 624 | $ | (2,715 | ) | $ | 6,481 | $ | 751 | $ | 7,232 | ||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 136 | — | 136 | 35 | 171 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | 656 | — | — | 656 | (25 | ) | 631 | |||||||||||||||||||||||
Total comprehensive income | 792 | 10 | 802 | |||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | — | — | — | — | (19 | ) | (19 | ) | — | (19 | ) | |||||||||||||||||||||
Dividends to noncontrolling interests | — | — | — | — | — | — | (4 | ) | (4 | ) | ||||||||||||||||||||||
Stock-based compensation expense and exercises and other | — | 6 | — | — | — | 6 | 1 | 7 | ||||||||||||||||||||||||
Balances as of September 30, 2022 (as adjusted) | $ | 1 | $ | 11,865 | $ | (2,632 | ) | $ | 760 | $ | (2,734 | ) | $ | 7,260 | $ | 758 | $ | 8,018 | ||||||||||||||
Nine months ended September 30, 2023 | ||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock, at cost | Total Genworth Financial, Inc.’s stockholders’ equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||
Balances as of December 31, 2022 (as adjusted) | $ | 1 | $ | 11,869 | $ | (2,614 | ) | $ | 1,139 | $ | (2,764 | ) | $ | 7,631 | $ | 755 | $ | 8,386 | ||||||||||||||
Repurchase of subsidiary shares | — | — | — | — | — | — | (13 | ) | (13 | ) | ||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 288 | — | 288 | 94 | 382 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | 394 | — | — | 394 | (3 | ) | 391 | |||||||||||||||||||||||
Total comprehensive income | 682 | 91 | 773 | |||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | — | — | — | — | (264 | ) | (264 | ) | — | (264 | ) | |||||||||||||||||||||
Dividends to noncontrolling interests | — | — | — | — | — | — | (14 | ) | (14 | ) | ||||||||||||||||||||||
Stock-based compensation expense and exercises and other | — | 8 | — | (1 | ) | — | 7 | 3 | 10 | |||||||||||||||||||||||
Balances as of September 30, 2023 | $ | 1 | $ | 11,877 | $ | (2,220 | ) | $ | 1,426 | $ | (3,028 | ) | $ | 8,056 | $ | 822 | $ | 8,878 | ||||||||||||||
Nine months ended September 30, 2022 | ||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Treasury stock, at cost | Total Genworth Financial, Inc.’s stockholders’ equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||
Balances as of December 31, 2021 (as adjusted) | $ | 1 | $ | 11,858 | $ | (5,855 | ) | $ | 225 | $ | (2,700 | ) | $ | 3,529 | $ | 756 | $ | 4,285 | ||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 535 | — | 535 | 103 | 638 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | 3,223 | — | — | 3,223 | (94 | ) | 3,129 | |||||||||||||||||||||||
Total comprehensive income | 3,758 | 9 | 3,767 | |||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | — | — | — | — | (34 | ) | (34 | ) | — | (34 | ) | |||||||||||||||||||||
Dividends to noncontrolling interests | — | — | — | — | — | — | (8 | ) | (8 | ) | ||||||||||||||||||||||
Stock-based compensation expense and exercises and other | — | 7 | — | — | — | 7 | 1 | 8 | ||||||||||||||||||||||||
Balances as of September 30, 2022 (as adjusted) | $ | 1 | $ | 11,865 | $ | (2,632 | ) | $ | 760 | $ | (2,734 | ) | $ | 7,260 | $ | 758 | $ | 8,018 | ||||||||||||||
Three months ended March 31, | ||||||||||||||||
2023 | 2022 | Nine months ended September 30, | ||||||||||||||
(As adjusted) | 2023 | 2022 | ||||||||||||||
(As adjusted) | ||||||||||||||||
Cash flows from (used by) operating activities: | ||||||||||||||||
Net income | $ | 94 | $ | 221 | $ | 382 | $ | 638 | ||||||||
Less loss from discontinued operations, net of taxes | — | 2 | ||||||||||||||
Adjustments to reconcile net income to net cash from (used by) operating activities: | ||||||||||||||||
Less income from discontinued operations, net of taxes | (2 | ) | (2 | ) | ||||||||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||||
Amortization of fixed maturity securities discounts and premiums | (25 | ) | (34 | ) | (84 | ) | (127 | ) | ||||||||
Net investment (gains) losses | 11 | (42 | ) | 15 | (3 | ) | ||||||||||
Changes in fair value of market risk benefits and associated hedges | 17 | (41 | ) | (26 | ) | (48 | ) | |||||||||
Charges assessed to policyholders | (144 | ) | (146 | ) | (430 | ) | (438 | ) | ||||||||
Acquisition costs deferred | (2 | ) | (4 | ) | (6 | ) | (10 | ) | ||||||||
Amortization of deferred acquisition costs and intangibles | 72 | 88 | 201 | 252 | ||||||||||||
Deferred income taxes | 37 | 67 | 135 | 200 | ||||||||||||
Derivative instruments, limited partnerships and other | (84 | ) | (105 | ) | (378 | ) | (250 | ) | ||||||||
Stock-based compensation expense | 15 | 10 | 37 | 29 | ||||||||||||
Change in certain assets and liabilities: | ||||||||||||||||
Accrued investment income and other assets | (73 | ) | (45 | ) | (124 | ) | (105 | ) | ||||||||
Insurance reserves | 273 | 290 | 903 | 995 | ||||||||||||
Current tax liabilities | 2 | — | (5 | ) | (4 | ) | ||||||||||
Other liabilities, policy and contract claims and other policy-related balances | (175 | ) | (323 | ) | (166 | ) | (451 | ) | ||||||||
Cash used by operating activities—discontinued operations | (1 | ) | (30 | ) | (2 | ) | (31 | ) | ||||||||
Net cash from (used by) operating activities | 17 | (92 | ) | |||||||||||||
Net cash from operating activities | 450 | 645 | ||||||||||||||
Cash flows from (used by) investing activities: | ||||||||||||||||
Proceeds from maturities and repayments of investments: | ||||||||||||||||
Fixed maturity securities | 613 | 730 | 1,676 | 2,154 | ||||||||||||
Commercial mortgage loans | 154 | 115 | 386 | 514 | ||||||||||||
Limited partnerships and other invested assets | 31 | 51 | 102 | 146 | ||||||||||||
Proceeds from sales of investments: | ||||||||||||||||
Fixed maturity and equity securities | 441 | 581 | 1,533 | 2,061 | ||||||||||||
Purchases and originations of investments: | ||||||||||||||||
Fixed maturity and equity securities | (685 | ) | (969 | ) | (2,187 | ) | (3,222 | ) | ||||||||
Commercial mortgage loans | (37 | ) | (197 | ) | (178 | ) | (765 | ) | ||||||||
Limited partnerships and other invested assets | (164 | ) | (137 | ) | (432 | ) | (491 | ) | ||||||||
Short-term investments, net | 1 | (50 | ) | (15 | ) | 24 | ||||||||||
Policy loans, net | 10 | 14 | 66 | 31 | ||||||||||||
Other | (38 | ) | — | |||||||||||||
Net cash from investing activities | 364 | 138 | 913 | 452 | ||||||||||||
Cash flows from (used by) financing activities: | ||||||||||||||||
Deposits to universal life and investment contracts | 148 | 159 | 437 | 466 | ||||||||||||
Withdrawals from universal life and investment contracts | (491 | ) | (418 | ) | (1,308 | ) | (1,190 | ) | ||||||||
Repayment and repurchase of long-term debt | (11 | ) | (82 | ) | (11 | ) | (284 | ) | ||||||||
Repurchase of subsidiary shares | (4 | ) | — | (13 | ) | — | ||||||||||
Treasury stock acquired in connection with share repurchases | (68 | ) | — | (261 | ) | (34 | ) | |||||||||
Dividends paid to noncontrolling interests | (4 | ) | — | (14 | ) | (8 | ) | |||||||||
Other, net | 2 | 15 | — | (57 | ) | |||||||||||
Net cash used by financing activities | (428 | ) | (326 | ) | (1,170 | ) | (1,107 | ) | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | — | — | 1 | — | ||||||||||||
Net change in cash, cash equivalents and restricted cash | (47 | ) | (280 | ) | 194 | (10 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,799 | 1,571 | 1,799 | 1,571 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | 1,752 | 1,291 | 1,993 | 1,561 | ||||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at end of period | — | — | — | — | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of period | $ | 1,752 | $ | 1,291 | $ | 1,993 | $ | 1,561 | ||||||||
Key Area Impacted | Change to Accounting Policy | Policy Elections and Other Significant Matters | ||
DAC and balances amortized on a basis consistent with DAC, including intangible assets and cost of reinsurance | DAC associated with long-duration insurance contracts is grouped into cohorts consistent with groupings used to estimate the related liability for future policy benefits and is amortized on a constant level basis over the expected contract term, which approximates straight-line. Assumptions used to amortize DAC are consistent with the assumptions used to estimate the liability for future policy benefits. Revised assumptions are recognized prospectively over the remaining term of the related contract. DAC and balances amortized on a basis consistent with DAC are no longer subject to impairment, shadow adjustments or recoverability testing; however, present value of future profits (“PVFP”) is still assessed for recoverability in connection with premium deficiency testing. | The constant level basis we use to amortize DAC by product is as follows: • long-term care • life • fixed and variable We apply the amortization rate at the beginning of the current reporting period, which reflects assumption updates, if applicable, and actual experience through the end of the current reporting period. We have elected to amortize intangible assets associated with investment contracts, such as PVFP, in a manner consistent with DAC. Cost of reinsurance is deferred and amortized in a manner consistent with DAC over the terms of the related reinsurance treaties. |
Key Area Impacted | Change to Accounting Policy | Policy Elections and Other Significant Matters | ||
MRBs, which include contracts or contract features that protect the policyholder’s account balance and expose the insurer to other-than-nominal capital market risk, such as guaranteed minimum death benefits (“GMDBs”), guaranteed minimum withdrawal benefits (“GMWBs”) and guaranteed payout annuity floor benefits (“GPAFs”) | MRBs are measured at fair value with changes related to instrument-specific credit risk recorded as a separate component in accumulated other comprehensive income (loss) and remaining changes recorded in net income (loss). | For additional details, see notes 7 and 13. | ||
Liability for future policy | For the purpose of calculating the net premium ratio used to measure the liability for future policy benefits, long-duration insurance contracts are grouped into annual cohorts on the basis of original contract issue date. For acquired contracts, the acquisition date is considered the original contract issue date. The net premium ratio for long-duration traditional and | Traditional and limited-payment long-duration insurance contracts are generally grouped into annual calendar-year cohorts based on the contract issue date, product type and company. Limited-payment contracts are grouped into cohorts separately from other traditional products and riders are combined with the associated base policies. Certain products may also be grouped by acquisition date for acquired contracts and reinsurance treaty effective date for reinsurance recoverables. |
Key Area Impacted | Change to Accounting Policy | Policy Elections and Other Significant Matters | ||
Liability for future policy | All cash flow assumptions used to estimate the liability for future policy benefits (including health care experience, policyholder persistency or lapses (i.e., the probability that a policy or contract will remain in-force from one period to the next), insured mortality (i.e., life expectancy or longevity)in-force rate actions and legal settlements as well as cash payments made to policyholders who elect certain reduced benefit options in connection with legal settlements, referred to as settlement payments) are reviewed at least annually in the same period each year or more frequently if actual experience indicates a change is required. Changes in cash flow assumptions are recorded using a retrospective approach with a cumulativecatch-up adjustment by recalculating the net premium ratio (which is capped at 100%) using actual historical and updated future cash flow assumptions. The liability for future policy benefits is recalculated using the revised net premium ratio andlocked-in discount rate as of the beginning of the current reporting period and compared to the carrying amount as of the beginning of the current reporting period using the previous net premium ratio andlocked-in discount rate, with any difference recorded as a remeasurement gain (loss).Cash flow assumptions no longer reflect a provision for adverse deviation, and the premium deficiency test and shadow adjustments are eliminated. | We calculate a single liability for future policy benefits and therefore, all cash flows, including benefit payments (such as claims in course of settlement and incurred claims) are aggregated. As a result, our U.S. life insurance companies elected to combine their previously disclosed liability for policy and contract claims, excluding amounts related to certain life and annuity products not subject to the new accounting guidance, within the liability for future policy benefits and present the aggregate liability as one line item in our condensed consolidated balance sheets. Cash flow assumptions will be formally reviewed and updated as necessary based on experience studies in the fourth quarter each year. We elected to update the net premium ratio quarterly for actual versus expected experience; therefore, during interim reporting periods we will replace forecasted cash flow assumptions with actual cash flows with any difference recorded in net income (loss). We made an entity-wide election not to update our expense assumptions and therefore, these assumptions remain locked-in at the time of the Transition Date or if issued after the Transition Date, at the time of contract inception. |
Key Area Impacted | Change to Accounting Policy | Policy Elections and Other Significant Matters | ||
Liability for future policy | The liability for future policy benefits is measured using two different discount rates, a current discount rate and a locked-in discount rate.The current discount rate is used to remeasure the liability for future policy benefits recorded in the condensed consolidated balance sheets and is a current upper-medium grade fixed-income instrument yield, commonly interpreted to be a single-A rated bond rate, with the same duration as the corresponding liability.The locked-in discount rate is used to determine the amounts recorded to net income (loss) and is held constant for the purpose of calculating the net premium ratio and interest accretion. The difference between the liability measured using thelocked-in rate and the liability measured using the current rate is recorded in accumulated other comprehensive income (loss).For policies in-force prior to the Transition Date, thelocked-in discount rate is equal to the discount rate in effect immediately before the Transition Date. For contracts issued on or after the Transition Date, thelocked-in discount rate is asingle-A rated bond rate identified at inception of the contract. | The methodology used to determine the current discount rate assumption maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. The current discount rate assumption is based on a single-A curve published by a market data service. For cash flows projected beyond the observable curve, we use estimation techniques consistent with Level 3 fair value measurements as defined in 10-K to interpolate from the last observable rate to an estimated ultimate long-term rate.For contracts issued on or after the Transition Date, the locked-in discount rate for each issue-year cohort is determined as a single discount rate, using the weighted-average monthlysingle-A fixed-income forward curves over the current calendar year. |
Key Area Impacted | Change to Accounting Policy | Policy Elections and Other Significant Matters | ||
Liability for future policy | A deferred profit liability is established for limited-payment products at the time of contract issuance for any amount of gross premiums received in excess of net premiums, which is amortized into net income (loss) in proportion to insurance in-force for life insurance products and expected future benefit payments for fixed annuity products. Cash flow assumptions related to the deferred profit liability are consistent with the assumptions used to estimate the related liability for future policy benefits and are updated at the same time.The deferred profit liability is recalculated using updated cash flow assumptions as of the beginning of the current reporting period and compared to the current carrying amount as of the beginning of the current reporting period, with any difference recorded in net income (loss). |
Policyholder account | Additional insurance liabilities are established for guarantees or certain product features not classified as MRBs or embedded derivatives. The remeasurement of additional insurance liabilities based on a revised benefit ratio is recorded as liability remeasurement (gains) losses in current period net income (loss). The calculation of additional insurance liabilities also includes investment performance. Therefore, the impacts from net unrealized investment gains and losses on available for-sale investment securities backing additional insurance liabilities are required to be analyzed, as if those unrealized investment gains and losses were realized. These “shadow adjustments” result in the recognition of unrealized gains and losses on additional insurance liabilities in a manner consistent with unrealized gains and losses onavailable-for-sale | Annual premium deficiency testing is still required to be performed for our universal and term universal life insurance products. |
Effect of adopting LDTI | ||||||||||||||||||||||||
(Amounts in millions) | As originally reported | Eliminate shadow adjustments | Changes in measurement of assets and liabilities | Change in discount rate | Recognize MRBs | As adjusted | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Total investments | $ | 58,948 | $ | — | $ | — | $ | — | $ | — | $ | 58,948 | ||||||||||||
Cash, cash equivalents and restricted cash | 1,799 | — | — | — | — | 1,799 | ||||||||||||||||||
Accrued investment income | 643 | — | — | — | — | 643 | ||||||||||||||||||
Deferred acquisition costs | 2,200 | (40 | ) | 51 | — | — | 2,211 | |||||||||||||||||
Intangible assets | 241 | (8 | ) | (30 | ) | — | — | 203 | ||||||||||||||||
Reinsurance recoverable | 16,495 | — | 1,180 | 1,470 | (86 | ) | 19,059 | |||||||||||||||||
Less: Allowance for credit losses | (60 | ) | — | (3 | ) | — | — | (63 | ) | |||||||||||||||
Reinsurance recoverable, net | 16,435 | — | 1,177 | 1,470 | (86 | ) | 18,996 | |||||||||||||||||
Other assets | 415 | — | (89 | ) | — | 162 | 488 | |||||||||||||||||
Deferred tax asset | 1,344 | (5 | ) | 488 | 110 | 31 | 1,968 | |||||||||||||||||
Market risk benefit assets | — | — | — | — | 26 | 26 | ||||||||||||||||||
Separate account assets | 4,417 | — | — | — | — | 4,417 | ||||||||||||||||||
Total assets | $ | 86,442 | $ | (53 | ) | $ | 1,597 | $ | 1,580 | $ | 133 | $ | 89,699 | |||||||||||
Liabilities and equity | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Future policy benefits | $ | 38,064 | $ | (5 | ) | $ | 15,303 | $ | 1,987 | $ | — | $ | 55,349 | |||||||||||
Policyholder account balances | 17,113 | (67 | ) | 20 | — | (502 | ) | 16,564 | ||||||||||||||||
Market risk benefit liabilities | — | — | — | — | 748 | 748 | ||||||||||||||||||
Liability for policy and contract claims | 12,234 | — | (11,551 | ) | — | — | 683 | |||||||||||||||||
Unearned premiums | 584 | — | (381 | ) | — | — | 203 | |||||||||||||||||
Other liabilities | 1,672 | — | — | — | 3 | 1,675 | ||||||||||||||||||
Long-term borrowings | 1,611 | — | — | — | — | 1,611 | ||||||||||||||||||
Separate account liabilities | 4,417 | — | — | — | — | 4,417 | ||||||||||||||||||
Liabilities related to discontinued operations | 8 | — | — | — | — | 8 | ||||||||||||||||||
Total liabilities | 75,703 | (72 | ) | 3,391 | 1,987 | 249 | 81,258 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Equity: | ||||||||||||||||||||||||
Class A common stock | 1 | — | — | — | — | 1 | ||||||||||||||||||
Additional paid-in capital | 11,869 | — | — | — | — | 11,869 | ||||||||||||||||||
Accumulated other comprehensive income (loss) | (2,220 | ) | 19 | — | (407 | ) | (9 | ) | (2,617 | ) | ||||||||||||||
Retained earnings | 3,098 | — | (1,794 | ) | — | (107 | ) | 1,197 | ||||||||||||||||
Treasury stock, at cost | (2,764 | ) | — | — | — | — | (2,764 | ) | ||||||||||||||||
Total Genworth Financial, Inc.’s stockholders’ equity | 9,984 | 19 | (1,794 | ) | (407 | ) | (116 | ) | 7,686 | |||||||||||||||
Noncontrolling interests | 755 | — | — | — | — | 755 | ||||||||||||||||||
Total equity | 10,739 | 19 | (1,794 | ) | (407 | ) | (116 | ) | 8,441 | |||||||||||||||
Total liabilities and equity | $ | 86,442 | $ | (53 | ) | $ | 1,597 | $ | 1,580 | $ | 133 | $ | 89,699 | |||||||||||
(Amounts in millions) | As originally reported | Effect of adopting LDTI | As adjusted | |||||||||
Assets | ||||||||||||
Deferred acquisition costs | $ | 2,200 | $ | 11 | $ | 2,211 | ||||||
Intangible assets | 241 | (38 | ) | 203 | ||||||||
Reinsurance recoverable | 16,495 | 2,564 | 19,059 | |||||||||
Less: Allowance for credit losses | (60 | ) | (3 | ) | (63 | ) | ||||||
Reinsurance recoverable, net | 16,435 | 2,561 | 18,996 | |||||||||
Other assets | 415 | 73 | 488 | |||||||||
Deferred tax asset | 1,344 | 639 | 1,983 | |||||||||
Market risk benefit assets | — | 26 | 26 | |||||||||
Total assets | 86,442 | 3,272 | 89,714 | |||||||||
Liabilities and equity | ||||||||||||
Liabilities: | ||||||||||||
Future policy benefits | 38,064 | 17,343 | 55,407 | |||||||||
Policyholder account balances | 17,113 | (549 | ) | 16,564 | ||||||||
Market risk benefit liabilities | — | 748 | 748 | |||||||||
Liability for policy and contract claims | 12,234 | (11,551 | ) | 683 | ||||||||
Unearned premiums | 584 | (381 | ) | 203 | ||||||||
Other liabilities | 1,672 | 15 | 1,687 | |||||||||
Total liabilities | 75,703 | 5,625 | 81,328 | |||||||||
Equity: | ||||||||||||
Accumulated other comprehensive income (loss) | (2,220 | ) | (394 | ) | (2,614 | ) | ||||||
Retained earnings | 3,098 | (1,959 | ) | 1,139 | ||||||||
Total Genworth Financial, Inc.’s stockholders’ equity | 9,984 | (2,353 | ) | 7,631 | ||||||||
Total equity | 10,739 | (2,353 | ) | 8,386 | ||||||||
Total liabilities and equity | 86,442 | 3,272 | 89,714 |
Effect of adopting LDTI | ||||||||||||||||||||||||
(Amounts in millions) | As originally reported | Change in amortization | Changes in measurement of insurance liabilities | Remeasurement (gains) losses | Change in MRBs | As adjusted | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Premiums | $ | 931 | $ | — | $ | (14 | ) | $ | — | $ | — | $ | 917 | |||||||||||
Net investment income | 764 | — | — | — | — | 764 | ||||||||||||||||||
Net investment gains (losses) | 28 | — | — | — | 14 | 42 | ||||||||||||||||||
Policy fees and other income | 169 | (5 | ) | — | — | 6 | 170 | |||||||||||||||||
Total revenues | 1,892 | (5 | ) | (14 | ) | — | 20 | 1,893 | ||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Benefits and other changes in policy reserves | 1,139 | (5 | ) | 34 | — | (3 | ) | 1,165 | ||||||||||||||||
Liability remeasurement (gains) losses | — | — | — | (41 | ) | — | (41 | ) | ||||||||||||||||
Changes in fair value of market risk benefits and associated hedges | — | — | — | — | (41 | ) | (41 | ) | ||||||||||||||||
Interest credited | 125 | — | — | — | — | 125 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals | 271 | — | 9 | — | — | 280 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles | 92 | (4 | ) | — | — | — | 88 | |||||||||||||||||
Interest expense | 26 | — | — | — | — | 26 | ||||||||||||||||||
Total benefits and expenses | 1,653 | (9 | ) | 43 | (41 | ) | (44 | ) | 1,602 | |||||||||||||||
Income from continuing operations before income taxes | 239 | 4 | (57 | ) | 41 | 64 | 291 | |||||||||||||||||
Provision for income taxes | 58 | 1 | (13 | ) | 9 | 13 | 68 | |||||||||||||||||
Income from continuing operations | 181 | 3 | (44 | ) | 32 | 51 | 223 | |||||||||||||||||
Loss from discontinued operations, net of taxes | (2 | ) | — | — | — | — | (2 | ) | ||||||||||||||||
Net income | 179 | 3 | (44 | ) | 32 | 51 | 221 | |||||||||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 30 | — | — | — | — | 30 | ||||||||||||||||||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 149 | $ | 3 | $ | (44 | ) | $ | 32 | $ | 51 | $ | 191 | |||||||||||
Net income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 151 | $ | 3 | $ | (44 | ) | $ | 32 | $ | 51 | $ | 193 | |||||||||||
Loss from discontinued operations available to Genworth Financial, Inc.’s common stockholders | (2 | ) | — | — | — | — | (2 | ) | ||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 149 | $ | 3 | $ | (44 | ) | $ | 32 | $ | 51 | $ | 191 | |||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | $ | 0.30 | $ | 0.38 | ||||||||||||||||||||
Diluted | $ | 0.29 | $ | 0.37 | ||||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | $ | 0.29 | $ | 0.38 | ||||||||||||||||||||
Diluted | $ | 0.29 | $ | 0.37 | ||||||||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||||||
Basic | 508.3 | 508.3 | ||||||||||||||||||||||
Diluted | 517.4 | 517.4 | ||||||||||||||||||||||
Three months ended September 30, 2022 | Nine months ended September 30, 2022 | |||||||||||||||||||||||
(Amounts in millions, except per share amounts) | As originally reported | Effect of adopting LDTI | As adjusted | As originally reported | Effect of adopting LDTI | As adjusted | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Premiums | $ | 934 | $ | (5 | ) | $ | 929 | $ | 2,792 | $ | (30 | ) | $ | 2,762 | ||||||||||
Net investment gains (losses) | (69 | ) | 11 | (58 | ) | (33 | ) | 36 | 3 | |||||||||||||||
Policy fees and other income | 166 | 3 | 169 | 494 | 10 | 504 | ||||||||||||||||||
Total revenues | 1,839 | 9 | 1,848 | 5,612 | 16 | 5,628 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Benefits and other changes in policy reserves | 1,180 | (21 | ) | 1,159 | 3,083 | 11 | 3,094 | |||||||||||||||||
Liability remeasurement (gains) losses | — | 17 | 17 | — | (23 | ) | (23 | ) | ||||||||||||||||
Changes in fair value of market risk benefits and associated hedges | — | (27 | ) | (27 | ) | — | (48 | ) | (48 | ) | ||||||||||||||
Interest credited | 128 | — | 128 | 378 | 1 | 379 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals | 240 | 5 | 245 | 1,100 | (40 | ) | 1,060 | |||||||||||||||||
Amortization of deferred acquisition costs and intangibles | 79 | 1 | 80 | 255 | (3 | ) | 252 | |||||||||||||||||
Total benefits and expenses | 1,653 | (25 | ) | 1,628 | 4,894 | (102 | ) | 4,792 | ||||||||||||||||
Income from continuing operations before income taxes | 186 | 34 | 220 | 718 | 118 | 836 | ||||||||||||||||||
Provision for income taxes | 52 | 2 | 54 | 183 | 17 | 200 | ||||||||||||||||||
Income from continuing operations | 134 | 32 | 166 | 535 | 101 | 636 | ||||||||||||||||||
Net income | 139 | 32 | 171 | 537 | 101 | 638 | ||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | 104 | 32 | 136 | 434 | 101 | 535 | ||||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 99 | 32 | 131 | 432 | 101 | 533 | ||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | 104 | 32 | 136 | 434 | 101 | 535 | ||||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | 0.20 | 0.06 | 0.26 | 0.85 | 0.20 | 1.05 | ||||||||||||||||||
Diluted | 0.19 | 0.07 | 0.26 | 0.84 | 0.20 | 1.04 | ||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | 0.21 | 0.06 | 0.27 | 0.86 | 0.19 | 1.05 | ||||||||||||||||||
Diluted | 0.20 | 0.07 | 0.27 | 0.85 | 0.19 | 1.04 |
Effect of adopting LDTI | ||||||||||||||||||||||||
(Amounts in millions) | As originally reported | Change in amortization | Changes in measurement of insurance liabilities | Remeasurement (gains) losses | Change in MRBs | As adjusted | ||||||||||||||||||
Cash flows from (used by) operating activities: | ||||||||||||||||||||||||
Net income | $ | 179 | $ | 3 | $ | (44 | ) | $ | 32 | $ | 51 | $ | 221 | |||||||||||
Less loss from discontinued operations, net of taxes | 2 | — | — | — | — | 2 | ||||||||||||||||||
Adjustments to reconcile net income to net cash used by operating activities: | ||||||||||||||||||||||||
Amortization of fixed maturity securities discounts and premiums | (34 | ) | — | — | — | — | (34 | ) | ||||||||||||||||
Net investment (gains) losses | (28 | ) | — | — | — | (14 | ) | (42 | ) | |||||||||||||||
Changes in fair value of market risk benefits and associated hedges | — | — | — | — | (41 | ) | (41 | ) | ||||||||||||||||
Charges assessed to policyholders | (150 | ) | — | 4 | — | — | (146 | ) | ||||||||||||||||
Acquisition costs deferred | (2 | ) | — | (2 | ) | — | — | (4 | ) | |||||||||||||||
Amortization of deferred acquisition costs and intangibles | 92 | (4 | ) | — | — | — | 88 | |||||||||||||||||
Deferred income taxes | 57 | 1 | (13 | ) | 9 | 13 | 67 | |||||||||||||||||
Derivative instruments, limited partnerships and other | (105 | ) | — | — | — | — | (105 | ) | ||||||||||||||||
Stock-based compensation expense | 10 | — | — | — | — | 10 | ||||||||||||||||||
Change in certain assets and liabilities: | ||||||||||||||||||||||||
Accrued investment income and other assets | (43 | ) | — | (2 | ) | — | — | (45 | ) | |||||||||||||||
Insurance reserves | 249 | — | 91 | (41 | ) | (9 | ) | 290 | ||||||||||||||||
Other liabilities, policy and contract claims and other policy-related balances | (289 | ) | — | (34 | ) | — | — | (323 | ) | |||||||||||||||
Cash used by operating activities—discontinued operations | (30 | ) | — | — | — | — | (30 | ) | ||||||||||||||||
Net cash used by operating activities | $ | (92 | ) | $ | — | $ | — | $ | — | $ | — | $ | (92 | ) | ||||||||||
(Amounts in millions) | As originally reported | Effect of adopting LDTI | As adjusted | |||||||||
Cash flows from (used by) operating activities: | ||||||||||||
Net income | $ | 537 | $ | 101 | $ | 638 | ||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||
Net investment (gains) losses | 33 | (36 | ) | (3 | ) | |||||||
Changes in fair value of market risk benefits and associated hedges | — | (48 | ) | (48 | ) | |||||||
Charges assessed to policyholders | (444 | ) | 6 | (438 | ) | |||||||
Acquisition costs deferred | — | (10 | ) | (10 | ) | |||||||
Amortization of deferred acquisition costs and intangibles | 255 | (3 | ) | 252 | ||||||||
Deferred income taxes | 183 | 17 | 200 | |||||||||
Change in certain assets and liabilities: | ||||||||||||
Accrued investment income and other assets | (104 | ) | (1 | ) | (105 | ) | ||||||
Insurance reserves | 717 | 278 | 995 | |||||||||
Other liabilities, policy and contract claims and other policy-related balances | (147 | ) | (304 | ) | (451 | ) | ||||||
Net cash from operating activities | 645 | — | 645 |
Effect of adopting LDTI | ||||||||||||||||||||||||
(Amounts in millions) | Balances as of December 31, 2020 (as reported) | Eliminate shadow adjustments | Changes in measurement of assets and liabilities | Change in discount rate | Recognize MRBs | Balances as of January 1, 2021 (as adjusted) | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Total investments | $ | 74,701 | $ | — | $ | — | $ | — | $ | — | $ | 74,701 | ||||||||||||
Cash, cash equivalents and restricted cash | 2,561 | — | — | — | — | 2,561 | ||||||||||||||||||
Accrued investment income | 655 | — | — | — | — | 655 | ||||||||||||||||||
Deferred acquisition costs | 1,487 | 1,322 | — | — | — | 2,809 | ||||||||||||||||||
Intangible assets | 157 | 114 | — | — | — | 271 | ||||||||||||||||||
Reinsurance recoverable | 16,864 | — | 1,214 | 10,149 | (92 | ) | 28,135 | |||||||||||||||||
Less: Allowance for credit losses | (45 | ) | — | — | — | — | (45 | ) | ||||||||||||||||
Reinsurance recoverable, net | 16,819 | — | 1,214 | 10,149 | (92 | ) | 28,090 | |||||||||||||||||
Other assets | 404 | — | (89 | ) | — | 248 | 563 | |||||||||||||||||
Deferred tax asset | 65 | (1,515 | ) | 481 | 4,629 | 105 | 3,765 | |||||||||||||||||
Market risk benefit assets | — | — | — | — | 22 | 22 | ||||||||||||||||||
Separate account assets | 6,081 | — | — | — | — | 6,081 | ||||||||||||||||||
Assets related to discontinued operations | 2,817 | — | — | — | — | 2,817 | ||||||||||||||||||
Total assets | $ | 105,747 | $ | (79 | ) | $ | 1,606 | $ | 14,778 | $ | 283 | $ | 122,335 | |||||||||||
Liabilities and equity | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Future policy benefits | $ | 42,695 | $ | (4,456 | ) | $ | 14,581 | $ | 31,916 | $ | — | $ | 84,736 | |||||||||||
Policyholder account balances | 21,503 | (1,229 | ) | — | — | (641 | ) | 19,633 | ||||||||||||||||
Market risk benefit liabilities | — | — | — | — | 1,310 | 1,310 | ||||||||||||||||||
Liability for policy and contract claims | 11,486 | — | (10,725 | ) | — | — | 761 | |||||||||||||||||
Unearned premiums | 775 | — | (468 | ) | — | — | 307 | |||||||||||||||||
Other liabilities | 1,614 | — | — | — | 4 | 1,618 | ||||||||||||||||||
Long-term borrowings | 3,403 | — | — | — | — | 3,403 | ||||||||||||||||||
Separate account liabilities | 6,081 | — | — | — | — | 6,081 | ||||||||||||||||||
Liabilities related to discontinued operations | 2,370 | — | — | — | — | 2,370 | ||||||||||||||||||
Total liabilities | 89,927 | (5,685 | ) | 3,388 | 31,916 | 673 | 120,219 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Equity: | ||||||||||||||||||||||||
Class A common stock | 1 | — | — | — | — | 1 | ||||||||||||||||||
Additional paid-in capital | 12,008 | — | — | — | — | 12,008 | ||||||||||||||||||
Accumulated other comprehensive income (loss) | 4,425 | 5,606 | — | (17,138 | ) | (19 | ) | (7,126 | ) | |||||||||||||||
Retained earnings | 1,584 | — | (1,782 | ) | — | (371 | ) | (569 | ) | |||||||||||||||
Treasury stock, at cost | (2,700 | ) | — | — | — | — | (2,700 | ) | ||||||||||||||||
Total Genworth Financial, Inc.’s stockholders’ equity | 15,318 | 5,606 | (1,782 | ) | (17,138 | ) | (390 | ) | 1,614 | |||||||||||||||
Noncontrolling interests | 502 | — | — | — | — | 502 | ||||||||||||||||||
Total equity | 15,820 | 5,606 | (1,782 | ) | (17,138 | ) | (390 | ) | 2,116 | |||||||||||||||
Total liabilities and equity | $ | 105,747 | $ | (79 | ) | $ | 1,606 | $ | 14,778 | $ | 283 | $ | 122,335 | |||||||||||
Balances as of December 31, 2020 (as reported) | Effect of adopting LDTI | Balances as of January 1, 2021 (as adjusted) | ||||||||||||||||||||||
(Amounts in millions) | Eliminate shadow adjustments | Changes in measurement of assets and liabilities | Change in discount rate | Recognize MRBs | ||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Total investments | $ | 74,701 | $ | — | $ | — | $ | — | $ | — | $ | 74,701 | ||||||||||||
Cash, cash equivalents and restricted cash | 2,561 | — | — | — | — | 2,561 | ||||||||||||||||||
Accrued investment income | 655 | — | — | — | — | 655 | ||||||||||||||||||
Deferred acquisition costs | 1,487 | 1,322 | — | — | — | 2,809 | ||||||||||||||||||
Intangible assets | 157 | 114 | — | — | — | 271 | ||||||||||||||||||
Reinsurance recoverable | 16,864 | — | 1,214 | 10,149 | (92 | ) | 28,135 | |||||||||||||||||
Less: Allowance for credit losses | (45 | ) | — | — | — | — | (45 | ) | ||||||||||||||||
Reinsurance recoverable, net | 16,819 | — | 1,214 | 10,149 | (92 | ) | 28,090 | |||||||||||||||||
Other assets | 404 | — | (89 | ) | — | 248 | 563 | |||||||||||||||||
Deferred tax asset | 65 | (1,515 | ) | 497 | 4,624 | 105 | 3,776 | |||||||||||||||||
Market risk benefit assets | — | — | — | — | 22 | 22 | ||||||||||||||||||
Separate account assets | 6,081 | — | — | — | — | 6,081 | ||||||||||||||||||
Assets related to discontinued operations | 2,817 | — | — | — | — | 2,817 | ||||||||||||||||||
Total assets | $ | 105,747 | $ | (79 | ) | $ | 1,622 | $ | 14,773 | $ | 283 | $ | 122,346 | |||||||||||
Liabilities and equity | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Future policy benefits | $ | 42,695 | $ | (4,456 | ) | $ | 14,654 | $ | 31,893 | $ | — | $ | 84,786 | |||||||||||
Policyholder account balances | 21,503 | (1,229 | ) | — | — | (641 | ) | 19,633 | ||||||||||||||||
Market risk benefit liabilities | — | — | — | — | 1,310 | 1,310 | ||||||||||||||||||
Liability for policy and contract claims | 11,486 | — | (10,725 | ) | — | — | 761 | |||||||||||||||||
Unearned premiums | 775 | — | (468 | ) | — | — | 307 | |||||||||||||||||
Other liabilities | 1,614 | — | — | — | 4 | 1,618 | ||||||||||||||||||
Long-term borrowings | 3,403 | — | — | — | — | 3,403 | ||||||||||||||||||
Separate account liabilities | 6,081 | — | — | — | — | 6,081 | ||||||||||||||||||
Liabilities related to discontinued operations | 2,370 | — | — | — | — | 2,370 | ||||||||||||||||||
Total liabilities | 89,927 | (5,685 | ) | 3,461 | 31,893 | 673 | 120,269 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||
Equity: | ||||||||||||||||||||||||
Class A common stock | 1 | — | — | — | — | 1 | ||||||||||||||||||
Additional paid-in capital | 12,008 | — | — | — | — | 12,008 | ||||||||||||||||||
Accumulated other comprehensive income (loss) | 4,425 | 5,606 | — | (17,120 | ) | (19 | ) | (7,108 | ) | |||||||||||||||
Retained earnings | 1,584 | — | (1,839 | ) | — | (371 | ) | (626 | ) | |||||||||||||||
Treasury stock, at cost | (2,700 | ) | — | — | — | — | (2,700 | ) | ||||||||||||||||
Total Genworth Financial, Inc.’s stockholders’ equity | 15,318 | 5,606 | (1,839 | ) | (17,120 | ) | (390 | ) | 1,575 | |||||||||||||||
Noncontrolling interests | 502 | — | — | — | — | 502 | ||||||||||||||||||
Total equity | 15,820 | 5,606 | (1,839 | ) | (17,120 | ) | (390 | ) | 2,077 | |||||||||||||||
Total liabilities and equity | $ | 105,747 | $ | (79 | ) | $ | 1,622 | $ | 14,773 | $ | 283 | $ | 122,346 | |||||||||||
(Amounts in millions) | Accumulated other comprehensive income (loss) | Retained earnings | Total stockholders’ equity | |||||||||
Deferred acquisition costs | $ | 1,322 | $ | — | $ | 1,322 | ||||||
Intangible assets | 114 | — | 114 | |||||||||
Reinsurance recoverable | 10,149 | 1,201 | 11,350 | |||||||||
Other assets | — | 156 | 156 | |||||||||
Future policy benefits | (27,460 | ) | (3,464 | ) | (30,924 | ) | ||||||
Policyholder account balances | 1,229 | — | 1,229 | |||||||||
Market risk benefits, net | (24 | ) | (623 | ) | (647 | ) | ||||||
Other liabilities | — | (4 | ) | (4 | ) | |||||||
Deferred taxes | 3,119 | 581 | 3,700 | |||||||||
Total | $ | (11,551 | ) | $ | (2,153 | ) | $ | (13,704 | ) | |||
(Amounts in millions) | Accumulated other comprehensive income (loss) | Retained earnings | Total stockholders’ equity | |||||||||
Deferred acquisition costs | $ | 1,322 | $ | — | $ | 1,322 | ||||||
Intangible assets | 114 | — | 114 | |||||||||
Reinsurance recoverable | 10,149 | 1,201 | 11,350 | |||||||||
Other assets | — | 156 | 156 | |||||||||
Future policy benefits | (27,437 | ) | (3,537 | ) | (30,974 | ) | ||||||
Policyholder account balances | 1,229 | — | 1,229 | |||||||||
Market risk benefits, net | (24 | ) | (623 | ) | (647 | ) | ||||||
Other liabilities | — | (4 | ) | (4 | ) | |||||||
Deferred taxes | 3,114 | 597 | 3,711 | |||||||||
Total | $ | (11,533 | ) | $ | (2,210 | ) | $ | (13,743 | ) | |||
(Amounts in millions) | Long-term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | |||||||||||||||
Balances as of December 31, 2020 | $ | — | $ | 1,316 | $ | 3 | $ | 139 | $ | 1,458 | ||||||||||
Adjustment for removal of related balances in accumulated other comprehensive income (loss) | 1,043 | 185 | 82 | 12 | 1,322 | |||||||||||||||
Adjusted balances as of January 1, 2021 | $ | 1,043 | $ | 1,501 | $ | 85 | $ | 151 | 2,780 | |||||||||||
Enact segment | 29 | |||||||||||||||||||
Total deferred acquisition costs as of January 1, 2021 | $ | 2,809 | ||||||||||||||||||
(Amounts in millions) | Life insurance | Fixed annuities | Variable annuities | Total | ||||||||||||
Balances as of December 31, 2020 | $ | 73 | $ | 7 | $ | 3 | $ | 83 | ||||||||
Adjustment for removal of related balance in accumulated other comprehensive income (loss) | 81 | 33 | — | 114 | ||||||||||||
Adjusted balances as of January 1, 2021 | $ | 154 | $ | 40 | $ | 3 | $ | 197 | ||||||||
(Amounts in millions) | Life insurance | Fixed annuities | Variable annuities | Total | ||||||||||||
Balances as of December 31, 2020 | $ | 73 | $ | 7 | $ | 3 | $ | 83 | ||||||||
Adjustment for removal of related balances in accumulated other comprehensive income (loss) | 81 | 33 | — | 114 | ||||||||||||
Adjusted balances as of January 1, 2021 | $ | 154 | $ | 40 | $ | 3 | $ | 197 | ||||||||
(Amounts in millions) | Long-term care insurance | Life insurance | Fixed annuities | Total | ||||||||||||
Balances as of December 31, 2020 | $ | 28,770 | $ | 2,101 | $ | 11,824 | $ | 42,695 | ||||||||
Reclassify liability for policy and contract claims, unearned premiums and due premiums (1) | 10,918 | 189 | 10 | 11,117 | ||||||||||||
Change in discount rate assumptions | 24,276 | 361 | 7,279 | 31,916 | ||||||||||||
Change in cash flow assumptions (2) | 3,246 | (2 | ) | 264 | 3,508 | |||||||||||
Change in cash flow assumptions, effect of increase (decrease) of the deferred profit liability (2) | (173 | ) | — | 129 | (44 | ) | ||||||||||
Adjustment for removal of related balances in accumulated other comprehensive income (loss) | (3,716 | ) | — | (740 | ) | (4,456 | ) | |||||||||
Adjusted balances as of January 1, 2021 | 63,321 | 2,649 | 18,766 | 84,736 | ||||||||||||
Less: reinsurance recoverable | 11,476 | 834 | 13,699 | 26,009 | ||||||||||||
Adjusted balances as of January 1, 2021, net of reinsurance | $ | 51,845 | $ | 1,815 | $ | 5,067 | $ | 58,727 | ||||||||
(Amounts in millions) | Long-term care insurance | Life insurance | Fixed annuities | Total | ||||||||||||
Balances as of December 31, 2020 | $ | 28,770 | $ | 2,101 | $ | 11,824 | $ | 42,695 | ||||||||
Reclassify liability for policy and contract claims, unearned premiums and due premiums (1) | 10,918 | 189 | 10 | 11,117 | ||||||||||||
Change in discount rate assumptions | 24,253 | 361 | 7,279 | 31,893 | ||||||||||||
Change in cash flow assumptions (2) | 3,319 | (2 | ) | 264 | 3,581 | |||||||||||
Change in cash flow assumptions, effect of increase (decrease) of the deferred profit liability (2) | (173 | ) | — | 129 | (44 | ) | ||||||||||
Adjustment for removal of related balances in accumulated other comprehensive income (loss) | (3,716 | ) | — | (740 | ) | (4,456 | ) | |||||||||
Adjusted balances as of January 1, 2021 | 63,371 | 2,649 | 18,766 | 84,786 | ||||||||||||
Less: reinsurance recoverable | 11,476 | 834 | 13,699 | 26,009 | ||||||||||||
Adjusted balances as of January 1, 2021, net of reinsurance | $ | 51,895 | $ | 1,815 | $ | 5,067 | $ | 58,777 | ||||||||
(1) | Upon adopting LDTI, we elected to combine our previously disclosed liability for policy and contract claims, unearned premiums and due premiums, excluding amounts related to mortgage insurance and certain life and annuity products not subject to the new accounting guidance, within the liability for future policy benefits and present the aggregate liability as one line item in our condensed consolidated balance sheets. |
(2) | For limited-payment contracts, if the remeasured liability for future policy benefits under LDTI is (less) greater than the carrying value immediately before the Transition Date, the deferred profit liability is increased (decreased) with a corresponding (decrease) increase to the liability for future policy benefits. |
(Amounts in millions) | Fixed index annuities | Variable annuities | Total | Fixed indexed annuities | Variable annuities | Total | ||||||||||||||||||
Balances as of December 31, 2020 | $ | 71 | $ | 570 | $ | 641 | $ | 71 | $ | 570 | $ | 641 | ||||||||||||
Adjustment for the difference between carrying amount and fair value, except for the difference due to instrument-specific credit risk | 39 | 584 | 623 | 39 | 584 | 623 | ||||||||||||||||||
Adjustment for the cumulative effect of changes in the instrument-specific credit risk since issuance | 5 | 19 | 24 | 5 | 19 | 24 | ||||||||||||||||||
Total adjustment for the difference between carrying amount and fair value | 44 | 603 | 647 | 44 | 603 | 647 | ||||||||||||||||||
Adjusted balances as of January 1, 2021 | 115 | 1,173 | 1,288 | 115 | 1,173 | 1,288 | ||||||||||||||||||
Less: reinsurance recoverable | — | 244 | 244 | — | 244 | 244 | ||||||||||||||||||
Adjusted balances as of January 1, 2021, net of reinsurance | $ | 115 | $ | 929 | $ | 1,044 | $ | 115 | $ | 929 | $ | 1,044 | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Weighted-average common shares used in basic earnings per share calculations | 460.5 | 503.8 | 475.3 | 507.0 | ||||||||||||
Potentially dilutive securities: | ||||||||||||||||
Stock options, restricted stock units and other equity-based awards | 5.5 | 5.5 | 6.1 | 6.6 | ||||||||||||
Weighted-average common shares used in diluted earnings per share calculations | 466.0 | 509.3 | 481.4 | 513.6 | ||||||||||||
Income from continuing operations: | ||||||||||||||||
Income from continuing operations | $ | 60 | $ | 166 | $ | 380 | $ | 636 | ||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | 94 | 103 | ||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 131 | $ | 286 | $ | 533 | ||||||||
Basic per share | $ | 0.06 | $ | 0.26 | $ | 0.60 | $ | 1.05 | ||||||||
Diluted per share | $ | 0.06 | $ | 0.26 | $ | 0.59 | $ | 1.04 | ||||||||
Income from discontinued operations: | ||||||||||||||||
Income from discontinued operations, net of taxes | $ | — | $ | 5 | $ | 2 | $ | 2 | ||||||||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | ||||||||||||
Income from discontinued operations available to Genworth Financial, Inc.’s common stockholders | $ | — | $ | 5 | $ | 2 | $ | 2 | ||||||||
Basic per share | $ | — | $ | 0.01 | $ | — | $ | — | ||||||||
Diluted per share | $ | — | $ | 0.01 | $ | — | $ | — | ||||||||
Net income: | ||||||||||||||||
Income from continuing operations | $ | 60 | $ | 166 | $ | 380 | $ | 636 | ||||||||
Income from discontinued operations, net of taxes | — | 5 | 2 | 2 | ||||||||||||
Net income | 60 | 171 | 382 | 638 | ||||||||||||
Less: net income attributable to noncontrolling interests | 31 | 35 | 94 | 103 | ||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 136 | $ | 288 | $ | 535 | ||||||||
Basic per share (1) | $ | 0.06 | $ | 0.27 | $ | 0.61 | $ | 1.05 | ||||||||
Diluted per share (1) | $ | 0.06 | $ | 0.27 | $ | 0.60 | $ | 1.04 | ||||||||
Three months ended March 31, | ||||||||
(Amounts in millions, except per share amounts) | 2023 | 2022 | ||||||
Weighted-average common shares used in basic earnings per share calculations | 492.3 | 508.3 | ||||||
Potentially dilutive securities: | ||||||||
Stock options, restricted stock units and other equity-based awards | 7.8 | 9.1 | ||||||
Weighted-average common shares used in diluted earnings per share calculations | 500.1 | 517.4 | ||||||
Income from continuing operations: | ||||||||
Income from continuing operations | $ | 94 | $ | 223 | ||||
Less: net income from continuing operations attributable to noncontrolling interests | 32 | 30 | ||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 193 | ||||
Basic per share | $ | 0.13 | $ | 0.38 | ||||
Diluted per share | $ | 0.12 | $ | 0.37 | ||||
Loss from discontinued operations: | ||||||||
Loss from discontinued operations, net of taxes | $ | — | $ | (2 | ) | |||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | ||||||
Loss from discontinued operations available to Genworth Financial, Inc.’s common stockholders | $ | — | $ | (2 | ) | |||
Basic per share | $ | — | $ | — | ||||
Diluted per share | $ | — | $ | — | ||||
Net income: | ||||||||
Income from continuing operations | $ | 94 | $ | 223 | ||||
Loss from discontinued operations, net of taxes | — | (2 | ) | |||||
Net income | 94 | 221 | ||||||
Less: net income attributable to noncontrolling interests | 32 | 30 | ||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 191 | ||||
Basic per share | $ | 0.13 | $ | 0.38 | ||||
Diluted per share | $ | 0.12 | $ | 0.37 | ||||
(1) | May not total due to whole number calculation. |
Three months ended March 31, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Fixed maturity securities—taxable | $ | 561 | $ | 580 | $ | 559 | $ | 576 | $ | 1,687 | $ | 1,734 | ||||||||||||
Fixed maturity securities—non-taxable | 1 | 1 | 1 | 2 | 3 | 4 | ||||||||||||||||||
Equity securities | 2 | 2 | 1 | 3 | 6 | 7 | ||||||||||||||||||
Commercial mortgage loans | 76 | 81 | 76 | 81 | 227 | 240 | ||||||||||||||||||
Policy loans | 55 | 50 | 58 | 55 | 167 | 156 | ||||||||||||||||||
Limited partnerships | 28 | 7 | 31 | 38 | 76 | 77 | ||||||||||||||||||
Other invested assets | 68 | 63 | 69 | 67 | 207 | 196 | ||||||||||||||||||
Cash, cash equivalents, restricted cash and short-term investments | 18 | — | 28 | 7 | 68 | 8 | ||||||||||||||||||
Gross investment income before expenses and fees | 809 | 784 | 823 | 829 | 2,441 | 2,422 | ||||||||||||||||||
Expenses and fees | (22 | ) | (20 | ) | (22 | ) | (21 | ) | (68 | ) | (63 | ) | ||||||||||||
Net investment income | $ | 787 | $ | 764 | $ | 801 | $ | 808 | $ | 2,373 | $ | 2,359 | ||||||||||||
Three months ended March 31, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Realized investment gains (losses): | ||||||||
Available-for-sale | ||||||||
Realized gains | $ | 3 | $ | 10 | ||||
Realized losses | (19 | ) | (18 | ) | ||||
Net realized gains (losses) on available-for-sale | (16 | ) | (8 | ) | ||||
Net realized gains (losses) on equity securities sold | — | — | ||||||
Net realized gains (losses) on limited partnerships | — | — | ||||||
Total net realized investment gains (losses) | (16 | ) | (8 | ) | ||||
Net change in allowance for credit losses on available-for-sale | (15 | ) | — | |||||
Write-down of available-for-sale (1) | — | (2 | ) | |||||
Net unrealized gains (losses) on equity securities still held | 11 | (6 | ) | |||||
Net unrealized gains (losses) on limited partnerships | — | 35 | ||||||
Commercial mortgage loans | (2 | ) | 1 | |||||
Derivative instruments (2) | 12 | 19 | ||||||
Other | (1 | ) | 3 | |||||
Net investment gains (losses) | $ | (11 | ) | $ | 42 | |||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Realized investment gains (losses): | ||||||||||||||||
Available-for-sale | ||||||||||||||||
Realized gains | $ | 5 | $ | 11 | $ | 26 | $ | 26 | ||||||||
Realized losses | (16 | ) | (38 | ) | (83 | ) | (65 | ) | ||||||||
Net realized gains (losses) on available-for-sale | (11 | ) | (27 | ) | (57 | ) | (39 | ) | ||||||||
Net realized gains (losses) on equity securities sold | — | — | (1 | ) | — | |||||||||||
Net realized gains (losses) on limited partnerships | — | — | — | — | ||||||||||||
Total net realized investment gains (losses) | (11 | ) | (27 | ) | (58 | ) | (39 | ) | ||||||||
Net change in allowance for credit losses on available-for-sale | (2 | ) | — | (6 | ) | — | ||||||||||
Write-down of available-for-sale (1) | — | — | (1 | ) | (2 | ) | ||||||||||
Net unrealized gains (losses) on equity securities still held | (12 | ) | (14 | ) | 20 | (46 | ) | |||||||||
Net unrealized gains (losses) on limited partnerships | 14 | (24 | ) | 54 | 35 | |||||||||||
Commercial mortgage loans | (1 | ) | — | (3 | ) | 3 | ||||||||||
Derivative instruments (2) | (28 | ) | 7 | (17 | ) | 44 | ||||||||||
Other | (3 | ) | — | (4 | ) | 8 | ||||||||||
Net investment gains (losses) | $ | (43 | ) | $ | (58 | ) | $ | (15 | ) | $ | 3 | |||||
(1) | Represents write-down of securities deemed uncollectible or that we intend to sell or will be required to sell prior to recovery of the amortized cost basis. |
(2) | See note 6 for additional information on the impact of derivative instruments included in net investment gains (losses). |
(Amounts in millions) | Beginning balance | Increase from securities without allowance in previous periods | Increase (decrease) from securities with allowance in previous periods | Securities sold | Decrease due to change in intent or requirement to sell | Write-offs | Recoveries | Ending balance | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||
Commercial mortgage- backed | $ | 4 | $ | 1 | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | 6 | ||||||||||||||||
Total available-for-sale | $ | 4 | $ | 1 | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | 6 | ||||||||||||||||
(Amounts in millions) | Beginning balance | Increase from securities without allowance in previous periods | Increase (decrease) from securities with allowance in previous periods | Securities sold | Decrease due to change in intent or requirement to sell | Write-offs | Recoveries | Ending balance | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||
U.S. corporate | $ | — | $ | 9 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 9 | ||||||||||||||||
Commercial mortgage-backed | — | 6 | — | — | — | — | — | 6 | ||||||||||||||||||||||||
Total available-for-sale | $ | — | $ | 15 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 15 | ||||||||||||||||
(Amounts in millions) | Beginning balance | Increase from securities without allowance in previous periods | Increase (decrease) from securities with allowance in previous periods | Securities sold | Decrease due to change in intent or requirement to sell | Write-offs | Recoveries | Ending balance | ||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||
U.S. corporate | $ | — | $ | 9 | $ | — | $ | (7 | ) | $ | — | $ | (2 | ) | $ | — | $ | — | ||||||||||||||
Commercial mortgage-backed | — | 7 | 1 | (2 | ) | — | — | — | 6 | |||||||||||||||||||||||
Total available-for-sale | $ | — | $ | 16 | $ | 1 | $ | (9 | ) | $ | — | $ | (2 | ) | $ | — | $ | 6 | ||||||||||||||
(Amounts in millions) | March 31, 2023 | December 31, 2022 | ||||||
Net unrealized gains (losses) on fixed maturity securities without an allowance for credit losses (1) | $ | (3,058 | ) | $ | (4,251 | ) | ||
Net unrealized gains (losses) on fixed maturity securities with an allowance for credit losses (1) | (7 | ) | — | |||||
Adjustments to policyholder contract balances | 49 | 68 | ||||||
Income taxes, net | 457 | 705 | ||||||
Net unrealized investment gains (losses) | (2,559 | ) | (3,478 | ) | ||||
Less: net unrealized investment gains (losses) attributable to noncontrolling interests | (59 | ) | (71 | ) | ||||
Net unrealized investment gains (losses) attributable to Genworth Financial, Inc. | $ | (2,500 | ) | $ | (3,407 | ) | ||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | ||||||
Net unrealized gains (losses) on fixed maturity securities without an allowance for credit losses | $ | (5,881 | ) | $ | (4,251 | ) | ||
Net unrealized gains (losses) on fixed maturity securities with an allowance for credit losses | — | — | ||||||
Adjustments to policyholder contract balances | 104 | 68 | ||||||
Income taxes, net | 925 | 705 | ||||||
Net unrealized investment gains (losses) | (4,852 | ) | (3,478 | ) | ||||
Less: net unrealized investment gains (losses) attributable to noncontrolling interests | (74 | ) | (71 | ) | ||||
Net unrealized investment gains (losses) attributable to Genworth Financial, Inc. | $ | (4,778 | ) | $ | (3,407 | ) | ||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Beginning balance | $ | (3,407 | ) | $ | 6,077 | $ | (3,056 | ) | $ | (1,518 | ) | $ | (3,407 | ) | $ | 6,077 | ||||||||
Unrealized gains (losses) arising during the period: | ||||||||||||||||||||||||
Unrealized gains (losses) on fixed maturity securities | 1,170 | (5,130 | ) | (2,102 | ) | (3,098 | ) | (1,687 | ) | (12,941 | ) | |||||||||||||
Adjustments to policyholder contract balances | (19 | ) | 83 | 42 | 52 | 36 | 212 | |||||||||||||||||
Provision for income taxes | (245 | ) | 1,074 | 319 | 508 | 232 | 2,517 | |||||||||||||||||
Change in unrealized gains (losses) on investment securities | 906 | (3,973 | ) | (1,741 | ) | (2,538 | ) | (1,419 | ) | (10,212 | ) | |||||||||||||
Reclassification adjustments to net investment (gains) losses, net of taxes of $(3) and $(2) | 13 | 6 | ||||||||||||||||||||||
Reclassification adjustments to net investment (gains) losses, net of taxes of $(2), $(6), $(12) and $(8) | 9 | 21 | 45 | 31 | ||||||||||||||||||||
Change in net unrealized investment gains (losses) | 919 | (3,967 | ) | (1,732 | ) | (2,517 | ) | (1,374 | ) | (10,181 | ) | |||||||||||||
Less: change in net unrealized investment gains (losses) attributable to noncontrolling interests | 12 | (41 | ) | (10 | ) | (25 | ) | (3 | ) | (94 | ) | |||||||||||||
Ending balance | $ | (2,500 | ) | $ | 2,151 | $ | (4,778 | ) | $ | (4,010 | ) | $ | (4,778 | ) | $ | (4,010 | ) | |||||||
(Amounts in millions) | Amortized cost or cost | Gross unrealized gains | Gross unrealized losses | Allowance for credit losses | Fair value | Amortized cost or cost | Gross unrealized gains | Gross unrealized losses | Allowance for credit losses | Fair value | ||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,417 | $ | 141 | $ | (117 | ) | $ | — | $ | 3,441 | $ | 3,498 | $ | 6 | $ | (392 | ) | $ | — | $ | 3,112 | ||||||||||||||||||
State and political subdivisions | 2,635 | 32 | (264 | ) | — | 2,403 | 2,566 | 5 | (407 | ) | — | 2,164 | ||||||||||||||||||||||||||||
Non-U.S. government | 711 | 15 | (96 | ) | — | 630 | 699 | 9 | (125 | ) | — | 583 | ||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 4,373 | 91 | (375 | ) | — | 4,089 | 4,454 | 13 | (611 | ) | — | 3,856 | ||||||||||||||||||||||||||||
Energy | 2,431 | 46 | (178 | ) | — | 2,299 | 2,454 | 18 | (265 | ) | — | 2,207 | ||||||||||||||||||||||||||||
Finance and insurance | 8,067 | 77 | (784 | ) | (6 | ) | 7,354 | 7,920 | 22 | (1,069 | ) | — | 6,873 | |||||||||||||||||||||||||||
Consumer—non-cyclical | 4,733 | 132 | (306 | ) | — | 4,559 | 4,632 | 32 | (538 | ) | — | 4,126 | ||||||||||||||||||||||||||||
Technology and communications | 3,259 | 60 | (281 | ) | — | 3,038 | 3,212 | 26 | (444 | ) | — | 2,794 | ||||||||||||||||||||||||||||
Industrial | 1,329 | 21 | (105 | ) | — | 1,245 | 1,309 | 8 | (168 | ) | — | 1,149 | ||||||||||||||||||||||||||||
Capital goods | 2,275 | 62 | (142 | ) | — | 2,195 | 2,255 | 19 | (235 | ) | — | 2,039 | ||||||||||||||||||||||||||||
Consumer—cyclical | 1,777 | 25 | (128 | ) | (3 | ) | 1,671 | 1,736 | 6 | (194 | ) | — | 1,548 | |||||||||||||||||||||||||||
Transportation | 1,149 | 39 | (76 | ) | — | 1,112 | 1,181 | 16 | (131 | ) | — | 1,066 | ||||||||||||||||||||||||||||
Other | 321 | 5 | (16 | ) | — | 310 | 320 | 1 | (23 | ) | — | 298 | ||||||||||||||||||||||||||||
Total U.S. corporate | 29,714 | 558 | (2,391 | ) | (9 | ) | 27,872 | 29,473 | 161 | (3,678 | ) | — | 25,956 | |||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 812 | — | (66 | ) | — | 746 | 809 | — | (90 | ) | — | 719 | ||||||||||||||||||||||||||||
Energy | 1,018 | 27 | (55 | ) | — | 990 | 1,054 | 10 | (86 | ) | — | 978 | ||||||||||||||||||||||||||||
Finance and insurance | 2,099 | 39 | (179 | ) | — | 1,959 | 2,045 | 22 | (223 | ) | — | 1,844 | ||||||||||||||||||||||||||||
Consumer—non-cyclical | 654 | 4 | (69 | ) | — | 589 | 688 | 1 | (107 | ) | — | 582 | ||||||||||||||||||||||||||||
Technology and communications | 995 | 10 | (83 | ) | — | 922 | 974 | 1 | (135 | ) | — | 840 | ||||||||||||||||||||||||||||
Industrial | 898 | 16 | (60 | ) | — | 854 | 853 | 2 | (86 | ) | — | 769 | ||||||||||||||||||||||||||||
Capital goods | 577 | 7 | (47 | ) | — | 537 | 593 | 1 | (70 | ) | — | 524 | ||||||||||||||||||||||||||||
Consumer—cyclical | 242 | 1 | (21 | ) | — | 222 | 241 | — | (30 | ) | — | 211 | ||||||||||||||||||||||||||||
Transportation | 393 | 15 | (24 | ) | — | 384 | 359 | 7 | (32 | ) | — | 334 | ||||||||||||||||||||||||||||
Other | 885 | 22 | (51 | ) | — | 856 | 819 | 3 | (69 | ) | — | 753 | ||||||||||||||||||||||||||||
Total non-U.S. corporate | 8,573 | 141 | (655 | ) | — | 8,059 | 8,435 | 47 | (928 | ) | — | 7,554 | ||||||||||||||||||||||||||||
Residential mortgage-backed | 1,030 | 12 | (57 | ) | — | 985 | 974 | 1 | (84 | ) | — | 891 | ||||||||||||||||||||||||||||
Commercial mortgage-backed | 2,086 | 2 | (251 | ) | (6 | ) | 1,831 | 1,868 | 1 | (360 | ) | (6 | ) | 1,503 | ||||||||||||||||||||||||||
Other asset-backed | 2,295 | 2 | (137 | ) | — | 2,160 | 2,342 | 1 | (138 | ) | — | 2,205 | ||||||||||||||||||||||||||||
Total available-for-sale | $ | 50,461 | $ | 903 | $ | (3,968 | ) | $ | (15 | ) | $ | 47,381 | $ | 49,855 | $ | 231 | $ | (6,112 | ) | $ | (6 | ) | $ | 43,968 | ||||||||||||||||
(Amounts in millions) | Amortized cost or cost | Gross unrealized gains | Gross unrealized losses | Allowance for credit losses | Fair value | |||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,446 | $ | 86 | $ | (191 | ) | $ | — | $ | 3,341 | |||||||||
State and political subdivisions | 2,726 | 19 | (346 | ) | — | 2,399 | ||||||||||||||
Non-U.S. government | 731 | 15 | (101 | ) | — | 645 | ||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 4,295 | 50 | (447 | ) | — | 3,898 | ||||||||||||||
Energy | 2,450 | 33 | (221 | ) | — | 2,262 | ||||||||||||||
Finance and insurance | 8,005 | 59 | (871 | ) | — | 7,193 | ||||||||||||||
Consumer—non-cyclical | 4,776 | 84 | (403 | ) | — | 4,457 | ||||||||||||||
Technology and communications | 3,265 | 43 | (361 | ) | — | 2,947 | ||||||||||||||
Industrial | 1,312 | 15 | (130 | ) | — | 1,197 | ||||||||||||||
Capital goods | 2,290 | 41 | (193 | ) | — | 2,138 | ||||||||||||||
Consumer—cyclical | 1,758 | 14 | (155 | ) | — | 1,617 | ||||||||||||||
Transportation | 1,165 | 32 | (97 | ) | — | 1,100 | ||||||||||||||
Other | 325 | 3 | (18 | ) | — | 310 | ||||||||||||||
Total U.S. corporate | 29,641 | 374 | (2,896 | ) | — | 27,119 | ||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 817 | — | (77 | ) | — | 740 | ||||||||||||||
Energy | 1,009 | 19 | (68 | ) | — | 960 | ||||||||||||||
Finance and insurance | 2,124 | 30 | (208 | ) | — | 1,946 | ||||||||||||||
Consumer—non-cyclical | 655 | 1 | (90 | ) | — | 566 | ||||||||||||||
Technology and communications | 997 | 4 | (107 | ) | — | 894 | ||||||||||||||
Industrial | 880 | 8 | (70 | ) | — | 818 | ||||||||||||||
Capital goods | 606 | 3 | (63 | ) | — | 546 | ||||||||||||||
Consumer—cyclical | 308 | — | (32 | ) | — | 276 | ||||||||||||||
Transportation | 392 | 12 | (29 | ) | — | 375 | ||||||||||||||
Other | 932 | 15 | (58 | ) | — | 889 | ||||||||||||||
Total non-U.S. corporate | 8,720 | 92 | (802 | ) | — | 8,010 | ||||||||||||||
Residential mortgage-backed | 1,059 | 7 | (71 | ) | — | 995 | ||||||||||||||
Commercial mortgage-backed | 2,183 | 2 | (277 | ) | — | 1,908 | ||||||||||||||
Other asset-backed | 2,328 | 1 | (163 | ) | — | 2,166 | ||||||||||||||
Total available-for-sale | $ | 50,834 | $ | 596 | $ | (4,847 | ) | $ | — | $ | 46,583 | |||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 1,552 | $ | (113 | ) | 40 | $ | 75 | $ | (4 | ) | 17 | $ | 1,627 | $ | (117 | ) | 57 | ||||||||||||||||||
State and political subdivisions | 871 | (84 | ) | 137 | 785 | (180 | ) | 150 | 1,656 | (264 | ) | 287 | ||||||||||||||||||||||||
Non-U.S. government | 171 | (9 | ) | 28 | 313 | (87 | ) | 50 | 484 | (96 | ) | 78 | ||||||||||||||||||||||||
U.S. corporate | 12,119 | (931 | ) | 1,572 | 7,343 | (1,453 | ) | 959 | 19,462 | (2,384 | ) | 2,531 | ||||||||||||||||||||||||
Non-U.S. corporate | 3,435 | (184 | ) | 431 | 2,449 | (471 | ) | 344 | 5,884 | (655 | ) | 775 | ||||||||||||||||||||||||
Residential mortgage-backed | 307 | (17 | ) | 95 | 231 | (40 | ) | 74 | 538 | (57 | ) | 169 | ||||||||||||||||||||||||
Commercial mortgage-backed | 854 | (78 | ) | 112 | 907 | (173 | ) | 151 | 1,761 | (251 | ) | 263 | ||||||||||||||||||||||||
Other asset-backed | 681 | (17 | ) | 170 | 1,346 | (120 | ) | 256 | 2,027 | (137 | ) | 426 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 19,990 | $ | (1,433 | ) | 2,585 | $ | 13,449 | $ | (2,528 | ) | 2,001 | $ | 33,439 | $ | (3,961 | ) | 4,586 | ||||||||||||||||||
% Below cost: | ||||||||||||||||||||||||||||||||||||
<20% Below cost | $ | 19,567 | $ | (1,309 | ) | 2,536 | $ | 10,090 | $ | (1,400 | ) | 1,541 | $ | 29,657 | $ | (2,709 | ) | 4,077 | ||||||||||||||||||
20%-50% Below cost | 423 | (124 | ) | 49 | 3,359 | (1,128 | ) | 460 | 3,782 | (1,252 | ) | 509 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 19,990 | $ | (1,433 | ) | 2,585 | $ | 13,449 | $ | (2,528 | ) | 2,001 | $ | 33,439 | $ | (3,961 | ) | 4,586 | ||||||||||||||||||
Investment grade | $ | 19,377 | $ | (1,399 | ) | 2,506 | $ | 12,475 | $ | (2,359 | ) | 1,851 | $ | 31,852 | $ | (3,758 | ) | 4,357 | ||||||||||||||||||
Below investment grade | 613 | (34 | ) | 79 | 974 | (169 | ) | 150 | 1,587 | (203 | ) | 229 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 19,990 | $ | (1,433 | ) | 2,585 | $ | 13,449 | $ | (2,528 | ) | 2,001 | $ | 33,439 | $ | (3,961 | ) | 4,586 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 1,254 | $ | (47 | ) | 69 | $ | 1,337 | $ | (345 | ) | 52 | $ | 2,591 | $ | (392 | ) | 121 | ||||||||||||||||||
State and political subdivisions | 476 | (23 | ) | 81 | 1,448 | (384 | ) | 314 | 1,924 | (407 | ) | 395 | ||||||||||||||||||||||||
Non-U.S. government | 59 | (3 | ) | 15 | 425 | (122 | ) | 85 | 484 | (125 | ) | 100 | ||||||||||||||||||||||||
U.S. corporate | 5,898 | (355 | ) | 894 | 16,088 | (3,323 | ) | 2,663 | 21,986 | (3,678 | ) | 3,557 | ||||||||||||||||||||||||
Non-U.S. corporate | 1,417 | (66 | ) | 182 | 5,062 | (862 | ) | 820 | 6,479 | (928 | ) | 1,002 | ||||||||||||||||||||||||
Residential mortgage-backed | 360 | (12 | ) | 194 | 455 | (72 | ) | 174 | 815 | (84 | ) | 368 | ||||||||||||||||||||||||
Commercial mortgage-backed | 48 | (3 | ) | 13 | 1,425 | (357 | ) | 283 | 1,473 | (360 | ) | 296 | ||||||||||||||||||||||||
Other asset-backed | 287 | (5 | ) | 103 | 1,718 | (133 | ) | 419 | 2,005 | (138 | ) | 522 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 9,799 | $ | (514 | ) | 1,551 | $ | 27,958 | $ | (5,598 | ) | 4,810 | $ | 37,757 | $ | (6,112 | ) | 6,361 | ||||||||||||||||||
% Below cost: | ||||||||||||||||||||||||||||||||||||
<20% Below cost | $ | 9,720 | $ | (486 | ) | 1,537 | $ | 18,962 | $ | (2,332 | ) | 3,283 | $ | 28,682 | $ | (2,818 | ) | 4,820 | ||||||||||||||||||
20%-50% Below cost | 79 | (28 | ) | 14 | 8,995 | (3,265 | ) | 1,526 | 9,074 | (3,293 | ) | 1,540 | ||||||||||||||||||||||||
>50% Below cost | — | — | — | 1 | (1 | ) | 1 | 1 | (1 | ) | 1 | |||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 9,799 | $ | (514 | ) | 1,551 | $ | 27,958 | $ | (5,598 | ) | 4,810 | $ | 37,757 | $ | (6,112 | ) | 6,361 | ||||||||||||||||||
Investment grade | $ | 9,581 | $ | (508 | ) | 1,525 | $ | 26,633 | $ | (5,377 | ) | 4,547 | $ | 36,214 | $ | (5,885 | ) | 6,072 | ||||||||||||||||||
Below investment grade | 218 | (6 | ) | 26 | 1,325 | (221 | ) | 263 | 1,543 | (227 | ) | 289 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 9,799 | $ | (514 | ) | 1,551 | $ | 27,958 | $ | (5,598 | ) | 4,810 | $ | 37,757 | $ | (6,112 | ) | 6,361 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | $ | 1,444 | $ | (154 | ) | 205 | $ | 946 | $ | (221 | ) | 141 | $ | 2,390 | $ | (375 | ) | 346 | ||||||||||||||||||
Energy | 966 | (62 | ) | 141 | 637 | (116 | ) | 80 | 1,603 | (178 | ) | 221 | ||||||||||||||||||||||||
Finance and insurance | 3,538 | (288 | ) | 463 | 2,302 | (494 | ) | 286 | 5,840 | (782 | ) | 749 | ||||||||||||||||||||||||
Consumer—non-cyclical | 1,978 | (154 | ) | 215 | 827 | (152 | ) | 101 | 2,805 | (306 | ) | 316 | ||||||||||||||||||||||||
Technology and communications | 1,464 | (83 | ) | 186 | 977 | (198 | ) | 137 | 2,441 | (281 | ) | 323 | ||||||||||||||||||||||||
Industrial | 585 | (43 | ) | 69 | 317 | (62 | ) | 43 | 902 | (105 | ) | 112 | ||||||||||||||||||||||||
Capital goods | 850 | (64 | ) | 108 | 503 | (78 | ) | 62 | 1,353 | (142 | ) | 170 | ||||||||||||||||||||||||
Consumer—cyclical | 681 | (36 | ) | 109 | 525 | (87 | ) | 67 | 1,206 | (123 | ) | 176 | ||||||||||||||||||||||||
Transportation | 498 | (43 | ) | 60 | 221 | (33 | ) | 33 | 719 | (76 | ) | 93 | ||||||||||||||||||||||||
Other | 115 | (4 | ) | 16 | 88 | (12 | ) | 9 | 203 | (16 | ) | 25 | ||||||||||||||||||||||||
Subtotal, U.S. corporate securities | 12,119 | (931 | ) | 1,572 | 7,343 | (1,453 | ) | 959 | 19,462 | (2,384 | ) | 2,531 | ||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | 438 | (20 | ) | 44 | 251 | (46 | ) | 29 | 689 | (66 | ) | 73 | ||||||||||||||||||||||||
Energy | 358 | (14 | ) | 43 | 229 | (41 | ) | 23 | 587 | (55 | ) | 66 | ||||||||||||||||||||||||
Finance and insurance | 810 | (39 | ) | 128 | 732 | (140 | ) | 103 | 1,542 | (179 | ) | 231 | ||||||||||||||||||||||||
Consumer—non-cyclical | 296 | (18 | ) | 31 | 224 | (51 | ) | 31 | 520 | (69 | ) | 62 | ||||||||||||||||||||||||
Technology and communications | 521 | (40 | ) | 58 | 204 | (43 | ) | 36 | 725 | (83 | ) | 94 | ||||||||||||||||||||||||
Industrial | 292 | (14 | ) | 43 | 247 | (46 | ) | 32 | 539 | (60 | ) | 75 | ||||||||||||||||||||||||
Capital goods | 193 | (13 | ) | 22 | 196 | (34 | ) | 30 | 389 | (47 | ) | 52 | ||||||||||||||||||||||||
Consumer—cyclical | 103 | (6 | ) | 11 | 93 | (15 | ) | 18 | 196 | (21 | ) | 29 | ||||||||||||||||||||||||
Transportation | 103 | (3 | ) | 13 | 111 | (21 | ) | 19 | 214 | (24 | ) | 32 | ||||||||||||||||||||||||
Other | 321 | (17 | ) | 38 | 162 | (34 | ) | 23 | 483 | (51 | ) | 61 | ||||||||||||||||||||||||
Subtotal, non-U.S. corporate securities | 3,435 | (184 | ) | 431 | 2,449 | (471 | ) | 344 | 5,884 | (655 | ) | 775 | ||||||||||||||||||||||||
Total for corporate securities in an unrealized loss position | $ | 15,554 | $ | (1,115 | ) | 2,003 | $ | 9,792 | $ | (1,924 | ) | 1,303 | $ | 25,346 | $ | (3,039 | ) | 3,306 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | $ | 1,404 | $ | (69 | ) | 188 | $ | 1,963 | $ | (542 | ) | 356 | $ | 3,367 | $ | (611 | ) | 544 | ||||||||||||||||||
Energy | 472 | (30 | ) | 85 | 1,263 | (235 | ) | 221 | 1,735 | (265 | ) | 306 | ||||||||||||||||||||||||
Finance and insurance | 1,318 | (83 | ) | 194 | 4,920 | (986 | ) | 753 | 6,238 | (1,069 | ) | 947 | ||||||||||||||||||||||||
Consumer—non-cyclical | 917 | (62 | ) | 119 | 2,326 | (476 | ) | 372 | 3,243 | (538 | ) | 491 | ||||||||||||||||||||||||
Technology and communications | 486 | (35 | ) | 98 | 2,011 | (409 | ) | 337 | 2,497 | (444 | ) | 435 | ||||||||||||||||||||||||
Industrial | 270 | (19 | ) | 34 | 695 | (149 | ) | 139 | 965 | (168 | ) | 173 | ||||||||||||||||||||||||
Capital goods | 345 | (16 | ) | 64 | 1,149 | (219 | ) | 182 | 1,494 | (235 | ) | 246 | ||||||||||||||||||||||||
Consumer—cyclical | 340 | (21 | ) | 58 | 1,044 | (173 | ) | 177 | 1,384 | (194 | ) | 235 | ||||||||||||||||||||||||
Transportation | 218 | (18 | ) | 40 | 586 | (113 | ) | 101 | 804 | (131 | ) | 141 | ||||||||||||||||||||||||
Other | 128 | (2 | ) | 14 | 131 | (21 | ) | 25 | 259 | (23 | ) | 39 | ||||||||||||||||||||||||
Subtotal, U.S. corporate securities | 5,898 | (355 | ) | 894 | 16,088 | (3,323 | ) | 2,663 | 21,986 | (3,678 | ) | 3,557 | ||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | 102 | (6 | ) | 8 | 616 | (84 | ) | 80 | 718 | (90 | ) | 88 | ||||||||||||||||||||||||
Energy | 264 | (13 | ) | 28 | 459 | (73 | ) | 75 | 723 | (86 | ) | 103 | ||||||||||||||||||||||||
Finance and insurance | 262 | (14 | ) | 35 | 1,328 | (209 | ) | 237 | 1,590 | (223 | ) | 272 | ||||||||||||||||||||||||
Consumer—non-cyclical | 81 | (5 | ) | 14 | 463 | (102 | ) | 72 | 544 | (107 | ) | 86 | ||||||||||||||||||||||||
Technology and communications | 161 | (7 | ) | 20 | 622 | (128 | ) | 98 | 783 | (135 | ) | 118 | ||||||||||||||||||||||||
Industrial | 209 | (11 | ) | 40 | 437 | (75 | ) | 74 | 646 | (86 | ) | 114 | ||||||||||||||||||||||||
Capital goods | 145 | (5 | ) | 18 | 358 | (65 | ) | 53 | 503 | (70 | ) | 71 | ||||||||||||||||||||||||
Consumer—cyclical | — | — | — | 184 | (30 | ) | 35 | 184 | (30 | ) | 35 | |||||||||||||||||||||||||
Transportation | — | — | — | 205 | (32 | ) | 33 | 205 | (32 | ) | 33 | |||||||||||||||||||||||||
Other | 193 | (5 | ) | 19 | 390 | (64 | ) | 63 | 583 | (69 | ) | 82 | ||||||||||||||||||||||||
Subtotal, non-U.S. corporate securities | 1,417 | (66 | ) | 182 | 5,062 | (862 | ) | 820 | 6,479 | (928 | ) | 1,002 | ||||||||||||||||||||||||
Total for corporate securities in an unrealized loss position | $ | 7,315 | $ | (421 | ) | 1,076 | $ | 21,150 | $ | (4,185 | ) | 3,483 | $ | 28,465 | $ | (4,606 | ) | 4,559 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 1,585 | $ | (189 | ) | 55 | $ | 17 | $ | (2 | ) | 6 | $ | 1,602 | $ | (191 | ) | 61 | ||||||||||||||||||
State and political subdivisions | 1,559 | (269 | ) | 258 | 261 | (77 | ) | 66 | 1,820 | (346 | ) | 324 | ||||||||||||||||||||||||
Non-U.S. government | 351 | (54 | ) | 59 | 152 | (47 | ) | 23 | 503 | (101 | ) | 82 | ||||||||||||||||||||||||
U.S. corporate | 18,480 | (2,344 | ) | 2,452 | 2,001 | (552 | ) | 236 | 20,481 | (2,896 | ) | 2,688 | ||||||||||||||||||||||||
Non-U.S. corporate | 5,593 | (599 | ) | 732 | 748 | (203 | ) | 111 | 6,341 | (802 | ) | 843 | ||||||||||||||||||||||||
Residential mortgage-backed | 569 | (51 | ) | 192 | 65 | (20 | ) | 22 | 634 | (71 | ) | 214 | ||||||||||||||||||||||||
Commercial mortgage-backed | 1,765 | (255 | ) | 265 | 88 | (22 | ) | 16 | 1,853 | (277 | ) | 281 | ||||||||||||||||||||||||
Other asset-backed | 1,455 | (83 | ) | 347 | 598 | (80 | ) | 101 | 2,053 | (163 | ) | 448 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 31,357 | $ | (3,844 | ) | 4,360 | $ | 3,930 | $ | (1,003 | ) | 581 | $ | 35,287 | $ | (4,847 | ) | 4,941 | ||||||||||||||||||
% Below cost: | ||||||||||||||||||||||||||||||||||||
<20% Below cost | $ | 27,596 | $ | (2,587 | ) | 3,835 | $ | 1,819 | $ | (291 | ) | 310 | $ | 29,415 | $ | (2,878 | ) | 4,145 | ||||||||||||||||||
20%-50% Below cost | 3,757 | (1,251 | ) | 523 | 2,111 | (712 | ) | 271 | 5,868 | (1,963 | ) | 794 | ||||||||||||||||||||||||
>50% Below cost | 4 | (6 | ) | 2 | — | — | — | 4 | (6 | ) | 2 | |||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 31,357 | $ | (3,844 | ) | 4,360 | $ | 3,930 | $ | (1,003 | ) | 581 | $ | 35,287 | $ | (4,847 | ) | 4,941 | ||||||||||||||||||
Investment grade | $ | 29,959 | $ | (3,687 | ) | 4,158 | $ | 3,590 | $ | (915 | ) | 537 | $ | 33,549 | $ | (4,602 | ) | 4,695 | ||||||||||||||||||
Below investment grade | 1,398 | (157 | ) | 202 | 340 | (88 | ) | 44 | 1,738 | (245 | ) | 246 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 31,357 | $ | (3,844 | ) | 4,360 | $ | 3,930 | $ | (1,003 | ) | 581 | $ | 35,287 | $ | (4,847 | ) | 4,941 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 1,585 | $ | (189 | ) | 55 | $ | 17 | $ | (2 | ) | 6 | $ | 1,602 | $ | (191 | ) | 61 | ||||||||||||||||||
State and political subdivisions | 1,559 | (269 | ) | 258 | 261 | (77 | ) | 66 | 1,820 | (346 | ) | 324 | ||||||||||||||||||||||||
Non-U.S. government | 351 | (54 | ) | 59 | 152 | (47 | ) | 23 | 503 | (101 | ) | 82 | ||||||||||||||||||||||||
U.S. corporate | 18,480 | (2,344 | ) | 2,452 | 2,001 | (552 | ) | 236 | 20,481 | (2,896 | ) | 2,688 | ||||||||||||||||||||||||
Non-U.S. corporate | 5,593 | (599 | ) | 732 | 748 | (203 | ) | 111 | 6,341 | (802 | ) | 843 | ||||||||||||||||||||||||
Residential mortgage-backed | 569 | (51 | ) | 192 | 65 | (20 | ) | 22 | 634 | (71 | ) | 214 | ||||||||||||||||||||||||
Commercial mortgage-backed | 1,765 | (255 | ) | 265 | 88 | (22 | ) | 16 | 1,853 | (277 | ) | 281 | ||||||||||||||||||||||||
Other asset-backed | 1,455 | (83 | ) | 347 | 598 | (80 | ) | 101 | 2,053 | (163 | ) | 448 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 31,357 | $ | (3,844 | ) | 4,360 | $ | 3,930 | $ | (1,003 | ) | 581 | $ | 35,287 | $ | (4,847 | ) | 4,941 | ||||||||||||||||||
% Below cost: | ||||||||||||||||||||||||||||||||||||
<20% Below cost | $ | 27,596 | $ | (2,587 | ) | 3,835 | $ | 1,819 | $ | (291 | ) | 310 | $ | 29,415 | $ | (2,878 | ) | 4,145 | ||||||||||||||||||
20%-50% Below cost | 3,757 | (1,251 | ) | 523 | 2,111 | (712 | ) | 271 | 5,868 | (1,963 | ) | 794 | ||||||||||||||||||||||||
>50% Below cost | 4 | (6 | ) | 2 | — | — | — | 4 | (6 | ) | 2 | |||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 31,357 | $ | (3,844 | ) | 4,360 | $ | 3,930 | $ | (1,003 | ) | 581 | $ | 35,287 | $ | (4,847 | ) | 4,941 | ||||||||||||||||||
Investment grade | $ | 29,959 | $ | (3,687 | ) | 4,158 | $ | 3,590 | $ | (915 | ) | 537 | $ | 33,549 | $ | (4,602 | ) | 4,695 | ||||||||||||||||||
Below investment grade | 1,398 | (157 | ) | 202 | 340 | (88 | ) | 44 | 1,738 | (245 | ) | 246 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 31,357 | $ | (3,844 | ) | 4,360 | $ | 3,930 | $ | (1,003 | ) | 581 | $ | 35,287 | $ | (4,847 | ) | 4,941 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | $ | 2,447 | $ | (398 | ) | 345 | $ | 187 | $ | (49 | ) | 37 | $ | 2,634 | $ | (447 | ) | 382 | ||||||||||||||||||
Energy | 1,538 | (187 | ) | 226 | 144 | (34 | ) | 14 | 1,682 | (221 | ) | 240 | ||||||||||||||||||||||||
Finance and insurance | 5,250 | (668 | ) | 696 | 706 | (203 | ) | 74 | 5,956 | (871 | ) | 770 | ||||||||||||||||||||||||
Consumer—non-cyclical | 2,805 | (342 | ) | 317 | 201 | (61 | ) | 22 | 3,006 | (403 | ) | 339 | ||||||||||||||||||||||||
Technology and communications | 2,259 | (273 | ) | 304 | 271 | (88 | ) | 32 | 2,530 | (361 | ) | 336 | ||||||||||||||||||||||||
Industrial | 829 | (105 | ) | 104 | 110 | (25 | ) | 13 | 939 | (130 | ) | 117 | ||||||||||||||||||||||||
Capital goods | 1,332 | (153 | ) | 169 | 148 | (40 | ) | 16 | 1,480 | (193 | ) | 185 | ||||||||||||||||||||||||
Consumer—cyclical | 1,138 | (108 | ) | 173 | 194 | (47 | ) | 22 | 1,332 | (155 | ) | 195 | ||||||||||||||||||||||||
Transportation | 746 | (93 | ) | 95 | 21 | (4 | ) | 5 | 767 | (97 | ) | 100 | ||||||||||||||||||||||||
Other | 136 | (17 | ) | 23 | 19 | (1 | ) | 1 | 155 | (18 | ) | 24 | ||||||||||||||||||||||||
Subtotal, U.S. corporate securities | 18,480 | (2,344 | ) | 2,452 | 2,001 | (552 | ) | 236 | 20,481 | (2,896 | ) | 2,688 | ||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | 640 | (63 | ) | 66 | 57 | (14 | ) | 9 | 697 | (77 | ) | 75 | ||||||||||||||||||||||||
Energy | 604 | (61 | ) | 69 | 40 | (7 | ) | 5 | 644 | (68 | ) | 74 | ||||||||||||||||||||||||
Finance and insurance | 1,310 | (122 | ) | 204 | 296 | (86 | ) | 42 | 1,606 | (208 | ) | 246 | ||||||||||||||||||||||||
Consumer—non-cyclical | 491 | (74 | ) | 56 | 54 | (16 | ) | 11 | 545 | (90 | ) | 67 | ||||||||||||||||||||||||
Technology and communications | 740 | (96 | ) | 93 | 39 | (11 | ) | 8 | 779 | (107 | ) | 101 | ||||||||||||||||||||||||
Industrial | 480 | (45 | ) | 71 | 105 | (25 | ) | 13 | 585 | (70 | ) | 84 | ||||||||||||||||||||||||
Capital goods | 394 | (46 | ) | 52 | 62 | (17 | ) | 6 | 456 | (63 | ) | 58 | ||||||||||||||||||||||||
Consumer—cyclical | 241 | (28 | ) | 31 | 23 | (4 | ) | 6 | 264 | (32 | ) | 37 | ||||||||||||||||||||||||
Transportation | 180 | (21 | ) | 26 | 29 | (8 | ) | 5 | 209 | (29 | ) | 31 | ||||||||||||||||||||||||
Other | 513 | (43 | ) | 64 | 43 | (15 | ) | 6 | 556 | (58 | ) | 70 | ||||||||||||||||||||||||
Subtotal, non-U.S. corporate securities | 5,593 | (599 | ) | 732 | 748 | (203 | ) | 111 | 6,341 | (802 | ) | 843 | ||||||||||||||||||||||||
Total for corporate securities in an unrealized loss position | $ | 24,073 | $ | (2,943 | ) | 3,184 | $ | 2,749 | $ | (755 | ) | 347 | $ | 26,822 | $ | (3,698 | ) | 3,531 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(Dollar amounts in millions) | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | Fair value | Gross unrealized losses | Number of securities | |||||||||||||||||||||||||||
Description of Securities | ||||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | $ | 2,447 | $ | (398 | ) | 345 | $ | 187 | $ | (49 | ) | 37 | $ | 2,634 | $ | (447 | ) | 382 | ||||||||||||||||||
Energy | 1,538 | (187 | ) | 226 | 144 | (34 | ) | 14 | 1,682 | (221 | ) | 240 | ||||||||||||||||||||||||
Finance and insurance | 5,250 | (668 | ) | 696 | 706 | (203 | ) | 74 | 5,956 | (871 | ) | 770 | ||||||||||||||||||||||||
Consumer—non-cyclical | 2,805 | (342 | ) | 317 | 201 | (61 | ) | 22 | 3,006 | (403 | ) | 339 | ||||||||||||||||||||||||
Technology and communications | 2,259 | (273 | ) | 304 | 271 | (88 | ) | 32 | 2,530 | (361 | ) | 336 | ||||||||||||||||||||||||
Industrial | 829 | (105 | ) | 104 | 110 | (25 | ) | 13 | 939 | (130 | ) | 117 | ||||||||||||||||||||||||
Capital goods | 1,332 | (153 | ) | 169 | 148 | (40 | ) | 16 | 1,480 | (193 | ) | 185 | ||||||||||||||||||||||||
Consumer—cyclical | 1,138 | (108 | ) | 173 | 194 | (47 | ) | 22 | 1,332 | (155 | ) | 195 | ||||||||||||||||||||||||
Transportation | 746 | (93 | ) | 95 | 21 | (4 | ) | 5 | 767 | (97 | ) | 100 | ||||||||||||||||||||||||
Other | 136 | (17 | ) | 23 | 19 | (1 | ) | 1 | 155 | (18 | ) | 24 | ||||||||||||||||||||||||
Subtotal, U.S. corporate securities | 18,480 | (2,344 | ) | 2,452 | 2,001 | (552 | ) | 236 | 20,481 | (2,896 | ) | 2,688 | ||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | 640 | (63 | ) | 66 | 57 | (14 | ) | 9 | 697 | (77 | ) | 75 | ||||||||||||||||||||||||
Energy | 604 | (61 | ) | 69 | 40 | (7 | ) | 5 | 644 | (68 | ) | 74 | ||||||||||||||||||||||||
Finance and insurance | 1,310 | (122 | ) | 204 | 296 | (86 | ) | 42 | 1,606 | (208 | ) | 246 | ||||||||||||||||||||||||
Consumer—non-cyclical | 491 | (74 | ) | 56 | 54 | (16 | ) | 11 | 545 | (90 | ) | 67 | ||||||||||||||||||||||||
Technology and communications | 740 | (96 | ) | 93 | 39 | (11 | ) | 8 | 779 | (107 | ) | 101 | ||||||||||||||||||||||||
Industrial | 480 | (45 | ) | 71 | 105 | (25 | ) | 13 | 585 | (70 | ) | 84 | ||||||||||||||||||||||||
Capital goods | 394 | (46 | ) | 52 | 62 | (17 | ) | 6 | 456 | (63 | ) | 58 | ||||||||||||||||||||||||
Consumer—cyclical | 241 | (28 | ) | 31 | 23 | (4 | ) | 6 | 264 | (32 | ) | 37 | ||||||||||||||||||||||||
Transportation | 180 | (21 | ) | 26 | 29 | (8 | ) | 5 | 209 | (29 | ) | 31 | ||||||||||||||||||||||||
Other | 513 | (43 | ) | 64 | 43 | (15 | ) | 6 | 556 | (58 | ) | 70 | ||||||||||||||||||||||||
Subtotal, non-U.S. corporate securities | 5,593 | (599 | ) | 732 | 748 | (203 | ) | 111 | 6,341 | (802 | ) | 843 | ||||||||||||||||||||||||
Total for corporate securities in an unrealized loss position | $ | 24,073 | $ | (2,943 | ) | 3,184 | $ | 2,749 | $ | (755 | ) | 347 | $ | 26,822 | $ | (3,698 | ) | 3,531 | ||||||||||||||||||
Amortized | ||||||||
(Amounts in millions) | cost or cost | Fair value | ||||||
Due one year or less | $ | 1,337 | $ | 1,328 | ||||
Due after one year through five years | 8,543 | 8,245 | ||||||
Due after five years through ten years | 12,640 | 11,746 | ||||||
Due after ten years | 22,530 | 21,086 | ||||||
Subtotal | 45,050 | 42,405 | ||||||
Residential mortgage-backed | 1,030 | 985 | ||||||
Commercial mortgage-backed | 2,086 | 1,831 | ||||||
Other asset-backed | 2,295 | 2,160 | ||||||
Total | $ | 50,461 | $ | 47,381 | ||||
(Amounts in millions) | Amortized cost or cost | Fair value | ||||||
Due one year or less | $ | 1,443 | $ | 1,426 | ||||
Due after one year through five years | 8,557 | 8,115 | ||||||
Due after five years through ten years | 12,791 | 11,368 | ||||||
Due after ten years | 21,880 | 18,460 | ||||||
Subtotal | 44,671 | 39,369 | ||||||
Residential mortgage-backed | 974 | 891 | ||||||
Commercial mortgage-backed | 1,868 | 1,503 | ||||||
Other asset-backed | 2,342 | 2,205 | ||||||
Total | $ | 49,855 | $ | 43,968 | ||||
March 31, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | ||||||||||||||||||||||||
Property type: | ||||||||||||||||||||||||||||||||
Retail | $ | 2,855 | 42 | % | $ | 2,916 | 42 | % | $ | 2,839 | 42 | % | $ | 2,916 | 42 | % | ||||||||||||||||
Office | 1,549 | 22 | 1,579 | 22 | 1,499 | 22 | 1,579 | 22 | ||||||||||||||||||||||||
Industrial | 1,449 | 21 | 1,456 | 21 | 1,422 | 21 | 1,456 | 21 | ||||||||||||||||||||||||
Apartments | 549 | 8 | 561 | 8 | 530 | 8 | 561 | 8 | ||||||||||||||||||||||||
Mixed use | 365 | 5 | 371 | 5 | 370 | 5 | 371 | 5 | ||||||||||||||||||||||||
Other | 148 | 2 | 149 | 2 | 158 | 2 | 149 | 2 | ||||||||||||||||||||||||
Subtotal | 6,915 | 100 | % | 7,032 | 100 | % | 6,818 | 100 | % | 7,032 | 100 | % | ||||||||||||||||||||
Allowance for credit losses | (24 | ) | (22 | ) | (25 | ) | (22 | ) | ||||||||||||||||||||||||
Total | $ | 6,891 | $ | 7,010 | $ | 6,793 | $ | 7,010 | ||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | ||||||||||||||||||||||||
Geographic region: | ||||||||||||||||||||||||||||||||
South Atlantic | $ | 1,788 | 26 | % | $ | 1,809 | 26 | % | $ | 1,795 | 26 | % | $ | 1,809 | 26 | % | ||||||||||||||||
Pacific | 1,324 | 19 | 1,340 | 19 | 1,276 | 19 | 1,340 | 19 | ||||||||||||||||||||||||
Mountain | 1,013 | 15 | 1,023 | 15 | 1,011 | 15 | 1,023 | 15 | ||||||||||||||||||||||||
Middle Atlantic | 953 | 14 | 988 | 14 | 916 | 13 | 988 | 14 | ||||||||||||||||||||||||
West South Central | 572 | 8 | 578 | 8 | 560 | 8 | 578 | 8 | ||||||||||||||||||||||||
East North Central | 448 | 6 | 454 | 6 | 453 | 7 | 454 | 6 | ||||||||||||||||||||||||
West North Central | 419 | 6 | 438 | 6 | 411 | 6 | 438 | 6 | ||||||||||||||||||||||||
East South Central | 216 | 3 | 218 | 3 | 211 | 3 | 218 | 3 | ||||||||||||||||||||||||
New England | 182 | 3 | 184 | 3 | 185 | 3 | 184 | 3 | ||||||||||||||||||||||||
Subtotal | 6,915 | 100 | % | 7,032 | 100 | % | 6,818 | 100 | % | 7,032 | 100 | % | ||||||||||||||||||||
Allowance for credit losses | (24 | ) | (22 | ) | (25 | ) | (22 | ) | ||||||||||||||||||||||||
Total | $ | 6,891 | $ | 7,010 | $ | 6,793 | $ | 7,010 | ||||||||||||||||||||||||
Three months ended March 31, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||
Beginning balance | $ | 22 | $ | 26 | $ | 24 | $ | 23 | $ | 22 | $ | 26 | ||||||||||||
Provision | 2 | (1 | ) | 1 | — | 3 | (4 | ) | ||||||||||||||||
Write-offs | — | — | — | — | — | — | ||||||||||||||||||
Recoveries | — | — | — | — | — | 1 | ||||||||||||||||||
Ending balance | $ | 24 | $ | 25 | $ | 25 | $ | 23 | $ | 25 | $ | 23 | ||||||||||||
(Amounts in millions) | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 and prior | Total | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 and prior | Total | ||||||||||||||||||||||||||||||||||||||||||
Debt-to-value: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0% - 50% | $ | — | $ | 41 | $ | 40 | $ | 98 | $ | 119 | $ | 2,068 | $ | 2,366 | $ | 2 | $ | 49 | $ | 86 | $ | 116 | $ | 121 | $ | 1,968 | $ | 2,342 | ||||||||||||||||||||||||||||
51% - 60% | — | 57 | 97 | 68 | 147 | 957 | 1,326 | 23 | 110 | 222 | 86 | 150 | 843 | 1,434 | ||||||||||||||||||||||||||||||||||||||||||
61% - 75% | 37 | 845 | 785 | 324 | 431 | 765 | 3,187 | 152 | 775 | 603 | 277 | 402 | 782 | 2,991 | ||||||||||||||||||||||||||||||||||||||||||
76% - 100% | — | — | — | — | 8 | 28 | 36 | — | — | — | 4 | 23 | 24 | 51 | ||||||||||||||||||||||||||||||||||||||||||
Greater than 100% | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 37 | $ | 943 | $ | 922 | $ | 490 | $ | 705 | $ | 3,818 | $ | 6,915 | $ | 177 | $ | 934 | $ | 911 | $ | 483 | $ | 696 | $ | 3,617 | $ | 6,818 | ||||||||||||||||||||||||||||
Debt service coverage ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 1.00 | $ | — | $ | 7 | $ | 9 | $ | 6 | $ | 47 | $ | 184 | $ | 253 | $ | — | $ | 17 | $ | 4 | $ | 18 | $ | 37 | $ | 207 | $ | 283 | ||||||||||||||||||||||||||||
1.00 - 1.25 | 14 | 17 | 1 | 16 | 19 | 214 | 281 | 14 | 56 | 9 | 19 | 36 | 155 | 289 | ||||||||||||||||||||||||||||||||||||||||||
1.26 - 1.50 | 9 | 288 | 70 | 65 | 162 | 483 | 1,077 | 105 | 224 | 104 | 68 | 160 | 478 | 1,139 | ||||||||||||||||||||||||||||||||||||||||||
1.51 - 2.00 | 14 | 578 | 610 | 204 | 268 | 1,390 | 3,064 | 56 | 372 | 424 | 206 | 263 | 1,288 | 2,609 | ||||||||||||||||||||||||||||||||||||||||||
Greater than 2.00 | — | 53 | 232 | 199 | 209 | 1,547 | 2,240 | 2 | 265 | 370 | 172 | 200 | 1,489 | 2,498 | ||||||||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 37 | $ | 943 | $ | 922 | $ | 490 | $ | 705 | $ | 3,818 | $ | 6,915 | $ | 177 | $ | 934 | $ | 911 | $ | 483 | $ | 696 | $ | 3,617 | $ | 6,818 | ||||||||||||||||||||||||||||
March 31, 2023 | September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | 0% - 50% | 51% - 60% | 61% - 75% | 76% - 100% | Greater than 100% | Total | 0% - 50% | 51% - 60% | 61% - 75% | 76% - 100% | Greater than 100% | Total | ||||||||||||||||||||||||||||||||||||
Property type: | ||||||||||||||||||||||||||||||||||||||||||||||||
Retail | $ | 860 | $ | 692 | $ | 1,275 | $ | 28 | $ | — | $ | 2,855 | $ | 918 | $ | 703 | $ | 1,218 | $ | — | $ | — | $ | 2,839 | ||||||||||||||||||||||||
Office | 462 | 252 | 835 | — | — | 1,549 | 353 | 329 | 781 | 36 | — | 1,499 | ||||||||||||||||||||||||||||||||||||
Industrial | 683 | 203 | 563 | — | — | 1,449 | 675 | 258 | 489 | — | — | 1,422 | ||||||||||||||||||||||||||||||||||||
Apartments | 180 | 83 | 278 | 8 | — | 549 | 200 | 57 | 265 | 8 | — | 530 | ||||||||||||||||||||||||||||||||||||
Mixed use | 94 | 87 | 184 | — | — | 365 | 107 | 76 | 180 | 7 | — | 370 | ||||||||||||||||||||||||||||||||||||
Other | 87 | 9 | 52 | — | — | 148 | 89 | 11 | 58 | — | — | 158 | ||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 2,366 | $ | 1,326 | $ | 3,187 | $ | 36 | $ | — | $ | 6,915 | $ | 2,342 | $ | 1,434 | $ | 2,991 | $ | 51 | $ | — | $ | 6,818 | ||||||||||||||||||||||||
% of total | 34 | % | 19 | % | 46 | % | 1 | % | — | % | 100 | % | 34 | % | 21 | % | 44 | % | 1 | % | — | % | 100 | % | ||||||||||||||||||||||||
Weighted-average debt service coverage ratio | 2.35 | 1.93 | 1.62 | 1.59 | — | 1.93 | 2.42 | 1.87 | 1.66 | 0.87 | — | 1.96 | ||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||
(Amounts in millions) | 0% - 50% | 51% - 60% | 61% - 75% | 76% - 100% | Greater than 100% | Total | ||||||||||||||||||
Property type: | ||||||||||||||||||||||||
Retail | $ | 907 | $ | 649 | $ | 1,332 | $ | 28 | $ | — | $ | 2,916 | ||||||||||||
Office | 445 | 272 | 848 | 14 | — | 1,579 | ||||||||||||||||||
Industrial | 668 | 243 | 545 | — | — | 1,456 | ||||||||||||||||||
Apartments | 184 | 90 | 279 | 8 | — | 561 | ||||||||||||||||||
Mixed use | 93 | 79 | 199 | — | — | 371 | ||||||||||||||||||
Other | 88 | 9 | 52 | — | — | 149 | ||||||||||||||||||
Total amortized cost | $ | 2,385 | $ | 1,342 | $ | 3,255 | $ | 50 | $ | — | $ | 7,032 | ||||||||||||
% of total | 34 | % | 19 | % | 46 | % | 1 | % | — | % | 100 | % | ||||||||||||
Weighted-average debt service coverage ratio | 2.35 | 1.95 | 1.63 | 1.34 | — | 1.93 | ||||||||||||||||||
March 31, 2023 | ||||||||||||||||||||||||
(Amounts in millions) | Less than 1.00 | 1.00 - 1.25 | 1.26 - 1.50 | 1.51 - 2.00 | Greater than 2.00 | Total | ||||||||||||||||||
Property type: | ||||||||||||||||||||||||
Retail | $ | 87 | $ | 72 | $ | 526 | $ | 1,368 | $ | 802 | $ | 2,855 | ||||||||||||
Office | 67 | 138 | 154 | 659 | 531 | 1,549 | ||||||||||||||||||
Industrial | 19 | 44 | 190 | 582 | 614 | 1,449 | ||||||||||||||||||
Apartments | 14 | 11 | 149 | 234 | 141 | 549 | ||||||||||||||||||
Mixed use | 25 | 14 | 49 | 188 | 89 | 365 | ||||||||||||||||||
Other | 41 | 2 | 9 | 33 | 63 | 148 | ||||||||||||||||||
Total amortized cost | $ | 253 | $ | 281 | $ | 1,077 | $ | 3,064 | $ | 2,240 | $ | 6,915 | ||||||||||||
% of total | 4 | % | 4 | % | 16 | % | 44 | % | 32 | % | 100 | % | ||||||||||||
Weighted-average debt-to-value | 60 | % | 62 | % | 63 | % | 60 | % | 44 | % | 55 | % | ||||||||||||
September 30, 2023 | ||||||||||||||||||||||||
(Amounts in millions) | Less than 1.00 | 1.00 – 1.25 | 1.26 – 1.50 | 1.51 – 2.00 | Greater than 2.00 | Total | ||||||||||||||||||
Property type: | ||||||||||||||||||||||||
Retail | $ | 58 | $ | 107 | $ | 550 | $ | 1,156 | $ | 968 | $ | 2,839 | ||||||||||||
Office | 111 | 53 | 247 | 624 | 464 | 1,499 | ||||||||||||||||||
Industrial | 50 | 31 | 155 | 461 | 725 | 1,422 | ||||||||||||||||||
Apartments | 12 | 51 | 84 | 192 | 191 | 530 | ||||||||||||||||||
Mixed use | 27 | 14 | 81 | 162 | 86 | 370 | ||||||||||||||||||
Other | 25 | 33 | 22 | 14 | 64 | 158 | ||||||||||||||||||
Total amortized cost | $ | 283 | $ | 289 | $ | 1,139 | $ | 2,609 | $ | 2,498 | $ | 6,818 | ||||||||||||
% of total | 4 | % | 4 | % | 17 | % | 38 | % | 37 | % | 100 | % | ||||||||||||
Weighted-average debt-to-value | 64 | % | 63 | % | 64 | % | 58 | % | 47 | % | 55 | % | ||||||||||||
December 31, 2022 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Less than 1.00 | 1.00 - 1.25 | 1.26 - 1.50 | 1.51 - 2.00 | Greater than 2.00 | Total | Less than 1.00 | 1.00 – 1.25 | 1.26 – 1.50 | 1.51 – 2.00 | Greater than 2.00 | Total | ||||||||||||||||||||||||||||||||||||
Property type: | ||||||||||||||||||||||||||||||||||||||||||||||||
Retail | $ | 88 | $ | 68 | $ | 560 | $ | 1,380 | $ | 820 | $ | 2,916 | $ | 88 | $ | 68 | $ | 560 | $ | 1,380 | $ | 820 | $ | 2,916 | ||||||||||||||||||||||||
Office | 81 | 131 | 155 | 666 | 546 | 1,579 | 81 | 131 | 155 | 666 | 546 | 1,579 | ||||||||||||||||||||||||||||||||||||
Industrial | 20 | 44 | 194 | 574 | 624 | 1,456 | 20 | 44 | 194 | 574 | 624 | 1,456 | ||||||||||||||||||||||||||||||||||||
Apartments | 14 | 11 | 150 | 242 | 144 | 561 | 14 | 11 | 150 | 242 | 144 | 561 | ||||||||||||||||||||||||||||||||||||
Mixed use | 25 | 16 | 50 | 190 | 90 | 371 | 25 | 16 | 50 | 190 | 90 | 371 | ||||||||||||||||||||||||||||||||||||
Other | 42 | 2 | 9 | 33 | 63 | 149 | 42 | 2 | 9 | 33 | 63 | 149 | ||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 270 | $ | 272 | $ | 1,118 | $ | 3,085 | $ | 2,287 | $ | 7,032 | $ | 270 | $ | 272 | $ | 1,118 | $ | 3,085 | $ | 2,287 | $ | 7,032 | ||||||||||||||||||||||||
% of total | 4 | % | 4 | % | 16 | % | 44 | % | 32 | % | 100 | % | 4 | % | 4 | % | 16 | % | 44 | % | 32 | % | 100 | % | ||||||||||||||||||||||||
Weighted-average debt-to-value | 61 | % | 62 | % | 63 | % | 60 | % | 44 | % | 56 | % | 61 | % | 62 | % | 63 | % | 60 | % | 44 | % | 56 | % | ||||||||||||||||||||||||
Derivative assets | Derivative liabilities | |||||||||||||||||||
Balance sheet classification | Fair value | Balance sheet classification | Fair value | |||||||||||||||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | ||||||||||||||||
Derivatives designated as hedges | ||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||
Interest rate swaps | Other invested assets | $ | 12 | $ | 24 | Other liabilities | $ | 884 | $ | 522 | ||||||||||
Foreign currency swaps | Other invested assets | 15 | 20 | Other liabilities | 1 | — | ||||||||||||||
Forward bond purchase commitments | Other invested assets | — | — | Other liabilities | 3 | — | ||||||||||||||
Total cash flow hedges | 27 | 44 | 888 | 522 | ||||||||||||||||
Total derivatives designated as hedges | 27 | 44 | 888 | 522 | ||||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||
Equity index options | Other invested assets | 11 | 6 | Other liabilities | — | — | ||||||||||||||
Financial futures (1) | Other invested assets | — | — | Other liabilities | — | — | ||||||||||||||
Forward bond purchase commitments | Other invested assets | — | — | Other liabilities | 25 | — | ||||||||||||||
Fixed indexed annuity embedded derivatives | Other assets | — | — | Policyholder account balances (2) | 174 | 202 | ||||||||||||||
Indexed universal life embedded derivatives | Reinsurance recoverable | — | — | Policyholder account balances (3) | 14 | 15 | ||||||||||||||
Total derivatives not designated as hedges | 11 | 6 | 213 | 217 | ||||||||||||||||
Total derivatives | $ | 38 | $ | 50 | $ | 1,101 | $ | 739 | ||||||||||||
Derivative assets | Derivative liabilities | |||||||||||||||||||||||
Fair value | Fair value | |||||||||||||||||||||||
(Amounts in millions) | Balance sheet classification | March 31, 2023 | December 31, 2022 | Balance sheet classification | March 31, 2023 | December 31, 2022 | ||||||||||||||||||
Derivatives designated as hedges | ||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||
Interest rate swaps | Other invested assets | $ | 42 | $ | 24 | Other liabilities | $ | 389 | $ | 522 | ||||||||||||||
Foreign currency swaps | Other invested assets | 17 | 20 | Other liabilities | 1 | — | ||||||||||||||||||
Total cash flow hedges | 59 | 44 | 390 | 522 | ||||||||||||||||||||
Total derivatives designated as hedges | 59 | 44 | 390 | 522 | ||||||||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||||||
Equity index options | Other invested assets | 10 | 6 | Other liabilities | — | — | ||||||||||||||||||
Financial futures | Other invested assets | — | — | Other liabilities | — | — | ||||||||||||||||||
Fixed index annuity embedded derivatives | Other assets | — | — | Policyholder account balances (1) | | 184 | 202 | |||||||||||||||||
Indexed universal life embedded derivatives | Reinsurance recoverable | | — | — | Policyholder account balances (2) | | 15 | 15 | ||||||||||||||||
Total derivatives not designated as hedges | 10 | 6 | 199 | 217 | ||||||||||||||||||||
Total derivatives | $ | 69 | $ | 50 | $ | 589 | $ | 739 | ||||||||||||||||
(1) | The period end valuations of financial futures were zero as a result of settling the margins on these contracts on a daily basis. |
(2) | Represents the embedded derivatives associated with our fixed |
Represents the embedded derivatives associated with our indexed universal life liabilities. |
(Notional in millions) | Measurement | December 31, 2022 | Additions | Maturities/ terminations | March 31, 2023 | |||||||||||||||
Derivatives designated as hedges | ||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||
Interest rate swaps | Notional | $ | 8,542 | $ | 669 | $ | (42 | ) | $ | 9,169 | ||||||||||
Foreign currency swaps | Notional | 144 | — | (13 | ) | 131 | ||||||||||||||
Total cash flow hedges | 8,686 | 669 | (55 | ) | 9,300 | |||||||||||||||
Total derivatives designated as hedges | 8,686 | 669 | (55 | ) | 9,300 | |||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||
Equity index options | Notional | 936 | 194 | (277 | ) | 853 | ||||||||||||||
Financial futures | Notional | 1,403 | 1,478 | (1,445 | ) | 1,436 | ||||||||||||||
Total derivatives not designated as hedges | 2,339 | 1,672 | (1,722 | ) | 2,289 | |||||||||||||||
Total derivatives | $ | 11,025 | $ | 2,341 | $ | (1,777 | ) | $ | 11,589 | |||||||||||
(Notional in millions) | Measurement | December 31, 2022 | Additions | Maturities/ terminations | September 30, 2023 | |||||||||||||||
Derivatives designated as hedges | ||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||
Interest rate swaps | Notional | $ | 8,542 | $ | 1,200 | $ | (261 | ) | $ | 9,481 | ||||||||||
Foreign currency swaps | Notional | 144 | — | (13 | ) | 131 | ||||||||||||||
Forward bond purchase commitments | Notional | — | 75 | — | 75 | |||||||||||||||
Total cash flow hedges | 8,686 | 1,275 | (274 | ) | 9,687 | |||||||||||||||
Total derivatives designated as hedges | 8,686 | 1,275 | (274 | ) | 9,687 | |||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||
Equity index options | Notional | 936 | 513 | (682 | ) | 767 | ||||||||||||||
Financial futures | Notional | 1,403 | 4,216 | (4,351 | ) | 1,268 | ||||||||||||||
Forward bond purchase commitments | Notional | — | 500 | — | 500 | |||||||||||||||
Total derivatives not designated as hedges | 2,339 | 5,229 | (5,033 | ) | 2,535 | |||||||||||||||
Total derivatives | $ | 11,025 | $ | 6,504 | $ | (5,307 | ) | $ | 12,222 | |||||||||||
(Number of policies) | Measurement | December 31, 2022 | Additions | Maturities/ terminations | March 31, 2023 | |||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||
Fixed index annuity embedded derivatives | Policies | 7,315 | — | (504 | ) | 6,811 | ||||||||||||||
Indexed universal life embedded derivatives | Policies | 771 | — | (6 | ) | 765 |
(Number of policies) | Measurement | December 31, 2022 | Additions | Maturities/ terminations | September 30, 2023 | |||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||
Fixed indexed annuity embedded derivatives | Policies | 7,315 | — | (1,177 | ) | 6,138 | ||||||||||||||
Indexed universal life embedded derivatives | Policies | 771 | — | (22 | ) | 749 |
(Amounts in millions) | Gain (loss) recognized in OCI | Gain (loss) reclassified into net income from OCI | Classification of gain (loss) reclassified into net income | Gain (loss) recognized in net income | Classification of gain (loss) recognized in net income | |||||||||||||||
Interest rate swaps hedging assets | $ | 146 | $ | 54 | Net investment income | $ | — | Net investment gains (losses) | ||||||||||||
Interest rate swaps hedging assets | — | 5 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||||||
Interest rate swaps hedging liabilities | — | (1 | ) | Interest expense | — | Net investment gains (losses) | ||||||||||||||
Interest rate swaps hedging liabilities | — | 1 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||||||
Foreign currency swaps | (1 | ) | — | Net investment income | — | Net investment gains (losses) | ||||||||||||||
Foreign currency swaps | — | 2 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||||||
Total | $ | 145 | $ | 61 | $ | — | ||||||||||||||
(Amounts in millions) | Gain (loss) recognized in OCI | Gain (loss) reclassified into net income from OCI | Classification of gain (loss) reclassified into net income | Gain (loss) recognized in net income | Classification of gain (loss) recognized in net income | |||||||||||
Interest rate swaps hedging assets | $ | (453 | ) | $ | 56 | Net investment income | $ | — | Net investment gains (losses) | |||||||
Interest rate swaps hedging liabilities | — | (1 | ) | Interest expense | — | Net investment gains (losses) | ||||||||||
Forward bond purchase commitments | (3 | ) | — | Net investment gains (losses) | — | Net investment gains (losses) | ||||||||||
Foreign currency swaps | (1 | ) | — | Net investment income | — | Net investment gains (losses) | ||||||||||
Total | $ | (457 | ) | $ | 55 | $ | — | |||||||||
(Amounts in millions) | Gain (loss) recognized in OCI | Gain (loss) reclassified into net income from OCI | Classification of gain (loss) reclassified into net income | Gain (loss) recognized in net income | Classification of gain (loss) recognized in net income | |||||||||||
Interest rate swaps hedging assets | $ | (125 | ) | $ | 55 | Net investment income | $ | — | Net investment gains (losses) | |||||||
Interest rate swaps hedging assets | — | 3 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||
Foreign currency swaps | 15 | — | Net investment income | — | Net investment gains (losses) | |||||||||||
Total | $ | (110 | ) | $ | 58 | $ | — | |||||||||
(Amounts in millions) | Gain (loss) recognized in OCI | Gain (loss) reclassified into net income from OCI | Classification of gain (loss) reclassified into net income | Gain (loss) recognized in net income | Classification of gain (loss) recognized in net income | |||||||||||||||
Interest rate swaps hedging assets | $ | (250 | ) | $ | 55 | | Net investment income | | $ | — | | Net investment gains (losses) | | |||||||
Interest rate swaps hedging assets | — | 2 | | Net investment gains (losses) | | — | | Net investment gains (losses) | | |||||||||||
Interest rate swaps hedging liabilities | — | (1 | ) | Interest expense | — | | Net investment gains (losses) | | ||||||||||||
Foreign currency swaps | (2 | ) | 1 | | Net investment income | | — | | Net investment gains (losses) | | ||||||||||
Total | $ | (252 | ) | $ | 57 | $ | — | |||||||||||||
(Amounts in millions) | Gain (loss) recognized in OCI | Gain (loss) reclassified into net income from OCI | Classification of gain (loss) reclassified into net income | Gain (loss) recognized in net income | Classification of gain (loss) recognized in net income | |||||||||||
Interest rate swaps hedging assets | $ | (411 | ) | $ | 165 | Net investment income | $ | — | Net investment gains (losses) | |||||||
Interest rate swaps hedging assets | — | 8 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||
Interest rate swaps hedging liabilities | — | (2 | ) | Interest expense | — | Net investment gains (losses) | ||||||||||
Interest rate swaps hedging liabilities | — | 1 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||
Forward bond purchase commitments | (3 | ) | — | Net investment gains (losses) | — | Net investment gains (losses) | ||||||||||
Foreign currency swaps | (4 | ) | — | Net investment income | — | Net investment gains (losses) | ||||||||||
Foreign currency swaps | — | 2 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||
Total | $ | (418 | ) | $ | 174 | $ | — | |||||||||
(Amounts in millions) | Gain (loss) recognized in OCI | Gain (loss) reclassified into net income from OCI | Classification of gain (loss) reclassified into net income | Gain (loss) recognized in net income | Classification of gain (loss) recognized in net income | |||||||||||
Interest rate swaps hedging assets | $ | (780 | ) | $ | 167 | Net investment income | $ | — | Net investment gains (losses) | |||||||
Interest rate swaps hedging assets | — | 5 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||
Interest rate swaps hedging liabilities | — | (2 | ) | Interest expense | — | Net investment gains (losses) | ||||||||||
Foreign currency swaps | 27 | 1 | Net investment income | — | Net investment gains (losses) | |||||||||||
Total | $ | (753 | ) | $ | 171 | $ | — | |||||||||
Three months ended March 31, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Derivatives qualifying as effective accounting hedges as of January 1 | $ | 1,200 | $ | 2,025 | ||||
Current period increases (decreases) in fair value, net of deferred taxes of $(31) and $53 | 114 | (199 | ) | |||||
Reclassification to net (income), net of deferred taxes of $21 and $20 | (40 | ) | (37 | ) | ||||
Derivatives qualifying as effective accounting hedges as of March 31 | $ | 1,274 | $ | 1,789 | ||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Beginning balance | $ | 1,154 | $ | 1,445 | $ | 1,200 | $ | 2,025 | ||||||||
Current period increases (decreases) in fair value, net of deferred taxes of $67, $12, $59 and $149 | (390 | ) | (98 | ) | (359 | ) | (604 | ) | ||||||||
Reclassification to net (income), net of deferred taxes of $18, $21, $60 and $60 | (37 | ) | (37 | ) | (114 | ) | (111 | ) | ||||||||
Ending balance | $ | 727 | $ | 1,310 | $ | 727 | $ | 1,310 | ||||||||
Three months ended March 31, | Classification of gain (loss) recognized in net income | |||||||||||
(Amounts in millions) | 2023 | 2022 | ||||||||||
Equity index options | $ | 1 | $ | (6 | ) | Net investment gains (losses) | ||||||
Financial futures | (2 | ) | (47 | ) | Changes in fair value of market risk benefits and associated hedges | | ||||||
Fixed index annuity embedded derivatives | (2 | ) | 12 | Net investment gains (losses) | ||||||||
Indexed universal life embedded derivatives | 5 | 11 | Net investment gains (losses) | |||||||||
Total derivatives not designated as hedges | $ | 2 | $ | (30 | ) | |||||||
Three months ended September 30, | Nine months ended September 30, | Classification of gain (loss) recognized in net income | ||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Equity index options | $ | (4 | ) | $ | 5 | $ | 2 | $ | (2 | ) | Net investment gains (losses) | |||||||
Financial futures | (50 | ) | (34 | ) | (117 | ) | (64 | ) | Changes in fair value of market risk benefits and associated hedges | |||||||||
Forward bond purchase commitments | (22 | ) | — | (25 | ) | — | Net investment gains (losses) | |||||||||||
Fixed indexed annuity embedded derivatives | (6 | ) | (5 | ) | (16 | ) | 18 | Net investment gains (losses) | ||||||||||
Indexed universal life embedded derivatives | 4 | 4 | 11 | 23 | Net investment gains (losses) | |||||||||||||
Total derivatives not designated as | $ | (78 | ) | $ | (30 | ) | $ | (145 | ) | $ | (25 | ) | ||||||
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||
(Amounts in millions) | Derivative assets (1) | Derivative liabilities (1) | Net derivatives | Derivative assets (1) | Derivative liabilities (1) | Net derivatives | ||||||||||||||||||
Amounts presented in the balance sheet: | ||||||||||||||||||||||||
Gross amounts recognized | $ | 38 | $ | 913 | $ | (875 | ) | $ | 50 | $ | 522 | $ | (472 | ) | ||||||||||
Gross amounts offset in the balance sheet | — | — | — | — | — | — | ||||||||||||||||||
Net amounts presented in the balance sheet | 38 | 913 | (875 | ) | 50 | 522 | (472 | ) | ||||||||||||||||
Gross amounts not offset in the balance sheet: | ||||||||||||||||||||||||
Financial instruments (2) | (15 | ) | (15 | ) | — | (25 | ) | (25 | ) | — | ||||||||||||||
Collateral received | (15 | ) | — | (15 | ) | (21 | ) | — | (21 | ) | ||||||||||||||
Collateral pledged | — | (1,516 | ) | 1,516 | — | (1,095 | ) | 1,095 | ||||||||||||||||
Over collateralization | — | 618 | (618 | ) | — | 598 | (598 | ) | ||||||||||||||||
Net amount | $ | 8 | $ | — | $ | 8 | $ | 4 | $ | — | $ | 4 | ||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
(Amounts in millions) | Derivative assets (1) | Derivative liabilities (1) | Net derivatives | Derivative assets (1) | Derivative liabilities (1) | Net derivatives | ||||||||||||||||||
Amounts presented in the balance sheet: | ||||||||||||||||||||||||
Gross amounts recognized | $ | 69 | $ | 390 | $ | (321 | ) | $ | 50 | $ | 522 | $ | (472 | ) | ||||||||||
Gross amounts offset in the balance sheet | — | — | — | — | — | — | ||||||||||||||||||
Net amounts presented in the balance sheet | 69 | 390 | (321 | ) | 50 | 522 | (472 | ) | ||||||||||||||||
Gross amounts not offset in the balance sheet: | ||||||||||||||||||||||||
Financial instruments (2) | (33 | ) | (33 | ) | — | (25 | ) | (25 | ) | — | ||||||||||||||
Collateral received | (26 | ) | — | (26 | ) | (21 | ) | — | (21 | ) | ||||||||||||||
Collateral pledged | — | (1,023 | ) | 1,023 | — | (1,095 | ) | 1,095 | ||||||||||||||||
Over collateralization | — | 666 | (666 | ) | — | 598 | (598 | ) | ||||||||||||||||
Net amount | $ | 10 | $ | — | $ | 10 | $ | 4 | $ | — | $ | 4 | ||||||||||||
(1) | Does not include amounts related to embedded derivatives as of |
(2) | Amounts represent derivative assets and/or liabilities that are presented gross within the balance sheet but are held with the same counterparty where we have a master netting arrangement. This adjustment results in presenting the net asset and net liability position for each counterparty. |
(Amounts in millions) | Fair value | Primary methodologies | Significant inputs | |||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,112 | Price quotes from trading desk, broker feeds | Bid side prices, trade prices, Option Adjusted Spread (“OAS”) to swap curve, Bond Market Association OAS, Treasury Curve, Agency Bullet Curve, maturity to issuer spread | ||||
State and political subdivisions | $ | 2,108 | Multi-dimensional attribute-based modeling systems, third-party pricing vendors | Trade prices, material event notices, Municipal Market Data benchmark yields, broker quotes | ||||
Non-U.S. government | $ | 582 | Matrix pricing, spread priced to benchmark curves, price quotes from market makers | Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources | ||||
U.S. corporate | $ | 22,508 | Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, OAS-based models | Bid side prices to Treasury Curve, Issuer Curve, which includes sector, quality, duration, OAS percentage and change for spread matrix, trade prices, comparative transactions, Trade Reporting and Compliance Engine (“TRACE”) reports | ||||
Non-U.S. corporate | $ | 5,976 | Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makers | Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources | ||||
Residential mortgage- backed | $ | 888 | OAS-based models, single factor binomial models, internally priced | Prepayment and default assumptions, aggregation of bonds with similar characteristics, including collateral type, vintage, tranche type, weighted-average life, weighted-average loan age, issuer program and delinquency ratio, pay up and pay down factors, TRACE reports | ||||
Commercial mortgage- backed | $ | 1,493 | Multi-dimensional attribute-based modeling systems, pricing matrix, spread matrix priced to swap curves, Trepp commercial mortgage-backed securities analytics model | Credit risk, interest rate risk, prepayment speeds, new issue data, collateral performance, origination year, tranche type, original credit ratings, weighted-average life, cash flows, spreads derived from broker quotes, bid side prices, spreads to daily updated swaps curves, TRACE reports | ||||
Other asset-backed | $ | 2,109 | Multi-dimensional attribute-based modeling systems, spread matrix priced to swap curves, price quotes from market makers | Spreads to daily updated swap curves, spreads derived from trade prices and broker quotes, bid side prices, new issue data, collateral performance, analysis of prepayment speeds, cash flows, collateral loss analytics, historical issue analysis, trade data from market makers, TRACE reports |
(Amounts in millions) | Fair value | Primary methodologies | Significant inputs | |||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,441 | Price quotes from trading desk, broker feeds | Bid side prices, trade prices, Option Adjusted Spread (“OAS”) to swap curve, Bond Market Association OAS, Treasury Curve, Agency Bullet Curve, maturity to issuer spread | ||||
State and political subdivisions | $ | 2,344 | Multi-dimensional attribute-based modeling systems, third-party pricing vendors | Trade prices, material event notices, Municipal Market Data benchmark yields, broker quotes | ||||
Non-U.S. government | $ | 630 | Matrix pricing, spread priced to benchmark curves, price quotes from market makers | Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources | ||||
U.S. corporate | $ | 24,240 | Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, OAS-based models | Bid side prices to Treasury Curve, Issuer Curve, which includes sector, quality, duration, OAS percentage and change for spread matrix, trade prices, comparative transactions, Trade Reporting and Compliance Engine (“TRACE”) reports | ||||
Non-U.S. corporate | $ | 6,419 | Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makers | Benchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources | ||||
Residential mortgage-backed | $ | 977 | OAS-based models, single factor binomial models, internally priced | Prepayment and default assumptions, aggregation of bonds with similar characteristics, including collateral type, vintage, tranche type, weighted-average life, weighted-average loan age, issuer program and delinquency ratio, pay up and pay down factors, TRACE reports | ||||
Commercial mortgage-backed | $ | 1,819 | Multi-dimensional attribute-based modeling systems, pricing matrix, spread matrix priced to swap curves, Trepp commercial mortgage-backed securities analytics model | Credit risk, interest rate risk, prepayment speeds, new issue data, collateral performance, origination year, tranche type, original credit ratings, weighted-average life, cash flows, spreads derived from broker quotes, bid side prices, spreads to daily updated swaps curves, TRACE reports | ||||
Other asset-backed | $ | 2,065 | Multi-dimensional attribute-based modeling systems, spread matrix priced to swap curves, price quotes from market makers | Spreads to daily updated swap curves, spreads derived from trade prices and broker quotes, bid side prices, new issue data, collateral performance, analysis of prepayment speeds, cash flows, collateral loss analytics, historical issue analysis, trade data from market makers, TRACE reports |
March 31, 2023 | ||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | NAV (1) | |||||||||||||||
Assets | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,441 | $ | — | $ | 3,441 | $ | — | $ | — | ||||||||||
State and political subdivisions | 2,403 | — | 2,344 | 59 | — | |||||||||||||||
Non-U.S. government | 630 | — | 630 | — | — | |||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 4,089 | — | 3,230 | 859 | — | |||||||||||||||
Energy | 2,299 | — | 2,184 | 115 | — | |||||||||||||||
Finance and insurance | 7,354 | — | 6,657 | 697 | — | |||||||||||||||
Consumer—non-cyclical | 4,559 | — | 4,490 | 69 | — | |||||||||||||||
Technology and communications | 3,038 | — | 3,026 | 12 | — | |||||||||||||||
Industrial | 1,245 | — | 1,223 | 22 | — | |||||||||||||||
Capital goods | 2,195 | — | 2,161 | 34 | — | |||||||||||||||
Consumer—cyclical | 1,671 | — | 1,544 | 127 | — | |||||||||||||||
Transportation | 1,112 | — | 1,088 | 24 | — | |||||||||||||||
Other | 310 | — | 154 | 156 | — | |||||||||||||||
Total U.S. corporate | 27,872 | — | 25,757 | 2,115 | — | |||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 746 | — | 448 | 298 | — | |||||||||||||||
Energy | 990 | — | 871 | 119 | — | |||||||||||||||
Finance and insurance | 1,959 | — | 1,828 | 131 | — | |||||||||||||||
Consumer—non-cyclical | 589 | — | 516 | 73 | — | |||||||||||||||
Technology and communications | 922 | — | 896 | 26 | — | |||||||||||||||
Industrial | 854 | — | 779 | 75 | — | |||||||||||||||
Capital goods | 537 | — | 485 | 52 | — | |||||||||||||||
Consumer—cyclical | 222 | — | 213 | 9 | — | |||||||||||||||
Transportation | 384 | — | 362 | 22 | — | |||||||||||||||
Other | 856 | — | 834 | 22 | — | |||||||||||||||
Total non-U.S. corporate | 8,059 | — | 7,232 | 827 | — | |||||||||||||||
Residential mortgage-backed | 985 | — | 977 | 8 | — | |||||||||||||||
Commercial mortgage-backed | 1,831 | — | 1,819 | 12 | — | |||||||||||||||
Other asset-backed | 2,160 | — | 2,065 | 95 | — | |||||||||||||||
Total fixed maturity securities | 47,381 | — | 44,265 | 3,116 | — | |||||||||||||||
Equity securities | 364 | 286 | 45 | 33 | — | |||||||||||||||
Limited partnerships | 1,901 | — | — | 22 | 1,879 | |||||||||||||||
Other invested assets: | ||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||
Interest rate swaps | 42 | — | 42 | — | — | |||||||||||||||
Foreign currency swaps | 17 | — | 17 | — | — | |||||||||||||||
Equity index options | 10 | — | — | 10 | — | |||||||||||||||
Total derivative assets | 69 | — | 59 | 10 | — | |||||||||||||||
Short-term investments | 7 | — | 7 | — | — | |||||||||||||||
Total other invested assets | 76 | — | 66 | 10 | — | |||||||||||||||
Separate account assets | 4,479 | 4,479 | — | — | — | |||||||||||||||
Total assets | $ | 54,201 | $ | 4,765 | $ | 44,376 | $ | 3,181 | $ | 1,879 | ||||||||||
September 30, 2023 | ||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | NAV (1) | |||||||||||||||
Assets | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,112 | $ | — | $ | 3,112 | $ | — | $ | — | ||||||||||
State and political subdivisions | 2,164 | — | 2,108 | 56 | — | |||||||||||||||
Non-U.S. government | 583 | — | 582 | 1 | — | |||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 3,856 | — | 3,068 | 788 | — | |||||||||||||||
Energy | 2,207 | — | 2,150 | 57 | — | |||||||||||||||
Finance and insurance | 6,873 | — | 6,171 | 702 | — | |||||||||||||||
Consumer—non-cyclical | 4,126 | — | 4,060 | 66 | — | |||||||||||||||
Technology and communications | 2,794 | — | 2,783 | 11 | — | |||||||||||||||
Industrial | 1,149 | — | 1,127 | 22 | — | |||||||||||||||
Capital goods | 2,039 | — | 2,006 | 33 | — | |||||||||||||||
Consumer—cyclical | 1,548 | — | 1,428 | 120 | — | |||||||||||||||
Transportation | 1,066 | — | 1,044 | 22 | — | |||||||||||||||
Other | 298 | — | 150 | 148 | — | |||||||||||||||
Total U.S. corporate | 25,956 | — | 23,987 | 1,969 | — | |||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 719 | — | 413 | 306 | — | |||||||||||||||
Energy | 978 | — | 852 | 126 | — | |||||||||||||||
Finance and insurance | 1,844 | — | 1,722 | 122 | — | |||||||||||||||
Consumer—non-cyclical | 582 | — | 510 | 72 | — | |||||||||||||||
Technology and communications | 840 | — | 817 | 23 | — | |||||||||||||||
Industrial | 769 | — | 711 | 58 | — | |||||||||||||||
Capital goods | 524 | — | 473 | 51 | — | |||||||||||||||
Consumer—cyclical | 211 | — | 202 | 9 | — | |||||||||||||||
Transportation | 334 | — | 313 | 21 | — | |||||||||||||||
Other | 753 | — | 732 | 21 | — | |||||||||||||||
Total non-U.S. corporate | 7,554 | — | 6,745 | 809 | — | |||||||||||||||
Residential mortgage-backed | 891 | — | 888 | 3 | — | |||||||||||||||
Commercial mortgage-backed | 1,503 | — | 1,493 | 10 | — | |||||||||||||||
Other asset-backed | 2,205 | — | 2,109 | 96 | — | |||||||||||||||
Total fixed maturity securities | 43,968 | — | 41,024 | 2,944 | — | |||||||||||||||
Equity securities | 363 | 290 | 41 | 32 | — | |||||||||||||||
Limited partnerships | 2,096 | — | — | 20 | 2,076 | |||||||||||||||
Other invested assets: | ||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||
Interest rate swaps | 12 | — | 12 | — | — | |||||||||||||||
Foreign currency swaps | 15 | — | 15 | — | — | |||||||||||||||
Equity index options | 11 | — | — | 11 | — | |||||||||||||||
Total derivative assets | 38 | — | 27 | 11 | — | |||||||||||||||
Short-term investments | 30 | — | 23 | 7 | — | |||||||||||||||
Total other invested assets | 68 | — | 50 | 18 | — | |||||||||||||||
Separate account assets | 4,244 | 4,244 | — | — | — | |||||||||||||||
Total assets | $ | 50,739 | $ | 4,534 | $ | 41,115 | $ | 3,014 | $ | 2,076 | ||||||||||
(1) | Limited partnerships that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. |
December 31, 2022 | ||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | NAV (1) | |||||||||||||||
Assets | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,341 | $ | — | $ | 3,341 | $ | — | $ | — | ||||||||||
State and political subdivisions | 2,399 | — | 2,344 | 55 | — | |||||||||||||||
Non-U.S. government | 645 | — | 645 | — | — | |||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 3,898 | — | 3,056 | 842 | — | |||||||||||||||
Energy | 2,262 | — | 2,146 | 116 | — | |||||||||||||||
Finance and insurance | 7,193 | — | 6,506 | 687 | — | |||||||||||||||
Consumer—non-cyclical | 4,457 | — | 4,375 | 82 | — | |||||||||||||||
Technology and communications | 2,947 | — | 2,923 | 24 | — | |||||||||||||||
Industrial | 1,197 | — | 1,175 | 22 | — | |||||||||||||||
Capital goods | 2,138 | — | 2,104 | 34 | — | |||||||||||||||
Consumer—cyclical | 1,617 | — | 1,504 | 113 | — | |||||||||||||||
Transportation | 1,100 | — | 1,057 | 43 | — | |||||||||||||||
Other | 310 | — | 151 | 159 | — | |||||||||||||||
Total U.S. corporate | 27,119 | — | 24,997 | 2,122 | — | |||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 740 | — | 445 | 295 | — | |||||||||||||||
Energy | 960 | — | 842 | 118 | — | |||||||||||||||
Finance and insurance | 1,946 | — | 1,821 | 125 | — | |||||||||||||||
Consumer—non-cyclical | 566 | — | 493 | 73 | — | |||||||||||||||
Technology and communications | 894 | — | 868 | 26 | — | |||||||||||||||
Industrial | 818 | — | 770 | 48 | — | |||||||||||||||
Capital goods | 546 | — | 451 | 95 | — | |||||||||||||||
Consumer—cyclical | 276 | — | 212 | 64 | — | |||||||||||||||
Transportation | 375 | — | 355 | 20 | — | |||||||||||||||
Other | 889 | — | 868 | 21 | — | |||||||||||||||
Total non-U.S. corporate | 8,010 | — | 7,125 | 885 | — | |||||||||||||||
Residential mortgage-backed | 995 | — | 973 | 22 | — | |||||||||||||||
Commercial mortgage-backed | 1,908 | — | 1,896 | 12 | — | |||||||||||||||
Other asset-backed | 2,166 | — | 2,072 | 94 | — | |||||||||||||||
Total fixed maturity securities | 46,583 | — | 43,393 | 3,190 | — | |||||||||||||||
Equity securities | 319 | 239 | 46 | 34 | — | |||||||||||||||
Limited partnerships | 1,816 | — | — | 24 | 1,792 | |||||||||||||||
Other invested assets: | ||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||
Interest rate swaps | 24 | — | 24 | — | — | |||||||||||||||
Foreign currency swaps | 20 | — | 20 | — | — | |||||||||||||||
Equity index options | 6 | — | — | 6 | — | |||||||||||||||
Total derivative assets | 50 | — | 44 | 6 | — | |||||||||||||||
Short-term investments | 3 | — | 3 | — | — | |||||||||||||||
Total other invested assets | 53 | — | 47 | 6 | — | |||||||||||||||
Separate account assets | 4,417 | 4,417 | — | — | — | |||||||||||||||
Total assets | $ | 53,188 | $ | 4,656 | $ | 43,486 | $ | 3,254 | $ | 1,792 | ||||||||||
December 31, 2022 | ||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | NAV (1) | |||||||||||||||
Assets | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,341 | $ | — | $ | 3,341 | $ | — | $ | — | ||||||||||
State and political subdivisions | 2,399 | — | 2,344 | 55 | — | |||||||||||||||
Non-U.S. government | 645 | — | 645 | — | — | |||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 3,898 | — | 3,056 | 842 | — | |||||||||||||||
Energy | 2,262 | — | 2,146 | 116 | — | |||||||||||||||
Finance and insurance | 7,193 | — | 6,506 | 687 | — | |||||||||||||||
Consumer—non-cyclical | 4,457 | — | 4,375 | 82 | — | |||||||||||||||
Technology and communications | 2,947 | — | 2,923 | 24 | — | |||||||||||||||
Industrial | 1,197 | — | 1,175 | 22 | — | |||||||||||||||
Capital goods | 2,138 | — | 2,104 | 34 | — | |||||||||||||||
Consumer—cyclical | 1,617 | — | 1,504 | 113 | — | |||||||||||||||
Transportation | 1,100 | — | 1,057 | 43 | — | |||||||||||||||
Other | 310 | — | 151 | 159 | — | |||||||||||||||
Total U.S. corporate | 27,119 | — | 24,997 | 2,122 | — | |||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 740 | — | 445 | 295 | — | |||||||||||||||
Energy | 960 | — | 842 | 118 | — | |||||||||||||||
Finance and insurance | 1,946 | — | 1,821 | 125 | — | |||||||||||||||
Consumer—non-cyclical | 566 | — | 493 | 73 | — | |||||||||||||||
Technology and communications | 894 | — | 868 | 26 | — | |||||||||||||||
Industrial | 818 | — | 770 | 48 | — | |||||||||||||||
Capital goods | 546 | — | 451 | 95 | — | |||||||||||||||
Consumer—cyclical | 276 | — | 212 | 64 | — | |||||||||||||||
Transportation | 375 | — | 355 | 20 | — | |||||||||||||||
Other | 889 | — | 868 | 21 | — | |||||||||||||||
Total non-U.S. corporate | 8,010 | — | 7,125 | 885 | — | |||||||||||||||
Residential mortgage-backed | 995 | — | 973 | 22 | — | |||||||||||||||
Commercial mortgage-backed | 1,908 | — | 1,896 | 12 | — | |||||||||||||||
Other asset-backed | 2,166 | — | 2,072 | 94 | — | |||||||||||||||
Total fixed maturity securities | 46,583 | — | 43,393 | 3,190 | — | |||||||||||||||
Equity securities | 319 | 239 | 46 | 34 | — | |||||||||||||||
Limited partnerships | 1,816 | — | — | 24 | 1,792 | |||||||||||||||
Other invested assets: | ||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||
Interest rate swaps | 24 | — | 24 | — | — | |||||||||||||||
Foreign currency swaps | 20 | — | 20 | — | — | |||||||||||||||
Equity index options | 6 | — | — | 6 | — | |||||||||||||||
Total derivative assets | 50 | — | 44 | 6 | — | |||||||||||||||
Short-term investments | 3 | — | 3 | — | — | |||||||||||||||
Total other invested assets | 53 | — | 47 | 6 | — | |||||||||||||||
Separate account assets | 4,417 | 4,417 | — | — | — | |||||||||||||||
Total assets | $ | 53,188 | $ | 4,656 | $ | 43,486 | $ | 3,254 | $ | 1,792 | ||||||||||
(1) | Limited partnerships that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. |
Beginning balance as of January 1, 2023 | Total realized and unrealized gains (losses) | Ending balance as of March 31, 2023 | Total gains (losses) attributable to assets still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net income | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Included in net income | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | $ | 55 | $ | 1 | $ | 3 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 59 | $ | 1 | $ | 3 | ||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 842 | — | 11 | 40 | (9 | ) | — | — | — | (25 | ) | 859 | — | 10 | ||||||||||||||||||||||||||||||||||
Energy | 116 | — | 1 | — | (1 | ) | — | (1 | ) | — | — | 115 | — | 2 | ||||||||||||||||||||||||||||||||||
Finance and insurance | 687 | — | 3 | 15 | — | — | (5 | ) | — | (3 | ) | 697 | — | 4 | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 82 | — | 1 | — | — | — | (14 | ) | — | — | 69 | — | 1 | |||||||||||||||||||||||||||||||||||
Technology and communications | 24 | — | 1 | — | — | — | — | — | (13 | ) | 12 | — | — | |||||||||||||||||||||||||||||||||||
Industrial | 22 | — | — | — | — | — | — | — | — | 22 | — | — | ||||||||||||||||||||||||||||||||||||
Capital goods | 34 | — | — | — | — | — | — | — | — | 34 | — | 1 | ||||||||||||||||||||||||||||||||||||
Consumer—cyclical | 113 | — | 2 | — | — | — | (1 | ) | 13 | — | 127 | — | 2 | |||||||||||||||||||||||||||||||||||
Transportation | 43 | — | 1 | — | — | — | (20 | ) | — | — | 24 | — | — | |||||||||||||||||||||||||||||||||||
Other | 159 | — | — | — | — | — | (3 | ) | — | — | 156 | — | — | |||||||||||||||||||||||||||||||||||
Total U.S. corporate | 2,122 | — | 20 | 55 | (10 | ) | — | (44 | ) | 13 | (41 | ) | 2,115 | — | 20 | |||||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 295 | — | 5 | 3 | — | — | (5 | ) | — | — | 298 | — | 5 | |||||||||||||||||||||||||||||||||||
Energy | 118 | — | 2 | — | — | — | (1 | ) | — | — | 119 | — | 2 | |||||||||||||||||||||||||||||||||||
Finance and insurance | 125 | 1 | 5 | — | — | — | — | — | — | 131 | 1 | 4 | ||||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 73 | — | — | — | — | — | — | — | — | 73 | — | 1 | ||||||||||||||||||||||||||||||||||||
Technology and communications | 26 | — | — | — | — | — | — | — | — | 26 | — | — | ||||||||||||||||||||||||||||||||||||
Industrial | 48 | — | 2 | 25 | — | — | — | — | — | 75 | — | 2 | ||||||||||||||||||||||||||||||||||||
Capital goods | 95 | 1 | 4 | — | (12 | ) | — | (36 | ) | — | — | 52 | — | 2 | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 64 | — | 6 | — | (6 | ) | — | (55 | ) | — | — | 9 | — | 1 | ||||||||||||||||||||||||||||||||||
Transportation | 20 | — | 1 | 1 | — | — | — | — | — | 22 | — | 1 | ||||||||||||||||||||||||||||||||||||
Other | 21 | — | 1 | — | — | — | — | — | — | 22 | — | — | ||||||||||||||||||||||||||||||||||||
Total non-U.S. corporate | 885 | 2 | 26 | 29 | (18 | ) | — | (97 | ) | — | — | 827 | 1 | 18 | ||||||||||||||||||||||||||||||||||
Residential mortgage-backed | 22 | — | 1 | — | — | — | — | — | (15 | ) | 8 | — | — | |||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 12 | — | — | — | — | — | — | — | — | 12 | — | — | ||||||||||||||||||||||||||||||||||||
Other asset-backed | 94 | — | 2 | 2 | — | — | (1 | ) | — | (2 | ) | 95 | — | 2 | ||||||||||||||||||||||||||||||||||
Total fixed maturity securities | 3,190 | 3 | 52 | 86 | (28 | ) | — | (142 | ) | 13 | (58 | ) | 3,116 | 2 | 43 | |||||||||||||||||||||||||||||||||
Equity securities | 34 | — | — | — | (1 | ) | — | — | — | — | 33 | — | — | |||||||||||||||||||||||||||||||||||
Limited partnerships | 24 | (2 | ) | — | — | — | — | — | — | — | 22 | (2 | ) | — | ||||||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity index options | 6 | 1 | — | 3 | — | — | — | — | — | 10 | 1 | — | ||||||||||||||||||||||||||||||||||||
Total derivative assets | 6 | 1 | — | 3 | — | — | — | — | — | 10 | 1 | — | ||||||||||||||||||||||||||||||||||||
Total other invested assets | 6 | 1 | — | 3 | — | — | — | — | — | 10 | 1 | — | ||||||||||||||||||||||||||||||||||||
Total Level 3 assets | $ | 3,254 | $ | 2 | $ | 52 | $ | 89 | $ | (29 | ) | $ | — | $ | (142 | ) | $ | 13 | $ | (58 | ) | $ | 3,181 | $ | 1 | $ | 43 | |||||||||||||||||||||
Beginning balance as of July 1, 2023 | Total realized and unrealized gains (losses) | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Ending balance as of September 30, 2023 | Total gains (losses) attributable to assets still held | |||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net income | Included in OCI | Purchases | Sales | Issuances | Settlements | Included in net income | Included in OCI | ||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | $ | 60 | $ | 1 | $ | (5 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 56 | $ | 1 | $ | (5 | ) | ||||||||||||||||||||||
Non-U.S. government | — | — | — | — | — | — | — | 1 | — | 1 | — | — | ||||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 818 | — | (42 | ) | 23 | — | — | — | — | (11 | ) | 788 | — | (42 | ) | |||||||||||||||||||||||||||||||||
Energy | 59 | — | (1 | ) | — | — | — | (1 | ) | — | — | 57 | — | (1 | ) | |||||||||||||||||||||||||||||||||
Finance and insurance | 704 | — | (17 | ) | 29 | — | — | (7 | ) | — | (7 | ) | 702 | — | (16 | ) | ||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 68 | — | (1 | ) | — | — | — | (1 | ) | — | — | 66 | — | (1 | ) | |||||||||||||||||||||||||||||||||
Technology and communications | 11 | — | — | — | — | — | — | — | — | 11 | — | — | ||||||||||||||||||||||||||||||||||||
Industrial | 22 | — | — | — | — | — | — | — | — | 22 | — | — | ||||||||||||||||||||||||||||||||||||
Capital goods | 34 | — | (1 | ) | — | — | — | — | — | — | 33 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 124 | — | (2 | ) | — | — | — | (2 | ) | — | — | 120 | — | (2 | ) | |||||||||||||||||||||||||||||||||
Transportation | 23 | — | — | — | — | — | (1 | ) | — | — | 22 | — | — | |||||||||||||||||||||||||||||||||||
Other | 153 | — | (4 | ) | — | — | — | (1 | ) | — | — | 148 | — | (4 | ) | |||||||||||||||||||||||||||||||||
Total U.S. corporate | 2,016 | — | (68 | ) | 52 | — | — | (13 | ) | — | (18 | ) | 1,969 | — | (67 | ) | ||||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 320 | — | (6 | ) | — | — | — | — | — | (8 | ) | 306 | — | (7 | ) | |||||||||||||||||||||||||||||||||
Energy | 117 | — | (2 | ) | — | — | — | — | 11 | — | 126 | — | (3 | ) | ||||||||||||||||||||||||||||||||||
Finance and insurance | 126 | 1 | (5 | ) | — | — | — | — | — | — | 122 | 1 | (5 | ) | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 73 | — | (1 | ) | — | — | — | — | — | — | 72 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Technology and communications | 26 | — | — | — | — | — | (3 | ) | — | — | 23 | — | — | |||||||||||||||||||||||||||||||||||
Industrial | 75 | — | (3 | ) | — | — | — | (15 | ) | 1 | — | 58 | — | (2 | ) | |||||||||||||||||||||||||||||||||
Capital goods | 51 | — | — | — | — | — | — | — | — | 51 | — | (1 | ) | |||||||||||||||||||||||||||||||||||
Consumer—cyclical | 9 | — | — | — | — | — | — | — | — | 9 | — | 1 | ||||||||||||||||||||||||||||||||||||
Transportation | 21 | — | — | — | — | — | — | — | — | 21 | — | — | ||||||||||||||||||||||||||||||||||||
Other | 21 | — | — | — | — | — | — | — | — | 21 | — | — | ||||||||||||||||||||||||||||||||||||
Total non-U.S. corporate | 839 | 1 | (17 | ) | — | — | — | (18 | ) | 12 | (8 | ) | 809 | 1 | (18 | ) | ||||||||||||||||||||||||||||||||
Residential mortgage-backed | 8 | — | (1 | ) | — | — | — | — | — | (4 | ) | 3 | — | — | ||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 11 | — | (1 | ) | — | — | — | — | — | — | 10 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Other asset-backed | 104 | — | (1 | ) | 4 | — | — | (1 | ) | — | (10 | ) | 96 | — | (1 | ) | ||||||||||||||||||||||||||||||||
Total fixed maturity securities | 3,038 | 2 | (93 | ) | 56 | — | — | (32 | ) | 13 | (40 | ) | 2,944 | 2 | (92 | ) | ||||||||||||||||||||||||||||||||
Equity securities | 30 | — | — | 4 | (2 | ) | — | — | — | — | 32 | — | — | |||||||||||||||||||||||||||||||||||
Limited partnerships | 21 | — | — | — | — | — | (1 | ) | — | — | 20 | — | — | |||||||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity index options | 15 | (4 | ) | — | 3 | — | — | (3 | ) | — | — | 11 | (4 | ) | — | |||||||||||||||||||||||||||||||||
Total derivative assets | 15 | (4 | ) | — | 3 | — | — | (3 | ) | — | — | 11 | (4 | ) | — | |||||||||||||||||||||||||||||||||
Short-term investments | 7 | — | — | — | — | — | — | — | — | 7 | — | — | ||||||||||||||||||||||||||||||||||||
Total other invested assets | 22 | (4 | ) | — | 3 | — | — | (3 | ) | — | — | 18 | (4 | ) | — | |||||||||||||||||||||||||||||||||
Total Level 3 assets | $ | 3,111 | $ | (2 | ) | $ | (93 | ) | $ | 63 | $ | (2 | ) | $ | — | $ | (36 | ) | $ | 13 | $ | (40 | ) | $ | 3,014 | $ | (2 | ) | $ | (92 | ) | |||||||||||||||||
(1) | The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads, as well as changes in the industry sectors assigned to specific securities. |
Beginning balance as of January 1, 2022 | Total realized and unrealized gains (losses) | Ending balance as of March 31, 2022 | Total gains (losses) attributable to assets still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net income | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Included in net income | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | $ | 82 | $ | 1 | $ | (12 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 71 | $ | 1 | $ | (12 | ) | ||||||||||||||||||||||
Non-U.S. government | 2 | — | — | — | (1 | ) | — | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 950 | — | (73 | ) | 35 | — | — | — | — | — | 912 | — | (73 | ) | ||||||||||||||||||||||||||||||||||
Energy | 76 | — | (4 | ) | — | — | — | — | — | — | 72 | — | (4 | ) | ||||||||||||||||||||||||||||||||||
Finance and insurance | 685 | — | (56 | ) | 66 | — | — | (2 | ) | — | (17 | ) | 676 | — | (55 | ) | ||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 104 | — | (5 | ) | — | — | — | (7 | ) | — | — | 92 | — | (6 | ) | |||||||||||||||||||||||||||||||||
Technology and communications | 29 | — | (1 | ) | — | — | — | — | — | — | 28 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Industrial | 37 | — | (2 | ) | — | — | — | — | — | — | 35 | — | (2 | ) | ||||||||||||||||||||||||||||||||||
Capital goods | 45 | — | (4 | ) | — | — | — | — | — | — | 41 | — | (3 | ) | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 137 | — | (8 | ) | — | — | — | (2 | ) | — | — | 127 | — | (8 | ) | |||||||||||||||||||||||||||||||||
Transportation | 64 | — | (3 | ) | 5 | — | — | (2 | ) | — | — | 64 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Other | 254 | — | (11 | ) | — | — | — | (4 | ) | — | (17 | ) | 222 | — | (10 | ) | ||||||||||||||||||||||||||||||||
Total U.S. corporate | 2,381 | — | (167 | ) | 106 | — | — | (17 | ) | — | (34 | ) | 2,269 | — | (165 | ) | ||||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 345 | — | (21 | ) | 10 | — | — | — | — | — | 334 | — | (21 | ) | ||||||||||||||||||||||||||||||||||
Energy | 145 | — | (7 | ) | — | — | — | — | — | — | 138 | — | (7 | ) | ||||||||||||||||||||||||||||||||||
Finance and insurance | 160 | 1 | (18 | ) | — | — | — | — | — | — | 143 | 1 | (18 | ) | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 63 | — | (3 | ) | — | — | — | — | — | — | 60 | — | (3 | ) | ||||||||||||||||||||||||||||||||||
Technology and communications | 28 | — | (1 | ) | — | — | — | — | — | — | 27 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Industrial | 93 | — | (6 | ) | — | — | — | — | — | (13 | ) | 74 | — | (4 | ) | |||||||||||||||||||||||||||||||||
Capital goods | 173 | — | (8 | ) | — | — | — | (33 | ) | — | — | 132 | — | (8 | ) | |||||||||||||||||||||||||||||||||
Consumer—cyclical | 76 | — | (7 | ) | — | — | — | — | 17 | — | 86 | — | (7 | ) | ||||||||||||||||||||||||||||||||||
Transportation | 53 | — | (2 | ) | — | — | — | (29 | ) | — | — | 22 | — | (2 | ) | |||||||||||||||||||||||||||||||||
Other | 26 | — | (2 | ) | — | — | — | — | — | — | 24 | — | (2 | ) | ||||||||||||||||||||||||||||||||||
Total non-U.S. corporate | 1,162 | 1 | (75 | ) | 10 | — | — | (62 | ) | 17 | (13 | ) | 1,040 | 1 | (73 | ) | ||||||||||||||||||||||||||||||||
Residential mortgage-backed | 27 | — | (1 | ) | 9 | — | — | (1 | ) | 4 | (5 | ) | 33 | — | — | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 16 | — | (1 | ) | — | — | — | — | — | — | 15 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Other asset-backed | 138 | — | (7 | ) | 6 | — | — | (3 | ) | — | (34 | ) | 100 | — | (5 | ) | ||||||||||||||||||||||||||||||||
Total fixed maturity securities | 3,808 | 2 | (263 | ) | 131 | (1 | ) | — | (83 | ) | 21 | (86 | ) | 3,529 | 2 | (256 | ) | |||||||||||||||||||||||||||||||
Equity securities | 37 | — | — | — | — | — | — | — | (1 | ) | 36 | — | — | |||||||||||||||||||||||||||||||||||
Limited partnerships | 26 | — | — | — | — | — | — | — | — | 26 | — | — | ||||||||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity index options | 42 | (6 | ) | — | 5 | — | — | (11 | ) | — | — | 30 | (3 | ) | — | |||||||||||||||||||||||||||||||||
Total derivative assets | 42 | (6 | ) | — | 5 | — | — | (11 | ) | — | — | 30 | (3 | ) | — | |||||||||||||||||||||||||||||||||
Total other invested assets | 42 | (6 | ) | — | 5 | — | — | (11 | ) | — | — | 30 | (3 | ) | — | |||||||||||||||||||||||||||||||||
Total Level 3 assets | $ | 3,913 | $ | (4 | ) | $ | (263 | ) | $ | 136 | $ | (1 | ) | $ | — | $ | (94 | ) | $ | 21 | $ | (87 | ) | $ | 3,621 | $ | (1 | ) | $ | (256 | ) | |||||||||||||||||
Beginning balance as of July 1, 2022 | Total realized and unrealized gains (losses) | Ending balance as of September 30, 2022 | Total gains (losses) attributable to assets still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net income | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Included in net income | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | $ | 63 | $ | — | $ | (7 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 56 | $ | — | $ | (8 | ) | ||||||||||||||||||||||
Non-U.S. government | 3 | — | — | — | (1 | ) | — | — | — | — | 2 | — | — | |||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 810 | — | (59 | ) | 23 | — | — | (6 | ) | — | — | 768 | — | (58 | ) | |||||||||||||||||||||||||||||||||
Energy | 122 | — | (6 | ) | — | — | — | (1 | ) | — | — | 115 | — | (6 | ) | |||||||||||||||||||||||||||||||||
Finance and insurance | 654 | — | (32 | ) | 16 | — | — | (9 | ) | — | — | 629 | — | (33 | ) | |||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 86 | — | (3 | ) | — | — | — | (1 | ) | — | — | 82 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Technology and communications | 25 | — | (1 | ) | — | — | — | — | — | — | 24 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Industrial | 33 | — | (1 | ) | — | — | — | — | — | — | 32 | — | — | |||||||||||||||||||||||||||||||||||
Capital goods | 38 | — | (1 | ) | — | — | — | — | — | — | 37 | — | (2 | ) | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 119 | — | (5 | ) | — | — | — | (1 | ) | — | — | 113 | — | (5 | ) | |||||||||||||||||||||||||||||||||
Transportation | 56 | — | (2 | ) | — | — | — | (1 | ) | — | — | 53 | — | (2 | ) | |||||||||||||||||||||||||||||||||
Other | 207 | — | (6 | ) | — | (7 | ) | — | (1 | ) | — | — | 193 | — | (7 | ) | ||||||||||||||||||||||||||||||||
Total U.S. corporate | 2,150 | — | (116 | ) | 39 | (7 | ) | — | (20 | ) | — | — | 2,046 | — | (117 | ) | ||||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 309 | — | (16 | ) | — | — | — | (18 | ) | — | — | 275 | — | (17 | ) | |||||||||||||||||||||||||||||||||
Energy | 133 | — | (4 | ) | — | — | — | (7 | ) | — | — | 122 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Finance and insurance | 132 | 2 | (11 | ) | — | — | — | — | — | — | 123 | 2 | (12 | ) | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 67 | — | (2 | ) | 9 | — | — | — | — | — | 74 | — | (2 | ) | ||||||||||||||||||||||||||||||||||
Technology and communications | 26 | — | (1 | ) | — | — | — | — | — | — | 25 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Industrial | 69 | — | (3 | ) | — | — | — | (20 | ) | — | — | 46 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Capital goods | 115 | — | (4 | ) | — | — | — | (19 | ) | — | — | 92 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Consumer—cyclical | 79 | — | (4 | ) | — | — | — | — | — | — | 75 | — | (4 | ) | ||||||||||||||||||||||||||||||||||
Transportation | 21 | — | — | — | — | — | — | — | — | 21 | — | (1 | ) | |||||||||||||||||||||||||||||||||||
Other | 22 | — | (1 | ) | — | — | — | — | — | — | 21 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Total non-U.S. corporate | 973 | 2 | (46 | ) | 9 | — | — | (64 | ) | — | — | 874 | 2 | (47 | ) | |||||||||||||||||||||||||||||||||
Residential mortgage-backed | 30 | — | (1 | ) | — | — | — | — | — | (4 | ) | 25 | — | — | ||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 14 | — | (3 | ) | — | — | — | — | 1 | — | 12 | — | (2 | ) | ||||||||||||||||||||||||||||||||||
Other asset-backed | 129 | — | (5 | ) | 26 | — | — | (2 | ) | — | (38 | ) | 110 | — | (4 | ) | ||||||||||||||||||||||||||||||||
Total fixed maturity securities | 3,362 | 2 | (178 | ) | 74 | (8 | ) | — | (86 | ) | 1 | (42 | ) | 3,125 | 2 | (178 | ) | |||||||||||||||||||||||||||||||
Equity securities | 35 | — | — | — | — | — | — | — | — | 35 | — | — | ||||||||||||||||||||||||||||||||||||
Limited partnerships | 23 | 1 | — | — | — | — | — | — | — | 24 | 1 | — | ||||||||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity index options | 30 | 5 | — | 3 | — | — | — | — | — | 38 | (5 | ) | — | |||||||||||||||||||||||||||||||||||
Total derivative assets | 30 | 5 | — | 3 | — | — | — | — | — | 38 | (5 | ) | — | |||||||||||||||||||||||||||||||||||
Total other invested assets | 30 | 5 | — | 3 | — | — | — | — | — | 38 | (5 | ) | — | |||||||||||||||||||||||||||||||||||
Total Level 3 assets | $ | 3,450 | $ | 8 | $ | (178 | ) | $ | 77 | $ | (8 | ) | $ | — | $ | (86 | ) | $ | 1 | $ | (42 | ) | $ | 3,222 | $ | (2 | ) | $ | (178 | ) | ||||||||||||||||||
(1) | The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads, as well as changes in the industry sectors assigned to specific securities. |
Beginning balance as of January 1, 2023 | Total realized and unrealized gains (losses) | Ending balance as of September 30, 2023 | Total gains (losses) attributable to assets still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net income | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Included in net income | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | $ | 55 | $ | 3 | $ | (2 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 56 | $ | 3 | $ | (2 | ) | ||||||||||||||||||||||
Non-U.S. government | — | — | — | — | — | — | — | 1 | — | 1 | — | — | ||||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 842 | — | (42 | ) | 63 | (40 | ) | — | (10 | ) | 11 | (36 | ) | 788 | — | (50 | ) | |||||||||||||||||||||||||||||||
Energy | 116 | — | — | — | (1 | ) | — | (3 | ) | — | (55 | ) | 57 | — | — | |||||||||||||||||||||||||||||||||
Finance and insurance | 687 | — | (20 | ) | 92 | — | — | (42 | ) | — | (15 | ) | 702 | — | (22 | ) | ||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 82 | — | (1 | ) | — | — | — | (15 | ) | — | — | 66 | — | (1 | ) | |||||||||||||||||||||||||||||||||
Technology and communications | 24 | — | — | — | — | — | — | — | (13 | ) | 11 | — | — | |||||||||||||||||||||||||||||||||||
Industrial | 22 | — | — | — | — | — | — | — | — | 22 | — | — | ||||||||||||||||||||||||||||||||||||
Capital goods | 34 | — | (1 | ) | — | — | — | — | — | — | 33 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 113 | — | (2 | ) | 1 | — | — | (5 | ) | 13 | — | 120 | — | (2 | ) | |||||||||||||||||||||||||||||||||
Transportation | 43 | — | — | — | — | — | (21 | ) | — | — | 22 | — | — | |||||||||||||||||||||||||||||||||||
Other | 159 | — | (3 | ) | — | — | — | (8 | ) | — | — | 148 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Total U.S. corporate | 2,122 | — | (69 | ) | 156 | (41 | ) | — | (104 | ) | 24 | (119 | ) | 1,969 | — | (79 | ) | |||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 295 | — | (10 | ) | 4 | — | — | (5 | ) | 30 | (8 | ) | 306 | — | (10 | ) | ||||||||||||||||||||||||||||||||
Energy | 118 | — | (2 | ) | — | — | — | (1 | ) | 11 | — | 126 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Finance and insurance | 125 | 4 | (7 | ) | — | — | — | — | — | — | 122 | 4 | (7 | ) | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 73 | — | (1 | ) | — | — | — | — | — | — | 72 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Technology and communications | 26 | — | — | — | — | — | (3 | ) | — | — | 23 | — | — | |||||||||||||||||||||||||||||||||||
Industrial | 48 | — | (1 | ) | 25 | — | — | (15 | ) | 1 | — | 58 | — | (1 | ) | |||||||||||||||||||||||||||||||||
Capital goods | 95 | 1 | 3 | — | (12 | ) | — | (36 | ) | — | — | 51 | — | 1 | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 64 | — | 7 | — | (6 | ) | — | (56 | ) | — | — | 9 | — | 2 | ||||||||||||||||||||||||||||||||||
Transportation | 20 | — | — | 1 | — | — | — | — | — | 21 | — | — | ||||||||||||||||||||||||||||||||||||
Other | 21 | — | — | — | — | — | — | — | — | 21 | — | — | ||||||||||||||||||||||||||||||||||||
Total non-U.S. corporate | 885 | 5 | (11 | ) | 30 | (18 | ) | — | (116 | ) | 42 | (8 | ) | 809 | 4 | (19 | ) | |||||||||||||||||||||||||||||||
Residential mortgage-backed | 22 | — | 1 | — | — | — | (1 | ) | — | (19 | ) | 3 | — | — | ||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 12 | — | (1 | ) | — | (1 | ) | — | — | — | — | 10 | — | (1 | ) | |||||||||||||||||||||||||||||||||
Other asset-backed | 94 | — | — | 16 | — | — | (2 | ) | — | (12 | ) | 96 | — | — | ||||||||||||||||||||||||||||||||||
Total fixed maturity securities | 3,190 | 8 | (82 | ) | 202 | (60 | ) | — | (223 | ) | 67 | (158 | ) | 2,944 | 7 | (101 | ) | |||||||||||||||||||||||||||||||
Equity securities | 34 | — | — | 5 | (7 | ) | — | — | — | — | 32 | — | — | |||||||||||||||||||||||||||||||||||
Limited partnerships | 24 | (3 | ) | — | — | — | — | (1 | ) | — | — | 20 | (3 | ) | — | |||||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity index options | 6 | 2 | — | 8 | — | — | (5 | ) | — | — | 11 | — | — | |||||||||||||||||||||||||||||||||||
Total derivative assets | 6 | 2 | — | 8 | — | — | (5 | ) | — | — | 11 | — | — | |||||||||||||||||||||||||||||||||||
Short-term investments | — | — | — | 7 | — | — | — | — | — | 7 | — | — | ||||||||||||||||||||||||||||||||||||
Total other invested assets | 6 | 2 | — | 15 | — | — | (5 | ) | — | — | 18 | — | — | |||||||||||||||||||||||||||||||||||
Total Level 3 assets | $ | 3,254 | $ | 7 | $ | (82 | ) | $ | 222 | $ | (67 | ) | $ | — | $ | (229 | ) | $ | 67 | $ | (158 | ) | $ | 3,014 | $ | 4 | $ | (101 | ) | |||||||||||||||||||
(1) | The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads, as well as changes in the industry sectors assigned to specific securities. |
Beginning balance as of January 1, 2022 | Total realized and unrealized gains (losses) | Ending balance as of September 30, 2022 | Total gains (losses) attributable to assets still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net income | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Included in net income | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | $ | 82 | $ | 2 | $ | (28 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 56 | $ | 2 | $ | (29 | ) | ||||||||||||||||||||||
Non-U.S. government | 2 | — | — | 2 | (2 | ) | — | — | — | — | 2 | — | — | |||||||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 950 | — | (224 | ) | 58 | — | — | (7 | ) | 2 | (11 | ) | 768 | — | (223 | ) | ||||||||||||||||||||||||||||||||
Energy | 76 | — | (21 | ) | — | — | — | (8 | ) | 68 | — | 115 | — | (21 | ) | |||||||||||||||||||||||||||||||||
Finance and insurance | 685 | — | (155 | ) | 167 | — | — | (12 | ) | — | (56 | ) | 629 | — | (149 | ) | ||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 104 | — | (14 | ) | — | — | — | (8 | ) | — | — | 82 | — | (14 | ) | |||||||||||||||||||||||||||||||||
Technology and communications | 29 | — | (5 | ) | — | — | — | — | — | — | 24 | — | (5 | ) | ||||||||||||||||||||||||||||||||||
Industrial | 37 | — | (5 | ) | — | — | — | — | — | — | 32 | — | (4 | ) | ||||||||||||||||||||||||||||||||||
Capital goods | 45 | — | (8 | ) | — | — | — | — | — | — | 37 | — | (8 | ) | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 137 | — | (20 | ) | — | — | — | (4 | ) | — | — | 113 | — | (20 | ) | |||||||||||||||||||||||||||||||||
Transportation | 64 | — | (8 | ) | 5 | — | — | (4 | ) | — | (4 | ) | 53 | — | (8 | ) | ||||||||||||||||||||||||||||||||
Other | 254 | — | (29 | ) | — | (7 | ) | — | (8 | ) | — | (17 | ) | 193 | — | (29 | ) | |||||||||||||||||||||||||||||||
Total U.S. corporate | 2,381 | — | (489 | ) | 230 | (7 | ) | — | (51 | ) | 70 | (88 | ) | 2,046 | — | (481 | ) | |||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 345 | — | (62 | ) | 10 | — | — | (18 | ) | — | — | 275 | — | (62 | ) | |||||||||||||||||||||||||||||||||
Energy | 145 | — | (18 | ) | 3 | — | — | (8 | ) | — | — | 122 | — | (18 | ) | |||||||||||||||||||||||||||||||||
Finance and insurance | 160 | 4 | (41 | ) | — | — | — | — | — | — | 123 | 4 | (42 | ) | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 63 | — | (9 | ) | 9 | — | — | — | 11 | — | 74 | — | (9 | ) | ||||||||||||||||||||||||||||||||||
Technology and communications | 28 | — | (3 | ) | — | — | — | — | — | — | 25 | — | (3 | ) | ||||||||||||||||||||||||||||||||||
Industrial | 93 | — | (13 | ) | — | — | — | (20 | ) | — | (14 | ) | 46 | — | (12 | ) | ||||||||||||||||||||||||||||||||
Capital goods | 173 | — | (19 | ) | — | (10 | ) | — | (52 | ) | — | — | 92 | — | (18 | ) | ||||||||||||||||||||||||||||||||
Consumer—cyclical | 76 | — | (18 | ) | — | — | — | — | 17 | — | 75 | — | (18 | ) | ||||||||||||||||||||||||||||||||||
Transportation | 53 | — | (3 | ) | — | — | — | (29 | ) | — | — | 21 | — | (4 | ) | |||||||||||||||||||||||||||||||||
Other | 26 | — | (5 | ) | — | — | — | — | — | — | 21 | — | (4 | ) | ||||||||||||||||||||||||||||||||||
Total non-U.S. corporate | 1,162 | 4 | (191 | ) | 22 | (10 | ) | — | (127 | ) | 28 | (14 | ) | 874 | 4 | (190 | ) | |||||||||||||||||||||||||||||||
Residential mortgage-backed | 27 | — | (4 | ) | 13 | — | — | (2 | ) | 4 | (13 | ) | 25 | — | (2 | ) | ||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 16 | — | (5 | ) | — | — | — | — | 1 | — | 12 | — | (5 | ) | ||||||||||||||||||||||||||||||||||
Other asset-backed | 138 | — | (17 | ) | 72 | (6 | ) | — | (5 | ) | — | (72 | ) | 110 | — | (14 | ) | |||||||||||||||||||||||||||||||
Total fixed maturity securities | 3,808 | 6 | (734 | ) | 339 | (25 | ) | — | (185 | ) | 103 | (187 | ) | 3,125 | 6 | (721 | ) | |||||||||||||||||||||||||||||||
Equity securities | 37 | — | — | — | (1 | ) | — | — | — | (1 | ) | 35 | — | — | ||||||||||||||||||||||||||||||||||
Limited partnerships | 26 | (2 | ) | — | — | — | — | — | — | — | 24 | (2 | ) | — | ||||||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity index options | 42 | (2 | ) | — | 11 | — | — | (13 | ) | — | — | 38 | 14 | — | ||||||||||||||||||||||||||||||||||
Total derivative assets | 42 | (2 | ) | — | 11 | — | — | (13 | ) | — | — | 38 | 14 | — | ||||||||||||||||||||||||||||||||||
Total other invested assets | 42 | (2 | ) | — | 11 | — | — | (13 | ) | — | — | 38 | 14 | — | ||||||||||||||||||||||||||||||||||
Total Level 3 assets | $ | 3,913 | $ | 2 | $ | (734 | ) | $ | 350 | $ | (26 | ) | $ | — | $ | (198 | ) | $ | 103 | $ | (188 | ) | $ | 3,222 | $ | 18 | $ | (721 | ) | |||||||||||||||||||
(1) | The transfers into and out of Level 3 for fixed maturity securities were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value, such as external ratings or credit spreads, as well as changes in the industry sectors assigned to specific securities. |
(Amounts in millions) | 2023 | 2022 | ||||||
Total realized and unrealized gains (losses) included in net income: | ||||||||
Net investment income | $ | 3 | $ | 2 | ||||
Net investment gains (losses) | (1 | ) | (6 | ) | ||||
Total | $ | 2 | $ | (4 | ) | |||
Net gains (losses) included in net income attributable to assets still held: | ||||||||
Net investment income | $ | 2 | $ | 2 | ||||
Net investment gains (losses) | (1 | ) | (3 | ) | ||||
Total | $ | 1 | $ | (1 | ) | |||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Total realized and unrealized gains (losses) included in net income: | ||||||||||||||||
Net investment income | $ | 2 | $ | 2 | $ | 8 | $ | 6 | ||||||||
Net investment gains (losses) | (4 | ) | 6 | (1 | ) | (4 | ) | |||||||||
Total | $ | (2 | ) | $ | 8 | $ | 7 | $ | 2 | |||||||
Total gains (losses) included in net income attributable to assets still held: | ||||||||||||||||
Net investment income | $ | 2 | $ | 2 | $ | 7 | $ | 6 | ||||||||
Net investment gains (losses) | (4 | ) | (4 | ) | (3 | ) | 12 | |||||||||
Total | $ | (2 | ) | $ | (2 | ) | $ | 4 | $ | 18 | ||||||
(Amounts in millions) | Valuation technique | Fair value | Unobservable input | Range | Weighted- average (1) | |||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | Internal models | $ | 830 | Credit spreads | 71 bps - 258bps | 180bps | ||||||||||||||
Energy | Internal models | 46 | Credit spreads | 152bps - 291 bps | 213bps | |||||||||||||||
Finance and insurance | Internal models | 685 | Credit spreads | 108 bps - 391bps | 248bps | |||||||||||||||
Consumer—non-cyclical | Internal models | 69 | Credit spreads | 115 bps - 291bps | 181bps | |||||||||||||||
Technology and communications | Internal models | 12 | Credit spreads | 100 bps - 141bps | 117bps | |||||||||||||||
Industrial | Internal models | 22 | Credit spreads | 151 bps - 242bps | 176bps | |||||||||||||||
Capital goods | Internal models | 34 | Credit spreads | 100 bps - 215bps | 170bps | |||||||||||||||
Consumer—cyclical | Internal models | 127 | Credit spreads | 115 bps - 226bps | 165bps | |||||||||||||||
Transportation | Internal models | 24 | Credit spreads | 59 bps - 193bps | 134bps | |||||||||||||||
Other | Internal models | 108 | Credit spreads | 123 bps - 169bps | 130bps | |||||||||||||||
Total U.S. corporate | Internal models | $ | 1,957 | Credit spreads | 59 bps - 391bps | 200bps | ||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | Internal models | $ | 298 | Credit spreads | 97 bps - 212bps | 157bps | ||||||||||||||
Energy | Internal models | 112 | Credit spreads | 125 bps - 242bps | 181bps | |||||||||||||||
Finance and insurance | Internal models | 130 | Credit spreads | 152 bps - 358bps | 176bps | |||||||||||||||
Consumer—non-cyclical | Internal models | 71 | Credit spreads | 84 bps - 168bps | 128bps | |||||||||||||||
Technology and communications | Internal models | 25 | Credit spreads | 125 bps - 160bps | 147bps | |||||||||||||||
Industrial | Internal models | 74 | Credit spreads | 100 bps - 235bps | 178bps | |||||||||||||||
Capital goods | Internal models | 52 | Credit spreads | 84 bps - 291bps | 154bps | |||||||||||||||
Transportation | Internal models | 20 | Credit spreads | 151 bps - 201bps | 160bps | |||||||||||||||
Other | Internal models | 22 | Credit spreads | 101 bps - 172bps | 148bps | |||||||||||||||
Total non-U.S. corporate | Internal models | $ | 804 | Credit spreads | 84 bps - 358bps | 162bps | ||||||||||||||
Derivative assets: | ||||||||||||||||||||
Equity index options | Discounted cash flows | | $ | 10 | Equity index volatility | 6 % - 25% | 20 % | |||||||||||||
Lapse rate | 2 % - 10% | 7 % | ||||||||||||||||||
Non-performance risk (counterparty credit risk) | | 43 bps - 83bps | 69bps | |||||||||||||||||
Other assets (2) | Cash flow model | | $ | 154 | Equity index volatility | 17 % - 31% | 23% |
(Amounts in millions) | Valuation technique | Fair value | Unobservable input | Range | Weighted-average (1) | |||||||||
Fixed maturity securities: | ||||||||||||||
U.S. corporate: | ||||||||||||||
Utilities | Internal models | $ | 761 | Credit spreads | 77bps - 247bps | 154bps | ||||||||
Energy | Internal models | 43 | Credit spreads | 138bps - 250bps | 184bps | |||||||||
Finance and insurance | Internal models | 691 | Credit spreads | 14bps - 297bps | 199bps | |||||||||
Consumer—non-cyclical | Internal models | 66 | Credit spreads | 91bps - 250bps | 158bps | |||||||||
Technology and communications | Internal models | 11 | Credit spreads | 78bps - 116bps | 93bps | |||||||||
Industrial | Internal models | 22 | Credit spreads | 138bps - 206bps | 156bps | |||||||||
Capital goods | Internal models | 33 | Credit spreads | 91bps - 193bps | 150bps | |||||||||
Consumer—cyclical | Internal models | 120 | Credit spreads | 101bps - 207bps | 147bps | |||||||||
Transportation | Internal models | 22 | Credit spreads | 51bps - 165bps | 116bps | |||||||||
Other | Internal models | 101 | Credit spreads | 91bps - 138bps | 102bps | |||||||||
Total U.S. corporate | Internal models | $ | 1,870 | Credit spreads | 14bps - 297bps | 167bps | ||||||||
Non-U.S. corporate: | ||||||||||||||
Utilities | Internal models | $ | 233 | Credit spreads | 96bps - 247bps | 143bps | ||||||||
Energy | Internal models | 119 | Credit spreads | 112bps - 221bps | 155bps | |||||||||
Finance and insurance | Internal models | 122 | Credit spreads | 140bps - 195bps | 171bps | |||||||||
Consumer—non-cyclical | Internal models | 69 | Credit spreads | 78bps - 161bps | 116bps | |||||||||
Technology and communications | Internal models | 23 | Credit spreads | 112bps - 138bps | 121bps | |||||||||
Industrial | Internal models | 56 | Credit spreads | 133bps - 221bps | 180bps | |||||||||
Capital goods | Internal models | 51 | Credit spreads | 78bps - 250bps | 137bps | |||||||||
Transportation | Internal models | 20 | Credit spreads | 140bps - 182bps | 148bps | |||||||||
Other | Internal models | 21 | Credit spreads | 77bps - 152bps | 123bps | |||||||||
Total non-U.S. corporate | Internal models | $ | 714 | Credit spreads | 77bps - 250bps | 148bps | ||||||||
Derivative assets: | ||||||||||||||
Equity index options | Discounted cash flows | | $ | 11 | Equity index volatility | 6% - 33% | 19% | |||||||
Lapse rate | 2% - 10% | 7% | ||||||||||||
Non-performance risk (counterparty credit risk) | 42bps - 83bps | 69bps | ||||||||||||
Other assets (2) | Cash flow model | $ | 123 | Equity index volatility | 16% - 30% | 23% |
(1) | Unobservable inputs weighted by the relative fair value of the associated instrument for fixed maturity securities, notional for derivative assets and the policyholder account balances associated with the instrument for the net reinsured portion of our variable annuity MRBs. |
(2) | Represents the net reinsured portion of our variable annuity MRBs. |
March 31, 2023 | September 30, 2023 | |||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||
Fixed index annuity embedded derivatives | $ | 184 | $ | — | $ | — | $ | 184 | ||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 174 | $ | — | $ | — | $ | 174 | ||||||||||||||||||||||||
Indexed universal life embedded derivatives | 15 | — | — | 15 | 14 | — | — | 14 | ||||||||||||||||||||||||
Total policyholder account balances | 199 | — | — | 199 | 188 | — | — | 188 | ||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||
Interest rate swaps | 389 | — | 389 | — | 884 | — | 884 | — | ||||||||||||||||||||||||
Foreign currency swaps | 1 | — | 1 | — | 1 | — | 1 | — | ||||||||||||||||||||||||
Forward bond purchase commitments | 28 | — | — | 28 | ||||||||||||||||||||||||||||
Total derivative liabilities | 390 | — | 390 | — | 913 | — | 885 | 28 | ||||||||||||||||||||||||
Total liabilities | $ | 589 | $ | — | $ | 390 | $ | 199 | $ | 1,101 | $ | — | $ | 885 | $ | 216 | ||||||||||||||||
December 31, 2022 | December 31, 2022 | |||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||
Fixed index annuity embedded derivatives | $ | 202 | $ | — | $ | — | $ | 202 | ||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 202 | $ | — | $ | — | $ | 202 | ||||||||||||||||||||||||
Indexed universal life embedded derivatives | 15 | — | — | 15 | 15 | — | — | 15 | ||||||||||||||||||||||||
Total policyholder account balances | 217 | — | — | 217 | 217 | — | — | 217 | ||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||
Interest rate swaps | 522 | — | 522 | — | 522 | — | 522 | — | ||||||||||||||||||||||||
Total derivative liabilities | 522 | — | 522 | — | 522 | — | 522 | — | ||||||||||||||||||||||||
Total liabilities | $ | 739 | $ | — | $ | 522 | $ | 217 | $ | 739 | $ | — | $ | 522 | $ | 217 | ||||||||||||||||
Beginning balance as of July 1, 2023 | Total realized and unrealized (gains) losses | Ending balance as of September 30, 2023 | Total (gains) losses attributable to liabilities still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net (income) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 | Transfer out of Level 3 | Included in net (income) | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 180 | $ | 6 | $ | — | $ | — | $ | — | $ | — | $ | (11 | ) | $ | — | $ | (1 | ) | $ | 174 | $ | 6 | $ | — | ||||||||||||||||||||||
Indexed universal life embedded derivatives | 15 | (4 | ) | — | — | — | 3 | — | — | — | 14 | (4 | ) | — | ||||||||||||||||||||||||||||||||||
Total policyholder account balances | 195 | 2 | — | — | — | 3 | (11 | ) | — | (1 | ) | 188 | 2 | — | ||||||||||||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Forward bond purchase commitments | 3 | 22 | 3 | — | — | — | — | — | — | 28 | 22 | 3 | ||||||||||||||||||||||||||||||||||||
Total derivative liabilities | 3 | 22 | 3 | — | — | — | — | — | — | 28 | 22 | 3 | ||||||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 198 | $ | 24 | $ | 3 | $ | — | $ | — | $ | 3 | $ | (11 | ) | $ | — | $ | (1 | ) | $ | 216 | $ | 24 | $ | 3 | ||||||||||||||||||||||
Beginning balance as of July 1, 2022 | Total realized and unrealized (gains) losses | Ending balance as of September 30, 2022 | Total (gains) losses attributable to liabilities still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net (income) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 | Transfer out of Level 3 | Included in net (income) | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 233 | $ | 5 | $ | — | $ | — | $ | — | $ | — | $ | (18 | ) | $ | — | $ | (1 | ) | $ | 219 | $ | 5 | $ | — | ||||||||||||||||||||||
Indexed universal life embedded derivatives | 16 | (4 | ) | — | — | — | 3 | — | — | — | 15 | (4 | ) | — | ||||||||||||||||||||||||||||||||||
Total policyholder account balances | 249 | 1 | — | — | — | 3 | (18 | ) | — | (1 | ) | 234 | 1 | — | ||||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 249 | $ | 1 | $ | — | $ | — | $ | — | $ | 3 | $ | (18 | ) | $ | — | $ | (1 | ) | $ | 234 | $ | 1 | $ | — | ||||||||||||||||||||||
Beginning balance as of January 1, 2023 | Total realized and unrealized (gains) losses | Ending balance as of March 31, 2023 | Total (gains) losses attributable to liabilities still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net (income) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 | Transfer out of Level 3 | Included in net (income) | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixed index annuity embedded derivatives | $ | 202 | $ | 2 | $ | — | $ | — | $ | — | $ | — | $ | (19 | ) | $ | — | $ | (1 | ) | $ | 184 | $ | 2 | $ | — | ||||||||||||||||||||||
Indexed universal life embedded derivatives | 15 | (5 | ) | — | — | — | 5 | — | — | — | 15 | (5 | ) | — | ||||||||||||||||||||||||||||||||||
Total policyholder account balances | 217 | (3 | ) | — | — | — | 5 | (19 | ) | — | (1 | ) | 199 | (3 | ) | — | ||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 217 | $ | (3 | ) | $ | — | $ | — | $ | — | $ | 5 | $ | (19 | ) | $ | — | $ | (1 | ) | $ | 199 | $ | (3 | ) | $ | — | ||||||||||||||||||||
Beginning balance as of January 1, 2022 | Total realized and unrealized (gains) losses | Ending balance as of March 31, 2022 | Total (gains) losses attributable to liabilities still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net (income) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 | Transfer out of Level 3 | Included in net (income) | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixed index annuity embedded derivatives | $ | 294 | $ | (12 | ) | $ | — | $ | — | $ | — | $ | — | $ | (20 | ) | $ | — | $ | (1 | ) | $ | 261 | $ | (12 | ) | $ | — | ||||||||||||||||||||
Indexed universal life embedded derivatives | 25 | (11 | ) | — | — | — | 7 | — | — | — | 21 | (11 | ) | — | ||||||||||||||||||||||||||||||||||
Total policyholder account balances | 319 | (23 | ) | — | — | — | 7 | (20 | ) | — | (1 | ) | 282 | (23 | ) | — | ||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 319 | $ | (23 | ) | $ | — | $ | — | $ | — | $ | 7 | $ | (20 | ) | $ | — | $ | (1 | ) | $ | 282 | $ | (23 | ) | $ | — | ||||||||||||||||||||
Beginning balance as of January 1, 2023 | Total realized and unrealized (gains) losses | Ending balance as of September 30, 2023 | Total (gains) losses attributable to liabilities still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net (income) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 | Transfer out of Level 3 | Included in net (income) | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 202 | $ | 16 | $ | — | $ | — | $ | — | $ | — | $ | (41 | ) | $ | — | $ | (3 | ) | $ | 174 | $ | 16 | $ | — | ||||||||||||||||||||||
Indexed universal life embedded derivatives | 15 | (11 | ) | — | — | — | 10 | — | — | — | 14 | (11 | ) | — | ||||||||||||||||||||||||||||||||||
Total policyholder account balances | 217 | 5 | — | — | — | 10 | (41 | ) | — | (3 | ) | 188 | 5 | — | ||||||||||||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Forward bond purchase commitments | — | 25 | 3 | — | — | — | — | — | — | 28 | 25 | 3 | ||||||||||||||||||||||||||||||||||||
Total derivative liabilities | — | 25 | 3 | — | — | — | — | — | — | 28 | 25 | 3 | ||||||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 217 | $ | 30 | $ | 3 | $ | — | $ | — | $ | 10 | $ | (41 | ) | $ | — | $ | (3 | ) | $ | 216 | $ | 30 | $ | 3 | ||||||||||||||||||||||
Beginning balance as of January 1, 2022 | Total realized and unrealized (gains) losses | Ending balance as of September 30, 2022 | Total (gains) losses attributable to liabilities still held | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net (income) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 | Transfer out of Level 3 | Included in net (income) | Included in OCI | ||||||||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 294 | $ | (18 | ) | $ | — | $ | — | $ | — | $ | — | $ | (55 | ) | $ | — | $ | (2 | ) | $ | 219 | $ | (18 | ) | $ | — | ||||||||||||||||||||
Indexed universal life embedded derivatives | 25 | (23 | ) | — | — | — | 13 | — | — | — | 15 | (23 | ) | — | ||||||||||||||||||||||||||||||||||
Total policyholder account balances | 319 | (41 | ) | — | — | — | 13 | (55 | ) | — | (2 | ) | 234 | (41 | ) | — | ||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 319 | $ | (41 | ) | $ | — | $ | — | $ | — | $ | 13 | $ | (55 | ) | $ | — | $ | (2 | ) | $ | 234 | $ | (41 | ) | $ | — | ||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Total realized and unrealized (gains) losses included in net (income): | ||||||||||||||||||||||||
Net investment income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Net investment (gains) losses | (3 | ) | (23 | ) | 24 | 1 | 30 | (41 | ) | |||||||||||||||
Total | $ | (3 | ) | $ | (23 | ) | ||||||||||||||||||
Total | $ | 24 | $ | 1 | $ | 30 | $ | (41 | ) | |||||||||||||||
Total (gains) losses included in net (income) attributable to liabilities still held: | ||||||||||||||||||||||||
Net investment income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Net investment (gains) losses | (3 | ) | (23 | ) | 24 | 1 | 30 | (41 | ) | |||||||||||||||
Total | $ | (3 | ) | $ | (23 | ) | ||||||||||||||||||
Total | $ | 24 | $ | 1 | $ | 30 | $ | (41 | ) | |||||||||||||||
(Amounts in millions) | Valuation technique | Fair value | Unobservable input | Range | Weighted- average (1) | |||||||||||||||
Policyholder account balances: | ||||||||||||||||||||
Fixed index annuity embedded derivatives | | Option budget method | | $ | 184 | | Expected future interest credited | | — % - 3% | 1% | ||||||||||
Indexed universal life embedded derivatives | | Option budget method | | $ | 15 | | Expected future interest credited | | 2% - 13% | 5% | ||||||||||
Market risk benefits: (2) | ||||||||||||||||||||
| GMWB withdrawal utilization rate | | — % - 58% | 47% | ||||||||||||||||
| Non-performance risk (credit spreads) | | 43bps - 83bps | 69bps | ||||||||||||||||
Fixed index annuities | | Cash flow model | | $ | 60 | | Expected future interest credited | | 1% - 3% | 1% | ||||||||||
Lapse rate | 2% - 11% | 5% | ||||||||||||||||||
| GMWB withdrawal utilization rate | | 61% - 89% | 77% | ||||||||||||||||
| Non-performance risk (credit spreads) | | 43bps - 83bps | 69bps | ||||||||||||||||
Variable annuities | | Cash flow model | | $ | 673 | | Equity index volatility | | 17% - 31% | 23% |
(Amounts in millions) | Valuation technique | Fair value | Unobservable input | Range | Weighted-average (1) | |||||||
Policyholder account balances: | ||||||||||||
Fixed indexed annuity embedded derivatives | Option budget method | $ | 174 | Expected future interest credited | 1% - 4% | 2% | ||||||
Indexed universal life embedded derivatives | Option budget method | $ | 14 | Expected future interest credited | 3% - 13% | 5% | ||||||
Market risk benefits: (2) | ||||||||||||
GMWB withdrawal utilization rate | — % - 63% | 51% | ||||||||||
Non-performance risk (credit spreads) | 42bps - 83bps | 69bps | ||||||||||
Fixed indexed annuities | Cash flow model | $ | 38 | Expected future interest credited | 1% - 4% | 2% | ||||||
Lapse rate | 2% - 11% | 5% | ||||||||||
GMWB withdrawal utilization rate | 62% - 89% | 78% | ||||||||||
Non-performance risk (credit spreads) | 42bps - 83bps | 69bps | ||||||||||
Variable annuities | Cash flow model | $ | 502 | Equity index volatility | 16% - 30% | 23% | ||||||
Derivative liabilities: | ||||||||||||
Forward bond purchase commitments | Discounted cash flows | $ | 28 | Counterparty financing spreads | 35bps | Not applicable |
(1) | Unobservable inputs weighted by the policyholder account balances associated with the instrument. |
(2) | Refer to note 13 for additional details related to MRBs. |
March 31, 2023 | ||||||||||||||||||||||||
Notional amount | Carrying amount | Fair value | ||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Commercial mortgage loans, net | (1 | ) | $ | 6,891 | $ | 6,332 | $ | — | $ | — | $ | 6,332 | ||||||||||||
Bank loan investments | (1 | ) | 495 | 479 | — | — | 479 | |||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Long-term borrowings | (1 | ) | 1,600 | 1,351 | — | 1,351 | — | |||||||||||||||||
Investment contracts | (1 | ) | 6,383 | 6,791 | — | — | 6,791 | |||||||||||||||||
Other firm commitments: | ||||||||||||||||||||||||
Commitments to fund bank loan investments | $ | 186 | — | — | — | — | — | |||||||||||||||||
Ordinary course of business lending commitments | 17 | — | — | — | — | — |
September 30, 2023 | ||||||||||||||||||||||||
Notional amount | Carrying amount | Fair value | ||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Commercial mortgage loans, net | (1 | ) | $ | 6,793 | $ | 6,121 | $ | — | $ | — | $ | 6,121 | ||||||||||||
Bank loan investments | (1 | ) | 530 | 517 | — | — | 517 | |||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Long-term borrowings | (1 | ) | 1,602 | 1,359 | — | 1,359 | — | |||||||||||||||||
Investment contracts | (1 | ) | 5,605 | 5,461 | — | — | 5,461 | |||||||||||||||||
Commitments to fund investments: | ||||||||||||||||||||||||
Bank loan investments | $ | 136 | — | — | — | — | — | |||||||||||||||||
Private placement investments | 12 | — | — | — | — | — | ||||||||||||||||||
Commercial mortgage loans | 9 | — | — | — | — | — |
(1) | These financial instruments do not have notional amounts. |
December 31, 2022 | ||||||||||||||||||||||||
Notional amount | Carrying amount | Fair value | ||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Commercial mortgage loans, net | (1 | ) | $ | 7,010 | $ | 6,345 | $ | — | $ | — | $ | 6,345 | ||||||||||||
Bank loan investments | (1 | ) | 467 | 474 | — | — | 474 | |||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Long-term borrowings | (1 | ) | 1,611 | 1,346 | — | 1,346 | — | |||||||||||||||||
Investment contracts | (1 | ) | 6,794 | 7,171 | — | — | 7,171 | |||||||||||||||||
Commitments to fund investments: | ||||||||||||||||||||||||
Bank loan investments | $ | 70 | — | — | — | — | — | |||||||||||||||||
Private placement investments | 19 | — | — | — | — | — | ||||||||||||||||||
Commercial mortgage loans | 5 | — | — | — | — | — |
December 31, 2022 | ||||||||||||||||||||||||
Notional amount | Carrying amount | Fair value | ||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Commercial mortgage loans, net | (1 | ) | $ | 7,010 | $ | 6,345 | $ | — | $ | — | $ | 6,345 | ||||||||||||
Bank loan investments | (1 | ) | 467 | 474 | — | — | 474 | |||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Long-term borrowings | (1 | ) | 1,611 | 1,346 | — | 1,346 | — | |||||||||||||||||
Investment contracts | (1 | ) | 6,794 | 7,171 | — | — | 7,171 | |||||||||||||||||
Other firm commitments: | ||||||||||||||||||||||||
Commitments to fund bank loan investments | $ | 70 | — | — | — | — | — | |||||||||||||||||
Ordinary course of business lending commitments | 24 | — | — | — | — | — |
(1) | These financial instruments do not have notional amounts. |
March 31, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||
(Amounts in millions) | Carrying value | Commitments to fund | Carrying value | Commitments to fund | Carrying value | Commitments to fund | Carrying value | Commitments to fund | ||||||||||||||||||||||||
Limited partnerships accounted for at NAV: | ||||||||||||||||||||||||||||||||
Private equity funds (1) | $ | 1,726 | $ | 1,056 | $ | 1,647 | $ | 1,107 | $ | 1,907 | $ | 1,156 | $ | 1,647 | $ | 1,107 | ||||||||||||||||
Real estate funds (2) | 86 | 77 | 82 | 79 | 97 | 88 | 82 | 79 | ||||||||||||||||||||||||
Infrastructure funds (3) | 67 | 25 | 63 | 29 | 72 | 19 | 63 | 29 | ||||||||||||||||||||||||
Total limited partnerships accounted for at NAV | 1,879 | 1,158 | 1,792 | 1,215 | 2,076 | 1,263 | 1,792 | 1,215 | ||||||||||||||||||||||||
Limited partnerships accounted for at fair value | 22 | 1 | 24 | 1 | 20 | 1 | 24 | 1 | ||||||||||||||||||||||||
Limited partnerships accounted for under equity method of accounting | 555 | 126 | 515 | 149 | 603 | 144 | 515 | 149 | ||||||||||||||||||||||||
Total | $ | 2,456 | $ | 1,285 | $ | 2,331 | $ | 1,365 | $ | 2,699 | $ | 1,408 | $ | 2,331 | $ | 1,365 | ||||||||||||||||
(1) | This class employs various investment strategies such as leveraged buyout, growth equity, venture capital and mezzanine financing, generally investing in debt or equity positions directly in companies or assets of various sizes across diverse industries globally, primarily concentrated in North America. |
(2) | This class invests in real estate in North America, Europe and Asia via direct property ownership, joint ventures, mortgages and investments in debt and equity instruments. |
(3) | This class invests in the debt or equity of cash flow generating assets diversified across a variety of industries, including transportation, energy infrastructure, renewable power, social infrastructure, power generation, water, telecommunications and other regulated entities globally. |
March 31, 2023 | September 30, 2023 | |||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Long-term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | Long- term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | ||||||||||||||||||||||||||||||
Balance as of January 1 | $ | 935 | $ | 1,080 | $ | 57 | $ | 113 | $ | 2,185 | $ | 935 | $ | 1,080 | $ | 57 | $ | 113 | $ | 2,185 | ||||||||||||||||||||
Costs deferred | — | — | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||
Amortization | (14 | ) | (40 | ) | (3 | ) | (4 | ) | (61 | ) | (43 | ) | (106 | ) | (9 | ) | (12 | ) | (170 | ) | ||||||||||||||||||||
Balance as of March 31 | $ | 921 | $ | 1,040 | $ | 54 | $ | 109 | 2,124 | |||||||||||||||||||||||||||||||
Balance as of September 30 | $ | 893 | $ | 974 | $ | 48 | $ | 101 | 2,016 | |||||||||||||||||||||||||||||||
Enact segment | 26 | 26 | ||||||||||||||||||||||||||||||||||||||
Total deferred acquisition costs | $ | 2,150 | $ | 2,042 | ||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||
(Amounts in millions) | Long-term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | |||||||||||||||
Balance as of January 1 | $ | 989 | $ | 1,271 | $ | 70 | $ | 131 | $ | 2,461 | ||||||||||
Costs deferred | 6 | — | — | — | 6 | |||||||||||||||
Amortization | (60 | ) | (191 | ) | (13 | ) | (18 | ) | (282 | ) | ||||||||||
Balance as of December 31 | $ | 935 | $ | 1,080 | $ | 57 | $ | 113 | 2,185 | |||||||||||
Enact segment | 26 | |||||||||||||||||||
Total deferred acquisition costs | $ | 2,211 | ||||||||||||||||||
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Long-term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | Long- term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | ||||||||||||||||||||||||||||||
Balance as of January 1 | $ | 1,043 | $ | 1,501 | $ | 85 | $ | 151 | $ | 2,780 | $ | 989 | $ | 1,271 | $ | 70 | $ | 131 | $ | 2,461 | ||||||||||||||||||||
Costs deferred | 9 | — | — | — | 9 | 6 | — | — | — | 6 | ||||||||||||||||||||||||||||||
Amortization | (63 | ) | (230 | ) | (15 | ) | (20 | ) | (328 | ) | (60 | ) | (191 | ) | (13 | ) | (18 | ) | (282 | ) | ||||||||||||||||||||
Balance as of December 31 | $ | 989 | $ | 1,271 | $ | 70 | $ | 131 | 2,461 | $ | 935 | $ | 1,080 | $ | 57 | $ | 113 | 2,185 | ||||||||||||||||||||||
Enact segment | 27 | 26 | ||||||||||||||||||||||||||||||||||||||
Total deferred acquisition costs | $ | 2,488 | $ | 2,211 | ||||||||||||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||
(Amounts in millions) | Long- term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | |||||||||||||||
Balance as of January 1 | $ | 1,043 | $ | 1,501 | $ | 85 | $ | 151 | $ | 2,780 | ||||||||||
Costs deferred | 9 | — | — | — | 9 | |||||||||||||||
Amortization | (63 | ) | (230 | ) | (15 | ) | (20 | ) | (328 | ) | ||||||||||
Balance as of December 31 | $ | 989 | $ | 1,271 | $ | 70 | $ | 131 | 2,461 | |||||||||||
Enact segment | 27 | |||||||||||||||||||
Total deferred acquisition costs | $ | 2,488 | ||||||||||||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||||
(Amounts in millions) | Gross carrying amount | Accumulated amortization | Gross carrying amount | Accumulated amortization | ||||||||||||
PVFP | $ | 2,146 | $ | (2,035 | ) | $ | 2,146 | $ | (2,026 | ) | ||||||
Capitalized software | 508 | (444 | ) | 482 | (427 | ) | ||||||||||
Deferred sales inducements to contractholders | 317 | (295 | ) | 317 | (291 | ) | ||||||||||
Other | 6 | (4 | ) | 6 | (4 | ) | ||||||||||
Total | $ | 2,977 | $ | (2,778 | ) | $ | 2,951 | $ | (2,748 | ) | ||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||
(Amounts in millions) | Gross carrying amount | Accumulated amortization | Gross carrying amount | Accumulated amortization | ||||||||||||
PVFP | $ | 2,146 | $ | (2,029 | ) | $ | 2,146 | (2,026 | ) | |||||||
Capitalized software | 493 | (433 | ) | 482 | (427 | ) | ||||||||||
Deferred sales inducements to contractholders | 317 | (293 | ) | 317 | (291 | ) | ||||||||||
Other | 6 | (4 | ) | 6 | (4 | ) | ||||||||||
Total | $ | 2,962 | $ | (2,759 | ) | $ | 2,951 | $ | (2,748 | ) | ||||||
(Amounts in millions) | March 31, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
Beginning balance | $ | 120 | $ | 134 | $ | 154 | ||||||
Costs deferred | — | — | — | |||||||||
Amortization | (3 | ) | (14 | ) | (20 | ) | ||||||
Ending balance | $ | 117 | $ | 120 | $ | 134 | ||||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
Beginning balance as of January 1 | $ | 120 | $ | 134 | $ | 154 | ||||||
Costs deferred | — | — | — | |||||||||
Amortization | (9 | ) | (14 | ) | (20 | ) | ||||||
Ending balance | $ | 111 | $ | 120 | $ | 134 | ||||||
(Amounts in millions) | March 31, 2023 | December 31, 2022 | ||||||
Long-term care insurance | $ | 43,371 | $ | 41,399 | ||||
Life insurance | 1,762 | 1,820 | ||||||
Fixed annuities | 12,219 | 11,923 | ||||||
Total long-duration insurance contracts | 57,352 | 55,142 | ||||||
Deferred profit liability | 119 | 115 | ||||||
Cost of reinsurance | 87 | 92 | ||||||
Total future policy benefits | $ | 57,558 | $ | 55,349 | ||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | ||||||
Long-term care insurance | $ | 38,928 | $ | 41,457 | ||||
Life insurance | 1,645 | 1,820 | ||||||
Fixed annuities | 10,965 | 11,923 | ||||||
Total long-duration insurance contracts | 51,538 | 55,200 | ||||||
Deferred profit liability | 126 | 115 | ||||||
Cost of reinsurance | 76 | 92 | ||||||
Total future policy benefits | $ | 51,740 | $ | 55,407 | ||||
March 31, 2023 | ||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | |||||||||
Present value of expected net premiums: | ||||||||||||
Beginning balance as of January 1 | $ | 19,773 | $ | 4,083 | $ | — | ||||||
Beginning balance, at original discount rate | $ | 19,841 | $ | 3,922 | $ | — | ||||||
Effect of changes in cash flow assumptions | (48 | ) | — | — | ||||||||
Effect of actual variances from expected experience | (33 | ) | 51 | — | ||||||||
Adjusted beginning balance | 19,760 | 3,973 | — | |||||||||
Issuances | 1 | — | 9 | |||||||||
Interest accrual | 254 | 55 | — | |||||||||
Net premiums collected (2) | (488 | ) | (112 | ) | (9 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | — | — | — | |||||||||
Ending balance, at original discount rate | 19,527 | 3,916 | — | |||||||||
Effect of changes in discount rate assumptions | 392 | 274 | — | |||||||||
Ending balance as of March 31 | $ | 19,919 | $ | 4,190 | $ | — | ||||||
Present value of expected future policy benefits: | ||||||||||||
Beginning balance as of January 1 | $ | 61,172 | $ | 5,556 | $ | 11,923 | ||||||
Beginning balance, at original discount rate | $ | 60,969 | $ | 5,374 | $ | 10,300 | ||||||
Effect of changes in cash flow assumptions | (34 | ) | — | — | ||||||||
Effect of actual variances from expected experience | (50 | ) | 62 | (11 | ) | |||||||
Adjusted beginning balance | 60,885 | 5,436 | 10,289 | |||||||||
Issuances | 1 | — | 7 | |||||||||
Interest accrual | 832 | 72 | 168 | |||||||||
Benefit payments | (864 | ) | (255 | ) | (249 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | 1 | (5 | ) | 3 | ||||||||
Ending balance, at original discount rate | 60,855 | 5,248 | 10,218 | |||||||||
Effect of changes in discount rate assumptions | 2,435 | 289 | 2,001 | |||||||||
Ending balance as of March 31 | $ | 63,290 | $ | 5,537 | $ | 12,219 | ||||||
Net liability for future policy benefits, before flooring adjustments | $ | 43,371 | $ | 1,347 | $ | 12,219 | ||||||
Flooring adjustments | — | 415 | — | |||||||||
Net liability for future policy benefits | 43,371 | 1,762 | 12,219 | |||||||||
Less: reinsurance recoverable | 7,551 | 849 | 9,227 | |||||||||
Net liability for future policy benefits, net of reinsurance recoverable | $ | 35,820 | $ | 913 | $ | 2,992 | ||||||
Weighted-average liability duration (years) | 14.5 | 6.1 | 11.1 |
September 30, 2023 | ||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | |||||||||
Present value of expected net premiums: | ||||||||||||
Beginning balance as of January 1 | $ | 19,895 | $ | 4,083 | $ | — | ||||||
Beginning balance, at original discount rate | $ | 19,959 | $ | 3,922 | $ | — | ||||||
Effect of changes in cash flow assumptions | (119 | ) | — | — | ||||||||
Effect of actual variances from expected experience | (156 | ) | 38 | — | ||||||||
Adjusted beginning balance | 19,684 | 3,960 | — | |||||||||
Issuances | 1 | — | 33 | |||||||||
Interest accrual | 754 | 164 | — | |||||||||
Net premiums collected (2) | (1,470 | ) | (330 | ) | (33 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | — | — | — | |||||||||
Ending balance, at original discount rate | 18,969 | 3,794 | — | |||||||||
Effect of changes in discount rate assumptions | (765 | ) | (31 | ) | — | |||||||
Ending balance as of September 30 | $ | 18,204 | $ | 3,763 | $ | — | ||||||
Present value of expected future policy benefits: | ||||||||||||
Beginning balance as of January 1 | $ | 61,352 | $ | 5,556 | $ | 11,923 | ||||||
Beginning balance, at original discount rate | $ | 61,148 | $ | 5,374 | $ | 10,300 | ||||||
Effect of changes in cash flow assumptions | (141 | ) | — | — | ||||||||
Effect of actual variances from expected experience | 8 | 56 | (35 | ) | ||||||||
Adjusted beginning balance | 61,015 | 5,430 | 10,265 | |||||||||
Issuances | 2 | — | 26 | |||||||||
Interest accrual | 2,498 | 212 | 500 | |||||||||
Benefit payments | (2,657 | ) | (628 | ) | (751 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | (1 | ) | (5 | ) | 5 | |||||||
Ending balance, at original discount rate | 60,857 | 5,009 | 10,045 | |||||||||
Effect of changes in discount rate assumptions | (3,725 | ) | 5 | 920 | ||||||||
Ending balance as of September 30 | $ | 57,132 | $ | 5,014 | $ | 10,965 | ||||||
Net liability for future policy benefits, before flooring adjustments | $ | 38,928 | $ | 1,251 | $ | 10,965 | ||||||
Flooring adjustments (3) | — | 394 | — | |||||||||
Net liability for future policy benefits | 38,928 | 1,645 | 10,965 | |||||||||
Less: reinsurance recoverable | 6,780 | 772 | 8,280 | |||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | 32,148 | $ | 873 | $ | 2,685 | ||||||
Weighted-average liability duration (years) | 13.6 | 5.7 | 10.3 |
(1) | The components of the life insurance rollforward exclude flooring. |
(2) | Net premiums collected represents the portion of gross premiums collected from policyholders that is used to fund expected benefit payments. |
(3) | Flooring adjustments are necessary when a cohort’s present value of future net premiums exceeds the present value of future benefits. The flooring adjustment ensures that the liability for future policy benefits for each cohort is not less than zero. This adjustment is most prevalent in our term life insurance products due to their product design of a level premium period followed by annual premium rate increases. |
December 31, 2022 | ||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | |||||||||
Present value of expected net premiums: | ||||||||||||
Beginning balance as of January 1 | $ | 25,064 | $ | 5,414 | $ | — | ||||||
Beginning balance, at original discount rate | $ | 20,573 | $ | 4,086 | $ | — | ||||||
Effect of changes in cash flow assumptions | 95 | — | — | |||||||||
Effect of actual variances from expected experience | 110 | 69 | — | |||||||||
Adjusted beginning balance | 20,778 | 4,155 | — | |||||||||
Issuances | 8 | — | 50 | |||||||||
Interest accrual | 1,055 | 226 | — | |||||||||
Net premiums collected (2) | (2,000 | ) | (459 | ) | (50 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | — | — | — | |||||||||
Ending balance, at original discount rate | 19,841 | 3,922 | — | |||||||||
Effect of changes in discount rate assumptions | (68 | ) | 161 | — | ||||||||
Ending balance as of December 31 | $ | 19,773 | $ | 4,083 | $ | — | ||||||
Present value of expected future policy benefits: | ||||||||||||
Beginning balance as of January 1 | $ | 85,222 | $ | 7,157 | $ | 17,039 | ||||||
Beginning balance, at original discount rate | $ | 61,033 | $ | 5,814 | $ | 11,012 | ||||||
Effect of changes in cash flow assumptions | (462 | ) | — | — | ||||||||
Effect of actual variances from expected experience | 19 | 106 | (24 | ) | ||||||||
Adjusted beginning balance | 60,590 | 5,920 | 10,988 | |||||||||
Issuances | 10 | — | 43 | |||||||||
Interest accrual | 3,363 | 304 | 690 | |||||||||
Benefit payments | (2,994 | ) | (851 | ) | (1,072 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Reinsurance transactions (3) | — | — | (352 | ) | ||||||||
Other | — | 1 | 3 | |||||||||
Ending balance, at original discount rate | 60,969 | 5,374 | 10,300 | |||||||||
Effect of changes in discount rate assumptions | 203 | 182 | 1,623 | |||||||||
Ending balance as of December 31 | $ | 61,172 | $ | 5,556 | $ | 11,923 | ||||||
Net liability for future policy benefits, before flooring adjustments | $ | 41,399 | $ | 1,473 | $ | 11,923 | ||||||
Flooring adjustments | — | 347 | — | |||||||||
Net liability for future policy benefits | 41,399 | 1,820 | 11,923 | |||||||||
Less: reinsurance recoverable | 7,270 | 873 | 8,957 | |||||||||
Net liability for future policy benefits, net of reinsurance recoverable | $ | 34,129 | $ | 947 | $ | 2,966 | ||||||
Weighted-average liability duration (years) | 14.5 | 6.0 | 10.9 |
December 31, 2022 | ||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | |||||||||
Present value of expected net premiums: | ||||||||||||
Beginning balance as of January 1 | $ | 25,247 | $ | 5,414 | $ | — | ||||||
Beginning balance, at original discount rate | $ | 20,717 | $ | 4,086 | $ | — | ||||||
Effect of changes in cash flow assumptions | 102 | — | — | |||||||||
Effect of actual variances from expected experience | 82 | 69 | — | |||||||||
Adjusted beginning balance | 20,901 | 4,155 | — | |||||||||
Issuances | 8 | — | 50 | |||||||||
Interest accrual | 1,061 | 226 | — | |||||||||
Net premiums collected (2) | (2,011 | ) | (459 | ) | (50 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | — | — | — | |||||||||
Ending balance, at original discount rate | 19,959 | 3,922 | — | |||||||||
Effect of changes in discount rate assumptions | (64 | ) | 161 | — | ||||||||
Ending balance as of December 31 | $ | 19,895 | $ | 4,083 | $ | — | ||||||
Present value of expected future policy benefits: | ||||||||||||
Beginning balance as of January 1 | $ | 85,338 | $ | 7,157 | $ | 17,039 | ||||||
Beginning balance, at original discount rate | $ | 61,146 | $ | 5,814 | $ | 11,012 | ||||||
Effect of changes in cash flow assumptions | (251 | ) | — | — | ||||||||
Effect of actual variances from expected experience | (31 | ) | 106 | (24 | ) | |||||||
Adjusted beginning balance | 60,864 | 5,920 | 10,988 | |||||||||
Issuances | 10 | — | 43 | |||||||||
Interest accrual | 3,364 | 304 | 690 | |||||||||
Benefit payments | (3,090 | ) | (851 | ) | (1,072 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Reinsurance transactions (3) | — | — | (352 | ) | ||||||||
Other | — | 1 | 3 | |||||||||
Ending balance, at original discount rate | 61,148 | 5,374 | 10,300 | |||||||||
Effect of changes in discount rate assumptions | 204 | 182 | 1,623 | |||||||||
Ending balance as of December 31 | $ | 61,352 | $ | 5,556 | $ | 11,923 | ||||||
Net liability for future policy benefits, before flooring adjustments | $ | 41,457 | $ | 1,473 | $ | 11,923 | ||||||
Flooring adjustments (4) | — | 347 | — | |||||||||
Net liability for future policy benefits | 41,457 | 1,820 | 11,923 | |||||||||
Less: reinsurance recoverable | 7,270 | 873 | 8,957 | |||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | 34,187 | $ | 947 | $ | 2,966 | ||||||
Weighted-average liability duration (years) | 14.5 | 6.0 | 10.9 |
(1) | The components of the life insurance rollforward exclude flooring. |
(2) | Net premiums collected represents the portion of gross premiums collected from policyholders that is used to fund expected benefit payments. |
(3) | Related to a third-party recapture of certain single premium immediate annuity contracts in 2022. |
(4) | Flooring adjustments are necessary when a cohort’s present value of future net premiums exceeds the present value of future benefits. The flooring adjustment ensures that the liability for future policy benefits for each cohort is not less than zero. This adjustment is most prevalent in our term life insurance products due to their product design of a level premium period followed by annual premium rate increases. |
December 31, 2021 | ||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | |||||||||
Present value of expected net premiums: | ||||||||||||
Beginning balance as of January 1 | $ | 26,167 | $ | 5,451 | $ | — | ||||||
Beginning balance, at original discount rate | $ | 20,512 | $ | 3,916 | $ | — | ||||||
Effect of changes in cash flow assumptions | 1,571 | 228 | — | |||||||||
Effect of actual variances from expected experience | (461 | ) | 165 | — | ||||||||
Adjusted beginning balance | 21,622 | 4,309 | — | |||||||||
Issuances | 23 | — | 47 | |||||||||
Interest accrual | 1,046 | 221 | — | |||||||||
Net premiums collected (2) | (2,118 | ) | (444 | ) | (47 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | — | — | — | |||||||||
Ending balance, at original discount rate | 20,573 | 4,086 | — | |||||||||
Effect of changes in discount rate assumptions | 4,491 | 1,328 | — | |||||||||
Ending balance as of December 31 | $ | 25,064 | $ | 5,414 | $ | — | ||||||
Present value of expected future policy benefits: | ||||||||||||
Beginning balance as of January 1 | $ | 89,479 | $ | 7,821 | $ | 18,637 | ||||||
Beginning balance, at original discount rate | $ | 59,548 | $ | 6,062 | $ | 11,358 | ||||||
Effect of changes in cash flow assumptions | 1,596 | 252 | 27 | |||||||||
Effect of actual variances from expected experience | (611 | ) | 190 | (24 | ) | |||||||
Adjusted beginning balance | 60,533 | 6,504 | 11,361 | |||||||||
Issuances | 23 | — | 46 | |||||||||
Interest accrual | 3,300 | 322 | 728 | |||||||||
Benefit payments | (2,821 | ) | (1,013 | ) | (1,119 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | (2 | ) | 1 | (4 | ) | |||||||
Ending balance, at original discount rate | 61,033 | 5,814 | 11,012 | |||||||||
Effect of changes in discount rate assumptions | 24,189 | 1,343 | 6,027 | |||||||||
Ending balance as of December 31 | $ | 85,222 | $ | 7,157 | $ | 17,039 | ||||||
Net liability for future policy benefits, before flooring adjustments | $ | 60,158 | $ | 1,743 | $ | 17,039 | ||||||
Flooring adjustments | — | 423 | — | |||||||||
Net liability for future policy benefits | 60,158 | 2,166 | 17,039 | |||||||||
Less: reinsurance recoverable | 10,557 | 1,040 | 12,583 | |||||||||
Net liability for future policy benefits, net of reinsurance recoverable | $ | 49,601 | $ | 1,126 | $ | 4,456 | ||||||
Weighted-average liability duration (years) | 16.9 | 7.0 | 13.6 |
December 31, 2021 | ||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | |||||||||
Present value of expected net premiums: | ||||||||||||
Beginning balance as of January 1 | $ | 26,283 | $ | 5,451 | $ | — | ||||||
Beginning balance, at original discount rate | $ | 20,600 | $ | 3,916 | $ | — | ||||||
Effect of changes in cash flow assumptions | 1,615 | 228 | — | |||||||||
Effect of actual variances from expected experience | (444 | ) | 165 | — | ||||||||
Adjusted beginning balance | 21,771 | 4,309 | — | |||||||||
Issuances | 23 | — | 47 | |||||||||
Interest accrual | 1,053 | 221 | — | |||||||||
Net premiums collected (2) | (2,130 | ) | (444 | ) | (47 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | — | — | — | |||||||||
Ending balance, at original discount rate | 20,717 | 4,086 | — | |||||||||
Effect of changes in discount rate assumptions | 4,530 | 1,328 | — | |||||||||
Ending balance as of December 31 | $ | 25,247 | $ | 5,414 | $ | — | ||||||
Present value of expected future policy benefits: | ||||||||||||
Beginning balance as of January 1 | $ | 89,645 | $ | 7,821 | $ | 18,637 | ||||||
Beginning balance, at original discount rate | $ | 59,709 | $ | 6,062 | $ | 11,358 | ||||||
Effect of changes in cash flow assumptions | 1,678 | 252 | 27 | |||||||||
Effect of actual variances from expected experience | (565 | ) | 190 | (24 | ) | |||||||
Adjusted beginning balance | 60,822 | 6,504 | 11,361 | |||||||||
Issuances | 23 | — | 46 | |||||||||
Interest accrual | 3,309 | 322 | 728 | |||||||||
Benefit payments | (3,006 | ) | (1,013 | ) | (1,119 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other | (2 | ) | 1 | (4 | ) | |||||||
Ending balance, at original discount rate | 61,146 | 5,814 | 11,012 | |||||||||
Effect of changes in discount rate assumptions | 24,192 | 1,343 | 6,027 | |||||||||
Ending balance as of December 31 | $ | 85,338 | $ | 7,157 | $ | 17,039 | ||||||
Net liability for future policy benefits, before flooring adjustments | $ | 60,091 | $ | 1,743 | $ | 17,039 | ||||||
Flooring adjustments (3) | — | 423 | — | |||||||||
Net liability for future policy benefits | 60,091 | 2,166 | 17,039 | |||||||||
Less: reinsurance recoverable | 10,557 | 1,040 | 12,583 | |||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | 49,534 | $ | 1,126 | $ | 4,456 | ||||||
Weighted-average liability duration (years) | 16.9 | 7.0 | 13.6 |
(1) | The components of the life insurance rollforward exclude flooring. |
(2) | Net premiums collected represents the portion of gross premiums collected from policyholders that is used to fund expected benefit payments. |
(3) | Flooring adjustments are necessary when a cohort’s present value of future net premiums exceeds the present value of future benefits. The flooring adjustment ensures that the liability for future policy benefits for each cohort is not less than zero. This adjustment is most prevalent in our term life insurance products due to their product design of a level premium period followed by annual premium rate increases. |
(Amounts in millions) | March 31, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
Future policy benefits beginning balance, excluding flooring adjustments | $ | 1,473 | $ | 1,743 | $ | 2,370 | ||||||
Future policy benefits beginning balance, including flooring adjustments | $ | 1,820 | $ | 2,166 | $ | 2,507 | ||||||
Liability remeasurement (gains) losses | 11 | 35 | 49 | |||||||||
Current period changes, at original discount rate | (130 | ) | (312 | ) | (467 | ) | ||||||
Changes in discount rate assumptions, excluding flooring adjustments | (7 | ) | 7 | (209 | ) | |||||||
Change in flooring adjustments, at original discount rate | 46 | 140 | 137 | |||||||||
Changes in discount rate assumptions, flooring adjustments | 22 | (216 | ) | 149 | ||||||||
Future policy benefits ending balance, including flooring adjustments | $ | 1,762 | $ | 1,820 | $ | 2,166 | ||||||
Future policy benefits ending balance, excluding flooring adjustments | $ | 1,347 | $ | 1,473 | $ | 1,743 | ||||||
March 31, 2023 | December 31, 2022 | December 31, 2021 | ||||||||||
Long-term care insurance | ||||||||||||
Interest accretion rate | 5.8 | % | 5.8 | % | 5.8 | % | ||||||
Current discount rate | 5.0 | % | 5.4 | % | 2.8 | % | ||||||
Life insurance | ||||||||||||
Interest accretion rate | 5.8 | % | 5.8 | % | 5.8 | % | ||||||
Current discount rate | 4.8 | % | 5.2 | % | 2.4 | % | ||||||
Fixed annuities | ||||||||||||
Interest accretion rate | 6.7 | % | 6.7 | % | 6.7 | % | ||||||
Current discount rate | 5.0 | % | 5.3 | % | 2.8 | % |
September 30, 2023 | December 31, 2022 | December 31, 2021 | ||||||||||
Long-term care insurance | ||||||||||||
Interest accretion rate | 5.8 | % | 5.8 | % | 5.8 | % | ||||||
Current discount rate | 6.0 | % | 5.4 | % | 2.8 | % | ||||||
Life insurance | ||||||||||||
Interest accretion rate | 5.8 | % | 5.8 | % | 5.8 | % | ||||||
Current discount rate | 5.8 | % | 5.2 | % | 2.4 | % | ||||||
Fixed annuities | ||||||||||||
Interest accretion rate | 6.7 | % | 6.7 | % | 6.7 | % | ||||||
Current discount rate | 5.9 | % | 5.3 | % | 2.8 | % |
March 31, 2023 | December 31, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Undiscounted | Discounted | Undiscounted | Discounted | Undiscounted | Discounted | Undiscounted | Discounted | Undiscounted | Discounted | Undiscounted | Discounted | ||||||||||||||||||||||||||||||||||||
Long-term care insurance | Long-term care insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Expected future gross premiums | $ | 41,609 | $ | 28,576 | $ | 42,329 | $ | 28,278 | $ | 45,334 | $ | 36,642 | $ | 39,880 | $ | 25,926 | $ | 42,329 | $ | 28,278 | $ | 45,334 | $ | 36,642 | ||||||||||||||||||||||||
Expected future benefit payments | 129,116 | 63,290 | 130,129 | 61,172 | 133,858 | 85,222 | $ | 127,148 | $ | 57,132 | $ | 130,315 | $ | 61,352 | $ | 133,974 | $ | 85,338 | ||||||||||||||||||||||||||||||
Life insurance | Life insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Expected future gross premiums | 11,377 | 6,654 | 11,541 | 6,559 | 12,266 | 8,853 | $ | 10,993 | $ | 5,970 | $ | 11,541 | $ | 6,559 | $ | 12,266 | $ | 8,853 | ||||||||||||||||||||||||||||||
Expected future benefit payments | 7,739 | 5,537 | 7,924 | 5,556 | 8,652 | 7,157 | $ | 7,360 | $ | 5,014 | $ | 7,924 | $ | 5,556 | $ | 8,652 | $ | 7,157 | ||||||||||||||||||||||||||||||
Fixed annuities | Fixed annuities | |||||||||||||||||||||||||||||||||||||||||||||||
Expected future gross premiums | — | — | — | — | — | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Expected future benefit payments | 24,674 | 12,219 | 24,924 | 11,923 | 26,473 | 17,039 | $ | 24,157 | $ | 10,965 | $ | 24,924 | $ | 11,923 | $ | 26,473 | $ | 17,039 |
2023 | 2022 | |||||||||||||||
(Amounts in millions) | Gross premiums | Interest expense (1) | Gross premiums | Interest expense (1) | ||||||||||||
Long-term care insurance | $ | 675 | $ | 578 | $ | 671 | $ | 573 | ||||||||
Life insurance | 179 | 17 | 187 | 22 | ||||||||||||
Fixed annuities | — | 168 | — | 178 | ||||||||||||
Total | $ | 854 | $ | 763 | $ | 858 | $ | 773 | ||||||||
Three months ended September 30, 2023 | Three months ended September 30, 2022 | Nine months ended September 30, 2023 | Nine months ended September 30, 2022 | Years ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Gross premiums | Interest expense (1) | Gross premiums | Interest expense (1) | Gross premiums | Interest expense (1) | Gross premiums | Interest expense (1) | Gross premiums | Interest expense (1) | Gross premiums | Interest expense (1) | ||||||||||||||||||||||||||||||||||||
Long-term care insurance | $ | 685 | $ | 584 | $ | 707 | $ | 578 | $ | 2,031 | $ | 1,744 | $ | 2,059 | $ | 1,723 | $ | 2,769 | $ | 2,303 | $ | 2,847 | $ | 2,256 | ||||||||||||||||||||||||
Life insurance | 168 | 15 | 178 | 19 | 521 | 48 | 550 | 60 | 725 | 78 | 759 | 101 | ||||||||||||||||||||||||||||||||||||
Fixed annuities | — | 166 | — | 171 | — | 500 | — | 521 | — | 690 | — | 728 | ||||||||||||||||||||||||||||||||||||
Total | $ | 853 | $ | 765 | $ | 885 | $ | 768 | $ | 2,552 | $ | 2,292 | $ | 2,609 | $ | 2,304 | $ | 3,494 | $ | 3,071 | $ | 3,606 | $ | 3,085 | ||||||||||||||||||||||||
(1) | Amounts for interest accretion, labeled “interest expense” in the table above, are included in benefits and other changes in policy reserves in the condensed consolidated statements of |
(Amounts in millions) | March 31, 2023 | December 31, 2022 | ||||||
Life insurance | $ | 7,627 | $ | 7,694 | ||||
Fixed annuities | 5,174 | 5,477 | ||||||
Variable annuities | 586 | 610 | ||||||
Total investment contracts | 13,387 | 13,781 | ||||||
Fixed indexed annuity embedded derivatives (1) | 184 | 202 | ||||||
Indexed universal life embedded derivatives (1) | 15 | 15 | ||||||
Additional insurance liabilities (2) | 2,616 | 2,566 | ||||||
Total policyholder account balances | $ | 16,202 | $ | 16,564 | ||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | ||||||
Life insurance | $ | 7,502 | $ | 7,694 | ||||
Fixed annuities | 4,700 | 5,477 | ||||||
Variable annuities | 549 | 610 | ||||||
Fixed indexed annuity embedded derivatives (1) | 174 | 202 | ||||||
Indexed universal life embedded derivatives (1) | 14 | 15 | ||||||
Additional insurance liabilities (2) | 2,646 | 2,566 | ||||||
Other | 5 | — | ||||||
Total policyholder account balances | $ | 15,590 | $ | 16,564 | ||||
(1) | See note 6 for additional information. |
(2) | Amount represents additional liabilities related to death or other insurance benefits that are recorded within policyholder account balances and are considered long-duration insurance contracts. See note 12 for additional information. |
March 31, 2023 | ||||||||||||
(Dollar amounts in millions) | Life insurance | Fixed annuities | Variable annuities | |||||||||
Beginning balance as of January 1 | $ | 7,694 | $ | 5,477 | $ | 610 | ||||||
Issuances | — | — | — | |||||||||
Premiums received | 126 | 5 | 17 | |||||||||
Policy charges | (156 | ) | (2 | ) | (10 | ) | ||||||
Surrenders and withdrawals | (91 | ) | (267 | ) | (112 | ) | ||||||
Benefit payments | (44 | ) | (101 | ) | (91 | ) | ||||||
Net transfers from (to) separate accounts | — | — | 156 | |||||||||
Interest credited | 97 | 41 | 1 | |||||||||
Other | 1 | 21 | 15 | |||||||||
Ending balance as of March 31 | $ | 7,627 | $ | 5,174 | $ | 586 | ||||||
Weighted-average crediting rate | 3.9 | % | 2.5 | % | 3.3 | % | ||||||
Net amount at risk (1) | $ | 43,682 | $ | 29 | $ | 631 | ||||||
Cash surrender value | $ | 4,427 | $ | 4,154 | $ | 586 |
September 30, 2023 | ||||||||||||
(Dollar amounts in millions) | Life insurance | Fixed annuities | Variable annuities | |||||||||
Beginning balance as of January 1 | $ | 7,694 | $ | 5,477 | $ | 610 | ||||||
Issuances | — | — | — | |||||||||
Premiums received | 384 | 17 | 11 | |||||||||
Policy charges | (464 | ) | (4 | ) | (4 | ) | ||||||
Surrenders and withdrawals | (234 | ) | (663 | ) | (55 | ) | ||||||
Benefit payments | (171 | ) | (292 | ) | (54 | ) | ||||||
Net transfers from (to) separate accounts | — | — | 1 | |||||||||
Interest credited | 291 | 121 | 3 | |||||||||
Other | 2 | 44 | 37 | |||||||||
Ending balance as of September 30 | $ | 7,502 | $ | 4,700 | $ | 549 | ||||||
Weighted-average crediting rate | 3.9 | % | 2.8 | % | 3.3 | % | ||||||
Net amount at risk (1) | $ | 43,456 | $ | 11 | $ | 535 | ||||||
Cash surrender value | $ | 4,308 | $ | 3,714 | $ | 549 |
(1) | The net amount at risk presented for fixed and variable annuity products contains both general and separate accounts, including amounts related to annuitization and other insurance benefits classified as MRBs. |
December 31, 2022 | ||||||||||||
(Dollar amounts in millions) | Life insurance | Fixed annuities | Variable annuities | |||||||||
Beginning balance as of January 1 | $ | 7,835 | $ | 6,595 | $ | 652 | ||||||
Issuances | — | — | — | |||||||||
Premiums received | 518 | 23 | 69 | |||||||||
Policy charges | (632 | ) | (6 | ) | (42 | ) | ||||||
Surrenders and withdrawals | (177 | ) | (908 | ) | (400 | ) | ||||||
Benefit payments | (210 | ) | (475 | ) | (295 | ) | ||||||
Net transfers from (to) separate accounts | — | — | 575 | |||||||||
Interest credited | 381 | 173 | 4 | |||||||||
Other | (21 | ) | 75 | 47 | ||||||||
Ending balance as of December 31 | $ | 7,694 | $ | 5,477 | $ | 610 | ||||||
Weighted-average crediting rate | 3.9 | % | 2.4 | % | 3.3 | % | ||||||
Net amount at risk (1) | $ | 44,113 | $ | 21 | $ | 661 | ||||||
Cash surrender value | $ | 4,415 | $ | 4,449 | $ | 610 |
December 31, 2022 | ||||||||||||
(Dollar amounts in millions) | Life insurance | Fixed annuities | Variable annuities | |||||||||
Beginning balance as of January 1 | $ | 7,835 | $ | 6,595 | $ | 652 | ||||||
Issuances | — | — | — | |||||||||
Premiums received | 518 | 23 | 21 | |||||||||
Policy charges | (632 | ) | (6 | ) | (8 | ) | ||||||
Surrenders and withdrawals | (177 | ) | (908 | ) | (48 | ) | ||||||
Benefit payments | (210 | ) | (475 | ) | (69 | ) | ||||||
Net transfers from (to) separate accounts | — | — | 11 | |||||||||
Interest credited | 381 | 173 | 4 | |||||||||
Other | (21 | ) | 75 | 47 | ||||||||
Ending balance as of December 31 | $ | 7,694 | $ | 5,477 | $ | 610 | ||||||
Weighted-average crediting rate | 3.9 | % | 2.4 | % | 3.3 | % | ||||||
Net amount at risk (1) | $ | 44,113 | $ | 21 | $ | 661 | ||||||
Cash surrender value | $ | 4,415 | $ | 4,449 | $ | 610 |
(1) | The net amount at risk presented for fixed and variable annuity products contains both general and separate accounts, including amounts related to annuitization and other insurance benefits classified as MRBs. |
December 31, 2021 | ||||||||||||
(Dollar amounts in millions) | Life insurance | Fixed annuities | Variable annuities | |||||||||
Beginning balance as of January 1 | $ | 8,105 | $ | 7,892 | $ | 689 | ||||||
Issuances | — | — | — | |||||||||
Premiums received | 558 | 36 | 24 | |||||||||
Policy charges | (644 | ) | (7 | ) | (8 | ) | ||||||
Surrenders and withdrawals | (298 | ) | (1,153 | ) | (43 | ) | ||||||
Benefit payments | (233 | ) | (508 | ) | (58 | ) | ||||||
Net transfers from (to) separate accounts | — | — | 5 | |||||||||
Interest credited | 365 | 199 | 5 | |||||||||
Other | (18 | ) | 136 | 38 | ||||||||
Ending balance as of December 31 | $ | 7,835 | $ | 6,595 | $ | 652 | ||||||
Weighted-average crediting rate | 3.9 | % | 2.3 | % | 3.2 | % | ||||||
Net amount at risk (1) | $ | 46,613 | $ | 98 | $ | 648 | ||||||
Cash surrender value | $ | 4,411 | $ | 5,471 | $ | 652 |
December 31, 2021 | ||||||||||||
(Dollar amounts in millions) | Life insurance | Fixed annuities | Variable annuities | |||||||||
Beginning balance as of January 1 | $ | 8,105 | $ | 7,892 | $ | 689 | ||||||
Issuances | — | — | — | |||||||||
Premiums received | 558 | 36 | 71 | |||||||||
Policy charges | (644 | ) | (7 | ) | (46 | ) | ||||||
Surrenders and withdrawals | (298 | ) | (1,153 | ) | (549 | ) | ||||||
Benefit payments | (233 | ) | (508 | ) | (324 | ) | ||||||
Net transfers from (to) separate accounts | — | — | 768 | |||||||||
Interest credited | 365 | 199 | 5 | |||||||||
Other | (18 | ) | 136 | 38 | ||||||||
Ending balance as of December 31 | $ | 7,835 | $ | 6,595 | $ | 652 | ||||||
Weighted-average crediting rate | 3.9 | % | 2.3 | % | 3.2 | % | ||||||
Net amount at risk (1) | $ | 46,613 | $ | 98 | $ | 648 | ||||||
Cash surrender value | $ | 4,411 | $ | 5,471 | $ | 652 |
(1) | The net amount at risk presented for fixed and variable annuity products contains both general and separate accounts, including amounts related to annuitization and other insurance benefits classified as MRBs. |
March 31, 2023 | ||||||||||||||||||||
(Amounts in millions) | At guaranteed minimum | 1–50 basis points above | 51–150 basis points above | Greater than 150 basis points above | Total (1) | |||||||||||||||
Less than 2.00% | $ | 744 | $ | 89 | $ | 4 | $ | — | $ | 837 | ||||||||||
2.00%–2.99% | 1,049 | 2 | — | — | 1,051 | |||||||||||||||
3.00%–3.99% | 1,874 | 759 | 1,161 | 4 | 3,798 | |||||||||||||||
4.00% and greater | 2,601 | 14 | 2 | — | 2,617 | |||||||||||||||
Total | $ | 6,268 | $ | 864 | $ | 1,167 | $ | 4 | $ | 8,303 | ||||||||||
September 30, 2023 | ||||||||||||||||||||
(Amounts in millions) | At guaranteed minimum | 1–50 basis points above | 51–150 basis points above | Greater than 150 basis points above | Total (1) | |||||||||||||||
Less than 2.00% | $ | 336 | $ | 106 | $ | 9 | $ | — | $ | 451 | ||||||||||
2.00%–2.99% | 1,186 | 2 | — | — | 1,188 | |||||||||||||||
3.00%–3.99% | 1,780 | 717 | 1,167 | 19 | 3,683 | |||||||||||||||
4.00% and greater | 2,509 | 16 | 8 | — | 2,533 | |||||||||||||||
Total | $ | 5,811 | $ | 841 | $ | 1,184 | $ | 19 | $ | 7,855 | ||||||||||
(1) | Excludes universal life insurance and investment contracts ofapproximately that have a market component totheir crediting strategy. |
December 31, 2022 | ||||||||||||||||||||
(Amounts in millions) | At guaranteed minimum | 1–50 basis points above | 51–150 basis points above | Greater than 150 basis points above | Total (1) | |||||||||||||||
Less than 2.00% | $ | 1,065 | $ | 42 | $ | 2 | $ | — | $ | 1,109 | ||||||||||
2.00%–2.99% | 947 | 2 | — | — | 949 | |||||||||||||||
3.00%–3.99% | 1,928 | 774 | 1,156 | 1 | 3,859 | |||||||||||||||
4.00% and greater | 2,649 | 12 | 1 | — | 2,662 | |||||||||||||||
Total | $ | 6,589 | $ | 830 | $ | 1,159 | $ | 1 | $ | 8,579 | ||||||||||
December 31, 2022 | ||||||||||||||||||||
(Amounts in millions) | At guaranteed minimum | 1–50 basis points above | 51–150 basis points above | Greater than 150 basis points above | Total (1) | |||||||||||||||
Less than 2.00 % | $ | 1,065 | $ | 42 | $ | 2 | $ | — | $ | 1,109 | ||||||||||
2.00%–2.99% | 947 | 2 | — | — | 949 | |||||||||||||||
3.00%–3.99% | 1,928 | 774 | 1,156 | 1 | 3,859 | |||||||||||||||
4.00% and greater | 2,649 | 12 | 1 | — | 2,662 | |||||||||||||||
Total | $ | 6,589 | $ | 830 | $ | 1,159 | $ | 1 | $ | 8,579 | ||||||||||
(1) | Excludes universal life insurance and investment contracts of approximately $5,202 million that have a market component to their crediting strategy. |
(Dollar amounts in millions) | March 31, 2023 | December 31, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | December 31, 2021 (2) | ||||||||||||||||||
Beginning balance | $ | 2,566 | $ | 2,656 | $ | 2,524 | ||||||||||||||||||
Beginning balance as of January 1 | $ | 2,566 | $ | 2,656 | $ | 2,524 | ||||||||||||||||||
Beginning balance before shadow accounting adjustments | 2,634 | 2,523 | 2,341 | $ | 2,634 | $ | 2,523 | $ | 2,341 | |||||||||||||||
Effect of changes in cash flow assumptions | — | (37 | ) | 85 | — | (37 | ) | 85 | ||||||||||||||||
Effect of actual variances from expected experience | 7 | 33 | (4 | ) | 30 | 33 | 40 | |||||||||||||||||
Adjusted beginning balance | 2,641 | 2,519 | 2,422 | 2,664 | 2,519 | 2,466 | ||||||||||||||||||
Issuances | — | — | — | — | — | — | ||||||||||||||||||
Interest accrual | 22 | 85 | 84 | 66 | 85 | 77 | ||||||||||||||||||
Assessments collected | 61 | 245 | 274 | 181 | 245 | 253 | ||||||||||||||||||
Benefit payments | (60 | ) | (215 | ) | (300 | ) | (161 | ) | (215 | ) | (282 | ) | ||||||||||||
Derecognition (lapses and withdrawals) | — | — | — | — | — | — | ||||||||||||||||||
Other (flooring adjustment) | 1 | — | 43 | — | — | 9 | ||||||||||||||||||
Ending balance before shadow accounting adjustments | 2,665 | 2,634 | 2,523 | 2,750 | 2,634 | 2,523 | ||||||||||||||||||
Effect of shadow accounting adjustments | (49 | ) | (68 | ) | 133 | (104 | ) | (68 | ) | 133 | ||||||||||||||
Ending balance | 2,616 | 2,566 | 2,656 | 2,646 | 2,566 | 2,656 | ||||||||||||||||||
Less: reinsurance recoverable | 374 | 377 | 407 | — | — | — | ||||||||||||||||||
Additional insurance liabilities, net of reinsurance recoverable | $ | 2,242 | $ | 2,189 | $ | 2,249 | $ | 2,646 | $ | 2,566 | $ | 2,656 | ||||||||||||
Weighted-average liability duration (years) | 20.6 | 20.8 | 22.6 | 19.8 | 20.8 | 22.6 |
(1) | Reflects immaterial revisions to the presentation of reinsurance recoverable previously disclosed in our quarterly reports on Form 10-Q for the first and second quarters of 2023 to correctly remove amounts associated with policyholder account balances. |
(2) | Reflects immaterial revisions to the presentation of certain line items of the December 31, 2021 rollforward previously disclosed in our quarterly reports on Form 10-Q for the first and second quarters of 2023 to correctly reflect changes to flooring adjustments. |
March 31, 2023 | December 31, 2022 | December 31, 2021 | ||||||||||
Interest accretion rate (1) | 3.3 | % | 3.3 | % | 3.2 | % | ||||||
Projected crediting rate (2) | 3.8 | % | 3.8 | % | 3.6 | % |
September 30, 2023 | December 31, 2022 | December 31, 2021 | ||||||||||
Interest accretion rate (1) | 3.3 | % | 3.3 | % | 3.2 | % | ||||||
Projected crediting rate (2) | 3.8 | % | 3.8 | % | 3.6 | % |
(1) | The interest accretion rate is determined by using the weighted-average policyholder crediting rates for the underlying policies over the period in-force, and based on the adjusted beginning balance, is used to measure the amount of interest accrual. |
(2) | The projected crediting rate is determined by using a future crediting rate curve that utilizes a portfolio approach reflecting anticipated reinvestment activity and runoff of existing assets over the projection period. The projected crediting rate is used to discount future assessments and excess benefits. |
Three months ended March 31, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Gross assessments | $ | 136 | $ | 147 | ||||
Interest expense (1) | $ | 22 | $ | 20 |
Three months ended September 30, | Nine months ended September 30, | Years ended December 31, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2022 | 2021 | ||||||||||||||||||
Gross assessments | $ | 134 | $ | 136 | $ | 406 | $ | 427 | $ | 559 | $ | 592 | ||||||||||||
Interest expense (1) | $ | 22 | $ | 22 | $ | 66 | $ | 63 | $ | 85 | $ | 77 |
(1) | Amounts for interest accretion, labeled “interest expense” in the table above, are included in benefits and other changes in policy reserves in the condensed consolidated statements of income. |
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
(Amounts in millions) | Asset | Liability | Net liability | Asset | Liability | Net liability | ||||||||||||||||||
Fixed index annuities | $ | — | $ | 60 | $ | 60 | $ | — | $ | 52 | $ | 52 | ||||||||||||
Variable annuities | 28 | 701 | 673 | 26 | 696 | 670 | ||||||||||||||||||
Total market risk benefits | $ | 28 | $ | 761 | $ | 733 | $ | 26 | $ | 748 | $ | 722 | ||||||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||
(Amounts in millions) | Asset | Liability | Net liability | Asset | Liability | Net liability | ||||||||||||||||||
Fixed indexed annuities | $ | — | $ | 38 | $ | 38 | $ | — | $ | 52 | $ | 52 | ||||||||||||
Variable annuities | 39 | 541 | 502 | 26 | 696 | 670 | ||||||||||||||||||
Total market risk benefits | $ | 39 | $ | 579 | $ | 540 | $ | 26 | $ | 748 | $ | 722 | ||||||||||||
March 31, 2023 | ||||||||||||
(Dollar amounts in millions) | Fixed index annuities | Variable annuities | Reinsurance recoverable (1) | |||||||||
Beginning balance as of January 1 | $ | 52 | $ | 670 | $ | 158 | ||||||
Beginning balance before effect of changes in instrument-specific credit risk | $ | 50 | $ | 660 | $ | 158 | ||||||
Issuances | — | — | — | |||||||||
Interest accrual | 1 | 9 | 2 | |||||||||
Attributed fees collected | 1 | 9 | 2 | |||||||||
Benefit payments | — | (9 | ) | (4 | ) | |||||||
Effect of changes in interest rates | 8 | 58 | 8 | |||||||||
Effect of changes in equity markets | (1 | ) | (65 | ) | (12 | ) | ||||||
Actual policyholder behavior different from expected behavior | (1 | ) | 1 | — | ||||||||
Effect of changes in future expected policyholder behavior | — | — | — | |||||||||
Effect of changes in other future expected assumptions | — | — | — | |||||||||
Ending balance before effect of changes in instrument-specific credit risk | 58 | 663 | 154 | |||||||||
Effect of changes in instrument-specific credit risk | 2 | 10 | — | |||||||||
Ending balance as of March 31 | 60 | 673 | $ | 154 | ||||||||
Less: reinsurance recoverable | — | 154 | ||||||||||
Market risk benefits, net of reinsurance recoverable | $ | 60 | $ | 519 | ||||||||
Weighted-average attained age of contractholders | 72 | 76 | ||||||||||
Net amount at risk (2) |
September 30, 2023 | ||||||||||||
(Dollar amounts in millions) | Fixed indexed annuities | Variable annuities | Reinsurance recoverable (1) | |||||||||
Beginning balance as of January 1 | $ | 52 | $ | 670 | $ | 158 | ||||||
Beginning balance before effect of changes in instrument-specific credit risk | $ | 50 | $ | 660 | $ | 158 | ||||||
Issuances | — | — | — | |||||||||
Interest accrual | 2 | 26 | 6 | |||||||||
Attributed fees collected | 3 | 28 | 6 | |||||||||
Benefit payments | — | (26 | ) | (11 | ) | |||||||
Effect of changes in interest rates | (16 | ) | (142 | ) | (24 | ) | ||||||
Effect of changes in equity markets | (1 | ) | (54 | ) | (15 | ) | ||||||
Actual policyholder behavior different from expected behavior | (2 | ) | 4 | 3 | ||||||||
Effect of changes in future expected policyholder behavior | — | — | — | |||||||||
Effect of changes in other future expected assumptions | — | — | — | |||||||||
Ending balance before effect of changes in instrument-specific credit risk | 36 | 496 | 123 | |||||||||
Effect of changes in instrument-specific credit risk | 2 | 6 | — | |||||||||
Ending balance as of September 30 | 38 | 502 | $ | 123 | ||||||||
Less: reinsurance recoverable | — | 123 | ||||||||||
Market risk benefits, net of reinsurance recoverable | $ | 38 | $ | 379 | ||||||||
Weighted-average attained age of contractholders | 72 | 76 | ||||||||||
Net amount at risk (2) |
(1) | Represents the net reinsured asset related to our variable annuity MRBs. |
(2) | See note 11 for additional information on the net amount at risk. |
December 31, 2022 | ||||||||||||
(Dollar amounts in millions) | Fixed index annuities | Variable annuities | Reinsurance recoverable (1) | |||||||||
Beginning balance as of January 1 | $ | 94 | $ | 855 | $ | 193 | ||||||
Beginning balance before effect of changes in instrument-specific credit risk | $ | 90 | $ | 840 | $ | 193 | ||||||
Issuances | — | 6 | — | |||||||||
Interest accrual | 1 | 18 | 4 | |||||||||
Attributed fees collected | 5 | 42 | 9 | |||||||||
Benefit payments | — | (28 | ) | (16 | ) | |||||||
Effect of changes in interest rates | (51 | ) | (513 | ) | (74 | ) | ||||||
Effect of changes in equity markets | 5 | 286 | 39 | |||||||||
Actual policyholder behavior different from expected behavior | (2 | ) | 8 | 3 | ||||||||
Effect of changes in future expected policyholder behavior | — | — | — | |||||||||
Effect of changes in other future expected assumptions | — | — | — | |||||||||
Other | 2 | 1 | — | |||||||||
Ending balance before effect of changes in instrument-specific credit risk | 50 | 660 | 158 | |||||||||
Effect of changes in instrument-specific credit risk | 2 | 10 | — | |||||||||
Ending balance as of December 31 | 52 | 670 | $ | 158 | ||||||||
Less: reinsurance recoverable | — | 158 | ||||||||||
Market risk benefits, net of reinsurance recoverable | $ | 52 | $ | 512 | ||||||||
Weighted-average attained age of contractholders | 72 | 76 | ||||||||||
Net amount at risk (2) |
December 31, 2022 | ||||||||||||
(Dollar amounts in millions) | Fixed indexed annuities | Variable annuities | Reinsurance recoverable (1) | |||||||||
Beginning balance as of January 1 | $ | 94 | $ | 855 | $ | 193 | ||||||
Beginning balance before effect of changes in instrument-specific credit risk | $ | 90 | $ | 840 | $ | 193 | ||||||
Issuances | — | 6 | — | |||||||||
Interest accrual | 1 | 18 | 4 | |||||||||
Attributed fees collected | 5 | 42 | 9 | |||||||||
Benefit payments | — | (28 | ) | (16 | ) | |||||||
Effect of changes in interest rates | (51 | ) | (513 | ) | (74 | ) | ||||||
Effect of changes in equity markets | 5 | 286 | 39 | |||||||||
Actual policyholder behavior different from expected behavior | (2 | ) | 8 | 3 | ||||||||
Effect of changes in future expected policyholder behavior | — | — | — | |||||||||
Effect of changes in other future expected assumptions | — | — | — | |||||||||
Other | 2 | 1 | — | |||||||||
Ending balance before effect of changes in instrument-specific credit risk | 50 | 660 | 158 | |||||||||
Effect of changes in instrument-specific credit risk | 2 | 10 | — | |||||||||
Ending balance as of December 31 | 52 | 670 | $ | 158 | ||||||||
Less: reinsurance recoverable | — | 158 | ||||||||||
Market risk benefits, net of reinsurance recoverable | $ | 52 | $ | 512 | ||||||||
Weighted-average attained age of contractholders | 72 | 76 | ||||||||||
Net amount at risk (2) |
(1) | Represents the net reinsured asset related to our variable annuity MRBs. |
(2) | See note 11 for additional information on the net amount at risk. |
December 31, 2021 | ||||||||||||
(Dollar amounts in millions) | Fixed index annuities | Variable annuities | Reinsurance recoverable (1) | |||||||||
Beginning balance as of January 1 | $ | 115 | $ | 1,173 | $ | 244 | ||||||
Beginning balance before effect of changes in instrument-specific credit risk | $ | 110 | $ | 1,154 | $ | 244 | ||||||
Issuances | — | 3 | — | |||||||||
Interest accrual | — | 4 | 1 | |||||||||
Attributed fees collected | 6 | 48 | 11 | |||||||||
Benefit payments | — | (23 | ) | (13 | ) | |||||||
Effect of changes in interest rates | (10 | ) | (115 | ) | (21 | ) | ||||||
Effect of changes in equity markets | (7 | ) | (267 | ) | (42 | ) | ||||||
Actual policyholder behavior different from expected behavior | (7 | ) | 36 | 13 | ||||||||
Effect of changes in future expected policyholder behavior | — | — | — | |||||||||
Effect of changes in other future expected assumptions | — | — | — | |||||||||
Other | (2 | ) | — | — | ||||||||
Ending balance before effect of changes in instrument-specific credit risk | 90 | 840 | 193 | |||||||||
Effect of changes in instrument-specific credit risk | 4 | 15 | — | |||||||||
Ending balance as of December 31 | 94 | 855 | $ | 193 | ||||||||
Less: reinsurance recoverable | — | 193 | ||||||||||
Market risk benefits, net of reinsurance recoverable | $ | 94 | $ | 662 | ||||||||
Weighted-average attained age of contractholders | 71 | 75 | ||||||||||
Net amount at risk (2) |
December 31, 2021 | ||||||||||||
(Dollar amounts in millions) | Fixed indexed annuities | Variable annuities | Reinsurance recoverable (1) | |||||||||
Beginning balance as of January 1 | $ | 115 | $ | 1,173 | $ | 244 | ||||||
Beginning balance before effect of changes in instrument-specific credit risk | $ | 110 | $ | 1,154 | $ | 244 | ||||||
Issuances | — | 3 | — | |||||||||
Interest accrual | — | 4 | 1 | |||||||||
Attributed fees collected | 6 | 48 | 11 | |||||||||
Benefit payments | — | (23 | ) | (13 | ) | |||||||
Effect of changes in interest rates | (10 | ) | (115 | ) | (21 | ) | ||||||
Effect of changes in equity markets | (7 | ) | (267 | ) | (42 | ) | ||||||
Actual policyholder behavior different from expected behavior | (7 | ) | 36 | 13 | ||||||||
Effect of changes in future expected policyholder behavior | — | — | — | |||||||||
Effect of changes in other future expected assumptions | — | — | — | |||||||||
Other | (2 | ) | — | — | ||||||||
Ending balance before effect of changes in instrument-specific credit risk | 90 | 840 | 193 | |||||||||
Effect of changes in instrument-specific credit risk | 4 | 15 | — | |||||||||
Ending balance as of December 31 | 94 | 855 | $ | 193 | ||||||||
Less: reinsurance recoverable | — | 193 | ||||||||||
Market risk benefits, net of reinsurance recoverable | $ | 94 | $ | 662 | ||||||||
Weighted-average attained age of contractholders | 71 | 75 | ||||||||||
Net amount at risk (2) |
(1) | Represents the net reinsured asset related to our variable annuity MRBs. |
(2) | See note 11 for additional information on the net amount at risk. |
(Amounts in millions) | March 31, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
Beginning balance | $ | 4,417 | $ | 6,066 | $ | 6,081 | ||||||
Investment performance and other | 218 | (1,074 | ) | 753 | ||||||||
Net transfers to general account (1) | (156 | ) | (575 | ) | (768 | ) | ||||||
Ending balance | $ | 4,479 | $ | 4,417 | $ | 6,066 | ||||||
Cash surrender value (2) | $ | 4,476 | $ | 4,414 | $ | 6,065 |
(Amounts in millions) | September 30, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
Beginning balance as of January 1 | $ | 4,417 | $ | 6,066 | $ | 6,081 | ||||||
Premiums and deposits | 27 | 48 | 47 | |||||||||
Policy charges | (79 | ) | (115 | ) | (136 | ) | ||||||
Surrenders and withdrawals | (265 | ) | (352 | ) | (506 | ) | ||||||
Benefit payments | (157 | ) | (226 | ) | (266 | ) | ||||||
Investment performance | 304 | (991 | ) | 852 | ||||||||
Net transfers to general account | (1 | ) | (11 | ) | (5 | ) | ||||||
Other charges | (2 | ) | (2 | ) | (1 | ) | ||||||
Ending balance | $ | 4,244 | $ | 4,417 | $ | 6,066 | ||||||
Cash surrender value (1) | $ | 4,241 | $ | 4,414 | $ | 6,065 |
(1) |
Cash surrender value represents the amount of the contractholders’ account balances that was distributable as of |
(Amounts in millions) | March 31, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | ||||||||||||
Equity funds | $ | 1,866 | $ | 1,866 | ||||||||||||
Balanced funds | $ | 1,983 | $ | 1,962 | 1,831 | 1,962 | ||||||||||
Equity funds | 1,923 | 1,866 | ||||||||||||||
Bond funds | 332 | 332 | 306 | 332 | ||||||||||||
Money market funds | 241 | 257 | 241 | 257 | ||||||||||||
Total | $ | 4,479 | $ | 4,417 | $ | 4,244 | $ | 4,417 | ||||||||
(Amounts in millions) | March 31, 2023 | December 31, 2022 | ||||||
Enact segment | $ | 502 | $ | 519 | ||||
Life and Annuities segment (1) | 157 | 158 | ||||||
Other mortgage insurance business | 6 | 6 | ||||||
Total liability for policy and contract claims | $ | 665 | $ | 683 | ||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | ||||||
Enact segment | $ | 501 | $ | 519 | ||||
Life and Annuities segment (1) | 123 | 158 | ||||||
Other mortgage insurance business | 7 | 6 | ||||||
Total liability for policy and contract claims | $ | 631 | $ | 683 | ||||
(1) | Primarily includes balances related to our universal and term universal life insurance products. |
Three months ended March 31, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Beginning balance as of January 1 | $ | 683 | $ | 819 | $ | 683 | $ | 819 | ||||||||
Less reinsurance recoverables | (23 | ) | (26 | ) | (23 | ) | (26 | ) | ||||||||
Net beginning balance | 660 | 793 | 660 | 793 | ||||||||||||
Incurred related to insured events of: | ||||||||||||||||
Current year | 215 | 243 | 634 | 647 | ||||||||||||
Prior years | (47 | ) | (31 | ) | (185 | ) | (245 | ) | ||||||||
Total incurred | 168 | 212 | 449 | 402 | ||||||||||||
Paid related to insured events of: | ||||||||||||||||
Current year | (117 | ) | (146 | ) | (393 | ) | (439 | ) | ||||||||
Prior years | (74 | ) | (87 | ) | (102 | ) | (111 | ) | ||||||||
Total paid | (191 | ) | (233 | ) | (495 | ) | (550 | ) | ||||||||
Foreign currency translation | 1 | — | 1 | — | ||||||||||||
Net ending balance | 638 | 772 | 615 | 645 | ||||||||||||
Add reinsurance recoverables | 27 | 37 | 16 | 24 | ||||||||||||
Ending balance as of March 31 | $ | 665 | $ | 809 | ||||||||||||
Ending balance as of September 30 | $ | 631 | $ | 669 | ||||||||||||
Three months ended September 30, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Allowance for credit losses: | ||||||||
Beginning balance | $ | 64 | $ | 63 | ||||
Provision | 33 | 1 | ||||||
Write-offs | (69 | ) | — | |||||
Recoveries | — | — | ||||||
Ending balance | $ | 28 | $ | 64 | ||||
Nine months ended September 30, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Allowance for credit losses: | ||||||||
Beginning balance | $ | 63 | $ | 58 | ||||
Provision | 34 | 6 | ||||||
Write-offs | (69 | ) | — | |||||
Recoveries | — | — | ||||||
Ending balance | $ | 28 | $ | 64 | ||||
September 30, 2023 | ||||||||||||
(Amounts in millions) | Collateralized | Non-collateralized | Total | |||||||||
Credit rating: | ||||||||||||
A++ | $ | — | $ | 660 | $ | 660 | ||||||
A+ | 1,349 | 1,691 | 3,040 | |||||||||
A | 34 | 346 | 380 | |||||||||
Not rated | 13,198 | 15 | 13,213 | |||||||||
Total reinsurance recoverable | $ | 14,581 | $ | 2,712 | $ | 17,293 | ||||||
December 31, 2022 | ||||||||||||
(Amounts in millions) | Collateralized | Non-collateralized | Total | |||||||||
Credit rating: | ||||||||||||
A++ | $ | — | $ | 626 | $ | 626 | ||||||
A+ | 1,268 | 2,050 | 3,318 | |||||||||
A | 20 | 33 | 53 | |||||||||
Not rated | 13,506 | 86 | 13,592 | |||||||||
Total reinsurance recoverable | $ | 14,794 | $ | 2,795 | $ | 17,589 | ||||||
Three months ended March 31, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Statutory U.S. federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||||||
Increase in rate resulting from: | ||||||||||||||||||||||||
Tax on income from terminated swaps | 5.9 | 1.9 | 8.4 | 2.7 | 4.4 | 2.4 | ||||||||||||||||||
Stock-based compensation | 1.5 | 0.2 | ||||||||||||||||||||||
Nondeductible expenses | 1.6 | 0.2 | ||||||||||||||||||||||
Non-deductible expenses | 3.2 | 1.1 | 1.2 | 0.5 | ||||||||||||||||||||
Other, net | (0.7 | ) | 0.1 | 0.7 | (0.3 | ) | 0.3 | — | ||||||||||||||||
Effective rate | 29.3 | % | 23.4 | % | 33.3 | % | 24.5 | % | 26.9 | % | 23.9 | % | ||||||||||||
Three months ended March 31, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Enact segment | $ | 281 | $ | 270 | $ | 299 | $ | 275 | $ | 857 | $ | 818 | ||||||||||||
Long-Term Care Insurance segment | 1,098 | 1,095 | 1,082 | 1,087 | 3,323 | 3,290 | ||||||||||||||||||
Life and Annuities segment: | ||||||||||||||||||||||||
Life insurance | 358 | 381 | 347 | 352 | 1,055 | 1,092 | ||||||||||||||||||
Fixed annuities | 85 | 115 | 68 | 91 | 237 | 299 | ||||||||||||||||||
Variable annuities | 36 | 40 | 34 | 37 | 105 | 114 | ||||||||||||||||||
Life and Annuities segment | 479 | 536 | 449 | 480 | 1,397 | 1,505 | ||||||||||||||||||
Corporate and Other | (4 | ) | (8 | ) | 1 | 6 | — | 15 | ||||||||||||||||
Total revenues | $ | 1,854 | $ | 1,893 | $ | 1,831 | $ | 1,848 | $ | 5,577 | $ | 5,628 | ||||||||||||
Three months ended March 31, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 191 | $ | 29 | $ | 136 | $ | 288 | $ | 535 | ||||||||||||
Add: net income from continuing operations attributable to noncontrolling interests | 32 | 30 | 31 | 35 | 94 | 103 | ||||||||||||||||||
Add: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||
Net income | 94 | 221 | 60 | 171 | 382 | 638 | ||||||||||||||||||
Less: loss from discontinued operations, net of taxes | — | (2 | ) | |||||||||||||||||||||
Less: income from discontinued operations, net of taxes | — | 5 | 2 | 2 | ||||||||||||||||||||
Income from continuing operations | 94 | 223 | 60 | 166 | 380 | 636 | ||||||||||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 32 | 30 | 31 | 35 | 94 | 103 | ||||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 62 | 193 | 29 | 131 | 286 | 533 | ||||||||||||||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||||||||||
Net investment (gains) losses | 11 | (42 | ) | |||||||||||||||||||||
Net investment (gains) losses, net (1) | 43 | 58 | 13 | (3 | ) | |||||||||||||||||||
Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges | 14 | (54 | ) | (26 | ) | (32 | ) | (35 | ) | (78 | ) | |||||||||||||
(Gains) losses on early extinguishment of debt | (1 | ) | 3 | — | 3 | (1 | ) | 7 | ||||||||||||||||
Expenses related to restructuring | 3 | — | — | — | 4 | 1 | ||||||||||||||||||
Pension plan termination costs | — | 6 | — | 6 | ||||||||||||||||||||
Taxes on adjustments | (5 | ) | 20 | (4 | ) | (8 | ) | 4 | 14 | |||||||||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 84 | $ | 120 | $ | 42 | $ | 158 | $ | 271 | $ | 480 | ||||||||||||
(1) | For the |
(2) | Changes in fair value of market risk benefits |
(3) | During the nine months ended September 30, 2023, we repurchased $11 million principal amount of Genworth Holdings’ senior notes due in June 2034 for a pre-tax gain of $1 million. During the three and nine months ended September 30, 2022, we paid apre-tax make-whole premium of $2 million and wrote off $1 million of bond consent fees and deferred borrowing costs related to the early redemption of Genworth Holdings’ senior notes originally scheduled to mature in February 2024. Additionally, during the nine months ended September 30, 2022, we repurchased $130 million principal amount of Genworth Holdings’ senior notes due in February 2024 for apre-tax loss of $4 million. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Enact segment | $ | 134 | $ | 156 | $ | 423 | $ | 458 | ||||||||
Long-Term Care Insurance segment | (71 | ) | 26 | (91 | ) | 116 | ||||||||||
Life and Annuities segment: | ||||||||||||||||
Life insurance | (25 | ) | (28 | ) | (69 | ) | (112 | ) | ||||||||
Fixed annuities | 17 | 15 | 41 | 48 | ||||||||||||
Variable annuities | 5 | 7 | 23 | 13 | ||||||||||||
Life and Annuities segment | (3 | ) | (6 | ) | (5 | ) | (51 | ) | ||||||||
Corporate and Other | (18 | ) | (18 | ) | (56 | ) | (43 | ) | ||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 42 | $ | 158 | $ | 271 | $ | 480 | ||||||||
Three months ended March 31, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||
Enact segment | $ | 143 | $ | 135 | ||||
Long-Term Care Insurance segment | (37 | ) | 27 | |||||
Life and Annuities segment: | ||||||||
Life insurance | (27 | ) | (47 | ) | ||||
Fixed annuities | 14 | 13 | ||||||
Variable annuities | 9 | 4 | ||||||
Life and Annuities segment | (4 | ) | (30 | ) | ||||
Corporate and Other | (18 | ) | (12 | ) | ||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 84 | $ | 120 | ||||
(Amounts in millions) | March 31, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | ||||||||||||
Assets: | ||||||||||||||||
Enact segment | $ | 5,841 | $ | 5,712 | $ | 6,000 | $ | 5,712 | ||||||||
Long-Term Care Insurance segment | 45,522 | 44,141 | 42,927 | 44,156 | ||||||||||||
Life and Annuities segment | 38,131 | 37,975 | 35,111 | 37,975 | ||||||||||||
Corporate and Other | 1,684 | 1,871 | 1,428 | 1,871 | ||||||||||||
Total assets | $ | 91,178 | $ | 89,699 | $ | 85,466 | $ | 89,714 | ||||||||
(Amounts in millions) | Net unrealized investment gains (losses) | Derivatives qualifying as hedges (1) | Change in the discount rate used to measure future policy benefits | Change in instrument- specific credit risk of market risk benefits | Foreign currency translation and other adjustments | Total | Net unrealized investment gains (losses) | Derivatives qualifying as hedges (1) | Change in the discount rate used to measure future policy benefits | Change in instrument- specific credit risk of market risk benefits | Foreign currency translation and other adjustments | Total | ||||||||||||||||||||||||||||||||||||
Balances as of January 1, 2023 | $ | (3,407 | ) | $ | 1,200 | $ | (406 | ) | $ | (10 | ) | $ | 6 | $ | (2,617 | ) | ||||||||||||||||||||||||||||||||
Balances as of July 1, 2023 | $ | (3,056 | ) | $ | 1,154 | $ | (964 | ) | $ | (9 | ) | $ | 14 | $ | (2,861 | ) | ||||||||||||||||||||||||||||||||
OCI before reclassifications | 906 | 114 | (1,227 | ) | 1 | 4 | (202 | ) | (1,741 | ) | (390 | ) | 2,790 | 3 | (5 | ) | 657 | |||||||||||||||||||||||||||||||
Amounts reclassified from (to) OCI | 13 | (40 | ) | — | — | — | (27 | ) | ||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from OCI | 9 | (37 | ) | — | — | 2 | (26 | ) | ||||||||||||||||||||||||||||||||||||||||
Current period OCI | 919 | 74 | (1,227 | ) | 1 | 4 | (229 | ) | (1,732 | ) | (427 | ) | 2,790 | 3 | (3 | ) | 631 | |||||||||||||||||||||||||||||||
Balances as of March 31, 2023 before noncontrolling interests | (2,488 | ) | 1,274 | (1,633 | ) | (9 | ) | 10 | (2,846 | ) | ||||||||||||||||||||||||||||||||||||||
Balances as of September 30, 2023 before noncontrolling interests | (4,788 | ) | 727 | 1,826 | (6 | ) | 11 | (2,230 | ) | |||||||||||||||||||||||||||||||||||||||
Less: change in OCI attributable to noncontrolling interests | 12 | — | — | — | — | 12 | (10 | ) | — | — | — | — | (10 | ) | ||||||||||||||||||||||||||||||||||
Balances as of March 31, 2023 | $ | (2,500 | ) | $ | 1,274 | $ | (1,633 | ) | $ | (9 | ) | $ | 10 | $ | (2,858 | ) | ||||||||||||||||||||||||||||||||
Balances as of September 30, 2023 | $ | (4,778 | ) | $ | 727 | $ | 1,826 | $ | (6 | ) | $ | 11 | $ | (2,220 | ) | |||||||||||||||||||||||||||||||||
(1) | See note 6 for additional information. |
(Amounts in millions) | Net unrealized investment gains (losses) | Derivatives qualifying as hedges (1) | Change in the discount rate used to measure future policy benefits | Change in instrument- specific credit risk of market risk benefits | Foreign currency translation and other adjustments | Total | ||||||||||||||||||
Balances as of July 1, 2022 | $ | (1,518 | ) | $ | 1,445 | $ | (3,167 | ) | $ | (12 | ) | $ | (36 | ) | $ | (3,288 | ) | |||||||
OCI before reclassifications | (2,538 | ) | (98 | ) | 3,282 | 1 | — | 647 | ||||||||||||||||
Amounts reclassified from OCI | 21 | (37 | ) | — | — | — | (16 | ) | ||||||||||||||||
Current period OCI | (2,517 | ) | (135 | ) | 3,282 | 1 | — | 631 | ||||||||||||||||
Balances as of September 30, 2022 before noncontrolling interests | (4,035 | ) | 1,310 | 115 | (11 | ) | (36 | ) | (2,657 | ) | ||||||||||||||
Less: change in OCI attributable to noncontrolling interests | (25 | ) | — | — | — | — | (25 | ) | ||||||||||||||||
Balances as of September 30, 2022 | $ | (4,010 | ) | $ | 1,310 | $ | 115 | $ | (11 | ) | $ | (36 | ) | $ | (2,632 | ) | ||||||||
(1) | See note 6 for additional information. |
(Amounts in millions) | Net unrealized investment gains (losses) | Derivatives qualifying as hedges (1) | Change in the discount rate used to measure future policy benefits | Change in instrument- specific credit risk of market risk benefits | Foreign currency translation and other adjustments | Total | ||||||||||||||||||
Balances as of January 1, 2023 | $ | (3,407 | ) | $ | 1,200 | $ | (403 | ) | $ | (10 | ) | $ | 6 | $ | (2,614 | ) | ||||||||
OCI before reclassifications | (1,419 | ) | (359 | ) | 2,229 | 4 | 3 | 458 | ||||||||||||||||
Amounts reclassified from OCI | 45 | (114 | ) | — | — | 2 | (67 | ) | ||||||||||||||||
Current period OCI | (1,374 | ) | (473 | ) | 2,229 | 4 | 5 | 391 | ||||||||||||||||
Balances as of September 30, 2023 before noncontrolling interests | (4,781 | ) | 727 | 1,826 | (6 | ) | 11 | (2,223 | ) | |||||||||||||||
Less: change in OCI attributable to noncontrolling interests | (3 | ) | — | — | — | — | (3 | ) | ||||||||||||||||
Balances as of September 30, 2023 | $ | (4,778 | ) | $ | 727 | $ | 1,826 | $ | (6 | ) | $ | 11 | $ | (2,220 | ) | |||||||||
(Amounts in millions) | Net unrealized investment gains (losses) | Derivatives qualifying as hedges (1) | Change in the discount rate used to measure future policy benefits | Change in instrument- specific credit risk of market risk benefits | Foreign currency translation and other adjustments | Total | ||||||||||||||||||
Balances as of January 1, 2022 | $ | 6,077 | $ | 2,025 | $ | (13,944 | ) | $ | (15 | ) | $ | (24 | ) | $ | (5,881 | ) | ||||||||
OCI before reclassifications | (3,973 | ) | (199 | ) | 5,482 | 2 | (5 | ) | 1,307 | |||||||||||||||
Amounts reclassified from (to) OCI | 6 | (37 | ) | — | — | — | (31 | ) | ||||||||||||||||
Current period OCI | (3,967 | ) | (236 | ) | 5,482 | 2 | (5 | ) | 1,276 | |||||||||||||||
Balances as of March 31, 2022 before noncontrolling interests | 2,110 | 1,789 | (8,462 | ) | (13 | ) | (29 | ) | (4,605 | ) | ||||||||||||||
Less: change in OCI attributable to noncontrolling interests | (41 | ) | — | — | — | — | (41 | ) | ||||||||||||||||
Balances as of March 31, 2022 | $ | 2,151 | $ | 1,789 | $ | (8,462 | ) | $ | (13 | ) | $ | (29 | ) | $ | (4,564 | ) | ||||||||
(1) | See note 6 for additional information. |
(Amounts in millions) | Net unrealized investment gains (losses) | Derivatives qualifying as hedges (1) | Change in the discount rate used to measure future policy benefits | Change in instrument- specific credit risk of market risk benefits | Foreign currency translation and other adjustments | Total | ||||||||||||||||||
Balances as of January 1, 2022 | $ | 6,077 | $ | 2,025 | $ | (13,918 | ) | $ | (15 | ) | $ | (24 | ) | $ | (5,855 | ) | ||||||||
OCI before reclassifications | (10,212 | ) | (604 | ) | 14,033 | 4 | (12 | ) | 3,209 | |||||||||||||||
Amounts reclassified from OCI | 31 | (111 | ) | — | — | — | (80 | ) | ||||||||||||||||
Current period OCI | (10,181 | ) | (715 | ) | 14,033 | 4 | (12 | ) | 3,129 | |||||||||||||||
Balances as of September 30, 2022 before noncontrolling interests | (4,104 | ) | 1,310 | 115 | (11 | ) | (36 | ) | (2,726 | ) | ||||||||||||||
Less: change in OCI attributable to noncontrolling interests | (94 | ) | — | — | — | — | (94 | ) | ||||||||||||||||
Balances as of September 30, 2022 | $ | (4,010 | ) | $ | 1,310 | $ | 115 | $ | (11 | ) | $ | (36 | ) | $ | (2,632 | ) | ||||||||
(1) | See note 6 for additional information. |
Three months ended March 31, | Affected line item in the condensed consolidated statements of income | |||||||||
(Amounts in millions) | 2023 | 2022 | ||||||||
Net unrealized investment (gains) losses: | ||||||||||
Unrealized (gains) losses on investments | $ | 16 | $ | 8 | Net investment (gains) losses | |||||
Income taxes | (3 | ) | (2 | ) | Provision for income taxes | |||||
Total | $ | 13 | $ | 6 | ||||||
Derivatives qualifying as hedges: | ||||||||||
Interest rate swaps hedging assets | $ | (54 | ) | $ | (55 | ) | Net investment income | |||
Interest rate swaps hedging assets | (5 | ) | (2 | ) | Net investment (gains) losses | |||||
Interest rate swaps hedging liabilities | 1 | 1 | Interest expense | |||||||
Interest rate swaps hedging liabilities | (1 | ) | — | Net investment (gains) losses | ||||||
Foreign currency swaps | — | (1 | ) | Net investment income | ||||||
Foreign currency swaps | (2 | ) | — | Net investment (gains) losses | ||||||
Income taxes | 21 | 20 | Provision for income taxes | |||||||
Total | $ | (40 | ) | $ | (37 | ) | ||||
Amount reclassified from accumulated other comprehensive income (loss) | Affected line item in the condensed consolidated statements of income | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Net unrealized investment (gains) losses: | ||||||||||||||||||
Unrealized (gains) losses on investments | $ | 11 | $ | 27 | $ | 57 | $ | 39 | Net investment (gains) losses | |||||||||
Income taxes | (2 | ) | (6 | ) | (12 | ) | (8 | ) | Provision for income taxes | |||||||||
Total | $ | 9 | $ | 21 | $ | 45 | $ | 31 | ||||||||||
Derivatives qualifying as hedges: | ||||||||||||||||||
Interest rate swaps hedging assets | $ | (56 | ) | $ | (55 | ) | $ | (165 | ) | $ | (167 | ) | Net investment income | |||||
Interest rate swaps hedging assets | — | (3 | ) | (8 | ) | (5 | ) | Net investment (gains) losses | ||||||||||
Interest rate swaps hedging liabilities | 1 | — | 2 | 2 | Interest expense | |||||||||||||
Interest rate swaps hedging liabilities | — | — | (1 | ) | — | Net investment (gains) losses | ||||||||||||
Foreign currency swaps | — | — | — | (1 | ) | Net investment income | ||||||||||||
Foreign currency swaps | — | — | (2 | ) | — | Net investment (gains) losses | ||||||||||||
Income taxes | 18 | 21 | 60 | 60 | Provision for income taxes | |||||||||||||
Total | $ | (37 | ) | $ | (37 | ) | $ | (114 | ) | $ | (111 | ) | ||||||
recession.
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rates, including actions taken by the U.S. Federal Reserve to increase interest rates to combat inflation and slow economic growth, which could heighten the risk of a future recession; unanticipated financial events such as |
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Enact Holdings is a public company traded on the Nasdaq Global Select Market exchange under the ticker symbol “ACT.” Genworth Financial maintains control of Enact Holdings through an indirect majority voting interest and accordingly, Enact Holdings remains a consolidated subsidiary of Genworth Financial. Our Enact segment predominantly includes Enact Holdings and its mortgage insurance subsidiaries. There are minor financial reporting differences between our Enact segment and the standalone financial results of Enact Holdings, which are separately disclosed with the Securities and Exchange Commission.SEC. Notwithstanding these differences, we commonly make references to “Enact,” our “Enact segment” and our “U.S. mortgage insurance subsidiaries” throughout this Quarterly Report on Form
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initial phase of our CareScout services business in March 2023. This business includes a digital platform, where we hope to curate a broad marketplace that matches consumers’ long-term care needs with a network of preferredquality providers that we are building as part of the initial phase of the CareScout services launch. In addition to the digital platform and preferredquality network offerings to consumers, employers and long-term care insurers, the discounts available through the network are expected to have the potential to generate significant reductionsfurther mitigate risk in our legacy long-term care insurance block by reducing claims costs. Our CareScout services business is currently focused on home care providers because we believeas the majority of Genworth policyholders prefer to receiveour initial long-term care insurance claims begin with care in their homes.the home. While the initial focus for the quality care provider network will beis with Genworth’s long-term care insurance policyholders in one state, we believe we can accelerate our efforts to build a national quality homenetwork of care provider network,providers, which we expect could allow a high-quality experience and discounted fees for more existing Genworth policyholders and broaden the scope of our CareScout services business to new consumer markets. As we expand the business, there may be other potential future growth opportunities, namely options that assist in funding long-term care needs and expanding CareScout’s products and services to international markets.
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insurance and investment contracts, including commissions, policy issuance expenses and other underwriting and general operating costs. These costs and expenses are net of amounts that are capitalized and deferred, which are costs and expenses that are related directly to the successful acquisition of new or renewal insurance policies and investment contracts, such as first-year commissions in excess of ultimate renewal commissions and other policy issuance expenses. We allocate corporate expenses to each of our operating segments using various methodologies. |
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The annually-determined tax rates and adjustments to each segment’s provision for income taxes are estimates which are subject to review and could change from year to year. U.S. GAAP generally requires an annualizedFor a discussion of the effective tax rate to berates used for interim reporting periods, utilizing projections of full year results. However, in certain circumstances it is appropriate to record the actual effective tax rate for the period if a reliable full year estimate cannot be made. For the three months ended March 31, 2023, we utilized the actual effective tax rate for the interim period to record the provision for income taxes for our Long-Term Care Insurance and Life and Annuitiesthree operating segments and the annualized projected effective tax rate for our Enact segment and Corporate and Other. We utilized the effective tax rate for the year ended December 31, 2022 in determining the re-presented provision for income taxesOther for the three and nine months ended March 31, 2022.
We allocate corporate expensesSeptember 30, 2023 and 2022, see note 17 in our unaudited condensed consolidated financial statements under “Item 1—Financial Statements.”
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Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 915 | $ | 917 | $ | (2 | ) | — | % | |||||||
Net investment income | 787 | 764 | 23 | 3 | % | |||||||||||
Net investment gains (losses) | (11 | ) | 42 | (53 | ) | (126 | )% | |||||||||
Policy fees and other income | 163 | 170 | (7 | ) | (4 | )% | ||||||||||
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| |||||||||||
Total revenues | 1,854 | 1,893 | (39 | ) | (2 | )% | ||||||||||
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| |||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 1,172 | 1,165 | 7 | 1 | % | |||||||||||
Liability remeasurement (gains) losses | 22 | (41 | ) | 63 | 154 | % | ||||||||||
Changes in fair value of market risk benefits and associated hedges | 17 | (41 | ) | 58 | 141 | % | ||||||||||
Interest credited | 126 | 125 | 1 | 1 | % | |||||||||||
Acquisition and operating expenses, net of deferrals | 283 | 280 | 3 | 1 | % | |||||||||||
Amortization of deferred acquisition costs and intangibles | 72 | 88 | (16 | ) | (18 | )% | ||||||||||
Interest expense | 29 | 26 | 3 | 12 | % | |||||||||||
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| |||||||||||
Total benefits and expenses | 1,721 | 1,602 | 119 | 7 | % | |||||||||||
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| |||||||||||
Income from continuing operations before income taxes | 133 | 291 | (158 | ) | (54 | )% | ||||||||||
Provision for income taxes | 39 | 68 | (29 | ) | (43 | )% | ||||||||||
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| |||||||||||
Income from continuing operations | 94 | 223 | (129 | ) | (58 | )% | ||||||||||
Loss from discontinued operations, net of taxes | — | (2 | ) | 2 | 100 | % | ||||||||||
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| |||||||||||
Net income | 94 | 221 | (127 | ) | (57 | )% | ||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 32 | 30 | 2 | 7 | % | |||||||||||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | % | |||||||||||
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| |||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 191 | $ | (129 | ) | (68 | )% | |||||||
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| |||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 193 | $ | (131 | ) | (68 | )% | |||||||
Loss from discontinued operations available to Genworth Financial, Inc.’s common stockholders | — | (2 | ) | 2 | 100 | % | ||||||||||
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|
| |||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 191 | $ | (129 | ) | (68 | )% | |||||||
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|
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|
Three months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 915 | $ | 929 | $ | (14 | ) | (2 | )% | |||||||
Net investment income | 801 | 808 | (7 | ) | (1 | )% | ||||||||||
Net investment gains (losses) | (43 | ) | (58 | ) | 15 | 26 | % | |||||||||
Policy fees and other income | 158 | 169 | (11 | ) | (7 | )% | ||||||||||
Total revenues | 1,831 | 1,848 | (17 | ) | (1 | )% | ||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 1,199 | 1,159 | 40 | 3 | % | |||||||||||
Liability remeasurement (gains) losses | 116 | 17 | 99 | NM | (1) | |||||||||||
Changes in fair value of market risk benefits and associated hedges | (24 | ) | (27 | ) | 3 | 11 | % | |||||||||
Interest credited | 127 | 128 | (1 | ) | (1 | )% | ||||||||||
Acquisition and operating expenses, net of deferrals | 228 | 245 | (17 | ) | (7 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 65 | 80 | (15 | ) | (19 | )% | ||||||||||
Interest expense | 30 | 26 | 4 | 15 | % | |||||||||||
Total benefits and expenses | 1,741 | 1,628 | 113 | 7 | % | |||||||||||
Income from continuing operations before income taxes | 90 | 220 | (130 | ) | (59 | )% | ||||||||||
Provision for income taxes | 30 | 54 | (24 | ) | (44 | )% | ||||||||||
Income from continuing operations | 60 | 166 | (106 | ) | (64 | )% | ||||||||||
Income from discontinued operations, net of taxes | — | 5 | (5 | ) | (100 | )% | ||||||||||
Net income | 60 | 171 | (111 | ) | (65 | )% | ||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | (4 | ) | (11 | )% | ||||||||||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | % | |||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 136 | $ | (107 | ) | (79 | )% | |||||||
Net income available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 131 | $ | (102 | ) | (78 | )% | |||||||
Income from discontinued operations available to Genworth Financial, Inc.’s common stockholders | — | 5 | (5 | ) | (100 | )% | ||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 136 | $ | (107 | ) | (79 | )% | |||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 2,732 | $ | 2,762 | $ | (30 | ) | (1 | )% | |||||||
Net investment income | 2,373 | 2,359 | 14 | 1 | % | |||||||||||
Net investment gains (losses) | (15 | ) | 3 | (18 | ) | NM | (1) | |||||||||
Policy fees and other income | 487 | 504 | (17 | ) | (3 | )% | ||||||||||
Total revenues | 5,577 | 5,628 | (51 | ) | (1 | )% | ||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 3,550 | 3,094 | 456 | 15 | % | |||||||||||
Liability remeasurement (gains) losses | 171 | (23 | ) | 194 | NM | (1) | ||||||||||
Changes in fair value of market risk benefits and associated hedges | (26 | ) | (48 | ) | 22 | 46 | % | |||||||||
Interest credited | 379 | 379 | — | — | % | |||||||||||
Acquisition and operating expenses, net of deferrals | 694 | 1,060 | (366 | ) | (35 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 201 | 252 | (51 | ) | (20 | )% | ||||||||||
Interest expense | 88 | 78 | 10 | 13 | % | |||||||||||
Total benefits and expenses | 5,057 | 4,792 | 265 | 6 | % | |||||||||||
Income from continuing operations before income taxes | 520 | 836 | (316 | ) | (38 | )% | ||||||||||
Provision for income taxes | 140 | 200 | (60 | ) | (30 | )% | ||||||||||
Income from continuing operations | 380 | 636 | (256 | ) | (40 | )% | ||||||||||
Income from discontinued operations, net of taxes | 2 | 2 | — | — | % | |||||||||||
Net income | 382 | 638 | (256 | ) | (40 | )% | ||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 94 | 103 | (9 | ) | (9 | )% | ||||||||||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | % | |||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 288 | $ | 535 | $ | (247 | ) | (46 | )% | |||||||
Net income available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 286 | $ | 533 | $ | (247 | ) | (46 | )% | |||||||
Income from discontinued operations available to Genworth Financial, Inc.’s common stockholders | 2 | 2 | — | — | % | |||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 288 | $ | 535 | $ | (247 | ) | (46 | )% | |||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
98
99
Three months ended March 31, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 62 | $ | 191 | ||||
Add: net income from continuing operations attributable to noncontrolling interests | 32 | 30 | ||||||
Add: net income from discontinued operations attributable to noncontrolling interests | — | — | ||||||
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| |||||
Net income | 94 | 221 | ||||||
Less: loss from discontinued operations, net of taxes | — | (2 | ) | |||||
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| |||||
Income from continuing operations | 94 | 223 | ||||||
Less: net income from continuing operations attributable to noncontrolling interests | 32 | 30 | ||||||
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|
| |||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 62 | 193 | ||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||
Net investment (gains) losses | 11 | (42 | ) | |||||
Changes in fair value of market risk benefits attributable to changes in interest rates, equity markets and associated hedges (1) | 14 | (54 | ) | |||||
(Gains) losses on early extinguishment of debt | (1 | ) | 3 | |||||
Expenses related to restructuring | 3 | — | ||||||
Taxes on adjustments | (5 | ) | 20 | |||||
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|
|
| |||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 84 | $ | 120 | ||||
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|
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 136 | $ | 288 | $ | 535 | ||||||||
Add: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | 94 | 103 | ||||||||||||
Add: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | ||||||||||||
Net income | 60 | 171 | 382 | 638 | ||||||||||||
Less: income from discontinued operations, net of taxes | — | 5 | 2 | 2 | ||||||||||||
Income from continuing operations | 60 | 166 | 380 | 636 | ||||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | 94 | 103 | ||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 29 | 131 | 286 | 533 | ||||||||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Net investment (gains) losses, net (1) | 43 | 58 | 13 | (3 | ) | |||||||||||
Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges (2) | (26 | ) | (32 | ) | (35 | ) | (78 | ) | ||||||||
(Gains) losses on early extinguishment of debt (3) | — | 3 | (1 | ) | 7 | |||||||||||
Expenses related to restructuring | — | — | 4 | 1 | ||||||||||||
Pension plan termination costs | — | 6 | — | 6 | ||||||||||||
Taxes on adjustments | (4 | ) | (8 | ) | 4 | 14 | ||||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 42 | $ | 158 | $ | 271 | $ | 480 | ||||||||
(1) | For the |
(2) | Changes in fair value of market risk benefits |
We repurchased $11 million principal amount of Genworth Holdings’ senior notes due
(3) | During the nine months ended September 30, 2023, we repurchased $11 million principal amount of Genworth Holdings’ 2034 Notes for a pre-tax gain of $1 million. During the three and nine months ended September 30, 2022, we paid apre-tax make-whole premium of $2 million and wrote off $1 million of bond consent fees and deferred borrowing costs related to the early redemption of Genworth Holdings’ senior notes originally scheduled to mature inpre-tax loss of $4 million. |
We recorded a pre-tax expense of $3 million in the firstthird quarter of 20232022 related to restructuring costs as we continue to evaluate and appropriately sizeone of our organizational needs and expenses. Theredefined benefit pension plans, there were no infrequent or unusual items excluded from adjusted operating income during the periods presented.
100
(Amounts in millions, except per share amounts) Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share: Basic Diluted Net income available to Genworth Financial, Inc.’s common stockholders per share: Basic Diluted Adjusted operating income available to Genworth Financial, Inc.’s common stockholders per share: Basic Diluted Weighted-average common shares outstanding: Basic Diluted Three months ended
March 31, Increase
(decrease) and
percentage
change 2023 2022 2023 vs. 2022 $ 0.13 $ 0.38 $ (0.25 ) (66 )% $ 0.12 $ 0.37 $ (0.25 ) (68 )% $ 0.13 $ 0.38 $ (0.25 ) (66 )% $ 0.12 $ 0.37 $ (0.25 ) (68 )% $ 0.17 $ 0.24 $ (0.07 ) (29 )% $ 0.17 $ 0.23 $ (0.06 ) (26 )% 492.3 508.3 500.1 517.4
September 30,
(decrease) and
percentage
change
September 30,
(decrease) and
percentage
change $ 0.06 $ 0.26 $ (0.20 ) (77 )% $ 0.60 $ 1.05 $ (0.45 ) (43 )% $ 0.06 $ 0.26 $ (0.20 ) (77 )% $ 0.59 $ 1.04 $ (0.45 ) (43 )% $ 0.06 $ 0.27 $ (0.21 ) (78 )% $ 0.61 $ 1.05 $ (0.44 ) (42 )% $ 0.06 $ 0.27 $ (0.21 ) (78 )% $ 0.60 $ 1.04 $ (0.44 ) (42 )% $ 0.09 $ 0.31 $ (0.22 ) (71 )% $ 0.57 $ 0.95 $ (0.38 ) (40 )% $ 0.09 $ 0.31 $ (0.22 ) (71 )% $ 0.56 $ 0.93 $ (0.37 ) (40 )% 460.5 503.8 475.3 507.0 466.0 509.3 481.4 513.6
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Enact segment | $ | 143 | $ | 135 | $ | 8 | 6 | % | ||||||||
Long-Term Care Insurance segment | (37 | ) | 27 | (64 | ) | NM | (1) | |||||||||
Life and Annuities segment: | ||||||||||||||||
Life insurance | (27 | ) | (47 | ) | 20 | 43 | % | |||||||||
Fixed annuities | 14 | 13 | 1 | 8 | % | |||||||||||
Variable annuities | 9 | 4 | 5 | 125 | % | |||||||||||
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Life and Annuities segment | (4 | ) | (30 | ) | 26 | 87 | % | |||||||||
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Corporate and Other | (18 | ) | (12 | ) | (6 | ) | (50 | )% | ||||||||
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Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 84 | $ | 120 | $ | (36 | ) | (30 | )% | |||||||
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|
Three months ended September 30, | Increase (decrease) and percentage change | Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | 2023 | 2022 | 2023 vs. 2022 | ||||||||||||||||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||||||||||||||||||
Enact segment | $ | 134 | $ | 156 | $ | (22 | ) | (14 | )% | $ | 423 | $ | 458 | $ | (35 | ) | (8 | )% | ||||||||||||||
Long-Term Care Insurance segment | (71 | ) | 26 | (97 | ) | NM | (1) | (91 | ) | 116 | (207 | ) | (178 | )% | ||||||||||||||||||
Life and Annuities segment: | ||||||||||||||||||||||||||||||||
Life insurance | (25 | ) | (28 | ) | 3 | 11 | % | (69 | ) | (112 | ) | 43 | 38 | % | ||||||||||||||||||
Fixed annuities | 17 | 15 | 2 | 13 | % | 41 | 48 | (7 | ) | (15 | )% | |||||||||||||||||||||
Variable annuities | 5 | 7 | (2 | ) | (29 | )% | 23 | 13 | 10 | 77 | % | |||||||||||||||||||||
Life and Annuities segment | (3 | ) | (6 | ) | 3 | 50 | % | (5 | ) | (51 | ) | 46 | 90 | % | ||||||||||||||||||
Corporate and Other | (18 | ) | (18 | ) | — | — | % | (56 | ) | (43 | ) | (13 | ) | (30 | )% | |||||||||||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 42 | $ | 158 | $ | (116 | ) | (73 | )% | $ | 271 | $ | 480 | $ | (209 | ) | (44 | )% | ||||||||||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
101
We
Higher net investment income and higher premiums related to our in-force rate action plan were mostly offset by higher operating expenses primarily from expenses related to policyholder benefit reduction elections made in connection with legal settlements in the current year.
Current year results reflected unfavorablefavorable mortality experience though improved compared to the prior year as COVID-19 impacts subsided.
and lower DAC amortization, was lower related to lower term lapses, partially offset by lower premiums reflecting runoffhigher liability remeasurement losses largely related to a voluntary recapture of our in-force blockspreviously ceded reinsurance in the current year.
102
Corporate and Other had an adjusted operating loss of $18$56 million and $12$43 million for the threenine months ended March 31,September 30, 2023 and 2022, respectively.
Dividends and other return of capital:
103
104
Management also regularly monitors and reports on
105
forbearances have generally declined. As of March 31,September 30, 2023, approximately 1%1.2% or 13,67812,135 of Enact’s active primary policies were reported in a forbearance plan, of which approximately 34%30% were reported as delinquent compared with approximately 2%1.5% or 18,58814,231 of its active primary policies reported in forbearance with approximately 41%34% reported as delinquent as of March 31,September 30, 2022.
106
relative to its peers and its selective participation in forward commitment transactions. Enact continues to manage the quality of new business through pricing and its underwriting guidelines, which are modified from time to time when circumstances warrant. The market and underwriting conditions, including the mortgage insurance pricing environment, are within Enact’s risk adjusted return appetite, enabling it to write new business at returns it views as attractive.
Enact’s primary persistency rate increased to 85%was 84% during the firstthird quarter of 2023 compared to 76%82% during the firstthird quarter of 2022. The increase in persistency was primarily driven by a decline in the percentage of
June 30, 2023.
periods.
economic environment.
107
prospective economic conditions. Approximately 17%12% of Enact’s primary new delinquencies in the firstthird quarter of 2023 were subject to a forbearance plan compared to 27%18% in the firstthird quarter of 2022. Due to the declining number of new delinquencies in forbearance, Enact no longer differentiates the expected claim rates applied to new delinquencies in forbearance versus those not in forbearance.
In September 2020, subsequent to the issuance of Enact Holdings’ senior notes due in 2025, the GSEs imposed certain restrictions (the “GSE Restrictions”) with respect to capital on Enact. In May 2021, in connection with their conditional approval of the then potential partial sale of Enact Holdings, the GSEs confirmed the GSE Restrictions would remain in effect until certain conditions (the “GSE Conditions”) were met. These conditions were met as of December 31, 2022 and in March 2023, the GSEs confirmed that Enact is no longer subject to the GSE Restrictions and the GSE Conditions.
Prior to the satisfaction of the GSE Conditions, the GSE Restrictions required EMICO to maintain 120% of PMIERs minimum required assets during 2022 and 125% thereafter, and Enact Holdings to retain $300 million of holding company liquidity that could be drawn down exclusively for its debt service or to contribute to EMICO to meet its regulatory capital needs including PMIERs. The removal of the GSE Restrictions and GSE Conditions enhances Enact’s financial flexibility and competitiveness by no longer making it subject to more stringent capital requirements than its peers.
108
the PMIERs requirements, compared to 165%162% or $2,050$1,958 million above the PMIERs requirements as of December 31, 2022. PMIERs sufficiency as of December 31, 2022 was based on the published requirements applicable to private mortgage insurers and did not give effect to the GSE Restrictions previously imposed on Enact. The PMIERs sufficiency in the first quarter of 2023 was relatively flat as an increase in available assets and the completion of an excess of loss reinsurance transaction during the first quarter of 2023 were mostly offset by new insurance written and amortization of existing reinsurance transactions.June 30, 2023. Enact’s PMIERs required assets as of March 31,September 30, 2023 and December 31, 2022June 30, 2023 benefited from the application of a 0.30 multiplier applied to the risk-based required asset amount factor for certain
On March 8, 2023, Enact executed an excess of loss Enact’s third-party reinsurance transaction with a panel of reinsurers, which provides up to approximately $180 million of reinsurance coverage on a portion of current and expected mortgage insurance policies written for the 2023 book year, effective January 1, 2023. Credit risk transfer transactions provided an aggregate of approximately $1,523$1,505 million and $1,524 million of PMIERs capital credit as of March 31, 2023.September 30, 2023 and June 30, 2023, respectively.
On April 26, 2022, Enact Holdings’ board of directors approved the initiation of a quarterly dividend program. Pursuant to the program, Enact Holdings began paying quarterly dividends in the second quarter of 2022. In the first quarter of 2023, Genworth Holdings received $19 million as the majority shareholder. On May 1, 2023, Enact Holdings announced an increase of its next quarterly dividend to $0.16 per share to be paid in June 2023.shareholders. Future dividend payments are subject to quarterly review and approval by Enact Holdings’ board of directors and Genworth Financial. In addition to Enact’s quarterly dividend program, in November 2022, Enact Holdings announced approval by its board of directors of a share repurchase program under which it may repurchase up to $75 million of its outstanding common stock.stock, and on August 1, 2023, announced the authorization of an additional $100 million of common stock repurchases under a new share repurchase program. Genworth Holdings has agreed to participate in order to maintain its overall ownership at its current level. As the majority shareholder, Genworth Holdings received $26 million of capital returns from Enact Holdings began share repurchases underduring the programthird quarter of 2023. On November 1, 2023, Enact Holdings announced a special dividend of $113 million to be paid in the fourth quarter of 2022 and in the first quarter of 2023, Genworth Holdings received $18 million as the majority shareholder.
EMICO completed a distribution to Enact Holdings in April 2023. Enact Holdings intends to use this and future EMICO distributions to fund the quarterly dividend as well as to bolster its financial flexibility and potentially return additional capital to shareholders.
109
(Amounts in millions) Revenues: Premiums Net investment income Net investment gains (losses) Policy fees and other income Total revenues Benefits and expenses: Benefits and other changes in policy reserves Acquisition and operating expenses, net of deferrals Amortization of deferred acquisition costs and intangibles Interest expense Total benefits and expenses Income from continuing operations before income taxes Provision for income taxes Income from continuing operations Less: net income from continuing operations attributable to noncontrolling interests Income from continuing operations available to Genworth Financial, Inc.’s common stockholders Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: Net investment (gains) losses Taxes on adjustments Adjusted operating income available to Genworth Financial, Inc.’s common stockholders March 31,September 30, 2023 Compared to Three Months Ended March 31,September 30, 2022 Three months ended
March 31, Increase
(decrease) and
percentage
change 2023 2022 2023 vs. 2022 $ 235 $ 234 $ 1 — % 46 35 11 31 % — — — — % — 1 (1 ) (100 )% 281 270 11 4 % (11 ) (10 ) (1 ) (10 )% 52 54 (2 ) (4 )% 3 3 — — % 13 13 — — % 57 60 (3 ) (5 )% 224 210 14 7 % 49 45 4 9 % 175 165 10 6 % 32 30 2 7 % 143 135 8 6 % — — — — % — — — — % $ 143 $ 135 $ 8 6 %
September 30,
(decrease) and
percentage
change $ 243 $ 235 $ 8 3 % 55 39 16 41 % — — — — % 1 1 — — % 299 275 24 9 % 18 (40 ) 58 145 % 52 55 (3 ) (5 )% 3 4 (1 ) (25 )% 13 12 1 8 % 86 31 55 177 % 213 244 (31 ) (13 )% 48 53 (5 ) (9 )% 165 191 (26 ) (14 )% 31 35 (4 ) (11 )% 134 156 (22 ) (14 )% — — — — % — — — — % $ 134 $ 156 $ (22 ) (14 )% increaseddecreased primarily attributable to higher losses on new delinquencies and a lower favorable reserve adjustment, partially offset by higher net investment income and premiums in the current year.slightly asmostly from higher insurance driven by increased persistency was mostlypartially offset by lower income from bond calls in the current year.110decreasedincreased largely from higher losses on new delinquencies and a higherlower favorable reserve adjustment mostly offset by higher new delinquenciesin the current year as discussed above in “—Trends and conditions.”
Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 717 | $ | 707 | $ | 10 | 1 | % | ||||||||
Net investment income | 151 | 110 | 41 | 37 | % | |||||||||||
Net investment gains (losses) | (13 | ) | (1 | ) | (12 | ) | NM | (1) | ||||||||
Policy fees and other income | 2 | 2 | — | — | % | |||||||||||
Total revenues | 857 | 818 | 39 | 5 | % | |||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 3 | (112 | ) | 115 | 103 | % | ||||||||||
Acquisition and operating expenses, net of deferrals | 156 | 167 | (11 | ) | (7 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 8 | 10 | (2 | ) | (20 | )% | ||||||||||
Interest expense | 39 | 38 | 1 | 3 | % | |||||||||||
Total benefits and expenses | 206 | 103 | 103 | 100 | % | |||||||||||
Income from continuing operations before income taxes | 651 | 715 | (64 | ) | (9 | )% | ||||||||||
Provision for income taxes | 143 | 155 | (12 | ) | (8 | )% | ||||||||||
Income from continuing operations | 508 | 560 | (52 | ) | (9 | )% | ||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 94 | 103 | (9 | ) | (9 | )% | ||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 414 | 457 | (43 | ) | (9 | )% | ||||||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Net investment (gains) losses, net (2) | 11 | 1 | 10 | NM | (1) | |||||||||||
Taxes on adjustments | (2 | ) | — | (2 | ) | NM | (1) | |||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 423 | $ | 458 | $ | (35 | ) | (8 | )% | |||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
(2) | For the nine months ended September 30, 2023, net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests of $2 million. |
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Primary insurance in-force (1) | $ | 252,516 | $ | 231,853 | $ | 20,663 | 9 | % | ||||||||
Risk in-force: | ||||||||||||||||
Primary | $ | 64,106 | $ | 58,295 | $ | 5,811 | 10 | % | ||||||||
Pool | 76 | 97 | (21 | ) | (22 | )% | ||||||||||
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Total risk in-force | $ | 64,182 | $ | 58,392 | $ | 5,790 | 10 | % | ||||||||
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New insurance written | $ | 13,154 | $ | 18,823 | $ | (5,669 | ) | (30 | )% |
September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Primary insurance in-force (1) | $ | 262,014 | $ | 241,813 | $ | 20,201 | 8 | % | ||||||||
Risk in-force: | ||||||||||||||||
Primary | $ | 67,056 | $ | 61,124 | $ | 5,932 | 10 | % | ||||||||
Pool | 70 | 84 | (14 | ) | (17 | )% | ||||||||||
Total risk in-force | $ | 67,126 | $ | 61,208 | $ | 5,918 | 10 | % | ||||||||
(1) | Primary insurance in-force represents the aggregate unpaid principal balance for loans Enact insures. |
Three months ended September 30, | Increase (decrease) and percentage change | Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | 2023 | 2022 | 2023 vs. 2022 | ||||||||||||||||||||||||||
New insurance written | $ | 14,391 | $ | 15,069 | $ | (678 | ) | (4 | )% | $ | 42,628 | $ | 51,340 | $ | (8,712 | ) | (17 | )% |
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New
Three months ended March 31, | Increase (decrease) | |||||||||||
2023 | 2022 | 2023 vs. 2022 | ||||||||||
Loss ratio | (5 | )% | (4 | )% | (1 | )% | ||||||
Expense ratio | 23 | % | 24 | % | (1 | )% |
Three months ended September 30, | Increase (decrease) | Nine months ended September 30, | Increase (decrease) | |||||||||||||||||||||
2023 | 2022 | 2023 vs. 2022 | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||||||||
Loss ratio | 7 | % | (17 | )% | 24 | % | — | % | (16 | )% | 16 | % | ||||||||||||
Expense ratio | 23 | % | 25 | % | (2 | )% | 23 | % | 25 | % | (2 | )% |
year, as discussed above.
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(Amounts in millions) Primary insurance in-force by loan-to-value ratio at origination: 95.01% and above 90.01% to 95.00% 85.01% to 90.00% 85.00% and below Total Primary risk in-force by loan-to-value ratio at origination: 95.01% and above 90.01% to 95.00% 85.01% to 90.00% 85.00% and below Total Primary insurance in-force by FICO (1) score at origination: Over 760 740-759 720-739 700-719 680-699 660-679 (2) 640-659 620-639 <620 Total Primary risk in-force by FICO score at origination: Over 760 740-759 720-739 700-719 680-699 660-679 (2) 640-659 620-639 <620 Total March 31:September 30: 2023 2022 $ 40,776 $ 36,867 105,336 96,419 73,756 66,226 32,648 32,341 $ 252,516 $ 231,853 $ 11,545 $ 10,379 30,589 27,987 18,054 16,082 3,918 3,847 $ 64,106 $ 58,295 $ 104,635 $ 93,222 40,983 36,821 35,554 32,363 29,160 27,620 21,717 21,259 11,057 10,805 6,114 6,188 2,604 2,774 692 801 $ 252,516 $ 231,853 $ 26,480 $ 23,326 10,418 9,267 9,126 8,224 7,406 6,974 5,481 5,334 2,809 2,715 1,549 1,550 660 699 177 206 $ 64,106 $ 58,295 $ 44,071 $ 38,099 109,019 101,164 77,121 69,803 31,803 32,747 $ 262,014 $ 241,813 $ 12,595 $ 10,809 31,696 29,379 18,945 17,019 3,820 3,917 $ 67,056 $ 61,124 $ 109,701 $ 99,177 42,899 38,731 36,889 33,874 29,818 28,384 21,993 21,294 11,351 10,842 6,166 6,115 2,548 2,663 649 733 $ 262,014 $ 241,813 $ 28,014 $ 24,965 11,009 9,808 9,553 8,656 7,615 7,200 5,582 5,356 2,901 2,739 1,569 1,541 647 672 166 187 $ 67,056 $ 61,124 (1) (2) 113
Primary insurance: Insured loans in-force Delinquent loans Percentage of delinquent loans (delinquency rate) (Dollar amounts in millions) Payments in default: 3 payments or less 4 - 11 payments 12 payments or more Total (Dollar amounts in millions) Payments in default: 3 payments or less 4 - 11 payments 12 payments or more Total Primary insurance delinquency rates differ from region to region in the United States at any one time depending upon economic conditions and cyclical growth patterns. The tables below set forth the dispersion of direct primary case reserves and primary delinquency rates for the 10 largest states and the 10 largest Metropolitan Statistical Areas (“MSA”) or Metro Divisions (“MD”) by Enact’s primary risk March 31,
2023 December 31,
2022 March 31,
2022 965,544 960,306 941,689 18,633 19,943 22,571 1.93 % 2.08 % 2.40 %
2023
2022
2022 977,832 960,306 949,052 19,241 19,943 18,856 1.97 % 2.08 % 1.99 % have decreased compared to December 31, 2022 primarily from a decline in total delinquencies asmostly driven by paid claims and cures outpacedoutpacing new delinquencies. March 31, 2023 Delinquencies Direct primary
case reserves (1) Risk
in-force Reserves as %
of risk in-force 7,876 $ 67 $ 462 14 % 6,714 182 423 43 % 4,043 213 220 97 % 18,633 $ 462 $ 1,105 42 % December 31, 2022 Delinquencies Direct primary
case reserves (1) Risk
in-force Reserves as %
of risk in-force 8,920 $ 69 $ 509 14 % 6,466 166 390 43 % 4,557 244 248 98 % 19,943 $ 479 $ 1,147 42 %
case reserves 9,398 $ 80 $ 568 14 % 6,381 192 426 45 % 3,462 188 201 94 % 19,241 $ 460 $ 1,195 38 %
case reserves 8,920 $ 69 $ 509 14 % 6,466 166 390 43 % 4,557 244 248 98 % 19,943 $ 479 $ 1,147 42 % (1) March 31,September 30, 2023 remained flatdecreased compared to December 31, 2022. While the2022 as long-term delinquencies with higher reserves have continued to cure. The number of loans that are delinquent for 12 months or more has decreased since December 31, 2022 it remains elevated compared to pre-COVID-19 levels dueand is more in large part to COVID-19 related forbearance options and the slowing of foreclosures.line with114
Percent of primary risk in-force as of March 31, 2023 | Percent of direct primary case reserves as of March 31, 2023 (1) | Delinquency rate as of | ||||||||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||||||||||
By State: | ||||||||||||||||||||
California | 12 | % | 11 | % | 1.99 | % | 2.09 | % | 2.75 | % | ||||||||||
Texas | 8 | % | 7 | % | 1.92 | % | 2.12 | % | 2.51 | % | ||||||||||
Florida (2) | 8 | % | 8 | % | 2.24 | % | 2.54 | % | 2.51 | % | ||||||||||
New York (2) | 5 | % | 13 | % | 2.82 | % | 2.95 | % | 3.51 | % | ||||||||||
Illinois (2) | 5 | % | 6 | % | 2.51 | % | 2.54 | % | 2.85 | % | ||||||||||
Arizona | 4 | % | 2 | % | 1.68 | % | 1.78 | % | 1.92 | % | ||||||||||
Michigan | 4 | % | 3 | % | 1.72 | % | 1.79 | % | 1.87 | % | ||||||||||
North Carolina | 3 | % | 2 | % | 1.48 | % | 1.59 | % | 1.96 | % | ||||||||||
Georgia | 3 | % | 3 | % | 2.19 | % | 2.23 | % | 2.63 | % | ||||||||||
Washington | 3 | % | 3 | % | 1.64 | % | 1.92 | % | 2.68 | % |
Percent of primary risk in-force as ofSeptember 30, 2023 | Percent of direct primary case reserves as of September 30, 2023 (1) | Delinquency rate as of | ||||||||||||||||||
September 30, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||||||||||
By State: | ||||||||||||||||||||
California | 13 | % | 12 | % | 2.10 | % | 2.09 | % | 2.02 | % | ||||||||||
Texas | 8 | % | 7 | % | 2.12 | % | 2.12 | % | 2.10 | % | ||||||||||
Florida (2) | 8 | % | 9 | % | 2.16 | % | 2.54 | % | 1.93 | % | ||||||||||
New York (2) | 5 | % | 12 | % | 2.89 | % | 2.95 | % | 2.97 | % | ||||||||||
Illinois (2) | 4 | % | 6 | % | 2.40 | % | 2.54 | % | 2.53 | % | ||||||||||
Arizona | 4 | % | 2 | % | 1.74 | % | 1.78 | % | 1.67 | % | ||||||||||
Michigan | 4 | % | 3 | % | 1.72 | % | 1.79 | % | 1.69 | % | ||||||||||
Georgia | 3 | % | 3 | % | 2.14 | % | 2.23 | % | 2.26 | % | ||||||||||
North Carolina | 3 | % | 2 | % | 1.41 | % | 1.59 | % | 1.62 | % | ||||||||||
Washington | 3 | % | 2 | % | 1.64 | % | 1.92 | % | 1.84 | % |
(1) | Direct primary case reserves exclude loss adjustment expenses, pool, IBNR and reinsurance reserves. |
(2) | Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed. |
Percent of primary risk in-force as of March 31, 2023 | Percent of direct primary case reserves as of March 31, 2023 (1) | Delinquency rate as of | ||||||||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||||||||||
By MSA or MD: | ||||||||||||||||||||
Phoenix, AZ MSA | 3 | % | 2 | % | 1.72 | % | 1.83 | % | 1.92 | % | ||||||||||
Chicago-Naperville, IL MD | 3 | % | 5 | % | 2.77 | % | 2.84 | % | 3.39 | % | ||||||||||
Atlanta, GA MSA | 3 | % | 3 | % | 2.35 | % | 2.42 | % | 2.92 | % | ||||||||||
New York, NY MD | 2 | % | 8 | % | 3.51 | % | 3.75 | % | 4.68 | % | ||||||||||
Washington-Arlington, DC MD | 2 | % | 2 | % | 1.79 | % | 1.85 | % | 2.50 | % | ||||||||||
Houston, TX MSA | 2 | % | 2 | % | 2.40 | % | 2.60 | % | 3.20 | % | ||||||||||
Riverside-San Bernardino, CA MSA | 2 | % | 2 | % | 2.54 | % | 2.89 | % | 3.05 | % | ||||||||||
Los Angeles-Long Beach, CA MD | 2 | % | 3 | % | 2.24 | % | 2.18 | % | 3.22 | % | ||||||||||
Dallas, TX MD | 2 | % | 1 | % | 1.65 | % | 1.86 | % | 2.04 | % | ||||||||||
Denver-Aurora-Lakewood, CO MSA | 2 | % | 1 | % | 0.93 | % | 1.12 | % | 1.47 | % |
Percent of primary risk in-force as ofSeptember 30, 2023 | Percent of direct primary case reserves as of September 30, 2023 (1) | Delinquency rate as of | ||||||||||||||||||
September 30, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||||||||||
By MSA or MD: | ||||||||||||||||||||
Phoenix, AZ MSA | 3 | % | 2 | % | 1.77 | % | 1.83 | % | 1.71 | % | ||||||||||
Chicago-Naperville, IL MD | 3 | % | 4 | % | 2.67 | % | 2.84 | % | 2.85 | % | ||||||||||
Atlanta, GA MSA | 3 | % | 3 | % | 2.32 | % | 2.42 | % | 2.47 | % | ||||||||||
New York, NY MD | 2 | % | 8 | % | 3.62 | % | 3.75 | % | 3.88 | % | ||||||||||
Washington-Arlington, DC MD | 2 | % | 2 | % | 1.75 | % | 1.85 | % | 1.79 | % | ||||||||||
Houston, TX MSA | 2 | % | 3 | % | 2.69 | % | 2.60 | % | 2.74 | % | ||||||||||
Los Angeles-Long Beach, CA MD | 2 | % | 2 | % | 2.28 | % | 2.18 | % | 2.13 | % | ||||||||||
Riverside-San Bernardino, CA MSA | 2 | % | 3 | % | 2.71 | % | 2.89 | % | 2.74 | % | ||||||||||
Dallas, TX MD | 2 | % | 2 | % | 1.69 | % | 1.86 | % | 1.78 | % | ||||||||||
Denver-Aurora-Lakewood, CO MSA | 2 | % | 1 | % | 1.07 | % | 1.12 | % | 1.11 | % |
(1) | Direct primary case reserves exclude loss adjustment expenses, pool, IBNR and reinsurance reserves. |
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(Amounts in millions) | Percent of direct primary case reserves (1) | Primary insurance in-force | Percent of total | Primary risk in-force | Percent of total | Delinquency rate | ||||||||||||||||||
Policy Year | ||||||||||||||||||||||||
2008 and prior | 25 | % | $ | 6,377 | 3 | % | $ | 1,643 | 3 | % | 8.81 | % | ||||||||||||
2009 to 2015 | 7 | 4,659 | 2 | 1,238 | 2 | 4.03 | % | |||||||||||||||||
2016 | 5 | 5,744 | 2 | 1,538 | 2 | 3.01 | % | |||||||||||||||||
2017 | 6 | 6,201 | 2 | 1,632 | 3 | 3.53 | % | |||||||||||||||||
2018 | 7 | 6,570 | 3 | 1,672 | 3 | 4.08 | % | |||||||||||||||||
2019 | 10 | 15,691 | 6 | 3,989 | 6 | 2.57 | % | |||||||||||||||||
2020 | 16 | 52,389 | 21 | 13,484 | 21 | 1.42 | % | |||||||||||||||||
2021 | 18 | 79,377 | 31 | 19,917 | 31 | 1.23 | % | |||||||||||||||||
2022 | 6 | 62,481 | 25 | 15,647 | 24 | 0.74 | % | |||||||||||||||||
2023 | — | 13,027 | 5 | 3,346 | 5 | 0.02 | % | |||||||||||||||||
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Total portfolio | 100 | % | $ | 252,516 | 100 | % | $ | 64,106 | 100 | % | 1.93 | % | ||||||||||||
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(Amounts in millions) | Percent of direct primary case reserves (1) | Primary insurance in-force | Percent of total | Primary risk in-force | Percent of total | Delinquency rate | ||||||||||||||||||
Policy Year | ||||||||||||||||||||||||
2008 and prior | 20 | % | $ | 5,859 | 2 | % | $ | 1,510 | 2 | % | 8.67 | % | ||||||||||||
2009 to 2015 | 5 | 3,819 | 1 | 1,004 | 2 | 4.20 | % | |||||||||||||||||
2016 | 4 | 4,948 | 2 | 1,327 | 2 | 3.07 | % | |||||||||||||||||
2017 | 6 | 5,582 | 2 | 1,471 | 2 | 3.62 | % | |||||||||||||||||
2018 | 6 | 5,993 | 2 | 1,535 | 2 | 4.18 | % | |||||||||||||||||
2019 | 9 | 14,372 | 6 | 3,676 | 5 | 2.58 | % | |||||||||||||||||
2020 | 15 | 46,881 | 18 | 12,228 | 18 | 1.53 | % | |||||||||||||||||
2021 | 21 | 73,141 | 28 | 18,524 | 28 | 1.48 | % | |||||||||||||||||
2022 | 13 | 60,258 | 23 | 15,129 | 23 | 1.28 | % | |||||||||||||||||
2023 | 1 | 41,161 | 16 | 10,652 | 16 | 0.25 | % | |||||||||||||||||
Total portfolio | 100 | % | $ | 262,014 | 100 | % | $ | 67,056 | 100 | % | 1.97 | % | ||||||||||||
(1) | Direct primary case reserves exclude loss adjustment expenses, pool, IBNR and reinsurance reserves. |
In
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experience from our long-term care insurance businesslegal settlement elections and benefit reductions. The favorable impact from changes in earlycash flow assumptions was mainly attributable to the inclusion of a second legal settlement. We also evaluated our assumptions regarding expectations of future premium rate increase approvals and benefit reductions and made no significant changes to our 2022 was likely impacted by COVID-19. We expectedmulti-year
We have also experienced lower than expected new claims incidence in ourreviews are still underway and not yet complete, the long-term care insurance business during COVID-19.assumption updates could be negative in the aggregate, as experience has been mixed, and would be reported immediately in earnings particularly for unprofitable capped cohorts.
While the ongoing impact of COVID-19 is very difficult to predict, the related outcomes and impact on our long-term care insurance business currently depend on the after-effects indirectly caused by the pandemic, including supply chain shortages and high inflation, and the shape of the economic recovery. We will continue to monitor COVID-19 associated impacts and evaluate all of our assumptions that may need updating as a result of longer-term trends related to the pandemic.
Average claim reserves for new claims are trending higher over time as the mix of claims continues to evolve, with an increasing number of policies with higher daily benefit amounts and higher inflation factors going on claim. Although new claim counts on our older long-term care insurance blocks of business will continue to decrease as the blocks run off, we are gaining more experience on our larger new blocks of business and expect continued growth in new claims on these blocks as policyholders reach older attained ages with higher likelihood of going on claim.
subsidiaries, should remain positive.
117
Results of our long-term care insurance business are also impacted by interest rates. Prior to the recent rise in interest rates beginning in 2022, historic low interest rates put pressure on the profitability and returns of our long-term care insurance business as higher yieldinghigher-yielding investments matured and were replaced with lower-yielding investments. We have sought to manage the impact of low interest rates through asset-liability management, investment in alternative assets, including limited partnerships, as well as interest rate hedging strategies for a
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 616 | $ | 607 | $ | 9 | 1 | % | ||||||||
Net investment income | 473 | 447 | 26 | 6 | % | |||||||||||
Net investment gains (losses) | 9 | 41 | (32 | ) | (78 | )% | ||||||||||
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Total revenues | 1,098 | 1,095 | 3 | — | % | |||||||||||
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Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 940 | 923 | 17 | 2 | % | |||||||||||
Liability remeasurement (gains) losses | 5 | (65 | ) | 70 | 108 | % | ||||||||||
Acquisition and operating expenses, net of deferrals | 162 | 140 | 22 | 16 | % | |||||||||||
Amortization of deferred acquisition costs and intangibles | 18 | 19 | (1 | ) | (5 | )% | ||||||||||
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Total benefits and expenses | 1,125 | 1,017 | 108 | 11 | % | |||||||||||
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Income (loss) from continuing operations before income taxes | (27 | ) | 78 | (105 | ) | (135 | )% | |||||||||
Provision for income taxes | 2 | 19 | (17 | ) | (89 | )% | ||||||||||
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Income (loss) from continuing operations | (29 | ) | 59 | (88 | ) | (149 | )% | |||||||||
Adjustments to income (loss) from continuing operations: | ||||||||||||||||
Net investment (gains) losses | (9 | ) | (41 | ) | 32 | 78 | % | |||||||||
Expenses related to restructuring | (1 | ) | — | (1 | ) | NM | (1) | |||||||||
Taxes on adjustments | 2 | 9 | (7 | ) | (78 | )% | ||||||||||
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Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders | $ | (37 | ) | $ | 27 | $ | (64 | ) | NM | (1) | ||||||
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Three months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 621 | $ | 637 | $ | (16 | ) | (3 | )% | |||||||
Net investment income | 482 | 497 | (15 | ) | (3 | )% | ||||||||||
Net investment gains (losses) | (21 | ) | (47 | ) | 26 | 55 | % | |||||||||
Total revenues | 1,082 | 1,087 | (5 | ) | — | % | ||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 953 | 956 | (3 | ) | — | % | ||||||||||
Liability remeasurement (gains) losses | 104 | 3 | 101 | NM | (1) | |||||||||||
Acquisition and operating expenses, net of deferrals | 109 | 122 | (13 | ) | (11 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 17 | 19 | (2 | ) | (11 | )% | ||||||||||
Total benefits and expenses | 1,183 | 1,100 | 83 | 8 | % | |||||||||||
Loss from continuing operations before income taxes | (101 | ) | (13 | ) | (88 | ) | NM | (1) | ||||||||
Benefit for income taxes | (13 | ) | (1 | ) | (12 | ) | NM | (1) | ||||||||
Loss from continuing operations | (88 | ) | (12 | ) | (76 | ) | NM | (1) | ||||||||
Adjustments to loss from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 21 | 47 | (26 | ) | (55 | )% | ||||||||||
Taxes on adjustments | (4 | ) | (9 | ) | 5 | 56 | % | |||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders | $ | (71 | ) | $ | 26 | $ | (97 | ) | NM | (1) | ||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
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that did not recur.
Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 1,848 | $ | 1,861 | $ | (13 | ) | (1 | )% | |||||||
Net investment income | 1,425 | 1,430 | (5 | ) | — | % | ||||||||||
Net investment gains (losses) | 50 | (1 | ) | 51 | NM | (1) | ||||||||||
Total revenues | 3,323 | 3,290 | 33 | 1 | % | |||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 2,838 | 2,823 | 15 | 1 | % | |||||||||||
Liability remeasurement (gains) losses | 133 | (62 | ) | 195 | NM | (1) | ||||||||||
Acquisition and operating expenses, net of deferrals | 336 | 313 | 23 | 7 | % | |||||||||||
Amortization of deferred acquisition costs and intangibles | 53 | 56 | (3 | ) | (5 | )% | ||||||||||
Total benefits and expenses | 3,360 | 3,130 | 230 | 7 | % | |||||||||||
Income (loss) from continuing operations before income taxes | (37 | ) | 160 | (197 | ) | (123 | )% | |||||||||
Provision for income taxes | 15 | 46 | (31 | ) | (67 | )% | ||||||||||
Income (loss) from continuing operations | (52 | ) | 114 | (166 | ) | (146 | )% | |||||||||
Adjustments to income (loss) from continuing operations: | ||||||||||||||||
Net investment (gains) losses | (50 | ) | 1 | (51 | ) | NM | (1) | |||||||||
Expenses related to restructuring | — | 1 | (1 | ) | (100 | )% | ||||||||||
Taxes on adjustments | 11 | — | 11 | NM | (1) | |||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders | $ | (91 | ) | $ | 116 | $ | (207 | ) | (178 | )% | ||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
implementation timing and approval of our in-force rate action plan.
year.
Three months ended September 30, | (Increase) decrease and percentage change | Nine months ended September 30, | (Increase) decrease and percentage change | |||||||||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | 2023 | 2022 | 2023 vs. 2022 | ||||||||||||||||||||||||||
Cash flow assumption updates | $ | (6 | ) | $ | (10 | ) | $ | 4 | 40 | % | $ | (9 | ) | $ | (32 | ) | $ | 23 | 72 | % | ||||||||||||
Actual to expected experience | 110 | 13 | 97 | NM | (1) | 142 | (30 | ) | 172 | NM | (1) | |||||||||||||||||||||
Total liability remeasurement (gains) losses | $ | 104 | $ | 3 | $ | 101 | NM | (1) | $ | 133 | $ | (62 | ) | $ | 195 | NM | (1) | |||||||||||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
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The following table sets forth filing approvals as part of our multi-year
Three months ended March 31, | ||||||||
(Dollar amounts in millions) | 2023 | 2022 | ||||||
State filings approved | 23 | 38 | ||||||
Impacted in-force premiums | $ | 78 | $ | 354 | ||||
Weighted-average percentage rate increase approved | 64 | % | 29 | % | ||||
Gross incremental premiums approved | $ | 50 | $ | 101 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Dollar amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
State filings approved | 27 | 24 | 88 | 95 | ||||||||||||
Impacted in-force premiums | $ | 150 | $ | 123 | $ | 528 | $ | 610 | ||||||||
Weighted-average percentage rate increase approved | 56 | % | 38 | % | 43 | % | 33 | % | ||||||||
Gross incremental premiums approved | $ | 83 | $ | 47 | $ | 227 | $ | 200 |
We no longer solicit sales of traditional life insurance and annuity products; however, we continue to service our existing retained and reinsured blocks of business.
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rates on our life insurance and annuity products, see “Item 7A—Quantitative and Qualitative Disclosures About Market Risk” in our 2022 Annual Report on Form
results.
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(Amounts in millions) Revenues: Premiums Net investment income Net investment gains (losses) Policy fees and other income Total revenues Benefits and expenses: Benefits and other changes in policy reserves Liability remeasurement (gains) losses Changes in fair value of market risk benefits and associated hedges Interest credited Acquisition and operating expenses, net of deferrals Amortization of deferred acquisition costs and intangibles Total benefits and expenses Income (loss) from continuing operations before income taxes Provision (benefit) for income taxes Income (loss) from continuing operations Adjustments to income (loss) from continuing operations: Net investment (gains) losses Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges (2) Taxes on adjustments Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders March 31,September 30, 2023 Compared to Three Months Ended March 31,September 30, 2022 Three months ended
March 31, Increase
(decrease) and
percentage
change 2023 2022 2023 vs. 2022 $ 62 $ 74 $ (12 ) (16 )% 264 279 (15 ) (5 )% (10 ) 14 (24 ) (171 )% 163 169 (6 ) (4 )% 479 536 (57 ) (11 )% 246 255 (9 ) (4 )% 17 24 (7 ) (29 )% 17 (41 ) 58 141 % 126 125 1 1 % 53 77 (24 ) (31 )% 51 66 (15 ) (23 )% 510 506 4 1 % (31 ) 30 (61 ) NM (1) (7 ) 6 (13 ) NM (1) (24 ) 24 (48 ) (200 )% 10 (14 ) 24 171 % 14 (54 ) 68 126 % (4 ) 14 (18 ) (129 )% $ (4 ) $ (30 ) $ 26 87 %
September 30,
(decrease) and
percentage
change $ 48 $ 55 $ (7 ) (13 )% 261 271 (10 ) (4 )% (18 ) (15 ) (3 ) (20 )% 158 169 (11 ) (7 )% 449 480 (31 ) (6 )% 229 247 (18 ) (7 )% 12 14 (2 ) (14 )% (24 ) (27 ) 3 11 % 127 128 (1 ) (1 )% 54 57 (3 ) (5 )% 45 57 (12 ) (21 )% 443 476 (33 ) (7 )% 6 4 2 50 % 1 — 1 NM (1) 5 4 1 25 % 18 15 3 20 % (26 ) (32 ) 6 19 % — 6 (6 ) (100 )% — 1 (1 ) (100 )% $ (3 ) $ (6 ) $ 3 50 % (1) (2) March 31,September 30, 2023 and 2022, changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges were adjusted forto exclude changes in reserves, attributed fees and benefit payments of $(3)$(2) million and $(13)$(5) million, respectively.122
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Life insurance | $ | (27 | ) | $ | (47 | ) | $ | 20 | 43 | % | ||||||
Fixed annuities | 14 | 13 | 1 | 8 | % | |||||||||||
Variable annuities | 9 | 4 | 5 | 125 | % | |||||||||||
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Total adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (4 | ) | $ | (30 | ) | $ | 26 | 87 | % | ||||||
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Three months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Life insurance | $ | (25 | ) | $ | (28 | ) | $ | 3 | 11 | % | ||||||
Fixed annuities | 17 | 15 | 2 | 13 | % | |||||||||||
Variable annuities | 5 | 7 | (2 | ) | (29 | )% | ||||||||||
Total adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (3 | ) | $ | (6 | ) | $ | 3 | 50 | % | ||||||
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Liability remeasurement (gains) losses. The decrease in liability remeasurement losses was driven by lower mortality in our life insurance products and higher mortality in our fixed annuity products in the current year.
. The unfavorable change was driven by increases of $21 million and $37 million in our fixed and variable annuity products, respectively, primarily attributable to lower interest rates, partially offset by favorable equity market impacts in the current year. The unfavorable change in our variable annuity products was also partially offset by lower derivative losses, as well as lower attributed fees and benefit payments due to aging of the in-force block in the current year.Acquisition and operating expenses, net of deferrals
Our life insurance products decreased $20 million primarily due to a $25 million legal settlement accrual in the prior year that did not recur, partially offset by $6 million of conversion costs associated with an outsourcing arrangement in the current year.
Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 160 | $ | 189 | $ | (29 | ) | (15 | )% | |||||||
Net investment income | 786 | 815 | (29 | ) | (4 | )% | ||||||||||
Net investment gains (losses) | (35 | ) | (1 | ) | (34 | ) | NM | (1) | ||||||||
Policy fees and other income | 486 | 502 | (16 | ) | (3 | )% | ||||||||||
Total revenues | 1,397 | 1,505 | (108 | ) | (7 | )% | ||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 715 | 394 | 321 | 81 | % | |||||||||||
Liability remeasurement (gains) losses | 38 | 39 | (1 | ) | (3 | )% | ||||||||||
Changes in fair value of market risk benefits and associated hedges | (26 | ) | (48 | ) | 22 | 46 | % | |||||||||
Interest credited | 379 | 379 | — | — | % | |||||||||||
Acquisition and operating expenses, net of deferrals | 158 | 550 | (392 | ) | (71 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 140 | 186 | (46 | ) | (25 | )% | ||||||||||
Total benefits and expenses | 1,404 | 1,500 | (96 | ) | (6 | )% | ||||||||||
Income (loss) from continuing operations before income taxes | (7 | ) | 5 | (12 | ) | NM | (1) | |||||||||
Benefit for income taxes | (3 | ) | (1 | ) | (2 | ) | (200 | )% | ||||||||
Income (loss) from continuing operations | (4 | ) | 6 | (10 | ) | (167 | )% | |||||||||
Adjustments to income (loss) from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 35 | 1 | 34 | NM | (1) | |||||||||||
Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges (2) | (35 | ) | (78 | ) | 43 | 55 | % | |||||||||
Pension plan termination costs | — | 6 | (6 | ) | (100 | )% | ||||||||||
Taxes on adjustments | (1 | ) | 14 | (15 | ) | (107 | )% | |||||||||
Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (5 | ) | $ | (51 | ) | $ | 46 | 90 | % | ||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
(2) | For the nine months ended September 30, 2023 and 2022, changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments of $(9) million and $(30) million, respectively. |
Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Life insurance | $ | (69 | ) | $ | (112 | ) | $ | 43 | 38 | % | ||||||
Fixed annuities | 41 | 48 | (7 | ) | (15 | )% | ||||||||||
Variable annuities | 23 | 13 | 10 | 77 | % | |||||||||||
Total adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (5 | ) | $ | (51 | ) | $ | 46 | 90 | % | ||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Term and whole life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 46,964 | $ | 49,637 | $ | (2,673 | ) | (5 | )% | |||||||
Life insurance in-force before reinsurance | $ | 292,091 | $ | 325,055 | $ | (32,964 | ) | (10 | )% | |||||||
Term universal life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 91,817 | $ | 97,750 | $ | (5,933 | ) | (6 | )% | |||||||
Life insurance in-force before reinsurance | $ | 92,431 | $ | 98,392 | $ | (5,961 | ) | (6 | )% | |||||||
Universal life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 29,475 | $ | 30,732 | $ | (1,257 | ) | (4 | )% | |||||||
Life insurance in-force before reinsurance | $ | 33,246 | $ | 34,756 | $ | (1,510 | ) | (4 | )% |
September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Term and whole life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 45,353 | $ | 50,916 | $ | (5,563 | ) | (11 | )% | |||||||
Life insurance in-force, before reinsurance | $ | 277,479 | $ | 308,153 | $ | (30,674 | ) | (10 | )% | |||||||
Term universal life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 90,820 | $ | 94,151 | $ | (3,331 | ) | (4 | )% | |||||||
Life insurance in-force, before reinsurance | $ | 91,421 | $ | 94,773 | $ | (3,352 | ) | (4 | )% | |||||||
Universal life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 29,299 | $ | 30,094 | $ | (795 | ) | (3 | )% | |||||||
Life insurance in-force, before reinsurance | $ | 32,572 | $ | 33,995 | $ | (1,423 | ) | (4 | )% |
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Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 2 | $ | 2 | $ | — | — | % | ||||||||
Net investment income | 4 | 3 | 1 | 33 | % | |||||||||||
Net investment gains (losses) | (10 | ) | (13 | ) | 3 | 23 | % | |||||||||
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Total revenues | (4 | ) | (8 | ) | 4 | 50 | % | |||||||||
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Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | (3 | ) | (3 | ) | — | — | % | |||||||||
Acquisition and operating expenses, net of deferrals | 16 | 9 | 7 | 78 | % | |||||||||||
Interest expense | 16 | 13 | 3 | 23 | % | |||||||||||
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Total benefits and expenses | 29 | 19 | 10 | 53 | % | |||||||||||
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Loss from continuing operations before income taxes | (33 | ) | (27 | ) | (6 | ) | (22 | )% | ||||||||
Benefit for income taxes | (5 | ) | (2 | ) | (3 | ) | (150 | )% | ||||||||
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Loss from continuing operations | (28 | ) | (25 | ) | (3 | ) | (12 | )% | ||||||||
Adjustments to loss from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 10 | 13 | (3 | ) | (23 | )% | ||||||||||
(Gains) losses on early extinguishment of debt | (1 | ) | 3 | (4 | ) | (133 | )% | |||||||||
Expenses related to restructuring | 4 | — | 4 | NM | (1) | |||||||||||
Taxes on adjustments | (3 | ) | (3 | ) | — | — | % | |||||||||
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Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (18 | ) | $ | (12 | ) | $ | (6 | ) | (50 | )% | |||||
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Three months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 3 | $ | 2 | $ | 1 | 50 | % | ||||||||
Net investment income | 3 | 1 | 2 | 200 | % | |||||||||||
Net investment gains (losses) | (4 | ) | 4 | (8 | ) | (200 | )% | |||||||||
Policy fees and other income | (1 | ) | (1 | ) | — | — | % | |||||||||
Total revenues | 1 | 6 | (5 | ) | (83 | )% | ||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | (1 | ) | (4 | ) | 3 | 75 | % | |||||||||
Acquisition and operating expenses, net of deferrals | 13 | 11 | 2 | 18 | % | |||||||||||
Interest expense | 17 | 14 | 3 | 21 | % | |||||||||||
Total benefits and expenses | 29 | 21 | 8 | 38 | % | |||||||||||
Loss from continuing operations before income taxes | (28 | ) | (15 | ) | (13 | ) | (87 | )% | ||||||||
Provision (benefit) for income taxes | (6 | ) | 2 | (8 | ) | NM | (1) | |||||||||
Loss from continuing operations | (22 | ) | (17 | ) | (5 | ) | (29 | )% | ||||||||
Adjustments to loss from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 4 | (4 | ) | 8 | 200 | % | ||||||||||
(Gains) losses on early extinguishment of debt | — | 3 | (3 | ) | (100 | )% | ||||||||||
Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (18 | ) | $ | (18 | ) | $ | — | — | % | ||||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
increased primarily fromwas flat as a decrease in tax expense on certain forward starting swap gains was offset by higher expenses related to CareScout growth initiatives and higher interest expense in the current year.
Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 7 | $ | 5 | $ | 2 | 40 | % | ||||||||
Net investment income | 11 | 4 | 7 | 175 | % | |||||||||||
Net investment gains (losses) | (17 | ) | 6 | (23 | ) | NM | (1) | |||||||||
Policy fees and other income | (1 | ) | — | (1 | ) | NM | (1) | |||||||||
Total revenues | — | 15 | (15 | ) | (100 | )% | ||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | (6 | ) | (11 | ) | 5 | 45 | % | |||||||||
Acquisition and operating expenses, net of deferrals | 44 | 30 | 14 | 47 | % | |||||||||||
Interest expense | 49 | 40 | 9 | 23 | % | |||||||||||
Total benefits and expenses | 87 | 59 | 28 | 47 | % | |||||||||||
Loss from continuing operations before income taxes | (87 | ) | (44 | ) | (43 | ) | (98 | )% | ||||||||
Benefit for income taxes | (15 | ) | — | (15 | ) | NM | (1) | |||||||||
Loss from continuing operations | (72 | ) | (44 | ) | (28 | ) | (64 | )% | ||||||||
Adjustments to loss from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 17 | (6 | ) | 23 | NM | (1) | ||||||||||
(Gains) losses on early extinguishment of debt | (1 | ) | 7 | (8 | ) | (114 | )% | |||||||||
Expenses related to restructuring | 4 | — | 4 | NM | (1) | |||||||||||
Taxes on adjustments | (4 | ) | — | (4 | ) | NM | (1) | |||||||||
Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (56 | ) | $ | (43 | ) | $ | (13 | ) | (30 | )% | |||||
(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
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Interest expense increased largely driven by a higher floating rate of interest on Genworth Holdings’ junior subordinated notes2066 Notes in the current year, partially offset by the early redemption of Genworth Holdings’ senior notes due in February 2024 Notes in the prior year.
income and
There was a sudden disruption in the banking sector during the first quarter of 2023 caused by regional bank failures, most notably2023. Silicon Valley Bank and Signature Bank, which were each taken into receivership by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC invoked a systemic risk exception to pay back uninsured depositors to mitigate consequences for the economy and the banking system. These two bank failures, contributed to deposit outflows and pressure on share prices for other small regional banks in the United States. Concerns have risen around tighter lending standards for regional banks and subsequent negative impacts to commercial real estate financing conditions. Also, duringStates in the first quarter of 2023. In the second quarter of 2023, Credit Suisse Group was acquired by rival Swiss bank UBS Group in a deal brokered by Swiss government officialsthese pressures contributed to stabilize the global banking system and prevent a collapse of Credit Suisse. The long-term impacts of these banking sector disruptions on the broader economy are still uncertain, particularly as financial distress emerges with other
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regional banks, such as in the case of First Republic Bank which was recentlyalso being taken into receivership by the FDIC and subsequently sold to JPMorgan Chase Bank. Regardless& Co. While bank deposits began to stabilize in the third quarter of 2023, the ultimate outcome, thelong-term impacts of these banking sector distress has shifted market outlooksdisruptions on the broader economy remain uncertain and lowered growth expectationsconcerns remain elevated regarding tighter bank lending standards, increased capital requirements for 2023.
regional banks and the subsequent negative impacts to commercial real estate financing conditions.
Credit markets performed well during the first quarter of 2023 with credit spreads decreasing prior to the disruption from the banking sector. The banking disruption drove credit spreads in financial sectors higher during March 2023. The increase in non-financial credit spreads was less severe and by the end of the firstsecond quarter of 2023, credit market performance remained resilient as macroeconomic data continued to support market optimism for a soft economic landing. Credit spreads for non-financial sectors were similar to levels fromended the end of the fourththird quarter of 2022. After a small pause amidst2023 flat compared to the banking sector disruption, corporatesecond quarter of 2023 and remained below first half of 2023 levels. Corporate borrowers in both the investment grade and below investment grade markets hadmaintained consistent access to capital markets, throughoutwith a significant increase in below investment grade issuances through the firstend of the third quarter of 2023.
As of March 31, 2023 werelative to the same period last year.
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(Amounts in millions) Fixed maturity securities—taxable Fixed maturity securities—non-taxable Equity securities Commercial mortgage loans Policy loans Limited partnerships (1) Other invested assets (2) Cash, cash equivalents, restricted cash and short-term investments Gross investment income before expenses and fees Expenses and fees Net investment income Average invested assets and cash March 31,September 30, 2023, $1.4$1.3 billion notional of our derivatives portfolio was cleared through the Chicago Mercantile Exchange (“CME”). The customer swap agreements that govern our cleared derivatives contain provisions that enable our clearing agents to request initial margin in excess of CME requirements. As of March 31,September 30, 2023, we posted initial margin of $112$92 million to our clearing agents, which represented $56$46 million more than was otherwise required by the clearinghouse. Because our clearing agents serve as guarantors of our obligations to the CME, the customer agreements contain broad termination provisions that are not specifically dependent on ratings. As of March 31,September 30, 2023, $10.2$11.0 billion notional of our derivatives portfolio was in bilateral$466$477 million and are holding collateral from counterparties in the amount of $26$15 million.havehad variousestablishesestablished benchmark rates, based on the Secured Overnight Financing Rate (“SOFR”), to replace LIBOR after its elimination on June 30, 2023. SOFR is calculated and published by the New York Federal Reserve Bank and reflects the combination of three overnight U.S. Treasury Repo Rates. The rate is different from LIBOR, in that it is a risk-free rate, is backward-looking instead of forward-looking, is a secured rate and currently is available primarily as an overnight rate rather than aWe completed our assessment of operational readiness for LIBOR cessation related to our various instruments in 2021. the majority of our LIBOR-based swaps and entered into alternative rate swaps. We plan to convert our remaining LIBOR-based derivatives to SOFR in the second quarter of 2023. In addition, the designated SOFR benchmark rate will replacereplaced the current contractual three-month LIBOR rate applied to Genworth Holdings’ junior subordinated notes due in 2066 subsequent toNotes during the secondthird quarter of 2023. See “—Liquidity and Capital Resources—Capital resources and financing activities” for additional information. We do not expect a material adverse impact on our results of operations or financial condition from the transition away from LIBOR.128table setstables set forth information about our investment income, excluding net investment gains (losses), for each component of our investment portfolio for the periods indicated: Three months ended March 31, Increase (decrease) 2023 2022 2023 vs. 2022 Yield Amount Yield Amount Yield Amount 4.4 % $ 561 4.4 % $ 580 — % $ (19 ) 4.6 % 1 3.6 % 1 1.0 % — 2.3 % 2 3.7 % 2 (1.4 )% — 4.4 % 76 4.7 % 81 (0.3 )% (5 ) 10.3 % 55 9.8 % 50 0.5 % 5 4.7 % 28 1.4 % 7 3.3 % 21 51.6 % 68 64.8 % 63 (13.2 )% 5 4.0 % 18 — % — 4.0 % 18 5.0 % 809 4.8 % 784 0.2 % 25 (0.1 )% (22 ) (0.1 )% (20 ) — % (2 ) 4.9 % $ 787 4.7 % $ 764 0.2 % $ 23 $ 64,768 $ 65,395 $ (627 ) 4.5 % $ 559 4.5 % $ 576 — % $ (17 ) 5.6 % 1 7.1 % 2 (1.5 )% (1 ) 1.1 % 1 4.6 % 3 (3.5 )% (2 ) 4.5 % 76 4.6 % 81 (0.1 )% (5 ) 10.3 % 58 10.2 % 55 0.1 % 3 4.7 % 31 7.0 % 38 (2.3 )% (7 ) 48.3 % 69 57.0 % 67 (8.7 )% 2 5.3 % 28 1.7 % 7 3.6 % 21 5.1 % 823 5.1 % 829 — % (6 ) (0.1 )% (22 ) (0.1 )% (21 ) — % (1 ) 5.0 % $ 801 5.0 % $ 808 — % $ (7 ) $ 64,622 $ 65,033 $ (411 ) (1) (2)
Nine months ended September 30, | Increase (decrease) | |||||||||||||||||||||||
2023 | 2022 | 2023 vs. 2022 | ||||||||||||||||||||||
(Amounts in millions) | Yield | Amount | Yield | Amount | Yield | Amount | ||||||||||||||||||
Fixed maturity securities—taxable | 4.5 | % | $ | 1,687 | 4.5 | % | $ | 1,734 | — | % | $ | (47 | ) | |||||||||||
Fixed maturity securities—non-taxable | 5.1 | % | 3 | 4.8 | % | 4 | 0.3 | % | (1 | ) | ||||||||||||||
Equity securities | 2.2 | % | 6 | 3.9 | % | 7 | (1.7 | )% | (1 | ) | ||||||||||||||
Commercial mortgage loans | 4.4 | % | 227 | 4.6 | % | 240 | (0.2 | )% | (13 | ) | ||||||||||||||
Policy loans | 10.1 | % | 167 | 9.9 | % | 156 | 0.2 | % | 11 | |||||||||||||||
Limited partnerships (1) | 4.0 | % | 76 | 5.0 | % | 77 | (1.0 | )% | (1 | ) | ||||||||||||||
Other invested assets (2) | 50.3 | % | 207 | 60.9 | % | 196 | (10.6 | )% | 11 | |||||||||||||||
Cash, cash equivalents, restricted cash and short-term investments | 4.7 | % | 68 | 0.7 | % | 8 | 4.0 | % | 60 | |||||||||||||||
Gross investment income before expenses and fees | 5.0 | % | 2,441 | 4.9 | % | 2,422 | 0.1 | % | 19 | |||||||||||||||
Expenses and fees | (0.1 | )% | (68 | ) | (0.1 | )% | (63 | ) | — | % | (5 | ) | ||||||||||||
Net investment income | 4.9 | % | $ | 2,373 | 4.8 | % | $ | 2,359 | 0.1 | % | $ | 14 | ||||||||||||
Average invested assets and cash | $ | 64,695 | $ | 65,214 | $ | (519 | ) | |||||||||||||||||
(1) | Limited partnership investments are primarily equity-based and do not have fixed returns by period. |
(2) | Investment income for other invested assets includes amortization of terminated cash flow hedges, which have no corresponding book value within the yield calculation. |
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Three months ended March 31, | ||||||||
(Amounts in millions) | 2023 | 2022 | ||||||
Realized investment gains (losses): | ||||||||
Available-for-sale fixed maturity securities: | ||||||||
Realized gains | $ | 3 | $ | 10 | ||||
Realized losses | (19 | ) | (18 | ) | ||||
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Net realized gains (losses) on available-for-sale fixed maturity securities | (16 | ) | (8 | ) | ||||
Net realized gains (losses) on equity securities sold | — | — | ||||||
Net realized gains (losses) on limited partnerships | — | — | ||||||
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Total net realized investment gains (losses) | (16 | ) | (8 | ) | ||||
|
|
|
| |||||
Net change in allowance for credit losses on available-for-sale fixed maturity securities | (15 | ) | — | |||||
Write-down of available-for-sale fixed maturity securities | — | (2 | ) | |||||
Net unrealized gains (losses) on equity securities still held | 11 | (6 | ) | |||||
Net unrealized gains (losses) on limited partnerships | — | 35 | ||||||
Commercial mortgage loans | (2 | ) | 1 | |||||
Derivative instruments | 12 | 19 | ||||||
Other | (1 | ) | 3 | |||||
|
|
|
| |||||
Net investment gains (losses) | $ | (11 | ) | $ | 42 | |||
|
|
|
|
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Realized investment gains (losses): | ||||||||||||||||
Available-for-sale | ||||||||||||||||
Realized gains | $ | 5 | $ | 11 | $ | 26 | $ | 26 | ||||||||
Realized losses | (16 | ) | (38 | ) | (83 | ) | (65 | ) | ||||||||
Net realized gains (losses) on available-for-sale | (11 | ) | (27 | ) | (57 | ) | (39 | ) | ||||||||
Net realized gains (losses) on equity securities sold | — | — | (1 | ) | — | |||||||||||
Net realized gains (losses) on limited partnerships | — | — | — | — | ||||||||||||
Total net realized investment gains (losses) | (11 | ) | (27 | ) | (58 | ) | (39 | ) | ||||||||
Net change in allowance for credit losses on available-for-sale | (2 | ) | — | (6 | ) | — | ||||||||||
Write-down of available-for-sale | — | — | (1 | ) | (2 | ) | ||||||||||
Net unrealized gains (losses) on equity securities still held | (12 | ) | (14 | ) | 20 | (46 | ) | |||||||||
Net unrealized gains (losses) on limited partnerships | 14 | (24 | ) | 54 | 35 | |||||||||||
Commercial mortgage loans | (1 | ) | — | (3 | ) | 3 | ||||||||||
Derivative instruments | (28 | ) | 7 | (17 | ) | 44 | ||||||||||
Other | (3 | ) | — | (4 | ) | 8 | ||||||||||
Net investment gains (losses) | $ | (43 | ) | $ | (58 | ) | $ | (15 | ) | $ | 3 | |||||
We recorded an allowance for credit The nine months ended September 30, 2023 included net losses on available for sale fixed-maturity securities ofsales related to portfolio repositioning and liquidity management, as well as regional bank exposure management, including a $15 million duringloss related to the threesale of First Republic Bank U.S. corporate bonds. The nine months ended March 31, 2023. September 30, 2022 included net losses primarily
from sales of U.S. corporate securities to manage asset exposure and to optimize cash at Genworth Holdings. |
performance in the current year. We had $7also recorded an allowance for credit losses on
130
March 31, 2023 | December 31, 2022 | |||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | ||||||||||||
Available-for-sale fixed maturity securities: | ||||||||||||||||
Public | $ | 32,566 | 53 | % | $ | 31,757 | 53 | % | ||||||||
Private | 14,815 | 24 | 14,826 | 24 | ||||||||||||
Equity securities | 364 | 1 | 319 | 1 | ||||||||||||
Commercial mortgage loans, net | 6,891 | 11 | 7,010 | 11 | ||||||||||||
Policy loans | 2,133 | 3 | 2,139 | 3 | ||||||||||||
Limited partnerships | 2,456 | 4 | 2,331 | 4 | ||||||||||||
Other invested assets | 617 | 1 | 566 | 1 | ||||||||||||
Cash, cash equivalents and restricted cash | 1,752 | 3 | 1,799 | 3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total cash, cash equivalents and invested assets | $ | 61,594 | 100 | % | $ | 60,747 | 100 | % | ||||||||
|
|
|
|
|
|
|
|
September 30, 2023 | December 31, 2022 | |||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | ||||||||||||
Available-for-sale | ||||||||||||||||
Public | $ | 30,004 | 51 | % | $ | 31,757 | 53 | % | ||||||||
Private | 13,964 | 24 | 14,826 | 24 | ||||||||||||
Equity securities | 363 | 1 | 319 | 1 | ||||||||||||
Commercial mortgage loans, net | 6,793 | 11 | 7,010 | 11 | ||||||||||||
Policy loans | 2,233 | 4 | 2,139 | 3 | ||||||||||||
Limited partnerships | 2,699 | 5 | 2,331 | 4 | ||||||||||||
Other invested assets | 645 | 1 | 566 | 1 | ||||||||||||
Cash, cash equivalents and restricted cash | 1,993 | 3 | 1,799 | 3 | ||||||||||||
Total cash, cash equivalents and invested assets | $ | 58,694 | 100 | % | $ | 60,747 | 100 | % | ||||||||
131
(Amounts in millions) Fixed maturity securities: U.S. government, agencies and government-sponsored enterprises State and political subdivisions Non-U.S. government U.S. corporate: Utilities Energy Finance and insurance Consumer—non-cyclical Technology and communications Industrial Capital goods Consumer—cyclical Transportation Other Total U.S. corporate Non-U.S. corporate: Utilities Energy Finance and insurance Consumer—non-cyclical Technology and communications Industrial Capital goods Consumer—cyclical Transportation Other Total non-U.S. corporate Residential mortgage-backed Commercial mortgage-backed Other asset-backed Total available-for-sale fixed maturity securities March 31,September 30, 2023, the amortized cost or cost, gross unrealized gains (losses), allowance for credit losses and fair value of our fixed maturity securities classified as Amortized
cost or
cost Gross
unrealized
gains Gross
unrealized
losses Allowance
for credit
losses Fair
value $ 3,417 $ 141 $ (117 ) $ — $ 3,441 2,635 32 (264 ) — 2,403 711 15 (96 ) — 630 4,373 91 (375 ) — 4,089 2,431 46 (178 ) — 2,299 8,067 77 (784 ) (6 ) 7,354 4,733 132 (306 ) — 4,559 3,259 60 (281 ) — 3,038 1,329 21 (105 ) — 1,245 2,275 62 (142 ) — 2,195 1,777 25 (128 ) (3 ) 1,671 1,149 39 (76 ) — 1,112 321 5 (16 ) — 310 29,714 558 (2,391 ) (9 ) 27,872 812 — (66 ) — 746 1,018 27 (55 ) — 990 2,099 39 (179 ) — 1,959 654 4 (69 ) — 589 995 10 (83 ) — 922 898 16 (60 ) — 854 577 7 (47 ) — 537 242 1 (21 ) — 222 393 15 (24 ) — 384 885 22 (51 ) — 856 8,573 141 (655 ) — 8,059 1,030 12 (57 ) — 985 2,086 2 (251 ) (6 ) 1,831 2,295 2 (137 ) — 2,160 $ 50,461 $ 903 $ (3,968 ) $ (15 ) $ 47,381 132
cost or
cost
unrealized
gains
unrealized
losses
for credit
losses
value $ 3,498 $ 6 $ (392 ) $ — $ 3,112 2,566 5 (407 ) — 2,164 699 9 (125 ) — 583 4,454 13 (611 ) — 3,856 2,454 18 (265 ) — 2,207 7,920 22 (1,069 ) — 6,873 4,632 32 (538 ) — 4,126 3,212 26 (444 ) — 2,794 1,309 8 (168 ) — 1,149 2,255 19 (235 ) — 2,039 1,736 6 (194 ) — 1,548 1,181 16 (131 ) — 1,066 320 1 (23 ) — 298 29,473 161 (3,678 ) — 25,956 809 — (90 ) — 719 1,054 10 (86 ) — 978 2,045 22 (223 ) — 1,844 688 1 (107 ) — 582 974 1 (135 ) — 840 853 2 (86 ) — 769 593 1 (70 ) — 524 241 — (30 ) — 211 359 7 (32 ) — 334 819 3 (69 ) — 753 8,435 47 (928 ) — 7,554 974 1 (84 ) — 891 1,868 1 (360 ) (6 ) 1,503 2,342 1 (138 ) — 2,205 $ 49,855 $ 231 $ (6,112 ) $ (6 ) $ 43,968
(Amounts in millions) | Amortized cost or cost | Gross unrealized gains | Gross unrealized losses | Allowance for credit losses | Fair value | |||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,446 | $ | 86 | $ | (191 | ) | $ | — | $ | 3,341 | |||||||||
State and political subdivisions | 2,726 | 19 | (346 | ) | — | 2,399 | ||||||||||||||
Non-U.S. government | 731 | 15 | (101 | ) | — | 645 | ||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 4,295 | 50 | (447 | ) | — | 3,898 | ||||||||||||||
Energy | 2,450 | 33 | (221 | ) | — | 2,262 | ||||||||||||||
Finance and insurance | 8,005 | 59 | (871 | ) | — | 7,193 | ||||||||||||||
Consumer—non-cyclical | 4,776 | 84 | (403 | ) | — | 4,457 | ||||||||||||||
Technology and communications | 3,265 | 43 | (361 | ) | — | 2,947 | ||||||||||||||
Industrial | 1,312 | 15 | (130 | ) | — | 1,197 | ||||||||||||||
Capital goods | 2,290 | 41 | (193 | ) | — | 2,138 | ||||||||||||||
Consumer—cyclical | 1,758 | 14 | (155 | ) | — | 1,617 | ||||||||||||||
Transportation | 1,165 | 32 | (97 | ) | — | 1,100 | ||||||||||||||
Other | 325 | 3 | (18 | ) | — | 310 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total U.S. corporate | 29,641 | 374 | (2,896 | ) | — | 27,119 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 817 | — | (77 | ) | — | 740 | ||||||||||||||
Energy | 1,009 | 19 | (68 | ) | — | 960 | ||||||||||||||
Finance and insurance | 2,124 | 30 | (208 | ) | — | 1,946 | ||||||||||||||
Consumer—non-cyclical | 655 | 1 | (90 | ) | — | 566 | ||||||||||||||
Technology and communications | 997 | 4 | (107 | ) | — | 894 | ||||||||||||||
Industrial | 880 | 8 | (70 | ) | — | 818 | ||||||||||||||
Capital goods | 606 | 3 | (63 | ) | — | 546 | ||||||||||||||
Consumer—cyclical | 308 | — | (32 | ) | — | 276 | ||||||||||||||
Transportation | 392 | 12 | (29 | ) | — | 375 | ||||||||||||||
Other | 932 | 15 | (58 | ) | — | 889 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total non-U.S. corporate | 8,720 | 92 | (802 | ) | — | 8,010 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Residential mortgage-backed | 1,059 | 7 | (71 | ) | — | 995 | ||||||||||||||
Commercial mortgage-backed | 2,183 | 2 | (277 | ) | — | 1,908 | ||||||||||||||
Other asset-backed | 2,328 | 1 | (163 | ) | — | 2,166 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total available-for-sale fixed maturity securities | $ | 50,834 | $ | 596 | $ | (4,847 | ) | $ | — | $ | 46,583 | |||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in millions) | Amortized cost or cost | Gross unrealized gains | Gross unrealized losses | Allowance for credit losses | Fair value | |||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||
U.S. government, agencies and government-sponsored enterprises | $ | 3,446 | $ | 86 | $ | (191 | ) | $ | — | $ | 3,341 | |||||||||
State and political subdivisions | 2,726 | 19 | (346 | ) | — | 2,399 | ||||||||||||||
Non-U.S. government | 731 | 15 | (101 | ) | — | 645 | ||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 4,295 | 50 | (447 | ) | — | 3,898 | ||||||||||||||
Energy | 2,450 | 33 | (221 | ) | — | 2,262 | ||||||||||||||
Finance and insurance | 8,005 | 59 | (871 | ) | — | 7,193 | ||||||||||||||
Consumer—non-cyclical | 4,776 | 84 | (403 | ) | — | 4,457 | ||||||||||||||
Technology and communications | 3,265 | 43 | (361 | ) | — | 2,947 | ||||||||||||||
Industrial | 1,312 | 15 | (130 | ) | — | 1,197 | ||||||||||||||
Capital goods | 2,290 | 41 | (193 | ) | — | 2,138 | ||||||||||||||
Consumer—cyclical | 1,758 | 14 | (155 | ) | — | 1,617 | ||||||||||||||
Transportation | 1,165 | 32 | (97 | ) | — | 1,100 | ||||||||||||||
Other | 325 | 3 | (18 | ) | — | 310 | ||||||||||||||
Total U.S. corporate | 29,641 | 374 | (2,896 | ) | — | 27,119 | ||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 817 | — | (77 | ) | — | 740 | ||||||||||||||
Energy | 1,009 | 19 | (68 | ) | — | 960 | ||||||||||||||
Finance and insurance | 2,124 | 30 | (208 | ) | — | 1,946 | ||||||||||||||
Consumer—non-cyclical | 655 | 1 | (90 | ) | — | 566 | ||||||||||||||
Technology and communications | 997 | 4 | (107 | ) | — | 894 | ||||||||||||||
Industrial | 880 | 8 | (70 | ) | — | 818 | ||||||||||||||
Capital goods | 606 | 3 | (63 | ) | — | 546 | ||||||||||||||
Consumer—cyclical | 308 | — | (32 | ) | — | 276 | ||||||||||||||
Transportation | 392 | 12 | (29 | ) | — | 375 | ||||||||||||||
Other | 932 | 15 | (58 | ) | — | 889 | ||||||||||||||
Total non-U.S. corporate | 8,720 | 92 | (802 | ) | — | 8,010 | ||||||||||||||
Residential mortgage-backed | 1,059 | 7 | (71 | ) | — | 995 | ||||||||||||||
Commercial mortgage-backed | 2,183 | 2 | (277 | ) | — | 1,908 | ||||||||||||||
Other asset-backed | 2,328 | 1 | (163 | ) | — | 2,166 | ||||||||||||||
Total available-for-sale | $ | 50,834 | $ | 596 | $ | (4,847 | ) | $ | — | $ | 46,583 | |||||||||
133
(Amounts in millions) Bank loan investments Derivatives Short-term investments Other investments Total other invested assets (Notional in millions) Derivatives designated as hedges Cash flow hedges: Interest rate swaps Foreign currency swaps Total cash flow hedges Total derivatives designated as hedges Derivatives not designated as hedges Equity index options Financial futures Total derivatives not designated as hedges Total derivatives (Number of policies) Derivatives not designated as hedges Fixed index annuity embedded derivatives Indexed universal life embedded derivatives March 31, 2023 December 31, 2022 Carrying value % of total Carrying value % of total $ 495 81 % $ 467 82 % 69 11 50 9 7 1 3 1 46 7 46 8 $ 617 100 % $ 566 100 % $ 530 82 % $ 467 82 % 38 6 50 9 30 5 3 1 47 7 46 8 $ 645 100 % $ 566 100 % repaymentspayments. Short-term investments increased from net purchases in the current year. increased largely from a decrease in interest rates in the current year.Derivativesindexindexed annuity and indexed universal life embedded derivatives, the change between periods is best illustrated by the number of policies. The following tables represent activity associated with derivative instruments as of the dates indicated: Measurement December 31,
2022 Additions Maturities/
terminations March 31,
2023 Notional $ 8,542 $ 669 $ (42 ) $ 9,169 Notional 144 — (13 ) 131 8,686 669 (55 ) 9,300 8,686 669 (55 ) 9,300 Notional 936 194 (277 ) 853 Notional 1,403 1,478 (1,445 ) 1,436 2,339 1,672 (1,722 ) 2,289 $ 11,025 $ 2,341 $ (1,777 ) $ 11,589 Measurement December 31,
2022 Additions Maturities/
terminations March 31,
2023 Policies 7,315 — (504 ) 6,811 Policies 771 — (6 ) 765
2022
terminations
2023 Notional $ 8,542 $ 1,200 $ (261 ) $ 9,481 Notional 144 — (13 ) 131 Notional — 75 — 75 8,686 1,275 (274 ) 9,687 8,686 1,275 (274 ) 9,687 Notional 936 513 (682 ) 767 Notional 1,403 4,216 (4,351 ) 1,268 Notional — 500 — 500 2,339 5,229 (5,033 ) 2,535 $ 11,025 $ 6,504 $ (5,307 ) $ 12,222
2022
terminations
2023 Policies 7,315 — (1,177 ) 6,138 Policies 771 — (22 ) 749
134
Cash, cash equivalents and invested
135
(Amounts in millions) | 2023 | 2022 | ||||||
Net cash from (used by) operating activities | $ | 17 | $ | (92 | ) | |||
Net cash from investing activities | 364 | 138 | ||||||
Net cash used by financing activities | (428 | ) | (326 | ) | ||||
|
|
|
| |||||
Net decrease in cash and cash equivalents | $ | (47 | ) | $ | (280 | ) | ||
|
|
|
|
September 30:
(Amounts in millions) | 2023 | 2022 | ||||||
Net cash from operating activities | $ | 450 | $ | 645 | ||||
Net cash from investing activities | 913 | 452 | ||||||
Net cash used by financing activities | (1,170 | ) | (1,107 | ) | ||||
Net increase (decrease) in cash and cash equivalents before foreign exchange effect | $ | 193 | $ | (10 | ) | |||
prior year.
136
Genworth Financial’s and Genworth Holdings’ principal sources of cash are derived from dividends from their respective subsidiaries, subsidiary payments to them under tax sharing and expense reimbursement arrangements and proceeds from borrowings or securities issuances. Our liquidity at the holding company level is highly dependent on the performance of Enact Holdings and its ability to pay timely dividends and other forms of capital returns to Genworth Holdings as anticipated. Although the business performance and financial resultsAs of December 31, 2022, our principal U.S. life insurance subsidiaries have improved significantly, as of December 31, 2022, they had negative unassigned surplus of approximately $849 million under statutory accounting, and as a result, we do not expect these subsidiaries to pay dividends for the foreseeable future. Genworth Financial has the right to appoint a majority of directors to the board of directors of Enact Holdings; however, actions taken by Enact Holdings and its board of directors (including in the case of the payment of dividends to us, the approval of Enact Holdings’ independent capital committee) are subject to and may be limited by the interests of Enact Holdings, including but not limited to, its use of capital for growth opportunities and regulatory requirements. In addition, insurance laws and regulations regulate the payment of dividends and other distributions to Genworth Financial and Genworth Holdings by their insurance subsidiaries.
137
provide sufficient liquidity to meet its financial obligations over the next twelve months. However, in the third quarter of 2023, we anticipate payingmade a federal taxes starting in 2023 or 2024 due to projectedtax payment based on our projection of current taxable income and the utilization of our remaining foreign tax credits; therefore,credits, and we expect the amount of intercompany cash tax payments retained by Genworth Holdings from its subsidiaries to be lower starting in 2023 or 2024 as compared to the amounts received during 2022.2022 and 2023. We also expect Genworth Holdings’ liquidity to be significantly impacted by the amounts and timing of future dividends and other forms of capital returns from Enact Holdings, which will be influenced by economic, regulatory factors and other conditions that affect its business.
Future dividends will be subject to quarterly
year.
138
In December 2022, the Board of Governors of the Federal Reserve System adopted a final rule that became effective on February 27, 2023. The final rule establishesestablished benchmark rates, based on SOFR, that replacereplaced LIBOR after its elimination on June 30, 2023. Pursuant to the final rule, Genworth Holdings’ floating rate junior subordinated notes due in 2066 Notes, which currently havehad an annual interest rate equal to three-month LIBOR plus 2.0025%, will transition subsequent totransitioned in the secondthird quarter of 2023 to an annual interest rate equal to the three-month Term SOFR Reference Rate, plus a tenor spread adjustment of 0.26161%, plus an additional spread of 2.0025%.
We do not expect this change to have a material impact on our results of operations or liquidity.
139
140
Second Quarter 2023 Form 10-Q.
141
Financial Condition and Results of Operations—Significant Developments and Strategic Highlights.”
(Dollar amounts in millions, except share amounts) | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced program | Approximate dollar amount of shares that may yet be purchased under the program (1) | ||||||||||||
January 1, 2023 through January 31, 2023 | — | $ | — | — | $ | 286 | ||||||||||
February 1, 2023 through February 28, 2023 | 6,047,437 | $ | 6.09 | 6,047,437 | $ | 249 | ||||||||||
March 1, 2023 through March 31, 2023 | 5,177,411 | $ | 6.06 | 5,177,411 | $ | 218 | ||||||||||
|
|
|
| |||||||||||||
Total | 11,224,848 | 11,224,848 | ||||||||||||||
|
|
|
|
(Dollar amounts in millions, except share amounts) | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced program | Approximate dollar amount of shares that may yet be purchased under the program (1) | ||||||||||||
July 1, 2023 through July 31, 2023 | 3,703,015 | $ | 5.40 | 3,703,015 | $ | 436 | ||||||||||
August 1, 2023 through August 31, 2023 | 4,424,891 | $ | 5.79 | 4,424,891 | $ | 410 | ||||||||||
September 1, 2023 through September 30, 2023 | 5,939,872 | $ | 5.79 | 5,939,872 | $ | 376 | ||||||||||
Total | 14,067,778 | 14,067,778 | ||||||||||||||
(1) | On May 2, 2022, Genworth Financial’s Board of Directors authorized a share repurchase program under which Genworth Financial may repurchase up to $350 million of its outstanding Class A common stock. On July 31, 2023, Genworth Financial’s Board of Directors authorized an additional $350 million of share repurchases under the existing program. Under the program, share repurchases may be made at Genworth’s discretion from time to time in open market transactions, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The timing and number of shares repurchased under the program will depend on a variety of factors, including Genworth Financial’s stock price and trading volume, and general business and market conditions, among other factors. The authorization has no expiration date and may be modified, suspended or terminated at any time. For additional information on the share repurchase program, see “Part I—Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” |
142
|
143
(Registrant) | ||||||||
Date: | GENWORTH FINANCIAL, INC. (Registrant) | |||||||
By: | /s/ | |||||||
Cristina E. Ahn Vice President and Controller ( and |
144