☒ | 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) | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of each exchange on which registered | ||
Class A Common Stock, par value $.001 per share | GNW | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
TABLE OF CONTENTS
Page | |||||||||
PART I—FINANCIAL INFORMATION | |||||||||
Item 1. | : | ||||||||
Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023 | 3 | ||||||||
4 | |||||||||
5 | |||||||||
6 | |||||||||
7 | |||||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 8 | ||||||||
8 | |||||||||
| 9 | ||||||||
10 | |||||||||
11 | |||||||||
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29 | |||||||||
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60 | |||||||||
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65 | |||||||||
Note 17 — Changes in Accumulated Other Comprehensive Income (Loss) | 70 | ||||||||
Item 2. | |||||||||
Item 3. | |||||||||
Item 4. | |||||||||
PART II—OTHER INFORMATION | |||||||||
Item 1. | |||||||||
Item 1A. | |||||||||
Item 2. | |||||||||
Item 5. | |||||||||
Item 6. | |||||||||
Signatures |
2
Item 1. |
September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | |||||||||||||
(As adjusted) | (Unaudited) | |||||||||||||||
Assets | ||||||||||||||||
Investments: | ||||||||||||||||
Fixed maturity securities available-for-sale, | $ | 43,968 | $ | 46,583 | ||||||||||||
Fixed maturity securities available-for-sale, at fair value (amortized cost of $49,281 and $49,365, respectively, and allowance for credit losses of $7 as of March 31, 2024 and December 31, 2023) | $ | 46,065 | $ | 46,781 | ||||||||||||
Equity securities, at fair value | 363 | 319 | 427 | 396 | ||||||||||||
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 | ||||||||||||||
Commercial mortgage loans (net of unamortized balance of loan origination fees and costs of $4 as of March 31, 2024 and December 31, 2023) | 6,748 | 6,829 | ||||||||||||||
Less: Allowance for credit losses | (25 | ) | (22 | ) | (29 | ) | (27 | ) | ||||||||
Commercial mortgage loans, net | 6,793 | 7,010 | 6,719 | 6,802 | ||||||||||||
Policy loans | 2,233 | 2,139 | 2,219 | 2,220 | ||||||||||||
Limited partnerships | 2,699 | 2,331 | 2,949 | 2,821 | ||||||||||||
Other invested assets | 645 | 566 | 683 | 731 | ||||||||||||
Total investments | 56,701 | 58,948 | 59,062 | 59,751 | ||||||||||||
Cash, cash equivalents and restricted cash | 1,993 | 1,799 | 1,952 | 2,215 | ||||||||||||
Accrued investment income | 620 | 643 | 707 | 647 | ||||||||||||
Deferred acquisition costs | 2,042 | 2,211 | 1,934 | 1,988 | ||||||||||||
Intangible assets | 199 | 203 | 197 | 198 | ||||||||||||
Reinsurance recoverable | 17,623 | 19,059 | 18,315 | 19,054 | ||||||||||||
Less: Allowance for credit losses | (28 | ) | (63 | ) | (27 | ) | (29 | ) | ||||||||
Reinsurance recoverable, net | 17,595 | 18,996 | 18,288 | 19,025 | ||||||||||||
Other assets | 453 | 488 | 516 | 489 | ||||||||||||
Deferred tax asset | 1,580 | 1,983 | 1,839 | 1,952 | ||||||||||||
Market risk benefit assets | 39 | 26 | 52 | 43 | ||||||||||||
Separate account assets | 4,244 | 4,417 | 4,645 | 4,509 | ||||||||||||
Total assets | $ | 85,466 | $ | 89,714 | $ | 89,192 | $ | 90,817 | ||||||||
Liabilities and equity | ||||||||||||||||
Liabilities: | ||||||||||||||||
Future policy benefits | $ | 51,740 | $ | 55,407 | $ | 55,545 | $ | 57,655 | ||||||||
Policyholder account balances | 15,590 | 16,564 | 15,315 | 15,540 | ||||||||||||
Market risk benefit liabilities | 579 | 748 | 528 | 625 | ||||||||||||
Liability for policy and contract claims | 631 | 683 | 673 | 652 | ||||||||||||
Unearned premiums | 162 | 203 | 139 | 149 | ||||||||||||
Other liabilities | 2,038 | 1,687 | 1,889 | 1,768 | ||||||||||||
Long-term borrowings | 1,602 | 1,611 | 1,579 | 1,584 | ||||||||||||
Separate account liabilities | 4,244 | 4,417 | 4,645 | 4,509 | ||||||||||||
Liabilities related to discontinued operations | 2 | 8 | ||||||||||||||
Total liabilities | 76,588 | 81,328 | 80,313 | 82,482 | ||||||||||||
Commitments and contingencies (Note 19) | ||||||||||||||||
Commitments and contingencies (Note 16) | ||||||||||||||||
Equity: | ||||||||||||||||
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 | ||||||||||||||
Class A common stock, $0.001 par value; 1,500,000,000 shares authorized; 606,168,754 and 603,151,611 shares issued as of March 31, 2024 and December 31, 2023, respectively; 439,599,677 and 446,823,204 shares outstanding as of March 31, 2024 and December 31, 2023, respectively | 1 | 1 | ||||||||||||||
Additional paid-in capital | 11,877 | 11,869 | 11,873 | 11,884 | ||||||||||||
Accumulated other comprehensive income (loss) | (2,220 | ) | (2,614 | ) | (2,094 | ) | (2,555 | ) | ||||||||
Retained earnings | 1,426 | 1,139 | 1,352 | 1,213 | ||||||||||||
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 | ) | ||||||||||||
Treasury stock, at cost (166,569,077 and 156,328,407 shares as of March 31, 2024 and December 31, 2023, respectively) | (3,126 | ) | (3,063 | ) | ||||||||||||
Total Genworth Financial, Inc.’s stockholders’ equity | 8,056 | 7,631 | 8,006 | 7,480 | ||||||||||||
Noncontrolling interests | 822 | 755 | 873 | 855 | ||||||||||||
Total equity | 8,878 | 8,386 | 8,879 | 8,335 | ||||||||||||
Total liabilities and equity | $ | 85,466 | $ | 89,714 | $ | 89,192 | $ | 90,817 | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | Three months ended March 31, | ||||||||||||||||||||
(As Adjusted) | (As Adjusted) | 2024 | 2023 | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Premiums | $ | 915 | $ | 929 | $ | 2,732 | $ | 2,762 | $ | 875 | $ | 915 | ||||||||||||
Net investment income | 801 | 808 | 2,373 | 2,359 | 782 | 787 | ||||||||||||||||||
Net investment gains (losses) | (43 | ) | (58 | ) | (15 | ) | 3 | 49 | (11 | ) | ||||||||||||||
Policy fees and other income | 158 | 169 | 487 | 504 | 158 | 163 | ||||||||||||||||||
Total revenues | 1,831 | 1,848 | 5,577 | 5,628 | 1,864 | 1,854 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Benefits and other changes in policy reserves | 1,199 | 1,159 | 3,550 | 3,094 | 1,203 | 1,176 | ||||||||||||||||||
Liability remeasurement (gains) losses | 116 | 17 | 171 | (23 | ) | (8 | ) | (15 | ) | |||||||||||||||
Changes in fair value of market risk benefits and associated hedges | (24 | ) | (27 | ) | (26 | ) | (48 | ) | (23 | ) | 17 | |||||||||||||
Interest credited | 127 | 128 | 379 | 379 | 125 | 126 | ||||||||||||||||||
Acquisition and operating expenses, net of deferrals | 228 | 245 | 694 | 1,060 | 236 | 240 | ||||||||||||||||||
Amortization of deferred acquisition costs and intangibles | 65 | 80 | 201 | 252 | 65 | 72 | ||||||||||||||||||
Interest expense | 30 | 26 | 88 | 78 | 30 | 29 | ||||||||||||||||||
Total benefits and expenses | 1,741 | 1,628 | 5,057 | 4,792 | 1,628 | 1,645 | ||||||||||||||||||
Income from continuing operations before income taxes | 90 | 220 | 520 | 836 | 236 | 209 | ||||||||||||||||||
Provision for income taxes | 30 | 54 | 140 | 200 | 66 | 55 | ||||||||||||||||||
Income from continuing operations | 60 | 166 | 380 | 636 | 170 | 154 | ||||||||||||||||||
Income from discontinued operations, net of taxes | — | 5 | 2 | 2 | ||||||||||||||||||||
Loss from discontinued operations, net of taxes | (1 | ) | — | |||||||||||||||||||||
Net income | 60 | 171 | 382 | 638 | 169 | 154 | ||||||||||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | 94 | 103 | ||||||||||||||||||||
Less: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | ||||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 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 | $ | 29 | $ | 131 | $ | 286 | $ | 533 | ||||||||||||||||
Income from discontinued operations available to Genworth Financial, Inc.’s common stockholders | — | 5 | 2 | 2 | ||||||||||||||||||||
Less: net income attributable to noncontrolling interests | 30 | 32 | ||||||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 136 | $ | 288 | $ | 535 | $ | 139 | $ | 122 | ||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.26 | $ | 0.60 | $ | 1.05 | $ | 0.32 | $ | 0.25 | ||||||||||||
Diluted | $ | 0.06 | $ | 0.26 | $ | 0.59 | $ | 1.04 | $ | 0.31 | $ | 0.24 | ||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.27 | $ | 0.61 | $ | 1.05 | $ | 0.31 | $ | 0.25 | ||||||||||||
Diluted | $ | 0.06 | $ | 0.27 | $ | 0.60 | $ | 1.04 | $ | 0.31 | $ | 0.24 | ||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||||||
Basic | 460.5 | 503.8 | 475.3 | 507.0 | 443.0 | 492.3 | ||||||||||||||||||
Diluted | 466.0 | 509.3 | 481.4 | 513.6 | 450.3 | 500.1 | ||||||||||||||||||
Three months ended March 31, | ||||||||
2024 | 2023 | |||||||
Net income | $ | 169 | $ | 154 | ||||
Other comprehensive income (loss), net of taxes: | ||||||||
Net unrealized gains (losses) on securities without an allowance for credit losses | (486 | ) | 925 | |||||
Net unrealized gains (losses) on securities with an allowance for credit losses | — | (6 | ) | |||||
Derivatives qualifying as hedges | (161 | ) | 74 | |||||
Change in the discount rate used to measure future policy benefits | 1,105 | (1,225 | ) | |||||
Change in instrument-specific credit risk of market risk benefits | 2 | 1 | ||||||
Foreign currency translation and other adjustments | — | 4 | ||||||
Total other comprehensive income (loss) | 460 | (227 | ) | |||||
Total comprehensive income (loss) | 629 | (73 | ) | |||||
Less: comprehensive income attributable to noncontrolling interests | 29 | 44 | ||||||
Total comprehensive income (loss) available to Genworth Financial, Inc.’s common stockholders | $ | 600 | $ | (117 | ) | |||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(As adjusted) | (As adjusted) | |||||||||||||||
Net income | $ | 60 | $ | 171 | $ | 382 | $ | 638 | ||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||||
Net unrealized gains (losses) on securities without an allowance for credit losses | (1,732 | ) | (2,517 | ) | (1,374 | ) | (10,181 | ) | ||||||||
Net unrealized gains (losses) on securities with an allowance for credit losses | — | — | — | — | ||||||||||||
Derivatives qualifying as hedges | (427 | ) | (135 | ) | (473 | ) | (715 | ) | ||||||||
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 | 3 | 1 | 4 | 4 | ||||||||||||
Foreign currency translation and other adjustments | (3 | ) | — | 5 | (12 | ) | ||||||||||
Total other comprehensive income (loss) | 631 | 631 | 391 | 3,129 | ||||||||||||
Total comprehensive income | 691 | 802 | 773 | 3,767 | ||||||||||||
Less: comprehensive income attributable to noncontrolling interests | 21 | 10 | 91 | 9 | ||||||||||||
Total comprehensive income available to Genworth Financial, Inc.’s common stockholders | $ | 670 | $ | 792 | $ | 682 | $ | 3,758 | ||||||||
Three months ended March 31, 2024 | ||||||||||||||||||||||||||||||||
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, 2023 | $ | 1 | $ | 11,884 | $ | (2,555 | ) | $ | 1,213 | $ | (3,063 | ) | $ | 7,480 | $ | 855 | $ | 8,335 | ||||||||||||||
Repurchase of subsidiary shares | — | — | — | — | — | — | (9 | ) | (9 | ) | ||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 139 | — | 139 | 30 | 169 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | 461 | — | — | 461 | (1 | ) | 460 | |||||||||||||||||||||||
Total comprehensive income | 600 | 29 | 629 | |||||||||||||||||||||||||||||
Treasury stock acquired in connection with share repurchases | — | — | — | — | (63 | ) | (63 | ) | — | (63 | ) | |||||||||||||||||||||
Dividends to noncontrolling interests | — | — | — | — | — | — | (5 | ) | (5 | ) | ||||||||||||||||||||||
Stock-based compensation expense and exercises and other | — | (11 | ) | — | — | — | (11 | ) | 3 | (8 | ) | |||||||||||||||||||||
Balances as of March 31, 2024 | $ | 1 | $ | 11,873 | $ | (2,094 | ) | $ | 1,352 | $ | (3,126 | ) | $ | 8,006 | $ | 873 | $ | 8,879 | ||||||||||||||
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 | $ | 1 | $ | 11,869 | $ | (2,614 | ) | $ | 1,139 | $ | (2,764 | ) | $ | 7,631 | $ | 755 | $ | 8,386 | ||||||||||||||
Repurchase of subsidiary shares | — | — | — | — | — | — | (4 | ) | (4 | ) | ||||||||||||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 122 | — | 122 | 32 | 154 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of taxes | — | — | (239 | ) | — | — | (239 | ) | 12 | (227 | ) | |||||||||||||||||||||
Total comprehensive income (loss) | (117 | ) | 44 | (73 | ) | |||||||||||||||||||||||||||
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 | $ | (2,853 | ) | $ | 1,261 | $ | (2,833 | ) | $ | 7,439 | $ | 793 | $ | 8,232 | ||||||||||||||
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 | ||||||||||||||
Nine months ended September 30, | ||||||||||||||||
2023 | 2022 | Three months ended March 31, | ||||||||||||||
(As adjusted) | 2024 | 2023 | ||||||||||||||
Cash flows from (used by) operating activities: | ||||||||||||||||
Net income | $ | 382 | $ | 638 | $ | 169 | $ | 154 | ||||||||
Less income from discontinued operations, net of taxes | (2 | ) | (2 | ) | ||||||||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||||
Less loss from discontinued operations, net of taxes | 1 | — | ||||||||||||||
Adjustments to reconcile net income to net cash from (used by) operating activities: | ||||||||||||||||
Amortization of fixed maturity securities discounts and premiums | (84 | ) | (127 | ) | (23 | ) | (25 | ) | ||||||||
Net investment (gains) losses | 15 | (3 | ) | (49 | ) | 11 | ||||||||||
Changes in fair value of market risk benefits and associated hedges | (26 | ) | (48 | ) | (23 | ) | 17 | |||||||||
Charges assessed to policyholders | (430 | ) | (438 | ) | (139 | ) | (144 | ) | ||||||||
Acquisition costs deferred | (6 | ) | (10 | ) | ||||||||||||
Amortization of deferred acquisition costs and intangibles | 201 | 252 | 65 | 72 | ||||||||||||
Deferred income taxes | 135 | 200 | (1 | ) | 53 | |||||||||||
Derivative instruments, limited partnerships and other | (378 | ) | (250 | ) | (138 | ) | (84 | ) | ||||||||
Stock-based compensation expense | 37 | 29 | ||||||||||||||
Long-term incentive compensation expense | 14 | 15 | ||||||||||||||
Change in certain assets and liabilities: | ||||||||||||||||
Accrued investment income and other assets | (124 | ) | (105 | ) | (68 | ) | (73 | ) | ||||||||
Insurance reserves | 903 | 995 | 140 | 191 | ||||||||||||
Current tax liabilities | (5 | ) | (4 | ) | 67 | 2 | ||||||||||
Other liabilities, policy and contract claims and other policy-related balances | (166 | ) | (451 | ) | (122 | ) | (171 | ) | ||||||||
Cash used by operating activities—discontinued operations | (2 | ) | (31 | ) | — | (1 | ) | |||||||||
Net cash from operating activities | 450 | 645 | ||||||||||||||
Net cash from (used by) operating activities | (107 | ) | 17 | |||||||||||||
Cash flows from (used by) investing activities: | ||||||||||||||||
Proceeds from maturities and repayments of investments: | ||||||||||||||||
Fixed maturity securities | 1,676 | 2,154 | 649 | 613 | ||||||||||||
Commercial mortgage loans | 386 | 514 | 127 | 154 | ||||||||||||
Limited partnerships and other invested assets | 102 | 146 | 59 | 31 | ||||||||||||
Proceeds from sales of investments: | ||||||||||||||||
Fixed maturity and equity securities | 1,533 | 2,061 | 635 | 441 | ||||||||||||
Purchases and originations of investments: | ||||||||||||||||
Fixed maturity and equity securities | (2,187 | ) | (3,222 | ) | (1,157 | ) | (685 | ) | ||||||||
Commercial mortgage loans | (178 | ) | (765 | ) | (45 | ) | (37 | ) | ||||||||
Limited partnerships and other invested assets | (432 | ) | (491 | ) | (125 | ) | (164 | ) | ||||||||
Short-term investments, net | (15 | ) | 24 | 17 | 1 | |||||||||||
Policy loans, net | 66 | 31 | — | 10 | ||||||||||||
Other | (38 | ) | — | (17 | ) | — | ||||||||||
Net cash from investing activities | 913 | 452 | 143 | 364 | ||||||||||||
Cash flows from (used by) financing activities: | ||||||||||||||||
Deposits to universal life and investment contracts | 437 | 466 | 133 | 148 | ||||||||||||
Withdrawals from universal life and investment contracts | (1,308 | ) | (1,190 | ) | (317 | ) | (491 | ) | ||||||||
Repayment and repurchase of long-term debt | (11 | ) | (284 | ) | (6 | ) | (11 | ) | ||||||||
Repurchase of subsidiary shares | (13 | ) | — | (9 | ) | (4 | ) | |||||||||
Treasury stock acquired in connection with share repurchases | (261 | ) | (34 | ) | (63 | ) | (68 | ) | ||||||||
Dividends paid to noncontrolling interests | (14 | ) | (8 | ) | (5 | ) | (4 | ) | ||||||||
Other, net | — | (57 | ) | (32 | ) | 2 | ||||||||||
Net cash used by financing activities | (1,170 | ) | (1,107 | ) | (299 | ) | (428 | ) | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1 | — | ||||||||||||||
Net change in cash, cash equivalents and restricted cash | 194 | (10 | ) | (263 | ) | (47 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,799 | 1,571 | 2,215 | 1,799 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | 1,993 | 1,561 | $ | 1,952 | $ | 1,752 | ||||||||||
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 | $ | 1,993 | $ | 1,561 | ||||||||||||
(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 |
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 |
(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 |
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 | (27,437 | ) | (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 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 | 24,253 | 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 | ||||||||
(Amounts in millions) | Fixed indexed annuities | Variable annuities | Total | |||||||||
Balances as of December 31, 2020 | $ | 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 | |||||||||
Adjustment for the cumulative effect of changes in the instrument-specific credit risk since issuance | 5 | 19 | 24 | |||||||||
Total adjustment for the difference between carrying amount and fair value | 44 | 603 | 647 | |||||||||
Adjusted balances as of January 1, 2021 | 115 | 1,173 | 1,288 | |||||||||
Less: reinsurance recoverable | — | 244 | 244 | |||||||||
Adjusted balances as of January 1, 2021, net of reinsurance | $ | 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) | 2024 | 2023 | ||||||
Weighted-average common shares used in basic earnings per share calculations | 443.0 | 492.3 | ||||||
Potentially dilutive securities: | ||||||||
Performance stock units, restricted stock units and other equity-based awards | 7.3 | 7.8 | ||||||
Weighted-average common shares used in diluted earnings per share calculations | 450.3 | 500.1 | ||||||
Income from continuing operations: | ||||||||
Income from continuing operations | $ | 170 | $ | 154 | ||||
Less: net income from continuing operations attributable to noncontrolling interests | 30 | 32 | ||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | $ | 140 | $ | 122 | ||||
Basic per share | $ | 0.32 | $ | 0.25 | ||||
Diluted per share | $ | 0.31 | $ | 0.24 | ||||
Loss from discontinued operations: | ||||||||
Loss from discontinued operations, net of taxes | $ | (1 | ) | $ | — | |||
Basic per share | $ | — | $ | — | ||||
Diluted per share | $ | — | $ | — | ||||
Net income: | ||||||||
Income from continuing operations | $ | 170 | $ | 154 | ||||
Loss from discontinued operations, net of taxes | (1 | ) | — | |||||
Net income | 169 | 154 | ||||||
Less: net income attributable to noncontrolling interests | 30 | 32 | ||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 139 | $ | 122 | ||||
Basic per share (1) | $ | 0.31 | $ | 0.25 | ||||
Diluted per share | $ | 0.31 | $ | 0.24 | ||||
(1) | May not total due to whole number calculation. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Fixed maturity securities—taxable | $ | 559 | $ | 576 | $ | 1,687 | $ | 1,734 | ||||||||
Fixed maturity securities—non-taxable | 1 | 2 | 3 | 4 | ||||||||||||
Equity securities | 1 | 3 | 6 | 7 | ||||||||||||
Commercial mortgage loans | 76 | 81 | 227 | 240 | ||||||||||||
Policy loans | 58 | 55 | 167 | 156 | ||||||||||||
Limited partnerships | 31 | 38 | 76 | 77 | ||||||||||||
Other invested assets | 69 | 67 | 207 | 196 | ||||||||||||
Cash, cash equivalents, restricted cash and short-term investments | 28 | 7 | 68 | 8 | ||||||||||||
Gross investment income before expenses and fees | 823 | 829 | 2,441 | 2,422 | ||||||||||||
Expenses and fees | (22 | ) | (21 | ) | (68 | ) | (63 | ) | ||||||||
Net investment income | $ | 801 | $ | 808 | $ | 2,373 | $ | 2,359 | ||||||||
Three months ended March 31, | ||||||||
(Amounts in millions) | 2024 | 2023 | ||||||
Fixed maturity securities—taxable | $ | 554 | $ | 561 | ||||
Fixed maturity securities—non-taxable | 1 | 1 | ||||||
Equity securities | 2 | 2 | ||||||
Commercial mortgage loans | 75 | 76 | ||||||
Policy loans | 58 | 55 | ||||||
Limited partnerships | 20 | 28 | ||||||
Other invested assets | 68 | 68 | ||||||
Cash, cash equivalents, restricted cash and short-term investments | 27 | 18 | ||||||
Gross investment income before expenses and fees | 805 | 809 | ||||||
Expenses and fees | (23 | ) | (22 | ) | ||||
Net investment income | $ | 782 | $ | 787 | ||||
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 | |||||
Three months ended March 31, | ||||||||
(Amounts in millions) | 2024 | 2023 | ||||||
Realized investment gains (losses): | ||||||||
Available-for-sale fixed maturity securities: | ||||||||
Realized gains | $ | 7 | $ | 3 | ||||
Realized losses | (29 | ) | (19 | ) | ||||
Net realized gains (losses) on available-for-sale fixed maturity securities | (22 | ) | (16 | ) | ||||
Net realized gains (losses) on equity securities sold | — | — | ||||||
Total net realized investment gains (losses) | (22 | ) | (16 | ) | ||||
Net change in allowance for credit losses on available-for-sale fixed maturity securities | — | (15 | ) | |||||
Net unrealized gains (losses) on equity securities still held | 32 | 11 | ||||||
Net unrealized gains (losses) on limited partnerships | 43 | — | ||||||
Commercial mortgage loans | (2 | ) | (2 | ) | ||||
Derivative instruments (1) | 1 | 12 | ||||||
Other | (3 | ) | (1 | ) | ||||
Net investment gains (losses) | $ | 49 | $ | (11 | ) | |||
(1) |
See note |
(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 | 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 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | $ | 7 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total available-for-sale | $ | 4 | $ | 1 | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | 6 | $ | 7 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 7 | ||||||||||||||||||||||||||||||||
(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) | 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 fixed maturity securities | $ | — | $ | 15 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 15 | ||||||||||||||||
(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 | ) | ||
(Amounts in millions) | March 31, 2024 | December 31, 2023 | ||||||
Net unrealized gains (losses) on fixed maturity securities without an allowance for credit losses | $ | (3,209 | ) | $ | (2,577 | ) | ||
Net unrealized gains (losses) on fixed maturity securities with an allowance for credit losses | — | — | ||||||
Adjustments to policyholder contract balances | 66 | 52 | ||||||
Income taxes, net | 484 | 352 | ||||||
Net unrealized investment gains (losses) | (2,659 | ) | (2,173 | ) | ||||
Less: net unrealized investment gains (losses) attributable to noncontrolling interests | (44 | ) | (43 | ) | ||||
Net unrealized investment gains (losses) attributable to Genworth Financial, Inc. | $ | (2,615 | ) | $ | (2,130 | ) | ||
(Amounts in millions) | 2024 | 2023 | ||||||
Beginning balance | $ | (2,130 | ) | $ | (3,407 | ) | ||
Unrealized gains (losses) arising during the period: | ||||||||
Unrealized gains (losses) on fixed maturity securities | (654 | ) | 1,170 | |||||
Adjustments to policyholder contract balances (1) | 14 | (19 | ) | |||||
Provision for income taxes | 137 | (245 | ) | |||||
Change in unrealized gains (losses) on investment securities | (503 | ) | 906 | |||||
Reclassification adjustments to net investment (gains) losses, net of taxes of $(5) and $(3) | 17 | 13 | ||||||
Change in net unrealized investment gains (losses) | (486 | ) | 919 | |||||
Less: change in net unrealized investment gains (losses) attributable to noncontrolling interests | (1 | ) | 12 | |||||
Ending balance | $ | (2,615 | ) | $ | (2,500 | ) | ||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Beginning balance | $ | (3,056 | ) | $ | (1,518 | ) | $ | (3,407 | ) | $ | 6,077 | |||||
Unrealized gains (losses) arising during the period: | ||||||||||||||||
Unrealized gains (losses) on fixed maturity securities | (2,102 | ) | (3,098 | ) | (1,687 | ) | (12,941 | ) | ||||||||
Adjustments to policyholder contract balances | 42 | 52 | 36 | 212 | ||||||||||||
Provision for income taxes | 319 | 508 | 232 | 2,517 | ||||||||||||
Change in unrealized gains (losses) on investment securities | (1,741 | ) | (2,538 | ) | (1,419 | ) | (10,212 | ) | ||||||||
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) | (1,732 | ) | (2,517 | ) | (1,374 | ) | (10,181 | ) | ||||||||
Less: change in net unrealized investment gains (losses) attributable to noncontrolling interests | (10 | ) | (25 | ) | (3 | ) | (94 | ) | ||||||||
Ending balance | $ | (4,778 | ) | $ | (4,010 | ) | $ | (4,778 | ) | $ | (4,010 | ) | ||||
(1) | See note 10 for additional information. |
(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 | $ | 3,648 | $ | 67 | $ | (255 | ) | $ | — | $ | 3,460 | |||||||||
State and political subdivisions | 2,517 | 16 | (267 | ) | — | 2,266 | ||||||||||||||
Non-U.S. government | 701 | 13 | (101 | ) | — | 613 | ||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 4,609 | 68 | (400 | ) | — | 4,277 | ||||||||||||||
Energy | 2,468 | 55 | (153 | ) | — | 2,370 | ||||||||||||||
Finance and insurance | 7,776 | 76 | (685 | ) | — | 7,167 | ||||||||||||||
Consumer—non-cyclical | 4,740 | 90 | (324 | ) | — | 4,506 | ||||||||||||||
Technology and communications | 3,062 | 58 | (277 | ) | — | 2,843 | ||||||||||||||
Industrial | 1,240 | 18 | (98 | ) | — | 1,160 | ||||||||||||||
Capital goods | 2,238 | 48 | (142 | ) | — | 2,144 | ||||||||||||||
Consumer—cyclical | 1,695 | 19 | (111 | ) | — | 1,603 | ||||||||||||||
Transportation | 1,126 | 33 | (79 | ) | — | 1,080 | ||||||||||||||
Other | 299 | 2 | (14 | ) | — | 287 | ||||||||||||||
Total U.S. corporate | 29,253 | 467 | (2,283 | ) | — | 27,437 | ||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 738 | 1 | (62 | ) | — | 677 | ||||||||||||||
Energy | 1,002 | 28 | (50 | ) | — | 980 | ||||||||||||||
Finance and insurance | 2,015 | 39 | (141 | ) | — | 1,913 | ||||||||||||||
Consumer—non-cyclical | 679 | 5 | (70 | ) | — | 614 | ||||||||||||||
Technology and communications | 925 | 8 | (72 | ) | — | 861 | ||||||||||||||
Industrial | 879 | 13 | (50 | ) | — | 842 | ||||||||||||||
Capital goods | 586 | 6 | (43 | ) | — | 549 | ||||||||||||||
Consumer—cyclical | 260 | 2 | (17 | ) | — | 245 | ||||||||||||||
Transportation | 427 | 13 | (27 | ) | — | 413 | ||||||||||||||
Other | 740 | 14 | (46 | ) | — | 708 | ||||||||||||||
Total non-U.S. corporate | 8,251 | 129 | (578 | ) | — | 7,802 | ||||||||||||||
Residential mortgage-backed | 930 | 4 | (58 | ) | — | 876 | ||||||||||||||
Commercial mortgage-backed | 1,613 | 1 | (286 | ) | (7 | ) | 1,321 | |||||||||||||
Other asset-backed | 2,368 | 7 | (85 | ) | — | 2,290 | ||||||||||||||
Total available-for-sale fixed maturity securities | $ | 49,281 | $ | 704 | $ | (3,913 | ) | $ | (7 | ) | $ | 46,065 | ||||||||
(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 | $ | 3,498 | $ | 6 | $ | (392 | ) | $ | —�� | $ | 3,112 | $ | 3,588 | $ | 121 | $ | (215 | ) | $ | — | $ | 3,494 | ||||||||||||||||||
State and political subdivisions | 2,566 | 5 | (407 | ) | — | 2,164 | 2,537 | 24 | (259 | ) | — | 2,302 | ||||||||||||||||||||||||||||
Non-U.S. government | 699 | 9 | (125 | ) | — | 583 | 703 | 15 | (92 | ) | — | 626 | ||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 4,454 | 13 | (611 | ) | — | 3,856 | 4,521 | 104 | (352 | ) | — | 4,273 | ||||||||||||||||||||||||||||
Energy | 2,454 | 18 | (265 | ) | — | 2,207 | 2,449 | 66 | (143 | ) | — | 2,372 | ||||||||||||||||||||||||||||
Finance and insurance | 7,920 | 22 | (1,069 | ) | — | 6,873 | 7,813 | 99 | (634 | ) | — | 7,278 | ||||||||||||||||||||||||||||
Consumer—non-cyclical | 4,632 | 32 | (538 | ) | — | 4,126 | 4,648 | 129 | (272 | ) | — | 4,505 | ||||||||||||||||||||||||||||
Technology and communications | 3,212 | 26 | (444 | ) | — | 2,794 | 3,187 | 75 | (239 | ) | — | 3,023 | ||||||||||||||||||||||||||||
Industrial | 1,309 | 8 | (168 | ) | — | 1,149 | 1,294 | 27 | (88 | ) | — | 1,233 | ||||||||||||||||||||||||||||
Capital goods | 2,255 | 19 | (235 | ) | — | 2,039 | 2,230 | 69 | (118 | ) | — | 2,181 | ||||||||||||||||||||||||||||
Consumer—cyclical | 1,736 | 6 | (194 | ) | — | 1,548 | 1,715 | 30 | (96 | ) | — | 1,649 | ||||||||||||||||||||||||||||
Transportation | 1,181 | 16 | (131 | ) | — | 1,066 | 1,187 | 44 | (69 | ) | — | 1,162 | ||||||||||||||||||||||||||||
Other | 320 | 1 | (23 | ) | — | 298 | 316 | 6 | (13 | ) | — | 309 | ||||||||||||||||||||||||||||
Total U.S. corporate | 29,473 | 161 | (3,678 | ) | — | 25,956 | 29,360 | 649 | (2,024 | ) | — | 27,985 | ||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 809 | — | (90 | ) | — | 719 | 739 | 1 | (55 | ) | — | 685 | ||||||||||||||||||||||||||||
Energy | 1,054 | 10 | (86 | ) | — | 978 | 1,038 | 34 | (45 | ) | — | 1,027 | ||||||||||||||||||||||||||||
Finance and insurance | 2,045 | 22 | (223 | ) | — | 1,844 | 2,041 | 47 | (140 | ) | — | 1,948 | ||||||||||||||||||||||||||||
Consumer—non-cyclical | 688 | 1 | (107 | ) | — | 582 | 669 | 8 | (61 | ) | — | 616 | ||||||||||||||||||||||||||||
Technology and communications | 974 | 1 | (135 | ) | — | 840 | 944 | 12 | (65 | ) | — | 891 | ||||||||||||||||||||||||||||
Industrial | 853 | 2 | (86 | ) | — | 769 | 829 | 17 | (49 | ) | — | 797 | ||||||||||||||||||||||||||||
Capital goods | 593 | 1 | (70 | ) | — | 524 | 591 | 8 | (38 | ) | — | 561 | ||||||||||||||||||||||||||||
Consumer—cyclical | 241 | — | (30 | ) | — | 211 | 236 | 2 | (17 | ) | — | 221 | ||||||||||||||||||||||||||||
Transportation | 359 | 7 | (32 | ) | — | 334 | 369 | 15 | (20 | ) | — | 364 | ||||||||||||||||||||||||||||
Other | 819 | 3 | (69 | ) | — | 753 | 726 | 18 | (43 | ) | — | 701 | ||||||||||||||||||||||||||||
Total non-U.S. corporate | 8,435 | 47 | (928 | ) | — | 7,554 | 8,182 | 162 | (533 | ) | — | 7,811 | ||||||||||||||||||||||||||||
Residential mortgage-backed | 974 | 1 | (84 | ) | — | 891 | 953 | 8 | (54 | ) | — | 907 | ||||||||||||||||||||||||||||
Commercial mortgage-backed | 1,868 | 1 | (360 | ) | (6 | ) | 1,503 | 1,714 | 1 | (290 | ) | (7 | ) | 1,418 | ||||||||||||||||||||||||||
Other asset-backed | 2,342 | 1 | (138 | ) | — | 2,205 | 2,328 | 6 | (96 | ) | — | 2,238 | ||||||||||||||||||||||||||||
Total available-for-sale | $ | 49,855 | $ | 231 | $ | (6,112 | ) | $ | (6 | ) | $ | 43,968 | $ | 49,365 | $ | 986 | $ | (3,563 | ) | $ | (7 | ) | $ | 46,781 | ||||||||||||||||
(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 | $ | 1,254 | $ | (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 | $ | 1,404 | $ | (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 | 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 | 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 | $ | 280 | $ | (4 | ) | 44 | $ | 1,315 | $ | (251 | ) | 49 | $ | 1,595 | $ | (255 | ) | 93 | ||||||||||||||||||||||||||||||||||||
State and political subdivisions | 1,559 | (269 | ) | 258 | 261 | (77 | ) | 66 | 1,820 | (346 | ) | 324 | 222 | (3 | ) | 29 | 1,579 | (264 | ) | 265 | 1,801 | (267 | ) | 294 | ||||||||||||||||||||||||||||||||||||||||||||||||
Non-U.S. government | 351 | (54 | ) | 59 | 152 | (47 | ) | 23 | 503 | (101 | ) | 82 | 47 | (1 | ) | 10 | 438 | (100 | ) | 66 | 485 | (101 | ) | 76 | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. corporate | 18,480 | (2,344 | ) | 2,452 | 2,001 | (552 | ) | 236 | 20,481 | (2,896 | ) | 2,688 | 2,303 | (71 | ) | 328 | 16,554 | (2,212 | ) | 2,120 | 18,857 | (2,283 | ) | 2,448 | ||||||||||||||||||||||||||||||||||||||||||||||||
Non-U.S. corporate | 5,593 | (599 | ) | 732 | 748 | (203 | ) | 111 | 6,341 | (802 | ) | 843 | 346 | (12 | ) | 52 | 5,099 | (566 | ) | 663 | 5,445 | (578 | ) | 715 | ||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed | 569 | (51 | ) | 192 | 65 | (20 | ) | 22 | 634 | (71 | ) | 214 | 121 | (1 | ) | 68 | 480 | (57 | ) | 154 | 601 | (58 | ) | 222 | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 1,765 | (255 | ) | 265 | 88 | (22 | ) | 16 | 1,853 | (277 | ) | 281 | 39 | (1 | ) | 7 | 1,261 | (285 | ) | 212 | 1,300 | (286 | ) | 219 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other asset-backed | 1,455 | (83 | ) | 347 | 598 | (80 | ) | 101 | 2,053 | (163 | ) | 448 | 157 | (1 | ) | 47 | 1,403 | (84 | ) | 286 | 1,560 | (85 | ) | 333 | ||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 3,515 | $ | (94 | ) | 585 | $ | 28,129 | $ | (3,819 | ) | 3,815 | $ | 31,644 | $ | (3,913 | ) | 4,400 | ||||||||||||||||||||||||||||||||||||
% Below cost: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
<20% Below cost | $ | 27,596 | $ | (2,587 | ) | 3,835 | $ | 1,819 | $ | (291 | ) | 310 | $ | 29,415 | $ | (2,878 | ) | 4,145 | $ | 3,444 | $ | (74 | ) | 578 | $ | 24,673 | $ | (2,606 | ) | 3,355 | $ | 28,117 | $ | (2,680 | ) | 3,933 | ||||||||||||||||||||||||||||||||||||
20%-50% Below cost | 3,757 | (1,251 | ) | 523 | 2,111 | (712 | ) | 271 | 5,868 | (1,963 | ) | 794 | 71 | (20 | ) | 7 | 3,456 | (1,213 | ) | 460 | 3,527 | (1,233 | ) | 467 | ||||||||||||||||||||||||||||||||||||||||||||||||
>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 | $ | 3,515 | $ | (94 | ) | 585 | $ | 28,129 | $ | (3,819 | ) | 3,815 | $ | 31,644 | $ | (3,913 | ) | 4,400 | ||||||||||||||||||||||||||||||||||||
Investment grade | $ | 29,959 | $ | (3,687 | ) | 4,158 | $ | 3,590 | $ | (915 | ) | 537 | $ | 33,549 | $ | (4,602 | ) | 4,695 | $ | 3,451 | $ | (93 | ) | 574 | $ | 26,926 | $ | (3,686 | ) | 3,644 | $ | 30,377 | $ | (3,779 | ) | 4,218 | ||||||||||||||||||||||||||||||||||||
Below investment grade | 1,398 | (157 | ) | 202 | 340 | (88 | ) | 44 | 1,738 | (245 | ) | 246 | 64 | (1 | ) | 11 | 1,203 | (133 | ) | 171 | 1,267 | (134 | ) | 182 | ||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 3,515 | $ | (94 | ) | 585 | $ | 28,129 | $ | (3,819 | ) | 3,815 | $ | 31,644 | $ | (3,913 | ) | 4,400 | ||||||||||||||||||||||||||||||||||||
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 | $ | 487 | $ | (7 | ) | 65 | $ | 2,124 | $ | (393 | ) | 311 | $ | 2,611 | $ | (400 | ) | 376 | ||||||||||||||||||
Energy | 191 | (17 | ) | 37 | 1,278 | (136 | ) | 162 | 1,469 | (153 | ) | 199 | ||||||||||||||||||||||||
Finance and insurance | 458 | (12 | ) | 62 | 5,080 | (673 | ) | 635 | 5,538 | (685 | ) | 697 | ||||||||||||||||||||||||
Consumer—non-cyclical | 375 | (9 | ) | 52 | 2,480 | (315 | ) | 270 | 2,855 | (324 | ) | 322 | ||||||||||||||||||||||||
Technology and communications | 240 | (8 | ) | 36 | 1,981 | (269 | ) | 260 | 2,221 | (277 | ) | 296 | ||||||||||||||||||||||||
Industrial | 128 | (3 | ) | 10 | 694 | (95 | ) | 95 | 822 | (98 | ) | 105 | ||||||||||||||||||||||||
Capital goods | 151 | (9 | ) | 25 | 1,145 | (133 | ) | 148 | 1,296 | (142 | ) | 173 | ||||||||||||||||||||||||
Consumer—cyclical | 169 | (4 | ) | 28 | 1,036 | (107 | ) | 145 | 1,205 | (111 | ) | 173 | ||||||||||||||||||||||||
Transportation | 104 | (2 | ) | 13 | 593 | (77 | ) | 77 | 697 | (79 | ) | 90 | ||||||||||||||||||||||||
Other | — | — | — | 143 | (14 | ) | 17 | 143 | (14 | ) | 17 | |||||||||||||||||||||||||
Subtotal, U.S. corporate securities | 2,303 | (71 | ) | 328 | 16,554 | (2,212 | ) | 2,120 | 18,857 | (2,283 | ) | 2,448 | ||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||
Utilities | 55 | (1 | ) | 3 | 578 | (61 | ) | 65 | 633 | (62 | ) | 68 | ||||||||||||||||||||||||
Energy | 47 | (1 | ) | 6 | 483 | (49 | ) | 56 | 530 | (50 | ) | 62 | ||||||||||||||||||||||||
Finance and insurance | 74 | (1 | ) | 19 | 1,386 | (140 | ) | 194 | 1,460 | (141 | ) | 213 | ||||||||||||||||||||||||
Consumer—non-cyclical | 48 | (3 | ) | 7 | 452 | (67 | ) | 54 | 500 | (70 | ) | 61 | ||||||||||||||||||||||||
Technology and communications | 68 | (1 | ) | 10 | 624 | (71 | ) | 79 | 692 | (72 | ) | 89 | ||||||||||||||||||||||||
Industrial | — | — | — | 442 | (50 | ) | 62 | 442 | (50 | ) | 62 | |||||||||||||||||||||||||
Capital goods | — | — | — | 360 | (43 | ) | 47 | 360 | (43 | ) | 47 | |||||||||||||||||||||||||
Consumer—cyclical | — | — | — | 190 | (17 | ) | 27 | 190 | (17 | ) | 27 | |||||||||||||||||||||||||
Transportation | 54 | (5 | ) | 7 | 214 | (22 | ) | 30 | 268 | (27 | ) | 37 | ||||||||||||||||||||||||
Other | — | — | — | 370 | (46 | ) | 49 | 370 | (46 | ) | 49 | |||||||||||||||||||||||||
Subtotal, non-U.S. corporate securities | 346 | (12 | ) | 52 | 5,099 | (566 | ) | 663 | 5,445 | (578 | ) | 715 | ||||||||||||||||||||||||
Total for corporate securities in an unrealized loss position | $ | 2,649 | $ | (83 | ) | 380 | $ | 21,653 | $ | (2,778 | ) | 2,783 | $ | 24,302 | $ | (2,861 | ) | 3,163 | ||||||||||||||||||
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 | $ | 28 | $ | (1 | ) | 6 | $ | 1,353 | $ | (214 | ) | 50 | $ | 1,381 | $ | (215 | ) | 56 | ||||||||||||||||||
State and political subdivisions | 121 | (2 | ) | 18 | 1,581 | (257 | ) | 268 | 1,702 | (259 | ) | 286 | ||||||||||||||||||||||||
Non-U.S. government | — | — | — | 448 | (92 | ) | 67 | 448 | (92 | ) | 67 | |||||||||||||||||||||||||
U.S. corporate | 1,054 | (30 | ) | 142 | 17,019 | (1,994 | ) | 2,164 | 18,073 | (2,024 | ) | 2,306 | ||||||||||||||||||||||||
Non-U.S. corporate | 157 | (5 | ) | 19 | 5,180 | (528 | ) | 684 | 5,337 | (533 | ) | 703 | ||||||||||||||||||||||||
Residential mortgage-backed | 62 | (1 | ) | 31 | 477 | (53 | ) | 156 | 539 | (54 | ) | 187 | ||||||||||||||||||||||||
Commercial mortgage-backed | 37 | (1 | ) | 7 | 1,349 | (289 | ) | 224 | 1,386 | (290 | ) | 231 | ||||||||||||||||||||||||
Other asset-backed | — | — | — | 1,624 | (96 | ) | 327 | 1,624 | (96 | ) | 327 | |||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 1,459 | $ | (40 | ) | 223 | $ | 29,031 | $ | (3,523 | ) | 3,940 | $ | 30,490 | $ | (3,563 | ) | 4,163 | ||||||||||||||||||
% Below cost: | ||||||||||||||||||||||||||||||||||||
<20% Below cost | $ | 1,450 | $ | (37 | ) | 221 | $ | 26,032 | $ | (2,509 | ) | 3,542 | $ | 27,482 | $ | (2,546 | ) | 3,763 | ||||||||||||||||||
20%-50% Below cost | 9 | (3 | ) | 2 | 2,999 | (1,014 | ) | 398 | 3,008 | (1,017 | ) | 400 | ||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 1,459 | $ | (40 | ) | 223 | $ | 29,031 | $ | (3,523 | ) | 3,940 | $ | 30,490 | $ | (3,563 | ) | 4,163 | ||||||||||||||||||
Investment grade | $ | 1,441 | $ | (40 | ) | 221 | $ | 27,804 | $ | (3,394 | ) | 3,762 | $ | 29,245 | $ | (3,434 | ) | 3,983 | ||||||||||||||||||
Below investment grade | 18 | — | 2 | 1,227 | (129 | ) | 178 | 1,245 | (129 | ) | 180 | |||||||||||||||||||||||||
Total for fixed maturity securities in an unrealized loss position | $ | 1,459 | $ | (40 | ) | 223 | $ | 29,031 | $ | (3,523 | ) | 3,940 | $ | 30,490 | $ | (3,563 | ) | 4,163 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | 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 | 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 | $ | 177 | $ | (2 | ) | 21 | $ | 2,129 | $ | (350 | ) | 308 | $ | 2,306 | $ | (352 | ) | 329 | ||||||||||||||||||||||||||||||||||||
Energy | 1,538 | (187 | ) | 226 | 144 | (34 | ) | 14 | 1,682 | (221 | ) | 240 | 122 | (2 | ) | 20 | 1,343 | (141 | ) | 168 | 1,465 | (143 | ) | 188 | ||||||||||||||||||||||||||||||||||||||||||||||||
Finance and insurance | 5,250 | (668 | ) | 696 | 706 | (203 | ) | 74 | 5,956 | (871 | ) | 770 | 274 | (8 | ) | 42 | 5,192 | (626 | ) | 645 | 5,466 | (634 | ) | 687 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 2,805 | (342 | ) | 317 | 201 | (61 | ) | 22 | 3,006 | (403 | ) | 339 | 173 | (6 | ) | 18 | 2,529 | (266 | ) | 280 | 2,702 | (272 | ) | 298 | ||||||||||||||||||||||||||||||||||||||||||||||||
Technology and communications | 2,259 | (273 | ) | 304 | 271 | (88 | ) | 32 | 2,530 | (361 | ) | 336 | 105 | (6 | ) | 19 | 2,100 | (233 | ) | 269 | 2,205 | (239 | ) | 288 | ||||||||||||||||||||||||||||||||||||||||||||||||
Industrial | 829 | (105 | ) | 104 | 110 | (25 | ) | 13 | 939 | (130 | ) | 117 | 50 | (1 | ) | 6 | 702 | (87 | ) | 96 | 752 | (88 | ) | 102 | ||||||||||||||||||||||||||||||||||||||||||||||||
Capital goods | 1,332 | (153 | ) | 169 | 148 | (40 | ) | 16 | 1,480 | (193 | ) | 185 | — | — | — | 1,193 | (118 | ) | 150 | 1,193 | (118 | ) | 150 | |||||||||||||||||||||||||||||||||||||||||||||||||
Consumer—cyclical | 1,138 | (108 | ) | 173 | 194 | (47 | ) | 22 | 1,332 | (155 | ) | 195 | 88 | (1 | ) | 11 | 1,073 | (95 | ) | 148 | 1,161 | (96 | ) | 159 | ||||||||||||||||||||||||||||||||||||||||||||||||
Transportation | 746 | (93 | ) | 95 | 21 | (4 | ) | 5 | 767 | (97 | ) | 100 | 65 | (4 | ) | 5 | 621 | (65 | ) | 82 | 686 | (69 | ) | 87 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | 136 | (17 | ) | 23 | 19 | (1 | ) | 1 | 155 | (18 | ) | 24 | — | — | — | 137 | (13 | ) | 18 | 137 | (13 | ) | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal, U.S. corporate securities | 18,480 | (2,344 | ) | 2,452 | 2,001 | (552 | ) | 236 | 20,481 | (2,896 | ) | 2,688 | 1,054 | (30 | ) | 142 | 17,019 | (1,994 | ) | 2,164 | 18,073 | (2,024 | ) | 2,306 | ||||||||||||||||||||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 640 | (63 | ) | 66 | 57 | (14 | ) | 9 | 697 | (77 | ) | 75 | — | — | — | 609 | (55 | ) | 68 | 609 | (55 | ) | 68 | |||||||||||||||||||||||||||||||||||||||||||||||||
Energy | 604 | (61 | ) | 69 | 40 | (7 | ) | 5 | 644 | (68 | ) | 74 | 39 | (1 | ) | 4 | 487 | (44 | ) | 59 | 526 | (45 | ) | 63 | ||||||||||||||||||||||||||||||||||||||||||||||||
Finance and insurance | 1,310 | (122 | ) | 204 | 296 | (86 | ) | 42 | 1,606 | (208 | ) | 246 | 100 | (2 | ) | 10 | 1,358 | (138 | ) | 203 | 1,458 | (140 | ) | 213 | ||||||||||||||||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 491 | (74 | ) | 56 | 54 | (16 | ) | 11 | 545 | (90 | ) | 67 | — | — | — | 471 | (61 | ) | 55 | 471 | (61 | ) | 55 | |||||||||||||||||||||||||||||||||||||||||||||||||
Technology and communications | 740 | (96 | ) | 93 | 39 | (11 | ) | 8 | 779 | (107 | ) | 101 | — | — | — | 659 | (65 | ) | 83 | 659 | (65 | ) | 83 | |||||||||||||||||||||||||||||||||||||||||||||||||
Industrial | 480 | (45 | ) | 71 | 105 | (25 | ) | 13 | 585 | (70 | ) | 84 | 18 | (2 | ) | 5 | 436 | (47 | ) | 61 | 454 | (49 | ) | 66 | ||||||||||||||||||||||||||||||||||||||||||||||||
Capital goods | 394 | (46 | ) | 52 | 62 | (17 | ) | 6 | 456 | (63 | ) | 58 | — | — | — | 384 | (38 | ) | 49 | 384 | (38 | ) | 49 | |||||||||||||||||||||||||||||||||||||||||||||||||
Consumer—cyclical | 241 | (28 | ) | 31 | 23 | (4 | ) | 6 | 264 | (32 | ) | 37 | — | — | — | 188 | (17 | ) | 26 | 188 | (17 | ) | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||
Transportation | 180 | (21 | ) | 26 | 29 | (8 | ) | 5 | 209 | (29 | ) | 31 | — | — | — | 216 | (20 | ) | 30 | 216 | (20 | ) | 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other | 513 | (43 | ) | 64 | 43 | (15 | ) | 6 | 556 | (58 | ) | 70 | — | — | — | 372 | (43 | ) | 50 | 372 | (43 | ) | 50 | |||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal, non-U.S. corporate securities | 5,593 | (599 | ) | 732 | 748 | (203 | ) | 111 | 6,341 | (802 | ) | 843 | 157 | (5 | ) | 19 | 5,180 | (528 | ) | 684 | 5,337 | (533 | ) | 703 | ||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 1,211 | $ | (35 | ) | 161 | $ | 22,199 | $ | (2,522 | ) | 2,848 | $ | 23,410 | $ | (2,557 | ) | 3,009 | ||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Amortized cost or cost | Fair value | Amortized cost or cost | Fair value | ||||||||||||
Due one year or less | $ | 1,443 | $ | 1,426 | $ | 1,311 | $ | 1,298 | ||||||||
Due after one year through five years | 8,557 | 8,115 | 8,351 | 8,112 | ||||||||||||
Due after five years through ten years | 12,791 | 11,368 | 12,593 | 11,851 | ||||||||||||
Due after ten years | 21,880 | 18,460 | 22,115 | 20,317 | ||||||||||||
Subtotal | 44,671 | 39,369 | 44,370 | 41,578 | ||||||||||||
Residential mortgage-backed | 974 | 891 | 930 | 876 | ||||||||||||
Commercial mortgage-backed | 1,868 | 1,503 | 1,613 | 1,321 | ||||||||||||
Other asset-backed | 2,342 | 2,205 | 2,368 | 2,290 | ||||||||||||
Total | $ | 49,855 | $ | 43,968 | $ | 49,281 | $ | 46,065 | ||||||||
September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | ||||||||||||||||||||||||
Property type: | ||||||||||||||||||||||||||||||||
Retail | $ | 2,839 | 42 | % | $ | 2,916 | 42 | % | $ | 2,829 | 42 | % | $ | 2,858 | 42 | % | ||||||||||||||||
Office | 1,499 | 22 | 1,579 | 22 | 1,466 | 22 | 1,481 | 22 | ||||||||||||||||||||||||
Industrial | 1,422 | 21 | 1,456 | 21 | 1,415 | 21 | 1,440 | 21 | ||||||||||||||||||||||||
Apartments | 530 | 8 | 561 | 8 | 514 | 8 | 522 | 8 | ||||||||||||||||||||||||
Mixed use | 370 | 5 | 371 | 5 | 368 | 5 | 371 | 5 | ||||||||||||||||||||||||
Other | 158 | 2 | 149 | 2 | 156 | 2 | 157 | 2 | ||||||||||||||||||||||||
Subtotal | 6,818 | 100 | % | 7,032 | 100 | % | 6,748 | 100 | % | 6,829 | 100 | % | ||||||||||||||||||||
Allowance for credit losses | (25 | ) | (22 | ) | ||||||||||||||||||||||||||||
Total | $ | 6,793 | $ | 7,010 | ||||||||||||||||||||||||||||
September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | ||||||||||||||||||||||||
Geographic region: | ||||||||||||||||||||||||||||||||
South Atlantic | $ | 1,795 | 26 | % | $ | 1,809 | 26 | % | $ | 1,809 | 27 | % | $ | 1,803 | 26 | % | ||||||||||||||||
Pacific | 1,276 | 19 | 1,340 | 19 | 1,248 | 18 | 1,281 | 19 | ||||||||||||||||||||||||
Mountain | 1,011 | 15 | 1,023 | 15 | 1,006 | 15 | 1,029 | 15 | ||||||||||||||||||||||||
Middle Atlantic | 916 | 13 | 988 | 14 | 916 | 14 | 925 | 14 | ||||||||||||||||||||||||
West South Central | 560 | 8 | 578 | 8 | 547 | 8 | 553 | 8 | ||||||||||||||||||||||||
East North Central | 453 | 7 | 454 | 6 | 437 | 6 | 445 | 6 | ||||||||||||||||||||||||
West North Central | 411 | 6 | 438 | 6 | 400 | 6 | 404 | 6 | ||||||||||||||||||||||||
East South Central | 211 | 3 | 218 | 3 | 203 | 3 | 206 | 3 | ||||||||||||||||||||||||
New England | 185 | 3 | 184 | 3 | 182 | 3 | 183 | 3 | ||||||||||||||||||||||||
Subtotal | 6,818 | 100 | % | 7,032 | 100 | % | 6,748 | 100 | % | 6,829 | 100 | % | ||||||||||||||||||||
Allowance for credit losses | (25 | ) | (22 | ) | ||||||||||||||||||||||||||||
Total | $ | 6,793 | $ | 7,010 | ||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | Three months ended March 31, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2024 | 2023 | ||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||
Beginning balance | $ | 24 | $ | 23 | $ | 22 | $ | 26 | $ | 27 | $ | 22 | ||||||||||||
Provision | 1 | — | 3 | (4 | ) | 2 | 2 | |||||||||||||||||
Write-offs | — | — | — | — | — | — | ||||||||||||||||||
Recoveries | — | — | — | 1 | — | — | ||||||||||||||||||
Ending balance | $ | 25 | $ | 23 | $ | 25 | $ | 23 | $ | 29 | $ | 24 | ||||||||||||
(Amounts in millions) | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 and prior | Total | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 and prior | Total | ||||||||||||||||||||||||||||||||||||||||||
Debt-to-value: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0% - 50% | $ | 2 | $ | 49 | $ | 86 | $ | 116 | $ | 121 | $ | 1,968 | $ | 2,342 | $ | 15 | $ | 19 | $ | 74 | $ | 85 | $ | 115 | $ | 2,022 | $ | 2,330 | ||||||||||||||||||||||||||||
51% - 60% | 23 | 110 | 222 | 86 | 150 | 843 | 1,434 | — | 29 | 95 | 226 | 95 | 961 | 1,406 | ||||||||||||||||||||||||||||||||||||||||||
61% - 75% | 152 | 775 | 603 | 277 | 402 | 782 | 2,991 | 30 | 222 | 755 | 589 | 263 | 1,103 | 2,962 | ||||||||||||||||||||||||||||||||||||||||||
76% - 100% | — | — | — | 4 | 23 | 24 | 51 | — | — | — | — | 4 | 46 | 50 | ||||||||||||||||||||||||||||||||||||||||||
Greater than 100% | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 177 | $ | 934 | $ | 911 | $ | 483 | $ | 696 | $ | 3,617 | $ | 6,818 | $ | 45 | $ | 270 | $ | 924 | $ | 900 | $ | 477 | $ | 4,132 | $ | 6,748 | ||||||||||||||||||||||||||||
Debt service coverage ratio: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 1.00 | $ | — | $ | 17 | $ | 4 | $ | 18 | $ | 37 | $ | 207 | $ | 283 | $ | — | $ | — | $ | 17 | $ | 4 | $ | 17 | $ | 224 | $ | 262 | ||||||||||||||||||||||||||||
1.00 - 1.25 | 14 | 56 | 9 | 19 | 36 | 155 | 289 | — | 14 | 37 | 9 | 19 | 180 | 259 | ||||||||||||||||||||||||||||||||||||||||||
1.26 - 1.50 | 105 | 224 | 104 | 68 | 160 | 478 | 1,139 | 22 | 171 | 221 | 103 | 67 | 614 | 1,198 | ||||||||||||||||||||||||||||||||||||||||||
1.51 - 2.00 | 56 | 372 | 424 | 206 | 263 | 1,288 | 2,609 | 12 | 65 | 394 | 419 | 203 | 1,502 | 2,595 | ||||||||||||||||||||||||||||||||||||||||||
Greater than 2.00 | 2 | 265 | 370 | 172 | 200 | 1,489 | 2,498 | 11 | 20 | 255 | 365 | 171 | 1,612 | 2,434 | ||||||||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 177 | $ | 934 | $ | 911 | $ | 483 | $ | 696 | $ | 3,617 | $ | 6,818 | $ | 45 | $ | 270 | $ | 924 | $ | 900 | $ | 477 | $ | 4,132 | $ | 6,748 | ||||||||||||||||||||||||||||
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
(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 | $ | 918 | $ | 703 | $ | 1,218 | $ | — | $ | — | $ | 2,839 | $ | 939 | $ | 704 | $ | 1,186 | $ | — | $ | — | $ | 2,829 | ||||||||||||||||||||||||
Office | 353 | 329 | 781 | 36 | — | 1,499 | 345 | 329 | 757 | 35 | — | 1,466 | ||||||||||||||||||||||||||||||||||||
Industrial | 675 | 258 | 489 | — | — | 1,422 | 642 | 249 | 524 | — | — | 1,415 | ||||||||||||||||||||||||||||||||||||
Apartments | 200 | 57 | 265 | 8 | — | 530 | 197 | 54 | 255 | 8 | — | 514 | ||||||||||||||||||||||||||||||||||||
Mixed use | 107 | 76 | 180 | 7 | — | 370 | 119 | 60 | 182 | 7 | — | 368 | ||||||||||||||||||||||||||||||||||||
Other | 89 | 11 | 58 | — | — | 158 | 88 | 10 | 58 | — | — | 156 | ||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 2,342 | $ | 1,434 | $ | 2,991 | $ | 51 | $ | — | $ | 6,818 | $ | 2,330 | $ | 1,406 | $ | 2,962 | $ | 50 | $ | — | $ | 6,748 | ||||||||||||||||||||||||
% of total | 34 | % | 21 | % | 44 | % | 1 | % | — | % | 100 | % | 34 | % | 21 | % | 44 | % | 1 | % | — | % | 100 | % | ||||||||||||||||||||||||
Weighted-average debt service coverage ratio | 2.42 | 1.87 | 1.66 | 0.87 | — | 1.96 | 2.41 | 1.87 | 1.66 | 0.87 | — | 1.96 | ||||||||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 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 | $ | 907 | $ | 649 | $ | 1,332 | $ | 28 | $ | — | $ | 2,916 | $ | 945 | $ | 686 | $ | 1,227 | $ | — | $ | — | $ | 2,858 | ||||||||||||||||||||||||
Office | 445 | 272 | 848 | 14 | — | 1,579 | 350 | 325 | 771 | 35 | — | 1,481 | ||||||||||||||||||||||||||||||||||||
Industrial | 668 | 243 | 545 | — | — | 1,456 | 670 | 250 | 520 | — | — | 1,440 | ||||||||||||||||||||||||||||||||||||
Apartments | 184 | 90 | 279 | 8 | — | 561 | 194 | 61 | 259 | 8 | — | 522 | ||||||||||||||||||||||||||||||||||||
Mixed use | 93 | 79 | 199 | — | — | 371 | 120 | 61 | 183 | 7 | — | 371 | ||||||||||||||||||||||||||||||||||||
Other | 88 | 9 | 52 | — | — | 149 | 89 | 10 | 58 | — | — | 157 | ||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 2,385 | $ | 1,342 | $ | 3,255 | $ | 50 | $ | — | $ | 7,032 | $ | 2,368 | $ | 1,393 | $ | 3,018 | $ | 50 | $ | — | $ | 6,829 | ||||||||||||||||||||||||
% of total | 34 | % | 19 | % | 46 | % | 1 | % | — | % | 100 | % | 35 | % | 20 | % | 44 | % | 1 | % | — | % | 100 | % | ||||||||||||||||||||||||
Weighted-average debt service coverage ratio | 2.35 | 1.95 | 1.63 | 1.34 | — | 1.93 | 2.42 | 1.87 | 1.66 | 0.87 | — | 1.96 | ||||||||||||||||||||||||||||||||||||
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
(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 | $ | 58 | $ | 107 | $ | 550 | $ | 1,156 | $ | 968 | $ | 2,839 | $ | 52 | $ | 104 | $ | 581 | $ | 1,133 | $ | 959 | $ | 2,829 | ||||||||||||||||||||||||
Office | 111 | 53 | 247 | 624 | 464 | 1,499 | 104 | 47 | 242 | 609 | 464 | 1,466 | ||||||||||||||||||||||||||||||||||||
Industrial | 50 | 31 | 155 | 461 | 725 | 1,422 | 43 | 29 | 193 | 473 | 677 | 1,415 | ||||||||||||||||||||||||||||||||||||
Apartments | 12 | 51 | 84 | 192 | 191 | 530 | 12 | 51 | 81 | 185 | 185 | 514 | ||||||||||||||||||||||||||||||||||||
Mixed use | 27 | 14 | 81 | 162 | 86 | 370 | 27 | 14 | 79 | 163 | 85 | 368 | ||||||||||||||||||||||||||||||||||||
Other | 25 | 33 | 22 | 14 | 64 | 158 | 24 | 14 | 22 | 32 | 64 | 156 | ||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 283 | $ | 289 | $ | 1,139 | $ | 2,609 | $ | 2,498 | $ | 6,818 | $ | 262 | $ | 259 | $ | 1,198 | $ | 2,595 | $ | 2,434 | $ | 6,748 | ||||||||||||||||||||||||
% of total | 4 | % | 4 | % | 17 | % | 38 | % | 37 | % | 100 | % | 4 | % | 4 | % | 18 | % | 38 | % | 36 | % | 100 | % | ||||||||||||||||||||||||
Weighted-average debt-to-value | 64 | % | 63 | % | 64 | % | 58 | % | 47 | % | 55 | % | 64 | % | 62 | % | 64 | % | 57 | % | 46 | % | 55 | % | ||||||||||||||||||||||||
December 31, 2022 | December 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 | 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 | $ | 54 | $ | 105 | $ | 583 | $ | 1,142 | $ | 974 | $ | 2,858 | ||||||||||||||||||||||||
Office | 81 | 131 | 155 | 666 | 546 | 1,579 | 105 | 48 | 244 | 615 | 469 | 1,481 | ||||||||||||||||||||||||||||||||||||
Industrial | 20 | 44 | 194 | 574 | 624 | 1,456 | 43 | 30 | 181 | 471 | 715 | 1,440 | ||||||||||||||||||||||||||||||||||||
Apartments | 14 | 11 | 150 | 242 | 144 | 561 | 12 | 51 | 86 | 187 | 186 | 522 | ||||||||||||||||||||||||||||||||||||
Mixed use | 25 | 16 | 50 | 190 | 90 | 371 | 27 | 14 | 80 | 164 | 86 | 371 | ||||||||||||||||||||||||||||||||||||
Other | 42 | 2 | 9 | 33 | 63 | 149 | 24 | 15 | 22 | 32 | 64 | 157 | ||||||||||||||||||||||||||||||||||||
Total amortized cost | $ | 270 | $ | 272 | $ | 1,118 | $ | 3,085 | $ | 2,287 | $ | 7,032 | $ | 265 | $ | 263 | $ | 1,196 | $ | 2,611 | $ | 2,494 | $ | 6,829 | ||||||||||||||||||||||||
% of total | 4 | % | 4 | % | 16 | % | 44 | % | 32 | % | 100 | % | 4 | % | 4 | % | 17 | % | 38 | % | 37 | % | 100 | % | ||||||||||||||||||||||||
Weighted-average debt-to-value | 61 | % | 62 | % | 63 | % | 60 | % | 44 | % | 56 | % | 64 | % | 63 | % | 65 | % | 58 | % | 46 | % | 55 | % | ||||||||||||||||||||||||
Derivative assets | Derivative liabilities | Derivative assets | Derivative liabilities | |||||||||||||||||||||||||||||||||||||
Balance sheet classification | Fair value | Balance sheet classification | Fair value | Fair value | Fair value | |||||||||||||||||||||||||||||||||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | Balance sheet classification | March 31, 2024 | December 31, 2023 | Balance sheet classification | March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||
Derivatives designated as hedges | ||||||||||||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Other invested assets | $ | 12 | $ | 24 | Other liabilities | $ | 884 | $ | 522 | Other invested assets | $ | 35 | $ | 55 | Other liabilities | $ | 606 | $ | 490 | ||||||||||||||||||||
Foreign currency swaps | Other invested assets | 15 | 20 | Other liabilities | 1 | — | Other invested assets | 11 | 10 | Other liabilities | 2 | 2 | ||||||||||||||||||||||||||||
Forward bond purchase commitments | Other invested assets | — | — | Other liabilities | 3 | — | Other invested assets | 41 | 51 | Other liabilities | 1 | — | ||||||||||||||||||||||||||||
Total cash flow hedges | 27 | 44 | 888 | 522 | 87 | 116 | 609 | 492 | ||||||||||||||||||||||||||||||||
Total derivatives designated as hedges | 27 | 44 | 888 | 522 | 87 | 116 | 609 | 492 | ||||||||||||||||||||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||||||||||||||||||||||
Equity index options | Other invested assets | 11 | 6 | Other liabilities | — | — | Other invested assets | 20 | 15 | Other liabilities | — | — | ||||||||||||||||||||||||||||
Financial futures (1) | Other invested assets | — | — | Other liabilities | — | — | Other invested assets | — | — | Other liabilities | — | — | ||||||||||||||||||||||||||||
Forward bond purchase commitments | Other invested assets | — | — | Other liabilities | 25 | — | Other invested assets | — | — | Other liabilities | 12 | 9 | ||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | Other assets | — | — | Policyholder account balances (2) | 174 | 202 | Other assets | — | — | Policyholder account balances (2) | 163 | 165 | ||||||||||||||||||||||||||||
Indexed universal life embedded derivatives | Reinsurance recoverable | — | — | Policyholder account balances (3) | 14 | 15 | Reinsurance recoverable | — | — | Policyholder account balances (3) | 15 | 15 | ||||||||||||||||||||||||||||
Total derivatives not designated as hedges | 11 | 6 | 213 | 217 | 20 | 15 | 190 | 189 | ||||||||||||||||||||||||||||||||
Total derivatives | $ | 38 | $ | 50 | $ | 1,101 | $ | 739 | $ | 107 | $ | 131 | $ | 799 | $ | 681 | ||||||||||||||||||||||||
(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 indexed annuity liabilities. |
(3) | Represents the embedded derivatives associated with our indexed universal life liabilities. |
(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 | |||||||||||
December 31, | Maturities/ | March 31, | ||||||||||||||||||||||||||||||||||||
(Notional in millions) | Measurement | 2023 | Additions | terminations | 2024 | |||||||||||||||||||||||||||||||||
Derivatives designated as hedges | ||||||||||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Notional | $ | 8,975 | $ | 231 | $ | (101 | ) | $ | 9,105 | ||||||||||||||||||||||||||||
Foreign currency swaps | Notional | 131 | 13 | — | 144 | |||||||||||||||||||||||||||||||||
Forward bond purchase commitments | Notional | 1,075 | 934 | — | 2,009 | |||||||||||||||||||||||||||||||||
Total cash flow hedges | 10,181 | 1,178 | (101 | ) | 11,258 | |||||||||||||||||||||||||||||||||
Total derivatives designated as hedges | 10,181 | 1,178 | (101 | ) | 11,258 | |||||||||||||||||||||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||||||||||||||||||||
Equity index options | Notional | 702 | 178 | (209 | ) | 671 | ||||||||||||||||||||||||||||||||
Financial futures | Notional | 1,251 | 1,191 | (1,268 | ) | 1,174 | ||||||||||||||||||||||||||||||||
Forward bond purchase commitments | Notional | 500 | — | — | 500 | |||||||||||||||||||||||||||||||||
Total derivatives not designated as hedges | 2,453 | 1,369 | (1,477 | ) | 2,345 | |||||||||||||||||||||||||||||||||
Total derivatives | $ | 12,634 | $ | 2,547 | $ | (1,578 | ) | $ | 13,603 | |||||||||||||||||||||||||||||
December 31, | Maturities/ | March 31, | ||||||||||||||||||||||||||||||||||||
(Number of policies) | Measurement | December 31, 2022 | Additions | Maturities/ terminations | September 30, 2023 | Measurement | 2023 | Additions | terminations | 2024 | ||||||||||||||||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | Policies | 7,315 | — | (1,177 | ) | 6,138 | Policies | 5,826 | — | (272 | ) | 5,554 | ||||||||||||||||||||||||||
Indexed universal life embedded derivatives | Policies | 771 | — | (22 | ) | 749 | Policies | 749 | — | (12 | ) | 737 |
(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 | 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) | $ | (148 | ) | $ | 53 | Net investment income | $ | — | Net investment gains (losses) | ||||||||||||||
Interest rate swaps hedging assets | — | 4 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||||||||||||||||||
Interest rate swaps hedging liabilities | — | (1 | ) | Interest expense | — | Net investment gains (losses) | — | (1 | ) | Interest expense | — | Net investment gains (losses) | ||||||||||||||||||||
Foreign currency swaps | 1 | — | Net investment income | — | Net investment gains (losses) | |||||||||||||||||||||||||||
Forward bond purchase commitments | (3 | ) | — | Net investment gains (losses) | — | Net investment gains (losses) | (11 | ) | — | 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 | $ | (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 | 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) | $ | 146 | $ | 54 | Net investment income | $ | — | Net investment gains (losses) | |||||||||||||||
Interest rate swaps hedging assets | — | 5 | Net investment gains (losses) | — | Net investment gains (losses) | — | 5 | Net investment gains (losses) | — | Net investment gains (losses) | ||||||||||||||||||||||
Interest rate swaps hedging liabilities | — | (2 | ) | Interest expense | — | Net investment gains (losses) | — | (1 | ) | Interest expense | — | Net investment gains (losses) | ||||||||||||||||||||
Interest rate swaps hedging liabilities | — | 1 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||||||||||||||||||
Foreign currency swaps | 27 | 1 | Net investment income | — | Net investment gains (losses) | (1 | ) | — | Net investment income | — | Net investment gains (losses) | |||||||||||||||||||||
Forward currency swaps | — | 2 | Net investment gains (losses) | — | Net investment gains (losses) | |||||||||||||||||||||||||||
Total | $ | (753 | ) | $ | 171 | $ | — | |||||||||||||||||||||||||
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, | ||||||||
(Amounts in millions) | 2024 | 2023 | ||||||
Derivatives qualifying as effective accounting hedges as of January 1 | $ | 1,010 | $ | 1,200 | ||||
Current period increases (decreases) in fair value, net of deferred taxes of $33 and $(31) | (125 | ) | 114 | |||||
Reclassification to net (income), net of deferred taxes of $20 and $21 | (36 | ) | (40 | ) | ||||
Derivatives qualifying as effective accounting hedges as of March 31 | $ | 849 | $ | 1,274 | ||||
Three months ended | ||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | Classification of gain (loss) recognized in net income | March 31, | Classification of gain (loss) recognized in net income | ||||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2024 | 2023 | ||||||||||||||||||||||
Equity index options | $ | (4 | ) | $ | 5 | $ | 2 | $ | (2 | ) | Net investment gains (losses) | $ | 5 | $ | 1 | Net investment gains (losses) | ||||||||||||
Financial futures | (50 | ) | (34 | ) | (117 | ) | (64 | ) | Changes in fair value of market risk benefits and associated hedges | (64 | ) | (2 | ) | Changes in fair value of market risk benefits and associated hedges | ||||||||||||||
Forward bond purchase commitments | (22 | ) | — | (25 | ) | — | Net investment gains (losses) | (4 | ) | — | Net investment gains (losses) | |||||||||||||||||
Fixed indexed annuity embedded derivatives | (6 | ) | (5 | ) | (16 | ) | 18 | Net investment gains (losses) | ||||||||||||||||||||
Fixed index annuity embedded derivatives | (8 | ) | (2 | ) | Net investment gains (losses) | |||||||||||||||||||||||
Indexed universal life embedded derivatives | 4 | 4 | 11 | 23 | Net investment gains (losses) | 4 | 5 | Net investment gains (losses) | ||||||||||||||||||||
Total derivatives not designated as | $ | (78 | ) | $ | (30 | ) | $ | (145 | ) | $ | (25 | ) | ||||||||||||||||
September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Derivative assets (1) | Derivative liabilities (1) | Net derivatives | Derivative assets (1) | Derivative liabilities (1) | Net derivatives | 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 | ) | $ | 107 | $ | 621 | $ | (514 | ) | $ | 131 | $ | 501 | $ | (370 | ) | ||||||||||||||||||||
Gross amounts offset in the balance sheet | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net amounts presented in the balance sheet | 38 | 913 | (875 | ) | 50 | 522 | (472 | ) | 107 | 621 | (514 | ) | 131 | 501 | (370 | ) | ||||||||||||||||||||||||||||||||
Gross amounts not offset in the balance sheet: | ||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments (2) | (15 | ) | (15 | ) | — | (25 | ) | (25 | ) | — | (53 | ) | (53 | ) | — | (59 | ) | (59 | ) | — | ||||||||||||||||||||||||||||
Collateral received | (15 | ) | — | (15 | ) | (21 | ) | — | (21 | ) | (16 | ) | — | (16 | ) | (19 | ) | — | (19 | ) | ||||||||||||||||||||||||||||
Collateral pledged | — | (1,516 | ) | 1,516 | — | (1,095 | ) | 1,095 | — | (1,360 | ) | 1,360 | — | (1,100 | ) | 1,100 | ||||||||||||||||||||||||||||||||
Over collateralization | — | 618 | (618 | ) | — | 598 | (598 | ) | — | 792 | (792 | ) | — | 658 | (658 | ) | ||||||||||||||||||||||||||||||||
Net amount | $ | 8 | $ | — | $ | 8 | $ | 4 | $ | — | $ | 4 | $ | 38 | $ | — | $ | 38 | $ | 53 | $ | — | $ | 53 | ||||||||||||||||||||||||
(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 | 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 | $ | 3,460 | 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 | ||||||||||||
State and political subdivisions | ||||||||||||||||
State and political subdivisions | ||||||||||||||||
State and political subdivisions | $ | 2,201 | 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 | ||||||||||||||||
Non-U.S. government | ||||||||||||||||
Non-U.S. government | ||||||||||||||||
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 | $ | 613 | 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 | ||||||||||||
U.S. corporate | ||||||||||||||||
U.S. corporate | ||||||||||||||||
U.S. corporate | $ | 23,802 | 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 | ||||||||||||
Non-U.S. corporate | ||||||||||||||||
Non-U.S. corporate | ||||||||||||||||
Non-U.S. corporate | $ | 6,174 | 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 | ||||||||||||
Residential mortgage-backed | ||||||||||||||||
Residential mortgage-backed | ||||||||||||||||
Residential mortgage-backed | ||||||||||||||||
Residential mortgage-backed | $ | 873 | 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 | ||||||||||||
Commercial mortgage-backed | ||||||||||||||||
Commercial mortgage-backed | ||||||||||||||||
Commercial mortgage-backed | ||||||||||||||||
Commercial mortgage-backed | $ | 1,310 | 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 | ||||||||||||
Other asset-backed | ||||||||||||||||
Other asset-backed | ||||||||||||||||
Other asset-backed | $ | 2,182 | 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 |
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | NAV (1) | 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 | $ | — | $ | — | $ | 3,460 | $ | — | $ | 3,460 | $ | — | $ | — | ||||||||||||||||||||
State and political subdivisions | 2,164 | — | 2,108 | 56 | — | 2,266 | — | 2,201 | 65 | — | ||||||||||||||||||||||||||||||
Non-U.S. government | 583 | — | 582 | 1 | — | 613 | — | 613 | — | — | ||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 3,856 | — | 3,068 | 788 | — | 4,277 | — | 3,410 | 867 | — | ||||||||||||||||||||||||||||||
Energy | 2,207 | — | 2,150 | 57 | — | 2,370 | — | 2,310 | 60 | — | ||||||||||||||||||||||||||||||
Finance and insurance | 6,873 | — | 6,171 | 702 | — | 7,167 | — | 6,437 | 730 | — | ||||||||||||||||||||||||||||||
Consumer—non-cyclical | 4,126 | — | 4,060 | 66 | — | 4,506 | — | 4,442 | 64 | — | ||||||||||||||||||||||||||||||
Technology and communications | 2,794 | — | 2,783 | 11 | — | 2,843 | — | 2,831 | 12 | — | ||||||||||||||||||||||||||||||
Industrial | 1,149 | — | 1,127 | 22 | — | 1,160 | — | 1,145 | 15 | — | ||||||||||||||||||||||||||||||
Capital goods | 2,039 | — | 2,006 | 33 | — | 2,144 | — | 2,110 | 34 | — | ||||||||||||||||||||||||||||||
Consumer—cyclical | 1,548 | — | 1,428 | 120 | — | 1,603 | — | 1,485 | 118 | — | ||||||||||||||||||||||||||||||
Transportation | 1,066 | — | 1,044 | 22 | — | 1,080 | — | 1,059 | 21 | — | ||||||||||||||||||||||||||||||
Other | 298 | — | 150 | 148 | — | 287 | — | 144 | 143 | — | ||||||||||||||||||||||||||||||
Total U.S. corporate | 25,956 | — | 23,987 | 1,969 | — | 27,437 | — | 25,373 | 2,064 | — | ||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 719 | — | 413 | 306 | — | 677 | — | 417 | 260 | — | ||||||||||||||||||||||||||||||
Energy | 978 | — | 852 | 126 | — | 980 | — | 850 | 130 | — | ||||||||||||||||||||||||||||||
Finance and insurance | 1,844 | — | 1,722 | 122 | — | 1,913 | — | 1,781 | 132 | — | ||||||||||||||||||||||||||||||
Consumer—non-cyclical | 582 | — | 510 | 72 | — | 614 | — | 537 | 77 | — | ||||||||||||||||||||||||||||||
Technology and communications | 840 | — | 817 | 23 | — | 861 | — | 837 | 24 | — | ||||||||||||||||||||||||||||||
Industrial | 769 | — | 711 | 58 | — | 842 | — | 781 | 61 | — | ||||||||||||||||||||||||||||||
Capital goods | 524 | — | 473 | 51 | — | 549 | — | 516 | 33 | — | ||||||||||||||||||||||||||||||
Consumer—cyclical | 211 | — | 202 | 9 | — | 245 | — | 244 | 1 | — | ||||||||||||||||||||||||||||||
Transportation | 334 | — | 313 | 21 | — | 413 | — | 391 | 22 | — | ||||||||||||||||||||||||||||||
Other | 753 | — | 732 | 21 | — | 708 | — | 657 | 51 | — | ||||||||||||||||||||||||||||||
Total non-U.S. corporate | 7,554 | — | 6,745 | 809 | — | 7,802 | — | 7,011 | 791 | — | ||||||||||||||||||||||||||||||
Residential mortgage-backed | 891 | — | 888 | 3 | — | 876 | — | 873 | 3 | — | ||||||||||||||||||||||||||||||
Commercial mortgage-backed | 1,503 | — | 1,493 | 10 | — | 1,321 | — | 1,310 | 11 | — | ||||||||||||||||||||||||||||||
Other asset-backed | 2,205 | — | 2,109 | 96 | — | 2,290 | — | 2,182 | 108 | — | ||||||||||||||||||||||||||||||
Total fixed maturity securities | 43,968 | — | 41,024 | 2,944 | — | 46,065 | — | 43,023 | 3,042 | — | ||||||||||||||||||||||||||||||
Equity securities | 363 | 290 | 41 | 32 | — | 427 | 351 | 44 | 32 | — | ||||||||||||||||||||||||||||||
Limited partnerships | 2,096 | — | — | 20 | 2,076 | 2,302 | — | — | 19 | 2,283 | ||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | 12 | — | 12 | — | — | 35 | — | 35 | — | — | ||||||||||||||||||||||||||||||
Foreign currency swaps | 15 | — | 15 | — | — | 11 | — | 11 | — | — | ||||||||||||||||||||||||||||||
Equity index options | 11 | — | — | 11 | — | 20 | — | — | 20 | — | ||||||||||||||||||||||||||||||
Forward bond purchase commitments | 41 | — | — | 41 | — | |||||||||||||||||||||||||||||||||||
Total derivative assets | 38 | — | 27 | 11 | — | 107 | — | 46 | 61 | — | ||||||||||||||||||||||||||||||
Short-term investments | 30 | — | 23 | 7 | — | 10 | — | 10 | — | — | ||||||||||||||||||||||||||||||
Total other invested assets | 68 | — | 50 | 18 | — | 117 | — | 56 | 61 | — | ||||||||||||||||||||||||||||||
Separate account assets | 4,244 | 4,244 | — | — | — | 4,645 | 4,645 | — | — | — | ||||||||||||||||||||||||||||||
Total assets | $ | 50,739 | $ | 4,534 | $ | 41,115 | $ | 3,014 | $ | 2,076 | $ | 53,556 | $ | 4,996 | $ | 43,123 | $ | 3,154 | $ | 2,283 | ||||||||||||||||||||
(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 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | NAV (1) | 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 | $ | — | $ | — | $ | 3,494 | $ | — | $ | 3,494 | $ | — | $ | — | ||||||||||||||||||||
State and political subdivisions | 2,399 | — | 2,344 | 55 | — | 2,302 | — | 2,242 | 60 | — | ||||||||||||||||||||||||||||||
Non-U.S. government | 645 | — | 645 | — | — | 626 | — | 626 | — | — | ||||||||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 3,898 | — | 3,056 | 842 | — | 4,273 | — | 3,392 | 881 | — | ||||||||||||||||||||||||||||||
Energy | 2,262 | — | 2,146 | 116 | — | 2,372 | — | 2,312 | 60 | — | ||||||||||||||||||||||||||||||
Finance and insurance | 7,193 | — | 6,506 | 687 | — | 7,278 | — | 6,561 | 717 | — | ||||||||||||||||||||||||||||||
Consumer—non-cyclical | 4,457 | — | 4,375 | 82 | — | 4,505 | — | 4,436 | 69 | — | ||||||||||||||||||||||||||||||
Technology and communications | 2,947 | — | 2,923 | 24 | — | 3,023 | — | 3,011 | 12 | — | ||||||||||||||||||||||||||||||
Industrial | 1,197 | — | 1,175 | 22 | — | 1,233 | — | 1,210 | 23 | — | ||||||||||||||||||||||||||||||
Capital goods | 2,138 | — | 2,104 | 34 | — | 2,181 | — | 2,146 | 35 | — | ||||||||||||||||||||||||||||||
Consumer—cyclical | 1,617 | — | 1,504 | 113 | — | 1,649 | — | 1,527 | 122 | — | ||||||||||||||||||||||||||||||
Transportation | 1,100 | — | 1,057 | 43 | — | 1,162 | — | 1,140 | 22 | — | ||||||||||||||||||||||||||||||
Other | 310 | — | 151 | 159 | — | 309 | — | 160 | 149 | — | ||||||||||||||||||||||||||||||
Total U.S. corporate | 27,119 | — | 24,997 | 2,122 | — | 27,985 | — | 25,895 | 2,090 | — | ||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||
Utilities | 740 | — | 445 | 295 | — | 685 | — | 416 | 269 | — | ||||||||||||||||||||||||||||||
Energy | 960 | — | 842 | 118 | — | 1,027 | — | 896 | 131 | — | ||||||||||||||||||||||||||||||
Finance and insurance | 1,946 | — | 1,821 | 125 | — | 1,948 | — | 1,814 | 134 | — | ||||||||||||||||||||||||||||||
Consumer—non-cyclical | 566 | — | 493 | 73 | — | 616 | — | 535 | 81 | — | ||||||||||||||||||||||||||||||
Technology and communications | 894 | — | 868 | 26 | — | 891 | — | 867 | 24 | — | ||||||||||||||||||||||||||||||
Industrial | 818 | — | 770 | 48 | — | 797 | — | 734 | 63 | — | ||||||||||||||||||||||||||||||
Capital goods | 546 | — | 451 | 95 | — | 561 | — | 508 | 53 | — | ||||||||||||||||||||||||||||||
Consumer—cyclical | 276 | — | 212 | 64 | — | 221 | — | 220 | 1 | — | ||||||||||||||||||||||||||||||
Transportation | 375 | — | 355 | 20 | — | 364 | — | 342 | 22 | — | ||||||||||||||||||||||||||||||
Other | 889 | — | 868 | 21 | — | 701 | — | 649 | 52 | — | ||||||||||||||||||||||||||||||
Total non-U.S. corporate | 8,010 | — | 7,125 | 885 | — | 7,811 | — | 6,981 | 830 | — | ||||||||||||||||||||||||||||||
Residential mortgage-backed | 995 | — | 973 | 22 | — | 907 | — | 904 | 3 | — | ||||||||||||||||||||||||||||||
Commercial mortgage-backed | 1,908 | — | 1,896 | 12 | — | 1,418 | — | 1,407 | 11 | — | ||||||||||||||||||||||||||||||
Other asset-backed | 2,166 | — | 2,072 | 94 | — | 2,238 | — | 2,136 | 102 | — | ||||||||||||||||||||||||||||||
Total fixed maturity securities | 46,583 | — | 43,393 | 3,190 | — | 46,781 | — | 43,685 | 3,096 | — | ||||||||||||||||||||||||||||||
Equity securities | 319 | 239 | 46 | 34 | — | 396 | 321 | 43 | 32 | — | ||||||||||||||||||||||||||||||
Limited partnerships | 1,816 | — | — | 24 | 1,792 | 2,193 | — | — | 20 | 2,173 | ||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | 24 | — | 24 | — | — | 55 | — | 55 | — | — | ||||||||||||||||||||||||||||||
Foreign currency swaps | 20 | — | 20 | — | — | 10 | — | 10 | — | — | ||||||||||||||||||||||||||||||
Equity index options | 6 | — | — | 6 | — | 15 | — | — | 15 | — | ||||||||||||||||||||||||||||||
Forward bond purchase commitments | 51 | — | — | 51 | — | |||||||||||||||||||||||||||||||||||
Total derivative assets | 50 | — | 44 | 6 | — | 131 | — | 65 | 66 | — | ||||||||||||||||||||||||||||||
Short-term investments | 3 | — | 3 | — | — | 27 | — | 20 | 7 | — | ||||||||||||||||||||||||||||||
Total other invested assets | 53 | — | 47 | 6 | — | 158 | — | 85 | 73 | — | ||||||||||||||||||||||||||||||
Separate account assets | 4,417 | 4,417 | — | — | — | 4,509 | 4,509 | — | — | — | ||||||||||||||||||||||||||||||
Total assets | $ | 53,188 | $ | 4,656 | $ | 43,486 | $ | 3,254 | $ | 1,792 | $ | 54,037 | $ | 4,830 | $ | 43,813 | $ | 3,221 | $ | 2,173 | ||||||||||||||||||||
(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 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 | ) | |||||||||||||||||
Beginning balance as of January 1, 2024 | Total realized and unrealized gains (losses) | Purchases | Sales | Issuances | Settlements | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Ending balance as of March 31, 2024 | Total gains (losses) attributable to assets still held | |||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Included in net income | Included in OCI | Included in net income | Included in OCI | ||||||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State andpolitical subdivisions | $ | 60 | $ | 1 | $ | 4 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 65 | $ | 1 | $ | 4 | ||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 881 | — | (20 | ) | 32 | — | — | (26 | ) | — | — | 867 | — | (20 | ) | |||||||||||||||||||||||||||||||||
Energy | 60 | — | — | — | — | — | — | — | — | 60 | — | — | ||||||||||||||||||||||||||||||||||||
Finance and insurance | 717 | — | (6 | ) | — | — | — | — | 19 | — | 730 | — | (6 | ) | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 69 | — | — | — | — | — | (5 | ) | — | — | 64 | — | — | |||||||||||||||||||||||||||||||||||
Technology and communications | 12 | — | — | — | — | — | — | — | — | 12 | — | — | ||||||||||||||||||||||||||||||||||||
Industrial | 23 | — | — | — | — | — | (8 | ) | — | — | 15 | — | — | |||||||||||||||||||||||||||||||||||
Capital goods | 35 | — | (1 | ) | — | — | — | — | — | — | 34 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Consumer—cyclical | 122 | — | (3 | ) | — | — | — | (1 | ) | — | — | 118 | — | (3 | ) | |||||||||||||||||||||||||||||||||
Transportation | 22 | — | — | — | — | — | (1 | ) | — | — | 21 | — | — | |||||||||||||||||||||||||||||||||||
Other | 149 | — | (2 | ) | — | — | — | (4 | ) | — | — | 143 | — | (2 | ) | |||||||||||||||||||||||||||||||||
Total U.S. corporate | 2,090 | — | (32 | ) | 32 | — | — | (45 | ) | 19 | — | 2,064 | — | (32 | ) | |||||||||||||||||||||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||
Utilities | 269 | — | (4 | ) | 10 | — | — | (15 | ) | — | — | 260 | — | (4 | ) | |||||||||||||||||||||||||||||||||
Energy | 131 | — | (1 | ) | — | — | — | — | — | — | 130 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Finance and insurance | 134 | 2 | (4 | ) | — | — | — | — | — | — | 132 | 2 | (4 | ) | ||||||||||||||||||||||||||||||||||
Consumer—non-cyclical | 81 | — | (1 | ) | — | — | — | (3 | ) | — | — | 77 | — | — | ||||||||||||||||||||||||||||||||||
Technology and communications | 24 | — | — | — | — | — | — | — | — | 24 | — | — | ||||||||||||||||||||||||||||||||||||
Industrial | 63 | — | (1 | ) | — | — | — | (1 | ) | — | — | 61 | — | (1 | ) | |||||||||||||||||||||||||||||||||
Capital goods | 53 | — | — | — | — | — | (20 | ) | — | — | 33 | — | — | |||||||||||||||||||||||||||||||||||
Consumer—cyclical | 1 | — | — | — | — | — | — | — | — | 1 | — | — | ||||||||||||||||||||||||||||||||||||
Transportation | 22 | — | — | — | — | — | — | — | — | 22 | — | — | ||||||||||||||||||||||||||||||||||||
Other | 52 | — | (1 | ) | — | — | — | — | — | — | 51 | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Total non-U.S. corporate | 830 | 2 | (12 | ) | 10 | — | — | (39 | ) | — | — | 791 | 2 | (11 | ) | |||||||||||||||||||||||||||||||||
Residential mortgage-backed | 3 | — | — | — | — | — | — | — | — | 3 | — | — | ||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 11 | — | — | — | — | — | — | — | — | 11 | — | — | ||||||||||||||||||||||||||||||||||||
Other asset-backed | 102 | — | — | 15 | — | — | (2 | ) | — | (7 | ) | 108 | — | (1 | ) | |||||||||||||||||||||||||||||||||
Total fixed maturity securities | 3,096 | 3 | (40 | ) | 57 | — | — | (86 | ) | 19 | (7 | ) | 3,042 | 3 | (40 | ) | ||||||||||||||||||||||||||||||||
Equity securities | 32 | — | — | — | — | — | — | — | — | 32 | — | — | ||||||||||||||||||||||||||||||||||||
Limited partnerships | 20 | (1 | ) | — | — | — | — | — | — | — | 19 | (1 | ) | — | ||||||||||||||||||||||||||||||||||
Other invested assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity index options | 15 | 5 | — | 4 | — | — | (4 | ) | — | — | 20 | 4 | — | |||||||||||||||||||||||||||||||||||
Forward bond purchase commitments | 51 | — | (10 | ) | — | — | — | — | — | — | 41 | — | (10 | ) | ||||||||||||||||||||||||||||||||||
Total derivative assets | 66 | 5 | (10 | ) | 4 | — | — | (4 | ) | — | — | 61 | 4 | (10 | ) | |||||||||||||||||||||||||||||||||
Short-term investments | 7 | — | — | — | — | — | (7 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Total other invested assets | 73 | 5 | (10 | ) | 4 | — | — | (11 | ) | — | — | 61 | 4 | (10 | ) | |||||||||||||||||||||||||||||||||
Total Level 3 assets | $ | 3,221 | $ | 7 | $ | (50 | ) | $ | 61 | $ | — | $ | — | $ | (97 | ) | $ | 19 | $ | (7 | ) | $ | 3,154 | $ | 6 | $ | (50 | ) | ||||||||||||||||||||
(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 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 | ) | ||||||||||||||||||
(Amounts in millions) | Beginning balance as of January 1, 2023 | Total realized and unrealized gains (losses) | Transfer into Level 3 (1) | Transfer out of Level 3 (1) | Ending balance as of March 31, 2023 | Total gains (losses) attributable to assets still held | ||||||||||||||||||||||||||||||||||||||||||
Included in net income | Included in OCI | Purchases | Sales | Issuances | Settlements | Included in net income | Included in OCI | |||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
State andpolitical 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 | |||||||||||||||||||||
(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 | ) | |||||||||||||||||||
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 | ) | |||||||||||||||||||
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) | 2024 | 2023 | ||||||
Total realized and unrealized gains (losses) included in net income: | ||||||||
Net investment income | $ | 3 | $ | 3 | ||||
Net investment gains (losses) | 4 | (1 | ) | |||||
Tota l | $ | 7 | $ | 2 | ||||
Net gains (losses) included in net income attributable to assets still held: | ||||||||
Net investment income | $ | 3 | $ | 2 | ||||
Net investment gains (losses) | 3 | (1 | ) | |||||
Tota l | $ | 6 | $ | 1 | ||||
(Amounts in millions) | Valuation technique | Fair value | Unobservable input | Range | Weighted-average (1) | Fair value | Unobservable input | Range | Weighted-average (1) | |||||||||||||||
Fixed maturity securities: | ||||||||||||||||||||||||
U.S. corporate: | ||||||||||||||||||||||||
Utilities | Internal models | $ | 761 | Credit spreads | 77bps - 247bps | 154bps | $ | 839 | Credit spreads | 56bps - 186bps | 130bps | |||||||||||||
Energy | Internal models | 43 | Credit spreads | 138bps - 250bps | 184bps | 46 | Credit spreads | 89bps - 167bps | 136bps | |||||||||||||||
Finance and insurance | Internal models | 691 | Credit spreads | 14bps - 297bps | 199bps | 718 | Credit spreads | 14bps - 216bps | 155bps | |||||||||||||||
Consumer—non-cyclical | Internal models | 66 | Credit spreads | 91bps - 250bps | 158bps | 64 | Credit spreads | 77bps - 225bps | 134bps | |||||||||||||||
Technology and communications | Internal models | 11 | Credit spreads | 78bps - 116bps | 93bps | 12 | Credit spreads | 65bps - 77bps | 70bps | |||||||||||||||
Industrial | Internal models | 22 | Credit spreads | 138bps - 206bps | 156bps | 15 | Credit spreads | 89bps - 167bps | 114bps | |||||||||||||||
Capital goods | Internal models | 33 | Credit spreads | 91bps - 193bps | 150bps | 34 | Credit spreads | 79bps - 158bps | 127bps | |||||||||||||||
Consumer—cyclical | Internal models | 120 | Credit spreads | 101bps - 207bps | 147bps | 118 | Credit spreads | 77bps - 242bps | 132bps | |||||||||||||||
Transportation | Internal models | 22 | Credit spreads | 51bps - 165bps | 116bps | 20 | Credit spreads | 43bps - 129bps | 94bps | |||||||||||||||
Other | Internal models | 101 | Credit spreads | 91bps - 138bps | 102bps | 96 | Credit spreads | 74bps - 115 bps | 84bps | |||||||||||||||
Total U.S. corporate | Internal models | $ | 1,870 | Credit spreads | 14bps - 297bps | 167bps | $ | 1,962 | Credit spreads | 14bps - 242bps | 137bps | |||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||||||
Utilities | Internal models | $ | 233 | Credit spreads | 96bps - 247bps | 143bps | $ | 221 | Credit spreads | 76bps - 183bps | 122bps | |||||||||||||
Energy | Internal models | 119 | Credit spreads | 112bps - 221bps | 155bps | 125 | Credit spreads | 89bps - 175bps | 119bps | |||||||||||||||
Finance and insurance | Internal models | 122 | Credit spreads | 140bps - 195bps | 171bps | 132 | Credit spreads | 99bps - 197bps | 130bps | |||||||||||||||
Consumer—non-cyclical | Internal models | 69 | Credit spreads | 78bps - 161bps | 116bps | 75 | Credit spreads | 79bps - 140bps | 96bps | |||||||||||||||
Technology and communications | Internal models | 23 | Credit spreads | 112bps - 138bps | 121bps | 24 | Credit spreads | 79bps - 118bps | 92bps | |||||||||||||||
Industrial | Internal models | 56 | Credit spreads | 133bps - 221bps | 180bps | 60 | Credit spreads | 104bps - 175bps | 141bps | |||||||||||||||
Capital goods | Internal models | 51 | Credit spreads | 78bps - 250bps | 137bps | 32 | Credit spreads | 92bps - 205bps | 143bps | |||||||||||||||
Transportation | Internal models | 20 | Credit spreads | 140bps - 182bps | 148bps | 20 | Credit spreads | 104bps - 140bps | 112bps | |||||||||||||||
Other | Internal models | 21 | Credit spreads | 77bps - 152bps | 123bps | 51 | Credit spreads | 56bps - 130bps | 112bps | |||||||||||||||
Total non-U.S. corporate | Internal models | $ | 714 | Credit spreads | 77bps - 250bps | 148bps | $ | 740 | Credit spreads | 56bps - 205bps | 121bps | |||||||||||||
Derivative assets: | ||||||||||||||||||||||||
Equity index options | Discounted cash flows | | $ | 11 | Equity index volatility | 6% - 33% | 19% | $ | 20 | Equity index volatility | 6% - 36% | 23% | ||||||||||||
Forward bond purchase commitments | $ | 41 | Counterparty financing spreads | 28bps - 41bps | 36bps | |||||||||||||||||||
Other assets (2) | $ | 123 | Lapse rate | 2% - 9% | 5% | |||||||||||||||||||
Lapse rate | 2% - 10% | 7% | ||||||||||||||||||||||
Non-performance risk (counterparty credit risk) | 42bps - 83bps | 69bps | (counterparty credit risk) | 42bps - 83bps | 69bps | |||||||||||||||||||
Other assets (2) | Cash flow model | $ | 123 | Equity index volatility | 16% - 30% | 23% | ||||||||||||||||||
Equity index volatility | 14% - 30% | 22% |
(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. |
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 174 | $ | — | $ | — | $ | 174 | $ | 163 | $ | — | $ | — | $ | 163 | ||||||||||||||||
Indexed universal life embedded derivatives | 14 | — | — | 14 | 15 | — | — | 15 | ||||||||||||||||||||||||
Total policyholder account balances | 188 | — | — | 188 | 178 | — | — | 178 | ||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||
Interest rate swaps | 884 | — | 884 | — | 606 | — | 606 | — | ||||||||||||||||||||||||
Foreign currency swaps | 1 | — | 1 | — | 2 | — | 2 | — | ||||||||||||||||||||||||
Forward bond purchase commitments | 28 | — | — | 28 | 13 | — | — | 13 | ||||||||||||||||||||||||
Total derivative liabilities | 913 | — | 885 | 28 | 621 | — | 608 | 13 | ||||||||||||||||||||||||
Total liabilities | $ | 1,101 | $ | — | $ | 885 | $ | 216 | $ | 799 | $ | — | $ | 608 | $ | 191 | ||||||||||||||||
December 31, 2022 | December 31, 2023 | |||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Policyholder account balances: | ||||||||||||||||||||||||||||||||
Fixed indexed annuity embedded derivatives | $ | 202 | $ | — | $ | — | $ | 202 | $ | 165 | $ | — | $ | — | $ | 165 | ||||||||||||||||
Indexed universal life embedded derivatives | 15 | — | — | 15 | 15 | — | — | 15 | ||||||||||||||||||||||||
Total policyholder account balances | 217 | — | — | 217 | 180 | — | — | 180 | ||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||
Interest rate swaps | 522 | — | 522 | — | 490 | — | 490 | — | ||||||||||||||||||||||||
Foreign currency swaps | 2 | — | 2 | — | ||||||||||||||||||||||||||||
Forward bond purchase commitments | 9 | — | — | 9 | ||||||||||||||||||||||||||||
Total derivative liabilities | 522 | — | 522 | — | 501 | — | 492 | 9 | ||||||||||||||||||||||||
Total liabilities | $ | 739 | $ | — | $ | 522 | $ | 217 | $ | 681 | $ | — | $ | 492 | $ | 189 | ||||||||||||||||
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 | Beginning balance as of January 1, 2024 | Total realized and unrealized (gains) losses | Ending balance as of March 31, 2024 | 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 | 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 | $ | — | $ | 165 | $ | 8 | $ | — | $ | — | $ | — | $ | — | $ | (9 | ) | $ | — | $ | (1 | ) | $ | 163 | $ | 8 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||
Indexed universal life embedded derivatives | 15 | (4 | ) | — | — | — | 3 | — | — | — | 14 | (4 | ) | — | 15 | (4 | ) | — | — | — | 4 | — | — | — | 15 | (4 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total policyholder account balances | 195 | 2 | — | — | — | 3 | (11 | ) | — | (1 | ) | 188 | 2 | — | 180 | 4 | — | — | — | 4 | (9 | ) | — | (1 | ) | 178 | 4 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forward bond purchase commitments | 3 | 22 | 3 | — | — | — | — | — | — | 28 | 22 | 3 | 9 | 4 | — | — | — | — | — | — | — | 13 | 4 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total derivative liabilities | 3 | 22 | 3 | — | — | — | — | — | — | 28 | 22 | 3 | 9 | 4 | — | — | — | — | — | — | — | 13 | 4 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 198 | $ | 24 | $ | 3 | $ | — | $ | — | $ | 3 | $ | (11 | ) | $ | — | $ | (1 | ) | $ | 216 | $ | 24 | $ | 3 | $ | 189 | $ | 8 | $ | — | $ | — | $ | — | $ | 4 | $ | (9 | ) | $ | — | $ | (1 | ) | $ | 191 | $ | 8 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||
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 | 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 | 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 | $ | — | $ | 202 | $ | 2 | $ | — | $ | — | $ | — | $ | — | $ | (19 | ) | $ | — | $ | (1 | ) | $ | 184 | $ | 2 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||
Indexed universal life embedded derivatives | 16 | (4 | ) | — | — | — | 3 | — | — | — | 15 | (4 | ) | — | 15 | (5 | ) | — | — | — | 5 | — | — | — | 15 | (5 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total policyholder account balances | 249 | 1 | — | — | — | 3 | (18 | ) | — | (1 | ) | 234 | 1 | — | 217 | (3 | ) | — | — | — | 5 | (19 | ) | — | (1 | ) | 199 | (3 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Level 3 liabilities | $ | 249 | $ | 1 | $ | — | $ | — | $ | — | $ | 3 | $ | (18 | ) | $ | — | $ | (1 | ) | $ | 234 | $ | 1 | $ | — | $ | 217 | $ | (3 | ) | $ | — | $ | — | $ | — | $ | 5 | $ | (19 | ) | $ | — | $ | (1 | ) | $ | 199 | $ | (3 | ) | $ | — | ||||||||||||||||||||||||||||||||||||||||||
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 | 2024 | 2023 | ||||||||||||||||||
Total realized and unrealized (gains) losses included in net (income): | ||||||||||||||||||||||||
Net investment income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Net investment (gains) losses | 24 | 1 | 30 | (41 | ) | 8 | (3 | ) | ||||||||||||||||
Total | $ | 24 | $ | 1 | $ | 30 | $ | (41 | ) | |||||||||||||||
Tota l | $ | 8 | $ | (3 | ) | |||||||||||||||||||
Total (gains) losses included in net (income) attributable to liabilities still held: | ||||||||||||||||||||||||
Net investment income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Net investment (gains) losses | 24 | 1 | 30 | (41 | ) | 8 | (3 | ) | ||||||||||||||||
Total | $ | 24 | $ | 1 | $ | 30 | $ | (41 | ) | |||||||||||||||
Tota l | $ | 8 | $ | (3 | ) | |||||||||||||||||||
(Amounts in millions) | Valuation technique | Fair value | Unobservable input | Range | Weighted-average (1) | 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% | $ | 163 | Expected future interest credited | 1 % - 3% | 2% | |||||||||||||
Indexed universal life embedded derivatives | Option budget method | $ | 14 | Expected future interest credited | 3% - 13% | 5% | $ | 15 | Expected future interest credited | 2% - 12% | 5% | |||||||||||||
Market risk benefits: (2) | ||||||||||||||||||||||||
GMWB withdrawal utilization rate | — % - 63% | 51% | ||||||||||||||||||||||
Non-performance risk (credit spreads) | 42bps - 83bps | 69bps | ||||||||||||||||||||||
Market risk benefits (2) : | ||||||||||||||||||||||||
Fixed indexed annuities | Cash flow model | $ | 38 | Expected future interest credited | 1% - 4% | 2% | $ | 47 | GMWB utilization rate | — % - 68% | 55% | |||||||||||||
Lapse rate | 2% - 11% | 5% | Non-performance risk (credit spreads) | 42bps - 83bps | 69bps | |||||||||||||||||||
GMWB withdrawal utilization rate | 62% - 89% | 78% | Expected future interest credited | 1% - 3% | 2% | |||||||||||||||||||
Non-performance risk (credit spreads) | 42bps - 83bps | 69bps | ||||||||||||||||||||||
Variable annuities | Cash flow model | $ | 502 | Equity index volatility | 16% - 30% | 23% | ||||||||||||||||||
Variable annuities | ||||||||||||||||||||||||
Variable annuities | ||||||||||||||||||||||||
Variable annuities | $ | 429 | Lapse rate | 2% - 11% | 5% | |||||||||||||||||||
GMWB utilization rate | 63% - 89% | 78% | ||||||||||||||||||||||
Non-performance risk (credit spreads) | 42bps - 83bps | 69bps | ||||||||||||||||||||||
Equity index volatility | 14% - 30% | 22% | ||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||
Forward bond purchase commitments | Discounted cash flows | $ | 28 | Counterparty financing spreads | 35bps | Not applicable | $ | 13 | Counterparty financing spreads | 28bps - 41bps | 38bps |
(1) | Unobservable inputs weighted by the policyholder account balances associated with the and .notional for derivative liabilities |
(2) | Refer to note |
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
Notional amount | Carrying amount | Fair value | Notional amount | Carrying amount | Fair value | |||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans, net | (1 | ) | $ | 6,793 | $ | 6,121 | $ | — | $ | — | $ | 6,121 | (1) | $ | 6,719 | $ | 6,213 | $ | — | $ | — | $ | 6,213 | |||||||||||||||||||||||||
Bank loan investments | (1 | ) | 530 | 517 | — | — | 517 | (1) | 520 | 514 | — | — | 514 | |||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Long-term borrowings | (1 | ) | 1,602 | 1,359 | — | 1,359 | — | (1) | 1,579 | 1,461 | — | 1,461 | — | |||||||||||||||||||||||||||||||||||
Investment contracts | (1 | ) | 5,605 | 5,461 | — | — | 5,461 | (1) | 5,115 | 5,073 | — | — | 5,073 | |||||||||||||||||||||||||||||||||||
Commitments to fund investments: | ||||||||||||||||||||||||||||||||||||||||||||||||
Bank loan investments | $ | 136 | — | — | — | — | — | $ | 119 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Private placement investments | 12 | — | — | — | — | — | 21 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Commercial mortgage loans | 9 | — | — | — | — | — | 28 | — | — | — | — | — |
(1) | These financial instruments do not have notional amounts. |
December 31, 2022 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Notional amount | Carrying amount | Fair value | Notional amount | Carrying amount | Fair value | |||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans, net | (1 | ) | $ | 7,010 | $ | 6,345 | $ | — | $ | — | $ | 6,345 | (1) | $ | 6,802 | $ | 6,291 | $ | — | $ | — | $ | 6,291 | |||||||||||||||||||||||||
Bank loan investments | (1 | ) | 467 | 474 | — | — | 474 | (1) | 529 | 520 | — | — | 520 | |||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Long-term borrowings | (1 | ) | 1,611 | 1,346 | — | 1,346 | — | (1) | 1,584 | 1,413 | — | 1,413 | — | |||||||||||||||||||||||||||||||||||
Investment contracts | (1 | ) | 6,794 | 7,171 | — | — | 7,171 | (1) | 5,346 | 5,372 | — | — | 5,372 | |||||||||||||||||||||||||||||||||||
Commitments to fund investments: | ||||||||||||||||||||||||||||||||||||||||||||||||
Bank loan investments | $ | 70 | — | — | — | — | — | $ | 117 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Private placement investments | 19 | — | — | — | — | — | 42 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Commercial mortgage loans | 5 | — | — | — | — | — | 13 | — | — | — | — | — |
(1) | These financial instruments do not have notional amounts. |
September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||
(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) | $ | 1,907 | $ | 1,156 | $ | 1,647 | $ | 1,107 | $ | 2,047 | $ | 1,140 | $ | 1,948 | $ | 1,203 | ||||||||||||||||
Real estate funds (2) | 97 | 88 | 82 | 79 | 121 | 87 | 123 | 87 | ||||||||||||||||||||||||
Infrastructure funds (3) | 72 | 19 | 63 | 29 | 115 | 151 | 102 | 160 | ||||||||||||||||||||||||
Total limited partnerships accounted for at NAV | 2,076 | 1,263 | 1,792 | 1,215 | 2,283 | 1,378 | 2,173 | 1,450 | ||||||||||||||||||||||||
Limited partnerships accounted for at fair value | 20 | 1 | 24 | 1 | 19 | 1 | 20 | 1 | ||||||||||||||||||||||||
Limited partnerships accounted for under equity method of accounting | 603 | 144 | 515 | 149 | 647 | 70 | 628 | 79 | ||||||||||||||||||||||||
Total | $ | 2,699 | $ | 1,408 | $ | 2,331 | $ | 1,365 | $ | 2,949 | $ | 1,449 | $ | 2,821 | $ | 1,530 | ||||||||||||||||
(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. |
September 30, 2023 | March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||
(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 | $ | 879 | $ | 941 | $ | 45 | $ | 98 | $ | 1,963 | |||||||||||||||||||||||
Costs deferred | 1 | — | — | — | 1 | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Amortization | (43 | ) | (106 | ) | (9 | ) | (12 | ) | (170 | ) | (14 | ) | (34 | ) | (2 | ) | (4 | ) | (54 | ) | |||||||||||||||||||||||
Balance as of September 30 | $ | 893 | $ | 974 | $ | 48 | $ | 101 | 2,016 | ||||||||||||||||||||||||||||||||||
Balance as of March 31 | $ | 865 | $ | 907 | $ | 43 | $ | 94 | 1,909 | ||||||||||||||||||||||||||||||||||
Enact segment | 26 | 25 | |||||||||||||||||||||||||||||||||||||||||
Total deferred acquisition costs | $ | 2,042 | $ | 1,934 | |||||||||||||||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||
(Amounts in millions) | Long-term care insurance | Life insurance | Fixed annuities | Variable annuities | Total | |||||||||||||||
Balance as of January 1 | $ | 935 | $ | 1,080 | $ | 57 | $ | 113 | $ | 2,185 | ||||||||||
Costs deferred | 1 | — | — | — | 1 | |||||||||||||||
Amortization | (57 | ) | (139 | ) | (12 | ) | (15 | ) | (223 | ) | ||||||||||
Balance as of December 31 | $ | 879 | $ | 941 | $ | 45 | $ | 98 | 1,963 | |||||||||||
Enact segment | 25 | |||||||||||||||||||
Total deferred acquisition costs | $ | 1,988 | ||||||||||||||||||
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 | ||||||||||||||||||||
(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 | ) | ||||||
(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) | September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | ||||||||||||
Long-term care insurance | $ | 38,928 | $ | 41,457 | $ | 42,339 | $ | 43,929 | ||||||||
Life insurance | 1,645 | 1,820 | 1,648 | 1,698 | ||||||||||||
Fixed annuities | 10,965 | 11,923 | 11,361 | 11,829 | ||||||||||||
Total long-duration insurance contracts | 51,538 | 55,200 | 55,348 | 57,456 | ||||||||||||
Deferred profit liability | 126 | 115 | 131 | 128 | ||||||||||||
Cost of reinsurance | 76 | 92 | 66 | 71 | ||||||||||||
Total future policy benefits | $ | 51,740 | $ | 55,407 | $ | 55,545 | $ | 57,655 | ||||||||
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | Long-term care insurance | Life insurance | Fixed annuities | ||||||||||||||||||
Present value of expected net premiums: | ||||||||||||||||||||||||
Beginning balance as of January 1 | $ | 19,895 | $ | 4,083 | $ | — | $ | 18,650 | $ | 4,180 | $ | — | ||||||||||||
Beginning balance, at original discount rate | $ | 19,959 | $ | 3,922 | $ | — | $ | 18,346 | $ | 3,918 | $ | — | ||||||||||||
Effect of changes in cash flow assumptions | (119 | ) | — | — | 58 | — | — | |||||||||||||||||
Effect of actual variances from expected experience | (156 | ) | 38 | — | (142 | ) | (1 | ) | — | |||||||||||||||
Adjusted beginning balance | 19,684 | 3,960 | — | 18,262 | 3,917 | — | ||||||||||||||||||
Issuances | 1 | — | 33 | — | — | 10 | ||||||||||||||||||
Interest accrual | 754 | 164 | — | |||||||||||||||||||||
Net premiums collected (2) | (1,470 | ) | (330 | ) | (33 | ) | ||||||||||||||||||
Interest accretion | 234 | 55 | — | |||||||||||||||||||||
Net premiums collected (1) | (463 | ) | (115 | ) | (10 | ) | ||||||||||||||||||
Derecognition (lapses and withdrawals) | — | — | — | — | — | — | ||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||
Ending balance, at original discount rate | 18,969 | 3,794 | — | 18,033 | 3,857 | — | ||||||||||||||||||
Effect of changes in discount rate assumptions | (765 | ) | (31 | ) | — | (55 | ) | 154 | — | |||||||||||||||
Ending balance as of September 30 | $ | 18,204 | $ | 3,763 | $ | — | ||||||||||||||||||
Ending balance as of March 31 | $ | 17,978 | $ | 4,011 | $ | — | ||||||||||||||||||
Present value of expected future policy benefits: | ||||||||||||||||||||||||
Beginning balance as of January 1 | $ | 61,352 | $ | 5,556 | $ | 11,923 | $ | 62,579 | $ | 5,412 | $ | 11,829 | ||||||||||||
Beginning balance, at original discount rate | $ | 61,148 | $ | 5,374 | $ | 10,300 | $ | 60,513 | $ | 5,146 | $ | 9,920 | ||||||||||||
Effect of changes in cash flow assumptions | (141 | ) | — | — | (15 | ) | — | — | ||||||||||||||||
Effect of actual variances from expected experience | 8 | 56 | (35 | ) | (155 | ) | 8 | (35 | ) | |||||||||||||||
Adjusted beginning balance | 61,015 | 5,430 | 10,265 | 60,343 | 5,154 | 9,885 | ||||||||||||||||||
Issuances | 2 | — | 26 | — | — | 8 | ||||||||||||||||||
Interest accrual | 2,498 | 212 | 500 | |||||||||||||||||||||
Interest accretion | 823 | 70 | 162 | |||||||||||||||||||||
Benefit payments | (2,657 | ) | (628 | ) | (751 | ) | (950 | ) | (204 | ) | (240 | ) | ||||||||||||
Derecognition (lapses and withdrawals) | — | — | — | — | — | — | ||||||||||||||||||
Other | (1 | ) | (5 | ) | 5 | 1 | — | 9 | ||||||||||||||||
Ending balance, at original discount rate | 60,857 | 5,009 | 10,045 | 60,217 | 5,020 | 9,824 | ||||||||||||||||||
Effect of changes in discount rate assumptions | (3,725 | ) | 5 | 920 | 100 | 167 | 1,537 | |||||||||||||||||
Ending balance as of September 30 | $ | 57,132 | $ | 5,014 | $ | 10,965 | ||||||||||||||||||
Ending balance as of March 31 | $ | 60,317 | $ | 5,187 | $ | 11,361 | ||||||||||||||||||
Net liability for future policy benefits, before flooring adjustments | $ | 38,928 | $ | 1,251 | $ | 10,965 | $ | 42,339 | $ | 1,176 | $ | 11,361 | ||||||||||||
Flooring adjustments (3) | — | 394 | — | |||||||||||||||||||||
Flooring adjustments (2) | — | 472 | — | |||||||||||||||||||||
Net liability for future policy benefits | 38,928 | 1,645 | 10,965 | 42,339 | 1,648 | 11,361 | ||||||||||||||||||
Less: reinsurance recoverable | 6,780 | 772 | 8,280 | 7,228 | 843 | 8,651 | ||||||||||||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | 32,148 | $ | 873 | $ | 2,685 | ||||||||||||||||||
Net liability for future policy benefits, net of reinsurance recoverable | $ | 35,111 | $ | 805 | $ | 2,710 | ||||||||||||||||||
Weighted-average liability duration (years) | 13.6 | 5.7 | 10.3 | 13.4 | 5.8 | 10.8 |
(1) |
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 | December 31, 2023 | |||||||||||||||||||||||
(Dollar amounts in millions) | Long-term care insurance | Life insurance (1) | Fixed annuities | Long-term care insurance | Life insurance | Fixed annuities | ||||||||||||||||||
Present value of expected net premiums: | ||||||||||||||||||||||||
Beginning balance as of January 1 | $ | 25,247 | $ | 5,414 | $ | — | $ | 19,895 | $ | 4,083 | $ | — | ||||||||||||
Beginning balance, at original discount rate | $ | 20,717 | $ | 4,086 | $ | — | $ | 19,959 | $ | 3,922 | $ | — | ||||||||||||
Effect of changes in cash flow assumptions | 102 | — | — | (276 | ) | 180 | — | |||||||||||||||||
Effect of actual variances from expected experience | 82 | 69 | — | (365 | ) | 38 | — | |||||||||||||||||
Adjusted beginning balance | 20,901 | 4,155 | — | 19,318 | 4,140 | — | ||||||||||||||||||
Issuances | 8 | — | 50 | 2 | — | 42 | ||||||||||||||||||
Interest accrual | 1,061 | 226 | — | |||||||||||||||||||||
Net premiums collected (2) | (2,011 | ) | (459 | ) | (50 | ) | ||||||||||||||||||
Interest accretion | 994 | 217 | — | |||||||||||||||||||||
Net premiums collected (1) | (1,968 | ) | (439 | ) | (42 | ) | ||||||||||||||||||
Derecognition (lapses and withdrawals) | — | — | — | — | — | — | ||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||
Ending balance, at original discount rate | 19,959 | 3,922 | — | 18,346 | 3,918 | — | ||||||||||||||||||
Effect of changes in discount rate assumptions | (64 | ) | 161 | — | 304 | 262 | — | |||||||||||||||||
Ending balance as of December 31 | $ | 19,895 | $ | 4,083 | $ | — | $ | 18,650 | $ | 4,180 | $ | — | ||||||||||||
Present value of expected future policy benefits: | ||||||||||||||||||||||||
Beginning balance as of January 1 | $ | 85,338 | $ | 7,157 | $ | 17,039 | $ | 61,352 | $ | 5,556 | $ | 11,923 | ||||||||||||
Beginning balance, at original discount rate | $ | 61,146 | $ | 5,814 | $ | 11,012 | $ | 61,148 | $ | 5,374 | $ | 10,300 | ||||||||||||
Effect of changes in cash flow assumptions | (251 | ) | — | — | (292 | ) | 261 | (33 | ) | |||||||||||||||
Effect of actual variances from expected experience | (31 | ) | 106 | (24 | ) | (50 | ) | 61 | (30 | ) | ||||||||||||||
Adjusted beginning balance | 60,864 | 5,920 | 10,988 | 60,806 | 5,696 | 10,237 | ||||||||||||||||||
Issuances | 10 | — | 43 | 2 | — | 35 | ||||||||||||||||||
Interest accrual | 3,364 | 304 | 690 | |||||||||||||||||||||
Interest accretion | 3,327 | 281 | 663 | |||||||||||||||||||||
Benefit payments | (3,090 | ) | (851 | ) | (1,072 | ) | (3,621 | ) | (823 | ) | (1,016 | ) | ||||||||||||
Derecognition (lapses and withdrawals) | — | — | — | — | — | — | ||||||||||||||||||
Reinsurance transactions (3) | — | — | (352 | ) | ||||||||||||||||||||
Other | — | 1 | 3 | (1 | ) | (8 | ) | 1 | ||||||||||||||||
Ending balance, at original discount rate | 61,148 | 5,374 | 10,300 | 60,513 | 5,146 | 9,920 | ||||||||||||||||||
Effect of changes in discount rate assumptions | 204 | 182 | 1,623 | 2,066 | 266 | 1,909 | ||||||||||||||||||
Ending balance as of December 31 | $ | 61,352 | $ | 5,556 | $ | 11,923 | $ | 62,579 | $ | 5,412 | $ | 11,829 | ||||||||||||
Net liability for future policy benefits, before flooring adjustments | $ | 41,457 | $ | 1,473 | $ | 11,923 | $ | 43,929 | $ | 1,232 | $ | 11,829 | ||||||||||||
Flooring adjustments (4) | — | 347 | — | |||||||||||||||||||||
Flooring adjustments (2) | — | 466 | — | |||||||||||||||||||||
Net liability for future policy benefits | 41,457 | 1,820 | 11,923 | 43,929 | 1,698 | 11,829 | ||||||||||||||||||
Less: reinsurance recoverable | 7,270 | 873 | 8,957 | 7,572 | 852 | 9,008 | ||||||||||||||||||
Net liability for future policy benefits, after reinsurance recoverable | $ | 34,187 | $ | 947 | $ | 2,966 | ||||||||||||||||||
Net liability for future policy benefits, net of reinsurance recoverable | $ | 36,357 | $ | 846 | $ | 2,821 | ||||||||||||||||||
Weighted-average liability duration (years) | 14.5 | 6.0 | 10.9 | 13.7 | 5.9 | 11.1 |
(1) |
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 | $ | 26,283 | $ | 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 |
September 30, 2023 | December 31, 2022 | December 31, 2021 | March 31, 2024 | December 31, 2023 | ||||||||||||||||
Long-term care insurance | ||||||||||||||||||||
Interest accretion rate | 5.8 | % | 5.8 | % | 5.8 | % | ||||||||||||||
Interest accretion (locked-in) rate | 5.7 | % | 5.8 | % | ||||||||||||||||
Current discount rate | 6.0 | % | 5.4 | % | 2.8 | % | 5.4 | % | 5.1 | % | ||||||||||
Life insurance | ||||||||||||||||||||
Interest accretion rate | 5.8 | % | 5.8 | % | 5.8 | % | ||||||||||||||
Interest accretion (locked-in) rate | 5.8 | % | 5.8 | % | ||||||||||||||||
Current discount rate | 5.8 | % | 5.2 | % | 2.4 | % | 5.1 | % | 4.8 | % | ||||||||||
Fixed annuities | ||||||||||||||||||||
Interest accretion rate | 6.7 | % | 6.7 | % | 6.7 | % | ||||||||||||||
Interest accretion (locked-in) rate | 6.7 | % | 6.7 | % | ||||||||||||||||
Current discount rate | 5.9 | % | 5.3 | % | 2.8 | % | 5.3 | % | 5.0 | % |
March 31, 2024 | December 31, 2023 | |||||||||||||||
(Amounts in millions) | Undiscounted | Discounted | Undiscounted | Discounted | ||||||||||||
Long-term care insurance | ||||||||||||||||
Expected future gross premiums | $ | 37,413 | $ | 25,340 | $ | 38,279 | $ | 26,341 | ||||||||
Expected future benefit payments | $ | 123,268 | $ | 60,317 | $ | 124,594 | $ | 62,579 | ||||||||
Life insurance | ||||||||||||||||
Expected future gross premiums | $ | 10,489 | $ | 6,010 | $ | 10,693 | $ | 6,278 | ||||||||
Expected future benefit payments | $ | 7,324 | $ | 5,187 | $ | 7,524 | $ | 5,412 | ||||||||
Fixed annuities | ||||||||||||||||
Expected future gross premiums | $ | — | $ | — | $ | — | $ | — | ||||||||
Expected future benefit payments | $ | 23,638 | $ | 11,361 | $ | 23,903 | $ | 11,829 |
September 30, 2023 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
(Amounts in millions) | Undiscounted | Discounted | Undiscounted | Discounted | Undiscounted | Discounted | ||||||||||||||||||
Long-term care insurance | ||||||||||||||||||||||||
Expected future gross premiums | $ | 39,880 | $ | 25,926 | $ | 42,329 | $ | 28,278 | $ | 45,334 | $ | 36,642 | ||||||||||||
Expected future benefit payments | $ | 127,148 | $ | 57,132 | $ | 130,315 | $ | 61,352 | $ | 133,974 | $ | 85,338 | ||||||||||||
Life insurance | ||||||||||||||||||||||||
Expected future gross premiums | $ | 10,993 | $ | 5,970 | $ | 11,541 | $ | 6,559 | $ | 12,266 | $ | 8,853 | ||||||||||||
Expected future benefit payments | $ | 7,360 | $ | 5,014 | $ | 7,924 | $ | 5,556 | $ | 8,652 | $ | 7,157 | ||||||||||||
Fixed annuities | ||||||||||||||||||||||||
Expected future gross premiums | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Expected future benefit payments | $ | 24,157 | $ | 10,965 | $ | 24,924 | $ | 11,923 | $ | 26,473 | $ | 17,039 |
Three months ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, | Year ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2024 | 2023 | December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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) | Gross premiums | Interest accretion (1) | Gross premiums | Interest accretion (1) | Gross premiums | Interest accretion (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 | $ | 630 | $ | 589 | $ | 675 | $ | 578 | $ | 2,713 | $ | 2,333 | ||||||||||||||||||||||||||||||||||||
Life insurance | 168 | 15 | 178 | 19 | 521 | 48 | 550 | 60 | 725 | 78 | 759 | 101 | 169 | 15 | 179 | 17 | 688 | 64 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed annuities | — | 166 | — | 171 | — | 500 | — | 521 | — | 690 | — | 728 | — | 162 | — | 168 | — | 663 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 853 | $ | 765 | $ | 885 | $ | 768 | $ | 2,552 | $ | 2,292 | $ | 2,609 | $ | 2,304 | $ | 3,494 | $ | 3,071 | $ | 3,606 | $ | 3,085 | $ | 799 | $ | 766 | $ | 854 | $ | 763 | $ | 3,401 | $ | 3,060 | ||||||||||||||||||||||||||||||||||||
(1) | Amounts for interest accretion |
(Amounts in millions) | September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | ||||||||||||
Life insurance | $ | 7,502 | $ | 7,694 | $ | 7,438 | $ | 7,460 | ||||||||
Fixed annuities | 4,700 | 5,477 | 4,278 | 4,479 | ||||||||||||
Variable annuities | 549 | 610 | 511 | 529 | ||||||||||||
Fixed indexed annuity embedded derivatives (1) | 174 | 202 | 163 | 165 | ||||||||||||
Indexed universal life embedded derivatives (1) | 14 | 15 | 15 | 15 | ||||||||||||
Additional insurance liabilities (2) | 2,646 | 2,566 | 2,904 | 2,887 | ||||||||||||
Other | 5 | — | 6 | 5 | ||||||||||||
Total policyholder account balances | $ | 15,590 | $ | 16,564 | $ | 15,315 | $ | 15,540 | ||||||||
(1) | See note |
(2) |
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||
(Dollar amounts in millions) | Life insurance | Fixed annuities | Variable annuities | Life insurance | Fixed annuities | Variable annuities | ||||||||||||||||||
Beginning balance as of January 1 | $ | 7,694 | $ | 5,477 | $ | 610 | $ | 7,460 | $ | 4,479 | $ | 529 | ||||||||||||
Issuances | — | — | — | — | — | — | ||||||||||||||||||
Premiums received | 384 | 17 | 11 | 119 | 5 | 4 | ||||||||||||||||||
Policy charges | (464 | ) | (4 | ) | (4 | ) | (151 | ) | (2 | ) | (2 | ) | ||||||||||||
Surrenders and withdrawals | (234 | ) | (663 | ) | (55 | ) | (37 | ) | (164 | ) | (17 | ) | ||||||||||||
Benefit payments | (171 | ) | (292 | ) | (54 | ) | (49 | ) | (88 | ) | (15 | ) | ||||||||||||
Net transfers from (to) separate accounts | — | — | 1 | |||||||||||||||||||||
Net transfers to separate accounts | — | — | (1 | ) | ||||||||||||||||||||
Interest credited | 291 | 121 | 3 | 98 | 37 | 1 | ||||||||||||||||||
Other | 2 | 44 | 37 | (2 | ) | 11 | 12 | |||||||||||||||||
Ending balance as of September 30 | $ | 7,502 | $ | 4,700 | $ | 549 | ||||||||||||||||||
Ending balance as of March 31 | $ | 7,438 | $ | 4,278 | $ | 511 | ||||||||||||||||||
Weighted-average crediting rate | 3.9 | % | 2.8 | % | 3.3 | % | 3.9 | % | 2.9 | % | 3.3 | % | ||||||||||||
Net amount at risk (1) | $ | 43,456 | $ | 11 | $ | 535 | $ | 42,493 | $ | 25 | $ | 407 | ||||||||||||
Cash surrender value | $ | 4,308 | $ | 3,714 | $ | 549 | $ | 4,347 | $ | 3,337 | $ | 511 |
(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, 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 | 500 | 20 | 14 | |||||||||
Policy charges | (614 | ) | (6 | ) | (6 | ) | ||||||
Surrenders and withdrawals | (272 | ) | (842 | ) | (66 | ) | ||||||
Benefit payments | (215 | ) | (387 | ) | (80 | ) | ||||||
Net transfers from separate accounts | — | — | 1 | |||||||||
Interest credited | 388 | 160 | 4 | |||||||||
Other | (21 | ) | 57 | 52 | ||||||||
Ending balance as of December 31 | $ | 7,460 | $ | 4,479 | $ | 529 | ||||||
Weighted-average crediting rate | 3.9 | % | 2.8 | % | 3.3 | % | ||||||
Net amount at risk (1) | $ | 42,754 | $ | 33 | $ | 479 | ||||||
Cash surrender value | $ | 4,336 | $ | 3,519 | $ | 529 |
(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 | 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 |
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 |
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||||||||||||||||||
(Amounts in millions) | At guaranteed minimum | 1–50 basis points above | 51–150 basis points above | Greater than 150 basis points above | Total (1) | 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 | $ | 115 | $ | 69 | $ | 52 | $ | — | $ | 236 | ||||||||||||||||||||
2.00%–2.99% | 1,186 | 2 | — | — | 1,188 | 977 | 107 | — | — | 1,084 | ||||||||||||||||||||||||||||||
3.00%–3.99% | 1,780 | 717 | 1,167 | 19 | 3,683 | 1,813 | 679 | 1,143 | 41 | 3,676 | ||||||||||||||||||||||||||||||
4.00% and greater | 2,509 | 16 | 8 | — | 2,533 | 2,430 | 17 | 14 | — | 2,461 | ||||||||||||||||||||||||||||||
Total | $ | 5,811 | $ | 841 | $ | 1,184 | $ | 19 | $ | 7,855 | $ | 5,335 | $ | 872 | $ | 1,209 | $ | 41 | $ | 7,457 | ||||||||||||||||||||
(1) | Excludes universal life insurance and investment contracts of approximately |
December 31, 2022 | December 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) | 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 | ||||||||||||||||||||||||||||||
Less than 2.00% | $ | 121 | $ | 97 | $ | 39 | $ | — | $ | 257 | ||||||||||||||||||||||||||||||
2.00%–2.99% | 947 | 2 | — | — | 949 | 1,201 | 81 | — | — | 1,282 | ||||||||||||||||||||||||||||||
3.00%–3.99% | 1,928 | 774 | 1,156 | 1 | 3,859 | 1,732 | 699 | 1,155 | 31 | 3,617 | ||||||||||||||||||||||||||||||
4.00% and greater | 2,649 | 12 | 1 | — | 2,662 | 2,479 | 16 | 10 | — | 2,505 | ||||||||||||||||||||||||||||||
Total | $ | 6,589 | $ | 830 | $ | 1,159 | $ | 1 | $ | 8,579 | $ | 5,533 | $ | 893 | $ | 1,204 | $ | 31 | $ | 7,661 | ||||||||||||||||||||
(1) | Excludes universal life insurance and investment contracts of approximately |
(Dollar amounts in millions) | September 30, 2023 | December 31, 2022 | December 31, 2021 (2) | |||||||||
Beginning balance as of January 1 | $ | 2,566 | $ | 2,656 | $ | 2,524 | ||||||
Beginning balance before shadow accounting adjustments | $ | 2,634 | $ | 2,523 | $ | 2,341 | ||||||
Effect of changes in cash flow assumptions | — | (37 | ) | 85 | ||||||||
Effect of actual variances from expected experience | 30 | 33 | 40 | |||||||||
Adjusted beginning balance | 2,664 | 2,519 | 2,466 | |||||||||
Issuances | — | — | — | |||||||||
Interest accrual | 66 | 85 | 77 | |||||||||
Assessments collected | 181 | 245 | 253 | |||||||||
Benefit payments | (161 | ) | (215 | ) | (282 | ) | ||||||
Derecognition (lapses and withdrawals) | — | — | — | |||||||||
Other (flooring adjustment) | — | — | 9 | |||||||||
Ending balance before shadow accounting adjustments | 2,750 | 2,634 | 2,523 | |||||||||
Effect of shadow accounting adjustments | (104 | ) | (68 | ) | 133 | |||||||
Ending balance | 2,646 | 2,566 | 2,656 | |||||||||
Less: reinsurance recoverable (1) | — | — | — | |||||||||
Additional insurance liabilities, net of reinsurance recoverable | $ | 2,646 | $ | 2,566 | $ | 2,656 | ||||||
Weighted-average liability duration (years) | 19.8 | 20.8 | 22.6 |
|
September 30, 2023 | December 31, 2022 | December 31, 2021 | March 31, 2024 | December 31, 2023 | ||||||||||||||||
Interest accretion rate (1) | 3.3 | % | 3.3 | % | 3.2 | % | 3.4 | % | 3.2 | % | ||||||||||
Projected crediting rate (2) | 3.8 | % | 3.8 | % | 3.6 | % | 3.8 | % | 3.8 | % |
(1) | The interest accretion rate is determined by using the weighted-average policyholder crediting rates for the underlying policies over the period accretion.in-force, and based on the adjusted beginning balance, is used to measure the amount of interest |
(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 | Year ended December 31, | |||||||||||
March 31, | ||||||||||||
(Amounts in millions) | 2024 | 2023 | 2023 | |||||||||
Gross assessments | $ | 133 | $ | 136 | $ | 539 | ||||||
Interest accretion (1) | $ | 25 | $ | 22 | $ | 90 |
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 |
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, 2024 | December 31, 2023 | |||||||||||||||||||||||
(Amounts in millions) | Asset | Liability | Net liability | Asset | Liability | Net liability | ||||||||||||||||||
Fixed indexed annuities | $ | — | $ | 47 | $ | 47 | $ | — | $ | 55 | $ | 55 | ||||||||||||
Variable annuities | 52 | 481 | 429 | 43 | 570 | 527 | ||||||||||||||||||
Total market risk benefits | $ | 52 | $ | 528 | $ | 476 | $ | 43 | $ | 625 | $ | 582 | ||||||||||||
September 30, 2023 | March 31, 2024 | |||||||||||||||||||||||||
(Dollar amounts in millions) | Fixed indexed annuities | Variable annuities | Reinsurance recoverable (1) | Fixed indexed annuities | Variable annuities | Reinsurance recoverable (1) | ||||||||||||||||||||
Beginning balance as of January 1 | $ | 52 | $ | 670 | $ | 158 | $ | 55 | $ | 527 | $ | 140 | ||||||||||||||
Beginning balance before effect of changes in instrument-specific credit risk | $ | 50 | $ | 660 | $ | 158 | $ | 52 | $ | 520 | $ | 140 | ||||||||||||||
Issuances | — | — | — | — | — | — | ||||||||||||||||||||
Interest accrual | 2 | 26 | 6 | |||||||||||||||||||||||
Interest accretion | 1 | 8 | 2 | |||||||||||||||||||||||
Attributed fees collected | 3 | 28 | 6 | 1 | 9 | 2 | ||||||||||||||||||||
Benefit payments | — | (26 | ) | (11 | ) | — | (8 | ) | (4 | ) | ||||||||||||||||
Effect of changes in interest rates | (16 | ) | (142 | ) | (24 | ) | (7 | ) | (50 | ) | (9 | ) | ||||||||||||||
Effect of changes in equity markets | (1 | ) | (54 | ) | (15 | ) | (1 | ) | (58 | ) | (10 | ) | ||||||||||||||
Actual policyholder behavior different from expected behavior | (2 | ) | 4 | 3 | (1 | ) | 2 | 2 | ||||||||||||||||||
Effect of changes in future expected policyholder behavior | — | — | — | — | — | — | ||||||||||||||||||||
Effect of changes in other future expected assumptions | — | — | — | — | — | — | ||||||||||||||||||||
Other | — | — | — | |||||||||||||||||||||||
Ending balance before effect of changes in instrument-specific credit risk | 36 | 496 | 123 | 45 | 423 | 123 | ||||||||||||||||||||
Effect of changes in instrument-specific credit risk | 2 | 6 | — | 2 | 6 | — | ||||||||||||||||||||
Ending balance as of September 30 | 38 | 502 | $ | 123 | ||||||||||||||||||||||
Ending balance as of March 31 | 47 | 429 | $ | 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 |
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) |
December 31, 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 accretion | 3 | 34 | 9 | |||||||||
Attributed fees collected | 5 | 37 | 8 | |||||||||
Benefit payments | — | (35 | ) | (15 | ) | |||||||
Effect of changes in interest rates | (2 | ) | (33 | ) | (5 | ) | ||||||
Effect of changes in equity markets | (2 | ) | (157 | ) | (31 | ) | ||||||
Actual policyholder behavior different from expected behavior | (2 | ) | 8 | 5 | ||||||||
Effect of changes in future expected policyholder behavior | — | 11 | 11 | |||||||||
Effect of changes in other future expected assumptions | — | — | — | |||||||||
Other | — | (5 | ) | — | ||||||||
Ending balance before effect of changes in instrument-specific credit risk | 52 | 520 | 140 | |||||||||
Effect of changes in instrument-specific credit risk | 3 | 7 | — | |||||||||
Ending balance as of December 31 | 55 | 527 | $ | 140 | ||||||||
Less: reinsurance recoverable | — | 140 | ||||||||||
Market risk benefits, net of reinsurance recoverable | $ | 55 | $ | 387 | ||||||||
Weighted-average attained age of contractholders | 73 | 76 | ||||||||||
Net amount at risk (2) |
(1) | Represents the net reinsured asset related to our variable annuity MRBs. |
(2) | See note |
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) |
(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 |
(Amounts in millions) | March 31, 2024 | December 31, 2023 | ||||||
Beginning balance as of January 1 | $ | 4,509 | $ | 4,417 | ||||
Premiums and deposits | 7 | 35 | ||||||
Policy charges | (26 | ) | (104 | ) | ||||
Surrenders and withdrawals | (103 | ) | (361 | ) | ||||
Benefit payments | (58 | ) | (190 | ) | ||||
Investment performance | 316 | 716 | ||||||
Net transfers from (to) general account | 1 | (1 | ) | |||||
Other charges | (1 | ) | (3 | ) | ||||
Ending balance | $ | 4,645 | $ | 4,509 | ||||
Cash surrender value (1) | $ | 4,642 | $ | 4,506 |
(1) | Cash surrender value represents the amount of the contractholders’ account balances that was distributable |
(Amounts in millions) | September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | ||||||||||||
Equity funds | $ | 1,866 | $ | 1,866 | $ | 2,138 | $ | 2,018 | ||||||||
Balanced funds | 1,831 | 1,962 | 1,950 | 1,927 | ||||||||||||
Bond funds | 306 | 332 | 316 | 320 | ||||||||||||
Money market funds | 241 | 257 | 241 | 244 | ||||||||||||
Total | $ | 4,244 | $ | 4,417 | $ | 4,645 | $ | 4,509 | ||||||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 | ||||||||||||
Enact segment | $ | 501 | $ | 519 | $ | 532 | $ | 518 | ||||||||
Life and Annuities segment (1) | 123 | 158 | 134 | 126 | ||||||||||||
Other mortgage insurance business | 7 | 6 | 7 | 8 | ||||||||||||
Total liability for policy and contract claims | $ | 631 | $ | 683 | $ | 673 | $ | 652 | ||||||||
(1) | Primarily includes balances related to our universal and term universal life insurance products. |
Nine months ended September 30, | Three months ended March 31, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2024 | 2023 | ||||||||||||
Beginning balance as of January 1 | $ | 683 | $ | 819 | $ | 652 | $ | 683 | ||||||||
Less reinsurance recoverables | (23 | ) | (26 | ) | ||||||||||||
Less reinsurance recoverable | (16 | ) | (23 | ) | ||||||||||||
Net beginning balance | 660 | 793 | 636 | 660 | ||||||||||||
Incurred related to insured events of: | ||||||||||||||||
Current year | 634 | 647 | 224 | 215 | ||||||||||||
Prior years | (185 | ) | (245 | ) | (27 | ) | (47 | ) | ||||||||
Total incurred | 449 | 402 | 197 | 168 | ||||||||||||
Paid related to insured events of: | ||||||||||||||||
Current year | (393 | ) | (439 | ) | (115 | ) | (117 | ) | ||||||||
Prior years | (102 | ) | (111 | ) | (61 | ) | (74 | ) | ||||||||
Total paid | (495 | ) | (550 | ) | (176 | ) | (191 | ) | ||||||||
Foreign currency translation | 1 | — | — | 1 | ||||||||||||
Net ending balance | 615 | 645 | 657 | 638 | ||||||||||||
Add reinsurance recoverables | 16 | 24 | ||||||||||||||
Add reinsurance recoverable | 16 | 27 | ||||||||||||||
Ending balance as of September 30 | $ | 631 | $ | 669 | ||||||||||||
Ending balance as of March 31 | $ | 673 | $ | 665 | ||||||||||||
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 September 30, | Nine months ended September 30, | Three months ended March 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2024 | 2023 | |||||||||||||||||||
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 | 8.4 | 2.7 | 4.4 | 2.4 | 6.2 | 3.8 | ||||||||||||||||||
Non-deductible expenses | 3.2 | 1.1 | 1.2 | 0.5 | 1.5 | 1.0 | ||||||||||||||||||
Other, net | 0.7 | (0.3 | ) | 0.3 | — | (0.7 | ) | 0.5 | ||||||||||||||||
Effective rate | 33.3 | % | 24.5 | % | 26.9 | % | 23.9 | % | 28.0 | % | 26.3 | % | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues: | ||||||||||||||||
Enact segment | $ | 299 | $ | 275 | $ | 857 | $ | 818 | ||||||||
Long-Term Care Insurance segment | 1,082 | 1,087 | 3,323 | 3,290 | ||||||||||||
Life and Annuities segment: | ||||||||||||||||
Life insurance | 347 | 352 | 1,055 | 1,092 | ||||||||||||
Fixed annuities | 68 | 91 | 237 | 299 | ||||||||||||
Variable annuities | 34 | 37 | 105 | 114 | ||||||||||||
Life and Annuities segment | 449 | 480 | 1,397 | 1,505 | ||||||||||||
Corporate and Other | 1 | 6 | — | 15 | ||||||||||||
Total revenues | $ | 1,831 | $ | 1,848 | $ | 5,577 | $ | 5,628 | ||||||||
Three months ended March 31, | ||||||||
(Amounts in millions) | 2024 | 2023 | ||||||
Revenues: | ||||||||
Enact segment | $ | 292 | $ | 281 | ||||
Long-Term Care Insurance segment | 1,105 | 1,098 | ||||||
Life and Annuities segment: | ||||||||
Life insurance | 354 | 358 | ||||||
Fixed annuities | 73 | 85 | ||||||
Variable annuities | 34 | 36 | ||||||
Life and Annuities segment | 461 | 479 | ||||||
Corporate and Other | 6 | (4 | ) | |||||
Total revenues | $ | 1,864 | $ | 1,854 | ||||
Three months ended September 30, | Nine months ended September 30, | Three months ended March 31, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2024 | 2023 | ||||||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 29 | $ | 136 | $ | 288 | $ | 535 | $ | 139 | $ | 122 | ||||||||||||
Add: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | 94 | 103 | ||||||||||||||||||||
Add: net income from discontinued operations attributable to noncontrolling interests | — | — | — | — | ||||||||||||||||||||
Add: net income attributable to noncontrolling interests | 30 | 32 | ||||||||||||||||||||||
Net income | 60 | 171 | 382 | 638 | 169 | 154 | ||||||||||||||||||
Less: income from discontinued operations, net of taxes | — | 5 | 2 | 2 | ||||||||||||||||||||
Less: loss from discontinued operations, net of taxes | (1 | ) | — | |||||||||||||||||||||
Income from continuing operations | 60 | 166 | 380 | 636 | 170 | 154 | ||||||||||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | 94 | 103 | 30 | 32 | ||||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 29 | 131 | 286 | 533 | 140 | 122 | ||||||||||||||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||||||||||
Net investment (gains) losses, net (1) | 43 | 58 | 13 | (3 | ) | (50 | ) | 11 | ||||||||||||||||
Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges (2) | (26 | ) | (32 | ) | (35 | ) | (78 | ) | (26 | ) | 14 | |||||||||||||
(Gains) losses on early extinguishment of debt (3) | — | 3 | (1 | ) | 7 | |||||||||||||||||||
(Gains) losses on early extinguishment of debt | (1 | ) | (1 | ) | ||||||||||||||||||||
Expenses related to restructuring | — | — | 4 | 1 | 7 | 3 | ||||||||||||||||||
Pension plan termination costs | — | 6 | — | 6 | ||||||||||||||||||||
Taxes on adjustments | (4 | ) | (8 | ) | 4 | 14 | 15 | (5 | ) | |||||||||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 42 | $ | 158 | $ | 271 | $ | 480 | $ | 85 | $ | 144 | ||||||||||||
(1) | For the |
(2) | Changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments of |
Three months ended September 30, | Nine months ended September 30, | Three months ended March 31, | ||||||||||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 | 2022 | 2024 | 2023 | ||||||||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||||||||||
Enact segment | $ | 134 | $ | 156 | $ | 423 | $ | 458 | $ | 135 | $ | 143 | ||||||||||||
Long-Term Care Insurance segment | (71 | ) | 26 | (91 | ) | 116 | 3 | 23 | ||||||||||||||||
Life and Annuities segment: | ||||||||||||||||||||||||
Life insurance | (25 | ) | (28 | ) | (69 | ) | (112 | ) | (33 | ) | (27 | ) | ||||||||||||
Fixed annuities | 17 | 15 | 41 | 48 | 11 | 14 | ||||||||||||||||||
Variable annuities | 5 | 7 | 23 | 13 | 7 | 9 | ||||||||||||||||||
Life and Annuities segment | (3 | ) | (6 | ) | (5 | ) | (51 | ) | (15 | ) | (4 | ) | ||||||||||||
Corporate and Other | (18 | ) | (18 | ) | (56 | ) | (43 | ) | (38 | ) | (18 | ) | ||||||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 42 | $ | 158 | $ | 271 | $ | 480 | $ | 85 | $ | 144 | ||||||||||||
March 31, | December 31, | |||||||||||||||
(Amounts in millions) | September 30, 2023 | December 31, 2022 | 2024 | 2023 | ||||||||||||
Assets: | ||||||||||||||||
Enact segment | $ | 6,000 | $ | 5,712 | $ | 6,303 | $ | 6,193 | ||||||||
Long-Term Care Insurance segment | 42,927 | 44,156 | 45,447 | 46,195 | ||||||||||||
Life and Annuities segment | 35,111 | 37,975 | 35,766 | 36,517 | ||||||||||||
Corporate and Other | 1,428 | 1,871 | 1,676 | 1,912 | ||||||||||||
Total assets | $ | 85,466 | $ | 89,714 | $ | 89,192 | $ | 90,817 | ||||||||
(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, 2023 | $ | (3,056 | ) | $ | 1,154 | $ | (964 | ) | $ | (9 | ) | $ | 14 | $ | (2,861 | ) | ||||||||
OCI before reclassifications | (1,741 | ) | (390 | ) | 2,790 | 3 | (5 | ) | 657 | |||||||||||||||
Amounts reclassified from OCI | 9 | (37 | ) | — | — | 2 | (26 | ) | ||||||||||||||||
Current period OCI | (1,732 | ) | (427 | ) | 2,790 | 3 | (3 | ) | 631 | |||||||||||||||
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 | (10 | ) | — | — | — | — | (10 | ) | ||||||||||||||||
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, 2024 | $ | (2,130 | ) | $ | 1,010 | $ | (1,439 | ) | $ | (8 | ) | $ | 12 | $ | (2,555 | ) | ||||||||
OCI before reclassifications | (503 | ) | (125 | ) | 1,105 | 2 | — | 479 | ||||||||||||||||
Amounts reclassified from OCI | 17 | (36 | ) | — | — | — | (19 | ) | ||||||||||||||||
Current period OCI | (486 | ) | (161 | ) | 1,105 | 2 | — | 460 | ||||||||||||||||
Balances as of March 31, 2024 before noncontrolling interests | (2,616 | ) | 849 | (334 | ) | (6 | ) | 12 | (2,095 | ) | ||||||||||||||
Less: change in OCI attributable to noncontrolling interests | (1 | ) | — | — | — | — | (1 | ) | ||||||||||||||||
Balances as of March 31, 2024 | $ | (2,615 | ) | $ | 849 | $ | (334 | ) | $ | (6 | ) | $ | 12 | $ | (2,094 | ) | ||||||||
(1) | See note |
(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 July 1, 2022 | $ | (1,518 | ) | $ | 1,445 | $ | (3,167 | ) | $ | (12 | ) | $ | (36 | ) | $ | (3,288 | ) | |||||||||||||||||||||||||||||||
Balances as of January 1, 2023 | $ | (3,407 | ) | $ | 1,200 | $ | (403 | ) | $ | (10 | ) | $ | 6 | $ | (2,614 | ) | ||||||||||||||||||||||||||||||||
OCI before reclassifications | (2,538 | ) | (98 | ) | 3,282 | 1 | — | 647 | 906 | 114 | (1,225 | ) | 1 | 4 | (200 | ) | ||||||||||||||||||||||||||||||||
Amounts reclassified from OCI | 21 | (37 | ) | — | — | — | (16 | ) | 13 | (40 | ) | — | — | — | (27 | ) | ||||||||||||||||||||||||||||||||
Current period OCI | (2,517 | ) | (135 | ) | 3,282 | 1 | — | 631 | 919 | 74 | (1,225 | ) | 1 | 4 | (227 | ) | ||||||||||||||||||||||||||||||||
Balances as of September 30, 2022 before noncontrolling interests | (4,035 | ) | 1,310 | 115 | (11 | ) | (36 | ) | (2,657 | ) | ||||||||||||||||||||||||||||||||||||||
Balances as of March 31, 2023 before noncontrolling interests | (2,488 | ) | 1,274 | (1,628 | ) | (9 | ) | 10 | (2,841 | ) | ||||||||||||||||||||||||||||||||||||||
Less: change in OCI attributable to noncontrolling interests | (25 | ) | — | — | — | — | (25 | ) | 12 | — | — | — | — | 12 | ||||||||||||||||||||||||||||||||||
Balances as of September 30, 2022 | $ | (4,010 | ) | $ | 1,310 | $ | 115 | $ | (11 | ) | $ | (36 | ) | $ | (2,632 | ) | ||||||||||||||||||||||||||||||||
Balances as of March 31, 2023 | $ | (2,500 | ) | $ | 1,274 | $ | (1,628 | ) | $ | (9 | ) | $ | 10 | $ | (2,853 | ) | ||||||||||||||||||||||||||||||||
(1) | See note |
(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 | $ | (13,918 | ) | $ | (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 | ) | ||||||||
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 | ) | ||||||
Three months ended March 31, | Affected line item in the condensed consolidated statements of income | |||||||||
(Amounts in millions) | 2024 | 2023 | ||||||||
Net unrealized investment (gains) losses: | ||||||||||
Unrealized (gains) losses on investments | $ | 22 | $ | 16 | Net investment (gains) losses | |||||
Income taxes | (5 | ) | (3 | ) | Provision for income taxes | |||||
Total | $ | 17 | $ | 13 | ||||||
Derivatives qualifying as hedges: | ||||||||||
Interest rate swaps hedging assets | $ | (53 | ) | $ | (54 | ) | Net investment income | |||
Interest rate swaps hedging assets | (4 | ) | (5 | ) | 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 | — | (2 | ) | Net investment (gains) losses | ||||||
Income taxes | 20 | 21 | Provision for income taxes | |||||||
Total | $ | (36 | ) | $ | (40 | ) | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included herein and with our 20222023 Annual Report on Form
Cautionary note regarding forward-looking statements
This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future business and financial performance. Examples of forward-looking statements include statements we make relating to potential dividends or share repurchases; future return of capital by Enact Holdings, Inc. (“Enact Holdings”), including share repurchases, and quarterly and special dividends; refinancing Enact Holdings’ debt maturities through debt offerings or other capital transactions; the cumulative amounteconomic benefit of approved and future rate action benefits required foractions contemplated in our long-term care insurance business to achieve economic break-even status;multi-year in-force rate action plan; future financial performance, including the expectation that adverse quarterly variances between actual and expected experience could persist resulting in future remeasurement losses in our long-term care insurance business; future financial condition of our businesses; liquidity and future strategic investments, including new senior carelines of business or new products and services, and products; futuresuch as those we are pursuing with our CareScout business and financial performance of CareScout LLC (“CareScout”); as well as statements we make regarding the potential occurrence of a recession.
Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from those in the forward-looking statements due to global political, economic, inflation, business, competitive, market, regulatory and other factors and risks, including but not limited to, the following:
the inability to successfully execute our strategic plans;launch new lines of business, including long-term care insurance and other products and services we are pursuing with CareScout;
our failure to achieve economic break-even on or stabilizemaintain self-sustainability of our legacy long-term carelife insurance
inaccuracies or changes in estimates, assumptions, methodologies, valuations, projections and/or models, which result in inadequate reserves or other adverse results (including as a result of any changes in connection with quarterly, annual or other reviews, including reviews we expect to complete and carry out in the fourth quarter of 2023)reviews);
the impact on holding company liquidity caused by an inability to receive dividends or any other returns of capital from Enact Holdings, and limited sources of capital and financing;financing and the need to seek additional capital on unfavorable terms;
adverse changes to the structure or requirements of Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”) or the U.S. mortgage insurance market; an increase in the number of loans insured through federal government mortgage insurance programs, including those offered by the Federal Housing Administration (“FHA”); the inability of Enact Holdings and/or its U.S. mortgage insurance subsidiaries to continue to meet the requirements mandated by the private mortgage insurer eligibility requirements (“PMIERs”) (or any adverse changes thereto), inability to meet minimum statutory capital requirements of applicable regulators or the mortgage insurer eligibility requirements of Fannie Mae or Freddie Mac;
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changes in economic, market and political conditions including as a result of highelevated inflation, labor shortages displacements related to the coronavirus pandemic
rates, |
downgrades in liquidity, financial strength and credit ratings;ratings and potential adverse impacts to liquidity; counterparty credit risks; defaults by counterparties to reinsurance arrangements or derivative instruments; defaults or other events impacting the value of invested assets;
changes in tax rates or tax laws, or changes in accounting and reporting standards (including new accounting guidance we adopted on January 1, 2023 related to long-duration insurance contracts);standards;
litigation and regulatory investigations or other actions, including commercial and contractual disputes with counterparties;
the inability to retain, attract and motivate qualified employees or senior management;
the loss of significant key customers and distribution relationships by Enact Holdings;
the impact from deficiencies in our disclosure controls and procedures or internal control over financial reporting;
the occurrence of natural or
the inability to effectively manage information technology systems (including artificial intelligence), cyber incidents or other failures, disruptions or security breaches toof us or our third-party vendors, as well as unknown risks and uncertainties associated with artificial intelligence;
the inability of third-party vendors to meet their obligations to us;
the lack of availability, affordability or adequacy of reinsurance to protect us against losses;
a decrease in the volume of high loan-to-value home mortgage originations or an increase in the volume of mortgage insurance cancellations;
unanticipated claims against Enact Holdings’ delegated underwriting program;
the impact of medical advances such as the MOVEit cybersecurity incident described herein (the “MOVEit Cybersecurity Incident”);genetic research and diagnostic imaging, emerging new technology, including artificial intelligence and related legislation; and
other factors described in the risk factors contained in Item 1A of our Annual Report on Form
We provide additional information regarding these risks and uncertainties in our Annual Report on Form
Overview
Genworth Financial, through its principal insurance subsidiaries, offers mortgage and long-term care insurance products. Genworth Financial is the parent company of Enact Holdings, a leading provider of private mortgage insurance in the United States through its mortgage insurance subsidiaries. Genworth Financial’s principal U.S. life insurance subsidiaries offer long-term care insurance and also manage
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We report our business results through three operating segments: Enact; Long-Term Care Insurance; and Life and Annuities. The products in the Life and Annuities segment include traditional and
In addition to our three operating segments, we also have Corporate and Other, which includes debt financing expenses that are incurred at the Genworth Holdings, Inc. (“Genworth Holdings”) level, unallocated
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 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
Strategic Update
We continue to further strengthen the context otherwise requires.
We continue to work closelymake progress on our strategic priority to develop innovative aging services and solutions through our CareScout services business with the National Associationbuild-out of Insurance Commissionersour network of long-term care providers (“NAIC”CareScout Quality Network”) and state regulators to demonstrate the broad-based need for actuarially justified rate increases and associated benefit reductions, which is currently available in orderover 30 states. We plan to pay future claims.
Enact continues to be a significant driver of value for Genworth, providing $61 million of capital returns to Genworth Holdings in the first quarter of 2024. We believe capital returns from Enact will continue to benefit our shareholders by funding our strategic initiatives, including new CareScout products and services, to international markets.
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Financial Strength and Credit Ratings
On August 1, 2023, A.M. Best Company,March 27, 2024, Moody’s Investors Service, Inc. assigned an initial publicaffirmed the financial strength rating of
There were no other changes in the financial strength ratings of our insurance subsidiaries or the credit ratings of Genworth Financial and Genworth Holdings subsequent to February 28, 2023,29, 2024, the date we filed our
Our Financial Information
The financial information in this Quarterly Report on Form
Revenues and expenses
Our revenues consist primarily of the following:
• | Premiums. Premiums consist primarily of premiums earned on insurance products for mortgage, long-term care and term life insurance. |
• | Net investment income. Net investment income represents the income earned on our investments. For discussion of the change in net investment income, see the comparison for this line item under “—Investments and Derivative Instruments.” |
• | Net investment gains (losses). Net investment gains (losses) consist primarily of realized gains and losses from the sale of our investments, credit losses, and unrealized gains and losses on equity securities, limited partnership investments and derivative instruments. For discussion of the change in net investment gains (losses), see the comparison for this line item under “—Investments and Derivative Instruments.” |
• | Policy fees and other income. Policy fees and other income consists primarily of fees assessed against policyholder and contractholder account values, surrender charges, cost of insurance assessed on universal and term universal life insurance policies, advisory and administration service fees assessed on investment contractholder account values, broker/dealer commission revenues, fee revenue from contract underwriting services and other fees. |
Our expenses consist primarily of the following:
• | Benefits and other changes in policy reserves. Benefits and other changes in policy reserves consist primarily of benefits paid, interest accretion expense and other reserve activity related to future policy benefits for long-term care insurance, life insurance, and fixed and variable annuities, and claim costs incurred related to mortgage insurance products. |
• | Liability remeasurement (gains) losses. Liability remeasurement (gains) losses represent changes to the net premium ratio for actual versus expected experience and updates to cash flow assumptions used to measure long-duration traditional and limited-payment insurance contracts. |
• | Changes in fair value of market risk benefits and associated hedges. Changes in fair value of market risk benefits and associated hedges consist of fair value changes of market risk benefits (other than changes attributable to instrument-specific credit risk), net of changes in the fair value of non-qualified derivative instruments that support our market risk benefits. |
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• | Interest credited. Interest credited represents interest credited on behalf of policyholder and contractholder general account balances. |
• | Acquisition and operating expenses, net of deferrals. Acquisition and operating expenses, net of deferrals, represent costs and expenses related to the acquisition and ongoing maintenance of 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. |
• | Amortization of deferred acquisition costs and intangibles. Amortization of deferred acquisition costs (“DAC”) and intangibles consists primarily of the amortization of capitalized acquisition costs, present value of future profits and capitalized software. |
• | Interest expense. Interest expense primarily represents interest related to our borrowings that are incurred at Genworth Holdings or Enact Holdings. |
• | Provision (benefit) for income taxes. We tax our businesses at the U.S. corporate federal income tax rate of 21%. Each segment is then adjusted to reflect the unique tax attributes of that segment, such as permanent differences between U.S. generally accepted accounting principles (“U.S. GAAP”) and tax law. The difference between the consolidated provision for income taxes and the sum of the provision for income taxes in each segment is reflected in Corporate and Other. |
The effective tax rates disclosed herein are calculated using whole numbers. As a result, the percentages shown may differ from an effective tax rate calculated using rounded numbers. 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. For a discussion of the effective tax rates used to record the provision for income taxes for our three operating segments and Corporate and Other, for the three and nine months ended September 30, 2023 and 2022, see note 1714 in our unaudited condensed consolidated financial statements under “Item 1—Financial Statements.”
• | Net income attributable to noncontrolling interests. Net income attributable to noncontrolling interests represents third party ownership interests in income from continuing operations of a consolidated subsidiary. |
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Consolidated Results of Operations
Three Months Ended September 30, 2023March 31, 2024 Compared to Three Months Ended September 30, 2022
The following table sets forth the consolidated results of operations for the periods indicated:
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 | )% | |||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 875 | $ | 915 | $ | (40 | ) | (4 | )% | |||||||
Net investment income | 782 | 787 | (5 | ) | (1 | )% | ||||||||||
Net investment gains (losses) | 49 | (11 | ) | 60 | NM | (1) | ||||||||||
Policy fees and other income | 158 | 163 | (5 | ) | (3 | )% | ||||||||||
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| |||||||||||
Total revenues | 1,864 | 1,854 | 10 | 1 | % | |||||||||||
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| |||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 1,203 | 1,176 | 27 | 2 | % | |||||||||||
Liability remeasurement (gains) losses | (8 | ) | (15 | ) | 7 | 47 | % | |||||||||
Changes in fair value of market risk benefits and associated hedges | (23 | ) | 17 | (40 | ) | NM | (1) | |||||||||
Interest credited | 125 | 126 | (1 | ) | (1 | )% | ||||||||||
Acquisition and operating expenses, net of deferrals | 236 | 240 | (4 | ) | (2 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 65 | 72 | (7 | ) | (10 | )% | ||||||||||
Interest expense | 30 | 29 | 1 | 3 | % | |||||||||||
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| |||||||||||
Total benefits and expenses | 1,628 | 1,645 | (17 | ) | (1 | )% | ||||||||||
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| |||||||||||
Income from continuing operations before income taxes | 236 | 209 | 27 | 13 | % | |||||||||||
Provision for income taxes | 66 | 55 | 11 | 20 | % | |||||||||||
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|
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| |||||||||||
Income from continuing operations | 170 | 154 | 16 | 10 | % | |||||||||||
Loss from discontinued operations, net of taxes | (1 | ) | — | (1 | ) | NM | (1) | |||||||||
|
|
|
|
|
| |||||||||||
Net income | 169 | 154 | 15 | 10 | % | |||||||||||
Less: net income attributable to noncontrolling interests | 30 | 32 | (2 | ) | (6 | )% | ||||||||||
|
|
|
|
|
| |||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 139 | $ | 122 | $ | 17 | 14 | % | ||||||||
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|
(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 | )% | |||||||
Unless otherwise stated, all references to net income (loss), net income (loss) per share, adjusted operating income (loss) and adjusted operating income (loss) per share found in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read as net income (loss) available to Genworth Financial, Inc.’s common stockholders, net income (loss) available to Genworth Financial, Inc.’s common stockholders per share, adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders per share, respectively.
Use ofnon-GAAP non-GAAP measures
Reconciliation of net income (loss) to adjusted operating income (loss)
Management uses non-GAAP
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(losses) is the result of estimated future credit losses, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to our discretion and are influenced by market opportunities, as well as asset-liability matching considerations. We exclude net investment gains (losses), changes in fair value of market risk benefits and associated hedges, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, restructuring costs and infrequent or unusual
While some of these items may be significant components of net income (loss) determined in accordance with U.S. GAAP, we believe that adjusted operating income (loss), and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss), among other key performance indicators, as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from adjusted operating income (loss) have occurred in the past and could, and in some cases will, recur in the future. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) or net income (loss) per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, our definition of adjusted operating income (loss) may differ from the definitions used by other companies.
Adjustments to reconcile net income (loss) to adjusted operating income (loss) assume a 21% tax rate and are net of the portion attributable to noncontrolling interests. Changes in fair value of market risk benefits and associated hedges are adjusted to exclude changes in reserves, attributed fees and benefit payments.
The following table presents a reconciliation of net income to adjusted operating income for the periods indicated:
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 | ||||||||
Three months ended March 31, | ||||||||
(Amounts in millions) | 2024 | 2023 | ||||||
Net income available to Genworth Financial, Inc.’s common stockholders | $ | 139 | $ | 122 | ||||
Add: net income attributable to noncontrolling interests | 30 | 32 | ||||||
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Less: loss from discontinued operations, net of taxes | (1 | ) | — | |||||
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Income from continuing operations | 170 | 154 | ||||||
Less: net income from continuing operations attributable to noncontrolling interests | 30 | 32 | ||||||
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Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 140 | 122 | ||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||
Net investment (gains) losses, net (1) | (50 | ) | 11 | |||||
Changes in fair value of market risk benefits attributable to changes in interest rates, equity markets and associated hedges (2) | (26 | ) | 14 | |||||
(Gains) losses on early extinguishment of debt | (1 | ) | (1 | ) | ||||
Expenses related to restructuring | 7 | 3 | ||||||
Taxes on adjustments | 15 | (5 | ) | |||||
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Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 85 | $ | 144 | ||||
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(2) | Changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments of |
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There were no infrequent or unusual items excluded from adjusted operating income during the periods presented.
Earnings per share
The following table provides basic and diluted earnings per common share for the periods indicated:
Three months ended September 30, | Increase (decrease) and percentage change | Nine months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||||||||||||||||
(Amounts in millions, except per share amounts) | 2023 | 2022 | 2023 vs. 2022 | 2023 | 2022 | 2023 vs. 2022 | ||||||||||||||||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.26 | $ | (0.20 | ) | (77 | )% | $ | 0.60 | $ | 1.05 | $ | (0.45 | ) | (43 | )% | ||||||||||||||
Diluted | $ | 0.06 | $ | 0.26 | $ | (0.20 | ) | (77 | )% | $ | 0.59 | $ | 1.04 | $ | (0.45 | ) | (43 | )% | ||||||||||||||
Net income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.27 | $ | (0.21 | ) | (78 | )% | $ | 0.61 | $ | 1.05 | $ | (0.44 | ) | (42 | )% | ||||||||||||||
Diluted | $ | 0.06 | $ | 0.27 | $ | (0.21 | ) | (78 | )% | $ | 0.60 | $ | 1.04 | $ | (0.44 | ) | (42 | )% | ||||||||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.09 | $ | 0.31 | $ | (0.22 | ) | (71 | )% | $ | 0.57 | $ | 0.95 | $ | (0.38 | ) | (40 | )% | ||||||||||||||
Diluted | $ | 0.09 | $ | 0.31 | $ | (0.22 | ) | (71 | )% | $ | 0.56 | $ | 0.93 | $ | (0.37 | ) | (40 | )% | ||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||||||||||||||
Basic | 460.5 | 503.8 | 475.3 | 507.0 | ||||||||||||||||||||||||||||
Diluted | 466.0 | 509.3 | 481.4 | 513.6 | ||||||||||||||||||||||||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions, except per share amounts) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||
Basic | $ | 0.32 | $ | 0.25 | $ | 0.07 | 28 | % | ||||||||
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Diluted | $ | 0.31 | $ | 0.24 | $ | 0.07 | 29 | % | ||||||||
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Net income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||
Basic | $ | 0.31 | $ | 0.25 | $ | 0.06 | 24 | % | ||||||||
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Adjusted operating income available to Genworth Financial, Inc.’s common stockholders per share: | ||||||||||||||||
Basic | $ | 0.19 | $ | 0.29 | $ | (0.10 | ) | (34 | )% | |||||||
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Diluted | $ | 0.19 | $ | 0.29 | $ | (0.10 | ) | (34 | )% | |||||||
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Basic | 443.0 | 492.3 | ||||||||||||||
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Diluted | 450.3 | 500.1 | ||||||||||||||
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The following table presents a summary of adjusted operating income (loss) for our segments and Corporate and Other for the periods indicated:
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 | )% | ||||||||||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Enact segment | $ | 135 | $ | 143 | $ | (8 | ) | (6 | )% | |||||||
Long-Term Care Insurance segment | 3 | 23 | (20 | ) | (87 | )% | ||||||||||
Life and Annuities segment: | ||||||||||||||||
Life insurance | (33 | ) | (27 | ) | (6 | ) | (22 | )% | ||||||||
Fixed annuities | 11 | 14 | (3 | ) | (21 | )% | ||||||||||
Variable annuities | 7 | 9 | (2 | ) | (22 | )% | ||||||||||
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Corporate and Other | (38 | ) | (18 | ) | (20 | ) | (111 | )% | ||||||||
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Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 85 | $ | 144 | $ | (59 | ) | (41 | )% | |||||||
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(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
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Executive Summary of Consolidated Financial Results
Below is an executive summary of our condensed consolidated financial results for the periods indicated. Amounts within this “Executive Summary of Consolidated Financial Results” are net of taxes, unless otherwise indicated.
For a discussion of selected financial information and detailed descriptions of operating performance measures, see “—Results of Operations and Selected Financial and Operating Performance Measures by Segment.”
Three Months Ended September 30, 2023March 31, 2024 Compared to Three Months Ended September 30, 2022
Net income for the three months ended September 30,March 31, 2024 and 2023 and 2022 was $29$139 million and $136$122 million, respectively, and adjusted operating income was $42$85 million and $158$144 million, respectively.
Enact segment reported adjusted operating income of $134 million and $156 million for the three months ended September 30, 2023 and 2022, respectively.
Adjusted operating income decreased primarily attributable to a lower reserve release and higher losses on new delinquencies, and a lower favorable reserve adjustment, partially offset by higher net investment income and premiums in the current year.
Long-Term Care Insurance segment reported adjusted
Adjusted operating income (loss) of $(71) milliondecreased primarily driven by less favorable mortality and $26 million for the three months ended September 30, 2023 and 2022, respectively.
The prior year was primarily from higher liability remeasurement losses largely driven by timing impactsincluded an unfavorable cash flow assumption update related to implementation timing of our in-force rate action plan, as well as a second legal settlement higher claims and lower terminations in the current year.
Life and Annuities segment reported an adjusted operating loss of $3 million and $6 million for the three months ended September 30, 2023 and 2022, respectively.
Life insurance:
The adjusted operating loss in our life insurance products decreased $3 millionincreased primarily due to favorable mortality experiencelower premiums and lower DAC amortization,product charges reflecting the runoff of our in-force blocks, partially offset by higher liability remeasurement losses largely related to a voluntary recapture of previously ceded reinsuranceless unfavorable mortality experience in the current year.
Fixed annuities:
Adjusted operating income in our fixed annuity products increased $2 milliondecreased mainly from favorable mortality in our fixed payout annuity products, partially offset by lower net spreads primarily related to block runoff in the current year.
Corporate and Other had an adjusted operating loss of $18 million for both the three months ended September 30, 2023 and 2022.
The adjusted operating loss was flat as a decreaseincreased primarily from timing of certain tax related items in tax expense on certain forward starting swap gains was offset bythe current year and higher expenses related to CareScout growth initiatives and higher interest expense in the current year.initiatives.
Significant Developments and Strategic Highlights
Enact segment
• | Mortgage insurance portfolio. Enact’s primary persistency rate of 85% continued to offset the decline in new insurance written, contributing to insurance in-force growth in the first quarter of 2024. New insurance written decreased 20% in the first quarter of 2024 compared to the first quarter of 2023 mostly from a smaller estimated mortgage insurance market and lower estimated market share. |
• | Loss performance. Enact recorded a pre-tax reserve release of $54 million during the first quarter of 2024 primarily related to favorable cure performance on delinquencies from early 2023 and prior |
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compared to a pre-tax reserve release of $70 million in the first quarter of 2023 primarily related to favorable cure performance on COVID-19 delinquencies from 2020 and 2021. New primary delinquencies in the first quarter of 2024 increased compared to the first quarter of 2023 primarily due to the aging of large, newer books of business. |
• | PMIERs compliance. Enact’s PMIERs sufficiency ratio was 163% or $1,883 million above the PMIERs requirements as of March 31, 2024. |
• | Capital returns. Genworth Holdings received $61 million of capital returns from Enact Holdings during the first quarter of 2024. On May 1, 2024, Enact Holdings announced an increase of its next quarterly dividend to $0.185 per share to be paid in June 2024 and a new share repurchase authorization of $250 million. |
Long-Term Care Insurance segment
• | In-force rate actions. We estimate that the cumulative economic benefit of approved rate actions in our long-term care insurance multi-year in-force rate action plan since 2012 through the first quarter of 2024 was approximately $28.3 billion, on a net present value basis, as described further below. |
• | Claims. We expect higher paid claims in our long-term care insurance business as our blocks age, with peak claim years over a decade away. Paid claims on newer products continue to increase as policyholders approach peak claim age, while claims on our oldest products decline as those policyholders, on average, are past peak claim age. We also expect overall claim costs to continue to increase as the approximately 620,000 insured individuals in our two largest blocks, Choice I and Choice II, with average attained ages of 77 and 74, respectively, reach their peak claim years, approximately age 85. |
Capital of our strategic priorities.
As of September 30,March 31, 2024 and December 31, 2023, the consolidated company action level risk-based capital ratio of our U.S. domiciled life insurance subsidiaries was estimatedapproximately 314% and 303%, respectively. The increase was primarily attributable to be approximately 291%, flat compared to December 31, 2022.
Genworth Financial share repurchase program:
Genworth Financial’s Board of Directors authorized an additional $350Financial executed $63 million of share repurchases under its existing share repurchase program.
Results of Operations and Selected Financial and Operating Performance Measures by Segment
Management’s discussion and analysis by segment contains selected operating performance measures including “sales”“new insurance written,” “insurance in-force” and “insurance
Management regularly monitors and reports sales metricsnew insurance written for our Enact segment as a measure of volume of new business generated in a period. Sales refer to new insurance written for mortgage insurance products included in our Enact segment. We consider new insurance written to be a measure of our Enact segment’s operating performance because it represents a measure of new sales of mortgage insurance policies during a specified period, rather than a measure of revenues or profitability during that period.
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measure of the aggregate unpaid principal balance as of the respective reporting date for loans insured by our U.S. mortgage insurance subsidiaries. Risk
Management also regularly monitors and reports a loss ratio for our Enact segment, which is the ratio of benefits and other changes in policy reserves to net earned premiums. We consider the loss ratio to be a measure of underwriting performance and helps to enhance the understanding of the operating performance of our Enact segment.
Management also regularly monitors and reports on
These operating performance measures enable us to compare our operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.
Enact segment
Trends and conditions
Results of our Enact segment are affected primarily by the following factors: competitor actions; unemployment or underemployment levels; other economic and housing market trends, including interest rates, home prices, the number of first-time homebuyers, and mortgage origination volume mix and practices; the size of the overall private mortgage insurance market and the effect of regulatory actions thereon; the levels and aging of mortgage delinquencies; the effect of seasonal variations; the inventory of unsold homes; loan modification and other servicing efforts; and litigation, among other items. References to “Enact” included herein “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Enact segment” are, unless the context otherwise requires, to our Enact segment.
Macroeconomic environment
During the first quarter of 2024, the U.S. economy faced uncertainty due to continued inflationary pressure, the geopolitical environment and lingering concerns around a possible recession. Mortgage origination activity remained slow during the thirdfirst quarter of 20232024 in response to elevated mortgage rates and sustained low housing supply. We anticipate thatOver the refinance market is likely to remain suppressed in the near to
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The unemployment rate was 3.8% in September 2023, up slightly from JuneMarch 2024, compared to 3.7% in December 2023. As of September 30, 2023, there were just over six millionMarch 31, 2024, the number of unemployed Americans of whichwas approximately one6.4 million, wereand the number of long term unemployed over 26 weeks. Both metrics remain in line with
Forbearance and Freddie Mac),loss mitigation programs
In response to COVID-19, borrowers were allowed extended forbearance has allowed borrowers impacted by
Although it is difficult to predict the future level of reported forbearance and how many of the loans in a forbearance plan that remain current on their monthly mortgage payment will go delinquent, servicer reported forbearances have generally declined. As of September 30, 2023,March 31, 2024, approximately 1.2%1.1% or 12,13510,479 of Enact’s active primary policies were reported in a forbearance plan, of which approximately 30%26% were reported as delinquent compared with approximately 1.5% or 14,231 of its active primary policies reported in forbearance with approximately 34% reported as delinquent as of September 30, 2022.
Regulatory developments
Private mortgage insurance market penetration and overall market size are affected in part by actions that impact housing or housing finance policy taken by the GSEs and the U.S. government, including but not limited to, the FHA and the FHFA. In the past, these actions have included announced changes, or potential changes, to underwriting standards, including changes to the GSEs’ automated underwriting systems, FHA pricing, GSE guaranty fees, loan limits and alternative products.
On October 24, 2022, the FHFA announced targeted changes to the GSEs’ guarantee fee pricing by eliminating upfront fees for certain first-time home buyers with income at or below area median income and for certain GSE affordable mortgage products, while implementing targeted increases to the upfront fees for most
Competitive environment
The U.S. private mortgage insurance industry is highly competitive. Enact Holdings’ market share is influenced by the execution of its go to market strategy, including but not limited to, pricing competitiveness 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.
Mortgage insurance portfolio
New insurance written of $14.4$10.5 billion in the thirdfirst quarter of 2024 decreased 20% compared to the first quarter of 2023 decreased 4% compared to the third quarter of 2022 mostly from a decline in originations due to elevateda smaller estimated mortgage rates.insurance market and lower estimated market share. Enact’s primary persistency rate was 84%85% during both the third quarterfirst quarters of 2023 compared to 82% during the third quarter of 2022. The increase in2024 and 2023. Elevated persistency, was primarily driven by a decline in thelarge percentage of
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Net earned premiums increased in the thirdfirst quarter of 2024 compared to the first quarter of 2023 compared to the third quarter of 2022 primarily driven by insurance
Loss experience
Enact’s loss ratio for the three months ended September 30,March 31, 2024 and 2023 was 8% and 2022 was 7% and (17)(5)%, respectively. Enact recorded a favorable reserve adjustmentreleased reserves of $55$54 million during the thirdfirst quarter of 2024 primarily related to delinquencies from early 2023 and prior as recent uncertainty in the economic environment has not negatively impacted cure performance to the extent initially expected. During the first quarter of 2023, primarilyEnact recorded a reserve release of $70 million largely related to favorable cure performance on COVID-19 delinquencies from 20222020 and earlier, including those related to
The severity of loss on loans that do go to claim may be negatively impacted by the extended forbearance and foreclosure timelines, the associated elevated expenses and the higher loan amount of the recent new delinquencies. These negative influences on loss severity could be mitigated in part by embedded home price appreciation. For loans insured on or after October 1, 2014, Enact’s mortgage insurance policies limit the number of months of unpaid interest and associated expenses that are included in the mortgage insurance claim amount to a maximum of 36 months.
New primary delinquencies in the thirdfirst quarter of 20232024 increased compared to the thirdfirst quarter of 20222023 primarily due to the aging of large, newnewer books of business. New primary delinquencies of 11,10711,395 contributed $72$74 million of loss expense in the thirdfirst quarter of 2023,2024, while Enact incurred $39$58 million of losses from 9,1219,599 new primary delinquencies in the thirdfirst quarter of 2022.2023. In determining the loss expense estimate, considerations were given to recent cure and claim experience and the prevailing and prospective economic conditions. Approximately 12%8% of Enact’s primary new delinquencies in the thirdfirst quarter of 20232024 were subject to a forbearance plan compared to 18%17% in the thirdfirst quarter of 2022.2023. 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.
Capital requirements and transactions
As of September 30, 2023,March 31, 2024, EMICO’s
Under PMIERs, Enact is subject to operational and financial requirements that private mortgage insurers must meet in order to remain eligible to insure loans that are purchased by the GSEs. In addition, 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.
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On January 3, 2024, Enact entered into a quota share reinsurance agreement under which it will cede approximately 21% of a portion of its new insurance written in the 2024 book year. On January 30, 2024, Enact executed an excess of loss reinsurance transaction which provides up to $255 million of reinsurance coverage on a portion of current and expected new insurance written for the 2024 book year, effective January 1, 2024. Enact’s third-party reinsurance transactions provided an aggregate of approximately $1,505$1,722 million and $1,524$1,714 million of PMIERs capital credit as of September 30,March 31, 2024 and December 31, 2023, respectively. Enact may execute future credit risk transfer transactions to maintain a prudent level of financial flexibility in excess of the PMIERs capital requirements in response to potential changes in performance and June 30, 2023, respectively.
Capital returns
In April 2023,March 2024, EMICO completed a distribution to Enact Holdings that supports its ability to pay a quarterly dividend. On May 1, 2024, Enact Holdings intends to use these proceeds and future EMICO distributions to fund theannounced an increase of its next quarterly dividend as well asfrom $0.16 to bolster its financial flexibility and potentially return additional capital$0.185 per share to shareholders.be paid in June 2024. 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 on August 1, 2023 of a share repurchase program under which it mayallows for the repurchase of up to $75 million of its outstanding common stock, and on August 1, 2023, announced the authorization of an additional $100 million of its common stock, repurchases underand on May 1, 2024, Enact Holdings announced a new share repurchase program.authorization of $250 million. Genworth Holdings has agreed to participate in share repurchases in order to maintain its overall ownership at approximately its current level. As the majority shareholder, Genworth Holdings received $26$61 million of capital returns from Enact Holdings during the thirdfirst quarter of 2023. On November 1, 2023, Enact Holdings announced a special dividend2024 comprised of $113$21 million to be paid in the fourth quarter of 2023.
Returning capital to shareholders, balanced with growth and risk management priorities, remains a key commitmentpriority for Enact Holdings as it looks to enhance shareholder value through time. Future return of capital will be shaped by Enact Holdings’ capital prioritization framework, including:including supporting its existing policyholders;policyholders, growing its mortgage insurance business;business, funding attractive new business opportunities;opportunities and returning capital to shareholders. Enact Holdings’ total return of capital will also be based on its view of the prevailing and prospective macroeconomic conditions, regulatory landscape and business performance.
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Segment results of operations
Three Months Ended September 30, 2023March 31, 2024 Compared to Three Months Ended September 30, 2022
The following table sets forth the results of operations relating to our Enact segment for the periods indicated:
Three months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | �� | |||||||||||||||
Premiums | $ | 243 | $ | 235 | $ | 8 | 3 | % | ||||||||
Net investment income | 55 | 39 | 16 | 41 | % | |||||||||||
Net investment gains (losses) | — | — | — | — | % | |||||||||||
Policy fees and other income | 1 | 1 | — | — | % | |||||||||||
Total revenues | 299 | 275 | 24 | 9 | % | |||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 18 | (40 | ) | 58 | 145 | % | ||||||||||
Acquisition and operating expenses, net of deferrals | 52 | 55 | (3 | ) | (5 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 3 | 4 | (1 | ) | (25 | )% | ||||||||||
Interest expense | 13 | 12 | 1 | 8 | % | |||||||||||
Total benefits and expenses | 86 | 31 | 55 | 177 | % | |||||||||||
Income from continuing operations before income taxes | 213 | 244 | (31 | ) | (13 | )% | ||||||||||
Provision for income taxes | 48 | 53 | (5 | ) | (9 | )% | ||||||||||
Income from continuing operations | 165 | 191 | (26 | ) | (14 | )% | ||||||||||
Less: net income from continuing operations attributable to noncontrolling interests | 31 | 35 | (4 | ) | (11 | )% | ||||||||||
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 134 | 156 | (22 | ) | (14 | )% | ||||||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Net investment (gains) losses, net | — | — | — | — | % | |||||||||||
Taxes on adjustments | — | — | — | — | % | |||||||||||
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 134 | $ | 156 | $ | (22 | ) | (14 | )% | |||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 241 | $ | 235 | $ | 6 | 3 | % | ||||||||
Net investment income | 57 | 46 | 11 | 24 | % | |||||||||||
Net investment gains (losses) | (6 | ) | — | (6 | ) | NM | (1) | |||||||||
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Total revenues | 292 | 281 | 11 | 4 | % | |||||||||||
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Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 20 | (11 | ) | 31 | NM | (1) | ||||||||||
Acquisition and operating expenses, net of deferrals | 51 | 52 | (1 | ) | (2 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 2 | 3 | (1 | ) | (33 | )% | ||||||||||
Interest expense | 13 | 13 | — | — | % | |||||||||||
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Total benefits and expenses | 86 | 57 | 29 | 51 | % | |||||||||||
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Income from continuing operations before income taxes | 206 | 224 | (18 | ) | (8 | )% | ||||||||||
Provision for income taxes | 45 | 49 | (4 | ) | (8 | )% | ||||||||||
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Income from continuing operations | 161 | 175 | (14 | ) | (8 | )% | ||||||||||
Less: net income attributable to noncontrolling interests | 30 | 32 | (2 | ) | (6 | )% | ||||||||||
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Income from continuing operations available to Genworth Financial, Inc.’s common stockholders | 131 | 143 | (12 | ) | (8 | )% | ||||||||||
Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Net investment (gains) losses, net(2) | 5 | — | 5 | NM | (1) | |||||||||||
Taxes on adjustments | (1 | ) | — | (1 | ) | NM | (1) | |||||||||
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Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 135 | $ | 143 | $ | (8 | ) | (6 | )% | |||||||
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(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
(2) | Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests of $1 million for the three months ended March 31, 2024. |
Adjusted operating income available to Genworth Financial, Inc.’s common stockholders
Adjusted operating income decreased primarily attributable to a lower reserve release and higher losses on new delinquencies, and a lower favorable reserve adjustment, partially offset by higher net investment income and premiums in the current year.
Revenues
Premiums increased mostly from higher insurance
Net investment income increased primarily from higher investment yields and higher average invested assets in the current year.
86
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 | )% | |||||||
For a discussion of the change in net investment gains (losses), see the comparison for this line item under “—Investments and Derivative Instruments.”
Benefits and expenses
Benefits and other changes in policy reserves increased largely from a lower reserve release and higher losses on new delinquencies and lower favorable reserve adjustments in the current year. Enact recorded reserve releasesreleased reserves of $188$54 million during the first quarter of 2024 primarily related to delinquencies from early 2023 and prior as recent uncertainty in the current year primarilyeconomic environment has not negatively impacted cure performance to the extent initially expected. During the first quarter of 2023, Enact recorded a reserve release of $70 million largely related to favorable cure performance on COVID-19 delinquencies from 20222020 and earlier, including those related to
Provision for income taxes.
Enact selected operating performance measures
Primary Mortgage Insurance
Substantially all of Enact’s policies are primary mortgage insurance, which provides protection on individual loans at specified coverage percentages. Primary mortgage insurance is placed on individual loans at the time of origination and is typically delivered to Enact on a
Pool Mortgage Insurance
Pool mortgage insurance transactions provide coverage on a finite set of individual loans identified by the pool policy. Pool policies contain coverage percentages and provisions limiting the insurer’s obligation to pay claims until a threshold amount is reached (known as a “deductible”) or capping the insurer’s potential aggregate liability for claims payments (known as a “stop loss”) or a combination of both provisions. Pool mortgage insurance is typically used to provide additional credit enhancement for certain secondary market mortgage transactions.
The following tables settable sets forth selected operating performance measures regarding Enact as of and for the dates indicated:
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 | % | ||||||||
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 | )% |
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Primary insurance in-force | $ | 263,645 | $ | 252,516 | $ | 11,129 | 4 | % | ||||||||
Risk in-force: | ||||||||||||||||
Primary | $ | 67,950 | $ | 64,106 | $ | 3,844 | 6 | % | ||||||||
Pool | 67 | 76 | (9 | ) | (12 | )% | ||||||||||
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Total risk in-force | $ | 68,017 | $ | 64,182 | $ | 3,835 | 6 | % | ||||||||
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New insurance written | $ | 10,526 | $ | 13,154 | $ | (2,628 | ) | (20 | )% |
Primary insurance
Primary insurance
87
New insurance written
New insurance written decreased principally from a smaller estimated mortgage insurance market and lower originationsestimated market share in the current year due to elevated interest rates.
Loss and expense ratios
The following table sets forth the loss and expense ratios for Enact for the dates indicated:
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 | )% |
Three months ended March 31, | Increase (decrease) | |||||||||||
2024 | 2023 | 2024 vs. 2023 | ||||||||||
Loss ratio | 8 | % | (5 | )% | 13 | % | ||||||
Expense ratio | 22 | % | 23 | % | (1 | )% |
The loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums. The expense ratio is the ratio of general expenses to net earned premiums. In Enact,Enact’s general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.
The loss ratio increased for the three and nine months ended September 30, 2023 largely from a lower reserve release and higher losses on new delinquencies and lower favorable reserve adjustments in the current year, as discussed above.
The expense ratio for the three and nine months ended September 30, 2023 decreased primarily attributable to lower operating costsdriven by higher premiums in the current year.
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Mortgage insurance loan portfolio
The following table sets forth selected financial information regarding Enact’s loan portfolio as of September 30:
(Amounts in millions) | 2023 | 2022 | ||||||
Primary insurance in-force byloan-to-value | ||||||||
95.01% and above | $ | 44,071 | $ | 38,099 | ||||
90.01% to 95.00% | 109,019 | 101,164 | ||||||
85.01% to 90.00% | 77,121 | 69,803 | ||||||
85.00% and below | 31,803 | 32,747 | ||||||
Total | $ | 262,014 | $ | 241,813 | ||||
Primary risk in-force byloan-to-value | ||||||||
95.01% and above | $ | 12,595 | $ | 10,809 | ||||
90.01% to 95.00% | 31,696 | 29,379 | ||||||
85.01% to 90.00% | 18,945 | 17,019 | ||||||
85.00% and below | 3,820 | 3,917 | ||||||
Total | $ | 67,056 | $ | 61,124 | ||||
Primary insurance in-force by FICO(1) score at origination: | ||||||||
Over 760 | $ | 109,701 | $ | 99,177 | ||||
740-759 | 42,899 | 38,731 | ||||||
720-739 | 36,889 | 33,874 | ||||||
700-719 | 29,818 | 28,384 | ||||||
680-699 | 21,993 | 21,294 | ||||||
660-679 (2) | 11,351 | 10,842 | ||||||
640-659 | 6,166 | 6,115 | ||||||
620-639 | 2,548 | 2,663 | ||||||
<620 | 649 | 733 | ||||||
Total | $ | 262,014 | $ | 241,813 | ||||
Primary risk in-force by FICO score at origination: | ||||||||
Over 760 | $ | 28,014 | $ | 24,965 | ||||
740-759 | 11,009 | 9,808 | ||||||
720-739 | 9,553 | 8,656 | ||||||
700-719 | 7,615 | 7,200 | ||||||
680-699 | 5,582 | 5,356 | ||||||
660-679 (2) | 2,901 | 2,739 | ||||||
640-659 | 1,569 | 1,541 | ||||||
620-639 | 647 | 672 | ||||||
<620 | 166 | 187 | ||||||
Total | $ | 67,056 | $ | 61,124 | ||||
(Amounts in millions) | 2024 | 2023 | ||||||
Primary insurance in-force by loan-to-value ratio at origination: | ||||||||
95.01% and above | $ | 46,259 | $ | 40,776 | ||||
90.01% to 95.00% | 109,566 | 105,336 | ||||||
85.01% to 90.00% | 78,214 | 73,756 | ||||||
85.00% and below | 29,606 | 32,648 | ||||||
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Total | $ | 263,645 | $ | 252,516 | ||||
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Primary risk in-force by loan-to-value ratio at origination: | ||||||||
95.01% and above | $ | 13,250 | $ | 11,545 | ||||
90.01% to 95.00% | 31,881 | 30,589 | ||||||
85.01% to 90.00% | 19,265 | 18,054 | ||||||
85.00% and below | 3,554 | 3,918 | ||||||
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Total | $ | 67,950 | $ | 64,106 | ||||
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Primary insurance in-force by FICO(1) score at origination: | ||||||||
Over 760 | $ | 111,589 | $ | 104,635 | ||||
740-759 | 43,155 | 40,983 | ||||||
720-739 | 37,068 | 35,554 | ||||||
700-719 | 29,679 | 29,160 | ||||||
680-699 | 21,628 | 21,717 | ||||||
660-679(2) | 11,316 | 11,057 | ||||||
640-659 | 6,109 | 6,114 | ||||||
620-639 | 2,488 | 2,604 | ||||||
<620 | 613 | 692 | ||||||
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Total | $ | 263,645 | $ | 252,516 | ||||
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Primary risk in-force by FICO score at origination: | ||||||||
Over 760 | $ | 28,703 | $ | 26,480 | ||||
740-759 | 11,167 | 10,418 | ||||||
720-739 | 9,669 | 9,126 | ||||||
700-719 | 7,629 | 7,406 | ||||||
680-699 | 5,524 | 5,481 | ||||||
660-679(2) | 2,908 | 2,809 | ||||||
640-659 | 1,562 | 1,549 | ||||||
620-639 | 632 | 660 | ||||||
<620 | 156 | 177 | ||||||
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Total | $ | 67,950 | $ | 64,106 | ||||
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(1) | Fair Isaac Company. |
(2) | Loans with unknown FICO scores are included in the 660-679 category. |
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Delinquent loans
The following table sets forth the number of loans insured, the number of delinquent loans and the delinquency rate for Enact’s loan portfolio as of the dates indicated:
September 30, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||
Primary insurance: | ||||||||||||
Insured loans in-force | 977,832 | 960,306 | 949,052 | |||||||||
Delinquent loans | 19,241 | 19,943 | 18,856 | |||||||||
Percentage of delinquent loans (delinquency rate) | 1.97 | % | 2.08 | % | 1.99 | % |
March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||
Primary insurance: | ||||||||||||
Insured loans in-force | 969,866 | 974,516 | 965,544 | |||||||||
Delinquent loans | 19,492 | 20,432 | 18,633 | |||||||||
Percentage of delinquent loans (delinquency rate) | 2.01 | % | 2.10 | % | 1.93 | % |
Delinquency rates decreased compared to December 31, 20222023 primarily from a declinedecrease in total delinquencies mostly driven by cures and paid claims and cures outpacing new delinquencies.
The following tables set forth primary delinquencies, direct primary case reserves and risk
September 30, 2023 | ||||||||||||||||
(Dollar amounts in millions) | Delinquencies | Direct primary case reserves (1) | Risk in-force | Reserves as % of risk in-force | ||||||||||||
Payments in default: | ||||||||||||||||
3 payments or less | 9,398 | $ | 80 | $ | 568 | 14 | % | |||||||||
4 - 11 payments | 6,381 | 192 | 426 | 45 | % | |||||||||||
12 payments or more | 3,462 | 188 | 201 | 94 | % | |||||||||||
Total | 19,241 | $ | 460 | $ | 1,195 | 38 | % | |||||||||
December 31, 2022 | ||||||||||||||||
(Dollar amounts in millions) | Delinquencies | Direct primary case reserves (1) | Risk in-force | Reserves as % of risk in-force | ||||||||||||
Payments in default: | ||||||||||||||||
3 payments or less | 8,920 | $ | 69 | $ | 509 | 14 | % | |||||||||
4 - 11 payments | 6,466 | 166 | 390 | 43 | % | |||||||||||
12 payments or more | 4,557 | 244 | 248 | 98 | % | |||||||||||
Total | 19,943 | $ | 479 | $ | 1,147 | 42 | % | |||||||||
March 31, 2024 | ||||||||||||||||
(Dollar amounts in millions) | Delinquencies | Direct primary case reserves (1) | Risk in-force | Reserves as % of risk in-force | ||||||||||||
Payments in default: | ||||||||||||||||
3 payments or less | 9,506 | $ | 87 | $ | 600 | 14 | % | |||||||||
4 - 11 payments | 6,853 | 220 | 468 | 47 | % | |||||||||||
12 payments or more | 3,133 | 179 | 197 | 91 | % | |||||||||||
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Total | 19,492 | $ | 486 | $ | 1,265 | 38 | % | |||||||||
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December 31, 2023 | ||||||||||||||||
(Dollar amounts in millions) | Delinquencies | Direct primary case reserves (1) | Risk in-force | Reserves as % of risk in-force | ||||||||||||
Payments in default: | ||||||||||||||||
3 payments or less | 10,166 | $ | 88 | $ | 629 | 14 | % | |||||||||
4 - 11 payments | 6,934 | 205 | 469 | 44 | % | |||||||||||
12 payments or more | 3,332 | 184 | 200 | 92 | % | |||||||||||
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Total | 20,432 | $ | 477 | $ | 1,298 | 37 | % | |||||||||
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(1) | Direct primary case reserves exclude loss adjustment expenses, pool, incurred but not reported (“IBNR”) and reinsurance reserves. |
Reserves as a percentage of risk
90
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
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 | % |
Percent of primary risk in-force as of March 31, 2024 | Percent of direct primary case reserves as of March 31, 2024 (1) | Delinquency rate as of | ||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||||||||||
By State: | ||||||||||||||||||||
California | 13 | % | 12 | % | 2.15 | % | 2.22 | % | 1.99 | % | ||||||||||
Texas | 9 | % | 8 | % | 2.08 | % | 2.22 | % | 1.92 | % | ||||||||||
Florida (2) | 8 | % | 10 | % | 2.29 | % | 2.39 | % | 2.24 | % | ||||||||||
New York (2) | 5 | % | 11 | % | 2.93 | % | 3.05 | % | 2.82 | % | ||||||||||
Illinois (2) | 4 | % | 6 | % | 2.57 | % | 2.61 | % | 2.51 | % | ||||||||||
Arizona | 4 | % | 3 | % | 1.88 | % | 1.93 | % | 1.68 | % | ||||||||||
Michigan | 4 | % | 3 | % | 1.78 | % | 1.94 | % | 1.72 | % | ||||||||||
Georgia | 3 | % | 4 | % | 2.32 | % | 2.23 | % | 2.19 | % | ||||||||||
North Carolina | 3 | % | 2 | % | 1.46 | % | 1.56 | % | 1.48 | % | ||||||||||
Washington | 3 | % | 3 | % | 1.64 | % | 1.77 | % | 1.64 | % |
(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 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 | % |
Percent of primary risk in-force as of March 31, 2024 | Percent of direct primary case reserves as of March 31, 2024 (1) | Delinquency rate as of | ||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||||||||||||
By MSA or MD: | ||||||||||||||||||||
Phoenix, AZ MSA | 3% | 3% | 1.93 | % | 2.01 | % | 1.72 | % | ||||||||||||
Chicago-Naperville, IL MD | 3% | 4% | 2.91 | % | 2.88 | % | 2.77 | % | ||||||||||||
Atlanta, GA MSA | 3% | 3% | 2.49 | % | 2.40 | % | 2.35 | % | ||||||||||||
New York, NY MD | 2% | 7% | 3.37 | % | 3.60 | % | 3.51 | % | ||||||||||||
Houston, TX MSA | 2% | 3% | 2.48 | % | 2.67 | % | 2.40 | % | ||||||||||||
Washington-Arlington, DC MD | 2% | 2% | 1.93 | % | 2.01 | % | 1.79 | % | ||||||||||||
Dallas, TX MD | 2% | 1% | 1.79 | % | 1.92 | % | 1.65 | % | ||||||||||||
Los Angeles-Long Beach, CA MD | 2% | 3% | 2.32 | % | 2.39 | % | 2.24 | % | ||||||||||||
Riverside-San Bernardino, CA MSA | 2% | 3% | 2.78 | % | 2.83 | % | 2.54 | % | ||||||||||||
Denver-Aurora-Lakewood, CO MSA | 2% | 1% | 1.27 | % | 1.12 | % | 0.93 | % |
(1) | Direct primary case reserves exclude loss adjustment expenses, pool, IBNR and reinsurance reserves. |
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The following table sets forth the dispersion of Enact’s direct primary case reserves, primary insurance
(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 | % | ||||||||||||
(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 |
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2008 and prior | 15 | % | $ | 5,420 | 2 | % | $ | 1,397 | 2 | % | 8.12 | % | ||||||||||||
2009 to 2016 | 7 | 7,368 | 3 | 1,943 | 3 | 3.74 | % | |||||||||||||||||
2017 | 4 | 5,015 | 2 | 1,324 | 2 | 3.41 | % | |||||||||||||||||
2018 | 6 | 5,524 | 2 | 1,419 | 2 | 4.13 | % | |||||||||||||||||
2019 | 8 | 13,126 | 5 | 3,403 | 5 | 2.70 | % | |||||||||||||||||
2020 | 14 | 42,183 | 16 | 11,181 | 16 | 1.67 | % | |||||||||||||||||
2021 | 22 | 66,971 | 25 | 17,174 | 25 | 1.63 | % | |||||||||||||||||
2022 | 19 | 58,051 | 22 | 14,629 | 22 | 1.61 | % | |||||||||||||||||
2023 | 5 | 49,556 | 19 | 12,810 | 19 | 0.67 | % | |||||||||||||||||
2024 | — | 10,431 | 4 | 2,670 | 4 | 0.02 | % | |||||||||||||||||
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Total portfolio | 100 | % | $ | 263,645 | 100 | % | $ | 67,950 | 100 | % | 2.01 | % | ||||||||||||
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(1) | Direct primary case reserves exclude loss adjustment expenses, pool, IBNR and reinsurance reserves. |
Loss reserves in policy years 2008 and prior are outsized compared to their representation of risk
Long-Term Care Insurance segment
Trends and conditions
The long-term profitability of our long-term care insurance business depends upon how our actual experience compares with our valuation assumptions, including but not limited to
Because these factors are not known in advance, change over time, are difficult to accurately predict and are inherently uncertain, we cannot determine with precision the ultimate amounts we will pay for actual claims or the timing of those payments.payments as our actual claims experience will emerge over many years, or decades. For example, average claim reserves for new claims have trended 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 certain of our oldest long-term care insurance blocks of business have reached their peak claim years and will decrease as the blocks run off, we are gaining more experience on the majority of our larger blocks of business and fully expect continued overall growth in new claims as policyholders reach their peak claim years.
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Additionally, in our long-term care insurance business, we have observed an increase in the cost of care in part due to elevated inflation. Increases in cost of care have resulted in higher claim payments in our long-term care insurance business, which could have a material adverse impact on our liquidity, results of operations and financial condition if it persists. We will continue to monitor our experience and assumptions closely and make changes to our assumptions and methodologies, as appropriate, for our long-term care insurance products. Any adverse change in our assumptions could have a negative impact on our reserve levels and results of operations in our long-term care insurance business. Even small changes in assumptions or small deviations of actual experience from assumptions could have, and in the past have had, material impacts on our reserve levels, results of operations and financial condition.
The impacts of assumption updates and actual versus expected experience will continue to drive volatility in our long-term care insurance results. Under LDTI, approximately 50% ofresults, particularly for our cohorts currently
The financial condition of our cash flow assumptions, including mortality, benefit utilization, expected claim incidencelong-term care insurance business is also impacted by interest rates. We remeasure our liability for future policy benefits and terminations,the related reinsurance recoverables at the single-A bond rate each quarter. As a result, our reported insurance liabilities are sensitive to movements in interest rates, which will likely result in continued volatility to our reserve balances and benefit reductions related to
In-force rate actions and legal settlements among other assumptions, for our long-term care insurance products in the fourth quarter of each year. Cash flow assumptions related to legal settlements also include estimates for cash payments to policyholders who elect certain reduced benefit options in connection with the legal settlements, referred to herein as settlement payments. In the fourth quarter of 2022, we refined several assumptions, including reducing our lapse assumption in light of favorable experience from our long-term care insurance legal settlement elections and benefit reductions. The favorable impact from changes in cash 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 multi-yearin-forcerate action plan. However, we did increase the value of our assumption for future approvals and benefit reductions based on recent rate increase approval experience, regulatory support and legal settlement results.
Given the ongoing challenges in our long-term care insurance business, we continue to pursue initiatives to improve the risk and profitability profile of our business, including premium rate increases and associated benefit reductions on our
In addition, we have reached certainthree legal settlements regarding alleged disclosure deficiencies in premium increases for long-term care insurance policies. The firstThese legal settlement related to certainsettlements cover approximately 70% of our long-term care insurance policies, which represents approximately 20% of our block was implemented beginning in 2021 and its implementation was materially completed in the second quarter of 2022. A second legal settlement on certain of our long-term care insurance policies, which represents 15% of our block, became final on July 29, 2022.have helped accelerate benefit reductions. We began implementation of this settlement on August 1, 2022implementing the third and expect it to be materially complete at the end of 2023. On March 27, 2023, a third similar settlement on certain of our long-term care insurance policies, which represents 35% of our block, became final. We began implementation of thisfinal legal settlement during the second quarter of 2023.
While the second and third legal settlements are similar, to the first settlement, their ultimate impact will dependdepends on the policyholder election rates and the types of reduced benefits elected. Given our experience with the first settlement,prior settlements, we expect the second and third legal settlementssettlement to result in an overall net favorable economic impact to our long-term care insurance business as they reduceit reduces tail risk on these long-duration liabilities.
While we expect renewal premiums to decline over time as the block runs off, benefit reductions elected by policyholders in connection with our in-force rate actions and legal settlements could acceleratehave accelerated that decline if policyholders continue to elect
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Segment results of operations
Three Months Ended September 30, 2023March 31, 2024 Compared to Three Months Ended September 30, 2022
The following table sets forth the results of operations relating to our Long-Term Care Insurance segment for the periods indicated:
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) | ||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 578 | $ | 616 | $ | (38 | ) | (6 | )% | |||||||
Net investment income | 464 | 473 | (9 | ) | (2 | )% | ||||||||||
Net investment gains (losses) | 63 | 9 | 54 | NM | (1) | |||||||||||
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Total revenues | 1,105 | 1,098 | 7 | 1 | % | |||||||||||
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Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 936 | 944 | (8 | ) | (1 | )% | ||||||||||
Liability remeasurement (gains) losses | (16 | ) | (32 | ) | 16 | 50 | % | |||||||||
Acquisition and operating expenses, net of deferrals | 102 | 119 | (17 | ) | (14 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 17 | 18 | (1 | ) | (6 | )% | ||||||||||
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Total benefits and expenses | 1,039 | 1,049 | (10 | ) | (1 | )% | ||||||||||
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Income from continuing operations before income taxes | 66 | 49 | 17 | 35 | % | |||||||||||
Provision for income taxes | 14 | 18 | (4 | ) | (22 | )% | ||||||||||
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Income from continuing operations | 52 | 31 | 21 | 68 | % | |||||||||||
Adjustments to income from continuing operations: | ||||||||||||||||
Net investment (gains) losses | (63 | ) | (9 | ) | (54 | ) | NM | (1) | ||||||||
Expenses related to restructuring | 1 | (1 | ) | 2 | 200 | % | ||||||||||
Taxes on adjustments | 13 | 2 | 11 | NM | (1) | |||||||||||
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Adjusted operating income available to Genworth Financial, Inc.’s common stockholders | $ | 3 | $ | 23 | $ | (20 | ) | (87 | )% | |||||||
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(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders
Adjusted operating income in the prior year wasdecreased primarily from higher liability remeasurement losses largely driven by timing impacts related to the second
Revenues
Premiums, including from in-force rate actions approved and implemented, decreased primarily driven by lower renewal premiums from policy terminations and policies entering
Net investment income decreased largely from lower income from U.S. Government Treasury Inflation Protected Securities (“TIPS”) and limited partnerships partially offset by higher investment yields and higher average invested assets in the current year.
For a discussion of the change in net investment gains (losses), see the comparison for this line item under “—Investments and Derivative Instruments.”
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Benefits and expenses
Benefits and other changes in policy reserves decreased primarily from policy terminations, partially offset by aging of the in-force block, including higher interest accretion in the current year.
The liability remeasurement lossgain decreased mainly due to less favorable mortality in the current year, was primarily due to adverse actual versus expected experience largely drivenpartially offset by timing impactsan unfavorable cash flow assumption update related to implementation timing of our in-force rate action plan in the second legal settlement, higher claims and lower terminations.
Acquisition and operating expenses, net of deferrals, decreased principally from a $20$13 million accrual for legal settlement costs in the prior year that did not recur, partially offset by higher operating costs in the current year.
Provision for income taxes.
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 | )% | ||||||
Long-Term Care Insurance selected operating performance measures
Liability remeasurement (gains) losses
We include expectations for benefit reductions related to
The following table sets forth the
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) | |||||||||||||||
Three months ended March 31, | (Increase) decrease and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Cash flow assumption updates | $ | (2 | ) | $ | 21 | $ | (23 | ) | (110 | )% | ||||||
Actual to expected experience | (14 | ) | (53 | ) | 39 | 74 | % | |||||||||
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Total liability remeasurement (gains) losses | $ | (16 | ) | $ | (32 | ) | $ | 16 | 50 | % | ||||||
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For aadditional discussion of the change in liability remeasurement (gains) losses, see the comparison for this line item above in “—Segment results of operations.”
In-force
As part of our strategy for our long-term care insurance business, we have been implementing, and expect to continue to pursue, significant premium rate increases and associated benefit reductions on older generation blocks of business in order to bring those blocks closer to a break-even pointensure the
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continued self-sustainability of the legacy life insurance subsidiaries over time and reduce the strain on earnings and capital.
The following table sets forth filing approvals as part of our multi-year
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 |
Three months ended March 31, | ||||||||
(Dollar amounts in millions) | 2024 | 2023 | ||||||
State filings approved | 23 | 23 | ||||||
Impacted in-force premiums | $ | 166 | $ | 78 | ||||
Weighted-average percentage rate increase approved | 25 | % | 64 | % | ||||
Gross incremental premiums approved | $ | 41 | $ | 50 |
During the nine months ended September 30, 2023,first quarter of 2024, we also submitted 104five new filings on approximately $705$41 million in annualized
The approval process for
We continue to work closely with the NAICNational Association of Insurance Commissioners and state regulators to demonstrate the broad-based need for actuarially justified rate increases in order to pay future claims. Because obtaining actuarially justified rate increases and associated benefit reductions is important to our ability to pay future claims, we will consider litigation against states that decline to approve those actuarially justified rate increases. In January 2022,As of March 31, 2024, we beganwere in litigation with two states that have refused to approve actuarially justified rate increases.
Life and Annuities segment
Trends and conditions
Many factors can affect the results of our life insurance and annuity products, as further discussed below. Because these factors are not known in advance, change over time, are difficult to accurately predict and are inherently uncertain, we cannot determine with precision the ultimate amounts we will pay for actual claims or the timing of those payments. We will continue to monitor our experience and assumptions closely and make changes to our assumptions and methodologies, as appropriate, for our life insurance and annuity products. Even small changes in assumptions or small deviations of actual experience from assumptions could have, and in the past have had, material impacts on our reserve levels, results of operations and financial condition. Results of our life insurance and annuity products depend significantly upon the extent to which our actual future experience is consistent with assumptions and methodologies we have used in calculating our reserves. Results of our life insurance and annuity products are also impacted by interest rates. For a discussion of the potential impacts and risks associated with changes in interest rates, see “Item 1A—Risk Factors—Interest rates and changes in rates, including changes in monetary policy to combat inflation, could materially adversely affect our business and profitability” in our 2023 Annual Report on Form 10-K.
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.
Life insurance
Results of our life insurance products are impacted primarily by mortality, persistency, investment yields, expenses, reinsurance and statutory reserve requirements, among other factors.
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Mortality levels may deviate each period from historical trends. OverallWe have typically observed seasonally higher mortality during the first quarter as compared to the remaining quarters of the year. However, overall mortality experience was favorable forless unfavorable during the thirdfirst quarter of 2024 compared to the first quarter of 2023 and the fourth quarter of 2023, largely in our universal life insurance products. The updates to our mortality assumptions in the fourth quarter of 2023, which increased expected mortality, also contributed to the less unfavorable mortality experience observed in the first quarter of 2024 compared to the third quarter of 2022 but was slightly less favorable than the second quarter of 2023. In our life insurance products,
Fixed annuities
Results of our fixed annuity products are affected primarily by investment performance, interest rate levels, the slope of the interest rate yield curve, net interest spreads, equity market conditions, mortality, persistency and expense and commission levels.
We monitor and change crediting rates on fixed deferred annuities on a regular basis to maintain spreads and targeted returns, if applicable. However, we have seen and could continue to see declines in our fixed annuity spreads and margins as interest rates change, depending on the severity of the change.
For fixed indexed annuities, equity market and interest rate performance and volatility could also result in additional gains or losses, although associated hedging activities are expected to partially mitigate these impacts.
Variable annuities
Results of our variable annuity products are affected primarily by investment performance, interest rate levels, the slope of the interest rate yield curve, net interest spreads, equity market conditions, mortality, surrenders and scheduled maturities. In addition, the results of our variable annuity products can significantly impact our regulatory capital requirements, distributable earnings and liquidity. We use hedging strategies as well as liquidity planning and asset-liability management to help mitigate the impacts. In addition, we have used reinsurance to help mitigate volatility in our variable annuity results.
Equity market volatility and interest rate movements have caused fluctuations in the results of our variable annuity products and regulatory capital requirements. In the future, equity market and interest rate market performance and volatility could result in additional gains or losses in these products, although associated hedging activities are expected to partially mitigate these impacts.
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Segment results of operations
Three Months Ended September 30, 2023March 31, 2024 Compared to Three Months Ended September 30, 2022
The following table sets forth the results of operations relating to our Life and Annuities segment for the periods indicated:
Three months ended September 30, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2023 | 2022 | 2023 vs. 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 48 | $ | 55 | $ | (7 | ) | (13 | )% | |||||||
Net investment income | 261 | 271 | (10 | ) | (4 | )% | ||||||||||
Net investment gains (losses) | (18 | ) | (15 | ) | (3 | ) | (20 | )% | ||||||||
Policy fees and other income | 158 | 169 | (11 | ) | (7 | )% | ||||||||||
Total revenues | 449 | 480 | (31 | ) | (6 | )% | ||||||||||
Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 229 | 247 | (18 | ) | (7 | )% | ||||||||||
Liability remeasurement (gains) losses | 12 | 14 | (2 | ) | (14 | )% | ||||||||||
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 | 54 | 57 | (3 | ) | (5 | )% | ||||||||||
Amortization of deferred acquisition costs and intangibles | 45 | 57 | (12 | ) | (21 | )% | ||||||||||
Total benefits and expenses | 443 | 476 | (33 | ) | (7 | )% | ||||||||||
Income from continuing operations before income taxes | 6 | 4 | 2 | 50 | % | |||||||||||
Provision for income taxes | 1 | — | 1 | NM | (1) | |||||||||||
Income from continuing operations | 5 | 4 | 1 | 25 | % | |||||||||||
Adjustments to income from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 18 | 15 | 3 | 20 | % | |||||||||||
Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges (2) | (26 | ) | (32 | ) | 6 | 19 | % | |||||||||
Pension plan termination costs | — | 6 | (6 | ) | (100 | )% | ||||||||||
Taxes on adjustments | — | 1 | (1 | ) | (100 | )% | ||||||||||
Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (3 | ) | $ | (6 | ) | $ | 3 | 50 | % | ||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 53 | $ | 62 | $ | (9 | ) | (15 | )% | |||||||
Net investment income | 254 | 264 | (10 | ) | (4 | )% | ||||||||||
Net investment gains (losses) | (4 | ) | (10 | ) | 6 | 60 | % | |||||||||
Policy fees and other income | 158 | 163 | (5 | ) | (3 | )% | ||||||||||
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| |||||||||||
Total revenues | 461 | 479 | (18 | ) | (4 | )% | ||||||||||
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Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | 250 | 246 | 4 | 2 | % | |||||||||||
Liability remeasurement (gains) losses | 8 | 17 | (9 | ) | (53 | )% | ||||||||||
Changes in fair value of market risk benefits and associated hedges | (23 | ) | 17 | (40 | ) | NM | (1) | |||||||||
Interest credited | 125 | 126 | (1 | ) | (1 | )% | ||||||||||
Acquisition and operating expenses, net of deferrals | 54 | 53 | 1 | 2 | % | |||||||||||
Amortization of deferred acquisition costs and intangibles | 45 | 51 | (6 | ) | (12 | )% | ||||||||||
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Total benefits and expenses | 459 | 510 | (51 | ) | (10 | )% | ||||||||||
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Income (loss) from continuing operations before income taxes | 2 | (31 | ) | 33 | 106 | % | ||||||||||
Benefit for income taxes | — | (7 | ) | 7 | 100 | % | ||||||||||
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Income (loss) from continuing operations | 2 | (24 | ) | 26 | 108 | % | ||||||||||
Adjustments to income (loss) from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 4 | 10 | (6 | ) | (60 | )% | ||||||||||
Changes in fair value of market risk benefits attributable to interest rates, equity markets and associated hedges(2) | (26 | ) | 14 | (40 | ) | NM | (1) | |||||||||
Taxes on adjustments | 5 | (4 | ) | 9 | NM | (1) | ||||||||||
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Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (15 | ) | $ | (4 | ) | $ | (11 | ) | NM | (1) | |||||
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(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
(2) | For the three months ended |
98
The following table sets forth adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders for the products included in our Life and Annuities segment for the periods indicated:
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 | % | ||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders: | ||||||||||||||||
Life insurance | $ | (33 | ) | $ | (27 | ) | $ | (6 | ) | (22 | )% | |||||
Fixed annuities | 11 | 14 | (3 | ) | (21 | )% | ||||||||||
Variable annuities | 7 | 9 | (2 | ) | (22 | )% | ||||||||||
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Total adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (15 | ) | $ | (4 | ) | $ | (11 | ) | NM | (1) | |||||
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(1) | We define “NM” as not meaningful for increases or decreases greater than 200%. |
Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders
The adjusted operating loss in our life insurance products decreasedincreased primarily due to favorable mortality experiencelower premiums and lower DAC amortization,product charges reflecting the runoff of our in-force blocks, partially offset by higher liability remeasurement losses largely related to a voluntary recapture of previously ceded reinsuranceless unfavorable mortality experience in the current year.
Adjusted operating income in our fixed annuity products increaseddecreased mainly from favorable mortality in our fixed payout annuity products, partially offset by lower net spreads primarily related to block runoff in the current year.
Revenues
Premiums
Net investment income
Net investment gains (losses)
Policy fees and other income
Benefits and expenses
Benefits and other changes in policy reserves
Our life insurance products decreased $13increased $9 million primarily from a lower favorable mortalitychange in reserves in our term life insurance products related to block runoff and from aging of the in-force block in our universal life insurance products, partially offset by lower lapsesless unfavorable mortality in the current year.
Our fixed annuity products decreased $3 million largely from block runoff in the current year.
Liability remeasurement (gains) losses. The decrease in the loss was driven mostly by less unfavorable mortality in our term life insurance products in the current year.
99
Changes in fair value of market risk benefits and associated hedges
Our variable annuity products had an unfavorablea favorable variance of $6$25 million primarily attributable to higher derivative losses and a less favorable impact fromchange in the interest rate increases,yield curve, partially offset by a less unfavorable equity market impacthigher derivative losses in the current year.
Our fixed annuity products had a favorable variance of $3$15 million primarily driven by higher interest rates in the current year.
Amortization of deferred acquisition costs and intangibles.
Benefit for income taxes.
Life and Annuities selected operating performance measures
Life insurance
The following table sets forth selected operating performance measures regarding our life insurance products as of the dates indicated:
March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Term and whole life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 43,512 | $ | 46,964 | $ | (3,452 | ) | (7 | )% | |||||||
Life insurance in-force, before reinsurance | $ | 263,727 | $ | 292,091 | $ | (28,364 | ) | (10 | )% | |||||||
Term universal life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 90,054 | $ | 91,817 | $ | (1,763 | ) | (2 | )% | |||||||
Life insurance in-force, before reinsurance | $ | 90,648 | $ | 92,431 | $ | (1,783 | ) | (2 | )% | |||||||
Universal life insurance | ||||||||||||||||
Life insurance in-force, net of reinsurance | $ | 28,306 | $ | 29,475 | $ | (1,169 | ) | (4 | )% | |||||||
Life insurance in-force, before reinsurance | $ | 31,831 | $ | 33,246 | $ | (1,415 | ) | (4 | )% |
The decrease in relation to
100
Three Months Ended September 30, 2023March 31, 2024 Compared to NineThree Months Ended September 30, 2022
The following table sets forth the results of operations relating to our LifeCorporate and Annuities segmentOther for the periods indicated:
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 | % | ||||||
Three months ended March 31, | Increase (decrease) and percentage change | |||||||||||||||
(Amounts in millions) | 2024 | 2023 | 2024 vs. 2023 | |||||||||||||
Revenues: | ||||||||||||||||
Premiums | $ | 3 | $ | 2 | $ | 1 | 50 | % | ||||||||
Net investment income | 7 | 4 | 3 | 75 | % | |||||||||||
Net investment gains (losses) | (4 | ) | (10 | ) | 6 | 60 | % | |||||||||
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Total revenues | 6 | (4 | ) | 10 | NM | (1) | ||||||||||
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Benefits and expenses: | ||||||||||||||||
Benefits and other changes in policy reserves | (3 | ) | (3 | ) | — | — | % | |||||||||
Acquisition and operating expenses, net of deferrals | 29 | 16 | 13 | 81 | % | |||||||||||
Amortization of deferred acquisition costs and intangibles | 1 | — | 1 | NM | (1) | |||||||||||
Interest expense | 17 | 16 | 1 | 6 | % | |||||||||||
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Total benefits and expenses | 44 | 29 | 15 | 52 | % | |||||||||||
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Loss from continuing operations before income taxes | (38 | ) | (33 | ) | (5 | ) | (15 | )% | ||||||||
Provision (benefit) for income taxes | 7 | (5 | ) | 12 | NM | (1) | ||||||||||
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Loss from continuing operations | (45 | ) | (28 | ) | (17 | ) | (61 | )% | ||||||||
Adjustments to loss from continuing operations: | ||||||||||||||||
Net investment (gains) losses | 4 | 10 | (6 | ) | (60 | )% | ||||||||||
(Gains) losses on early extinguishment of debt | (1 | ) | (1 | ) | — | — | % | |||||||||
Expenses related to restructuring | 6 | 4 | 2 | 50 | % | |||||||||||
Taxes on adjustments | (2 | ) | (3 | ) | 1 | 33 | % | |||||||||
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Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders | $ | (38 | ) | $ | (18 | ) | $ | (20 | ) | (111 | )% | |||||
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(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 | |||||||||||||
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 | % | ||||||
Adjusted operating loss available to Genworth Financial, Inc.’s common stockholders
The adjusted operating loss in our life insurance products decreased largelyincreased primarily from lower DAC amortizationtiming of certain tax related to higher lapse in the prior year and from favorable mortality experienceitems in the current year as the
Revenues
For a discussion of the change in net investment gains (losses), see the comparison for this line item under “—Investments and Derivative Instruments.”
Benefits and expenses
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 | )% |
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 | ) | $ | — | — | % | ||||||
Acquisition and operating expenses, net of deferrals, increased primarily from higher expenses related to CareScout growth initiatives, andas well as higher employee-related expenses in the current year, partially offset by a loss of $3 million inyear.
101
The provision for income taxes for the prior yearthree months ended March 31, 2024 was primarily related to the early redemptiontiming of Genworth Holdings’ 2024 Notes that did not recur.
Investments and Derivative Instruments
Trends and conditions
Investments
During the three months ended September 30, 2022March 31, 2024, our investment portfolio was largely related to tax expense on certain forward starting swap gains that are tax effected at the previously enacted federal income tax rate of 35% as they are amortized into net investment income, partially offset by a tax benefit related to the
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 | )% | |||||
The U.S. Federal Reserve increasedkept interest rates by 25 basis points at its July 2023 meeting, bringingunchanged during the upper endfirst quarter of the target range to the highest level since 2001, but held rates steady at its September and November 2023 meetings2024 as it continues to monitor economic activity and inflation. The U.S. consumer price index increased from
During the secondfirst quarter of 2023 while core inflation, which excludes the food2024, both short-term and energy sectors, continued to decline from the second quarter of 2023, although it remained at elevated levels
Credit spreads tightened and credit market performance remained tight and contributed to elevated inflation in the third quarter of 2023 with real wage growth continuing to decline but job creation exceeding market expectations.
As of 2023 flat compared to the second quarter of 2023 and remained below first half of 2023 levels. Corporate borrowers in both theMarch 31, 2024, our investment grade and below investment grade markets maintained consistent access to capital markets, with a significant increase in below investment grade issuances through the end of the third quarter of 2023 relative to the same period last year.
As of September 30, 2023,March 31, 2024, our fixed maturity securities portfolio, which was 96% investment grade, comprised 75% of our total invested assets and cash.
Derivatives
As of September 30, 2023, $1.3March 31, 2024, $1.2 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 September 30, 2023,March 31, 2024, we posted initial margin of $92$70 million to our clearing agents, which represented $46$35 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 September 30, 2023, $11.0March 31, 2024, $12.4 billion notional of our derivatives portfolio was in bilateral
102
Investment results
The following tables settable sets 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 September 30, | Increase (decrease) | |||||||||||||||||||||||
2023 | 2022 | 2023 vs. 2022 | ||||||||||||||||||||||
(Amounts in millions) | Yield | Amount | Yield | Amount | Yield | Amount | ||||||||||||||||||
Fixed maturity securities—taxable | 4.5 | % | $ | 559 | 4.5 | % | $ | 576 | — | % | $ | (17 | ) | |||||||||||
Fixed maturity securities—non-taxable | 5.6 | % | 1 | 7.1 | % | 2 | (1.5 | )% | (1 | ) | ||||||||||||||
Equity securities | 1.1 | % | 1 | 4.6 | % | 3 | (3.5 | )% | (2 | ) | ||||||||||||||
Commercial mortgage loans | 4.5 | % | 76 | 4.6 | % | 81 | (0.1 | )% | (5 | ) | ||||||||||||||
Policy loans | 10.3 | % | 58 | 10.2 | % | 55 | 0.1 | % | 3 | |||||||||||||||
Limited partnerships (1) | 4.7 | % | 31 | 7.0 | % | 38 | (2.3 | )% | (7 | ) | ||||||||||||||
Other invested assets (2) | 48.3 | % | 69 | 57.0 | % | 67 | (8.7 | )% | 2 | |||||||||||||||
Cash, cash equivalents, restricted cash and short-term investments | 5.3 | % | 28 | 1.7 | % | 7 | 3.6 | % | 21 | |||||||||||||||
Gross investment income before expenses and fees | 5.1 | % | 823 | 5.1 | % | 829 | — | % | (6 | ) | ||||||||||||||
Expenses and fees | (0.1 | )% | (22 | ) | (0.1 | )% | (21 | ) | — | % | (1 | ) | ||||||||||||
Net investment income | 5.0 | % | $ | 801 | 5.0 | % | $ | 808 | — | % | $ | (7 | ) | |||||||||||
Average invested assets and cash | $ | 64,622 | $ | 65,033 | $ | (411 | ) | |||||||||||||||||
Three months ended March 31, | Increase (decrease) | |||||||||||||||||||||||
2024 | 2023 | 2024 vs. 2023 | ||||||||||||||||||||||
(Amounts in millions) | Yield | Amount | Yield | Amount | Yield | Amount | ||||||||||||||||||
Fixed maturity securities—taxable | 4.5 | % | $ | 554 | 4.4 | % | $ | 561 | 0.1 | % | $ | (7 | ) | |||||||||||
Fixed maturity securities—non-taxable | 10.8 | % | 1 | 4.6 | % | 1 | 6.2 | % | — | |||||||||||||||
Equity securities | 1.9 | % | 2 | 2.3 | % | 2 | (0.4 | )% | — | |||||||||||||||
Commercial mortgage loans | 4.4 | % | 75 | 4.4 | % | 76 | — | % | (1 | ) | ||||||||||||||
Policy loans | 10.5 | % | 58 | 10.3 | % | 55 | 0.2 | % | 3 | |||||||||||||||
Limited partnerships (1) | 2.8 | % | 20 | 4.7 | % | 28 | (1.9 | )% | (8 | ) | ||||||||||||||
Other invested assets (2) | 47.7 | % | 68 | 51.6 | % | 68 | (3.9 | )% | — | |||||||||||||||
Cash, cash equivalents, restricted cash and short-term investments | 5.1 | % | 27 | 4.0 | % | 18 | 1.1 | % | 9 | |||||||||||||||
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Gross investment income before expenses and fees | 5.0 | % | 805 | 5.0 | % | 809 | — | % | (4 | ) | ||||||||||||||
Expenses and fees | (0.1 | )% | (23 | ) | (0.1 | )% | (22 | ) | — | % | (1 | ) | ||||||||||||
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Net investment income | 4.9 | % | $ | 782 | 4.9 | % | $ | 787 | — | % | $ | (5 | ) | |||||||||||
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Average invested assets and cash | $ | 64,265 | $ | 64,768 | $ | (503 | ) | |||||||||||||||||
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(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. |
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 | ) | |||||||||||||||||
Yields are based on net investment income as reported under U.S. GAAP and are consistent with how we measure our investment performance for management purposes. Yields are annualized, for interim periods, and are calculated as net investment income as a percentage of average quarterly asset carrying values except for fixed maturity securities, derivatives and derivative counterparty collateral, which exclude unrealized fair value adjustments.
Annualized weighted-average investment yields were unchanged as lowerunchanged; however, net investment income was offset bydecreased slightly primarily due to lower average invested assets. Net investment income included $16 million of lower income related to inflation-driven volatility on TIPS and $7 million of lower limited partnership income. We experienced higher returns on our short-term investments mainly due to higher interest rates in the current year.
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The following table sets forth net investment gains (losses) for the periods indicated:
Three months ended March 31, | ||||||||
(Amounts in millions) | 2024 | 2023 | ||||||
Realized investment gains (losses): | ||||||||
Available-for-sale fixed maturity securities: | ||||||||
Realized gains | $ | 7 | $ | 3 | ||||
Realized losses | (29 | ) | (19 | ) | ||||
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Net realized gains (losses) on available-for-sale fixed maturity securities | (22 | ) | (16 | ) | ||||
Net realized gains (losses) on equity securities sold | — | — | ||||||
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Total net realized investment gains (losses) | (22 | ) | (16 | ) | ||||
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Net change in allowance for credit losses on available-for-sale fixed maturity securities | — | (15 | ) | |||||
Net unrealized gains (losses) on equity securities still held | 32 | 11 | ||||||
Net unrealized gains (losses) on limited partnerships | 43 | — | ||||||
Commercial mortgage loans | (2 | ) | (2 | ) | ||||
Derivative instruments | 1 | 12 | ||||||
Other | (3 | ) | (1 | ) | ||||
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Net investment gains (losses) | $ | 49 | $ | (11 | ) | |||
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(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 | |||||
The three months ended September 30, 2022March 31, 2024 included $38 million of realized losses primarily driven by sales of U.S. corporate securities to manage asset exposure.
We had $11 million in the current year.
Investment portfolio
The following table sets forth our cash, cash equivalents and invested assets as of the dates indicated:
March 31, 2024 | December 31, 2023 | |||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | ||||||||||||
Available-for-sale fixed maturity securities: | ||||||||||||||||
Public | $ | 31,412 | 51 | % | $ | 32,189 | 51 | % | ||||||||
Private | 14,653 | 24 | 14,592 | 24 | ||||||||||||
Equity securities | 427 | 1 | 396 | 1 | ||||||||||||
Commercial mortgage loans, net | 6,719 | 11 | 6,802 | 10 | ||||||||||||
Policy loans | 2,219 | 4 | 2,220 | 4 | ||||||||||||
Limited partnerships | 2,949 | 5 | 2,821 | 5 | ||||||||||||
Other invested assets | 683 | 1 | 731 | 1 | ||||||||||||
Cash, cash equivalents and restricted cash | 1,952 | 3 | 2,215 | 4 | ||||||||||||
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Total cash, cash equivalents and invested assets | $ | 61,014 | 100 | % | $ | 61,966 | 100 | % | ||||||||
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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 | % | ||||||||
For a discussion of the change in cash, cash equivalents and invested assets, see the comparison for these line items under “—Consolidated Balance Sheets.” See note 54 in our unaudited condensed consolidated financial statements under “Item 1—Financial Statements” for additional information related to our investment portfolio.
We hold fixed maturity and equity securities, limited partnerships, derivatives, embedded derivatives and certain other financial instruments, which are carried at fair value. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. As of September 30, 2023,March 31, 2024, approximately 6%7% of our investment holdings recorded at fair value was based on significant inputs that were not market observable and were classified as Level 3 measurements. See note 76 in our unaudited condensed consolidated financial statements under “Item 1—Financial Statements” for additional information related to fair value.
(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 | $ | 3,498 | $ | 6 | $ | (392 | ) | $ | — | $ | 3,112 | |||||||||
State and political subdivisions | 2,566 | 5 | (407 | ) | — | 2,164 | ||||||||||||||
Non-U.S. government | 699 | 9 | (125 | ) | — | 583 | ||||||||||||||
U.S. corporate: | ||||||||||||||||||||
Utilities | 4,454 | 13 | (611 | ) | — | 3,856 | ||||||||||||||
Energy | 2,454 | 18 | (265 | ) | — | 2,207 | ||||||||||||||
Finance and insurance | 7,920 | 22 | (1,069 | ) | — | 6,873 | ||||||||||||||
Consumer—non-cyclical | 4,632 | 32 | (538 | ) | — | 4,126 | ||||||||||||||
Technology and communications | 3,212 | 26 | (444 | ) | — | 2,794 | ||||||||||||||
Industrial | 1,309 | 8 | (168 | ) | — | 1,149 | ||||||||||||||
Capital goods | 2,255 | 19 | (235 | ) | — | 2,039 | ||||||||||||||
Consumer—cyclical | 1,736 | 6 | (194 | ) | — | 1,548 | ||||||||||||||
Transportation | 1,181 | 16 | (131 | ) | — | 1,066 | ||||||||||||||
Other | 320 | 1 | (23 | ) | — | 298 | ||||||||||||||
Total U.S. corporate | 29,473 | 161 | (3,678 | ) | — | 25,956 | ||||||||||||||
Non-U.S. corporate: | ||||||||||||||||||||
Utilities | 809 | — | (90 | ) | — | 719 | ||||||||||||||
Energy | 1,054 | 10 | (86 | ) | — | 978 | ||||||||||||||
Finance and insurance | 2,045 | 22 | (223 | ) | — | 1,844 | ||||||||||||||
Consumer—non-cyclical | 688 | 1 | (107 | ) | — | 582 | ||||||||||||||
Technology and communications | 974 | 1 | (135 | ) | — | 840 | ||||||||||||||
Industrial | 853 | 2 | (86 | ) | — | 769 | ||||||||||||||
Capital goods | 593 | 1 | (70 | ) | — | 524 | ||||||||||||||
Consumer—cyclical | 241 | — | (30 | ) | — | 211 | ||||||||||||||
Transportation | 359 | 7 | (32 | ) | — | 334 | ||||||||||||||
Other | 819 | 3 | (69 | ) | — | 753 | ||||||||||||||
Total non-U.S. corporate | 8,435 | 47 | (928 | ) | — | 7,554 | ||||||||||||||
Residential mortgage-backed | 974 | 1 | (84 | ) | — | 891 | ||||||||||||||
Commercial mortgage-backed | 1,868 | 1 | (360 | ) | (6 | ) | 1,503 | |||||||||||||
Other asset-backed | 2,342 | 1 | (138 | ) | — | 2,205 | ||||||||||||||
Total available-for-sale | $ | 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 | |||||||||
Other invested assets
The following table sets forth the carrying values of our other invested assets as of the dates indicated:
September 30, 2023 | December 31, 2022 | |||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | ||||||||||||
Bank loan investments | $ | 530 | 82 | % | $ | 467 | 82 | % | ||||||||
Derivatives | 38 | 6 | 50 | 9 | ||||||||||||
Short-term investments | 30 | 5 | 3 | 1 | ||||||||||||
Other investments | 47 | 7 | 46 | 8 | ||||||||||||
Total other invested assets | $ | 645 | 100 | % | $ | 566 | 100 | % | ||||||||
March 31, 2024 | December 31, 2023 | |||||||||||||||
(Amounts in millions) | Carrying value | % of total | Carrying value | % of total | ||||||||||||
Bank loan investments | $ | 520 | 76 | % | $ | 529 | 72 | % | ||||||||
Derivatives | 107 | 16 | 131 | 18 | ||||||||||||
Short-term investments | 10 | 1 | 27 | 4 | ||||||||||||
Other investments | 46 | 7 | 44 | 6 | ||||||||||||
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Total other invested assets | $ | 683 | 100 | % | $ | 731 | 100 | % | ||||||||
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Derivatives decreased largely from funding of additional investments, partially offset by principal payments. Short-term investments increased from net purchasesan increase in interest rates in the current year.
Derivatives
The activity associated with derivative instruments can generally be measured by the change in notional value over the periods presented. However, for fixed indexed 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:
(Notional in millions) | Measurement | December 31, 2023 | Additions | Maturities/ terminations | March 31, 2024 | |||||||||||||||
Derivatives designated as hedges |
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Cash flow hedges: | ||||||||||||||||||||
Interest rate swaps | Notional | $ | 8,975 | $ | 231 | $ | (101 | ) | $ | 9,105 | ||||||||||
Foreign currency swaps | Notional | 131 | 13 | — | 144 | |||||||||||||||
Forward bond purchase commitments | Notional | 1,075 | 934 | — | 2,009 | |||||||||||||||
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Total cash flow hedges | 10,181 | 1,178 | (101 | ) | 11,258 | |||||||||||||||
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Total derivatives designated as hedges | 10,181 | 1,178 | (101 | ) | 11,258 | |||||||||||||||
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Derivatives not designated as hedges | ||||||||||||||||||||
Equity index options | Notional | 702 | 178 | (209 | ) | 671 | ||||||||||||||
Financial futures | Notional | 1,251 | 1,191 | (1,268 | ) | 1,174 | ||||||||||||||
Forward bond purchase commitments | Notional | 500 | — | — | 500 | |||||||||||||||
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Total derivatives not designated as hedges | 2,453 | 1,369 | (1,477 | ) | 2,345 | |||||||||||||||
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Total derivatives | $ | 12,634 | $ | 2,547 | $ | (1,578 | ) | $ | 13,603 | |||||||||||
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(Number of policies) | Measurement | December 31, 2023 | Additions | Maturities/ terminations | March 31, 2024 | |||||||||||||||
Derivatives not designated as hedges | ||||||||||||||||||||
Fixed indexed annuity embedded derivatives | Policies | 5,826 | — | (272 | ) | 5,554 | ||||||||||||||
Indexed universal life embedded derivatives | Policies | 749 | — | (12 | ) | 737 |
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(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 | 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 |
The increase in the notional value of derivatives was primarily attributable to the addition of interest rate swaps and forward bond purchase commitments and interest rate swaps that support our long-term care and universal life insurance business,businesses, partially offset by a decrease in equity index options used tofinancial futures that support our fixed indexedvariable annuity products.
The number of policies with embedded derivatives decreased as these products are no longer being offered and continue to runoff.
Consolidated Balance Sheets
Total assets
Invested assets decreased $2,247$689 million primarily attributable to decreases of $2,615$716 million in fixed maturity securities and $217$83 million in commercial mortgage loans, partially offset by increasesan increase of $368$128 million in limited partnerships and $94 million in policy loans in the current year.partnerships. The decrease in fixed maturity securities was predominantly related to higher interest rates reducing the fair value of our fixed maturity investment portfolio and from net sales and maturities in the current year. The decrease in commercialCommercial mortgage loans wasdecreased mostly due to payments outpacing originations. Limitedoriginations, and limited partnerships increased largely from capital calls in the current year, and policy loans increased as new policy loans outpaced payoffs in our corporate-owned life insurance products in the current year.
Cash and cash equivalents increased $194decreased $263 million primarily from net sales and maturities of fixed maturity securities and payments of commercial mortgage loans outpacing originations, partially offset bylargely due to net withdrawals from our investment contracts, settlements of derivatives that support our variable annuity products with guaranteed minimum benefits and repurchases of Genworth Financial’s common stock in the current year.
Reinsurance recoverable decreased $1,401$737 million largelyprimarily due to an increase in the single-A interest rate used to discount the reinsurance recoverable and from the runoff of certain ceded products.
Deferred tax asset decreased $113 million principally from a reduction in insurance reserves and the related reinsurance recoverables due to an increase in the single-A interest rate, partially offset by an increase in net unrealized losses on investments due to rising interest rates in the current year.
Separate account assets (and liabilities) increased $136 million primarily driven by favorable equity market performance, partially offset by surrenders, withdrawals and benefit payments in the current year.
Total liabilities. Total liabilities decreased $2,169 million from $82,482 million as of December 31, 2023 to $80,313 million as of March 31, 2024.
The liability for future policy benefits decreased $2,110 million primarily from an increase in the single-A interest rate used to discount the liability for future policy benefits and related reinsurance recoverablesfrom the runoff of our life insurance and annuity products in the current year.
Policyholder account balances decreased $403$225 million principally from a reduction in insurance reserves due to an increase in the
Market risk benefit liabilities decreased $97 million mostly related to favorable equity market performance and interest rate changes in the current year.
Total liabilities
We reported net income available to Genworth Financial, Inc.’s common stockholders of $288$139 million for the ninethree months ended September 30, 2023.March 31, 2024.
Unrealized gains (losses) on investments and derivatives qualifying as hedges decreased $1,371total equity by $485 million and $473$161 million, respectively, primarily fromdue to an increase in interest rates in the current year, resulting in a decrease to total equity.year.
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Change in the discount rate used to measure future policy benefits increased $2,229total equity by $1,105 million largely attributable to an increase in the
Treasury stock increased $264$63 million primarily due to the repurchase of Genworth Financial’s common stock, at cost, including excise taxes and other costs paid in connection with acquiring the shares, resulting in a decrease to total equity in the current year.
Liquidity and Capital Resources
Liquidity and capital resources represent our overall financial strength and our ability to generate cash flows from our businesses, borrow funds at competitive rates and raise new capital to meet our operating and growth needs.
Overview of cash flows—Genworth and subsidiaries
The following table sets forth our unaudited condensed consolidated cash flows for the ninethree months ended 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 | ) | |||
(Amounts in millions) | 2024 | 2023 | ||||||
Net cash from (used by) operating activities | $ | (107 | ) | $ | 17 | |||
Net cash from investing activities | 143 | 364 | ||||||
Net cash used by financing activities | (299 | ) | (428 | ) | ||||
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Net decrease in cash and cash equivalents | $ | (263 | ) | $ | (47 | ) | ||
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Our principal sources of cash include sales of our products and services, income from our investment portfolio and proceeds from sales of investments. As an insurance business, we typically generate positive cash flows from operating activities, as premiums collected from our insurance products and income received from our investments typically exceed policy acquisition costs, benefits and claims paid, redemptions and operating expenses. Our cash flows from operating activities are affected by the timing of premiums, fees and investment income received and benefits, claims and expenses paid. Positive cash flows from operating activities are then invested to support the obligations of our insurance and investment products and required capital supporting these products. In analyzing our cash flow,flows, we focus on the change in the amount of cash available and used in investing activities. Changes in cash from financing activities primarily relate to deposits to, and redemptions and benefit payments on, universal life insurance and investment contracts; the issuance of debt and equity securities; the repayment or repurchase of borrowings; the repurchase of common stock presented as treasury stock; and other capital transactions.
We had lowernet cash inflows fromoutflows related to operating activities in the current year compared to net inflows in the prior year primarily from higher benefit paymentssettlements of derivatives that support our variable annuity products with guaranteed minimum benefits and lower premiums collected in our long-term care insurance business, partially offset by net cash disbursements in the prior year in connection with the return of cash collateral received from counterparties under our derivative contracts.
Net cash inflows from investing activities mainly due to payments of commercial mortgage loans outpacing originationswere lower in the current year comparedmainly due to originations outpacing payments in the prior year.
Net cash outflows fromused by financing activities were lower in the current year principally from higher repurchases of Genworth Financial’s common stock and higherprimarily due to lower net withdrawals from our investment contracts,
Genworth—holding company liquidity
In consideration of our liquidity, it is important to separate the needs of our holding companies from the needs of their respective subsidiaries. Genworth Financial and Genworth Holdings each act as a holding
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company for their respective subsidiaries and do not have any significant operations of their own. Accordingly, our holding companies are highly dependent upon their respective subsidiaries to pay dividends and make other payments to meet their respective obligations. Moreover, management’s focus is predominantly on Genworth Holdings’ liquidity given it is the issuer of our outstanding public debt.
Management’s focus is predominantly on Genworth Holdings’ liquidity given it is the issuer of our outstanding public debt. We manage our U.S. life insurance subsidiaries on a standalone basis and accordingly, do not expect to receive any dividends or other returns of capital from them. Therefore, our liquidity at the holding company level is highly dependent on the performance of Enact Holdings, its capacity to maintain sufficient cash to pay its debt maturities and other obligations when due and its ability to pay timely dividends and other forms of capital returns to Genworth Holdings as anticipated. 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 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. Future dividends will be subject to quarterly review and approval by Enact Holdings’ board of directors and Genworth Financial and will also be dependent on a variety of economic, market and business conditions, among other considerations. In addition, insurance laws and regulations regulate the payment of dividends and other distributions to Genworth Financial and Genworth Holdings by their insurance subsidiaries.
On May 2, 2022, Genworth Financial’s Board1, 2024, Enact Holdings announced an increase of Directors authorizedits next quarterly dividend from $0.16 to $0.185 per share to be paid in June 2024. In addition to its quarterly cash dividend program, on August 1, 2023, Enact Holdings announced the approval by its board of directors of a share repurchase program under which Genworth FinancialEnact Holdings may repurchase up to $350$100 million of its outstanding Class A common stock. On May 1, 2024, Enact Holdings announced a new share repurchase authorization of $250 million. Genworth Holdings has agreed to participate in order to maintain its overall ownership at approximately its current level. The timing and number of future shares repurchased under the share repurchase program will depend on a variety of factors, including Enact Holdings’ stock price and trading volume, and general business and market conditions, among other factors.
As the majority shareholder, Genworth Holdings received $61 million of capital returns from Enact Holdings in the first quarter of 2024. Enact Holdings’ capital allocation strategy includes supporting its existing policyholders, growing its mortgage insurance business, funding attractive new business opportunities and returning capital to its shareholders. Enact Holdings’ total return of capital will be based on this strategy as well as its view of the prevailing and prospective macroeconomic conditions, regulatory landscape and business performance.
On July 31, 2023, Genworth Financial’s Board of Directors authorized an additional $350 million of share repurchases under its existing share repurchase program.program that began in May 2022. Pursuant to the program, during the nine months ended September 30, 2023,first quarter of 2024, Genworth Financial repurchased 45,839,75010,240,670 shares of its common stock at an average price of $5.68$6.17 per share for a total of $260 million, excluding excise taxes and other costs paid in connection with acquiring the shares.$63 million. Genworth Financial also authorized repurchases under its share repurchasesrepurchase program through a Rule
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Rule 10b5-1
Our future use of liquidity and capital will prioritize future strategic investments in CareScout and returning capital to Genworth Financial’s shareholders through share repurchases (as discussed above).repurchases. We expect to continue to provide capital to CareScout to help advance our senior care growth initiatives through
Genworth Holdings had $232$253 million and $350 million of unrestricted cash and cash equivalents with noas of March 31, 2024 and December 31, 2023, respectively. The decrease was principally driven by annual employee benefit payments that are expected to be offset by subsidiary expense arrangements during 2024, repurchases of Genworth Financial’s common stock and debt maturities due until June 2034.interest payments, partially offset by capital returns from Enact Holdings. We believe Genworth Holdings’ unrestricted cash and cash equivalents provide sufficient liquidity to meet its financial obligations over the next twelve months. However, in the third quarter of 2023, we made a federal tax payment based on our projection of current taxable income and utilization of our remaining foreign tax credits, and we expect the amount of intercompany cash tax payments retained by Genworth Holdings from its subsidiaries to be lower starting in 2024 as compared to the amounts received during 2022 and 2023. We also expect Genworth Holdings’ liquidity to continue to be significantly impacted by the amounts and timing of Genworth Financial’s share repurchases as well as 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.
We actively monitor our liquidity position (most notably at Genworth Holdings), liquidity generation options and the credit markets given changing market conditions. For example, although interest rates rose dramatically during 2022 and 2023, we do not expect a significant impact on our liquidity given the reduction in Genworth Holdings’ debt and corresponding decrease in debt service costs. Genworth Holdings’ cash management target is to maintain a cash buffer of two times expected annual external debt interest payments. Genworth Holdings may move below or above this targeted cash buffer during any given quarter due to the timing of cash outflows and inflows or from future actions. Management of Genworth Financial continues to evaluate Genworth Holdings’ target level of liquidity as circumstances warrant.
Capital resources and financing activities
Our current capital resource plans do not include any additional debt offerings by Genworth Holdings or minority sales of Enact Holdings. The availability of additional capital resources will depend on a variety of factors such as market conditions, regulatory considerations, the general availability of credit, credit ratings and the performance of and outlook for Enact Holdings and the payment of dividends and other returns of capital therefrom.
During the nine months ended September 30, 2023,first quarter of 2024, Genworth Holdings repurchased $11$6 million principal amount of its 2034 Notesfloating rate junior subordinated notes due in 2066 for a
As of March 31, 2024, Enact Holdings had a consent solicitation from bondholders representing a majority incredit facility that remained undrawn and $750 million principal amount of senior notes due in August 2025. Enact Holdings continually evaluates opportunities based upon market conditions to further increase its 2034 Notes to amend the Replacement Capital Covenant, dated as of November 14, 2006. The amendment permits Genworth Holdings to repay, redeemfinancial flexibility including through raising additional capital, restructuring or repurchase $2,000 principal amountrefinancing some or all of its 2066 Notes for each $1,000 principal amount ofoutstanding debt or pursuing other options such as reinsurance or credit risk transfer transactions. There can be no guarantee that any such opportunities will be available on favorable terms or at all. Other than its 2034 Notes repaid, redeemed or repurchased. In connection with this transaction, Genworthsenior notes due in August 2025, Enact Holdings repurchased approximately $14 million principal ofhas no material outstanding debt obligations that are expected to affect its 2034 Notes at prices negotiated withliquidity over the noteholders below par value.next five years. We believe that the operating cash flows generated by Enact Holdings’ mortgage insurance subsidiaries will provide the funds necessary to satisfy its claim payments, operating expenses and taxes.
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Regulated insurance subsidiaries
The liquidity requirements of our regulated insurance subsidiaries principally relate to the liabilities associated with their various insurance and investment products, operating costs and expenses, the payment of dividends to us, contributions to their subsidiaries, paymentpayments of principal and interest on their outstanding debt obligations and income taxes. Liabilities arising from insurance and investment products include the payment of benefits and claims, as well as cash payments in connection with policy surrenders and withdrawals, policy loans and obligations to redeem funding agreements. Given the challenging macroeconomic environment during 2022 and through the third quarter of 2023, employee costs were higher driven in part by high wage inflation, the competitive labor market and low labor participation. Additionally, in our long-term care insurance business, we have observed an increase in the cost of care principally attributable to elevated inflation. These inflationary impacts have not had a significant impact on our liquidity to date; however, we have experienced elevated benefit utilization in our long-term care insurance business, which could have a material adverse impact on our liquidity, results of operations and financial condition if it persists. We will continue to monitor macroeconomic trends, including inflation, to help mitigate any potential adverse impacts to our liquidity.
Given the challenging macroeconomic environment in 2023 and through the first quarter of investments2024, employee costs were higher driven in part by wage inflation, the competitive labor market and low labor participation. Additionally, in our long-term care insurance business, we have observed an increase in the cost of care due in part to elevated inflation. These inflationary pressures have not had a significant impact on our liquidity to date; however, if these conditions persist for a long period of time, they could have a material adverse impact on our liquidity, results of operations and financial condition. We will continue to monitor macroeconomic trends, including inflation, to help mitigate any potential adverse impacts to our liquidity. We also expect overall claim costs to continue to increase over time in our long-term care insurance business as necessary, sales of invested assets.
Our insurance subsidiaries maintain investment strategies intended to provide adequate funds to pay benefits without forced sales of investments. Products having liabilities with longer durations, such as certain life insurance and long-term care insurance policies, are typically matched with investments having similar duration such as long-term fixed maturity securities and commercial mortgage loans. Shorter-term liabilities are typically matched with fixed maturity securities that have short- andshort-and medium-term fixed maturities. In addition, our insurance subsidiaries hold highly liquid, high quality short-term investment securities and other liquid investment grade fixed maturity securities to fund anticipated operating expenses, surrenders and withdrawals. As of September 30, 2023,March 31, 2024, our total cash, cash equivalents and invested assets were $58.7$61.0 billion. Our investments in privately placed fixed maturity securities, commercial mortgage loans, policy loans, bank loans, limited partnership investments and select mortgage-backed and asset-backed securities are relatively illiquid. These asset classes represented approximately 45%44% of the carrying value of our total cash, cash equivalents and invested assets as of September 30, 2023.
Off-balance
As of September 30, 2023,March 31, 2024, we were committed to fund $1,408$1,449 million in limited partnership investments, $136$119 million of bank loan investments, $12 million in private placement investments and $9$28 million in commercial mortgage loan investments and $21 million in private placement investments.
As of September 30, 2023,March 31, 2024, there have been no material additions or changes to guarantees provided by Genworth Financial and Genworth Holdings or to our contractual obligations as compared to the amounts disclosed within our 20222023 Annual Report on Form
Supplemental Condensed Consolidating Financial Information
Genworth Financial provides a full and unconditional guarantee to the trustee and holders of Genworth Holdings’ outstanding senior and subordinated notes (registered securities under the Securities Act of 1933) and the holders of the senior and subordinated notes,, on an unsecured unsubordinated and subordinated basis, respectively, of the full and punctual payment of the
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principal of, premium, if any and interest on, and all other amounts payable under, eachthe outstanding series of senior notes and outstanding subordinated notes, and the full and punctual payment of all other amounts payable by Genworth Holdings under the senior and subordinated notes indentures in respect of such senior and subordinated notes.their respective indentures. Genworth Holdings is a direct, 100% owned subsidiary of Genworth Financial.
Excluding investments in subsidiaries, the assets, liabilities and results of operations of Genworth Financial and Genworth Holdings, on a combined basis, are not material to the consolidated financial position or the consolidated results of operations of Genworth. In addition, none of Genworth Financial’s direct or indirect subsidiaries, other than Genworth Holdings, are issuers or guarantors of any guaranteed securities. Therefore, in accordance with Rule
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Market risk is the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates, equity prices and foreign currency exchange rates. Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying financial instruments are traded. We may have additional financial impacts other than changes in estimated fair value, which are beyond the scope of this discussion. There have beenwere no material changes toin our market risk exposuresrisks since December 31, 2022, except as described below.
Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
As of September 30, 2023,March 31, 2024, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules
Changes in Internal Control Over Financial Reporting During the Quarter Ended September 30, 2023
During the three months ended September 30, 2023, as previously disclosed in our Quarterly Report on Form 10-Q for the period ended June 30, 2023 (“Second Quarter 2023 Form 10-Q”), we fully remediated the material weakness in our internal control over financial reporting, which arose solely from a change in the accounting treatment related to cash payments made to policyholders in connection with legal settlements under LDTI that we adopted on January 1, 2023 (for which no specific guidance had been published) that resulted in the immaterial correction to our financial statements as described in note 1 in our unaudited condensed consolidated financial statements in our Second Quarter 2023 Form 10-Q.
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Item 1. |
Item 1A. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(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 | ||||||||||||||
(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, 2024 through January 31, 2024 | 2,231,991 | $ | 6.15 | 2,231,991 | $ | 328 | ||||||||||
February 1, 2024 through February 29, 2024 | 4,808,584 | $ | 6.13 | 4,808,584 | $ | 298 | ||||||||||
March 1, 2024 through March 31, 2024 | 3,200,095 | $ | 6.25 | 3,200,095 | $ | 278 | ||||||||||
Total | 10,240,670 | 10,240,670 | ||||||||||||||
(1) | On May 2, 2022, Genworth Financial’s Board of Directors authorized a share repurchase program under which Genworth Financial 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.” |
Item 5. | Other Information |
Item 6. | Exhibits |
Number | Description | |
10.1§ | Form of 2024-2026 Restricted Stock Unit Award Agreement under the 2021 Genworth Financial, Inc. Omnibus Incentive Plan (filed herewith) | |
10.2§ | Form of 2024-2026 Performance Stock Unit Award Agreement under the 2021 Genworth Financial, Inc. Omnibus Incentive Plan (filed herewith) | |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101) |
§ | Management contract or compensatory plan or arrangement. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
GENWORTH FINANCIAL, INC. (Registrant) | ||||||||||
Date: | ||||||||||
By: | /s/ | |||||||||
Darren W. Woodell Vice President and Controller (Principal Accounting Officer) |
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