Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 24, 2022 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-07434 | |
Entity Registrant Name | Aflac Incorporated | |
Entity Incorporation, State or Country Code | GA | |
Entity Tax Identification Number | 58-1167100 | |
Entity Address, Address Line One | 1932 Wynnton Road | |
Entity Address, City or Town | Columbus, | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 31999 | |
City Area Code | 706. | |
Local Phone Number | 323.3431 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 621,788,560 | |
Amendment Flag | false | |
Entity Central Index Key | 0000004977 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
NEW YORK STOCK EXCHANGE, INC. | ||
Title of 12(b) Security | Common Stock, $.10 par value per share | |
Trading Symbol | AFL | |
Security Exchange Name | NYSE |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Revenues: | |||||
Net earned premiums, principally supplemental health insurance | $ 3,651 | $ 4,372 | $ 11,679 | $ 13,406 | |
Net investment income | 920 | 991 | 2,760 | 2,908 | |
Net investment gains (losses) | 199 | (171) | 885 | 224 | |
Other income (loss) | 50 | 45 | 168 | 132 | |
Total revenues | 4,820 | 5,237 | 15,492 | 16,670 | |
Benefits and expenses: | |||||
Benefits and claims, net | 2,340 | 2,609 | 7,125 | 7,996 | |
Acquisition and operating expenses: | |||||
Amortization of deferred policy acquisition costs | 268 | 278 | 858 | 869 | |
Insurance commissions | 267 | 311 | 846 | 952 | |
Insurance and other expenses | [1] | 783 | 869 | 2,412 | 2,582 |
Interest expense | 59 | 57 | 171 | 181 | |
Total acquisition and operating expenses | 1,377 | 1,515 | 4,287 | 4,584 | |
Total benefits and expenses | 3,717 | 4,124 | 11,412 | 12,580 | |
Earnings before income taxes | 1,103 | 1,113 | 4,080 | 4,090 | |
Income taxes | (493) | 225 | 64 | 804 | |
Net earnings | $ 1,596 | $ 888 | $ 4,016 | $ 3,286 | |
Net earnings per share: | |||||
Basic (in dollars per share) | $ 2.54 | $ 1.33 | $ 6.28 | $ 4.84 | |
Diluted (in dollars per share) | $ 2.53 | $ 1.32 | $ 6.25 | $ 4.82 | |
Weighted-average outstanding common shares used in computing earnings per share (In thousands): | |||||
Basic (in shares) | 629,350 | 668,762 | 639,862 | 678,509 | |
Diluted (in shares) | 631,946 | 671,925 | 642,597 | 681,521 | |
Cash dividends per share | $ 0.40 | $ 0.33 | $ 1.20 | $ 0.99 | |
[1]Includes expense of $48 in the nine-month period ended September 30, 2021 for the early extinguishment of debt. |
Consolidated Statements of Ea_2
Consolidated Statements of Earnings (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2021 USD ($) | |
3.625% senior notes paid May 2021 | |
Expense on extinguishment of debt | $ 48 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 1,596 | $ 888 | $ 4,016 | $ 3,286 |
Other comprehensive income (loss) before income taxes: | ||||
Unrealized foreign currency translation gains (losses) during period | (447) | (93) | (1,693) | (646) |
Unrealized gains (losses) on fixed maturity securities: | ||||
Unrealized holding gains (losses) on fixed maturity securities during period | (2,220) | (316) | (10,473) | (800) |
Reclassification adjustment for (gains) losses on fixed maturity securities included in net earnings | (58) | (13) | (252) | 2 |
Unrealized gains (losses) on derivatives during period | 1 | 2 | 2 | 3 |
Pension liability adjustment during period | 2 | 1 | 10 | 7 |
Total other comprehensive income (loss) before income taxes | (2,722) | (419) | (12,406) | (1,434) |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 241 | (62) | (1,502) | (162) |
Other comprehensive income (loss), net of income taxes | (2,963) | (357) | (10,904) | (1,272) |
Total comprehensive income (loss) | $ (1,367) | $ 531 | $ (6,888) | $ 2,014 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | ||
Investments and Cash: | ||||
Available for sale, fixed maturity securities | $ 73,643 | $ 98,696 | ||
Held to maturity, fixed maturity securities | 17,466 | [1] | 22,000 | |
Equity securities | 1,064 | 1,603 | ||
Commercial mortgage and other loans | 13,459 | 11,786 | ||
Other investments | 4,186 | 3,842 | ||
Cash and cash equivalents | 4,710 | 5,051 | ||
Total investments and cash | 114,528 | 142,978 | ||
Receivables | 655 | 693 | ||
Accrued investment income | 684 | 737 | ||
Deferred policy acquisition costs | 8,155 | 9,525 | ||
Property and equipment, at cost less accumulated depreciation | 488 | 538 | ||
Other | 3,590 | 3,071 | ||
Total assets | 128,100 | 157,542 | ||
Policy Liabilities: | ||||
Future policy benefits | 74,629 | 90,588 | ||
Unpaid policy claims | 4,516 | 4,836 | ||
Unearned premiums | 1,763 | 2,576 | ||
Other policyholders’ funds | 5,632 | 7,072 | ||
Total policy liabilities | 86,540 | 105,072 | ||
Income taxes | 1,888 | 4,339 | ||
Payables for return of cash collateral on loaned securities | 2,721 | 2,162 | ||
Notes payable and lease obligations | 7,518 | 7,956 | ||
Other | 5,281 | 4,760 | ||
Total liabilities | 103,948 | 124,289 | ||
Commitments and contingent liabilities (Note 13) | ||||
Shareholders’ equity: | ||||
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in 2022 and 2021; issued 1,353,969 shares in 2022 and 1,352,739 shares in 2021 | 135 | 135 | ||
Additional paid-in capital | 2,615 | 2,529 | ||
Retained earnings | 44,892 | 41,381 | ||
Accumulated other comprehensive income (loss): | ||||
Unrealized foreign currency translation gains (losses) | (4,455) | (2,013) | ||
Unrealized gains (losses) on fixed maturity securities | 1,131 | 9,602 | ||
Unrealized gains (losses) on derivatives | (29) | (30) | ||
Pension liability adjustment | (158) | (166) | ||
Treasury stock, at average cost | (19,979) | (18,185) | ||
Total shareholders’ equity | 24,152 | 33,253 | ||
Total liabilities and shareholders’ equity | 128,100 | 157,542 | ||
Consolidated Entity Excluding Variable Interest Entities (VIE) | ||||
Investments and Cash: | ||||
Available for sale, fixed maturity securities | 70,026 | 94,206 | ||
Variable Interest Entity, Consolidated | ||||
Investments and Cash: | ||||
Available for sale, fixed maturity securities | 3,617 | 4,490 | ||
Commercial mortgage and other loans | [2] | 10,775 | 9,740 | |
Other investments | [2],[3] | 1,815 | 1,535 | |
Policy Liabilities: | ||||
Total liabilities | [2] | $ 463 | $ 414 | |
[1]Net of allowance for credit losses[2]Net of allowance for credit losses[3]Consists entirely of alternative investments in limited partnerships |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Available for sale, fixed maturity securities, allowance for credit losses | $ 0 | $ 0 | |
Available for sale, fixed maturity securities, amortized cost | 71,035 | 85,369 | |
Held to maturity, fixed maturity securities, fair value | 20,085 | 26,869 | |
Held-to-maturity, fixed maturity securities, allowance for credit losses | 6 | 8 | |
Commercial mortgage and other loans | 13,459 | 11,786 | |
Commercial mortgage and other loans, allowance for credit losses | 182 | 174 | |
Other investments | $ 4,186 | $ 3,842 | |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | |
Common stock, shares authorized (in shares) | 1,900,000 | 1,900,000 | |
Common stock, shares issued (in shares) | 1,353,969 | 1,352,739 | |
Consolidated Entity Excluding Variable Interest Entities (VIE) | |||
Available for sale, fixed maturity securities, allowance for credit losses | $ 0 | $ 0 | |
Available for sale, fixed maturity securities, amortized cost | 68,127 | 82,105 | |
Variable Interest Entity, Consolidated | |||
Available for sale, fixed maturity securities, amortized cost | 2,908 | 3,264 | |
Commercial mortgage and other loans | [1] | 10,775 | 9,740 |
Other investments | [1],[2] | $ 1,815 | $ 1,535 |
[1]Net of allowance for credit losses[2]Consists entirely of alternative investments in limited partnerships |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock | |
Balance, beginning of period at Dec. 31, 2020 | $ 33,559 | $ 135 | $ 2,410 | $ 37,984 | $ 8,934 | $ (15,904) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,293 | 0 | 0 | 1,293 | 0 | 0 | |
Unrealized foreign currency translation gains (losses) during period, net of income taxes | (565) | 0 | 0 | 0 | (565) | 0 | |
Unrealized gains (losses) on fixed maturity securities during period, net of income taxes and reclassification adjustments | (1,567) | 0 | 0 | 0 | (1,567) | 0 | |
Unrealized gains (losses) on derivatives during period, net of income taxes | 1 | 0 | 0 | 0 | 1 | 0 | |
Pension liability adjustment during period, net of income taxes | 4 | 0 | 0 | 0 | 4 | 0 | |
Dividends to shareholders | [1] | 0 | 0 | 0 | 0 | 0 | 0 |
Exercise of stock options | 9 | 0 | 9 | 0 | 0 | 0 | |
Share-based compensation | 9 | 0 | 9 | 0 | 0 | 0 | |
Purchases of treasury stock | (668) | 0 | 0 | 0 | 0 | (668) | |
Treasury stock reissued | 28 | 0 | 10 | 0 | 0 | 18 | |
Balance, end of period at Mar. 31, 2021 | 32,103 | 135 | 2,438 | 39,277 | 6,807 | (16,554) | |
Balance, beginning of period at Dec. 31, 2020 | 33,559 | 135 | 2,410 | 37,984 | 8,934 | (15,904) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 3,286 | ||||||
Balance, end of period at Sep. 30, 2021 | 33,552 | 135 | 2,491 | 40,830 | 7,662 | (17,566) | |
Balance, beginning of period at Dec. 31, 2020 | 33,559 | 135 | 2,410 | 37,984 | 8,934 | (15,904) | |
Balance, end of period at Dec. 31, 2021 | 33,253 | 135 | 2,529 | 41,381 | 7,393 | (18,185) | |
Balance, beginning of period at Mar. 31, 2021 | 32,103 | 135 | 2,438 | 39,277 | 6,807 | (16,554) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,105 | 0 | 0 | 1,105 | 0 | 0 | |
Unrealized foreign currency translation gains (losses) during period, net of income taxes | 13 | 0 | 0 | 0 | 13 | 0 | |
Unrealized gains (losses) on fixed maturity securities during period, net of income taxes and reclassification adjustments | 1,198 | 0 | 0 | 0 | 1,198 | 0 | |
Unrealized gains (losses) on derivatives during period, net of income taxes | 0 | 0 | 0 | 0 | 0 | 0 | |
Pension liability adjustment during period, net of income taxes | 1 | 0 | 0 | 0 | 1 | 0 | |
Dividends to shareholders | [1] | (220) | 0 | 0 | (220) | 0 | 0 |
Exercise of stock options | 2 | 0 | 2 | 0 | 0 | 0 | |
Share-based compensation | 20 | 0 | 20 | 0 | 0 | 0 | |
Purchases of treasury stock | (500) | 0 | 0 | 0 | 0 | (500) | |
Treasury stock reissued | 13 | 0 | 5 | 0 | 0 | 8 | |
Balance, end of period at Jun. 30, 2021 | 33,735 | 135 | 2,465 | 40,162 | 8,019 | (17,046) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 888 | 0 | 0 | 888 | 0 | 0 | |
Unrealized foreign currency translation gains (losses) during period, net of income taxes | (99) | 0 | 0 | 0 | (99) | 0 | |
Unrealized gains (losses) on fixed maturity securities during period, net of income taxes and reclassification adjustments | (261) | 0 | 0 | 0 | (261) | 0 | |
Unrealized gains (losses) on derivatives during period, net of income taxes | 2 | 0 | 0 | 0 | 2 | 0 | |
Pension liability adjustment during period, net of income taxes | 1 | 0 | 0 | 0 | 1 | 0 | |
Dividends to shareholders | [1] | (220) | 0 | 0 | (220) | 0 | 0 |
Exercise of stock options | 2 | 0 | 2 | 0 | 0 | 0 | |
Share-based compensation | 16 | 0 | 16 | 0 | 0 | 0 | |
Purchases of treasury stock | (527) | 0 | 0 | 0 | 0 | (527) | |
Treasury stock reissued | 15 | 0 | 8 | 0 | 0 | 7 | |
Balance, end of period at Sep. 30, 2021 | 33,552 | 135 | 2,491 | 40,830 | 7,662 | (17,566) | |
Balance, beginning of period at Dec. 31, 2021 | 33,253 | 135 | 2,529 | 41,381 | 7,393 | (18,185) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,032 | 0 | 0 | 1,032 | 0 | 0 | |
Unrealized foreign currency translation gains (losses) during period, net of income taxes | (469) | 0 | 0 | 0 | (469) | 0 | |
Unrealized gains (losses) on fixed maturity securities during period, net of income taxes and reclassification adjustments | (3,815) | 0 | 0 | 0 | (3,815) | 0 | |
Unrealized gains (losses) on derivatives during period, net of income taxes | 1 | 0 | 0 | 0 | 1 | 0 | |
Pension liability adjustment during period, net of income taxes | 3 | 0 | 0 | 0 | 3 | 0 | |
Dividends to shareholders | [1] | 0 | 0 | 0 | 0 | 0 | 0 |
Exercise of stock options | 6 | 0 | 6 | 0 | 0 | 0 | |
Share-based compensation | 13 | 0 | 13 | 0 | 0 | 0 | |
Purchases of treasury stock | (523) | 0 | 0 | 0 | 0 | (523) | |
Treasury stock reissued | 26 | 0 | 12 | 0 | 0 | 14 | |
Balance, end of period at Mar. 31, 2022 | 29,527 | 135 | 2,560 | 42,413 | 3,113 | (18,694) | |
Balance, beginning of period at Dec. 31, 2021 | 33,253 | 135 | 2,529 | 41,381 | 7,393 | (18,185) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 4,016 | ||||||
Balance, end of period at Sep. 30, 2022 | 24,152 | 135 | 2,615 | 44,892 | (3,511) | (19,979) | |
Balance, beginning of period at Mar. 31, 2022 | 29,527 | 135 | 2,560 | 42,413 | 3,113 | (18,694) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,388 | 0 | 0 | 1,388 | 0 | 0 | |
Unrealized foreign currency translation gains (losses) during period, net of income taxes | (807) | 0 | 0 | 0 | (807) | 0 | |
Unrealized gains (losses) on fixed maturity securities during period, net of income taxes and reclassification adjustments | (2,857) | 0 | 0 | 0 | (2,857) | 0 | |
Unrealized gains (losses) on derivatives during period, net of income taxes | 0 | 0 | 0 | 0 | 0 | 0 | |
Pension liability adjustment during period, net of income taxes | 3 | 0 | 0 | 0 | 3 | 0 | |
Dividends to shareholders | [1] | (254) | 0 | 0 | (254) | 0 | 0 |
Exercise of stock options | 1 | 0 | 1 | 0 | 0 | 0 | |
Share-based compensation | 19 | 0 | 19 | 0 | 0 | 0 | |
Purchases of treasury stock | (650) | 0 | 0 | 0 | 0 | (650) | |
Treasury stock reissued | 17 | 0 | 9 | 0 | 0 | 8 | |
Balance, end of period at Jun. 30, 2022 | 26,387 | 135 | 2,589 | 43,547 | (548) | (19,336) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,596 | 0 | 0 | 1,596 | 0 | 0 | |
Unrealized foreign currency translation gains (losses) during period, net of income taxes | (1,166) | 0 | 0 | 0 | (1,166) | 0 | |
Unrealized gains (losses) on fixed maturity securities during period, net of income taxes and reclassification adjustments | (1,799) | 0 | 0 | 0 | (1,799) | 0 | |
Unrealized gains (losses) on derivatives during period, net of income taxes | 0 | 0 | 0 | 0 | 0 | 0 | |
Pension liability adjustment during period, net of income taxes | 2 | 0 | 0 | 0 | 2 | 0 | |
Dividends to shareholders | [1] | (251) | 0 | 0 | (251) | 0 | 0 |
Exercise of stock options | 3 | 0 | 3 | 0 | 0 | 0 | |
Share-based compensation | 14 | 0 | 14 | 0 | 0 | 0 | |
Purchases of treasury stock | (651) | 0 | 0 | 0 | 0 | (651) | |
Treasury stock reissued | 17 | 0 | 9 | 0 | 0 | 8 | |
Balance, end of period at Sep. 30, 2022 | $ 24,152 | $ 135 | $ 2,615 | $ 44,892 | $ (3,511) | $ (19,979) | |
[1]Dividends to shareholders are recorded in the period in which they are declared. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Retained earnings | ||||||
Dividends to shareholders (in dollars per share) | $ 0.40 | $ 0.40 | $ 0 | $ 0.33 | $ 0.33 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||||||
Net earnings | $ 1,596 | $ 1,032 | $ 888 | $ 1,293 | $ 4,016 | $ 3,286 | |
Adjustments to reconcile net earnings to net cash provided (used) by operating activities: | |||||||
Change in receivables and advance premiums | (17) | 22 | |||||
Capitalization of deferred policy acquisition costs | (770) | (778) | |||||
Amortization of deferred policy acquisition costs | 268 | 278 | 858 | 869 | |||
Increase in policy liabilities | 752 | 770 | |||||
Change in income tax liabilities | (536) | 325 | |||||
Net investment (gains) losses | (199) | 171 | (885) | (224) | |||
Other, net | (572) | (89) | |||||
Net cash provided (used) by operating activities | 2,846 | 4,181 | |||||
Proceeds from investments sold or matured: | |||||||
Available-for-sale fixed maturity securities | 2,997 | 2,719 | |||||
Equity securities | 518 | 210 | |||||
Held-to-maturity fixed maturity securities | 2 | 2 | |||||
Commercial mortgage and other loans | 1,849 | 2,625 | |||||
Costs of investments acquired: | |||||||
Available-for-sale fixed maturity securities | (2,961) | (4,187) | |||||
Equity securities | (414) | (458) | |||||
Commercial mortgage and other loans | (3,552) | (3,434) | |||||
Other investments, net | (54) | (929) | |||||
Settlement of derivatives, net | (159) | 171 | |||||
Cash received (pledged or returned) as collateral, net | 769 | 2,123 | |||||
Other, net | 158 | (13) | |||||
Net cash provided (used) by investing activities | (847) | (1,171) | |||||
Cash flows from financing activities: | |||||||
Purchases of treasury stock | (1,801) | (1,676) | |||||
Proceeds from borrowings | 1,277 | 1,153 | |||||
Principal payments under debt obligations | (966) | (700) | |||||
Dividends paid to shareholders | (740) | (647) | |||||
Change in investment-type contracts, net | (61) | (25) | |||||
Treasury stock reissued | 15 | 13 | |||||
Other, net | 20 | (15) | |||||
Net cash provided (used) by financing activities | (2,256) | (1,897) | |||||
Effect of exchange rate changes on cash and cash equivalents | (84) | (46) | |||||
Net change in cash and cash equivalents | (341) | 1,067 | |||||
Cash and cash equivalents, beginning of period | $ 5,051 | $ 5,141 | 5,051 | 5,141 | $ 5,141 | ||
Cash and cash equivalents, end of period | $ 4,710 | $ 6,208 | 4,710 | 6,208 | $ 5,051 | ||
Supplemental disclosures of cash flow information: | |||||||
Income taxes paid | 600 | 478 | |||||
Interest paid | 153 | 146 | |||||
Noncash interest | 17 | 36 | |||||
Noncash financing activities: | |||||||
Lease obligations | 72 | 36 | |||||
Associate stock bonus | |||||||
Treasury stock issued for: | |||||||
Treasury stock issued | 11 | 16 | |||||
Shareholder dividend reinvestment | |||||||
Treasury stock issued for: | |||||||
Treasury stock issued | 28 | 23 | |||||
Share-based compensation grants | |||||||
Treasury stock issued for: | |||||||
Treasury stock issued | $ 6 | $ 4 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Aflac Incorporated (the Parent Company) and its subsidiaries (collectively, the Company) primarily sell supplemental health and life insurance in the United States (U.S.) and Japan. The Company's insurance business is marketed and administered through American Family Life Assurance Company of Columbus (Aflac) in the U.S. and through Aflac Life Insurance Japan Ltd. (ALIJ) in Japan. The Company’s operations consist of two reportable business segments: Aflac U.S., which includes Aflac, and Aflac Japan, which includes ALIJ. American Family Life Assurance Company of New York (Aflac New York) is a wholly owned subsidiary of Aflac. Most of Aflac's policies are individually underwritten and marketed through independent agents. With the exception of dental and vision products administered by Aflac Benefits Solutions, Inc. (ABS), formerly known as Argus Dental & Vision, Inc., and certain group life insurance products, Aflac U.S. markets and administers group products through Continental American Insurance Company (CAIC), branded as Aflac Group Insurance. The Company's insurance operations in the U.S. and Japan service the two markets for the Company's insurance business. Aflac Japan's revenues, including net gains and losses on its investment portfolio, accounted for 72% and 69% of the Company's total revenues in the nine-month periods ended September 30, 2022 and 2021, respectively. The percentage of the Company's total assets attributable to Aflac Japan was 79% at September 30, 2022, compared with 82% at December 31, 2021. Basis of Presentation The Company prepares its financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP). These principles are established primarily by the Financial Accounting Standards Board (FASB). In these Notes to the Consolidated Financial Statements, references to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards Codification TM (ASC). The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates based on currently available information when recording transactions resulting from business operations. The most significant items on the Company's balance sheet that involve a greater degree of accounting estimates and actuarial determinations subject to changes in the future are the valuation of investments and derivatives, deferred policy acquisition costs (DAC), liabilities for future policy benefits and unpaid policy claims, and income taxes. These accounting estimates and actuarial determinations are sensitive to market conditions, investment yields, mortality, morbidity, commission and other acquisition expenses, and terminations by policyholders. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised and reflected in operating results. Although some variability is inherent in these estimates, the Company believes the amounts provided are reasonable and reflective of the best estimates of management. The unaudited consolidated financial statements include the accounts of the Parent Company, its subsidiaries and those entities required to be consolidated under applicable accounting standards. All material intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements of the Company contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the consolidated balance sheets as of September 30, 2022 and December 31, 2021, the consolidated statements of earnings and comprehensive income (loss) for the three- and nine-month periods ended September 30, 2022 and 2021, the consolidated statement of shareholders' equity for the three-month periods ended March 31, 2022 and 2021, June 30, 2022 and 2021, and September 30, 2022 and 2021, and the consolidated statement of cash flows for the nine-month periods ended September 30, 2022 and 2021. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2021 (2021 Annual Report). Market Conditions: The impact of the Coronavirus Disease 2019 (COVID-19) global pandemic on the Company continues to evolve and the continued path of the global economic recovery remains uncertain given the potential longer term impacts of the pandemic. For example, economic conditions have acted as headwinds to sales in the first nine months of 2022, particularly in Japan and most notably in the first quarter with a gradually decreasing impact in the second and third quarters, pressuring net earned premiums. Further, in the U.S., supply shortages, upward pressure on wages to attract employees and higher commodity prices have all driven near-term increases in inflation. Central bank and government efforts to control inflation, as well the impacts of the Russia-Ukraine conflict, including volatility in energy prices and additional disruptions in the global supply chain, have led to slower economic growth in Japan and the U.S. Additionally, continued widening of the differential between U.S. and Japan interest rates has contributed to a weakening of the yen, which has the effect of suppressing the Company's current period results in relation to the comparable prior period. Reclassifications : Certain reclassifications have been made to prior-year amounts to conform to current-year reporting classifications. These reclassifications had no impact on net earnings or total shareholders' equity. New Accounting Pronouncements Accounting Pronouncements Pending Adoption ASU 2018-12 Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts , as clarified and amended by: ASU 2019-09 Financial Services - Insurance: Effective Date ASU 2020-11 Financial Services - Insurance: Effective Date and Early Application In August 2018, the FASB issued amendments that will significantly change how insurers account for long-duration contracts. The amendments will change existing recognition, measurement, presentation, and disclosure requirements. Issues addressed in the new guidance include: 1) a requirement to review and, if there is a change, update assumptions for the liability for future policy benefits (LFPB) at least annually, and to update the discount rate assumption quarterly, 2) accounting for market risk benefits at fair value, 3) simplified amortization for deferred acquisition costs, and 4) enhanced financial statement presentation and disclosures. In November 2019, the FASB issued an amendment extending the effective date for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be small reporting companies as defined by the SEC, by one year. In November 2020, the FASB issued an amendment providing an additional year deferral for all insurance entities due to the impact of COVID-19. The amendments are now effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application of the amendments is permitted. The Company continues to evaluate the impact of adoption and has determined that the adoption will have a significant impact on the Company’s financial position, results of operations, and disclosures. The requirement to update assumptions for LFPB will have a significant impact on the Company's results of operations, systems, processes and controls and the requirement to update discount rates will have a significant impact on its equity. As part of working toward implementation of the updated standard, the Company has made key accounting policy decisions, including processes to identify insurance policy groupings (cohorts) for LFPB measurement and DAC amortization purposes, applicable discount rates, development of liability cash flow and claim expense assumptions, and DAC amortization methodology. The Company will not early adopt the updated standard and has selected the modified retrospective transition method, which requires the amended guidance be applied as of the beginning of the earliest period presented beginning on the January 1, 2021 transition date (Transition Date). The modified retrospective transition method generally results in applying the guidance to contracts on the basis of existing carrying values as of the Transition Date. On the Transition Date the Company calculates the ratio of expected benefits less existing carrying values to gross premiums (net premium ratio) using updated assumptions and the discount rate immediately before the Transition Date. For any cohorts that have a net premium ratio greater than 100% on the Transition Date, the net premium ratio is capped at 100%. The Company uses the net premium ratio calculated on the Transition Date (and capped at 100% if required) to calculate the LFPB using two different discount rates: i) the discount rate used immediately before the Transition Date, and ii) the discount rate determined by reference to the Transition Date market level yields for upper-medium-grade (low credit risk) fixed income instruments (as of December 31, 2020). For cohorts with their net premium ratio capped at 100% on the Transition Date, any difference between the LFPB calculated using the discount rate immediately before the Transition Date and the existing carrying value as of the Transition Date is recorded as an adjustment (decrease) to opening retained earnings. For all cohorts on the Transition Date, the difference in the LFPB calculated using the two different discount rates (i.e., the discount rate used immediately before the Transition Date and the updated discount rate as of the Transition Date) is recorded in accumulated other comprehensive income (AOCI) net of tax at transition. When the Company adopts the updated standard beginning January 1, 2023, opening equity will be adjusted for the Transition Date impacts to AOCI and retained earnings and prior periods presented (years 2021 and 2022) will be restated following the updated standard. Based on the modified retrospective transition method, the Transition Date impact from adoption will result in a decrease in AOCI of approximately $18.6 billion and a decrease in retained earnings of approximately $0.3 billion. The Company has designed its discount rate methodology for both the U.S. and Japan insurance business. The methodology incorporates constructing a discount rate curve separately for discounting cash flows used to calculate the U.S. and Japan LFPB, with each curve intended to be reflective of the currency, tenor and characteristics of the insurance liabilities. Discount rates comprising each curve will be determined by reference to upper-medium grade (low credit risk) fixed-income instrument yields that reflect the duration characteristics of the corresponding insurance liabilities. The Company uses for these yields single-A rated fixed income instruments with credit ratings based on international rating standards. Where only local ratings are available, the Company selects the fixed-income instruments with local ratings that are equivalent to a single-A rating based on international rating standards. The methodology is designed to prioritize observable inputs based on market data available in the local debt markets where the respective policies were issued in the currency in which the policies are denominated. For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company uses various estimation techniques consistent with the fair value guidance in ASC 820, which include, but are not limited to: (i) for tenors where there is less observable market data and/or the observable market data is available for similar instruments, estimating tenor-specific single-A credit spreads and applying them to risk-free government rates; (ii) for tenors where there is very limited or no observable single-A or similar market data, interpolation and extrapolation techniques. Discount rates are updated each reporting period. Long duration insurance contracts issued by the Company will be grouped into annual calendar-year cohorts based on the contract issue date, reportable segment, legal entity and product type. Limited pay contracts will be grouped into separate cohorts from other traditional products in the same manner and will be further separated based on their premium payment structures. Riders will be combined with base policies with similar insurance coverage types and the same contract issue years. In addition to the policy elections related to cohorts and LFPB discount rates directly impacting Transition Date AOCI, the Company has also made the following accounting policy elections relevant to the post-Transition Date accounting: • All payments under an insurance contract including future expected claims and already incurred claims (i.e., claim liabilities) and related expenses will be measured together as an integrated reserve. This will result in the following presentation changes in the consolidated balance sheet: (i) unpaid policy claims on long-duration insurance contracts and accrued claim adjustment expenses presented separately pre-adoption will be presented as part of LFPB; and (ii) liabilities for fixed annuity benefits will be excluded from the integrated reserve, as they are outside the scope of the amended standard, and will be presented in other policyholders' funds. • Cash flow assumptions underlying insurance liabilities will be evaluated as to whether an update is needed at least annually in the same fiscal quarter each year. To facilitate the review, experience studies will be performed annually in the consistent quarter year-to-year to substantiate assumptions, including mortality, morbidity, and terminations in future periods. • Locked-in discount rates used for the computation of interest accretion on LFPB for policies issued on or after January 1, 2021 will be determined for each issue-year cohort as a single discount rate, calculated as the weighted-average of monthly upper-medium grade (low-credit risk) fixed-income instrument forward curves over the calendar year, determined using the methodology described above and weighted using issued annualized premiums for each issue month. The single discount rate for each issue-year cohort will remain unchanged after the calendar year of issue. Locked-in discount rates on the policies held at Transition Date reflect the locked-in rates in existence immediately before the Transition Date. • For DAC amortization, the Company has elected to group insurance policies into cohorts that are consistent with the groupings used in estimating the associated LFPB. DAC will be amortized on a constant-level basis for the grouped contracts over the expected remaining term of the related contracts. For both life and health products issued by Aflac Japan, the constant-level basis used will be units in force, which is a proxy for face amount and insurance in force, respectively. For life products issued by Aflac U.S., the constant level basis used will be face amount of policies in force; for health products issued by Aflac U.S., the constant level basis used will be the number of policies in force. • The Company has made an entity-wide election to use locked-in claim expense assumptions determined for each issue-year cohort as a percentage of paid claims; these assumptions would remain unchanged over the term of the insurance policy. Under the amended guidance, certain insurance commissions and expenses must be excluded from the expense assumption, which will result in an increase in the deferred profit liability on limited-payment products compared to current guidance. In conjunction with the adoption of the updated standard effective January 1, 2023, the Company will change its practice of recording the change in the deferred profit liability on products with limited-payment features from the benefits and claims, net line item to the net earned premiums line item in the consolidated statement of earnings. This reclassification will have no impact on net earnings. The change in presentation will be made for all comparative periods presented. The Company has created a governance framework and a plan to support implementation of the updated standard. As part of its implementation plan, the Company continues to advance the modernization of its actuarial technology platform to enhance its modeling, data management, experience study and analytical capabilities, increase the end-to-end automation of key reporting and analytical processes and optimize its control framework. The Company has also put in place internal controls related to the new processes created as part of implementing the updated standard and will continue to refine and maturate these internal controls until the formal implementation in the first quarter of 2023. The Company continues testing its reporting and disclosure capabilities under the new ASU for post-Transition Date accounting periods. The Company currently has no products with market risk benefits. Impacts on Previously Reported Results Impacts from the adoption of ASU 2018-12 to the Company's previously reported results are expected to be as follows: Consolidated Statement of Earnings Year Ended December 31, 2021 (In millions) As Adoption As Revenues: Net earned premiums, principally supplemental health insurance (1) $ 17,647 $ (552) $ 17,095 Net investment income 3,818 0 3,818 Net investment gains (losses) 468 0 468 Other income (loss) 173 0 173 Total revenues 22,106 (552) 21,554 Benefits and expenses: Benefits and claims, excluding reserve remeasurement (1)(2) 10,576 47 10,623 Reserve remeasurement (gains) losses (3) 0 (147) (147) Total benefits and claims, net 10,576 (100) 10,476 Acquisition and operating expenses: Amortization of deferred policy acquisition costs (4) 1,170 (335) 835 Insurance commissions 1,256 0 1,256 Insurance and other expenses (5) 3,544 (3) 3,541 Interest expense 238 0 238 Total acquisition and operating expenses 6,208 (338) 5,870 Total benefits and expenses 16,784 (438) 16,346 Earnings before income taxes 5,322 (114) 5,208 Income taxes (6) 997 (20) 977 Net earnings $ 4,325 $ (94) $ 4,231 (1) Adjustment reflects a $489 increase in the deferred profit liability on limited-payment products under the updated standard combined with the reclassification of a $63 increase in deferred profit liability previously reported in benefits and claims and reclassified to net earned premiums in conjunction with adoption of the updated standard. (2) Adjustment reflects 2021 activity for the effect of calculating benefits using revised net premium ratios and best estimate future cash flow projections, excluding reserve remeasurement impacts. (3) Adjustment reflects the reserve remeasurement on the liability for future policy benefits due to applying revised net premium ratios based on updated historical actuals and revised assumptions to past periods each quarter under the updated standard. (4) Adjustment reflects a decrease in DAC amortization due to DAC assets being amortized over the expected life of a contract and no interest accretion recorded under the updated standard. (5) Adjustment reflects 2021 activity for the change in accrued claim adjustment expenses that are included in benefits and claims as a component of the integrated reserve under the updated standard. (6) Adjustment reflects a decrease in income tax expense associated with the decrease in pretax earnings. Consolidated Balance Sheet December 31, 2021 (In millions) As Adoption As Assets: Investments and cash: Fixed maturity securities available for sale, at fair value $ 94,206 $ 0 $ 94,206 Fixed maturity securities available for sale - consolidated variable interest entities, at fair value 4,490 0 4,490 Fixed maturity securities held to maturity, at amortized cost, net of allowance for credit losses 22,000 0 22,000 Equity securities, at fair value 1,603 0 1,603 Commercial mortgage and other loans, net of allowance for credit losses 11,786 0 11,786 Other investments 3,842 0 3,842 Cash and cash equivalents 5,051 0 5,051 Total investments and cash 142,978 0 142,978 Receivables (1) 693 10 703 Accrued investment income 737 0 737 Deferred policy acquisition costs (2) 9,525 323 9,848 Property and equipment 538 0 538 Other (3) 3,071 275 3,346 Total assets $ 157,542 $ 608 $ 158,150 Liabilities and shareholders’ equity: Liabilities: Policy liabilities: Future policy benefits (1),(4),(5),(6) $ 90,588 $ 25,376 $ 115,964 Unpaid policy claims (4),(7) 4,836 (4,685) 151 Unearned premiums 2,576 0 2,576 Other policyholders’ funds (7) 7,072 568 7,640 Total policy liabilities 105,072 21,259 126,331 Income taxes (8) 4,339 (4,309) 30 Payables for return of cash collateral on loaned securities 2,162 0 2,162 Notes payable and lease obligations 7,956 0 7,956 Other (5) 4,760 (120) 4,640 Total liabilities 124,289 16,830 141,119 Commitments and contingent liabilities Shareholders’ equity: Common stock 135 0 135 Additional paid-in capital 2,529 0 2,529 Retained earnings (9) 41,381 (418) 40,963 Accumulated other comprehensive income (loss): Unrealized foreign currency translation gains (losses) (10) (2,013) 28 (1,985) Unrealized gains (losses) on fixed maturity securities 9,602 0 9,602 Unrealized gains (losses) on derivatives (30) 0 (30) Effect of changes in discount rate assumptions (11) 0 (15,832) (15,832) Pension liability adjustment (166) 0 (166) Treasury stock (18,185) 0 (18,185) Total shareholders’ equity 33,253 (16,222) 17,031 Total liabilities and shareholders’ equity $ 157,542 $ 608 $ 158,150 (1) Adjustment for the reclassification of ceded reserves from future policy benefits to receivables in conjunction with adoption of the updated standard. (2) Adjustment reflects an increase in DAC assets as a result of DAC being amortized over the expected life of a contract and no interest accretion recorded under the updated standard. (3) Adjustment reflects the discounting of reinsurance recoverables for retrocession activities under the updated standard. (4) Adjustment for the reclassification of unpaid policy claims for long-duration contracts to future policy benefits as a component of the integrated reserve. (5) Adjustment for the reclassification of accrued claim adjustment expenses from other liabilities to future policy benefits as a component of the integrated reserve. (6) Adjustment reflects the impacts of adoption and 2021 activity under the updated standard, including a $490 increase in the deferred profit liability on limited-payment products under the updated standard as discussed above. (7) Adjustment for the reclassification of the claims liability for certain fixed annuity benefits from unpaid policy claims to other policyholders' funds. (8) Adjustment reflects the tax effects from adoption and 2021 activity under the updated standard. (9) Adjustment reflects the impacts from adoption of ($324) as a result of capping the net premium ratio at 100% for cohorts that are in a loss position at transition, and the decrease in current year net earnings of $(94) under the updated standard. (10) Adjustment reflects foreign currency translation related to the updated standard, as applicable. (11) Adjustment reflects the impacts from adoption of ($18,570) and 2021 activity of $2,738 due to changes in the discount rate assumptions under the updated standard. Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact to the Company's business. For additional information on new accounting pronouncements and recent accounting guidance and their impact, if any, on the Company's financial position, results of operations or disclosures, see Note 1 of the Notes to the Consolidated Financial Statements in the 2021 Annual Report. |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The Company consists of two reportable insurance business segments: Aflac Japan and Aflac U.S., both of which sell supplemental health and life insurance. In addition, the Parent Company, other operating business units that are not individually reportable, and business activities, including reinsurance retrocession activities, not included in Aflac Japan or Aflac U.S. are included in Corporate and other. The Company does not allocate corporate overhead expenses to business segments. Consistent with U.S. GAAP accounting guidance for segment reporting, the Company evaluates and manages its business segments using a financial performance measure called pretax adjusted earnings. Adjusted earnings are adjusted revenues less benefits and adjusted expenses. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management’s control. Adjusted revenues are U.S. GAAP total revenues excluding net investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest cash flows from derivatives associated with certain investment strategies. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance. The Company excludes income taxes related to operations to arrive at pretax adjusted earnings. Information regarding operations by reportable segment and Corporate and other, follows: Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Revenues: Aflac Japan: Net earned premiums $ 2,241 $ 2,934 $ 7,384 $ 9,045 Adjusted net investment income (1),(2) 663 763 2,066 2,260 Other income 9 10 26 32 Total adjusted revenue Aflac Japan 2,913 3,707 9,476 11,337 Aflac U.S.: Net earned premiums 1,375 1,393 4,182 4,223 Adjusted net investment income (3) 185 191 563 557 Other income 38 32 120 90 Total adjusted revenue Aflac U.S. 1,598 1,616 4,865 4,870 Corporate and other (4),(5) 73 72 189 205 Total adjusted revenues 4,584 5,395 14,530 16,412 Net investment gains (losses) (1),(2),(3),(4) 236 (158) 962 258 Total revenues $ 4,820 $ 5,237 $ 15,492 $ 16,670 (1) Amortized hedge costs of $28 and $20 for the three-month periods and $84 and $55 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations. (2) Net interest cash flows from derivatives associated with certain investment strategies of $(25) and $(7) for the three-month periods and $(37) and $(24) for the nine-month periods ended September 30, 2022, and 2021, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (3) Net interest cash flows from derivatives associated with certain investment strategies of $(1) and $1 for the three-month periods and $1 and $1 for the nine-month periods ended September 30, 2022, and 2021, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (4) Amortized hedge income of $19 and $13 for the three-month periods and $44 and $45 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase to net investment income when analyzing operations. (5) The change in value of federal historic rehabilitation and solar investments in partnerships of $19 and $5 for the three-month periods and $61 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, is included as a reduction to net investment income. Tax credits on these investments of $19 and $10 for the three-month periods and $63 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings. See Note 3 of the Notes to the Consolidated Financial Statements for additional information on these investments. Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Pretax earnings: Aflac Japan (1),(2) $ 630 $ 976 $ 2,351 $ 2,867 Aflac U.S. (3) 309 358 984 1,217 Corporate and other (4),(5),(6) (59) (41) (179) (144) Pretax adjusted earnings (7) 880 1,293 3,156 3,940 Net investment gains (losses) (1),(2),(3),(4),(5) 222 (172) 923 216 Other income (loss) 1 (8) 1 (66) Total earnings before income taxes $ 1,103 $ 1,113 $ 4,080 $ 4,090 Income taxes applicable to pretax adjusted earnings $ 156 $ 262 $ 565 $ 771 Effect of foreign currency translation on after-tax (53) (14) (147) (8) (1) Amortized hedge costs of $28 and $20 for the three-month periods and $84 and $55 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations. (2) Net interest cash flows from derivatives associated with certain investment strategies of $(25) and $(7) for the three-month periods and $(37) and $(24) for the nine-month periods ended September 30, 2022, and 2021, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (3) Net interest cash flows from derivatives associated with certain investment strategies of $(1) and $1 for the three-month periods and $1 and $1 for the nine-month periods ended September 30, 2022, and 2021, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (4) Amortized hedge income of $19 and $13 for the three-month periods and $44 and $45 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase in net investment income when analyzing operations. (5) A gain of $13 and $14 for the three-month periods and $38 and $41 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable has been reclassified from net investment gains (losses) and included in adjusted earnings when analyzing operations. (6) The change in value of federal historic rehabilitation and solar investments in partnerships of $19 and $5 for the three-month periods and $61 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, is included as a reduction to net investment income. Tax credits on these investments of $19 and $10 for the three-month periods and $63 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings. See Note 3 of the Notes to the Consolidated Financial Statements for additional information on these investments. (7) Includes $45 and $40 for the three-month periods and $127 and $130 for the nine-month periods ended September 30, 2022, and 2021, respectively, of interest expense on debt. Assets were as follows: (In millions) September 30, December 31, Assets: Aflac Japan $ 101,311 $ 128,536 Aflac U.S. 20,212 23,106 Corporate and other 6,577 5,900 Total assets $ 128,100 $ 157,542 |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS Investment Holdings The amortized cost for the Company's investments in fixed maturity securities, the cost for equity securities and the fair values of these investments are shown in the following tables. September 30, 2022 (In millions) Amortized Allowance for Credit Losses Gross Gross Fair Securities available for sale, carried at fair Fixed maturity securities: Yen-denominated: Japan government and agencies $ 23,342 $ 0 $ 1,558 $ 1,158 $ 23,742 Municipalities 947 0 164 40 1,071 Mortgage- and asset-backed securities 231 0 9 8 232 Public utilities 3,605 0 303 87 3,821 Sovereign and supranational 603 0 34 1 636 Banks/financial institutions 5,813 0 365 399 5,779 Other corporate 5,712 0 696 264 6,144 Total yen-denominated 40,253 0 3,129 1,957 41,425 U.S. dollar-denominated: U.S. government and agencies 176 0 0 8 168 Municipalities 1,252 0 58 105 1,205 Mortgage- and asset-backed securities 1,732 0 119 74 1,777 Public utilities 3,398 0 312 181 3,529 Sovereign and supranational 194 0 45 13 226 Banks/financial institutions 3,002 0 347 97 3,252 Other corporate 21,028 0 2,152 1,119 22,061 Total U.S. dollar-denominated 30,782 0 3,033 1,597 32,218 Total securities available for sale $ 71,035 $ 0 $ 6,162 $ 3,554 $ 73,643 December 31, 2021 (In millions) Amortized Allowance for Credit Losses Gross Gross Fair Securities available for sale, carried at fair Fixed maturity securities: Yen-denominated: Japan government and agencies $ 30,335 $ 0 $ 3,343 $ 61 $ 33,617 Municipalities 1,192 0 322 5 1,509 Mortgage- and asset-backed securities 300 0 19 1 318 Public utilities 4,462 0 906 2 5,366 Sovereign and supranational 760 0 82 0 842 Banks/financial institutions 6,963 0 787 72 7,678 Other corporate 7,148 0 1,535 26 8,657 Total yen-denominated 51,160 0 6,994 167 57,987 U.S. dollar-denominated: U.S. government and agencies 196 0 8 1 203 Municipalities 1,340 0 189 2 1,527 Mortgage- and asset-backed securities 897 0 33 2 928 Public utilities 3,781 0 909 5 4,685 Sovereign and supranational 222 0 57 6 273 Banks/financial institutions 3,169 0 747 3 3,913 Other corporate 24,604 0 4,629 53 29,180 Total U.S. dollar-denominated 34,209 0 6,572 72 40,709 Total securities available for sale $ 85,369 $ 0 $ 13,566 $ 239 $ 98,696 September 30, 2022 (In millions) Amortized Allowance for Credit Losses Net Carrying Amount Gross Gross Fair Securities held to maturity, carried at Fixed maturity securities: Yen-denominated: Japan government and agencies $ 16,745 $ 3 $ 16,742 $ 2,483 $ 0 $ 19,225 Municipalities 264 0 264 57 0 321 Public utilities 34 0 34 7 0 41 Sovereign and supranational 412 3 409 68 0 477 Other corporate 17 0 17 4 0 21 Total yen-denominated 17,472 6 17,466 2,619 0 20,085 Total securities held to maturity $ 17,472 $ 6 $ 17,466 $ 2,619 $ 0 $ 20,085 December 31, 2021 (In millions) Amortized Allowance for Credit Losses Net Carrying Amount Gross Gross Fair Securities held to maturity, carried at Fixed maturity securities: Yen-denominated: Japan government and agencies $ 21,089 $ 3 $ 21,086 $ 4,613 $ 0 $ 25,699 Municipalities 335 0 335 101 0 436 Public utilities 44 1 43 12 0 55 Sovereign and supranational 518 4 514 136 0 650 Other corporate 22 0 22 7 0 29 Total yen-denominated 22,008 8 22,000 4,869 0 26,869 Total securities held to maturity $ 22,008 $ 8 $ 22,000 $ 4,869 $ 0 $ 26,869 (In millions) September 30, December 31, 2021 Equity securities, carried at fair value through net earnings: Fair Value Fair Value Equity securities: Yen-denominated $ 592 $ 744 U.S. dollar-denominated 427 817 Other currencies 45 42 Total equity securities $ 1,064 $ 1,603 The methods of determining the fair values of the Company's investments in fixed maturity securities and equity securities are described in Note 5. During the first nine months of 2022 and 2021, respectively, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category. Contractual and Economic Maturities The contractual and economic maturities of the Company's investments in fixed maturity securities at September 30, 2022, were as follows: (In millions) Amortized (1) Fair Available for sale: Due in one year or less $ 1,285 $ 1,455 Due after one year through five years 7,261 7,815 Due after five years through 10 years 13,081 14,297 Due after 10 years 47,445 48,067 Mortgage- and asset-backed securities 1,963 2,009 Total fixed maturity securities available for sale $ 71,035 $ 73,643 Held to maturity: Due in one year or less $ 0 $ 0 Due after one year through five years 37 39 Due after five years through 10 years 9,285 10,498 Due after 10 years 8,144 9,548 Mortgage- and asset-backed securities 0 0 Total fixed maturity securities held to maturity $ 17,466 $ 20,085 (1) Net of allowance for credit losses Economic maturities are used for certain debt instruments with no stated maturity where the expected maturity date is based on the combination of features in the financial instrument such as the right to call or prepay obligations or changes in coupon rates. Investment Concentrations The Company's process for investing in credit-related investments begins with an independent approach to underwriting each issuer's fundamental credit quality. The Company evaluates independently those factors that it believes could influence an issuer's ability to make payments under the contractual terms of the Company's instruments. This includes a thorough analysis of a variety of items including the issuer's country of domicile (including political, legal, and financial considerations); the industry in which the issuer competes (with an analysis of industry structure, end-market dynamics, and regulation); company specific issues (such as management, assets, earnings, cash generation, and capital needs); and contractual provisions of the instrument (such as financial covenants and position in the capital structure). The Company further evaluates the investment considering broad business and portfolio management objectives, including asset/liability needs, portfolio diversification, and expected income. Investment exposures that individually exceeded 10% of shareholders' equity were as follows: September 30, 2022 December 31, 2021 (In millions) Credit Amortized Fair Credit Amortized Fair Japan National Government (1) A+ $39,106 $41,927 A+ $50,186 $57,862 (1) Japan Government Bonds (JGBs) or JGB-backed securities Net Investment Gains and Losses Information regarding pretax net gains and losses from investments is as follows: Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Net investment gains (losses): Sales and redemptions: Fixed maturity securities available for sale: Gross gains from sales $ 8 $ 24 $ 93 $ 40 Gross losses from sales (4) (36) (30) (39) Foreign currency gains (losses) 54 (2) 187 (21) Other investments: Gross gains from sales 1 0 10 0 Total sales and redemptions 59 (14) 260 (20) Equity securities (22) (119) (313) (17) Credit losses: Fixed maturity securities available for sale 0 27 0 38 Fixed maturity securities held to maturity 0 0 0 1 Commercial mortgage and other loans (12) (29) (8) 15 Impairment losses (4) 0 (21) (20) Loan commitments 5 3 7 3 Reinsurance recoverables and other 0 0 2 (2) Total credit losses (11) 1 (20) 35 Derivatives and other: Derivative gains (losses) (491) (174) (1,515) (557) Foreign currency gains (losses) 664 135 2,473 783 Total derivatives and other 173 (39) 958 226 Total net investment gains (losses) $ 199 $ (171) $ 885 $ 224 The unrealized holding losses, net of gains, recorded as a component of net investment gains and losses for the three-month period ended September 30, 2022, that relate to equity securities still held at the September 30, 2022 reporting date, were $21 million. The unrealized holding losses, net of gains, recorded as a component of net investment gains and losses for the nine-month period ended September 30, 2022, that relate to equity securities still held at the September 30, 2022 reporting date, were $313 million. Unrealized Investment Gains and Losses Effect on Shareholders’ Equity The net effect on shareholders’ equity of unrealized gains and losses from fixed maturity securities was as follows: (In millions) September 30, December 31, Unrealized gains (losses) on securities available for sale $ 2,608 $ 13,330 Deferred income taxes (1,477) (3,728) Shareholders’ equity, unrealized gains (losses) on fixed maturity securities $ 1,131 $ 9,602 Gross Unrealized Loss Aging The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended September 30, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position. September 30, 2022 Total Less than 12 months 12 months or longer (In millions) Fair Unrealized Fair Unrealized Fair Unrealized Fixed maturity securities available U.S. government and U.S. dollar-denominated $ 51 $ 8 $ 0 $ 5 $ 51 $ 3 Japan government and Yen-denominated 8,091 1,158 4,300 482 3,791 676 Municipalities: U.S. dollar-denominated 708 105 675 95 33 10 Yen-denominated 278 40 166 18 112 22 Mortgage- and asset- U.S. dollar-denominated 839 74 723 63 116 11 Yen-denominated 69 8 46 4 23 4 Public utilities: U.S. dollar-denominated 1,544 181 1,486 171 58 10 Yen-denominated 1,041 87 929 79 112 8 Sovereign and supranational: U.S. dollar-denominated 29 13 0 0 29 13 Yen-denominated 68 1 34 1 34 0 Banks/financial institutions: U.S. dollar-denominated 968 97 760 69 208 28 Yen-denominated 3,485 399 2,625 281 860 118 Other corporate: U.S. dollar-denominated 8,276 1,119 7,463 905 813 214 Yen-denominated 1,696 264 1,435 208 261 56 Total $ 27,143 $ 3,554 $ 20,642 $ 2,381 $ 6,501 $ 1,173 December 31, 2021 Total Less than 12 months 12 months or longer (In millions) Fair Unrealized Fair Unrealized Fair Unrealized Fixed maturity securities available U.S. government and U.S. dollar-denominated $ 1 $ 1 $ 0 $ 1 $ 1 $ 0 Japan government and Yen-denominated 2,868 61 445 3 2,423 58 Municipalities: U.S. dollar-denominated 82 2 79 2 3 0 Yen-denominated 187 5 53 0 134 5 Mortgage- and asset- U.S. dollar-denominated 278 2 278 2 0 0 Yen-denominated 33 1 0 0 33 1 Public utilities: U.S. dollar-denominated 130 5 70 2 60 3 Yen-denominated 26 2 0 0 26 2 Sovereign and supranational: U.S. dollar-denominated 37 6 6 1 31 5 Banks/financial institutions: U.S. dollar-denominated 292 3 274 3 18 0 Yen-denominated 2,074 72 1,011 16 1,063 56 Other corporate: U.S. dollar-denominated 1,365 53 458 8 907 45 Yen-denominated 541 26 274 4 267 22 Total $ 7,914 $ 239 $ 2,948 $ 42 $ 4,966 $ 197 Analysis of Securities in Unrealized Loss Positions The unrealized losses on the Company's fixed maturity securities investments have been primarily related to general market changes in interest rates, foreign exchange rates, and/or the levels of credit spreads rather than specific concerns with the issuer's ability to pay interest and repay principal. For any of its fixed maturity securities with significant declines in fair value, the Company performs detailed analyses to identify whether the drivers of the declines are due to general market drivers, such as the recent rise in interest rates, or due to credit-related factors. Identifying the drivers of the declines in fair value helps to align and allocate the Company‘s resources to securities with real credit-related concerns that could impact ultimate collection of principal and interest. For any significant declines in fair value determined to be non-interest rate or market related, the Company performs a more focused review of the related issuers' specific credit profile. For corporate issuers, the Company evaluates their assets, business profile including industry dynamics and competitive positioning, financial statements and other available financial data. For non-corporate issuers, the Company analyzes all sources of credit support, including issuer-specific factors. The Company utilizes information available in the public domain and, for certain private placement issuers, from consultations with the issuers directly. The Company also considers ratings from Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security it owns including seniority in the issuer's capital structure, covenant protections, or other relevant features. From these reviews, the Company evaluates the issuers' continued ability to service the Company's investment through payment of interest and principal. Assuming no credit-related factors develop, unrealized gains and losses on fixed maturity securities are expected to diminish as investments near maturity. Based on its credit analysis, the Company believes that the issuers of its fixed maturity investments in the sectors shown in the table above have the ability to service their obligations to the Company, and the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. However, from time to time the Company identifies certain available-for-sale fixed maturity securities where the amortized cost basis exceeds the present value of the cash flows expected to be collected due to credit related factors and as a result, a credit allowance will be estimated. Refer to the Allowance for Credit Losses section below for additional information. Commercial Mortgage and Other Loans The Company classifies its transitional real estate loans (TREs), commercial mortgage loans (CMLs) and middle market loans (MMLs) as held-for-investment and includes them in the commercial mortgage and other loans line on the consolidated balance sheets. The Company carries them on the balance sheet at amortized cost less an estimated allowance for credit losses. The following table reflects the composition of the carrying value for commercial mortgage and other loans by property type as of the periods presented. (In millions) September 30, 2022 December 31, 2021 Amortized Cost % of Total Amortized Cost % of Total Commercial Mortgage and other loans: Transitional real estate loans: Office $ 2,121 15.5 % $ 2,001 16.7 % Retail 485 3.6 267 2.2 Apartments/Multi-Family 2,730 20.0 1,893 15.8 Industrial 154 1.1 94 .8 Hospitality 835 6.1 876 7.3 Other 177 1.3 228 1.9 Total transitional real estate loans 6,502 47.6 5,359 44.7 Commercial mortgage loans: Office 390 2.9 398 3.3 Retail 312 2.3 332 2.8 Apartments/Multi-Family 634 4.6 649 5.4 Industrial 691 5.1 525 4.4 Total commercial mortgage loans 2,027 14.9 1,904 15.9 Middle market loans 5,112 37.5 4,697 39.4 Total commercial mortgage and other loans $ 13,641 100.0 % $ 11,960 100.0 % Allowance for credit losses (182) (174) Total net commercial mortgage and other loans $ 13,459 $ 11,786 CMLs and TREs were secured by properties entirely within the U.S. (with the largest concentrations in California (19%), Texas (13%) and Florida (10%)). Middle market loans are issued only to companies domiciled within the U.S. and Canada. Transitional Real Estate Loans TREs are commercial mortgage loans that are typically relatively short-term floating rate instruments secured by a first lien on the property. These loans provide funding for properties undergoing a change in their physical characteristics and/or economic profile and do not typically require any principal repayment prior to the maturity date. This loan portfolio is generally considered to be investment grade. As of September 30, 2022, the Company had $982 million in outstanding commitments to fund TREs. These commitments are contingent on the final underwriting and due diligence to be performed. Commercial Mortgage Loans CMLs are typically fixed rate loans on commercial real estate with partial repayment of principal over the life of the loan with the remaining outstanding principal being repaid upon maturity. This loan portfolio is generally considered higher quality investment grade loans. Middle Market Loans MMLs are typically first lien senior secured cash flow loans to small to mid-size companies for working capital, refinancing, acquisition, and recapitalization. These loans are generally considered to be below investment grade. The carrying value for MMLs included $14 million and $11 million for a short term credit facility that is reflected in other liabilities on the consolidated balance sheets, as of September 30, 2022, and December 31, 2021, respectively. As of September 30, 2022, the Company had commitments of approximately $442 million to fund future MMLs. These commitments are contingent upon the availability of middle market loans that meet the Company's underwriting criteria. Credit Quality Indicators For TREs, the Company’s key credit quality indicator is loan-to-value (LTV). Given that TRE loans involve properties undergoing renovation or construction, LTV provides the most insight into the credit risk of the loan. The Company monitors the performance of the loans periodically, but not less frequently than quarterly. For CMLs, the Company’s key credit quality indicators include LTV and debt service coverage ratios (DSCR). LTV is calculated by dividing the current outstanding loan balance by the most recent estimated property value. DSCR is the most recently available operating income of the underlying property compared to the required debt service of the loan. For MMLs and held-to-maturity fixed maturity securities, the Company’s key credit quality indicator is credit ratings. The Company’s held-to-maturity portfolio is composed of investment grade securities that are senior unsecured instruments, while its MMLs generally have below-investment-grade ratings but are typically senior secured instruments. The Company monitors the credit ratings periodically, but not less frequently than quarterly. For the Company’s reinsurance recoverable balance, the key credit quality indicator is the credit rating of the Company’s reinsurance counterparty. The Company uses external credit ratings focused on the reinsurer’s financial strength and credit worthiness. As of September 30, 2022, the Company's reinsurance counterparties were rated A+. The Company monitors the credit ratings periodically, but not less frequently than quarterly. The following tables present as of September 30, 2022 the amortized cost basis of TREs, CMLs and MMLs by year of origination and credit quality indicator . Transitional Real Estate Loans (In millions) 2022 2021 2020 2019 2018 Prior Total Loan-to-Value Ratio: 0%-59.99% $ 534 $ 585 $ 137 $ 192 $ 102 $ 0 $ 1,550 60%-69.99% 580 796 56 504 437 50 2,423 70%-79.99% 780 928 107 380 159 1 2,355 80% or greater 15 159 0 0 0 0 174 Total $ 1,909 $ 2,468 $ 300 $ 1,076 $ 698 $ 51 $ 6,502 Commercial Mortgage Loans (In millions) 2022 2021 2020 2019 2018 Prior Total Weighted-Average DSCR Loan-to-Value Ratio: 0%-59.99% $ 211 $ 322 $ 46 $ 513 $ 152 $ 542 $ 1,786 2.23 60%-69.99% 0 15 0 46 0 115 176 2.08 70%-79.99% 0 0 0 40 0 25 65 1.18 80% or greater 0 0 0 0 0 0 0 0.00 Total $ 211 $ 337 $ 46 $ 599 $ 152 $ 682 $ 2,027 2.18 Weighted Average DSCR 0.00 2.74 1.92 2.56 2.06 2.30 Middle Market Loans (In millions) 2022 2021 2020 2019 2018 Prior Revolving Loans Total Credit Ratings: BBB $ 30 $ 153 $ 85 $ 37 $ 19 $ 0 $ 114 $ 438 BB 258 456 327 210 80 46 309 1,686 B 283 716 396 497 243 220 350 2,705 CCC 0 0 21 71 70 56 50 268 CC 0 0 0 0 14 0 1 15 C and lower 0 0 0 0 0 0 0 0 Total $ 571 $ 1,325 $ 829 $ 815 $ 426 $ 322 $ 824 $ 5,112 Allowance for Credit Losses The Company calculates its allowance for credit losses for held-to-maturity fixed maturity securities, loan receivables, loan commitments and reinsurance recoverable by grouping assets with similar risk characteristics when there is not a specific expectation of a loss for an individual asset. For held-to-maturity fixed maturity securities, MMLs, and MML commitments, the Company groups assets by credit ratings, industry, and country. The Company groups CMLs and TREs and respective loan commitments by property type, property location and the property’s LTV and debt service coverage ratios. The credit allowance for the reinsurance recoverable balance is estimated using a probability-of-default (PD) / loss-given-default (LGD) method. The credit allowance for held-to-maturity fixed maturity securities and loan receivables is estimated using a PD / LGD method, discounted for the time value of money. For held-to-maturity fixed maturity securities, available-for-sale fixed maturity securities and loan receivables, the Company includes the change in present value due to the passage of time in the change in the allowance for credit losses. The Company’s methodology for estimating credit losses utilizes the contractual maturity date of the financial asset, adjusted when necessary to reflect the expected timing of repayment (such as prepayment options, renewal options, call options, or extension options). The Company applies reasonable and supportable forecasts of macroeconomic variables that impact the determination of PD/LGD over a two-year period for held-to-maturity fixed maturity securities and MMLs. The Company reverts to historical loss information over one year, following the two-year forecast period. For the CML and TRE portfolio, the Company applies reasonable and supportable forecasts of macroeconomic variables as well as national and local real-estate market factors to estimate future credit losses where the market factors revert back to historical levels over time with the period being dependent on current market conditions, projected market conditions and difference in the current and historical market levels for each factor. The Company continuously monitors the estimation methodology, due to changes in portfolio composition, changes in underwriting practices and significant events or conditions and makes adjustments as necessary. The Company’s held-to-maturity fixed maturity portfolio includes Japan Government and Agency securities of $16.6 billion amortized cost as of September 30, 2022 that meet the requirements for zero-credit-loss expectation and therefore these asset classes have been excluded from the current expected credit loss measurement. An investment in an available-for-sale fixed maturity security may be impaired if the fair value falls below amortized cost. The Company regularly reviews its fixed maturity security investments portfolio for declines in fair value. The Company's debt impairment model focuses on the ultimate collection of the cash flows from its investments and whether the Company has the intent to sell or if it is more likely than not the Company would be required to sell the security prior to recovery of its amortized cost. The determination of the amount of impairments under this model is based upon the Company's periodic evaluation and assessment of known and inherent risks associated with the respective securities. Such evaluations and assessments are revised as conditions change and new information becomes available. When determining the Company's intention to sell a security prior to recovery of its fair value to amortized cost, the Company evaluates facts and circumstances such as, but not limited to, future cash flow needs, decisions to reposition its security portfolio, and risk profile of individual investment holdings. The Company performs ongoing analyses of its liquidity needs, which includes cash flow testing of its policy liabilities, debt maturities, projected dividend payments, and other cash flow and liquidity needs. The Company’s methodology for estimating credit losses for available-for-sale fixed maturity securities utilizes the discounted cash flow model, based on past events, current market conditions and future economic conditions, as well as industry analysis and credit ratings of the fixed maturity securities. In addition, the Company evaluates the specific issuer’s probability of default and expected recovery of its position in the event of default based on the underlying financial condition and assets of the borrower as well as seniority and/or security of other debt holders in the issuer when developing management’s best estimate of expected cash flows. The Company granted certain loan modifications in its MML and TRE portfolios during the nine-month period ended September 30, 2022. As of September 30, 2022, these loan modifications did not have a material impact on the Company’s results of operations. The Company had no troubled debt restructurings (TDRs) during the nine-month periods ended September 30, 2022 and 2021, respectively. The Company designates nonaccrual status for a nonperforming debt security or a loan that is not generating its stated interest rate because of nonpayment of periodic interest by the borrower. The Company applies the cash basis method to record any payments received on non-accrual assets. The Company resumes the accrual of interest on fixed maturity securities and loans that are currently making contractual payments or for those that are not current where the borrower has paid timely (less than 30 days outstanding). As of September 30, 2022 and December 31, 2021, the Company had an immaterial amount of loans and fixed maturity securities on nonaccrual status. The following table presents the roll forward of the allowance for credit losses by portfolio segment. (In millions) Transitional Real Estate Loans Commercial Mortgage Loans Middle Market Loans Held to Maturity Securities Available for Sale Securities Reinsurance Recoverables Three Months Ended September 30, 2022: Balance at June 30, 2022 $ (53) $ (8) $ (109) $ (7) $ 0 $ (8) (Addition to) release of allowance for credit (2) (2) (6) 0 0 0 Write-offs, net of recoveries 0 0 (2) 0 0 0 Change in foreign exchange 0 0 0 1 0 0 Balance at September 30, 2022 $ (55) $ (10) $ (117) $ (6) $ 0 $ (8) Three Months Ended September 30, 2021: Balance at June 30, 2021 $ (41) $ (22) $ (76) $ (8) $ (26) $ (13) (Addition to) release of allowance for credit (18) 5 (13) (1) 0 0 Write-offs, net of recoveries 0 0 0 0 26 0 Balance at September 30, 2021 $ (59) $ (17) $ (89) $ (9) $ 0 $ (13) Nine Months Ended September 30, 2022: Balance at December 31, 2021 $ (68) $ (10) $ (96) $ (8) $ 0 $ (13) (Addition to) release of allowance for credit 13 0 (24) 0 0 2 Write-offs, net of recoveries 0 0 3 0 0 0 Change in foreign exchange 0 0 0 2 0 3 Balance at September 30, 2022 $ (55) $ (10) $ (117) $ (6) $ 0 $ (8) Nine Months Ended September 30, 2021: Balance at December 31, 2020 $ (63) $ (32) $ (85) $ (10) $ (38) $ (12) (Addition to) release of allowance for credit 4 15 (4) 1 26 (1) Write-offs, net of recoveries 0 0 0 0 12 0 Balance at September 30, 2021 $ (59) $ (17) $ (89) $ (9) $ 0 $ (13) For assets that are subject to the credit loss measurement, the change in credit loss allowance will be significantly impacted by purchases and sales in those assets during the period as well as entering into new non-cancelable loan commitments. The estimate of credit losses for loan commitments as of September 30, 2022 was $26 million. Other Investments The table below reflects the composition of the carrying value for other investments as of the periods presented. (In millions) September 30, December 31, 2021 Other investments: Policy loans $ 195 $ 236 Short-term investments (1) 1,816 1,726 Limited partnerships 2,145 1,858 Other 30 22 Total other investments $ 4,186 $ 3,842 (1) Includes securities lending collateral The Parent Company invests in partnerships that specialize in rehabilitating historic structures or the installation of solar equipment in order to receive federal historic rehabilitation and solar tax credits. These investments are classified as limited partnerships and included in other investments in the consolidated balance sheet. The change in value of each investment is recorded as a reduction to net investment income. Tax credits generated by these investments are recorded as an income tax benefit in the consolidated statement of earnings. As of September 30, 2022, the Company had $2.1 billion in outstanding commitments to fund alternative investments in limited partnerships. Variable Interest Entities (VIEs) As a condition of its involvement or investment in a VIE, the Company enters into certain protective rights and covenants that preclude changes in the structure of the VIE that would alter the creditworthiness of the Company's investment or its beneficial interest in the VIE. For those VIEs other than certain unit trust structures, the Company's involvement is passive in nature. The Company is not, nor has it been, required to purchase any securities issued in the future by these VIEs. The Company's ownership interest in VIEs is limited to holding the obligations issued by them. The Company has no direct or contingent obligations to fund the limited activities of these VIEs, nor does it have any direct or indirect financial guarantees related to the limited activities of these VIEs. The Company has not provided any assistance or any other type of financing support to any of the VIEs it invests in, nor does it have any intention to do so in the future. For those VIEs in which the Company holds debt obligations, the weighted-average lives of the Company's notes are very similar to the underlying collateral held by these VIEs where applicable. The Company's risk of loss related to its interests in any of its VIEs is limited to the carrying value of the related investments held in the VIE. VIEs - Consolidated The following table presents the cost or amortized cost, fair value and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. Investments in Consolidated Variable Interest Entities September 30, 2022 December 31, 2021 (In millions) Amortized (1) Fair Amortized Cost (1) Fair Assets: Fixed maturity securities, available for sale $ 2,908 $ 3,617 $ 3,264 $ 4,490 Commercial mortgage and other loans 10,775 10,716 9,740 9,910 Other investments (2) 1,815 1,815 1,535 1,535 Other assets (3) 65 65 78 78 Total assets of consolidated VIEs $ 15,563 $ 16,213 $ 14,617 $ 16,013 Liabilities: Other liabilities (3) $ 463 $ 463 $ 414 $ 414 Total liabilities of consolidated VIEs $ 463 $ 463 $ 414 $ 414 (1) Net of allowance for credit losses (2) Consists entirely of alternative investments in limited partnerships (3) Consists entirely of derivatives The Company is substantively the only investor in the consolidated VIEs listed in the table above. As the sole investor in these VIEs, the Company has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and is therefore considered to be the primary beneficiary of the VIEs that it consolidates. The Company also participates in substantially all of the variability created by these VIEs. The activities of these VIEs are limited to holding invested assets and foreign currency swaps, as appropriate, and utilizing the cash flows from these securities to service its investment. Neither the Company nor any of its creditors are able to obtain the underlying collateral of the VIEs unless there is an event of default or other specified event. For those VIEs that contain a swap, the Company is not a direct counterparty to the swap contracts and has no control over them. The Company's loss exposure to these VIEs is limited to its original investment. The Company's consolidated VIEs do not rely on outside or ongoing sources of funding to support their activities beyond the underlying collateral and swap contracts, if applicable. With the exception of its investment in unit trust structures, the underlying collateral assets and funding of the Company's consolidated VIEs are generally static in nature. Investments in Unit Trust Structures The Company also utilizes unit trust structures in its Aflac Japan segment to invest in various asset classes. As the sole investor of these VIEs, the Company is required to consolidate these trusts under U.S. GAAP. VIEs - Not Consolidated The table below reflects the amortized cost, fair value and balance sheet caption in which the Company's investment in VIEs not consolidated are reported. Investments in Variable Interest Entities Not Consolidated September 30, 2022 December 31, 2021 (In millions) Amortized Fair Amortized Fair Assets: Fixed maturity securities, available for sale $ 3,809 $ 4,131 $ 4,779 $ 5,864 Other investments (1) 330 330 323 323 Total investments in VIEs not consolidated $ 4,139 $ 4,461 $ 5,102 $ 6,187 (1) Consists entirely of alternative investments in limited partnerships C |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company's freestanding derivative financial instruments have historically consisted of: • foreign currency forwards and options used in hedging foreign exchange risk on U.S. dollar-denominated investments in Aflac Japan's portfolio, with options used on a standalone basis and/or in a collar strategy; • foreign currency forwards and options used to economically hedge certain portions of forecasted cash flows denominated in yen and hedge the Company's long term exposure to a weakening yen; • cross-currency interest rate swaps, also referred to as foreign currency swaps, associated with certain senior notes and subordinated debentures; • foreign currency swaps that are associated with variable interest entity (VIE) bond purchase commitments, and investments in special-purpose entities, including VIEs where the Company is the primary beneficiary; • interest rate swaps used to economically hedge interest rate fluctuations in certain variable-rate investments; • interest rate swaptions used to hedge changes in the fair value associated with interest rate fluctuations for certain U.S. dollar-denominated available-for-sale fixed-maturity securities; and • bond purchase commitments at the inception of investments in consolidated VIEs. Some of the Company's derivatives are designated as cash flow hedges, fair value hedges or net investment hedges; however, other derivatives do not qualify for hedge accounting or the Company elects not to designate them as accounting hedges. Derivative Types Foreign currency forwards and options are executed for the Aflac Japan segment in order to hedge the currency risk on the carrying value of certain U.S. dollar-denominated investments. The average maturity of these forwards and options can change depending on factors such as market conditions and types of investments being held. In situations where the maturity of the forwards and options is shorter than the underlying investment being hedged, the Company may enter into new forwards and options near maturity of the existing derivative in order to continue hedging the underlying investment. In forward transactions, Aflac Japan agrees with another party to buy a fixed amount of yen and sell a corresponding amount of U.S. dollars at a specified future date. The Company also uses one-sided foreign currency put options to mitigate the settlement risk on U.S. dollar-denominated assets related to extreme foreign currency rate changes. From time to time, Aflac Japan also executes foreign currency option transactions in a collar strategy, where Aflac Japan agrees with another party to simultaneously purchase put options and sell call options. In the purchased put transactions, Aflac Japan obtains the option to buy a fixed amount of yen and sell a corresponding amount of U.S. dollars at a specified future date. In the sold call transactions, Aflac Japan agrees to sell a fixed amount of yen and buy a corresponding amount of U.S. dollars at a specified future date. The combination of purchasing the put option and selling the call option results in no net premium being paid (i.e. a costless or zero-cost collar). In 2021, the Company moved to a strategy that contains one-sided put options, fewer foreign currency forwards and no collars. From time to time, the Company may also enter into foreign currency forwards and options to hedge the currency risk associated with the net investment in Aflac Japan. In these forward transactions, the Company agrees with another party to buy a fixed amount of U.S. dollars and sell a corresponding amount of yen at a specified price at a specified future date. In the option transactions, the Company may use a combination of foreign currency options to protect expected future cash flows by simultaneously purchasing yen put options (options that protect against a weakening yen) and selling yen call options (options that limit participation in a strengthening yen). The combination of these two actions create a zero-cost collar. Additionally, the Company enters into purchased options to hedge cash flows from the net investment in Aflac Japan. The Company enters into foreign currency swaps pursuant to which it exchanges an initial principal amount in one currency for an initial principal amount of another currency, with an agreement to re-exchange the principal amounts at a future date. There may also be periodic exchanges of payments at specified intervals based on the agreed upon rates and notional amounts. Foreign currency swaps are used primarily in the consolidated VIEs in the Company's Aflac Japan portfolio to convert foreign-denominated cash flows to yen, the functional currency of Aflac Japan, in order to minimize cash flow fluctuations. The Company also uses foreign currency swaps to economically convert certain of its U.S. dollar-denominated senior note and subordinated debenture principal and interest obligations into yen-denominated obligations. In order to reduce investment income volatility from its variable-rate investments, the Company enters into receive–fixed, pay–floating interest rate swaps. These derivatives are cleared and settled through a central clearinghouse. Swaptions are used to mitigate the adverse impact resulting from significant changes in the fair value of U.S. dollar-denominated available-for-sale securities due to fluctuation in interest rates. In a payer swaption, the Company pays a premium to obtain the right, but not the obligation, to enter into a swap contract where it will pay a fixed rate and receive a floating rate. Interest rate swaption collars are combinations of two swaption positions. In order to maximize the efficiency of the collars while minimizing cost, a collar strategy is used whereby the Company purchases a long payer swaption (the Company purchases an option that allows it to enter into a swap where the Company will pay the fixed rate and receive the floating rate of the swap) and sells a short receiver swaption (the Company sells an option that provides the counterparty with the right to enter into a swap where the Company will receive the fixed rate and pay the floating rate of the swap). The combination of purchasing the long payer swaption and selling the short receiver swaption results in no net premium being paid (i.e. a costless or zero-cost collar). Bond purchase commitments result from repackaged bond structures that are consolidated VIEs whereby there is a delay in the trade date and settlement date of the bond within the structure to ensure completion of all necessary legal agreements to support the consolidated VIE that issues the repackaged bond. Since the Company has a commitment to purchase the underlying bond at a specified price, the agreement meets the definition of a derivative where the value is derived based on the current market value of the bond compared to the fixed purchase price to be paid on the settlement date. Derivative Balance Sheet Classification The table below summarizes the balance sheet classification of the Company's derivative fair value amounts, as well as the gross asset and liability fair value amounts. The fair value amounts presented do not include income accruals. Derivative assets are included in “Other Assets,” while derivative liabilities are included in “Other Liabilities” within the Company’s Consolidated Balance Sheets. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not reflective of exposure or credit risk. September 30, 2022 December 31, 2021 (In millions) Asset Liability Asset Liability Hedge Designation/ Derivative Notional Fair Value Fair Value Notional Fair Value Fair Value Cash flow hedges: Foreign currency swaps - VIE $ 18 $ 0 $ 4 $ 18 $ 0 $ 2 Total cash flow hedges 18 0 4 18 0 2 Fair value hedges: Foreign currency forwards 0 0 0 62 0 5 Foreign currency options 7,749 5 0 8,829 5 0 Total fair value hedges 7,749 5 0 8,891 5 5 Net investment hedge: Foreign currency forwards 4,993 833 0 4,996 341 0 Foreign currency options 1,669 0 0 1,949 0 0 Total net investment hedge 6,662 833 0 6,945 341 0 Non-qualifying strategies: Foreign currency swaps 1,900 81 0 2,250 59 13 Foreign currency swaps - VIE 3,420 65 458 3,151 78 412 Foreign currency forwards 5,843 162 1,035 15,953 450 1,133 Foreign currency options 5,711 0 0 2,746 3 0 Interest rate swaps 11,130 0 590 3,500 0 54 Forward bond purchase commitment - VIE 14 0 1 0 0 0 Total non-qualifying strategies 28,018 308 2,084 27,600 590 1,612 Total derivatives $ 42,447 $ 1,146 $ 2,088 $ 43,454 $ 936 $ 1,619 Cash Flow Hedges For certain variable-rate U.S. dollar-denominated available-for-sale securities held by Aflac Japan via consolidated VIEs, foreign currency swaps are used to swap the U.S. Dollar (USD) variable rate interest and principal payments to fixed rate Japanese Yen (JPY) interest and principal payments. The Company has designated foreign currency swaps as a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset (“cash flow” hedge). The remaining maximum length of time for which these cash flows are hedged is approximately four years. The derivatives in the Company's consolidated VIEs that are not designated as accounting hedges are discussed in the "non-qualifying strategies" section of this note. Fair Value Hedges The Company designates and accounts for certain foreign currency forwards, options, and interest rate swaptions as fair value hedges when they meet the requirements for hedge accounting. The Company recognizes gains and losses on these derivatives as well as the offsetting gain or loss on the related hedged items in current earnings. Foreign currency forwards and options hedge the foreign currency exposure of certain U.S. dollar-denominated available-for-sale fixed-maturity investments held in Aflac Japan. The change in the fair value of the foreign currency forwards related to the changes in the difference between the spot rate and the forward price is excluded from the assessment of hedge effectiveness. The change in fair value of the foreign currency option related to the time value of the option is recognized in current earnings and is excluded from the assessment of hedge effectiveness. Interest rate swaptions hedge the interest rate exposure of certain U.S. dollar-denominated available-for-sale securities held in Aflac Japan. For these hedging relationships, the Company excludes time value from the assessment of hedge effectiveness and recognizes changes in the intrinsic value of the swaptions in current earnings within net investment income. The change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into earnings (net investment income) over its legal term. The following table presents the gains and losses on derivatives and the related hedged items in fair value hedges. Fair Value Hedging Relationships (In millions) Hedging Derivatives Hedged Items Hedging Derivatives Hedged Items Total Gains (Losses) (1) Gains (Losses) (2) Gains (Losses) (2) Net Investment Gains (Losses) Recognized for Fair Value Hedge Three Months Ended September 30, 2022: Foreign currency options Fixed maturity securities $ (15) $ (15) $ 0 $ 0 $ 0 Total gains (losses) $ (15) $ (15) $ 0 $ 0 $ 0 Nine Months Ended September 30, 2022: Foreign currency options Fixed maturity securities $ (41) $ (41) $ 0 $ 0 $ 0 Total gains (losses) $ (41) $ (41) $ 0 $ 0 $ 0 Three Months Ended September 30, 2021: Foreign currency forwards Fixed maturity securities $ (1) $ 0 $ (1) $ 1 $ 0 Foreign currency options Fixed maturity securities $ (5) $ (5) $ 0 $ 0 $ 0 Total gains (losses) $ (6) $ (5) $ (1) $ 1 $ 0 Nine Months Ended September 30, 2021: Foreign currency forwards Fixed maturity securities $ (5) $ 0 $ (5) $ 5 $ 0 Foreign currency options Fixed maturity securities (16) (15) (1) 4 3 Total gains (losses) $ (21) $ (15) $ (6) $ 9 $ 3 (1) Gains (losses) excluded from effectiveness testing includes the forward point on foreign currency forwards and time value change on foreign currency options which are reported in the consolidated statement of earnings as net investment gains (losses). It also includes the change in the fair value of the interest rate swaptions related to the time value of the swaptions which is recognized as a component of other comprehensive income (loss). (2) Gains and losses on foreign currency forwards and options and related hedged items are reported in the consolidated statement of earnings as net investment gains (losses). For interest rate swaptions and related hedged items, gains and losses included in the hedge assessment, premium amortization and time value amortization while the hedge items are still outstanding are reported within net investment income. The time value gains and losses for interest rate swaptions when the related hedged items are redeemed are reported in net investment gains and losses consistent with the impact of the hedged item. For the three-month and nine-month periods ended September 30, 2022 and 2021, gains and losses included in the hedge assessment on interest rate swaptions and related hedged items were immaterial. The following table shows the carrying amounts of assets designated and qualifying as hedged items in fair value hedges of interest rate risk and the related cumulative hedge adjustment included in the carrying amount. (In millions) Carrying Amount of the Hedged Assets/(Liabilities) (1) Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities) September 30, December 31, 2021 September 30, December 31, 2021 Fixed maturity securities $ 2,166 $ 3,038 $ 193 $ 205 (1) The balance includes hedging adjustment on discontinued hedging relationships of $193 in 2022 and $205 in 2021. Net Investment Hedge The Company's investment in Aflac Japan is affected by changes in the yen/dollar exchange rate. To mitigate this exposure, the Parent Company's yen-denominated liabilities (see Note 8) have been designated as non-derivative hedges and certain foreign currency forwards and options have been designated as derivative hedges of the foreign currency exposure of the Company's net investment in Aflac Japan. The Company's net investment hedge was effective during the three- and nine-month periods ended September 30, 2022 and 2021, respectively. Non-qualifying Strategies For the Company's derivative instruments in consolidated VIEs that do not qualify for hedge accounting treatment, all changes in their fair value are reported in current period earnings within n et i nvestment gains (losses). The amount of gain or loss recognized in earnings for the Company's VIEs is attributable to the derivatives in those investment structures. While the change in value of the swaps is recorded through current period earnings, the change in value of the available-for-sale fixed maturity securities associated with these swaps is recorded through other comprehensive income. As of September 30, 2022, the Parent Company had $1.9 billion notional amount of cross-currency interest rate swap agreements related to certain of its U.S. dollar-denominated senior notes to effectively convert a portion of the interest on the notes from U.S dollar to Japanese yen. Changes in the values of these swaps are recorded through current period earnings. For additional information regarding these swaps, see Note 9 of the Notes to the Consolidated Financial Statements in the 2021 Annual Report. The Company uses foreign exchange forwards and options to economically mitigate the currency risk of some of its U.S. dollar-denominated loan receivables held within the Aflac Japan segment. These arrangements are not designated as accounting hedges, as the foreign currency remeasurement of the loan receivables impacts current period earnings, and substantially offsets gains and losses from foreign exchange forwards within net investment gains (losses). The Company also has certain foreign exchange forwards on U.S. dollar-denominated available-for-sale securities where hedge accounting is not being applied. The Company uses interest rate swaps to economically convert the variable rate investment income to a fixed rate on certain variable-rate investments. Impact of Derivatives and Hedging Instruments The following table summarizes the impact to earnings and other comprehensive income (loss) from all derivatives and hedging instruments. Three Months Ended September 30, 2022 2021 (In millions) Net Investment Income (1) Net Investment Other (2) Net Investment Income (1) Net Investment Other (2) Qualifying hedges: Cash flow hedges: Foreign currency swaps - VIE $ 0 $ (1) $ 1 $ 0 $ (1) $ 1 Total cash flow hedges 0 (1) (3) 1 0 (1) (3) 1 Fair value hedges: Foreign currency options (3) (15) (5) Interest rate swaptions (3) 0 0 0 (1) (1) 1 Total fair value hedges 0 (15) 0 (1) (6) 1 Net investment hedge: Non-derivative hedging 0 181 0 41 Foreign currency forwards 28 236 (42) 55 Foreign currency options (1) 0 (1) 0 Total net investment hedge 27 417 (43) 96 Non-qualifying strategies: Foreign currency swaps 27 6 Foreign currency swaps - VIE (19) (36) Foreign currency forwards (252) (84) Interest rate swaps (257) (9) Forward bond purchase (1) (1) Total non- qualifying strategies (502) (124) Total $ 0 $ (491) $ 418 $ (1) $ (174) $ 98 (1) Interest expense/income on cash flow hedges are recorded in net investment income. For interest rate swaptions classified as fair value hedges, the change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into net investment income over its legal term. If the swaption is early terminated but the hedge item is still outstanding, the amortization of disposal amount of the swaptions is recorded in net investment income over the remaining life of the hedged items. (2) Gains and losses on cash flow hedges and the change in the fair value of interest rate swaptions related to the time value of the swaptions in fair value hedges are recorded as unrealized gains (losses). Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statement of comprehensive income (loss). (3) Impact of cash flow hedges reported as net investment gains (losses) includes $1 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended September 30, 2022, and $1 of losses during the three-month period ended September 30, 2021. In addition, an immaterial amount of losses were reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended September 30, 2022, and $1 of losses during the three-month period ended September 30, 2021, related to fair value hedges excluded component. Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail). Nine Months Ended September 30, 2022 2021 (In millions) Net Investment Income (1) Net Investment Other (2) Net Investment Income (1) Net Investment Other (2) Qualifying hedges: Cash flow hedges: Foreign currency swaps - VIE $ 0 $ (3) $ 2 $ 0 $ (3) $ 2 Total cash flow hedges 0 (3) (3) 2 0 (3) (3) 2 Fair value hedges: Foreign currency options (3) (41) (12) Interest rate swaptions (3) 0 0 0 (1) (1) 1 Total fair value hedges 0 (41) 0 (1) (13) 1 Net investment hedge: Non-derivative hedging 0 705 0 237 Foreign currency forwards (73) 1,059 7 396 Foreign currency options (2) 0 (4) 0 Total net investment hedge (75) 1,764 3 633 Non-qualifying strategies: Foreign currency swaps 162 105 Foreign currency swaps - VIE (35) (115) Foreign currency forwards (966) (527) Foreign currency options (13) 1 Interest rate swaps (523) (6) Forward bond purchase (21) (2) Total non-qualifying strategies (1,396) (544) Total $ 0 $ (1,515) $ 1,766 $ (1) $ (557) $ 636 (1) Interest expense/income on cash flow hedges are recorded in net investment income. For interest rate swaptions classified as fair value hedges, the change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into net investment income over its legal term. If the swaption is early terminated but the hedge item is still outstanding, the amortization of disposal amount of the swaptions is recorded in net investment income over the remaining life of the hedged items. (2) Gains and losses on cash flow hedges and the change in the fair value of interest rate swaptions related to the time value of the swaptions in fair value hedges are recorded as unrealized gains (losses). Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statement of comprehensive income (loss). (3) Impact of cash flow hedges reported as net investment gains (losses) includes $3 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the nine-month period ended September 30, 2022, and $3 of losses during the nine-month period ended September 30, 2021. In addition, $1 of losses were reclassified from accumulated other comprehensive income (loss) into earnings during the nine-month period ended September 30, 2022, and $1 of losses during the nine-month period ended September 30, 2021, related to fair value hedges excluded component. Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail). As of September 30, 2022, $5 million of deferred losses on derivative instruments recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next twelve months. Credit Risk Assumed through Derivatives For the foreign currency swaps associated with the Company's VIE investments for which it is the primary beneficiary, the Company bears the risk of loss due to counterparty default even though it is not a direct counterparty to those contracts. The Company is a direct counterparty to the foreign currency swaps that it has entered into in connection with certain of its senior notes and subordinated debentures; foreign currency forwards; and foreign currency options, and therefore the Company is exposed to credit risk in the event of nonperformance by the counterparties in those contracts. The risk of counterparty default for the Company's foreign currency swaps, certain foreign currency forwards, and foreign currency options is mitigated by collateral posting requirements that counterparties to those transactions must meet. As of September 30, 2022, all of the Company's derivative agreement counterparties were investment grade. The Company engages in over-the-counter (OTC) bilateral derivative transactions directly with unaffiliated third parties under International Swaps and Derivatives Association, Inc. (ISDA) agreements and other documentation. Most of the ISDA agreements also include Credit Support Annexes (CSAs) provisions, which generally provide for two-way collateral postings at the first dollar of exposure. The Company mitigates the risk that counterparties to transactions might be unable to fulfill their contractual obligations by monitoring counterparty credit exposure and collateral value while generally requiring that collateral be posted at the outset of the transaction. In addition, a significant portion of the derivative transactions have provisions that give the counterparty the right to terminate the transaction upon a downgrade of the Company's financial strength rating. The actual amount of payments that the Company could be required to make depends on market conditions, the fair value of outstanding affected transactions, and other factors prevailing at and after the time of the downgrade. The Company also engages in OTC cleared derivative transactions through regulated central clearing counterparties. These positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to these derivatives. Collateral posted by the Company to third parties for derivative transactions can generally be repledged or resold by the counterparties. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position by counterparty was approximately $1.5 billion and $904 million as of September 30, 2022, and December 31, 2021, respectively. If the credit-risk-related contingent features underlying these agreements had been triggered on September 30, 2022, the Company estimates that it would be required to post a maximum of $77 million of additional collateral to these derivative counterparties. The Company is generally allowed to sell or repledge collateral obtained from its derivative counterparties, although it does not typically exercise such rights. (See the Offsetting tables below for collateral posted or received as of the reported balance sheet dates.) Offsetting of Financial Instruments and Derivatives Most of the Company's derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Parent Company or its subsidiaries and the respective counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements with the master netting arrangements generally provide that the Company will receive or pledge financial collateral at the first dollar of exposure. The Company has securities lending agreements with unaffiliated financial institutions that post collateral to the Company in return for the use of its fixed maturity and public equity securities (see Note 3). When the Company has entered into securities lending agreements with the same counterparty, the agreements generally provide for net settlement in the event of default by the counterparty. This right of set-off allows the Company to keep and apply collateral received if the counterparty failed to return the securities borrowed from the Company as contractually agreed. The tables below summarize the Company's derivatives and securities lending transactions, and as reflected in the tables, in accordance with U.S. GAAP, the Company's policy is to not offset these financial instruments in the Consolidated Balance Sheets. Offsetting of Financial Assets and Derivative Assets September 30, 2022 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Assets Gross Amount Net Amount of Assets Presented Financial Instruments Securities Cash Collateral Received Net Amount Derivative Derivative assets subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 1,081 $ 0 $ 1,081 $ (167) $ (135) $ (775) $ 4 Total derivative 1,081 0 1,081 (167) (135) (775) 4 Derivative assets not subject to a master netting agreement or offsetting arrangement OTC - bilateral 65 65 65 Total derivative 65 65 65 Total derivative 1,146 0 1,146 (167) (135) (775) 69 Securities lending 2,691 0 2,691 0 0 (2,691) 0 Total $ 3,837 $ 0 $ 3,837 $ (167) $ (135) $ (3,466) $ 69 December 31, 2021 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Assets Gross Amount Net Amount of Assets Presented Financial Instruments Securities Cash Collateral Received Net Amount Derivative Derivative assets subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 858 $ 0 $ 858 $ (471) $ (53) $ (334) $ 0 Total derivative 858 0 858 (471) (53) (334) 0 Derivative assets not subject to a master netting agreement or offsetting arrangement OTC - bilateral 78 78 78 Total derivative 78 78 78 Total derivative 936 0 936 (471) (53) (334) 78 Securities lending 2,124 0 2,124 0 0 (2,124) 0 Total $ 3,060 $ 0 $ 3,060 $ (471) $ (53) $ (2,458) $ 78 Offsetting of Financial Liabilities and Derivative Liabilities September 30, 2022 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Liabilities Gross Amount Net Amount of Liabilities Presented Financial Instruments Securities Cash Collateral Pledged Net Amount Derivative Derivative liabilities subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 1,036 $ 0 $ 1,036 $ (167) $ (793) $ (72) $ 4 OTC - cleared 590 0 590 0 0 (590) 0 Total derivative 1,626 0 1,626 (167) (793) (662) 4 Derivative liabilities not subject to a master netting agreement or offsetting arrangement OTC - bilateral 462 462 462 Total derivative 462 462 462 Total derivative 2,088 0 2,088 (167) (793) (662) 466 Securities lending 2,721 0 2,721 (2,691) 0 0 30 Total $ 4,809 $ 0 $ 4,809 $ (2,858) $ (793) $ (662) $ 496 December 31, 2021 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Liabilities Gross Amount Net Amount of Liabilities Presented Financial Instruments Securities Cash Collateral Pledged Net Amount Derivative Derivative liabilities subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 1,151 $ 0 $ 1,151 $ (471) $ (662) $ (14) $ 4 OTC - cleared 54 0 54 0 0 (35) 19 Total derivative 1,205 0 1,205 (471) (662) (49) 23 Derivative liabilities not subject to a master netting agreement or offsetting arrangement OTC - bilateral 414 414 414 Total derivative 414 414 414 Total derivative 1,619 0 1,619 (471) (662) (49) 437 Securities lending 2,162 0 2,162 (2,124) 0 0 38 Total $ 3,781 $ 0 $ 3,781 $ (2,595) $ (662) $ (49) $ 475 For additional information on the Company's financial instruments, see the accompanying Notes 1, 3 and 5 and Notes 1, 3 and 5 of the Notes to the Consolidated Financial Statements in the 2021 Annual Report. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value Hierarchy U.S. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. These two types of inputs create three valuation hierarchy levels. Level 1 valuations reflect quoted market prices for identical assets or liabilities in active markets. Level 2 valuations reflect quoted market prices for similar assets or liabilities in an active market, quoted market prices for identical or similar assets or liabilities in non-active markets or model-derived valuations in which all significant valuation inputs are observable in active markets. Level 3 valuations reflect valuations in which one or more of the significant inputs are not observable in an active market. The following tables present the fair value hierarchy levels of the Company's assets and liabilities that are measured and carried at fair value on a recurring basis. September 30, 2022 (In millions) Quoted Prices in Significant Significant Total Assets: Securities available for sale, carried at Fixed maturity securities: Government and agencies $ 22,987 $ 923 $ 0 $ 23,910 Municipalities 0 2,276 0 2,276 Mortgage- and asset-backed securities 0 1,699 310 2,009 Public utilities 0 6,843 507 7,350 Sovereign and supranational 0 828 34 862 Banks/financial institutions 0 8,883 148 9,031 Other corporate 0 27,584 621 28,205 Total fixed maturity securities 22,987 49,036 1,620 73,643 Equity securities 801 66 197 1,064 Other investments 1,816 0 0 1,816 Cash and cash equivalents 4,710 0 0 4,710 Other assets: Foreign currency swaps 0 146 0 146 Foreign currency forwards 0 995 0 995 Foreign currency options 0 5 0 5 Total other assets 0 1,146 0 1,146 Total assets $ 30,314 $ 50,248 $ 1,817 $ 82,379 Liabilities: Other liabilities: Foreign currency swaps $ 0 $ 462 $ 0 $ 462 Foreign currency forwards 0 1,035 0 1,035 Interest rate swaps 0 590 0 590 Forward bond purchase commitment 0 1 0 1 Total liabilities $ 0 $ 2,088 $ 0 $ 2,088 December 31, 2021 (In millions) Quoted Prices in Significant Significant Total Assets: Securities available for sale, carried at Fixed maturity securities: Government and agencies $ 32,532 $ 1,288 $ 0 $ 33,820 Municipalities 0 3,036 0 3,036 Mortgage- and asset-backed securities 0 955 291 1,246 Public utilities 0 9,558 493 10,051 Sovereign and supranational 0 1,072 43 1,115 Banks/financial institutions 0 11,546 45 11,591 Other corporate 0 37,411 426 37,837 Total fixed maturity securities 32,532 64,866 1,298 98,696 Equity securities 1,340 90 173 1,603 Other investments 1,726 0 0 1,726 Cash and cash equivalents 5,051 0 0 5,051 Other assets: Foreign currency swaps 0 137 0 137 Foreign currency forwards 0 791 0 791 Foreign currency options 0 8 0 8 Total other assets 0 936 0 936 Total assets $ 40,649 $ 65,892 $ 1,471 $ 108,012 Liabilities: Other liabilities: Foreign currency swaps $ 0 $ 427 $ 0 $ 427 Foreign currency forwards 0 1,138 0 1,138 Interest rate swaps 0 54 0 54 Total liabilities $ 0 $ 1,619 $ 0 $ 1,619 The following tables present the carrying amount and fair value categorized by fair value hierarchy level for the Company's financial instruments that are not carried at fair value. September 30, 2022 (In millions) Carrying Quoted Prices in Significant Significant Total Assets: Securities held to maturity, Fixed maturity securities: Government and agencies $ 16,742 $ 19,053 $ 172 $ 0 $ 19,225 Municipalities 264 0 321 0 321 Public utilities 34 0 41 0 41 Sovereign and 409 0 477 0 477 Other corporate 17 0 21 0 21 Commercial mortgage and 13,459 0 0 13,189 13,189 Other investments (1) 30 0 30 0 30 Total assets $ 30,955 $ 19,053 $ 1,062 $ 13,189 $ 33,304 Liabilities: Other policyholders’ funds $ 5,632 $ 0 $ 0 $ 5,539 $ 5,539 Notes payable 7,393 0 6,237 757 6,994 Total liabilities $ 13,025 $ 0 $ 6,237 $ 6,296 $ 12,533 (1) Excludes policy loans of $195 and equity method investments of $2,145, at carrying value December 31, 2021 (In millions) Carrying Quoted Prices in Significant Significant Total Assets: Securities held to maturity, Fixed maturity securities: Government and agencies $ 21,086 $ 25,469 $ 230 $ 0 $ 25,699 Municipalities 335 0 436 0 436 Public utilities 43 0 55 0 55 Sovereign and 514 0 650 0 650 Other corporate 22 0 29 0 29 Commercial mortgage and 11,786 0 0 11,996 11,996 Other investments (1) 22 0 22 0 22 Total assets $ 33,808 $ 25,469 $ 1,422 $ 11,996 $ 38,887 Liabilities: Other policyholders’ funds $ 7,072 $ 0 $ 0 $ 6,957 $ 6,957 Notes payable 7,839 0 8,280 259 8,539 Total liabilities $ 14,911 $ 0 $ 8,280 $ 7,216 $ 15,496 (1) Excludes policy loans of $236 and equity method investments of $1,858, at carrying value Fair Value of Financial Instruments Fixed maturity and equity securities The Company determines the fair values of fixed maturity securities and public and privately-issued equity securities using the following approaches or techniques: price quotes and valuations from third party pricing vendors (including quoted market prices readily available from public exchange markets), in-house valuations and non-binding price quotes the Company obtains from outside brokers. A third party pricing vendor has developed valuation models to determine fair values of privately issued securities and derivatives associated with VIEs. Starting in June 2021 and July 2022, respectively, these models and associated processes and controls were transitioned to and executed by Company personnel. These models are discounted cash flow (DCF) valuation models but also use information from related markets, specifically the credit default swap (CDS) market, to estimate expected cash flows. These models take into consideration any unique characteristics of the securities or derivatives and make various adjustments to arrive at an appropriate issuer-specific loss adjusted credit curve. This credit curve is then used with the relevant recovery rates to estimate expected cash flows and modeling of additional features, including illiquidity adjustments, if necessary, to price the security or derivative by discounting those loss adjusted cash flows. In cases where a credit curve cannot be developed from the specific security features, the valuation methodology takes into consideration other market observable inputs, including: 1) the most appropriate comparable security(ies) of the issuer 2) issuer-specific CDS spreads 3) bonds or CDS spreads of comparable issuers with similar characteristics such as rating, geography, or sector 4) bond indices that are comparative in rating, industry, maturity, and region. The pricing data and market quotes the Company obtains from outside sources, including third party pricing services, are reviewed internally for reasonableness. If a fair value appears unreasonable, the Company will re-examine the inputs and assess the reasonableness of the pricing data with the vendor. Additionally, the Company may compare the inputs to relevant market indices and other performance measurements. Based on management's analysis, the valuation is confirmed or may be revised if there is evidence of a more appropriate estimate of fair value based on available market data. The Company has performed verification of the inputs and calculations in any valuation models to confirm that the valuations represent reasonable estimates of fair value. For the periods presented, the Company has not adjusted the quotes or prices it obtains from the pricing services and brokers it uses. The following tables present the pricing sources for the fair values of the Company's fixed maturity and equity securities. September 30, 2022 (In millions) Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Significant Unobservable Inputs Total Securities available for sale, carried at fair value: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 22,987 $ 570 $ 0 $ 23,557 Internal 0 353 0 353 Total government and agencies 22,987 923 0 23,910 Municipalities: Third party pricing vendor 0 1,975 0 1,975 Internal 0 301 0 301 Total municipalities 0 2,276 0 2,276 Mortgage- and asset-backed securities: Third party pricing vendor 0 1,676 0 1,676 Internal 0 3 0 3 Broker/other 0 20 310 330 Total mortgage- and asset-backed securities 0 1,699 310 2,009 Public utilities: Third party pricing vendor 0 3,717 0 3,717 Internal 0 3,126 0 3,126 Broker/other 0 0 507 507 Total public utilities 0 6,843 507 7,350 Sovereign and supranational: Third party pricing vendor 0 295 0 295 Internal 0 533 0 533 Broker/other 0 0 34 34 Total sovereign and supranational 0 828 34 862 Banks/financial institutions: Third party pricing vendor 0 4,650 0 4,650 Internal 0 4,233 93 4,326 Broker/other 0 0 55 55 Total banks/financial institutions 0 8,883 148 9,031 Other corporate: Third party pricing vendor 0 22,427 0 22,427 Internal 0 5,157 192 5,349 Broker/other 0 0 429 429 Total other corporate 0 27,584 621 28,205 Total securities available for sale $ 22,987 $ 49,036 $ 1,620 $ 73,643 Equity securities, carried at fair value: Third party pricing vendor $ 801 $ 66 $ 0 $ 867 Broker/other 0 0 197 197 Total equity securities $ 801 $ 66 $ 197 $ 1,064 September 30, 2022 (In millions) Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Significant Unobservable Inputs Total Securities held to maturity, carried at amortized cost: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 19,053 $ 172 $ 0 $ 19,225 Total government and agencies 19,053 172 0 19,225 Municipalities: Third party pricing vendor 0 321 0 321 Total municipalities 0 321 0 321 Public utilities: Third party pricing vendor 0 41 0 41 Total public utilities 0 41 0 41 Sovereign and supranational: Third party pricing vendor 0 232 0 232 Broker/other 0 245 0 245 Total sovereign and supranational 0 477 0 477 Other corporate: Third party pricing vendor 0 21 0 21 Total other corporate 0 21 0 21 Total securities held to maturity $ 19,053 $ 1,032 $ 0 $ 20,085 December 31, 2021 (In millions) Quoted Prices in Active Markets Significant Observable Significant Unobservable Inputs Total Securities available for sale, carried at fair value: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 32,532 $ 808 $ 0 $ 33,340 Internal 0 480 0 480 Total government and agencies 32,532 1,288 0 33,820 Municipalities: Third party pricing vendor 0 2,222 0 2,222 Internal 0 814 0 814 Total municipalities 0 3,036 0 3,036 Mortgage- and asset-backed securities: Third party pricing vendor 0 955 0 955 Broker/other 0 0 291 291 Total mortgage- and asset-backed securities 0 955 291 1,246 Public utilities: Third party pricing vendor 0 4,527 0 4,527 Internal 0 5,031 0 5,031 Broker/other 0 0 493 493 Total public utilities 0 9,558 493 10,051 Sovereign and supranational: Third party pricing vendor 0 273 0 273 Internal 0 799 0 799 Broker/other 0 0 43 43 Total sovereign and supranational 0 1,072 43 1,115 Banks/financial institutions: Third party pricing vendor 0 5,237 0 5,237 Internal 0 6,309 0 6,309 Broker/other 0 0 45 45 Total banks/financial institutions 0 11,546 45 11,591 Other corporate: Third party pricing vendor 0 29,495 0 29,495 Internal 0 7,916 0 7,916 Broker/other 0 0 426 426 Total other corporate 0 37,411 426 37,837 Total securities available for sale $ 32,532 $ 64,866 $ 1,298 $ 98,696 Equity securities, carried at fair value: Third party pricing vendor $ 1,340 $ 90 $ 0 $ 1,430 Broker/other 0 0 173 173 Total equity securities $ 1,340 $ 90 $ 173 $ 1,603 December 31, 2021 (In millions) Quoted Prices in Active Markets Significant Observable Significant Unobservable Inputs Total Securities held to maturity, carried at amortized cost: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 25,469 $ 230 $ 0 $ 25,699 Total government and agencies 25,469 230 0 25,699 Municipalities: Third party pricing vendor 0 436 0 436 Total municipalities 0 436 0 436 Public utilities: Third party pricing vendor 0 55 0 55 Total public utilities 0 55 0 55 Sovereign and supranational: Third party pricing vendor 0 313 0 313 Broker/other 0 337 0 337 Total sovereign and supranational 0 650 0 650 Other corporate: Third party pricing vendor 0 29 0 29 Total other corporate 0 29 0 29 Total securities held to maturity $ 25,469 $ 1,400 $ 0 $ 26,869 The following is a discussion of the determination of fair value of the Company's remaining financial instruments. Derivatives The Company uses derivative instruments to manage the risk associated with certain assets. However, the derivative instrument may not be classified in the same fair value hierarchy level as the associated asset. The significant inputs to pricing derivatives are generally observable in the market or can be derived by observable market data. When these inputs are observable, the derivatives are classified as Level 2. The Company uses present value techniques to value non-option based derivatives. It also uses option pricing models to value option based derivatives. Key inputs are as follows: Instrument Type Level 2 Interest rate derivatives Swap yield curves Basic curves Interest rate volatility (1) Foreign currency exchange rate derivatives - Non-VIES (forwards, swaps and options) Foreign currency forward rates Swap yield curves Basis curves Foreign currency spot rates Cross foreign currency basis curves Foreign currency volatility (1) Foreign currency exchange rate derivatives - VIEs (swaps) Foreign currency spot rates Swap yield curves Credit default swap curves Basis curves Recovery rates Foreign currency forward rates Foreign cross currency basis curves (1) Option-based only The fair values of the foreign currency forwards and options are based on observable market inputs, therefore they are classified as Level 2. The Parent Company has cross-currency swap agreements related to certain of its U.S. dollar-denominated senior notes to effectively convert a portion of the interest on the notes from U.S dollar to Japanese yen. Their fair values are based on observable market inputs, therefore they are classified as Level 2. To determine the fair value of its interest rate derivatives, the Company uses inputs that are generally observable in the market or can be derived from observable market data. Interest rate swaps are cleared trades. In a cleared swap contract, the clearinghouse provides benefits to the counterparties similar to contracts listed for investment traded on an exchange since it maintains a daily margin to mitigate counterparties' credit risk. These derivatives are priced using observable inputs, accordingly, they are classified as Level 2. For its interest rate swaptions, the Company estimates their fair values using observable market data, including interest rate curves and volatility. Their fair values are also classified as Level 2. For derivatives associated with VIEs where the Company is the primary beneficiary, the Company is not the direct counterparty to the swap contracts. Nevertheless, the Company has full transparency into the contracts to properly value the swaps for reporting purposes. Prior to October 1, 2021, these derivatives were classified as Level 3 because certain significant inputs were determined to be unobservable, primarily due to the long duration of the swaps which required extrapolation beyond the observable limits of the curve(s). However, due to the natural aging of the swap portfolio and the continued evolution of capital market inputs, especially the availability of long-term interest rates with tenors beyond 30 years, the Company has concluded that all significant inputs are now observable. As a result, effective October 1, 2021, the Company transferred the derivatives associated with its consolidated VIEs to Level 2 of the fair value hierarchy. For forward bond purchase commitments with VIEs, the fair value of the derivative is based on the difference in the fixed purchase price and the current market value of the related bond prior to the settlement date. Since the bond is typically a public bond with readily available pricing, the derivatives associated with the forward purchase commitment are classified as Level 2 of the fair value hierarchy. Commercial mortgage and other loans Commercial mortgage and other loans include TREs, CMLs and MMLs. The Company's loan receivables do not have readily determinable market prices and generally lack market liquidity. Fair values for loan receivables are determined based on the present value of expected future cash flows discounted at the applicable U.S. Treasury or floating-rate benchmark yield plus an appropriate spread that considers other risk factors, such as credit and liquidity risk. The spreads are a significant component of the pricing inputs and are generally considered unobservable. Therefore, these investments have been assigned a Level 3 within the fair value hierarchy. Other investments Other investments includes short-term investments that are measured at fair value where amortized cost approximates fair value. Other policyholders' funds The largest component of the other policyholders' funds liability is the Company's annuity line of business in Aflac Japan. The Company's annuities have fixed benefits and premiums. For this product, the Company estimates the fair value to be equal to the cash surrender value. This is analogous to the value paid to policyholders on the valuation date if they were to surrender their policy. The Company periodically checks the cash value against discounted cash flow projections for reasonableness. The Company considers its inputs for this valuation to be unobservable and have accordingly classified this valuation as Level 3. Notes payable The fair values of the Company's publicly issued notes payable are determined by utilizing available sources of observable inputs from third party pricing vendors and are classified as Level 2. The fair values of the Company's yen-denominated loans approximate their carrying values and are classified as Level 3. Transfers between Hierarchy Levels and Level 3 Rollforward Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Effective October 1, 2021, the foreign exchange swaps discussed above were transferred from Level 3 to Level 2 because the significant inputs used for their valuation that were previously unobservable are now observable. The following tables present the changes in fair value of the Company's investments and derivatives carried at fair value classified as Level 3. Derivative assets and liabilities are presented as a net value. Three Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign and Supranational Banks/ Other Foreign Total Balance, beginning of period $ 311 $ 537 $ 36 $ 91 $ 632 $ 190 $ 0 $ 1,797 Net investment gains (losses) included in 0 1 0 1 0 (3) 0 (1) Unrealized gains (losses) included in other (12) (30) (2) (12) (41) 0 0 (97) Purchases, issuances, sales and Purchases 56 7 0 88 145 10 0 306 Issuances 0 0 0 0 0 0 0 0 Sales 0 0 0 0 0 0 0 0 Settlements (21) (8) 0 (20) (183) 0 0 (232) Transfers into Level 3 0 0 0 0 68 0 0 68 Transfers out of Level 3 (24) 0 0 0 0 0 0 (24) Balance, end of period $ 310 $ 507 $ 34 $ 148 $ 621 $ 197 $ 0 $ 1,817 Changes in unrealized gains (losses) $ 0 $ 1 $ 0 $ 0 $ 0 $ (2) $ 0 $ (1) Three Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign and Supranational Banks/ Other Foreign Total Balance, beginning of period $ 258 $ 480 $ 45 $ 38 $ 316 $ 158 $ (200) $ 1,095 Net investment gains (losses) included 0 0 0 0 2 (1) (57) (56) Unrealized gains (losses) included in (4) (3) 0 0 (7) 0 0 (14) Purchases, issuances, sales and Purchases 35 54 0 8 0 12 0 109 Issuances 0 0 0 0 0 0 0 0 Sales 0 0 0 0 0 (8) 0 (8) Settlements 0 (8) 0 0 0 0 0 (8) Transfers into Level 3 0 0 0 0 0 0 0 0 Transfers out of Level 3 (39) 0 0 0 (5) 0 0 (44) Balance, end of period $ 250 $ 523 $ 45 $ 46 $ 306 $ 161 $ (257) $ 1,074 Changes in unrealized gains (losses) $ (4) $ (3) $ 0 $ 0 $ (7) $ (1) $ (57) $ (72) Nine Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign Banks/ Other Foreign Total Balance, beginning of period $ 291 $ 493 $ 43 $ 45 $ 426 $ 173 $ 0 $ 1,471 Net investment gains (losses) included 0 2 0 1 0 (2) 0 1 Unrealized gains (losses) included in (81) (111) (9) (14) (96) 0 0 (311) Purchases, issuances, sales Purchases 222 35 0 121 267 53 0 698 Issuances 0 0 0 0 0 0 0 0 Sales 0 0 0 0 0 0 0 0 Settlements (59) (40) 0 (23) (185) (7) 0 (314) Transfers into Level 3 0 128 0 18 350 0 0 496 Transfers out of Level 3 (63) 0 0 0 (141) (20) 0 (224) Balance, end of period $ 310 $ 507 $ 34 $ 148 $ 621 $ 197 $ 0 $ 1,817 Changes in unrealized gains $ 0 $ 1 $ 0 $ 0 $ 0 $ (4) $ 0 $ (3) Nine Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign Banks/ Other Foreign Total Balance, beginning of period $ 224 $ 422 $ 48 $ 24 $ 299 $ 102 $ (98) $ 1,021 Net investment gains (losses) included 0 0 0 0 2 21 (158) (135) Unrealized gains (losses) included in (19) (13) (3) (1) (5) 0 (1) (42) Purchases, issuances, sales and Purchases 99 132 0 23 0 29 0 283 Issuances 0 0 0 0 0 17 0 17 Sales 0 0 (23) 0 0 (8) 0 (31) Settlements 0 (18) 0 0 (17) 0 0 (35) Transfers into Level 3 0 0 23 0 32 0 0 55 Transfers out of Level 3 (54) 0 0 0 (5) 0 0 (59) Balance, end of period $ 250 $ 523 $ 45 $ 46 $ 306 $ 161 $ (257) $ 1,074 Changes in unrealized gains $ (19) $ (13) $ (3) $ (1) $ (5) $ 21 $ (158) $ (178) Fair Value Sensitivity Level 3 Significant Unobservable Input Sensitivity The following tables summarize the significant unobservable inputs used in the valuation of the Company's Level 3 investments carried at fair value. Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments. September 30, 2022 (In millions) Fair Value Valuation Technique(s) Unobservable Input Range Assets: Securities available for sale, carried at fair value: Fixed maturity securities: Mortgage- and asset-backed securities $ 310 Consensus pricing Offered quotes N/A (a) Public utilities 507 Discounted cash flow Credit spreads N/A (a) Sovereign and supranational 34 Discounted cash flow Historical volatility N/A (a) Banks/financial institutions 148 Consensus pricing Offered quotes N/A (a) Other corporate 621 Discounted cash flow Credit spreads N/A (a) Equity securities 197 Net asset value Offered quotes N/A (a) Total assets $ 1,817 (a) N/A represents securities where the Company receives unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs. December 31, 2021 (In millions) Fair Value Valuation Technique(s) Unobservable Input Range Assets: Securities available for sale, carried at fair value: Fixed maturity securities: Mortgage- and asset-backed securities $ 291 Consensus pricing Offered quotes N/A (a) Public utilities 493 Discounted cash flow Credit spreads N/A (a) Sovereign and supranational 43 Discounted cash flow Historical volatility N/A (a) Banks/financial institutions 45 Consensus pricing Offered quotes N/A (a) Other corporate 426 Discounted cash flow Credit spreads N/A (a) Equity securities 173 Net asset value Offered quotes N/A (a) Total assets $ 1,471 (a) N/A represents securities where the Company receives unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs. The following is a discussion of the significant unobservable inputs or valuation techniques used in determining the fair value of securities and derivatives classified as Level 3. Net Asset Value The Company holds certain unlisted equity securities whose fair value is derived based on the financial statements published by the investee. These securities do not trade on an active market and the valuations derived are dependent on the availability of timely financial reporting of the investee. Net asset value is an unobservable input in the determination of fair value of equity securities. Offered Quotes In circumstances where the Company's valuation model price is overridden because it implies a value that is not consistent with current market conditions, the Company will solicit bids from a limited number of brokers. The Company also receives unadjusted prices from brokers for its mortgage and asset-backed securities. These quotes are non-binding but are reflective of valuation best estimates at that particular point in time. Offered quotes are an unobservable input in the determination of fair value of mortgage- and asset-backed securities, certain banks/financial institutions, certain other corporate, and equity securities investments. Interest Rates and CDS Spreads The significant drivers of the valuation of the foreign exchange swaps are interest rates and CDS spreads. Some of the Company's swaps have long maturities that increase the sensitivity of the swaps to interest rate fluctuations. For the Company's foreign exchange or cross currency swaps that are in a net asset position, an increase in yen interest rates (all other factors held constant) will decrease the present value of the yen final settlement receivable (receive leg), thus decreasing the value of the swap as long as the derivative remains in a net asset position. Foreign exchange swaps also have a lump-sum final settlement of foreign exchange principal amounts at the termination of the swap. Assuming all other factors are held constant, an increase in yen interest rates will decrease the receive leg and decrease the net value of the swap. Likewise, holding all other factors constant, an increase in U.S. dollar interest rates will increase the swap's net value due to the decrease in the present value of the dollar final settlement payable (pay leg). The extinguisher feature in most of the Company's VIE swaps results in a cessation of cash flows and no further payments between the parties to the swap in the event of a default on the referenced or underlying collateral. To price this feature, the Company applies the survival probability of the referenced entity to the projected cash flows. The survival probability uses the CDS spreads and recovery rates to adjust the present value of the cash flows. For extinguisher swaps with positive values, an increase in CDS spreads decreases the likelihood of receiving the final exchange payments and reduces the value of the swap. Effective October 1, 2021, the foreign exchange swaps mentioned above were transferred from Level 3 to Level 2 because the significant inputs used for their valuation that were previously unobservable are now observable. For additional information on the Company's investments and financial instruments, see the accompanying Notes 1, 3 and 4 and Notes 1, 3 and 4 of the Notes to the Consolidated Financial Statements in the 2021 Annual Report. |
POLICY LIABILITIES
POLICY LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Insurance Loss Reserves [Abstract] | |
POLICY LIABILITIES | POLICY LIABILITIES Changes in the liability for unpaid policy claims were as follows: Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Unpaid supplemental health claims, beginning of period $ 3,779 $ 4,162 $ 4,067 $ 4,389 Less reinsurance recoverables 38 37 37 39 Net balance, beginning of period 3,741 4,125 4,030 4,350 Add claims incurred during the period related to: Current year 1,689 1,720 5,007 5,302 Prior years (151) (215) (512) (739) Total incurred 1,538 1,505 4,495 4,563 Less claims paid during the period on claims incurred during: Current year 1,148 1,279 2,703 2,947 Prior years 214 219 1,554 1,676 Total paid 1,362 1,498 4,257 4,623 Effect of foreign exchange rate changes on unpaid claims (105) (29) (456) (187) Net balance, end of period 3,812 4,103 3,812 4,103 Add reinsurance recoverables 50 39 50 39 Unpaid supplemental health claims, end of period 3,862 4,142 3,862 4,142 Unpaid life claims, end of period 654 767 654 767 Total liability for unpaid policy claims $ 4,516 $ 4,909 $ 4,516 $ 4,909 The incurred claims development related to prior years reflects favorable claims experience compared to previous estimates. The favorable claims development of $512 million for the nine-month period ended September 30, 2022 comprises approximately $321 million from Japan and $191 million from the U.S., representing approximately 63% and 37% of the total, respectively. Excluding the impact of foreign exchange of a loss of approximately $83 million from December 31, 2021 to September 30, 2022, the favorable claims development in Japan would have been approximately $404 million, representing approximately 79% of the total. The Company has experienced continued favorable claim trends in 2022 for its core health products in Japan. During the first nine months of 2022, there were impacts from lower utilization of healthcare services, due to the COVID-19 pandemic. This impacted both cancer and medical products, as the Japan population was avoiding doctor and hospital visits and staying home more. This resulted in lower sickness, accident, and cancer incurred claims. Although overall experience is favorable, during the first nine months of 2022, there has been an increase in medical hospitalization claims related to COVID-19, mainly due to a wider scope of "deemed hospitalization" being utilized in Japan. In addition, dating back to before the pandemic, cancer treatment patterns in Japan are continuing to be influenced by significant advances in early-detection techniques and by the increased use of pathological diagnosis rather than clinical exams. Additionally, follow-up radiation and chemotherapy treatments are occurring more often on an outpatient basis. Such changes in treatment not only increase the quality of life and initial outcomes for the patients, but also decrease the average length of each hospital stay, resulting in favorable claims development. In the first nine months of 2022, as experienced in 2021 and 2020, the incurred claims development related to prior years reflects favorable claims experience compared to previous estimates. The favorable claims trend continued for the majority of the Company's major U.S. accident and health lines of business, including accident, hospital indemnity, cancer, critical illness and short-term disability. Additionally, refinements to COVID-19 incurred estimates also contributed to the favorable development. The U.S. portion of the favorable claims development in the first nine months of 2022 includes $63 million related to refinements in the estimates for COVID-19 and non-COVID-19 claims as experience emerges. |
REINSURANCE
REINSURANCE | 9 Months Ended |
Sep. 30, 2022 | |
Reinsurance Disclosures [Abstract] | |
REINSURANCE | REINSURANCE The Company periodically enters into fixed quota-share coinsurance agreements in the normal course of business. For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Reinsurance premiums and benefits paid or provided are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums and benefits are reported net of insurance ceded. The Company has recorded a deferred profit liability related to reinsurance transactions. The remaining deferred profit liability of $646 million and $859 million as of September 30, 2022 and December 31, 2021, respectively, is included in future policy benefits in the consolidated balance sheet and is being amortized into income over the expected lives of the policies. The Company has also recorded a reinsurance recoverable for reinsurance transactions, which is included in other assets in the consolidated balance sheet and had a remaining balance of $761 million and $937 million as of September 30, 2022 and December 31, 2021, respectively. The spot yen/dollar exchange rate weakened by approximately 20.6% and ceded reserves decreased approximately 19.1% from December 31, 2021 to September 30, 2022. The following table reconciles direct premiums and direct benefits and claims to net amounts after the effect of reinsurance which also includes the elimination of inter-segment amounts associated with affiliated reinsurance. Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Direct earned premiums $ 3,681 $ 4,426 $ 11,772 $ 13,567 Ceded to other companies: Ceded Aflac Japan closed blocks (80) (107) (266) (329) Other (20) (19) (55) (54) Assumed from other companies: Retrocession activities 35 45 112 138 Other 35 27 116 84 Net earned premiums $ 3,651 $ 4,372 $ 11,679 $ 13,406 Direct benefits and claims $ 2,385 $ 2,649 $ 7,209 $ 8,112 Ceded benefits and change in reserves for future benefits: Ceded Aflac Japan closed blocks (103) (94) (276) (288) Eliminations 5 8 17 24 Other (9) (9) (28) (25) Assumed from other companies: Retrocession activities 43 42 115 126 Eliminations (5) (8) (17) (24) Other 24 21 105 71 Benefits and claims, net $ 2,340 $ 2,609 $ 7,125 $ 7,996 These reinsurance transactions are indemnity reinsurance that do not relieve the Company from its obligations to policyholders. In the event that the reinsurer is unable to meet their obligations, the Company remains liable for the reinsured claims. As a part of its capital contingency plan, the Company entered into a committed reinsurance facility agreement on December 1, 2015, with reserves of approximately ¥120 billion as of September 30, 2022. This reinsurance facility agreement was renewed in 2021 and is effective until December 31, 2022. There are also additional commitment periods of a one-year duration, each of which are automatically extended unless notification is received from the reinsurer within 60 days prior to the expiration. The reinsurer can withdraw from the committed facility if Aflac's Standard and Poor's (S&P) rating drops below BBB-. As of September 30, 2022, the Company has not executed a reinsurance treaty under this committed reinsurance facility. |
NOTES PAYABLE AND LEASE OBLIGAT
NOTES PAYABLE AND LEASE OBLIGATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND LEASE OBLIGATIONS | NOTES PAYABLE AND LEASE OBLIGATIONS A summary of notes payable and lease obligations follows: (In millions) September 30, December 31, 3.625% senior notes paid September 2022 $ 0 $ 748 3.25% senior notes due March 2025 (1) 448 448 1.125% senior sustainability notes due March 2026 398 397 2.875% senior notes due October 2026 298 298 3.60% senior notes due April 2030 992 991 6.90% senior notes due December 2039 221 221 6.45% senior notes due August 2040 254 255 4.00% senior notes due October 2046 394 394 4.750% senior notes due January 2049 542 541 Yen-denominated senior notes and subordinated debentures: .300% senior notes due September 2025 (principal amount ¥12.4 billion) 84 107 .932% senior notes due January 2027 (principal amount ¥60.0 billion) 413 520 1.075% senior notes due September 2029 (principal amount ¥33.4 billion) 227 0 .500% senior notes due December 2029 (principal amount ¥12.6 billion) 87 109 .550% senior notes due March 2030 (principal amount ¥13.3 billion) 90 115 1.159% senior notes due October 2030 (principal amount ¥29.3 billion) 201 254 .633% senior notes due April 2031 (principal amount ¥30.0 billion) 203 259 .843% senior notes due December 2031 (principal amount ¥9.3 billion) 64 81 .750% senior notes due March 2032 (principal amount ¥20.7 billion) 139 179 1.320% senior notes due December 2032 (principal amount ¥21.1 billion) 143 0 .844% senior notes due April 2033 (principal amount ¥12.0 billion) 81 104 1.488% senior notes due October 2033 (principal amount ¥15.2 billion) 104 131 .934% senior notes due December 2034 (principal amount ¥9.8 billion) 67 85 .830% senior notes due March 2035 (principal amount ¥10.6 billion) 71 91 1.039% senior notes due April 2036 (principal amount ¥10.0 billion) 67 86 1.594% senior notes due September 2037 (principal amount ¥6.5 billion) 44 0 1.750% senior notes due October 2038 (principal amount ¥8.9 billion) 61 77 1.122% senior notes due December 2039 (principal amount ¥6.3 billion) 43 54 1.264% senior notes due April 2041 (principal amount ¥10.0 billion) 67 86 2.108% subordinated debentures due October 2047 (principal amount ¥60.0 billion) 410 517 .963% subordinated bonds due April 2049 (principal amount ¥30.0 billion) 207 260 1.560% senior notes due April 2051 (principal amount ¥20.0 billion) 135 172 2.144% senior notes due September 2052 (principal amount ¥12.0 billion) 81 0 Yen-denominated loans: Variable interest rate loan due August 2027 (.34% in 2022, principal amount ¥11.7 billion) 83 0 Variable interest rate loan due August 2029 (.44% in 2022 and .41% in 2021, principal amount ¥25.3 billion in 2022 and ¥5.0 billion in 2021) 179 43 Variable interest rate loan due August 2032 (.59% in 2022 and .56% in 2021, principal amount ¥70.0 billion in 2022 and ¥25.0 billion in 2021) 495 216 Finance lease obligations payable through 2028 8 12 Operating lease obligations payable through 2049 117 105 Total notes payable and lease obligations $ 7,518 $ 7,956 (1) Redeemed in October 2022 Amounts in the table above are reported net of debt issuance costs and issuance premiums or discounts, if applicable, that are being amortized over the life of the notes. In September 2022, the Parent Company issued four series of senior notes totaling ¥73.0 billion through a public debt offering under its U.S. shelf registration statement. The first series, which totaled ¥33.4 billion, bears interest at a fixed rate of 1.075% per annum, payable semi-annually, and will mature in September 2029. The second series, which totaled ¥21.1 billion, bears interest at a fixed rate of 1.320% per annum, payable semi-annually, and will mature in December 2032. The third series, which totaled ¥6.5 billion, bears interest at a fixed rate of 1.594% per annum, payable semi-annually, and will mature in September 2037. The fourth series, which totaled ¥12.0 billion, bears interest at a fixed rate of 2.144% per annum, payable semi-annually, and will mature in September 2052. These notes are redeemable at the Parent Company’s option at any time, in whole but not in part, upon the occurrence of certain changes affecting U.S. taxation, as specified in the indenture governing the terms of the issuance. In addition, the notes maturing in September 2029, December 2032 and September 2037 are redeemable at the Parent Company's option, in whole or in part from time to time, on or after June 14, 2029, June 14, 2032 and March 14, 2037, respectively, at a redemption price equal to the aggregate principal amount of the applicable series to be redeemed plus accrued and unpaid interest on the principal amount to be redeemed to, but excluding, the date of redemption. In August 2022, the Parent Company renewed a senior term loan facility with a commitment amount totaling ¥107.0 billion. The first tranche of the facility, which totaled ¥11.7 billion, bears interest at a rate per annum equal to the Tokyo interbank market rate (TIBOR), or alternate TIBOR, if applicable, plus the applicable TIBOR margin and will mature in August 2027. The applicable margin ranges between .225% and .625%, depending on the Parent Company's debt ratings as of the date of determination. The second tranche, which totaled ¥25.3 billion, bears interest at a rate per annum equal to TIBOR, or alternate TIBOR, if applicable, plus the applicable TIBOR margin and will mature in August 2029. The applicable margin ranges between .325% and .725%, depending on the Parent Company's debt ratings as of the date of determination. The third tranche, which totaled ¥70.0 billion, bears interest at a rate per annum equal to TIBOR, or alternate TIBOR, if applicable, plus the applicable TIBOR margin and will mature in August 2032. The applicable margin ranges between .475% and 1.025%, depending on the Parent Company's debt ratings as of the date of determination. In September 2022, the Parent Company used a portion of the net proceeds from its September 2022 issuance of various series of senior notes and the August 2022 senior term loan facility to redeem $750 million of its 3.625% senior notes due November 2024. A summary of the Company's lines of credit as of September 30, 2022 follows: Borrower(s) Type Term Expiration Date Capacity Amount Outstanding Interest Rate on Borrowed Amount Maturity Period Commitment Fee Business Purpose Aflac Incorporated uncommitted bilateral 364 days December 30, 2022 $100 million $0 million The rate quoted by the bank and agreed upon at the time of borrowing Up to 3 months None General corporate purposes Aflac Incorporated unsecured revolving 5 years May 9, ¥100.0 billion ¥0.0 billion A rate per annum equal to (a) TIBOR plus, the alternative applicable TIBOR margin during the availability period from the closing date to the commitment termination date or (b) the TIBOR rate offered by the agent to major banks in yen for the applicable period plus, the applicable alternative TIBOR margin during the term out period No later than .28% to .45%, depending on the Parent Company's debt ratings as of the date of determination General corporate purposes, including a capital contingency plan for the operations of the Parent Company Aflac Incorporated unsecured revolving 5 years November 18, 2024, or the date commitments are terminated pursuant to an event of default $1.0 billion $0.0 billion A rate per annum equal to, at the Company's option, either, (a) USD London Interbank Offered Rate (LIBOR) for U.S. dollar denominated borrowings or TIBOR for Japanese yen denominated borrowings, in either case adjusted for certain costs, or (b) a base rate determined by reference to the highest of (1) the federal funds rate plus 1/2 of 1%, (2) the rate of interest for such day announced by Mizuho Bank, Ltd. as its prime rate, or (3) the eurocurrency rate for an interest period of one month plus 1.00%, in each case plus an applicable margin No later than November 18, 2024 .085% to .225%, depending on the Parent Company's debt ratings as of the date of determination General corporate purposes, including a capital contingency plan for the operations of the Parent Company Aflac Incorporated uncommitted bilateral None specified None specified $50 million $0 million A rate per annum equal to, at the Parent Company's option, either (a) a rate determined by reference to USD LIBOR for the interest period relevant to such borrowing or (b) the base rate determined by reference to the highest of (a) the lender's U.S. dollar short-term commercial loan rate, (b) the federal funds rate plus 1/2 of 1% and (c) USD one-month LIBOR plus 1%. USD LIBOR is subject to replacement with Secured Overnight Financing Rate (SOFR) under certain circumstances Up to 3 months None General corporate purposes Aflac (1) uncommitted revolving 364 days November 30, 2022 $250 million $0 million USD three-month LIBOR plus 75 basis points per annum 3 months None General corporate purposes Aflac Incorporated (1) (Tranche 1) uncommitted revolving 364 days November 25, 2022 ¥50.0 billion ¥0.0 billion Three-month TIBOR plus 70 basis points per annum 3 months None General corporate purposes Aflac Incorporated (1) (Tranche 2) uncommitted revolving 364 days November 25, 2022 ¥50.0 billion ¥0.0 billion Three-month TIBOR plus 70 basis points per annum 3 months None General corporate purposes Aflac New York (1) uncommitted revolving 364 days April 10, 2023 $25 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than None General corporate purposes CAIC (1) uncommitted revolving 364 days March 21, 2023 $15 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than None General corporate purposes (1) Intercompany credit agreement (continued) Borrower(s) Type Term Expiration Date Capacity Amount Outstanding Interest Rate on Borrowed Amount Maturity Period Commitment Fee Business Purpose Tier One Insurance Company (1) uncommitted revolving 364 days March 21, 2023 $0.3 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than March 22, 2023 None General corporate purposes Aflac Ventures Japan K.K. (1) uncommitted revolving 364 days May 2, 2023 ¥500 million ¥350 million A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period No later than None General corporate purposes Hatch Healthcare K.K. (1) uncommitted revolving 364 days January 3, 2023 ¥900 million ¥0 million A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period No later than January 4, 2023 None General corporate purposes Hatch Insight K.K. (1) uncommitted revolving 364 days January 3, 2023 ¥600 million ¥0 million A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period No later than January 4, 2023 None General corporate purposes Aflac GI Holdings LLC (1) uncommitted revolving 364 days July 17, 2023 $30 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than July 18, 2023 None General corporate purposes (1) Intercompany credit agreement The Company was in compliance with all of the covenants of its notes payable and lines of credit at September 30, 2022. No events of default or defaults occurred during the nine-month period ended September 30, 2022. For additional information, see Notes 4 and 9 of the Notes to the Consolidated Financial Statements in the 2021 Annual Report. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company uses a full year estimated annual effective tax rate to calculate total income tax expense on interim quarters. In addition, the Company discretely recognizes certain other items in the period in which they occur. The estimated annual effective tax rate is calculated as the ratio of projected total income tax expense divided by projected earnings before income taxes for the year. The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the year. The Company’s consolidated effective income tax rate on pretax earnings was (44.7)% and 20.2% for the three-month periods and 1.6% and 19.7% for the nine-month periods ended September 30, 2022 and 2021, respectively. This combined effective tax rate differs from the U.S. statutory rate primarily due to the impact of the tax accounting method change discussed below, as well as solar, historic and foreign tax credits. Aflac Japan holds certain U.S. dollar-denominated assets in a Delaware Statutory Trust (DST). These assets are mostly comprised of various U.S. dollar-denominated commercial mortgage loans. The functional currency of the DST for U.S. tax purposes was historically the Japanese yen. In the third quarter of 2022, the Company requested a change in tax accounting method through the Internal Revenue Service's automatic consent procedures to change its functional currency on the DST for U.S. tax purposes to the U.S. dollar. As a result, foreign currency translation gains or losses on assets held in the DST will no longer be recognized for U.S. tax purposes. The Company historically recorded a deferred tax liability for foreign currency translation gains on the DST assets, which was released in the third quarter of 2022 as a result of the functional currency change. The release of the deferred tax liability resulted in the Company recognizing an income tax benefit of $695 million ($1.10 per basic and diluted share, respectively) in the third quarter of 2022. The Company has determined that the change in tax accounting method will impact its combined effective tax rate in future periods as a function of changes in the foreign exchange rate between the Japanese yen and U.S. dollar. In August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into U.S. law. Effective January 1, 2023, the law will impose a 15% alternative minimum corporate tax rate and imposes a 1% excise tax on the Company’s repurchases of its common stock. The Company does not anticipate any impacts from the new corporate minimum tax rate since its current tax rate is above the 15% minimum rate. Further, the Company expects the charges associated with the excise tax to be recognized in equity consistent with other costs related to treasury stock. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY The following table is a reconciliation of the number of shares of the Company's common stock for the nine-month periods ended September 30. (In thousands of shares) 2022 2021 Common stock - issued: Balance, beginning of period 1,352,739 1,351,018 Exercise of stock options and issuance of restricted shares 1,230 1,544 Balance, end of period 1,353,969 1,352,562 Treasury stock: Balance, beginning of period 700,607 658,564 Purchases of treasury stock: Share repurchase program 30,249 32,186 Other 354 419 Dispositions of treasury stock: Shares issued to AFL Stock Plan (787) (967) Exercise of stock options (108) (240) Other (214) (217) Balance, end of period 730,101 689,745 Shares outstanding, end of period 623,868 662,817 Outstanding share-based awards are excluded from the calculation of weighted-average shares used in the computation of basic earnings per share (EPS). The following table presents the approximate number of share-based awards to purchase shares, on a weighted-average basis, that were considered to be anti-dilutive and were excluded from the calculation of diluted EPS for the following periods. Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Anti-dilutive share-based awards 53 0 158 1 Share Repurchase Program During the first nine months of 2022, the Company repurchased 30.2 million shares of its common stock for $1.8 billion as part of its share repurchase program. During the first nine months of 2021, the Company repurchased 32.2 million shares of its common stock for $1.7 billion as part of its share repurchase program. As of September 30, 2022, a remaining balance of 25.6 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors. In August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into U.S. law. Effective January 1, 2023, the law will impose a 1% excise tax on the Company’s repurchases of its common stock. Reclassifications from Accumulated Other Comprehensive Income The tables below are reconciliations of accumulated other comprehensive income by component for the following periods. Changes in Accumulated Other Comprehensive Income Three Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Total Balance at June 30, 2022 $ (3,289) $ 2,930 $ (29) $ (160) $ (548) Other comprehensive (1,166) (1,753) (1) (4) (2,924) Amounts reclassified from 0 (46) 1 6 (39) Net current-period other (1,166) (1,799) 0 2 (2,963) Balance at September 30, 2022 $ (4,455) $ 1,131 $ (29) $ (158) $ (3,511) All amounts in the table above are net of tax. Three Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Liability Adjustment Total Balance at June 30, 2021 $ (1,661) $ 9,992 $ (33) $ (279) $ 8,019 Other comprehensive (99) (251) 0 (5) (355) Amounts reclassified from 0 (10) 2 6 (2) Net current-period other (99) (261) 2 1 (357) Balance at September 30, 2021 $ (1,760) $ 9,731 $ (31) $ (278) $ 7,662 All amounts in the table above are net of tax. Nine Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Total Balance at December 31, 2021 $ (2,013) $ 9,602 $ (30) $ (166) $ 7,393 Other comprehensive (2,442) (8,272) (1) (6) (10,721) Amounts reclassified from 0 (199) 2 14 (183) Net current-period other (2,442) (8,471) 1 8 (10,904) Balance at September 30, 2022 $ (4,455) $ 1,131 $ (29) $ (158) $ (3,511) All amounts in the table above are net of tax. Nine Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Liability Adjustment Total Balance at December 31, 2020 $ (1,109) $ 10,361 $ (34) $ (284) $ 8,934 Other comprehensive (651) (632) 0 (15) (1,298) Amounts reclassified from 0 2 3 21 26 Net current-period other (651) (630) 3 6 (1,272) Balance at September 30, 2021 $ (1,760) $ 9,731 $ (31) $ (278) $ 7,662 All amounts in the table above are net of tax. The tables below summarize the amounts reclassified from each component of accumulated other comprehensive income into net earnings for the following periods. Reclassifications Out of Accumulated Other Comprehensive Income (In millions) Three Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ 58 Net investment gains (losses) (12) Tax (expense) or benefit (1) $ 46 Net of tax Unrealized gains (losses) on derivatives $ (1) Net investment gains (losses) 0 Tax (expense) or benefit (1) $ (1) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (7) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 1 Tax (expense) or benefit (1) $ (6) Net of tax Total reclassifications for the period $ 39 Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). (In millions) Three Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ 13 Net investment gains (losses) (3) Tax (expense) or benefit (1) $ 10 Net of tax Unrealized gains (losses) on derivatives $ (2) Net investment gains (losses) 0 Tax (expense) or benefit (1) $ (2) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (8) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 2 Tax (expense) or benefit (1) $ (6) Net of tax Total reclassifications for the period $ 2 Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). (In millions) Nine Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ 252 Net investment gains (losses) (53) Tax (expense) or benefit (1) $ 199 Net of tax Unrealized gains (losses) on derivatives $ (3) Net investment gains (losses) 1 Tax (expense) or benefit (1) $ (2) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (18) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 4 Tax (expense) or benefit (1) $ (14) Net of tax Total reclassifications for the period $ 183 Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). (In millions) Nine Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ (2) Net investment gains (losses) 0 Tax (expense) or benefit (1) $ (2) Net of tax Unrealized gains (losses) on derivatives $ (4) Net investment gains (losses) 1 Tax (expense) or benefit (1) $ (3) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (27) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 6 Tax (expense) or benefit (1) $ (21) Net of tax Total reclassifications for the period $ (26) Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION As of September 30, 2022, the Company has outstanding share-based awards under the Aflac Incorporated Long-Term Incentive Plan (As Amended and Restated February 14, 2017), as further amended on August 9, 2022 (the Plan). Share-based awards are designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with the Company. The number and frequency of share-based awards are based on competitive practices, operating results of the Company, government regulations, and other factors. The Plan, allows for a maximum number of shares issuable over its term of 75 million shares including 38 million shares that may be awarded in respect of awards other than options or stock appreciation rights. If any awards granted under the Plan are forfeited or are terminated before being exercised or settled for any reason other than tax forfeiture, then the shares underlying the awards will again be available under the Plan. The Plan allows awards to Company employees for incentive stock options (ISOs), non-qualifying stock options (NQSOs), restricted stock, restricted stock units, and stock appreciation rights. Non-employee directors are eligible for grants of NQSOs, restricted stock, and stock appreciation rights. As of September 30, 2022, approximately 35.7 million shares were available for future grants under this plan. The ISOs and NQSOs have a term of 10 years, and the share-based awards generally vest upon time-based conditions or time and performance-based conditions. Time-based vesting generally occurs after three years. Performance-based vesting conditions generally include the attainment of goals related to Company financial performance. As of September 30, 2022, the only performance-based awards issued and outstanding were restricted stock awards and units. Stock options and stock appreciation rights granted under the amended Plan have an exercise price of at least the fair market value of the underlying stock on the grant date and have an expiration date no later than 10 years from the grant date. Time-based restricted stock awards, restricted stock units and stock options granted after January 1, 2017 generally vest on a ratable basis over three years, and awards granted prior to the amendment vest on a cliff basis over three years. The Compensation Committee of the Board of Directors has the discretion to determine vesting schedules. Share-based awards granted to U.S.-based grantees are settled with authorized but unissued Company stock, while those issued to Japan-based grantees are settled with treasury shares. The following table provides information on stock options outstanding and exercisable at September 30, 2022. Stock Weighted-Average Aggregate Weighted-Average Outstanding 1,657 3.0 $ 40 $ 31.88 Exercisable 1,657 3.0 40 31.88 The Company received cash from the exercise of stock options in the amount of $13 million during the first nine months of 2022, compared with $20 million in the first nine months of 2021. The tax benefit realized as a result of stock option exercises and restricted stock releases was $18 million in the first nine months of 2022, compared with $16 million in the first nine months of 2021. As of September 30, 2022, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $46 million, of which $23 million (1.8 million shares) was related to restricted stock awards and units with a performance-based vesting condition. The Company expects to recognize these amounts over a weighted-average period of approximately 1.7 years. There are no other contractual terms covering restricted stock awards once vested. The following table summarizes restricted stock activity during the nine-month period ended September 30, 2022. (In thousands of shares) Shares Weighted-Average Restricted stock at December 31, 2021 2,557 $ 49.38 Granted in 2022 1,099 66.70 Canceled in 2022 (54) 53.77 Vested in 2022 (1,127) 49.58 Restricted stock at September 30, 2022 2,475 $ 56.09 In February 2022, the Company granted 390 thousand performance-based stock awards and units, which are contingent on the achievement of the Company's financial performance metrics and its market-based conditions. On the date of grant, the Company estimated the fair value of restricted stock awards and units with market-based conditions using a Monte Carlo simulation model. The model discounts the value of the stock at the assumed vesting date based on the risk-free interest rate. Based on estimates of actual performance versus the vesting thresholds, the calculated fair value percentage pay-out estimate will be updated each quarter. The Company uses third-party analyses to assist in developing the assumptions used in, as well as calibrating, a Monte Carlo simulation model. The Company is responsible for determining the assumptions used in estimating the fair value of its share-based payment awards. For additional information on the Company's long-term share-based compensation plans and the types of share-based awards, see Note 12 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report. |
BENEFIT PLANS
BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2022 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS The Company has funded defined benefit plans in Japan and the U.S., however the U.S. plan was frozen to new participants effective October 1, 2013. The Company also maintains non-qualified, unfunded supplemental retirement plans that provide defined pension benefits in excess of limits imposed by federal tax law for certain Japanese, U.S. and former employees, however the U.S. plan was frozen to new participants effective January 1, 2015. U.S. employees who are not participants in the defined benefit plan receive a nonelective 401(k) employer contribution. The Company provides certain health care benefits for eligible U.S. retired employees, their beneficiaries and covered dependents (other postretirement benefits). The health care plan is contributory and unfunded. Effective January 1, 2014, employees eligible for benefits included the following: (1) active employees whose age plus service, in years, equaled or exceeded 80 (rule of 80); (2) active employees who were age 55 or older and have met the 15 years of service requirement; (3) active employees who would meet the rule of 80 in the next five years; (4) active employees who were age 55 or older and who would meet the 15 years of service requirement within the next five years; and (5) current retirees. For certain employees and former employees, additional coverage is provided for all medical expenses for life. Pension and other postretirement benefit expenses are included in acquisition and operating expenses in the consolidated statements of earnings, which includes other components of net periodic pension cost and postretirement costs (other than service costs) of $5 million and $4 million for the three-month periods and $11 million and $18 million for the nine-month periods ended September 30, 2022 and 2021, respectively. Total net periodic benefit cost includes the following components: Three Months Ended September 30, Pension Benefits Other Japan U.S. Postretirement Benefits (In millions) 2022 2021 2022 2021 2022 2021 Components of net periodic Service cost $ 5 $ 6 $ 6 $ 7 $ 0 $ 0 Interest cost 1 1 9 8 1 0 Expected return on plan assets (2) (2) (11) (11) 0 0 Amortization of net actuarial loss 0 1 6 7 1 0 Net periodic (benefit) cost $ 4 $ 6 $ 10 $ 11 $ 2 $ 0 Nine Months Ended September 30, Pension Benefits Other Japan U.S. Postretirement Benefits (In millions) 2022 2021 2022 2021 2022 2021 Components of net periodic Service cost $ 15 $ 18 $ 19 $ 21 $ 0 $ 0 Interest cost 4 3 26 24 1 1 Expected return on plan assets (6) (6) (32) (31) 0 0 Amortization of net actuarial loss 0 2 16 23 2 2 Net periodic (benefit) cost $ 13 $ 17 $ 29 $ 37 $ 3 $ 3 During the nine months ended September 30, 2022, Aflac Japan contributed approximately $25 million (using the weighted-average yen/dollar exchange rate for the nine-month period ended September 30, 2022) to the Japanese funded defined benefit plan, and Aflac U.S. did not make a contribution to the U.S. funded defined benefit plan. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES Effective April 1, 2022, the Company renewed an outsourcing agreement with an information technology and data services company to provide application maintenance and development services for Aflac Japan. As of September 30, 2022, the agreement has a remaining term of four years and an aggregate remaining cost of ¥6.7 billion ($46 million using the September 30, 2022 exchange rate). The Company is a defendant in various lawsuits considered to be in the normal course of business. Members of the Company's senior legal and financial management teams review litigation on a quarterly and annual basis. The final results of any litigation cannot be predicted with certainty. Although some of this litigation is pending in states where large punitive damages, bearing little relation to the actual damages sustained by plaintiffs, have been awarded in recent years, the Company believes the outcome of pending litigation will not have a material adverse effect on its financial position, results of operations, or cash flows. See Note 3 of the Notes to the Consolidated Financial Statements for details on certain investment commitments. Guaranty Fund Assessments The U.S. insurance industry has a policyholder protection system that is monitored and regulated by state insurance departments. These life and health insurance guaranty associations are state entities (in all 50 states as well as Puerto Rico and the District of Columbia) created to protect policyholders of an insolvent insurance company. All insurance companies (with limited exceptions) licensed to sell life or health insurance in a state must be members of that state’s guaranty association. Under state guaranty association laws, certain insurance companies can be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of impaired or insolvent insurance companies that write the same line or similar lines of business. In 2009, the Pennsylvania Insurance Commissioner placed long-term care insurer Penn Treaty Network America Insurance Company and its subsidiary American Network Insurance Company (collectively referred to as Penn Treaty), neither of which is affiliated with Aflac, in rehabilitation and petitioned a state court for approval to liquidate Penn Treaty. A final order of liquidation was granted by a recognized judicial authority on March 1, 2017, and as a result, Penn Treaty is in the process of liquidation. The Company estimated and recognized the impact of its share of guaranty fund assessments resulting from the liquidation using a discounted rate of 4.25%. The Company recognized a discounted liability for the assessments of $62 million (undiscounted $94 million), offset by discounted premium tax credits of $48 million (undiscounted $74 million), for a net $14 million impact to net income in the quarter ended March 31, 2017. The Company paid a majority of these assessments by September 30, 2022. The Company used the cost estimate provided as of the liquidation date by the National Organization of Life and Health Guaranty Associations (NOLHGA) to calculate its estimated assessments and tax credits. Guaranty fund assessments for the nine-month periods ended September 30, 2022 and 2021 were immaterial. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSIn October 2022, the Parent Company used a portion of the net proceeds from its September 2022 issuance of various series of senior notes to redeem $450 million of its 3.25% senior notes due March 2025. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business Aflac Incorporated (the Parent Company) and its subsidiaries (collectively, the Company) primarily sell supplemental health and life insurance in the United States (U.S.) and Japan. The Company's insurance business is marketed and administered through American Family Life Assurance Company of Columbus (Aflac) in the U.S. and through Aflac Life Insurance Japan Ltd. (ALIJ) in Japan. The Company’s operations consist of two reportable business segments: Aflac U.S., which includes Aflac, and Aflac Japan, which includes ALIJ. American Family Life Assurance Company of New York (Aflac New York) is a wholly owned subsidiary of Aflac. Most of Aflac's policies are individually underwritten and marketed through independent agents. With the exception of dental and vision products administered by Aflac Benefits Solutions, Inc. (ABS), formerly known as Argus Dental & Vision, Inc., and certain group life insurance products, Aflac U.S. markets and administers group products through Continental American Insurance Company (CAIC), branded as Aflac Group Insurance. The Company's insurance operations in the U.S. and Japan service the two markets for the Company's insurance business. Aflac Japan's revenues, including net gains and losses on its investment portfolio, accounted for 72% and 69% of the Company's total revenues in the nine-month periods ended September 30, 2022 and 2021, respectively. The percentage of the Company's total assets attributable to Aflac Japan was 79% at September 30, 2022, compared with 82% at December 31, 2021. Basis of Presentation The Company prepares its financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP). These principles are established primarily by the Financial Accounting Standards Board (FASB). In these Notes to the Consolidated Financial Statements, references to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards Codification TM (ASC). The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates based on currently available information when recording transactions resulting from business operations. The most significant items on the Company's balance sheet that involve a greater degree of accounting estimates and actuarial determinations subject to changes in the future are the valuation of investments and derivatives, deferred policy acquisition costs (DAC), liabilities for future policy benefits and unpaid policy claims, and income taxes. These accounting estimates and actuarial determinations are sensitive to market conditions, investment yields, mortality, morbidity, commission and other acquisition expenses, and terminations by policyholders. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised and reflected in operating results. Although some variability is inherent in these estimates, the Company believes the amounts provided are reasonable and reflective of the best estimates of management. The unaudited consolidated financial statements include the accounts of the Parent Company, its subsidiaries and those entities required to be consolidated under applicable accounting standards. All material intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements of the Company contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the consolidated balance sheets as of September 30, 2022 and December 31, 2021, the consolidated statements of earnings and comprehensive income (loss) for the three- and nine-month periods ended September 30, 2022 and 2021, the consolidated statement of shareholders' equity for the three-month periods ended March 31, 2022 and 2021, June 30, 2022 and 2021, and September 30, 2022 and 2021, and the consolidated statement of cash flows for the nine-month periods ended September 30, 2022 and 2021. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2021 (2021 Annual Report). |
Market Conditions | Market Conditions: The impact of the Coronavirus Disease 2019 (COVID-19) global pandemic on the Company continues to evolve and the continued path of the global economic recovery remains uncertain given the potential longer term impacts of the pandemic. For example, economic conditions have acted as headwinds to sales in the first nine months of 2022, particularly in Japan and most notably in the first quarter with a gradually decreasing impact in the second and third quarters, pressuring net earned premiums. Further, in the U.S., supply shortages, upward pressure on wages to attract employees and higher commodity prices have all driven near-term increases in inflation. Central bank |
Reclassifications | Reclassifications : Certain reclassifications have been made to prior-year amounts to conform to current-year reporting classifications. These reclassifications had no impact on net earnings or total shareholders' equity. |
Description of Accounting Pronouncements Pending Adoption | ASU 2018-12 Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts , as clarified and amended by: ASU 2019-09 Financial Services - Insurance: Effective Date ASU 2020-11 Financial Services - Insurance: Effective Date and Early Application In August 2018, the FASB issued amendments that will significantly change how insurers account for long-duration contracts. The amendments will change existing recognition, measurement, presentation, and disclosure requirements. Issues addressed in the new guidance include: 1) a requirement to review and, if there is a change, update assumptions for the liability for future policy benefits (LFPB) at least annually, and to update the discount rate assumption quarterly, 2) accounting for market risk benefits at fair value, 3) simplified amortization for deferred acquisition costs, and 4) enhanced financial statement presentation and disclosures. In November 2019, the FASB issued an amendment extending the effective date for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be small reporting companies as defined by the SEC, by one year. In November 2020, the FASB issued an amendment providing an additional year deferral for all insurance entities due to the impact of COVID-19. The amendments are now effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application of the amendments is permitted. The Company continues to evaluate the impact of adoption and has determined that the adoption will have a significant impact on the Company’s financial position, results of operations, and disclosures. The requirement to update assumptions for LFPB will have a significant impact on the Company's results of operations, systems, processes and controls and the requirement to update discount rates will have a significant impact on its equity. As part of working toward implementation of the updated standard, the Company has made key accounting policy decisions, including processes to identify insurance policy groupings (cohorts) for LFPB measurement and DAC amortization purposes, applicable discount rates, development of liability cash flow and claim expense assumptions, and DAC amortization methodology. The Company will not early adopt the updated standard and has selected the modified retrospective transition method, which requires the amended guidance be applied as of the beginning of the earliest period presented beginning on the January 1, 2021 transition date (Transition Date). The modified retrospective transition method generally results in applying the guidance to contracts on the basis of existing carrying values as of the Transition Date. On the Transition Date the Company calculates the ratio of expected benefits less existing carrying values to gross premiums (net premium ratio) using updated assumptions and the discount rate immediately before the Transition Date. For any cohorts that have a net premium ratio greater than 100% on the Transition Date, the net premium ratio is capped at 100%. The Company uses the net premium ratio calculated on the Transition Date (and capped at 100% if required) to calculate the LFPB using two different discount rates: i) the discount rate used immediately before the Transition Date, and ii) the discount rate determined by reference to the Transition Date market level yields for upper-medium-grade (low credit risk) fixed income instruments (as of December 31, 2020). For cohorts with their net premium ratio capped at 100% on the Transition Date, any difference between the LFPB calculated using the discount rate immediately before the Transition Date and the existing carrying value as of the Transition Date is recorded as an adjustment (decrease) to opening retained earnings. For all cohorts on the Transition Date, the difference in the LFPB calculated using the two different discount rates (i.e., the discount rate used immediately before the Transition Date and the updated discount rate as of the Transition Date) is recorded in accumulated other comprehensive income (AOCI) net of tax at transition. When the Company adopts the updated standard beginning January 1, 2023, opening equity will be adjusted for the Transition Date impacts to AOCI and retained earnings and prior periods presented (years 2021 and 2022) will be restated following the updated standard. Based on the modified retrospective transition method, the Transition Date impact from adoption will result in a decrease in AOCI of approximately $18.6 billion and a decrease in retained earnings of approximately $0.3 billion. The Company has designed its discount rate methodology for both the U.S. and Japan insurance business. The methodology incorporates constructing a discount rate curve separately for discounting cash flows used to calculate the U.S. and Japan LFPB, with each curve intended to be reflective of the currency, tenor and characteristics of the insurance liabilities. Discount rates comprising each curve will be determined by reference to upper-medium grade (low credit risk) fixed-income instrument yields that reflect the duration characteristics of the corresponding insurance liabilities. The Company uses for these yields single-A rated fixed income instruments with credit ratings based on international rating standards. Where only local ratings are available, the Company selects the fixed-income instruments with local ratings that are equivalent to a single-A rating based on international rating standards. The methodology is designed to prioritize observable inputs based on market data available in the local debt markets where the respective policies were issued in the currency in which the policies are denominated. For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company uses various estimation techniques consistent with the fair value guidance in ASC 820, which include, but are not limited to: (i) for tenors where there is less observable market data and/or the observable market data is available for similar instruments, estimating tenor-specific single-A credit spreads and applying them to risk-free government rates; (ii) for tenors where there is very limited or no observable single-A or similar market data, interpolation and extrapolation techniques. Discount rates are updated each reporting period. Long duration insurance contracts issued by the Company will be grouped into annual calendar-year cohorts based on the contract issue date, reportable segment, legal entity and product type. Limited pay contracts will be grouped into separate cohorts from other traditional products in the same manner and will be further separated based on their premium payment structures. Riders will be combined with base policies with similar insurance coverage types and the same contract issue years. In addition to the policy elections related to cohorts and LFPB discount rates directly impacting Transition Date AOCI, the Company has also made the following accounting policy elections relevant to the post-Transition Date accounting: • All payments under an insurance contract including future expected claims and already incurred claims (i.e., claim liabilities) and related expenses will be measured together as an integrated reserve. This will result in the following presentation changes in the consolidated balance sheet: (i) unpaid policy claims on long-duration insurance contracts and accrued claim adjustment expenses presented separately pre-adoption will be presented as part of LFPB; and (ii) liabilities for fixed annuity benefits will be excluded from the integrated reserve, as they are outside the scope of the amended standard, and will be presented in other policyholders' funds. • Cash flow assumptions underlying insurance liabilities will be evaluated as to whether an update is needed at least annually in the same fiscal quarter each year. To facilitate the review, experience studies will be performed annually in the consistent quarter year-to-year to substantiate assumptions, including mortality, morbidity, and terminations in future periods. • Locked-in discount rates used for the computation of interest accretion on LFPB for policies issued on or after January 1, 2021 will be determined for each issue-year cohort as a single discount rate, calculated as the weighted-average of monthly upper-medium grade (low-credit risk) fixed-income instrument forward curves over the calendar year, determined using the methodology described above and weighted using issued annualized premiums for each issue month. The single discount rate for each issue-year cohort will remain unchanged after the calendar year of issue. Locked-in discount rates on the policies held at Transition Date reflect the locked-in rates in existence immediately before the Transition Date. • For DAC amortization, the Company has elected to group insurance policies into cohorts that are consistent with the groupings used in estimating the associated LFPB. DAC will be amortized on a constant-level basis for the grouped contracts over the expected remaining term of the related contracts. For both life and health products issued by Aflac Japan, the constant-level basis used will be units in force, which is a proxy for face amount and insurance in force, respectively. For life products issued by Aflac U.S., the constant level basis used will be face amount of policies in force; for health products issued by Aflac U.S., the constant level basis used will be the number of policies in force. • The Company has made an entity-wide election to use locked-in claim expense assumptions determined for each issue-year cohort as a percentage of paid claims; these assumptions would remain unchanged over the term of the insurance policy. Under the amended guidance, certain insurance commissions and expenses must be excluded from the expense assumption, which will result in an increase in the deferred profit liability on limited-payment products compared to current guidance. In conjunction with the adoption of the updated standard effective January 1, 2023, the Company will change its practice of recording the change in the deferred profit liability on products with limited-payment features from the benefits and claims, net line item to the net earned premiums line item in the consolidated statement of earnings. This reclassification will have no impact on net earnings. The change in presentation will be made for all comparative periods presented. The Company has created a governance framework and a plan to support implementation of the updated standard. As part of its implementation plan, the Company continues to advance the modernization of its actuarial technology platform to enhance its modeling, data management, experience study and analytical capabilities, increase the end-to-end automation of key reporting and analytical processes and optimize its control framework. The Company has also put in place internal controls related to the new processes created as part of implementing the updated standard and will continue to refine and maturate these internal controls until the formal implementation in the first quarter of 2023. The Company continues testing its reporting and disclosure capabilities under the new ASU for post-Transition Date accounting periods. The Company currently has no products with market risk benefits. Impacts on Previously Reported Results Impacts from the adoption of ASU 2018-12 to the Company's previously reported results are expected to be as follows: Consolidated Statement of Earnings Year Ended December 31, 2021 (In millions) As Adoption As Revenues: Net earned premiums, principally supplemental health insurance (1) $ 17,647 $ (552) $ 17,095 Net investment income 3,818 0 3,818 Net investment gains (losses) 468 0 468 Other income (loss) 173 0 173 Total revenues 22,106 (552) 21,554 Benefits and expenses: Benefits and claims, excluding reserve remeasurement (1)(2) 10,576 47 10,623 Reserve remeasurement (gains) losses (3) 0 (147) (147) Total benefits and claims, net 10,576 (100) 10,476 Acquisition and operating expenses: Amortization of deferred policy acquisition costs (4) 1,170 (335) 835 Insurance commissions 1,256 0 1,256 Insurance and other expenses (5) 3,544 (3) 3,541 Interest expense 238 0 238 Total acquisition and operating expenses 6,208 (338) 5,870 Total benefits and expenses 16,784 (438) 16,346 Earnings before income taxes 5,322 (114) 5,208 Income taxes (6) 997 (20) 977 Net earnings $ 4,325 $ (94) $ 4,231 (1) Adjustment reflects a $489 increase in the deferred profit liability on limited-payment products under the updated standard combined with the reclassification of a $63 increase in deferred profit liability previously reported in benefits and claims and reclassified to net earned premiums in conjunction with adoption of the updated standard. (2) Adjustment reflects 2021 activity for the effect of calculating benefits using revised net premium ratios and best estimate future cash flow projections, excluding reserve remeasurement impacts. (3) Adjustment reflects the reserve remeasurement on the liability for future policy benefits due to applying revised net premium ratios based on updated historical actuals and revised assumptions to past periods each quarter under the updated standard. (4) Adjustment reflects a decrease in DAC amortization due to DAC assets being amortized over the expected life of a contract and no interest accretion recorded under the updated standard. (5) Adjustment reflects 2021 activity for the change in accrued claim adjustment expenses that are included in benefits and claims as a component of the integrated reserve under the updated standard. (6) Adjustment reflects a decrease in income tax expense associated with the decrease in pretax earnings. Consolidated Balance Sheet December 31, 2021 (In millions) As Adoption As Assets: Investments and cash: Fixed maturity securities available for sale, at fair value $ 94,206 $ 0 $ 94,206 Fixed maturity securities available for sale - consolidated variable interest entities, at fair value 4,490 0 4,490 Fixed maturity securities held to maturity, at amortized cost, net of allowance for credit losses 22,000 0 22,000 Equity securities, at fair value 1,603 0 1,603 Commercial mortgage and other loans, net of allowance for credit losses 11,786 0 11,786 Other investments 3,842 0 3,842 Cash and cash equivalents 5,051 0 5,051 Total investments and cash 142,978 0 142,978 Receivables (1) 693 10 703 Accrued investment income 737 0 737 Deferred policy acquisition costs (2) 9,525 323 9,848 Property and equipment 538 0 538 Other (3) 3,071 275 3,346 Total assets $ 157,542 $ 608 $ 158,150 Liabilities and shareholders’ equity: Liabilities: Policy liabilities: Future policy benefits (1),(4),(5),(6) $ 90,588 $ 25,376 $ 115,964 Unpaid policy claims (4),(7) 4,836 (4,685) 151 Unearned premiums 2,576 0 2,576 Other policyholders’ funds (7) 7,072 568 7,640 Total policy liabilities 105,072 21,259 126,331 Income taxes (8) 4,339 (4,309) 30 Payables for return of cash collateral on loaned securities 2,162 0 2,162 Notes payable and lease obligations 7,956 0 7,956 Other (5) 4,760 (120) 4,640 Total liabilities 124,289 16,830 141,119 Commitments and contingent liabilities Shareholders’ equity: Common stock 135 0 135 Additional paid-in capital 2,529 0 2,529 Retained earnings (9) 41,381 (418) 40,963 Accumulated other comprehensive income (loss): Unrealized foreign currency translation gains (losses) (10) (2,013) 28 (1,985) Unrealized gains (losses) on fixed maturity securities 9,602 0 9,602 Unrealized gains (losses) on derivatives (30) 0 (30) Effect of changes in discount rate assumptions (11) 0 (15,832) (15,832) Pension liability adjustment (166) 0 (166) Treasury stock (18,185) 0 (18,185) Total shareholders’ equity 33,253 (16,222) 17,031 Total liabilities and shareholders’ equity $ 157,542 $ 608 $ 158,150 (1) Adjustment for the reclassification of ceded reserves from future policy benefits to receivables in conjunction with adoption of the updated standard. (2) Adjustment reflects an increase in DAC assets as a result of DAC being amortized over the expected life of a contract and no interest accretion recorded under the updated standard. (3) Adjustment reflects the discounting of reinsurance recoverables for retrocession activities under the updated standard. (4) Adjustment for the reclassification of unpaid policy claims for long-duration contracts to future policy benefits as a component of the integrated reserve. (5) Adjustment for the reclassification of accrued claim adjustment expenses from other liabilities to future policy benefits as a component of the integrated reserve. (6) Adjustment reflects the impacts of adoption and 2021 activity under the updated standard, including a $490 increase in the deferred profit liability on limited-payment products under the updated standard as discussed above. (7) Adjustment for the reclassification of the claims liability for certain fixed annuity benefits from unpaid policy claims to other policyholders' funds. (8) Adjustment reflects the tax effects from adoption and 2021 activity under the updated standard. (9) Adjustment reflects the impacts from adoption of ($324) as a result of capping the net premium ratio at 100% for cohorts that are in a loss position at transition, and the decrease in current year net earnings of $(94) under the updated standard. (10) Adjustment reflects foreign currency translation related to the updated standard, as applicable. (11) Adjustment reflects the impacts from adoption of ($18,570) and 2021 activity of $2,738 due to changes in the discount rate assumptions under the updated standard. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Impact from Adoption on Statement of Earnings | Consolidated Statement of Earnings Year Ended December 31, 2021 (In millions) As Adoption As Revenues: Net earned premiums, principally supplemental health insurance (1) $ 17,647 $ (552) $ 17,095 Net investment income 3,818 0 3,818 Net investment gains (losses) 468 0 468 Other income (loss) 173 0 173 Total revenues 22,106 (552) 21,554 Benefits and expenses: Benefits and claims, excluding reserve remeasurement (1)(2) 10,576 47 10,623 Reserve remeasurement (gains) losses (3) 0 (147) (147) Total benefits and claims, net 10,576 (100) 10,476 Acquisition and operating expenses: Amortization of deferred policy acquisition costs (4) 1,170 (335) 835 Insurance commissions 1,256 0 1,256 Insurance and other expenses (5) 3,544 (3) 3,541 Interest expense 238 0 238 Total acquisition and operating expenses 6,208 (338) 5,870 Total benefits and expenses 16,784 (438) 16,346 Earnings before income taxes 5,322 (114) 5,208 Income taxes (6) 997 (20) 977 Net earnings $ 4,325 $ (94) $ 4,231 (1) Adjustment reflects a $489 increase in the deferred profit liability on limited-payment products under the updated standard combined with the reclassification of a $63 increase in deferred profit liability previously reported in benefits and claims and reclassified to net earned premiums in conjunction with adoption of the updated standard. (2) Adjustment reflects 2021 activity for the effect of calculating benefits using revised net premium ratios and best estimate future cash flow projections, excluding reserve remeasurement impacts. (3) Adjustment reflects the reserve remeasurement on the liability for future policy benefits due to applying revised net premium ratios based on updated historical actuals and revised assumptions to past periods each quarter under the updated standard. (4) Adjustment reflects a decrease in DAC amortization due to DAC assets being amortized over the expected life of a contract and no interest accretion recorded under the updated standard. (5) Adjustment reflects 2021 activity for the change in accrued claim adjustment expenses that are included in benefits and claims as a component of the integrated reserve under the updated standard. (6) Adjustment reflects a decrease in income tax expense associated with the decrease in pretax earnings. |
Schedule of Impact from Adoption on Balance Sheet | Consolidated Balance Sheet December 31, 2021 (In millions) As Adoption As Assets: Investments and cash: Fixed maturity securities available for sale, at fair value $ 94,206 $ 0 $ 94,206 Fixed maturity securities available for sale - consolidated variable interest entities, at fair value 4,490 0 4,490 Fixed maturity securities held to maturity, at amortized cost, net of allowance for credit losses 22,000 0 22,000 Equity securities, at fair value 1,603 0 1,603 Commercial mortgage and other loans, net of allowance for credit losses 11,786 0 11,786 Other investments 3,842 0 3,842 Cash and cash equivalents 5,051 0 5,051 Total investments and cash 142,978 0 142,978 Receivables (1) 693 10 703 Accrued investment income 737 0 737 Deferred policy acquisition costs (2) 9,525 323 9,848 Property and equipment 538 0 538 Other (3) 3,071 275 3,346 Total assets $ 157,542 $ 608 $ 158,150 Liabilities and shareholders’ equity: Liabilities: Policy liabilities: Future policy benefits (1),(4),(5),(6) $ 90,588 $ 25,376 $ 115,964 Unpaid policy claims (4),(7) 4,836 (4,685) 151 Unearned premiums 2,576 0 2,576 Other policyholders’ funds (7) 7,072 568 7,640 Total policy liabilities 105,072 21,259 126,331 Income taxes (8) 4,339 (4,309) 30 Payables for return of cash collateral on loaned securities 2,162 0 2,162 Notes payable and lease obligations 7,956 0 7,956 Other (5) 4,760 (120) 4,640 Total liabilities 124,289 16,830 141,119 Commitments and contingent liabilities Shareholders’ equity: Common stock 135 0 135 Additional paid-in capital 2,529 0 2,529 Retained earnings (9) 41,381 (418) 40,963 Accumulated other comprehensive income (loss): Unrealized foreign currency translation gains (losses) (10) (2,013) 28 (1,985) Unrealized gains (losses) on fixed maturity securities 9,602 0 9,602 Unrealized gains (losses) on derivatives (30) 0 (30) Effect of changes in discount rate assumptions (11) 0 (15,832) (15,832) Pension liability adjustment (166) 0 (166) Treasury stock (18,185) 0 (18,185) Total shareholders’ equity 33,253 (16,222) 17,031 Total liabilities and shareholders’ equity $ 157,542 $ 608 $ 158,150 (1) Adjustment for the reclassification of ceded reserves from future policy benefits to receivables in conjunction with adoption of the updated standard. (2) Adjustment reflects an increase in DAC assets as a result of DAC being amortized over the expected life of a contract and no interest accretion recorded under the updated standard. (3) Adjustment reflects the discounting of reinsurance recoverables for retrocession activities under the updated standard. (4) Adjustment for the reclassification of unpaid policy claims for long-duration contracts to future policy benefits as a component of the integrated reserve. (5) Adjustment for the reclassification of accrued claim adjustment expenses from other liabilities to future policy benefits as a component of the integrated reserve. (6) Adjustment reflects the impacts of adoption and 2021 activity under the updated standard, including a $490 increase in the deferred profit liability on limited-payment products under the updated standard as discussed above. (7) Adjustment for the reclassification of the claims liability for certain fixed annuity benefits from unpaid policy claims to other policyholders' funds. (8) Adjustment reflects the tax effects from adoption and 2021 activity under the updated standard. (9) Adjustment reflects the impacts from adoption of ($324) as a result of capping the net premium ratio at 100% for cohorts that are in a loss position at transition, and the decrease in current year net earnings of $(94) under the updated standard. (10) Adjustment reflects foreign currency translation related to the updated standard, as applicable. (11) Adjustment reflects the impacts from adoption of ($18,570) and 2021 activity of $2,738 due to changes in the discount rate assumptions under the updated standard. |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | Information regarding operations by reportable segment and Corporate and other, follows: Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Revenues: Aflac Japan: Net earned premiums $ 2,241 $ 2,934 $ 7,384 $ 9,045 Adjusted net investment income (1),(2) 663 763 2,066 2,260 Other income 9 10 26 32 Total adjusted revenue Aflac Japan 2,913 3,707 9,476 11,337 Aflac U.S.: Net earned premiums 1,375 1,393 4,182 4,223 Adjusted net investment income (3) 185 191 563 557 Other income 38 32 120 90 Total adjusted revenue Aflac U.S. 1,598 1,616 4,865 4,870 Corporate and other (4),(5) 73 72 189 205 Total adjusted revenues 4,584 5,395 14,530 16,412 Net investment gains (losses) (1),(2),(3),(4) 236 (158) 962 258 Total revenues $ 4,820 $ 5,237 $ 15,492 $ 16,670 (1) Amortized hedge costs of $28 and $20 for the three-month periods and $84 and $55 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations. (2) Net interest cash flows from derivatives associated with certain investment strategies of $(25) and $(7) for the three-month periods and $(37) and $(24) for the nine-month periods ended September 30, 2022, and 2021, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (3) Net interest cash flows from derivatives associated with certain investment strategies of $(1) and $1 for the three-month periods and $1 and $1 for the nine-month periods ended September 30, 2022, and 2021, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (4) Amortized hedge income of $19 and $13 for the three-month periods and $44 and $45 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase to net investment income when analyzing operations. (5) The change in value of federal historic rehabilitation and solar investments in partnerships of $19 and $5 for the three-month periods and $61 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, is included as a reduction to net investment income. Tax credits on these investments of $19 and $10 for the three-month periods and $63 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings. See Note 3 of the Notes to the Consolidated Financial Statements for additional information on these investments. |
Reconciliation of Adjusted Profit (Loss) from Segments to Consolidated | Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Pretax earnings: Aflac Japan (1),(2) $ 630 $ 976 $ 2,351 $ 2,867 Aflac U.S. (3) 309 358 984 1,217 Corporate and other (4),(5),(6) (59) (41) (179) (144) Pretax adjusted earnings (7) 880 1,293 3,156 3,940 Net investment gains (losses) (1),(2),(3),(4),(5) 222 (172) 923 216 Other income (loss) 1 (8) 1 (66) Total earnings before income taxes $ 1,103 $ 1,113 $ 4,080 $ 4,090 Income taxes applicable to pretax adjusted earnings $ 156 $ 262 $ 565 $ 771 Effect of foreign currency translation on after-tax (53) (14) (147) (8) (1) Amortized hedge costs of $28 and $20 for the three-month periods and $84 and $55 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations. (2) Net interest cash flows from derivatives associated with certain investment strategies of $(25) and $(7) for the three-month periods and $(37) and $(24) for the nine-month periods ended September 30, 2022, and 2021, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (3) Net interest cash flows from derivatives associated with certain investment strategies of $(1) and $1 for the three-month periods and $1 and $1 for the nine-month periods ended September 30, 2022, and 2021, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income when analyzing operations. (4) Amortized hedge income of $19 and $13 for the three-month periods and $44 and $45 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase in net investment income when analyzing operations. (5) A gain of $13 and $14 for the three-month periods and $38 and $41 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable has been reclassified from net investment gains (losses) and included in adjusted earnings when analyzing operations. (6) The change in value of federal historic rehabilitation and solar investments in partnerships of $19 and $5 for the three-month periods and $61 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, is included as a reduction to net investment income. Tax credits on these investments of $19 and $10 for the three-month periods and $63 and $35 for the nine-month periods ended September 30, 2022, and 2021, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings. See Note 3 of the Notes to the Consolidated Financial Statements for additional information on these investments. (7) Includes $45 and $40 for the three-month periods and $127 and $130 for the nine-month periods ended September 30, 2022, and 2021, respectively, of interest expense on debt. |
Reconciliation of Assets from Segment to Consolidated | Assets were as follows: (In millions) September 30, December 31, Assets: Aflac Japan $ 101,311 $ 128,536 Aflac U.S. 20,212 23,106 Corporate and other 6,577 5,900 Total assets $ 128,100 $ 157,542 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Available-for-Sale Debt Securities | The amortized cost for the Company's investments in fixed maturity securities, the cost for equity securities and the fair values of these investments are shown in the following tables. September 30, 2022 (In millions) Amortized Allowance for Credit Losses Gross Gross Fair Securities available for sale, carried at fair Fixed maturity securities: Yen-denominated: Japan government and agencies $ 23,342 $ 0 $ 1,558 $ 1,158 $ 23,742 Municipalities 947 0 164 40 1,071 Mortgage- and asset-backed securities 231 0 9 8 232 Public utilities 3,605 0 303 87 3,821 Sovereign and supranational 603 0 34 1 636 Banks/financial institutions 5,813 0 365 399 5,779 Other corporate 5,712 0 696 264 6,144 Total yen-denominated 40,253 0 3,129 1,957 41,425 U.S. dollar-denominated: U.S. government and agencies 176 0 0 8 168 Municipalities 1,252 0 58 105 1,205 Mortgage- and asset-backed securities 1,732 0 119 74 1,777 Public utilities 3,398 0 312 181 3,529 Sovereign and supranational 194 0 45 13 226 Banks/financial institutions 3,002 0 347 97 3,252 Other corporate 21,028 0 2,152 1,119 22,061 Total U.S. dollar-denominated 30,782 0 3,033 1,597 32,218 Total securities available for sale $ 71,035 $ 0 $ 6,162 $ 3,554 $ 73,643 December 31, 2021 (In millions) Amortized Allowance for Credit Losses Gross Gross Fair Securities available for sale, carried at fair Fixed maturity securities: Yen-denominated: Japan government and agencies $ 30,335 $ 0 $ 3,343 $ 61 $ 33,617 Municipalities 1,192 0 322 5 1,509 Mortgage- and asset-backed securities 300 0 19 1 318 Public utilities 4,462 0 906 2 5,366 Sovereign and supranational 760 0 82 0 842 Banks/financial institutions 6,963 0 787 72 7,678 Other corporate 7,148 0 1,535 26 8,657 Total yen-denominated 51,160 0 6,994 167 57,987 U.S. dollar-denominated: U.S. government and agencies 196 0 8 1 203 Municipalities 1,340 0 189 2 1,527 Mortgage- and asset-backed securities 897 0 33 2 928 Public utilities 3,781 0 909 5 4,685 Sovereign and supranational 222 0 57 6 273 Banks/financial institutions 3,169 0 747 3 3,913 Other corporate 24,604 0 4,629 53 29,180 Total U.S. dollar-denominated 34,209 0 6,572 72 40,709 Total securities available for sale $ 85,369 $ 0 $ 13,566 $ 239 $ 98,696 |
Held-to-maturity Securities | September 30, 2022 (In millions) Amortized Allowance for Credit Losses Net Carrying Amount Gross Gross Fair Securities held to maturity, carried at Fixed maturity securities: Yen-denominated: Japan government and agencies $ 16,745 $ 3 $ 16,742 $ 2,483 $ 0 $ 19,225 Municipalities 264 0 264 57 0 321 Public utilities 34 0 34 7 0 41 Sovereign and supranational 412 3 409 68 0 477 Other corporate 17 0 17 4 0 21 Total yen-denominated 17,472 6 17,466 2,619 0 20,085 Total securities held to maturity $ 17,472 $ 6 $ 17,466 $ 2,619 $ 0 $ 20,085 December 31, 2021 (In millions) Amortized Allowance for Credit Losses Net Carrying Amount Gross Gross Fair Securities held to maturity, carried at Fixed maturity securities: Yen-denominated: Japan government and agencies $ 21,089 $ 3 $ 21,086 $ 4,613 $ 0 $ 25,699 Municipalities 335 0 335 101 0 436 Public utilities 44 1 43 12 0 55 Sovereign and supranational 518 4 514 136 0 650 Other corporate 22 0 22 7 0 29 Total yen-denominated 22,008 8 22,000 4,869 0 26,869 Total securities held to maturity $ 22,008 $ 8 $ 22,000 $ 4,869 $ 0 $ 26,869 |
Equity securities, FV-NI | (In millions) September 30, December 31, 2021 Equity securities, carried at fair value through net earnings: Fair Value Fair Value Equity securities: Yen-denominated $ 592 $ 744 U.S. dollar-denominated 427 817 Other currencies 45 42 Total equity securities $ 1,064 $ 1,603 |
Investments Classified by Contractual Maturity Date | The contractual and economic maturities of the Company's investments in fixed maturity securities at September 30, 2022, were as follows: (In millions) Amortized (1) Fair Available for sale: Due in one year or less $ 1,285 $ 1,455 Due after one year through five years 7,261 7,815 Due after five years through 10 years 13,081 14,297 Due after 10 years 47,445 48,067 Mortgage- and asset-backed securities 1,963 2,009 Total fixed maturity securities available for sale $ 71,035 $ 73,643 Held to maturity: Due in one year or less $ 0 $ 0 Due after one year through five years 37 39 Due after five years through 10 years 9,285 10,498 Due after 10 years 8,144 9,548 Mortgage- and asset-backed securities 0 0 Total fixed maturity securities held to maturity $ 17,466 $ 20,085 |
Investment Exposures Exceeding Ten Percent Shareholders Equity | Investment exposures that individually exceeded 10% of shareholders' equity were as follows: September 30, 2022 December 31, 2021 (In millions) Credit Amortized Fair Credit Amortized Fair Japan National Government (1) A+ $39,106 $41,927 A+ $50,186 $57,862 (1) Japan Government Bonds (JGBs) or JGB-backed securities |
Gain (Loss) on Investments | Information regarding pretax net gains and losses from investments is as follows: Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Net investment gains (losses): Sales and redemptions: Fixed maturity securities available for sale: Gross gains from sales $ 8 $ 24 $ 93 $ 40 Gross losses from sales (4) (36) (30) (39) Foreign currency gains (losses) 54 (2) 187 (21) Other investments: Gross gains from sales 1 0 10 0 Total sales and redemptions 59 (14) 260 (20) Equity securities (22) (119) (313) (17) Credit losses: Fixed maturity securities available for sale 0 27 0 38 Fixed maturity securities held to maturity 0 0 0 1 Commercial mortgage and other loans (12) (29) (8) 15 Impairment losses (4) 0 (21) (20) Loan commitments 5 3 7 3 Reinsurance recoverables and other 0 0 2 (2) Total credit losses (11) 1 (20) 35 Derivatives and other: Derivative gains (losses) (491) (174) (1,515) (557) Foreign currency gains (losses) 664 135 2,473 783 Total derivatives and other 173 (39) 958 226 Total net investment gains (losses) $ 199 $ (171) $ 885 $ 224 |
Net Effect on Shareholders' Equity of Unrealized Gains and Losses from Investment Securities | The net effect on shareholders’ equity of unrealized gains and losses from fixed maturity securities was as follows: (In millions) September 30, December 31, Unrealized gains (losses) on securities available for sale $ 2,608 $ 13,330 Deferred income taxes (1,477) (3,728) Shareholders’ equity, unrealized gains (losses) on fixed maturity securities $ 1,131 $ 9,602 |
Investments Gross Unrealized Loss Aging | The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended September 30, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position. September 30, 2022 Total Less than 12 months 12 months or longer (In millions) Fair Unrealized Fair Unrealized Fair Unrealized Fixed maturity securities available U.S. government and U.S. dollar-denominated $ 51 $ 8 $ 0 $ 5 $ 51 $ 3 Japan government and Yen-denominated 8,091 1,158 4,300 482 3,791 676 Municipalities: U.S. dollar-denominated 708 105 675 95 33 10 Yen-denominated 278 40 166 18 112 22 Mortgage- and asset- U.S. dollar-denominated 839 74 723 63 116 11 Yen-denominated 69 8 46 4 23 4 Public utilities: U.S. dollar-denominated 1,544 181 1,486 171 58 10 Yen-denominated 1,041 87 929 79 112 8 Sovereign and supranational: U.S. dollar-denominated 29 13 0 0 29 13 Yen-denominated 68 1 34 1 34 0 Banks/financial institutions: U.S. dollar-denominated 968 97 760 69 208 28 Yen-denominated 3,485 399 2,625 281 860 118 Other corporate: U.S. dollar-denominated 8,276 1,119 7,463 905 813 214 Yen-denominated 1,696 264 1,435 208 261 56 Total $ 27,143 $ 3,554 $ 20,642 $ 2,381 $ 6,501 $ 1,173 December 31, 2021 Total Less than 12 months 12 months or longer (In millions) Fair Unrealized Fair Unrealized Fair Unrealized Fixed maturity securities available U.S. government and U.S. dollar-denominated $ 1 $ 1 $ 0 $ 1 $ 1 $ 0 Japan government and Yen-denominated 2,868 61 445 3 2,423 58 Municipalities: U.S. dollar-denominated 82 2 79 2 3 0 Yen-denominated 187 5 53 0 134 5 Mortgage- and asset- U.S. dollar-denominated 278 2 278 2 0 0 Yen-denominated 33 1 0 0 33 1 Public utilities: U.S. dollar-denominated 130 5 70 2 60 3 Yen-denominated 26 2 0 0 26 2 Sovereign and supranational: U.S. dollar-denominated 37 6 6 1 31 5 Banks/financial institutions: U.S. dollar-denominated 292 3 274 3 18 0 Yen-denominated 2,074 72 1,011 16 1,063 56 Other corporate: U.S. dollar-denominated 1,365 53 458 8 907 45 Yen-denominated 541 26 274 4 267 22 Total $ 7,914 $ 239 $ 2,948 $ 42 $ 4,966 $ 197 |
Composition of the Carrying Value for Commercial Mortgage and Other Loans by Property Type | The following table reflects the composition of the carrying value for commercial mortgage and other loans by property type as of the periods presented. (In millions) September 30, 2022 December 31, 2021 Amortized Cost % of Total Amortized Cost % of Total Commercial Mortgage and other loans: Transitional real estate loans: Office $ 2,121 15.5 % $ 2,001 16.7 % Retail 485 3.6 267 2.2 Apartments/Multi-Family 2,730 20.0 1,893 15.8 Industrial 154 1.1 94 .8 Hospitality 835 6.1 876 7.3 Other 177 1.3 228 1.9 Total transitional real estate loans 6,502 47.6 5,359 44.7 Commercial mortgage loans: Office 390 2.9 398 3.3 Retail 312 2.3 332 2.8 Apartments/Multi-Family 634 4.6 649 5.4 Industrial 691 5.1 525 4.4 Total commercial mortgage loans 2,027 14.9 1,904 15.9 Middle market loans 5,112 37.5 4,697 39.4 Total commercial mortgage and other loans $ 13,641 100.0 % $ 11,960 100.0 % Allowance for credit losses (182) (174) Total net commercial mortgage and other loans $ 13,459 $ 11,786 |
Allowance for Loan Losses by Portfolio Segment | The following table presents the roll forward of the allowance for credit losses by portfolio segment. (In millions) Transitional Real Estate Loans Commercial Mortgage Loans Middle Market Loans Held to Maturity Securities Available for Sale Securities Reinsurance Recoverables Three Months Ended September 30, 2022: Balance at June 30, 2022 $ (53) $ (8) $ (109) $ (7) $ 0 $ (8) (Addition to) release of allowance for credit (2) (2) (6) 0 0 0 Write-offs, net of recoveries 0 0 (2) 0 0 0 Change in foreign exchange 0 0 0 1 0 0 Balance at September 30, 2022 $ (55) $ (10) $ (117) $ (6) $ 0 $ (8) Three Months Ended September 30, 2021: Balance at June 30, 2021 $ (41) $ (22) $ (76) $ (8) $ (26) $ (13) (Addition to) release of allowance for credit (18) 5 (13) (1) 0 0 Write-offs, net of recoveries 0 0 0 0 26 0 Balance at September 30, 2021 $ (59) $ (17) $ (89) $ (9) $ 0 $ (13) Nine Months Ended September 30, 2022: Balance at December 31, 2021 $ (68) $ (10) $ (96) $ (8) $ 0 $ (13) (Addition to) release of allowance for credit 13 0 (24) 0 0 2 Write-offs, net of recoveries 0 0 3 0 0 0 Change in foreign exchange 0 0 0 2 0 3 Balance at September 30, 2022 $ (55) $ (10) $ (117) $ (6) $ 0 $ (8) Nine Months Ended September 30, 2021: Balance at December 31, 2020 $ (63) $ (32) $ (85) $ (10) $ (38) $ (12) (Addition to) release of allowance for credit 4 15 (4) 1 26 (1) Write-offs, net of recoveries 0 0 0 0 12 0 Balance at September 30, 2021 $ (59) $ (17) $ (89) $ (9) $ 0 $ (13) |
Other Investments | The table below reflects the composition of the carrying value for other investments as of the periods presented. (In millions) September 30, December 31, 2021 Other investments: Policy loans $ 195 $ 236 Short-term investments (1) 1,816 1,726 Limited partnerships 2,145 1,858 Other 30 22 Total other investments $ 4,186 $ 3,842 |
Securities Lending Transactions Accounted for as Secured Borrowings | Details of collateral by loaned security type and remaining maturity of the agreements were as follows: Securities Lending Transactions Accounted for as Secured Borrowings Remaining Contractual Maturity of the Agreements September 30, 2022 December 31, 2021 (In millions) Overnight (1) Up to 30 Total Overnight (1) Up to 30 Total Securities lending transactions: Fixed maturity securities: Japan government and $ 0 $ 1,874 $ 1,874 $ 0 $ 920 $ 920 Public utilities 23 0 23 40 0 40 Sovereign and supranational 0 0 0 2 0 2 Banks/financial institutions 96 0 96 88 0 88 Other corporate 727 0 727 1,112 0 1,112 Equity securities 1 0 1 0 0 0 Total borrowings $ 847 $ 1,874 $ 2,721 $ 1,242 $ 920 $ 2,162 Gross amount of recognized liabilities for securities $ 2,721 $ 2,162 (1) The related loaned security, under the Company's U.S. securities lending program, can be returned to the Company at the transferee's discretion; therefore, they are classified as Overnight and Continuous. |
Variable Interest Entity, Consolidated | |
Investments in Variable Interest Entities | VIEs - Consolidated The following table presents the cost or amortized cost, fair value and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. Investments in Consolidated Variable Interest Entities September 30, 2022 December 31, 2021 (In millions) Amortized (1) Fair Amortized Cost (1) Fair Assets: Fixed maturity securities, available for sale $ 2,908 $ 3,617 $ 3,264 $ 4,490 Commercial mortgage and other loans 10,775 10,716 9,740 9,910 Other investments (2) 1,815 1,815 1,535 1,535 Other assets (3) 65 65 78 78 Total assets of consolidated VIEs $ 15,563 $ 16,213 $ 14,617 $ 16,013 Liabilities: Other liabilities (3) $ 463 $ 463 $ 414 $ 414 Total liabilities of consolidated VIEs $ 463 $ 463 $ 414 $ 414 (1) Net of allowance for credit losses (2) Consists entirely of alternative investments in limited partnerships (3) Consists entirely of derivatives |
Variable Interest Entity, Not Consolidated | |
Investments in Variable Interest Entities | VIEs - Not Consolidated The table below reflects the amortized cost, fair value and balance sheet caption in which the Company's investment in VIEs not consolidated are reported. Investments in Variable Interest Entities Not Consolidated September 30, 2022 December 31, 2021 (In millions) Amortized Fair Amortized Fair Assets: Fixed maturity securities, available for sale $ 3,809 $ 4,131 $ 4,779 $ 5,864 Other investments (1) 330 330 323 323 Total investments in VIEs not consolidated $ 4,139 $ 4,461 $ 5,102 $ 6,187 (1) Consists entirely of alternative investments in limited partnerships |
Transitional real estate loans | |
Financing Receivable Credit Quality Indicators | Transitional Real Estate Loans (In millions) 2022 2021 2020 2019 2018 Prior Total Loan-to-Value Ratio: 0%-59.99% $ 534 $ 585 $ 137 $ 192 $ 102 $ 0 $ 1,550 60%-69.99% 580 796 56 504 437 50 2,423 70%-79.99% 780 928 107 380 159 1 2,355 80% or greater 15 159 0 0 0 0 174 Total $ 1,909 $ 2,468 $ 300 $ 1,076 $ 698 $ 51 $ 6,502 |
Commercial mortgage loans | |
Financing Receivable Credit Quality Indicators | Commercial Mortgage Loans (In millions) 2022 2021 2020 2019 2018 Prior Total Weighted-Average DSCR Loan-to-Value Ratio: 0%-59.99% $ 211 $ 322 $ 46 $ 513 $ 152 $ 542 $ 1,786 2.23 60%-69.99% 0 15 0 46 0 115 176 2.08 70%-79.99% 0 0 0 40 0 25 65 1.18 80% or greater 0 0 0 0 0 0 0 0.00 Total $ 211 $ 337 $ 46 $ 599 $ 152 $ 682 $ 2,027 2.18 Weighted Average DSCR 0.00 2.74 1.92 2.56 2.06 2.30 |
Middle market loans | |
Financing Receivable Credit Quality Indicators | Middle Market Loans (In millions) 2022 2021 2020 2019 2018 Prior Revolving Loans Total Credit Ratings: BBB $ 30 $ 153 $ 85 $ 37 $ 19 $ 0 $ 114 $ 438 BB 258 456 327 210 80 46 309 1,686 B 283 716 396 497 243 220 350 2,705 CCC 0 0 21 71 70 56 50 268 CC 0 0 0 0 14 0 1 15 C and lower 0 0 0 0 0 0 0 0 Total $ 571 $ 1,325 $ 829 $ 815 $ 426 $ 322 $ 824 $ 5,112 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below summarizes the balance sheet classification of the Company's derivative fair value amounts, as well as the gross asset and liability fair value amounts. The fair value amounts presented do not include income accruals. Derivative assets are included in “Other Assets,” while derivative liabilities are included in “Other Liabilities” within the Company’s Consolidated Balance Sheets. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not reflective of exposure or credit risk. September 30, 2022 December 31, 2021 (In millions) Asset Liability Asset Liability Hedge Designation/ Derivative Notional Fair Value Fair Value Notional Fair Value Fair Value Cash flow hedges: Foreign currency swaps - VIE $ 18 $ 0 $ 4 $ 18 $ 0 $ 2 Total cash flow hedges 18 0 4 18 0 2 Fair value hedges: Foreign currency forwards 0 0 0 62 0 5 Foreign currency options 7,749 5 0 8,829 5 0 Total fair value hedges 7,749 5 0 8,891 5 5 Net investment hedge: Foreign currency forwards 4,993 833 0 4,996 341 0 Foreign currency options 1,669 0 0 1,949 0 0 Total net investment hedge 6,662 833 0 6,945 341 0 Non-qualifying strategies: Foreign currency swaps 1,900 81 0 2,250 59 13 Foreign currency swaps - VIE 3,420 65 458 3,151 78 412 Foreign currency forwards 5,843 162 1,035 15,953 450 1,133 Foreign currency options 5,711 0 0 2,746 3 0 Interest rate swaps 11,130 0 590 3,500 0 54 Forward bond purchase commitment - VIE 14 0 1 0 0 0 Total non-qualifying strategies 28,018 308 2,084 27,600 590 1,612 Total derivatives $ 42,447 $ 1,146 $ 2,088 $ 43,454 $ 936 $ 1,619 |
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table presents the gains and losses on derivatives and the related hedged items in fair value hedges. Fair Value Hedging Relationships (In millions) Hedging Derivatives Hedged Items Hedging Derivatives Hedged Items Total Gains (Losses) (1) Gains (Losses) (2) Gains (Losses) (2) Net Investment Gains (Losses) Recognized for Fair Value Hedge Three Months Ended September 30, 2022: Foreign currency options Fixed maturity securities $ (15) $ (15) $ 0 $ 0 $ 0 Total gains (losses) $ (15) $ (15) $ 0 $ 0 $ 0 Nine Months Ended September 30, 2022: Foreign currency options Fixed maturity securities $ (41) $ (41) $ 0 $ 0 $ 0 Total gains (losses) $ (41) $ (41) $ 0 $ 0 $ 0 Three Months Ended September 30, 2021: Foreign currency forwards Fixed maturity securities $ (1) $ 0 $ (1) $ 1 $ 0 Foreign currency options Fixed maturity securities $ (5) $ (5) $ 0 $ 0 $ 0 Total gains (losses) $ (6) $ (5) $ (1) $ 1 $ 0 Nine Months Ended September 30, 2021: Foreign currency forwards Fixed maturity securities $ (5) $ 0 $ (5) $ 5 $ 0 Foreign currency options Fixed maturity securities (16) (15) (1) 4 3 Total gains (losses) $ (21) $ (15) $ (6) $ 9 $ 3 (1) Gains (losses) excluded from effectiveness testing includes the forward point on foreign currency forwards and time value change on foreign currency options which are reported in the consolidated statement of earnings as net investment gains (losses). It also includes the change in the fair value of the interest rate swaptions related to the time value of the swaptions which is recognized as a component of other comprehensive income (loss). (2) Gains and losses on foreign currency forwards and options and related hedged items are reported in the consolidated statement of earnings as net investment gains (losses). For interest rate swaptions and related hedged items, gains and losses included in the hedge assessment, premium amortization and time value amortization while the hedge items are still outstanding are reported within net investment income. The time value gains and losses for interest rate swaptions when the related hedged items are redeemed are reported in net investment gains and losses consistent with the impact of the hedged item. For the three-month and nine-month periods ended September 30, 2022 and 2021, gains and losses included in the hedge assessment on interest rate swaptions and related hedged items were immaterial. |
Schedule of Interest Rate Fair Value Hedges Hedged Items | The following table shows the carrying amounts of assets designated and qualifying as hedged items in fair value hedges of interest rate risk and the related cumulative hedge adjustment included in the carrying amount. (In millions) Carrying Amount of the Hedged Assets/(Liabilities) (1) Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities) September 30, December 31, 2021 September 30, December 31, 2021 Fixed maturity securities $ 2,166 $ 3,038 $ 193 $ 205 (1) The balance includes hedging adjustment on discontinued hedging relationships of $193 in 2022 and $205 in 2021. |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table summarizes the impact to earnings and other comprehensive income (loss) from all derivatives and hedging instruments. Three Months Ended September 30, 2022 2021 (In millions) Net Investment Income (1) Net Investment Other (2) Net Investment Income (1) Net Investment Other (2) Qualifying hedges: Cash flow hedges: Foreign currency swaps - VIE $ 0 $ (1) $ 1 $ 0 $ (1) $ 1 Total cash flow hedges 0 (1) (3) 1 0 (1) (3) 1 Fair value hedges: Foreign currency options (3) (15) (5) Interest rate swaptions (3) 0 0 0 (1) (1) 1 Total fair value hedges 0 (15) 0 (1) (6) 1 Net investment hedge: Non-derivative hedging 0 181 0 41 Foreign currency forwards 28 236 (42) 55 Foreign currency options (1) 0 (1) 0 Total net investment hedge 27 417 (43) 96 Non-qualifying strategies: Foreign currency swaps 27 6 Foreign currency swaps - VIE (19) (36) Foreign currency forwards (252) (84) Interest rate swaps (257) (9) Forward bond purchase (1) (1) Total non- qualifying strategies (502) (124) Total $ 0 $ (491) $ 418 $ (1) $ (174) $ 98 (1) Interest expense/income on cash flow hedges are recorded in net investment income. For interest rate swaptions classified as fair value hedges, the change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into net investment income over its legal term. If the swaption is early terminated but the hedge item is still outstanding, the amortization of disposal amount of the swaptions is recorded in net investment income over the remaining life of the hedged items. (2) Gains and losses on cash flow hedges and the change in the fair value of interest rate swaptions related to the time value of the swaptions in fair value hedges are recorded as unrealized gains (losses). Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statement of comprehensive income (loss). (3) Impact of cash flow hedges reported as net investment gains (losses) includes $1 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended September 30, 2022, and $1 of losses during the three-month period ended September 30, 2021. In addition, an immaterial amount of losses were reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended September 30, 2022, and $1 of losses during the three-month period ended September 30, 2021, related to fair value hedges excluded component. Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail). Nine Months Ended September 30, 2022 2021 (In millions) Net Investment Income (1) Net Investment Other (2) Net Investment Income (1) Net Investment Other (2) Qualifying hedges: Cash flow hedges: Foreign currency swaps - VIE $ 0 $ (3) $ 2 $ 0 $ (3) $ 2 Total cash flow hedges 0 (3) (3) 2 0 (3) (3) 2 Fair value hedges: Foreign currency options (3) (41) (12) Interest rate swaptions (3) 0 0 0 (1) (1) 1 Total fair value hedges 0 (41) 0 (1) (13) 1 Net investment hedge: Non-derivative hedging 0 705 0 237 Foreign currency forwards (73) 1,059 7 396 Foreign currency options (2) 0 (4) 0 Total net investment hedge (75) 1,764 3 633 Non-qualifying strategies: Foreign currency swaps 162 105 Foreign currency swaps - VIE (35) (115) Foreign currency forwards (966) (527) Foreign currency options (13) 1 Interest rate swaps (523) (6) Forward bond purchase (21) (2) Total non-qualifying strategies (1,396) (544) Total $ 0 $ (1,515) $ 1,766 $ (1) $ (557) $ 636 (1) Interest expense/income on cash flow hedges are recorded in net investment income. For interest rate swaptions classified as fair value hedges, the change in the time value of the swaptions is recognized in other comprehensive income (loss) and amortized into net investment income over its legal term. If the swaption is early terminated but the hedge item is still outstanding, the amortization of disposal amount of the swaptions is recorded in net investment income over the remaining life of the hedged items. (2) Gains and losses on cash flow hedges and the change in the fair value of interest rate swaptions related to the time value of the swaptions in fair value hedges are recorded as unrealized gains (losses). Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statement of comprehensive income (loss). (3) Impact of cash flow hedges reported as net investment gains (losses) includes $3 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the nine-month period ended September 30, 2022, and $3 of losses during the nine-month period ended September 30, 2021. In addition, $1 of losses were reclassified from accumulated other comprehensive income (loss) into earnings during the nine-month period ended September 30, 2022, and $1 of losses during the nine-month period ended September 30, 2021, related to fair value hedges excluded component. Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail). |
Offsetting Assets | Offsetting of Financial Assets and Derivative Assets September 30, 2022 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Assets Gross Amount Net Amount of Assets Presented Financial Instruments Securities Cash Collateral Received Net Amount Derivative Derivative assets subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 1,081 $ 0 $ 1,081 $ (167) $ (135) $ (775) $ 4 Total derivative 1,081 0 1,081 (167) (135) (775) 4 Derivative assets not subject to a master netting agreement or offsetting arrangement OTC - bilateral 65 65 65 Total derivative 65 65 65 Total derivative 1,146 0 1,146 (167) (135) (775) 69 Securities lending 2,691 0 2,691 0 0 (2,691) 0 Total $ 3,837 $ 0 $ 3,837 $ (167) $ (135) $ (3,466) $ 69 December 31, 2021 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Assets Gross Amount Net Amount of Assets Presented Financial Instruments Securities Cash Collateral Received Net Amount Derivative Derivative assets subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 858 $ 0 $ 858 $ (471) $ (53) $ (334) $ 0 Total derivative 858 0 858 (471) (53) (334) 0 Derivative assets not subject to a master netting agreement or offsetting arrangement OTC - bilateral 78 78 78 Total derivative 78 78 78 Total derivative 936 0 936 (471) (53) (334) 78 Securities lending 2,124 0 2,124 0 0 (2,124) 0 Total $ 3,060 $ 0 $ 3,060 $ (471) $ (53) $ (2,458) $ 78 |
Offsetting Liabilities | Offsetting of Financial Liabilities and Derivative Liabilities September 30, 2022 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Liabilities Gross Amount Net Amount of Liabilities Presented Financial Instruments Securities Cash Collateral Pledged Net Amount Derivative Derivative liabilities subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 1,036 $ 0 $ 1,036 $ (167) $ (793) $ (72) $ 4 OTC - cleared 590 0 590 0 0 (590) 0 Total derivative 1,626 0 1,626 (167) (793) (662) 4 Derivative liabilities not subject to a master netting agreement or offsetting arrangement OTC - bilateral 462 462 462 Total derivative 462 462 462 Total derivative 2,088 0 2,088 (167) (793) (662) 466 Securities lending 2,721 0 2,721 (2,691) 0 0 30 Total $ 4,809 $ 0 $ 4,809 $ (2,858) $ (793) $ (662) $ 496 December 31, 2021 Gross Amounts Not Offset (In millions) Gross Amount of Recognized Liabilities Gross Amount Net Amount of Liabilities Presented Financial Instruments Securities Cash Collateral Pledged Net Amount Derivative Derivative liabilities subject to a master netting agreement or offsetting arrangement OTC - bilateral $ 1,151 $ 0 $ 1,151 $ (471) $ (662) $ (14) $ 4 OTC - cleared 54 0 54 0 0 (35) 19 Total derivative 1,205 0 1,205 (471) (662) (49) 23 Derivative liabilities not subject to a master netting agreement or offsetting arrangement OTC - bilateral 414 414 414 Total derivative 414 414 414 Total derivative 1,619 0 1,619 (471) (662) (49) 437 Securities lending 2,162 0 2,162 (2,124) 0 0 38 Total $ 3,781 $ 0 $ 3,781 $ (2,595) $ (662) $ (49) $ 475 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy, Assets and Liabilities Measured on Recurring Basis | The following tables present the fair value hierarchy levels of the Company's assets and liabilities that are measured and carried at fair value on a recurring basis. September 30, 2022 (In millions) Quoted Prices in Significant Significant Total Assets: Securities available for sale, carried at Fixed maturity securities: Government and agencies $ 22,987 $ 923 $ 0 $ 23,910 Municipalities 0 2,276 0 2,276 Mortgage- and asset-backed securities 0 1,699 310 2,009 Public utilities 0 6,843 507 7,350 Sovereign and supranational 0 828 34 862 Banks/financial institutions 0 8,883 148 9,031 Other corporate 0 27,584 621 28,205 Total fixed maturity securities 22,987 49,036 1,620 73,643 Equity securities 801 66 197 1,064 Other investments 1,816 0 0 1,816 Cash and cash equivalents 4,710 0 0 4,710 Other assets: Foreign currency swaps 0 146 0 146 Foreign currency forwards 0 995 0 995 Foreign currency options 0 5 0 5 Total other assets 0 1,146 0 1,146 Total assets $ 30,314 $ 50,248 $ 1,817 $ 82,379 Liabilities: Other liabilities: Foreign currency swaps $ 0 $ 462 $ 0 $ 462 Foreign currency forwards 0 1,035 0 1,035 Interest rate swaps 0 590 0 590 Forward bond purchase commitment 0 1 0 1 Total liabilities $ 0 $ 2,088 $ 0 $ 2,088 December 31, 2021 (In millions) Quoted Prices in Significant Significant Total Assets: Securities available for sale, carried at Fixed maturity securities: Government and agencies $ 32,532 $ 1,288 $ 0 $ 33,820 Municipalities 0 3,036 0 3,036 Mortgage- and asset-backed securities 0 955 291 1,246 Public utilities 0 9,558 493 10,051 Sovereign and supranational 0 1,072 43 1,115 Banks/financial institutions 0 11,546 45 11,591 Other corporate 0 37,411 426 37,837 Total fixed maturity securities 32,532 64,866 1,298 98,696 Equity securities 1,340 90 173 1,603 Other investments 1,726 0 0 1,726 Cash and cash equivalents 5,051 0 0 5,051 Other assets: Foreign currency swaps 0 137 0 137 Foreign currency forwards 0 791 0 791 Foreign currency options 0 8 0 8 Total other assets 0 936 0 936 Total assets $ 40,649 $ 65,892 $ 1,471 $ 108,012 Liabilities: Other liabilities: Foreign currency swaps $ 0 $ 427 $ 0 $ 427 Foreign currency forwards 0 1,138 0 1,138 Interest rate swaps 0 54 0 54 Total liabilities $ 0 $ 1,619 $ 0 $ 1,619 |
Fair Value Hierarchy Levels of Assets and Liabilities Carried at Cost or Amortized Cost | The following tables present the carrying amount and fair value categorized by fair value hierarchy level for the Company's financial instruments that are not carried at fair value. September 30, 2022 (In millions) Carrying Quoted Prices in Significant Significant Total Assets: Securities held to maturity, Fixed maturity securities: Government and agencies $ 16,742 $ 19,053 $ 172 $ 0 $ 19,225 Municipalities 264 0 321 0 321 Public utilities 34 0 41 0 41 Sovereign and 409 0 477 0 477 Other corporate 17 0 21 0 21 Commercial mortgage and 13,459 0 0 13,189 13,189 Other investments (1) 30 0 30 0 30 Total assets $ 30,955 $ 19,053 $ 1,062 $ 13,189 $ 33,304 Liabilities: Other policyholders’ funds $ 5,632 $ 0 $ 0 $ 5,539 $ 5,539 Notes payable 7,393 0 6,237 757 6,994 Total liabilities $ 13,025 $ 0 $ 6,237 $ 6,296 $ 12,533 (1) Excludes policy loans of $195 and equity method investments of $2,145, at carrying value December 31, 2021 (In millions) Carrying Quoted Prices in Significant Significant Total Assets: Securities held to maturity, Fixed maturity securities: Government and agencies $ 21,086 $ 25,469 $ 230 $ 0 $ 25,699 Municipalities 335 0 436 0 436 Public utilities 43 0 55 0 55 Sovereign and 514 0 650 0 650 Other corporate 22 0 29 0 29 Commercial mortgage and 11,786 0 0 11,996 11,996 Other investments (1) 22 0 22 0 22 Total assets $ 33,808 $ 25,469 $ 1,422 $ 11,996 $ 38,887 Liabilities: Other policyholders’ funds $ 7,072 $ 0 $ 0 $ 6,957 $ 6,957 Notes payable 7,839 0 8,280 259 8,539 Total liabilities $ 14,911 $ 0 $ 8,280 $ 7,216 $ 15,496 (1) Excludes policy loans of $236 and equity method investments of $1,858, at carrying value |
Fair Value Assets Securities Carried At Fair Value Primary Pricing Sources | The following tables present the pricing sources for the fair values of the Company's fixed maturity and equity securities. September 30, 2022 (In millions) Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Significant Unobservable Inputs Total Securities available for sale, carried at fair value: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 22,987 $ 570 $ 0 $ 23,557 Internal 0 353 0 353 Total government and agencies 22,987 923 0 23,910 Municipalities: Third party pricing vendor 0 1,975 0 1,975 Internal 0 301 0 301 Total municipalities 0 2,276 0 2,276 Mortgage- and asset-backed securities: Third party pricing vendor 0 1,676 0 1,676 Internal 0 3 0 3 Broker/other 0 20 310 330 Total mortgage- and asset-backed securities 0 1,699 310 2,009 Public utilities: Third party pricing vendor 0 3,717 0 3,717 Internal 0 3,126 0 3,126 Broker/other 0 0 507 507 Total public utilities 0 6,843 507 7,350 Sovereign and supranational: Third party pricing vendor 0 295 0 295 Internal 0 533 0 533 Broker/other 0 0 34 34 Total sovereign and supranational 0 828 34 862 Banks/financial institutions: Third party pricing vendor 0 4,650 0 4,650 Internal 0 4,233 93 4,326 Broker/other 0 0 55 55 Total banks/financial institutions 0 8,883 148 9,031 Other corporate: Third party pricing vendor 0 22,427 0 22,427 Internal 0 5,157 192 5,349 Broker/other 0 0 429 429 Total other corporate 0 27,584 621 28,205 Total securities available for sale $ 22,987 $ 49,036 $ 1,620 $ 73,643 Equity securities, carried at fair value: Third party pricing vendor $ 801 $ 66 $ 0 $ 867 Broker/other 0 0 197 197 Total equity securities $ 801 $ 66 $ 197 $ 1,064 December 31, 2021 (In millions) Quoted Prices in Active Markets Significant Observable Significant Unobservable Inputs Total Securities available for sale, carried at fair value: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 32,532 $ 808 $ 0 $ 33,340 Internal 0 480 0 480 Total government and agencies 32,532 1,288 0 33,820 Municipalities: Third party pricing vendor 0 2,222 0 2,222 Internal 0 814 0 814 Total municipalities 0 3,036 0 3,036 Mortgage- and asset-backed securities: Third party pricing vendor 0 955 0 955 Broker/other 0 0 291 291 Total mortgage- and asset-backed securities 0 955 291 1,246 Public utilities: Third party pricing vendor 0 4,527 0 4,527 Internal 0 5,031 0 5,031 Broker/other 0 0 493 493 Total public utilities 0 9,558 493 10,051 Sovereign and supranational: Third party pricing vendor 0 273 0 273 Internal 0 799 0 799 Broker/other 0 0 43 43 Total sovereign and supranational 0 1,072 43 1,115 Banks/financial institutions: Third party pricing vendor 0 5,237 0 5,237 Internal 0 6,309 0 6,309 Broker/other 0 0 45 45 Total banks/financial institutions 0 11,546 45 11,591 Other corporate: Third party pricing vendor 0 29,495 0 29,495 Internal 0 7,916 0 7,916 Broker/other 0 0 426 426 Total other corporate 0 37,411 426 37,837 Total securities available for sale $ 32,532 $ 64,866 $ 1,298 $ 98,696 Equity securities, carried at fair value: Third party pricing vendor $ 1,340 $ 90 $ 0 $ 1,430 Broker/other 0 0 173 173 Total equity securities $ 1,340 $ 90 $ 173 $ 1,603 |
Fair Value Assets Held-To-Maturity Securities Primary Pricing Sources | September 30, 2022 (In millions) Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Significant Unobservable Inputs Total Securities held to maturity, carried at amortized cost: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 19,053 $ 172 $ 0 $ 19,225 Total government and agencies 19,053 172 0 19,225 Municipalities: Third party pricing vendor 0 321 0 321 Total municipalities 0 321 0 321 Public utilities: Third party pricing vendor 0 41 0 41 Total public utilities 0 41 0 41 Sovereign and supranational: Third party pricing vendor 0 232 0 232 Broker/other 0 245 0 245 Total sovereign and supranational 0 477 0 477 Other corporate: Third party pricing vendor 0 21 0 21 Total other corporate 0 21 0 21 Total securities held to maturity $ 19,053 $ 1,032 $ 0 $ 20,085 December 31, 2021 (In millions) Quoted Prices in Active Markets Significant Observable Significant Unobservable Inputs Total Securities held to maturity, carried at amortized cost: Fixed maturity securities: Government and agencies: Third party pricing vendor $ 25,469 $ 230 $ 0 $ 25,699 Total government and agencies 25,469 230 0 25,699 Municipalities: Third party pricing vendor 0 436 0 436 Total municipalities 0 436 0 436 Public utilities: Third party pricing vendor 0 55 0 55 Total public utilities 0 55 0 55 Sovereign and supranational: Third party pricing vendor 0 313 0 313 Broker/other 0 337 0 337 Total sovereign and supranational 0 650 0 650 Other corporate: Third party pricing vendor 0 29 0 29 Total other corporate 0 29 0 29 Total securities held to maturity $ 25,469 $ 1,400 $ 0 $ 26,869 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables present the changes in fair value of the Company's investments and derivatives carried at fair value classified as Level 3. Derivative assets and liabilities are presented as a net value. Three Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign and Supranational Banks/ Other Foreign Total Balance, beginning of period $ 311 $ 537 $ 36 $ 91 $ 632 $ 190 $ 0 $ 1,797 Net investment gains (losses) included in 0 1 0 1 0 (3) 0 (1) Unrealized gains (losses) included in other (12) (30) (2) (12) (41) 0 0 (97) Purchases, issuances, sales and Purchases 56 7 0 88 145 10 0 306 Issuances 0 0 0 0 0 0 0 0 Sales 0 0 0 0 0 0 0 0 Settlements (21) (8) 0 (20) (183) 0 0 (232) Transfers into Level 3 0 0 0 0 68 0 0 68 Transfers out of Level 3 (24) 0 0 0 0 0 0 (24) Balance, end of period $ 310 $ 507 $ 34 $ 148 $ 621 $ 197 $ 0 $ 1,817 Changes in unrealized gains (losses) $ 0 $ 1 $ 0 $ 0 $ 0 $ (2) $ 0 $ (1) Three Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign and Supranational Banks/ Other Foreign Total Balance, beginning of period $ 258 $ 480 $ 45 $ 38 $ 316 $ 158 $ (200) $ 1,095 Net investment gains (losses) included 0 0 0 0 2 (1) (57) (56) Unrealized gains (losses) included in (4) (3) 0 0 (7) 0 0 (14) Purchases, issuances, sales and Purchases 35 54 0 8 0 12 0 109 Issuances 0 0 0 0 0 0 0 0 Sales 0 0 0 0 0 (8) 0 (8) Settlements 0 (8) 0 0 0 0 0 (8) Transfers into Level 3 0 0 0 0 0 0 0 0 Transfers out of Level 3 (39) 0 0 0 (5) 0 0 (44) Balance, end of period $ 250 $ 523 $ 45 $ 46 $ 306 $ 161 $ (257) $ 1,074 Changes in unrealized gains (losses) $ (4) $ (3) $ 0 $ 0 $ (7) $ (1) $ (57) $ (72) Nine Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign Banks/ Other Foreign Total Balance, beginning of period $ 291 $ 493 $ 43 $ 45 $ 426 $ 173 $ 0 $ 1,471 Net investment gains (losses) included 0 2 0 1 0 (2) 0 1 Unrealized gains (losses) included in (81) (111) (9) (14) (96) 0 0 (311) Purchases, issuances, sales Purchases 222 35 0 121 267 53 0 698 Issuances 0 0 0 0 0 0 0 0 Sales 0 0 0 0 0 0 0 0 Settlements (59) (40) 0 (23) (185) (7) 0 (314) Transfers into Level 3 0 128 0 18 350 0 0 496 Transfers out of Level 3 (63) 0 0 0 (141) (20) 0 (224) Balance, end of period $ 310 $ 507 $ 34 $ 148 $ 621 $ 197 $ 0 $ 1,817 Changes in unrealized gains $ 0 $ 1 $ 0 $ 0 $ 0 $ (4) $ 0 $ (3) Nine Months Ended Fixed Maturity Securities Equity Derivatives (In millions) Mortgage- Public Sovereign Banks/ Other Foreign Total Balance, beginning of period $ 224 $ 422 $ 48 $ 24 $ 299 $ 102 $ (98) $ 1,021 Net investment gains (losses) included 0 0 0 0 2 21 (158) (135) Unrealized gains (losses) included in (19) (13) (3) (1) (5) 0 (1) (42) Purchases, issuances, sales and Purchases 99 132 0 23 0 29 0 283 Issuances 0 0 0 0 0 17 0 17 Sales 0 0 (23) 0 0 (8) 0 (31) Settlements 0 (18) 0 0 (17) 0 0 (35) Transfers into Level 3 0 0 23 0 32 0 0 55 Transfers out of Level 3 (54) 0 0 0 (5) 0 0 (59) Balance, end of period $ 250 $ 523 $ 45 $ 46 $ 306 $ 161 $ (257) $ 1,074 Changes in unrealized gains $ (19) $ (13) $ (3) $ (1) $ (5) $ 21 $ (158) $ (178) |
Fair Value Measurement Inputs and Valuation Techniques | Level 3 Significant Unobservable Input Sensitivity The following tables summarize the significant unobservable inputs used in the valuation of the Company's Level 3 investments carried at fair value. Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments. September 30, 2022 (In millions) Fair Value Valuation Technique(s) Unobservable Input Range Assets: Securities available for sale, carried at fair value: Fixed maturity securities: Mortgage- and asset-backed securities $ 310 Consensus pricing Offered quotes N/A (a) Public utilities 507 Discounted cash flow Credit spreads N/A (a) Sovereign and supranational 34 Discounted cash flow Historical volatility N/A (a) Banks/financial institutions 148 Consensus pricing Offered quotes N/A (a) Other corporate 621 Discounted cash flow Credit spreads N/A (a) Equity securities 197 Net asset value Offered quotes N/A (a) Total assets $ 1,817 (a) N/A represents securities where the Company receives unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs. December 31, 2021 (In millions) Fair Value Valuation Technique(s) Unobservable Input Range Assets: Securities available for sale, carried at fair value: Fixed maturity securities: Mortgage- and asset-backed securities $ 291 Consensus pricing Offered quotes N/A (a) Public utilities 493 Discounted cash flow Credit spreads N/A (a) Sovereign and supranational 43 Discounted cash flow Historical volatility N/A (a) Banks/financial institutions 45 Consensus pricing Offered quotes N/A (a) Other corporate 426 Discounted cash flow Credit spreads N/A (a) Equity securities 173 Net asset value Offered quotes N/A (a) Total assets $ 1,471 (a) N/A represents securities where the Company receives unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs. |
POLICY LIABILITIES (Tables)
POLICY LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Unpaid Claims Adjustment Expense | Changes in the liability for unpaid policy claims were as follows: Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Unpaid supplemental health claims, beginning of period $ 3,779 $ 4,162 $ 4,067 $ 4,389 Less reinsurance recoverables 38 37 37 39 Net balance, beginning of period 3,741 4,125 4,030 4,350 Add claims incurred during the period related to: Current year 1,689 1,720 5,007 5,302 Prior years (151) (215) (512) (739) Total incurred 1,538 1,505 4,495 4,563 Less claims paid during the period on claims incurred during: Current year 1,148 1,279 2,703 2,947 Prior years 214 219 1,554 1,676 Total paid 1,362 1,498 4,257 4,623 Effect of foreign exchange rate changes on unpaid claims (105) (29) (456) (187) Net balance, end of period 3,812 4,103 3,812 4,103 Add reinsurance recoverables 50 39 50 39 Unpaid supplemental health claims, end of period 3,862 4,142 3,862 4,142 Unpaid life claims, end of period 654 767 654 767 Total liability for unpaid policy claims $ 4,516 $ 4,909 $ 4,516 $ 4,909 |
REINSURANCE (Tables)
REINSURANCE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Reinsurance Disclosures [Abstract] | |
Effects of Reinsurance | The following table reconciles direct premiums and direct benefits and claims to net amounts after the effect of reinsurance which also includes the elimination of inter-segment amounts associated with affiliated reinsurance. Three Months Ended Nine Months Ended (In millions) 2022 2021 2022 2021 Direct earned premiums $ 3,681 $ 4,426 $ 11,772 $ 13,567 Ceded to other companies: Ceded Aflac Japan closed blocks (80) (107) (266) (329) Other (20) (19) (55) (54) Assumed from other companies: Retrocession activities 35 45 112 138 Other 35 27 116 84 Net earned premiums $ 3,651 $ 4,372 $ 11,679 $ 13,406 Direct benefits and claims $ 2,385 $ 2,649 $ 7,209 $ 8,112 Ceded benefits and change in reserves for future benefits: Ceded Aflac Japan closed blocks (103) (94) (276) (288) Eliminations 5 8 17 24 Other (9) (9) (28) (25) Assumed from other companies: Retrocession activities 43 42 115 126 Eliminations (5) (8) (17) (24) Other 24 21 105 71 Benefits and claims, net $ 2,340 $ 2,609 $ 7,125 $ 7,996 |
NOTES PAYABLE AND LEASE OBLIG_2
NOTES PAYABLE AND LEASE OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | A summary of notes payable and lease obligations follows: (In millions) September 30, December 31, 3.625% senior notes paid September 2022 $ 0 $ 748 3.25% senior notes due March 2025 (1) 448 448 1.125% senior sustainability notes due March 2026 398 397 2.875% senior notes due October 2026 298 298 3.60% senior notes due April 2030 992 991 6.90% senior notes due December 2039 221 221 6.45% senior notes due August 2040 254 255 4.00% senior notes due October 2046 394 394 4.750% senior notes due January 2049 542 541 Yen-denominated senior notes and subordinated debentures: .300% senior notes due September 2025 (principal amount ¥12.4 billion) 84 107 .932% senior notes due January 2027 (principal amount ¥60.0 billion) 413 520 1.075% senior notes due September 2029 (principal amount ¥33.4 billion) 227 0 .500% senior notes due December 2029 (principal amount ¥12.6 billion) 87 109 .550% senior notes due March 2030 (principal amount ¥13.3 billion) 90 115 1.159% senior notes due October 2030 (principal amount ¥29.3 billion) 201 254 .633% senior notes due April 2031 (principal amount ¥30.0 billion) 203 259 .843% senior notes due December 2031 (principal amount ¥9.3 billion) 64 81 .750% senior notes due March 2032 (principal amount ¥20.7 billion) 139 179 1.320% senior notes due December 2032 (principal amount ¥21.1 billion) 143 0 .844% senior notes due April 2033 (principal amount ¥12.0 billion) 81 104 1.488% senior notes due October 2033 (principal amount ¥15.2 billion) 104 131 .934% senior notes due December 2034 (principal amount ¥9.8 billion) 67 85 .830% senior notes due March 2035 (principal amount ¥10.6 billion) 71 91 1.039% senior notes due April 2036 (principal amount ¥10.0 billion) 67 86 1.594% senior notes due September 2037 (principal amount ¥6.5 billion) 44 0 1.750% senior notes due October 2038 (principal amount ¥8.9 billion) 61 77 1.122% senior notes due December 2039 (principal amount ¥6.3 billion) 43 54 1.264% senior notes due April 2041 (principal amount ¥10.0 billion) 67 86 2.108% subordinated debentures due October 2047 (principal amount ¥60.0 billion) 410 517 .963% subordinated bonds due April 2049 (principal amount ¥30.0 billion) 207 260 1.560% senior notes due April 2051 (principal amount ¥20.0 billion) 135 172 2.144% senior notes due September 2052 (principal amount ¥12.0 billion) 81 0 Yen-denominated loans: Variable interest rate loan due August 2027 (.34% in 2022, principal amount ¥11.7 billion) 83 0 Variable interest rate loan due August 2029 (.44% in 2022 and .41% in 2021, principal amount ¥25.3 billion in 2022 and ¥5.0 billion in 2021) 179 43 Variable interest rate loan due August 2032 (.59% in 2022 and .56% in 2021, principal amount ¥70.0 billion in 2022 and ¥25.0 billion in 2021) 495 216 Finance lease obligations payable through 2028 8 12 Operating lease obligations payable through 2049 117 105 Total notes payable and lease obligations $ 7,518 $ 7,956 (1) Redeemed in October 2022 Amounts in the table above are reported net of debt issuance costs and issuance premiums or discounts, if applicable, that are being amortized over the life of the notes. |
Schedule of Line of Credit Facilities | A summary of the Company's lines of credit as of September 30, 2022 follows: Borrower(s) Type Term Expiration Date Capacity Amount Outstanding Interest Rate on Borrowed Amount Maturity Period Commitment Fee Business Purpose Aflac Incorporated uncommitted bilateral 364 days December 30, 2022 $100 million $0 million The rate quoted by the bank and agreed upon at the time of borrowing Up to 3 months None General corporate purposes Aflac Incorporated unsecured revolving 5 years May 9, ¥100.0 billion ¥0.0 billion A rate per annum equal to (a) TIBOR plus, the alternative applicable TIBOR margin during the availability period from the closing date to the commitment termination date or (b) the TIBOR rate offered by the agent to major banks in yen for the applicable period plus, the applicable alternative TIBOR margin during the term out period No later than .28% to .45%, depending on the Parent Company's debt ratings as of the date of determination General corporate purposes, including a capital contingency plan for the operations of the Parent Company Aflac Incorporated unsecured revolving 5 years November 18, 2024, or the date commitments are terminated pursuant to an event of default $1.0 billion $0.0 billion A rate per annum equal to, at the Company's option, either, (a) USD London Interbank Offered Rate (LIBOR) for U.S. dollar denominated borrowings or TIBOR for Japanese yen denominated borrowings, in either case adjusted for certain costs, or (b) a base rate determined by reference to the highest of (1) the federal funds rate plus 1/2 of 1%, (2) the rate of interest for such day announced by Mizuho Bank, Ltd. as its prime rate, or (3) the eurocurrency rate for an interest period of one month plus 1.00%, in each case plus an applicable margin No later than November 18, 2024 .085% to .225%, depending on the Parent Company's debt ratings as of the date of determination General corporate purposes, including a capital contingency plan for the operations of the Parent Company Aflac Incorporated uncommitted bilateral None specified None specified $50 million $0 million A rate per annum equal to, at the Parent Company's option, either (a) a rate determined by reference to USD LIBOR for the interest period relevant to such borrowing or (b) the base rate determined by reference to the highest of (a) the lender's U.S. dollar short-term commercial loan rate, (b) the federal funds rate plus 1/2 of 1% and (c) USD one-month LIBOR plus 1%. USD LIBOR is subject to replacement with Secured Overnight Financing Rate (SOFR) under certain circumstances Up to 3 months None General corporate purposes Aflac (1) uncommitted revolving 364 days November 30, 2022 $250 million $0 million USD three-month LIBOR plus 75 basis points per annum 3 months None General corporate purposes Aflac Incorporated (1) (Tranche 1) uncommitted revolving 364 days November 25, 2022 ¥50.0 billion ¥0.0 billion Three-month TIBOR plus 70 basis points per annum 3 months None General corporate purposes Aflac Incorporated (1) (Tranche 2) uncommitted revolving 364 days November 25, 2022 ¥50.0 billion ¥0.0 billion Three-month TIBOR plus 70 basis points per annum 3 months None General corporate purposes Aflac New York (1) uncommitted revolving 364 days April 10, 2023 $25 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than None General corporate purposes CAIC (1) uncommitted revolving 364 days March 21, 2023 $15 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than None General corporate purposes (1) Intercompany credit agreement (continued) Borrower(s) Type Term Expiration Date Capacity Amount Outstanding Interest Rate on Borrowed Amount Maturity Period Commitment Fee Business Purpose Tier One Insurance Company (1) uncommitted revolving 364 days March 21, 2023 $0.3 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than March 22, 2023 None General corporate purposes Aflac Ventures Japan K.K. (1) uncommitted revolving 364 days May 2, 2023 ¥500 million ¥350 million A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period No later than None General corporate purposes Hatch Healthcare K.K. (1) uncommitted revolving 364 days January 3, 2023 ¥900 million ¥0 million A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period No later than January 4, 2023 None General corporate purposes Hatch Insight K.K. (1) uncommitted revolving 364 days January 3, 2023 ¥600 million ¥0 million A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period No later than January 4, 2023 None General corporate purposes Aflac GI Holdings LLC (1) uncommitted revolving 364 days July 17, 2023 $30 million $0 million USD three-month LIBOR plus 75 basis points per annum No later than July 18, 2023 None General corporate purposes (1) Intercompany credit agreement |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Common Stock Outstanding Roll Forward | The following table is a reconciliation of the number of shares of the Company's common stock for the nine-month periods ended September 30. (In thousands of shares) 2022 2021 Common stock - issued: Balance, beginning of period 1,352,739 1,351,018 Exercise of stock options and issuance of restricted shares 1,230 1,544 Balance, end of period 1,353,969 1,352,562 Treasury stock: Balance, beginning of period 700,607 658,564 Purchases of treasury stock: Share repurchase program 30,249 32,186 Other 354 419 Dispositions of treasury stock: Shares issued to AFL Stock Plan (787) (967) Exercise of stock options (108) (240) Other (214) (217) Balance, end of period 730,101 689,745 Shares outstanding, end of period 623,868 662,817 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the approximate number of share-based awards to purchase shares, on a weighted-average basis, that were considered to be anti-dilutive and were excluded from the calculation of diluted EPS for the following periods. Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Anti-dilutive share-based awards 53 0 158 1 |
Changes in Accumulated Other Comprehensive Income (Loss) | The tables below are reconciliations of accumulated other comprehensive income by component for the following periods. Changes in Accumulated Other Comprehensive Income Three Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Total Balance at June 30, 2022 $ (3,289) $ 2,930 $ (29) $ (160) $ (548) Other comprehensive (1,166) (1,753) (1) (4) (2,924) Amounts reclassified from 0 (46) 1 6 (39) Net current-period other (1,166) (1,799) 0 2 (2,963) Balance at September 30, 2022 $ (4,455) $ 1,131 $ (29) $ (158) $ (3,511) All amounts in the table above are net of tax. Three Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Liability Adjustment Total Balance at June 30, 2021 $ (1,661) $ 9,992 $ (33) $ (279) $ 8,019 Other comprehensive (99) (251) 0 (5) (355) Amounts reclassified from 0 (10) 2 6 (2) Net current-period other (99) (261) 2 1 (357) Balance at September 30, 2021 $ (1,760) $ 9,731 $ (31) $ (278) $ 7,662 All amounts in the table above are net of tax. Nine Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Total Balance at December 31, 2021 $ (2,013) $ 9,602 $ (30) $ (166) $ 7,393 Other comprehensive (2,442) (8,272) (1) (6) (10,721) Amounts reclassified from 0 (199) 2 14 (183) Net current-period other (2,442) (8,471) 1 8 (10,904) Balance at September 30, 2022 $ (4,455) $ 1,131 $ (29) $ (158) $ (3,511) All amounts in the table above are net of tax. Nine Months Ended (In millions) Unrealized Foreign Unrealized Unrealized Pension Liability Adjustment Total Balance at December 31, 2020 $ (1,109) $ 10,361 $ (34) $ (284) $ 8,934 Other comprehensive (651) (632) 0 (15) (1,298) Amounts reclassified from 0 2 3 21 26 Net current-period other (651) (630) 3 6 (1,272) Balance at September 30, 2021 $ (1,760) $ 9,731 $ (31) $ (278) $ 7,662 All amounts in the table above are net of tax. |
Reclassification Out Of Accumulated Other Comprehensive Income | The tables below summarize the amounts reclassified from each component of accumulated other comprehensive income into net earnings for the following periods. Reclassifications Out of Accumulated Other Comprehensive Income (In millions) Three Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ 58 Net investment gains (losses) (12) Tax (expense) or benefit (1) $ 46 Net of tax Unrealized gains (losses) on derivatives $ (1) Net investment gains (losses) 0 Tax (expense) or benefit (1) $ (1) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (7) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 1 Tax (expense) or benefit (1) $ (6) Net of tax Total reclassifications for the period $ 39 Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). (In millions) Three Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ 13 Net investment gains (losses) (3) Tax (expense) or benefit (1) $ 10 Net of tax Unrealized gains (losses) on derivatives $ (2) Net investment gains (losses) 0 Tax (expense) or benefit (1) $ (2) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (8) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 2 Tax (expense) or benefit (1) $ (6) Net of tax Total reclassifications for the period $ 2 Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). (In millions) Nine Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ 252 Net investment gains (losses) (53) Tax (expense) or benefit (1) $ 199 Net of tax Unrealized gains (losses) on derivatives $ (3) Net investment gains (losses) 1 Tax (expense) or benefit (1) $ (2) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (18) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 4 Tax (expense) or benefit (1) $ (14) Net of tax Total reclassifications for the period $ 183 Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). (In millions) Nine Months Ended Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Unrealized gains (losses) on available-for-sale $ (2) Net investment gains (losses) 0 Tax (expense) or benefit (1) $ (2) Net of tax Unrealized gains (losses) on derivatives $ (4) Net investment gains (losses) 1 Tax (expense) or benefit (1) $ (3) Net of tax Amortization of defined benefit pension items: Actuarial gains (losses) $ (27) Acquisition and operating expenses (2) Prior service (cost) credit 0 Acquisition and operating expenses (2) 6 Tax (expense) or benefit (1) $ (21) Net of tax Total reclassifications for the period $ (26) Net of tax (1) Based on 21% tax rate (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Options Outstanding and Exercisable | The following table provides information on stock options outstanding and exercisable at September 30, 2022. Stock Weighted-Average Aggregate Weighted-Average Outstanding 1,657 3.0 $ 40 $ 31.88 Exercisable 1,657 3.0 40 31.88 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes restricted stock activity during the nine-month period ended September 30, 2022. (In thousands of shares) Shares Weighted-Average Restricted stock at December 31, 2021 2,557 $ 49.38 Granted in 2022 1,099 66.70 Canceled in 2022 (54) 53.77 Vested in 2022 (1,127) 49.58 Restricted stock at September 30, 2022 2,475 $ 56.09 |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Schedule of Net Benefit Costs | Pension and other postretirement benefit expenses are included in acquisition and operating expenses in the consolidated statements of earnings, which includes other components of net periodic pension cost and postretirement costs (other than service costs) of $5 million and $4 million for the three-month periods and $11 million and $18 million for the nine-month periods ended September 30, 2022 and 2021, respectively. Total net periodic benefit cost includes the following components: Three Months Ended September 30, Pension Benefits Other Japan U.S. Postretirement Benefits (In millions) 2022 2021 2022 2021 2022 2021 Components of net periodic Service cost $ 5 $ 6 $ 6 $ 7 $ 0 $ 0 Interest cost 1 1 9 8 1 0 Expected return on plan assets (2) (2) (11) (11) 0 0 Amortization of net actuarial loss 0 1 6 7 1 0 Net periodic (benefit) cost $ 4 $ 6 $ 10 $ 11 $ 2 $ 0 Nine Months Ended September 30, Pension Benefits Other Japan U.S. Postretirement Benefits (In millions) 2022 2021 2022 2021 2022 2021 Components of net periodic Service cost $ 15 $ 18 $ 19 $ 21 $ 0 $ 0 Interest cost 4 3 26 24 1 1 Expected return on plan assets (6) (6) (32) (31) 0 0 Amortization of net actuarial loss 0 2 16 23 2 2 Net periodic (benefit) cost $ 13 $ 17 $ 29 $ 37 $ 3 $ 3 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Impact from Adoption on Statement of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | ||
Revenues: | ||||||||||
Net earned premiums, principally supplemental health insurance | $ 3,651 | $ 4,372 | $ 11,679 | $ 13,406 | ||||||
Net investment income | 920 | 991 | 2,760 | 2,908 | ||||||
Net investment gains (losses) | 199 | (171) | 885 | 224 | ||||||
Other income (loss) | 50 | 45 | 168 | 132 | ||||||
Total revenues | 4,820 | 5,237 | 15,492 | 16,670 | ||||||
Benefits and expenses: | ||||||||||
Benefits and claims, net | 2,340 | 2,609 | 7,125 | 7,996 | ||||||
Acquisition and operating expenses: | ||||||||||
Amortization of deferred policy acquisition costs | 268 | 278 | 858 | 869 | ||||||
Insurance commissions | 267 | 311 | 846 | 952 | ||||||
Insurance and other expenses | [1] | 783 | 869 | 2,412 | 2,582 | |||||
Interest expense | 59 | 57 | 171 | 181 | ||||||
Total acquisition and operating expenses | 1,377 | 1,515 | 4,287 | 4,584 | ||||||
Total benefits and expenses | 3,717 | 4,124 | 11,412 | 12,580 | ||||||
Earnings before income taxes | 1,103 | 1,113 | 4,080 | 4,090 | ||||||
Income taxes | (493) | 225 | 64 | 804 | ||||||
Net earnings | $ 1,596 | $ 1,388 | $ 1,032 | $ 888 | $ 1,105 | $ 1,293 | $ 4,016 | $ 3,286 | ||
Accounting Standards Update 2018-12 | Pro Forma | ||||||||||
Revenues: | ||||||||||
Net earned premiums, principally supplemental health insurance | [2] | $ 17,095 | ||||||||
Net investment income | 3,818 | |||||||||
Net investment gains (losses) | 468 | |||||||||
Other income (loss) | 173 | |||||||||
Total revenues | 21,554 | |||||||||
Benefits and expenses: | ||||||||||
Benefits and claims, excluding reserve remeasurement (gains) losses | [2],[3] | 10,623 | ||||||||
Reserve remeasurement (gains) losses | [4] | (147) | ||||||||
Benefits and claims, net | 10,476 | |||||||||
Acquisition and operating expenses: | ||||||||||
Amortization of deferred policy acquisition costs | [5] | 835 | ||||||||
Insurance commissions | 1,256 | |||||||||
Insurance and other expenses | [6] | 3,541 | ||||||||
Interest expense | 238 | |||||||||
Total acquisition and operating expenses | 5,870 | |||||||||
Total benefits and expenses | 16,346 | |||||||||
Earnings before income taxes | 5,208 | |||||||||
Income taxes | [7] | 977 | ||||||||
Net earnings | 4,231 | |||||||||
Accounting Standards Update 2018-12 | As Previously Reported | Pro Forma | ||||||||||
Revenues: | ||||||||||
Net earned premiums, principally supplemental health insurance | [2] | 17,647 | ||||||||
Net investment income | 3,818 | |||||||||
Net investment gains (losses) | 468 | |||||||||
Other income (loss) | 173 | |||||||||
Total revenues | 22,106 | |||||||||
Benefits and expenses: | ||||||||||
Benefits and claims, excluding reserve remeasurement (gains) losses | [2],[3] | 10,576 | ||||||||
Reserve remeasurement (gains) losses | [4] | 0 | ||||||||
Benefits and claims, net | 10,576 | |||||||||
Acquisition and operating expenses: | ||||||||||
Amortization of deferred policy acquisition costs | [5] | 1,170 | ||||||||
Insurance commissions | 1,256 | |||||||||
Insurance and other expenses | [6] | 3,544 | ||||||||
Interest expense | 238 | |||||||||
Total acquisition and operating expenses | 6,208 | |||||||||
Total benefits and expenses | 16,784 | |||||||||
Earnings before income taxes | 5,322 | |||||||||
Income taxes | [7] | 997 | ||||||||
Net earnings | 4,325 | |||||||||
Accounting Standards Update 2018-12 | Transition Adjustments | Pro Forma | ||||||||||
Revenues: | ||||||||||
Net earned premiums, principally supplemental health insurance | [2] | (552) | ||||||||
Net investment income | 0 | |||||||||
Net investment gains (losses) | 0 | |||||||||
Other income (loss) | 0 | |||||||||
Total revenues | (552) | |||||||||
Benefits and expenses: | ||||||||||
Benefits and claims, excluding reserve remeasurement (gains) losses | [2],[3] | 47 | ||||||||
Reserve remeasurement (gains) losses | [4] | (147) | ||||||||
Benefits and claims, net | (100) | |||||||||
Acquisition and operating expenses: | ||||||||||
Amortization of deferred policy acquisition costs | [5] | (335) | ||||||||
Insurance commissions | 0 | |||||||||
Insurance and other expenses | [6] | (3) | ||||||||
Interest expense | 0 | |||||||||
Total acquisition and operating expenses | (338) | |||||||||
Total benefits and expenses | (438) | |||||||||
Earnings before income taxes | (114) | |||||||||
Income taxes | [7] | (20) | ||||||||
Net earnings | (94) | |||||||||
Accounting Standards Update 2018-12 | Revision of Prior Period, Accounting Standards Update, Adjustment | Pro Forma | ||||||||||
Revenues: | ||||||||||
Net earned premiums, principally supplemental health insurance | (63) | |||||||||
Benefits and expenses: | ||||||||||
Benefits and claims, net | $ (63) | |||||||||
[1]Includes expense of $48 in the nine-month period ended September 30, 2021 for the early extinguishment of debt.[2]Adjustment reflects a $489 increase in the deferred profit liability on limited-payment products under the updated standard combined with the reclassification of a $63 increase in deferred profit liability previously reported in benefits and claims and reclassified to net earned premiums in conjunction with adoption of the updated standard.[3]Adjustment reflects 2021 activity for the effect of calculating benefits using revised net premium ratios and best estimate future cash flow projections, excluding reserve remeasurement impacts.[4]Adjustment reflects the reserve remeasurement on the liability for future policy benefits due to applying revised net premium ratios based on updated historical actuals and revised assumptions to past periods each quarter under the updated standard.[5]Adjustment reflects a decrease in DAC amortization due to DAC assets being amortized over the expected life of a contract and no interest accretion recorded under the updated standard.[6]Adjustment reflects 2021 activity for the change in accrued claim adjustment expenses that are included in benefits and claims as a component of the integrated reserve under the updated standard.[7]Adjustment reflects a decrease in income tax expense associated with the decrease in pretax earnings. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Impact from Adoption on Statement of Earnings (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | ||
Policyholder Benefits and Claims Incurred, Net | $ (2,340) | $ (2,609) | $ (7,125) | $ (7,996) | ||
Net earned premiums, principally supplemental health insurance | $ (3,651) | $ (4,372) | $ (11,679) | $ (13,406) | ||
Accounting Standards Update 2018-12 | Pro Forma | ||||||
Policyholder Benefits and Claims Incurred, Net | $ (10,476) | |||||
Net earned premiums, principally supplemental health insurance | [1] | (17,095) | ||||
Accounting Standards Update 2018-12 | Revision of Prior Period, Accounting Standards Update, Adjustment | Pro Forma | ||||||
Increase in deferred profit liability | 489 | |||||
Policyholder Benefits and Claims Incurred, Net | 63 | |||||
Net earned premiums, principally supplemental health insurance | $ 63 | |||||
[1]Adjustment reflects a $489 increase in the deferred profit liability on limited-payment products under the updated standard combined with the reclassification of a $63 increase in deferred profit liability previously reported in benefits and claims and reclassified to net earned premiums in conjunction with adoption of the updated standard. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Impact from Adoption on Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | ||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | $ 73,643 | $ 98,696 | |||||||||
Held to maturity, fixed maturity securities | 17,466 | [1] | 22,000 | ||||||||
Equity securities | 1,064 | 1,603 | |||||||||
Commercial mortgage and other loans | 13,459 | 11,786 | |||||||||
Other investments | 4,186 | 3,842 | |||||||||
Cash and cash equivalents | 4,710 | 5,051 | |||||||||
Total investments and cash | 114,528 | 142,978 | |||||||||
Receivables | 655 | 693 | |||||||||
Accrued investment income | 684 | 737 | |||||||||
Deferred policy acquisition costs | 8,155 | 9,525 | |||||||||
Property and equipment, at cost less accumulated depreciation | 488 | 538 | |||||||||
Other | 3,590 | 3,071 | |||||||||
Total assets | 128,100 | 157,542 | |||||||||
Policy Liabilities: | |||||||||||
Future policy benefits | 74,629 | 90,588 | |||||||||
Unpaid policy claims | 4,516 | 4,836 | |||||||||
Unearned premiums | 1,763 | 2,576 | |||||||||
Other policyholders’ funds | 5,632 | 7,072 | |||||||||
Total policy liabilities | 86,540 | 105,072 | |||||||||
Income taxes | 1,888 | 4,339 | |||||||||
Payables for return of cash collateral on loaned securities | 2,721 | 2,162 | |||||||||
Notes payable and lease obligations | 7,518 | 7,956 | |||||||||
Other | 5,281 | 4,760 | |||||||||
Liabilities | 103,948 | 124,289 | |||||||||
Commitments and contingent liabilities | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock | 135 | 135 | |||||||||
Additional paid-in capital | 2,615 | 2,529 | |||||||||
Retained earnings | 44,892 | 41,381 | |||||||||
Accumulated other comprehensive income (loss): | |||||||||||
Unrealized foreign currency translation gains (losses) | (4,455) | (2,013) | |||||||||
Unrealized gains (losses) on fixed maturity securities | 1,131 | 9,602 | |||||||||
Unrealized gains (losses) on derivatives | (29) | (30) | |||||||||
Pension liability adjustment | (158) | (166) | |||||||||
Treasury stock, at average cost | (19,979) | (18,185) | |||||||||
Total shareholders’ equity | 24,152 | $ 26,387 | $ 29,527 | 33,253 | $ 33,552 | $ 33,735 | $ 32,103 | $ 33,559 | |||
Total liabilities and shareholders’ equity | 128,100 | 157,542 | |||||||||
Accounting Standards Update 2018-12 | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Held to maturity, fixed maturity securities | 22,000 | ||||||||||
Equity securities | 1,603 | ||||||||||
Commercial mortgage and other loans | 11,786 | ||||||||||
Cash and cash equivalents | 5,051 | ||||||||||
Total investments and cash | 142,978 | ||||||||||
Receivables | [2] | 703 | |||||||||
Deferred policy acquisition costs | [3] | 9,848 | |||||||||
Property and equipment, at cost less accumulated depreciation | 538 | ||||||||||
Other | [4] | 3,346 | |||||||||
Total assets | 158,150 | ||||||||||
Policy Liabilities: | |||||||||||
Future policy benefits | [2],[5],[6],[7] | 115,964 | |||||||||
Unpaid policy claims | [6],[8] | 151 | |||||||||
Unearned premiums | 2,576 | ||||||||||
Other policyholders’ funds | [8] | 7,640 | |||||||||
Total policy liabilities | 126,331 | ||||||||||
Income taxes | [9] | 30 | |||||||||
Payables for return of cash collateral on loaned securities | 2,162 | ||||||||||
Other | [5] | 4,640 | |||||||||
Liabilities | 141,119 | ||||||||||
Commitments and contingent liabilities | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock | 135 | ||||||||||
Additional paid-in capital | 2,529 | ||||||||||
Retained earnings | [10] | 40,963 | |||||||||
Accumulated other comprehensive income (loss): | |||||||||||
Unrealized foreign currency translation gains (losses) | [11] | (1,985) | |||||||||
Unrealized gains (losses) on fixed maturity securities | 9,602 | ||||||||||
Unrealized gains (losses) on derivatives | (30) | ||||||||||
Effect of changes in discount rate assumptions | [12] | (15,832) | |||||||||
Pension liability adjustment | (166) | ||||||||||
Treasury stock, at average cost | (18,185) | ||||||||||
Total shareholders’ equity | 17,031 | ||||||||||
Total liabilities and shareholders’ equity | 158,150 | ||||||||||
Accounting Standards Update 2018-12 | Pro Forma | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Shareholders’ equity: | |||||||||||
Retained earnings | $ (300) | ||||||||||
Accounting Standards Update 2018-12 | As Previously Reported | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Held to maturity, fixed maturity securities | 22,000 | ||||||||||
Equity securities | 1,603 | ||||||||||
Commercial mortgage and other loans | 11,786 | ||||||||||
Other investments | 3,842 | ||||||||||
Cash and cash equivalents | 5,051 | ||||||||||
Total investments and cash | 142,978 | ||||||||||
Receivables | [2] | 693 | |||||||||
Accrued investment income | 737 | ||||||||||
Deferred policy acquisition costs | [3] | 9,525 | |||||||||
Property and equipment, at cost less accumulated depreciation | 538 | ||||||||||
Other | [4] | 3,071 | |||||||||
Total assets | 157,542 | ||||||||||
Policy Liabilities: | |||||||||||
Future policy benefits | [2],[5],[6],[7] | 90,588 | |||||||||
Unpaid policy claims | [6],[8] | 4,836 | |||||||||
Unearned premiums | 2,576 | ||||||||||
Other policyholders’ funds | [8] | 7,072 | |||||||||
Total policy liabilities | 105,072 | ||||||||||
Income taxes | [9] | 4,339 | |||||||||
Payables for return of cash collateral on loaned securities | 2,162 | ||||||||||
Notes payable and lease obligations | 7,956 | ||||||||||
Other | [5] | 4,760 | |||||||||
Liabilities | 124,289 | ||||||||||
Commitments and contingent liabilities | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock | 135 | ||||||||||
Additional paid-in capital | 2,529 | ||||||||||
Retained earnings | [10] | 41,381 | |||||||||
Accumulated other comprehensive income (loss): | |||||||||||
Unrealized foreign currency translation gains (losses) | [11] | (2,013) | |||||||||
Unrealized gains (losses) on fixed maturity securities | 9,602 | ||||||||||
Unrealized gains (losses) on derivatives | (30) | ||||||||||
Effect of changes in discount rate assumptions | [12] | 0 | |||||||||
Pension liability adjustment | (166) | ||||||||||
Treasury stock, at average cost | (18,185) | ||||||||||
Total shareholders’ equity | 33,253 | ||||||||||
Total liabilities and shareholders’ equity | 157,542 | ||||||||||
Accounting Standards Update 2018-12 | Transition Adjustments | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Held to maturity, fixed maturity securities | 0 | ||||||||||
Equity securities | 0 | ||||||||||
Commercial mortgage and other loans | 0 | ||||||||||
Other investments | 0 | ||||||||||
Cash and cash equivalents | 0 | ||||||||||
Total investments and cash | 0 | ||||||||||
Receivables | [2] | 10 | |||||||||
Accrued investment income | 0 | ||||||||||
Deferred policy acquisition costs | [3] | 323 | |||||||||
Property and equipment, at cost less accumulated depreciation | 0 | ||||||||||
Other | [4] | 275 | |||||||||
Total assets | 608 | ||||||||||
Policy Liabilities: | |||||||||||
Future policy benefits | [2],[5],[6],[7] | 25,376 | |||||||||
Unpaid policy claims | [6],[8] | (4,685) | |||||||||
Unearned premiums | 0 | ||||||||||
Other policyholders’ funds | [8] | 568 | |||||||||
Total policy liabilities | 21,259 | ||||||||||
Income taxes | [9] | (4,309) | |||||||||
Payables for return of cash collateral on loaned securities | 0 | ||||||||||
Notes payable and lease obligations | 0 | ||||||||||
Other | [5] | (120) | |||||||||
Liabilities | 16,830 | ||||||||||
Commitments and contingent liabilities | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock | 0 | ||||||||||
Additional paid-in capital | 0 | ||||||||||
Retained earnings | [10] | (418) | |||||||||
Accumulated other comprehensive income (loss): | |||||||||||
Unrealized foreign currency translation gains (losses) | [11] | 28 | |||||||||
Unrealized gains (losses) on fixed maturity securities | 0 | ||||||||||
Unrealized gains (losses) on derivatives | 0 | ||||||||||
Effect of changes in discount rate assumptions | [12] | (15,832) | |||||||||
Pension liability adjustment | 0 | ||||||||||
Treasury stock, at average cost | 0 | ||||||||||
Total shareholders’ equity | (16,222) | ||||||||||
Total liabilities and shareholders’ equity | 608 | ||||||||||
Accounting Standards Update 2018-12 | Transition Adjustments | Pro Forma | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Shareholders’ equity: | |||||||||||
Retained earnings | (324) | ||||||||||
Accumulated other comprehensive income (loss): | |||||||||||
Effect of changes in discount rate assumptions | $ (18,570) | ||||||||||
Consolidated Entity, Excluding VIE | Accounting Standards Update 2018-12 | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | 94,206 | ||||||||||
Consolidated Entity, Excluding VIE | Accounting Standards Update 2018-12 | As Previously Reported | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | 94,206 | ||||||||||
Consolidated Entity, Excluding VIE | Accounting Standards Update 2018-12 | Transition Adjustments | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | 0 | ||||||||||
Variable Interest Entity, Consolidated | |||||||||||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | 3,617 | 4,490 | |||||||||
Commercial mortgage and other loans | [13] | 10,775 | 9,740 | ||||||||
Other investments | [13],[14] | 1,815 | 1,535 | ||||||||
Policy Liabilities: | |||||||||||
Liabilities | [13] | $ 463 | 414 | ||||||||
Variable Interest Entity, Consolidated | Accounting Standards Update 2018-12 | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | 4,490 | ||||||||||
Variable Interest Entity, Consolidated | Accounting Standards Update 2018-12 | As Previously Reported | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | 4,490 | ||||||||||
Variable Interest Entity, Consolidated | Accounting Standards Update 2018-12 | Transition Adjustments | Pro Forma | |||||||||||
Investments and Cash: | |||||||||||
Available for sale, fixed maturity securities | $ 0 | ||||||||||
[1]Net of allowance for credit losses[2]Adjustment for the reclassification of ceded reserves from future policy benefits to receivables in conjunction with adoption of the updated standard.[3]Adjustment reflects an increase in DAC assets as a result of DAC being amortized over the expected life of a contract and no interest accretion recorded under the updated standard.[4]Adjustment reflects the discounting of reinsurance recoverables for retrocession activities under the updated standard.[5]Adjustment for the reclassification of accrued claim adjustment expenses from other liabilities to future policy benefits as a component of the integrated reserve.[6]Adjustment for the reclassification of unpaid policy claims for long-duration contracts to future policy benefits as a component of the integrated reserve.[7]Adjustment reflects the impacts of adoption and 2021 activity under the updated standard, including a $490 increase in the deferred profit liability on limited-payment products under the updated standard as discussed above.[8]Adjustment for the reclassification of the claims liability for certain fixed annuity benefits from unpaid policy claims to other policyholders' funds.[9]Adjustment reflects the tax effects from adoption and 2021 activity under the updated standard.[10]Adjustment reflects the impacts from adoption of ($324) as a result of capping the net premium ratio at 100% for cohorts that are in a loss position at transition, and the decrease in current year net earnings of $(94) under the updated standard.[11]Adjustment reflects foreign currency translation related to the updated standard, as applicable.[12]Adjustment reflects the impacts from adoption of ($18,570) and 2021 activity of $2,738 due to changes in the discount rate assumptions under the updated standard.[13]Net of allowance for credit losses[14]Consists entirely of alternative investments in limited partnerships |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Impact from Adoption on Balance Sheet (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jan. 01, 2021 | ||
Retained earnings | $ 44,892 | $ 44,892 | $ 41,381 | ||||||||
Net earnings | $ 1,596 | $ 1,388 | $ 1,032 | $ 888 | $ 1,105 | $ 1,293 | $ 4,016 | $ 3,286 | |||
Accounting Standards Update 2018-12 | Pro Forma | |||||||||||
Retained earnings | [1] | 40,963 | |||||||||
Net earnings | 4,231 | ||||||||||
Effect of changes in discount rate assumptions | [2] | (15,832) | |||||||||
Accounting Standards Update 2018-12 | Pro Forma | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Retained earnings | $ (300) | ||||||||||
Accounting Standards Update 2018-12 | Revision of Prior Period, Accounting Standards Update, Adjustment | Pro Forma | |||||||||||
Increase in deferred profit liability | 490 | ||||||||||
Accounting Standards Update 2018-12 | Transition Adjustments | Pro Forma | |||||||||||
Retained earnings | [1] | (418) | |||||||||
Net earnings | (94) | ||||||||||
Effect of changes in discount rate assumptions | [2] | (15,832) | |||||||||
Effect of changes in discount rate assumptions during period, net of income taxes | $ 2,738 | ||||||||||
Accounting Standards Update 2018-12 | Transition Adjustments | Pro Forma | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||
Retained earnings | (324) | ||||||||||
Effect of changes in discount rate assumptions | $ (18,570) | ||||||||||
[1]Adjustment reflects the impacts from adoption of ($324) as a result of capping the net premium ratio at 100% for cohorts that are in a loss position at transition, and the decrease in current year net earnings of $(94) under the updated standard.[2]Adjustment reflects the impacts from adoption of ($18,570) and 2021 activity of $2,738 due to changes in the discount rate assumptions under the updated standard. |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 9 Months Ended | |||||||
Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2021 USD ($) | Jan. 01, 2021 USD ($) | Dec. 31, 2020 USD ($) | ||
Significant Accounting Policies [Line Items] | ||||||||
Number of reportable insurance business segments | segment | 2 | |||||||
Accumulated other comprehensive income (loss) | $ (3,511) | $ 7,662 | $ (548) | $ 7,393 | $ 8,019 | $ 8,934 | ||
Retained earnings | $ 44,892 | 41,381 | ||||||
Pro Forma | Accounting Standards Update 2018-12 | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Retained earnings | [1] | $ 40,963 | ||||||
Pro Forma | Accounting Standards Update 2018-12 | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Accumulated other comprehensive income (loss) | $ (18,600) | |||||||
Retained earnings | $ (300) | |||||||
Aflac Japan | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of the Company's total revenues | 72% | 69% | ||||||
Percentage of the Company's total assets | 79% | 82% | ||||||
[1]Adjustment reflects the impacts from adoption of ($324) as a result of capping the net premium ratio at 100% for cohorts that are in a loss position at transition, and the decrease in current year net earnings of $(94) under the updated standard. |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Operations by Segment - Revenues (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Number of reportable insurance business segments | segment | 2 | ||||
Net earned premiums | $ 3,651 | $ 4,372 | $ 11,679 | $ 13,406 | |
Other income | 50 | 45 | 168 | 132 | |
Total adjusted revenues | 4,584 | 5,395 | 14,530 | 16,412 | |
Net investment gains (losses) | [1],[2],[3],[4] | 236 | (158) | 962 | 258 |
Total revenues | 4,820 | 5,237 | 15,492 | 16,670 | |
Aflac Japan | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net earned premiums | 2,241 | 2,934 | 7,384 | 9,045 | |
Adjusted net investment income | [1],[4] | 663 | 763 | 2,066 | 2,260 |
Other income | 9 | 10 | 26 | 32 | |
Total adjusted revenues | 2,913 | 3,707 | 9,476 | 11,337 | |
Hedge costs | 28 | 20 | 84 | 55 | |
Net interest cash flows from derivatives | (25) | (7) | (37) | (24) | |
Aflac U.S. | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net earned premiums | 1,375 | 1,393 | 4,182 | 4,223 | |
Adjusted net investment income | [3] | 185 | 191 | 563 | 557 |
Other income | 38 | 32 | 120 | 90 | |
Total adjusted revenues | 1,598 | 1,616 | 4,865 | 4,870 | |
Net interest cash flows from derivatives | (1) | 1 | 1 | 1 | |
Corporate and other | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Total adjusted revenues | [2],[5] | 73 | 72 | 189 | 205 |
Hedge income | 19 | 13 | 44 | 45 | |
Income (loss) from federal historic rehabilitation and solar tax credit investments | (19) | (5) | (61) | (35) | |
Federal historic rehabilitation and solar tax credits, amount | $ 19 | $ 10 | $ 63 | $ 35 | |
[1]Amortized hedge costs of $28 and $20 for the three-month periods and $84 and $55 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations.[2]Amortized hedge income of $19 and $13 for the three-month periods and $44 and $45 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase to net investment income when analyzing operations. |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Operations by Segment - Pretax Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting, Reconciling Item for Adjusted Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Pretax adjusted earnings | [1] | $ 880 | $ 1,293 | $ 3,156 | $ 3,940 |
Net investment gains (losses) | [2],[3],[4],[5],[6] | 222 | (172) | 923 | 216 |
Other income (loss) | 1 | (8) | 1 | (66) | |
Earnings before income taxes | 1,103 | 1,113 | 4,080 | 4,090 | |
Income taxes applicable to pretax adjusted earnings | 156 | 262 | 565 | 771 | |
Effect of foreign currency translation on after tax adjusted earnings | (53) | (14) | (147) | (8) | |
Interest expense on debt | 45 | 40 | 127 | 130 | |
Aflac Japan | |||||
Segment Reporting, Reconciling Item for Adjusted Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Pretax adjusted earnings | [2],[5] | 630 | 976 | 2,351 | 2,867 |
Hedge costs | 28 | 20 | 84 | 55 | |
Net interest cash flows from derivatives | (25) | (7) | (37) | (24) | |
Aflac U.S. | |||||
Segment Reporting, Reconciling Item for Adjusted Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Pretax adjusted earnings | [6] | 309 | 358 | 984 | 1,217 |
Net interest cash flows from derivatives | (1) | 1 | 1 | 1 | |
Corporate and other | |||||
Segment Reporting, Reconciling Item for Adjusted Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Pretax adjusted earnings | [3],[4],[7] | (59) | (41) | (179) | (144) |
Hedge income | 19 | 13 | 44 | 45 | |
Gain (loss) on change in fair value of derivative, interest rate component | 13 | 14 | 38 | 41 | |
Income (loss) from federal historic rehabilitation and solar tax credit investments | (19) | (5) | (61) | (35) | |
Federal historic rehabilitation and solar tax credits, amount | $ 19 | $ 10 | $ 63 | $ 35 | |
[1]Includes $45 and $40 for the three-month periods and $127 and $130 for the nine-month periods ended September 30, 2022, and 2021, respectively, of interest expense on debt.[2] Amortized hedge costs of $28 and $20 for the three-month periods and $84 and $55 for the nine-month periods ended September 30, 2022, and 2021, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations. |
BUSINESS SEGMENT INFORMATION _3
BUSINESS SEGMENT INFORMATION - Operations by Segment - Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 128,100 | $ 157,542 |
Aflac Japan | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 101,311 | 128,536 |
Aflac U.S. | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 20,212 | 23,106 |
Corporate and other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 6,577 | $ 5,900 |
INVESTMENTS - Available-for-sal
INVESTMENTS - Available-for-sale Debt Securities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 71,035 | $ 85,369 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 6,162 | 13,566 |
Gross Unrealized Losses | 3,554 | 239 |
Fair Value | 73,643 | 98,696 |
Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 40,253 | 51,160 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 3,129 | 6,994 |
Gross Unrealized Losses | 1,957 | 167 |
Fair Value | 41,425 | 57,987 |
Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 30,782 | 34,209 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 3,033 | 6,572 |
Gross Unrealized Losses | 1,597 | 72 |
Fair Value | 32,218 | 40,709 |
Japan government and agencies | Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,342 | 30,335 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 1,558 | 3,343 |
Gross Unrealized Losses | 1,158 | 61 |
Fair Value | 23,742 | 33,617 |
Municipalities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 2,276 | 3,036 |
Municipalities | Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 947 | 1,192 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 164 | 322 |
Gross Unrealized Losses | 40 | 5 |
Fair Value | 1,071 | 1,509 |
Municipalities | Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,252 | 1,340 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 58 | 189 |
Gross Unrealized Losses | 105 | 2 |
Fair Value | 1,205 | 1,527 |
Mortgage- and asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 2,009 | 1,246 |
Mortgage- and asset-backed securities | Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 231 | 300 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 9 | 19 |
Gross Unrealized Losses | 8 | 1 |
Fair Value | 232 | 318 |
Mortgage- and asset-backed securities | Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,732 | 897 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 119 | 33 |
Gross Unrealized Losses | 74 | 2 |
Fair Value | 1,777 | 928 |
Public utilities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 7,350 | 10,051 |
Public utilities | Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,605 | 4,462 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 303 | 906 |
Gross Unrealized Losses | 87 | 2 |
Fair Value | 3,821 | 5,366 |
Public utilities | Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,398 | 3,781 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 312 | 909 |
Gross Unrealized Losses | 181 | 5 |
Fair Value | 3,529 | 4,685 |
Sovereign and supranational | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 862 | 1,115 |
Sovereign and supranational | Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 603 | 760 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 34 | 82 |
Gross Unrealized Losses | 1 | 0 |
Fair Value | 636 | 842 |
Sovereign and supranational | Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 194 | 222 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 45 | 57 |
Gross Unrealized Losses | 13 | 6 |
Fair Value | 226 | 273 |
Banks/financial institutions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 9,031 | 11,591 |
Banks/financial institutions | Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,813 | 6,963 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 365 | 787 |
Gross Unrealized Losses | 399 | 72 |
Fair Value | 5,779 | 7,678 |
Banks/financial institutions | Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,002 | 3,169 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 347 | 747 |
Gross Unrealized Losses | 97 | 3 |
Fair Value | 3,252 | 3,913 |
Other corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 28,205 | 37,837 |
Other corporate | Yen-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,712 | 7,148 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 696 | 1,535 |
Gross Unrealized Losses | 264 | 26 |
Fair Value | 6,144 | 8,657 |
Other corporate | Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 21,028 | 24,604 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 2,152 | 4,629 |
Gross Unrealized Losses | 1,119 | 53 |
Fair Value | 22,061 | 29,180 |
U.S. government and agencies | Dollar-denominated | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 176 | 196 |
Allowance for Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 8 |
Gross Unrealized Losses | 8 | 1 |
Fair Value | $ 168 | $ 203 |
INVESTMENTS - Held-to-Maturity
INVESTMENTS - Held-to-Maturity Debt Securities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | $ 17,472 | $ 22,008 | |
Allowance for Credit Loss | 6 | 8 | |
Total fixed maturity securities, held to maturity, amortized cost | 17,466 | [1] | 22,000 |
Gross Unrealized Gains | 2,619 | 4,869 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 20,085 | 26,869 | |
Yen-denominated | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 17,472 | 22,008 | |
Allowance for Credit Loss | 6 | 8 | |
Total fixed maturity securities, held to maturity, amortized cost | 17,466 | 22,000 | |
Gross Unrealized Gains | 2,619 | 4,869 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 20,085 | 26,869 | |
Japan government and agencies | Yen-denominated | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 16,745 | 21,089 | |
Allowance for Credit Loss | 3 | 3 | |
Total fixed maturity securities, held to maturity, amortized cost | 16,742 | 21,086 | |
Gross Unrealized Gains | 2,483 | 4,613 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 19,225 | 25,699 | |
Municipalities | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 264 | 335 | |
Fair Value | 321 | 436 | |
Municipalities | Yen-denominated | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 264 | 335 | |
Allowance for Credit Loss | 0 | 0 | |
Total fixed maturity securities, held to maturity, amortized cost | 264 | 335 | |
Gross Unrealized Gains | 57 | 101 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 321 | 436 | |
Public utilities | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 34 | 43 | |
Fair Value | 41 | 55 | |
Public utilities | Yen-denominated | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 34 | 44 | |
Allowance for Credit Loss | 0 | 1 | |
Total fixed maturity securities, held to maturity, amortized cost | 34 | 43 | |
Gross Unrealized Gains | 7 | 12 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 41 | 55 | |
Sovereign and supranational | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 409 | 514 | |
Fair Value | 477 | 650 | |
Sovereign and supranational | Yen-denominated | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 412 | 518 | |
Allowance for Credit Loss | 3 | 4 | |
Total fixed maturity securities, held to maturity, amortized cost | 409 | 514 | |
Gross Unrealized Gains | 68 | 136 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 477 | 650 | |
Other corporate | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 17 | 22 | |
Fair Value | 21 | 29 | |
Other corporate | Yen-denominated | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Held to maturity, fixed maturity securities, amortized cost | 17 | 22 | |
Allowance for Credit Loss | 0 | 0 | |
Total fixed maturity securities, held to maturity, amortized cost | 17 | 22 | |
Gross Unrealized Gains | 4 | 7 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | $ 21 | $ 29 | |
[1]Net of allowance for credit losses |
INVESTMENTS - Equity Securities
INVESTMENTS - Equity Securities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Equity Securities, FV-NI [Line Items] | ||
Fair Value | $ 1,064 | $ 1,603 |
Yen-denominated | ||
Equity Securities, FV-NI [Line Items] | ||
Fair Value | 592 | 744 |
Dollar-denominated | ||
Equity Securities, FV-NI [Line Items] | ||
Fair Value | 427 | 817 |
Other currencies | ||
Equity Securities, FV-NI [Line Items] | ||
Fair Value | $ 45 | $ 42 |
INVESTMENTS - Contractual and E
INVESTMENTS - Contractual and Economic Maturities of Investments in Fixed Maturities (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | ||
Available for sale: | ||||
Due in one year or less | [1] | $ 1,285 | ||
Due after one year through five years | [1] | 7,261 | ||
Due after five years through 10 years | [1] | 13,081 | ||
Due after 10 years | [1] | 47,445 | ||
Mortgage- and asset-backed securities | [1] | 1,963 | ||
Total fixed maturity securities, available for sale, amortized cost | [1] | 71,035 | ||
Held to maturity: | ||||
Due in one year or less | [1] | 0 | ||
Due after one year through five years | [1] | 37 | ||
Due after five years through 10 years | [1] | 9,285 | ||
Due after 10 years | [1] | 8,144 | ||
Mortgage- and asset-backed securities | [1] | 0 | ||
Total fixed maturity securities, held to maturity, amortized cost | 17,466 | [1] | $ 22,000 | |
Available for sale: | ||||
Due in one year or less | 1,455 | |||
Due after one year through five years | 7,815 | |||
Due after five years through 10 years | 14,297 | |||
Due after 10 years | 48,067 | |||
Mortgage- and asset-backed securities | 2,009 | |||
Fair Value | 73,643 | 98,696 | ||
Held to maturity: | ||||
Due in one year or less | 0 | |||
Due after one year through five years | 39 | |||
Due after five years through 10 years | 10,498 | |||
Due after 10 years | 9,548 | |||
Mortgage- and asset-backed securities | 0 | |||
Fair Value | $ 20,085 | $ 26,869 | ||
[1]Net of allowance for credit losses |
INVESTMENTS - Investment Exposu
INVESTMENTS - Investment Exposures Individually Exceeded 10% of Shareholders' Equity (Details) - Japan National Government - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | ||
Summary of Investment Holdings [Line Items] | |||
Credit Rating | [1] | A+ | A+ |
Amortized Cost | [1] | $ 39,106 | $ 50,186 |
Fair Value | [1] | $ 41,927 | $ 57,862 |
[1]Japan Government Bonds (JGBs) or JGB-backed securities |
INVESTMENTS - Information Regar
INVESTMENTS - Information Regarding Pretax Net Gains and Losses From Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ 199 | $ (171) | $ 885 | $ 224 |
Credit Losses | ||||
Fixed maturity securities available for sale | 0 | 27 | 0 | 38 |
Fixed maturity securities held to maturity | 0 | 0 | 0 | 1 |
Commercial mortgage and other loans | (12) | (29) | (8) | 15 |
Impairment losses | (4) | 0 | (21) | (20) |
Loan commitments | 5 | 3 | 7 | 3 |
Reinsurance recoverable and other | 0 | 0 | 2 | (2) |
Total credit losses | (11) | 1 | (20) | 35 |
Derivatives and Other | ||||
Derivative gains (losses) | (491) | (174) | (1,515) | (557) |
Foreign currency gains (losses) | 664 | 135 | 2,473 | 783 |
Derivatives and other | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | 173 | (39) | 958 | 226 |
Fixed maturity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Gross gains from sales | 8 | 24 | 93 | 40 |
Gross losses from sales | (4) | (36) | (30) | (39) |
Foreign currency gains (losses) on sales and redemptions | 54 | (2) | 187 | (21) |
Net investment gains (losses) | 59 | (14) | 260 | (20) |
Other investments | ||||
Gain (Loss) on Securities [Line Items] | ||||
Gross gains from sales | 1 | 0 | 10 | 0 |
Equity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Net investment gains (losses) | $ (22) | $ (119) | $ (313) | $ (17) |
INVESTMENTS - Net Effect on Sha
INVESTMENTS - Net Effect on Shareholders' Equity of Unrealized Gains and Losses from Investment Securities (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Investments [Abstract] | ||
Unrealized gains (losses) on securities available for sale | $ 2,608 | $ 13,330 |
Deferred income taxes | (1,477) | (3,728) |
Unrealized gains (losses) on fixed maturity securities | $ 1,131 | $ 9,602 |
INVESTMENTS - Fair Value and Gr
INVESTMENTS - Fair Value and Gross Unrealized Losses for Securities That Have Been in Continuous Unrealized Loss Position (Detail) - Fixed maturity securities - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | $ 27,143 | $ 7,914 |
Total Unrealized Losses | 3,554 | 239 |
Less than 12 months Fair Value | 20,642 | 2,948 |
Less than 12 months Unrealized Losses | 2,381 | 42 |
12 months or Longer Fair Value | 6,501 | 4,966 |
12 months or Longer Unrealized Losses | 1,173 | 197 |
Dollar-denominated | U.S. government and agencies | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 51 | 1 |
Total Unrealized Losses | 8 | 1 |
Less than 12 months Fair Value | 0 | 0 |
Less than 12 months Unrealized Losses | 5 | 1 |
12 months or Longer Fair Value | 51 | 1 |
12 months or Longer Unrealized Losses | 3 | 0 |
Dollar-denominated | Municipalities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 708 | 82 |
Total Unrealized Losses | 105 | 2 |
Less than 12 months Fair Value | 675 | 79 |
Less than 12 months Unrealized Losses | 95 | 2 |
12 months or Longer Fair Value | 33 | 3 |
12 months or Longer Unrealized Losses | 10 | 0 |
Dollar-denominated | Mortgage- and asset-backed securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 839 | 278 |
Total Unrealized Losses | 74 | 2 |
Less than 12 months Fair Value | 723 | 278 |
Less than 12 months Unrealized Losses | 63 | 2 |
12 months or Longer Fair Value | 116 | 0 |
12 months or Longer Unrealized Losses | 11 | 0 |
Dollar-denominated | Public utilities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 1,544 | 130 |
Total Unrealized Losses | 181 | 5 |
Less than 12 months Fair Value | 1,486 | 70 |
Less than 12 months Unrealized Losses | 171 | 2 |
12 months or Longer Fair Value | 58 | 60 |
12 months or Longer Unrealized Losses | 10 | 3 |
Dollar-denominated | Sovereign and supranational | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 29 | 37 |
Total Unrealized Losses | 13 | 6 |
Less than 12 months Fair Value | 0 | 6 |
Less than 12 months Unrealized Losses | 0 | 1 |
12 months or Longer Fair Value | 29 | 31 |
12 months or Longer Unrealized Losses | 13 | 5 |
Dollar-denominated | Banks/financial institutions | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 968 | 292 |
Total Unrealized Losses | 97 | 3 |
Less than 12 months Fair Value | 760 | 274 |
Less than 12 months Unrealized Losses | 69 | 3 |
12 months or Longer Fair Value | 208 | 18 |
12 months or Longer Unrealized Losses | 28 | 0 |
Dollar-denominated | Other corporate | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 8,276 | 1,365 |
Total Unrealized Losses | 1,119 | 53 |
Less than 12 months Fair Value | 7,463 | 458 |
Less than 12 months Unrealized Losses | 905 | 8 |
12 months or Longer Fair Value | 813 | 907 |
12 months or Longer Unrealized Losses | 214 | 45 |
Yen-denominated | Japan government and agencies | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 8,091 | 2,868 |
Total Unrealized Losses | 1,158 | 61 |
Less than 12 months Fair Value | 4,300 | 445 |
Less than 12 months Unrealized Losses | 482 | 3 |
12 months or Longer Fair Value | 3,791 | 2,423 |
12 months or Longer Unrealized Losses | 676 | 58 |
Yen-denominated | Municipalities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 278 | 187 |
Total Unrealized Losses | 40 | 5 |
Less than 12 months Fair Value | 166 | 53 |
Less than 12 months Unrealized Losses | 18 | 0 |
12 months or Longer Fair Value | 112 | 134 |
12 months or Longer Unrealized Losses | 22 | 5 |
Yen-denominated | Mortgage- and asset-backed securities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 69 | 33 |
Total Unrealized Losses | 8 | 1 |
Less than 12 months Fair Value | 46 | 0 |
Less than 12 months Unrealized Losses | 4 | 0 |
12 months or Longer Fair Value | 23 | 33 |
12 months or Longer Unrealized Losses | 4 | 1 |
Yen-denominated | Public utilities | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 1,041 | 26 |
Total Unrealized Losses | 87 | 2 |
Less than 12 months Fair Value | 929 | 0 |
Less than 12 months Unrealized Losses | 79 | 0 |
12 months or Longer Fair Value | 112 | 26 |
12 months or Longer Unrealized Losses | 8 | 2 |
Yen-denominated | Sovereign and supranational | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 68 | |
Total Unrealized Losses | 1 | |
Less than 12 months Fair Value | 34 | |
Less than 12 months Unrealized Losses | 1 | |
12 months or Longer Fair Value | 34 | |
12 months or Longer Unrealized Losses | 0 | |
Yen-denominated | Banks/financial institutions | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 3,485 | 2,074 |
Total Unrealized Losses | 399 | 72 |
Less than 12 months Fair Value | 2,625 | 1,011 |
Less than 12 months Unrealized Losses | 281 | 16 |
12 months or Longer Fair Value | 860 | 1,063 |
12 months or Longer Unrealized Losses | 118 | 56 |
Yen-denominated | Other corporate | ||
Investments, Unrealized Loss Position [Line Items] | ||
Total Fair Value | 1,696 | 541 |
Total Unrealized Losses | 264 | 26 |
Less than 12 months Fair Value | 1,435 | 274 |
Less than 12 months Unrealized Losses | 208 | 4 |
12 months or Longer Fair Value | 261 | 267 |
12 months or Longer Unrealized Losses | $ 56 | $ 22 |
INVESTMENTS - Commercial Mortga
INVESTMENTS - Commercial Mortgage and Other Loans by Portfolio Segment (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 13,641 | $ 11,960 | ||||
Percent of total commercial mortgage and other loans | 100% | 100% | ||||
Allowance for credit losses | $ (182) | $ (174) | ||||
Total net commercial mortgage and other loans | 13,459 | 11,786 | ||||
Transitional real estate loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 6,502 | $ 5,359 | ||||
Percent of total commercial mortgage and other loans | 47.60% | 44.70% | ||||
Allowance for credit losses | $ (55) | $ (53) | $ (68) | $ (59) | $ (41) | $ (63) |
Commercial mortgage loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 2,027 | $ 1,904 | ||||
Percent of total commercial mortgage and other loans | 14.90% | 15.90% | ||||
Allowance for credit losses | $ (10) | (8) | $ (10) | (17) | (22) | (32) |
Middle market loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 5,112 | $ 4,697 | ||||
Percent of total commercial mortgage and other loans | 37.50% | 39.40% | ||||
Allowance for credit losses | $ (117) | $ (109) | $ (96) | $ (89) | $ (76) | $ (85) |
Office | Transitional real estate loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 2,121 | $ 2,001 | ||||
Percent of total commercial mortgage and other loans | 15.50% | 16.70% | ||||
Office | Commercial mortgage loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 390 | $ 398 | ||||
Percent of total commercial mortgage and other loans | 2.90% | 3.30% | ||||
Retail | Transitional real estate loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 485 | $ 267 | ||||
Percent of total commercial mortgage and other loans | 3.60% | 2.20% | ||||
Retail | Commercial mortgage loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 312 | $ 332 | ||||
Percent of total commercial mortgage and other loans | 2.30% | 2.80% | ||||
Apartment/Multi-Family | Transitional real estate loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 2,730 | $ 1,893 | ||||
Percent of total commercial mortgage and other loans | 20% | 15.80% | ||||
Apartment/Multi-Family | Commercial mortgage loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 634 | $ 649 | ||||
Percent of total commercial mortgage and other loans | 4.60% | 5.40% | ||||
Industrial | Transitional real estate loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 154 | $ 94 | ||||
Percent of total commercial mortgage and other loans | 1.10% | 0.80% | ||||
Industrial | Commercial mortgage loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 691 | $ 525 | ||||
Percent of total commercial mortgage and other loans | 5.10% | 4.40% | ||||
Hospitality | Transitional real estate loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 835 | $ 876 | ||||
Percent of total commercial mortgage and other loans | 6.10% | 7.30% | ||||
Other | Transitional real estate loans | ||||||
Participating Mortgage Loans [Line Items] | ||||||
Commercial mortgage and other loans, gross | $ 177 | $ 228 | ||||
Percent of total commercial mortgage and other loans | 1.30% | 1.90% |
INVESTMENTS - Transitional Real
INVESTMENTS - Transitional Real Estate Loans by Key Credit Quality Indicators (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total Financing Receivable | $ 13,641 | $ 11,960 |
Transitional real estate loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 1,909 | |
2021 | 2,468 | |
2020 | 300 | |
2019 | 1,076 | |
2018 | 698 | |
Prior | 51 | |
Total Financing Receivable | 6,502 | |
Transitional real estate loans | Loan to Value Ratio, 0.00% to 59.99% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 534 | |
2021 | 585 | |
2020 | 137 | |
2019 | 192 | |
2018 | 102 | |
Prior | 0 | |
Total Financing Receivable | 1,550 | |
Transitional real estate loans | Loan to Value Ratio, 60.00% to 69.99% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 580 | |
2021 | 796 | |
2020 | 56 | |
2019 | 504 | |
2018 | 437 | |
Prior | 50 | |
Total Financing Receivable | 2,423 | |
Transitional real estate loans | Loan to Value Ratio, 70.00% to 79.99% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 780 | |
2021 | 928 | |
2020 | 107 | |
2019 | 380 | |
2018 | 159 | |
Prior | 1 | |
Total Financing Receivable | 2,355 | |
Transitional real estate loans | Loan-to-Value Ratio, 80.00% or greater | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 15 | |
2021 | 159 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
Prior | 0 | |
Total Financing Receivable | $ 174 |
INVESTMENTS - Commercial Mort_2
INVESTMENTS - Commercial Mortgage Loans by Key Credit Quality Indicators (Details) $ in Millions | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total Financing Receivable | $ 13,641 | $ 11,960 |
Commercial mortgage loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 211 | |
2021 | 337 | |
2020 | 46 | |
2019 | 599 | |
2018 | 152 | |
Prior | 682 | |
Total Financing Receivable | $ 2,027 | |
Weighted Average Debt Service Coverage Ratio | 2.18 | |
Commercial mortgage loans | 2022 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Weighted Average Debt Service Coverage Ratio | 0 | |
Commercial mortgage loans | 2021 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Weighted Average Debt Service Coverage Ratio | 2.74 | |
Commercial mortgage loans | 2020 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Weighted Average Debt Service Coverage Ratio | 1.92 | |
Commercial mortgage loans | 2019 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Weighted Average Debt Service Coverage Ratio | 2.56 | |
Commercial mortgage loans | 2018 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Weighted Average Debt Service Coverage Ratio | 2.06 | |
Commercial mortgage loans | Prior | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Weighted Average Debt Service Coverage Ratio | 2.30 | |
Commercial mortgage loans | Loan to Value Ratio, 0.00% to 59.99% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | $ 211 | |
2021 | 322 | |
2020 | 46 | |
2019 | 513 | |
2018 | 152 | |
Prior | 542 | |
Total Financing Receivable | $ 1,786 | |
Weighted Average Debt Service Coverage Ratio | 2.23 | |
Commercial mortgage loans | Loan to Value Ratio, 60.00% to 69.99% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | $ 0 | |
2021 | 15 | |
2020 | 0 | |
2019 | 46 | |
2018 | 0 | |
Prior | 115 | |
Total Financing Receivable | $ 176 | |
Weighted Average Debt Service Coverage Ratio | 2.08 | |
Commercial mortgage loans | Loan to Value Ratio, 70.00% to 79.99% | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | $ 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 40 | |
2018 | 0 | |
Prior | 25 | |
Total Financing Receivable | $ 65 | |
Weighted Average Debt Service Coverage Ratio | 1.18 | |
Commercial mortgage loans | Loan-to-Value Ratio, 80.00% or greater | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | $ 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
Prior | 0 | |
Total Financing Receivable | $ 0 | |
Weighted Average Debt Service Coverage Ratio | 0 |
INVESTMENTS - Middle Market Loa
INVESTMENTS - Middle Market Loans by Key Credit Quality Indicators (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total Financing Receivable | $ 13,641 | $ 11,960 |
Middle market loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 571 | |
2021 | 1,325 | |
2020 | 829 | |
2019 | 815 | |
2018 | 426 | |
Prior | 322 | |
Revolving Loans | 824 | |
Total Financing Receivable | 5,112 | |
Middle market loans | BBB Credit Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 30 | |
2021 | 153 | |
2020 | 85 | |
2019 | 37 | |
2018 | 19 | |
Prior | 0 | |
Revolving Loans | 114 | |
Total Financing Receivable | 438 | |
Middle market loans | BB Credit Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 258 | |
2021 | 456 | |
2020 | 327 | |
2019 | 210 | |
2018 | 80 | |
Prior | 46 | |
Revolving Loans | 309 | |
Total Financing Receivable | 1,686 | |
Middle market loans | B Credit Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 283 | |
2021 | 716 | |
2020 | 396 | |
2019 | 497 | |
2018 | 243 | |
Prior | 220 | |
Revolving Loans | 350 | |
Total Financing Receivable | 2,705 | |
Middle market loans | CCC Credit Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 0 | |
2021 | 0 | |
2020 | 21 | |
2019 | 71 | |
2018 | 70 | |
Prior | 56 | |
Revolving Loans | 50 | |
Total Financing Receivable | 268 | |
Middle market loans | CC Credit Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
2018 | 14 | |
Prior | 0 | |
Revolving Loans | 1 | |
Total Financing Receivable | 15 | |
Middle market loans | C and Lower Credit Rating | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Total Financing Receivable | $ 0 |
INVESTMENTS - Allowance for Loa
INVESTMENTS - Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Allowance for Loan Losses by Portfolio Segment [Roll Forward] | ||||
Balance, beginning of period | $ (174) | |||
(Addition to) release of allowance for credit losses | $ (12) | $ (29) | (8) | $ 15 |
Balance, end of period | (182) | (182) | ||
Balance, beginning of period | (8) | |||
(Addition to) release of allowance for credit losses | 0 | 0 | 0 | 1 |
Balance, end of period | (6) | (6) | ||
Balance, beginning of period | 0 | |||
(Addition to) release of allowance for credit losses | 0 | 27 | 0 | 38 |
Balance, end of period | 0 | 0 | ||
Transitional real estate loans | ||||
Allowance for Loan Losses by Portfolio Segment [Roll Forward] | ||||
Balance, beginning of period | (53) | (41) | (68) | (63) |
(Addition to) release of allowance for credit losses | (2) | (18) | 13 | 4 |
Write-offs, net of recoveries | 0 | 0 | 0 | 0 |
Change in foreign exchange | 0 | 0 | ||
Balance, end of period | (55) | (59) | (55) | (59) |
Commercial mortgage loans | ||||
Allowance for Loan Losses by Portfolio Segment [Roll Forward] | ||||
Balance, beginning of period | (8) | (22) | (10) | (32) |
(Addition to) release of allowance for credit losses | (2) | 5 | 0 | 15 |
Write-offs, net of recoveries | 0 | 0 | 0 | 0 |
Change in foreign exchange | 0 | 0 | ||
Balance, end of period | (10) | (17) | (10) | (17) |
Middle market loans | ||||
Allowance for Loan Losses by Portfolio Segment [Roll Forward] | ||||
Balance, beginning of period | (109) | (76) | (96) | (85) |
(Addition to) release of allowance for credit losses | (6) | (13) | (24) | (4) |
Write-offs, net of recoveries | (2) | 0 | 3 | 0 |
Change in foreign exchange | 0 | 0 | ||
Balance, end of period | (117) | (89) | (117) | (89) |
Held-to-maturity securities | ||||
Allowance for Loan Losses by Portfolio Segment [Roll Forward] | ||||
Balance, beginning of period | (7) | (8) | (8) | (10) |
(Addition to) release of allowance for credit losses | 0 | (1) | 0 | 1 |
Write-offs, net of recoveries | 0 | 0 | 0 | 0 |
Change in foreign exchange | 1 | 2 | ||
Balance, end of period | (6) | (9) | (6) | (9) |
Available-for-sale securities | ||||
Allowance for Loan Losses by Portfolio Segment [Roll Forward] | ||||
Balance, beginning of period | 0 | (26) | 0 | (38) |
(Addition to) release of allowance for credit losses | 0 | 0 | 0 | 26 |
Write-offs, net of recoveries | 0 | 26 | 0 | 12 |
Change in foreign exchange | 0 | 0 | ||
Balance, end of period | 0 | 0 | 0 | 0 |
Reinsurance recoverables | ||||
Allowance for Loan Losses by Portfolio Segment [Roll Forward] | ||||
Balance, beginning of period | (8) | (13) | (13) | (12) |
(Addition to) release of allowance for credit losses) | 0 | 0 | 2 | (1) |
Write-offs, net of recoveries | 0 | 0 | 0 | 0 |
Change in foreign exchange | 0 | 3 | ||
Balance, end of period | $ (8) | $ (13) | $ (8) | $ (13) |
INVESTMENTS - Other Investments
INVESTMENTS - Other Investments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Investment Holdings [Line Items] | |||
Other investments | $ 4,186 | $ 3,842 | |
Policy loans | |||
Investment Holdings [Line Items] | |||
Other investments | 195 | 236 | |
Short-term investments | |||
Investment Holdings [Line Items] | |||
Other investments | [1] | 1,816 | 1,726 |
Limited partnerships | |||
Investment Holdings [Line Items] | |||
Other investments | 2,145 | 1,858 | |
Other | |||
Investment Holdings [Line Items] | |||
Other investments | $ 30 | $ 22 | |
[1]Includes securities lending collateral |
INVESTMENTS - Investments in Co
INVESTMENTS - Investments in Consolidated Variable Interest Entities (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Available for sale, fixed maturity securities, amortized cost | [1] | $ 71,035 | |
Available for sale, fixed maturity securities | 73,643 | $ 98,696 | |
Commercial mortgage and other loans | 13,459 | 11,786 | |
Commercial mortgage and other loans, fair value | 13,189 | 11,996 | |
Other investments | 4,186 | 3,842 | |
Asset derivatives | 1,146 | 936 | |
Assets, fair value | 82,379 | 108,012 | |
Liability derivatives | 2,088 | 1,619 | |
Liabilities | 103,948 | 124,289 | |
Liabilities, fair value | 2,088 | 1,619 | |
Variable Interest Entity, Consolidated | |||
Variable Interest Entity [Line Items] | |||
Available for sale, fixed maturity securities, amortized cost | [2] | 2,908 | 3,264 |
Available for sale, fixed maturity securities | 3,617 | 4,490 | |
Commercial mortgage and other loans | [2] | 10,775 | 9,740 |
Commercial mortgage and other loans, fair value | 10,716 | 9,910 | |
Other investments | [2],[3] | 1,815 | 1,535 |
Other investments, fair value | [3] | 1,815 | 1,535 |
Asset derivatives, amortized cost | [2],[4] | 65 | 78 |
Asset derivatives | [4] | 65 | 78 |
Assets, amortized cost | [2] | 15,563 | 14,617 |
Assets, fair value | 16,213 | 16,013 | |
Liability derivatives, amortized cost | [2],[4] | 463 | 414 |
Liability derivatives | [4] | 463 | 414 |
Liabilities | [2] | 463 | 414 |
Liabilities, fair value | $ 463 | $ 414 | |
[1]Net of allowance for credit losses[2]Net of allowance for credit losses[3]Consists entirely of alternative investments in limited partnerships[4]Consists entirely of derivatives |
INVESTMENTS - Investments in Va
INVESTMENTS - Investments in Variable Interest Entities Not Consolidated (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Available for sale, fixed maturity securities, amortized cost | $ 71,035 | $ 85,369 | |
Available for sale, fixed maturity securities | 73,643 | 98,696 | |
Other investments | 4,186 | 3,842 | |
Assets, fair value | 82,379 | 108,012 | |
Variable Interest Entity, Not Consolidated | |||
Variable Interest Entity [Line Items] | |||
Available for sale, fixed maturity securities, amortized cost | 3,809 | 4,779 | |
Available for sale, fixed maturity securities | 4,131 | 5,864 | |
Other investments | [1] | 330 | 323 |
Other investments, fair value | [1] | 330 | 323 |
Assets, amortized cost | 4,139 | 5,102 | |
Assets, fair value | $ 4,461 | $ 6,187 | |
[1]Consists entirely of alternative investments in limited partnerships |
INVESTMENTS - Securities Lendin
INVESTMENTS - Securities Lending Transactions Accounted for as Secured Borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | $ 2,721 | $ 2,162 | |
Gross amount of recognized liabilities for securities lending | 2,721 | 2,162 | |
Japan government and agencies | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 1,874 | 920 | |
Public utilities | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 23 | 40 | |
Sovereign and supranational | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 0 | 2 | |
Banks/financial institutions | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 96 | 88 | |
Other corporate | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 727 | 1,112 | |
Equity securities | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 1 | 0 | |
Maturity Overnight and Continuous | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | [1] | 847 | 1,242 |
Maturity Overnight and Continuous | Japan government and agencies | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | [1] | 0 | 0 |
Maturity Overnight and Continuous | Public utilities | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | [1] | 23 | 40 |
Maturity Overnight and Continuous | Sovereign and supranational | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | [1] | 0 | 2 |
Maturity Overnight and Continuous | Banks/financial institutions | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | [1] | 96 | 88 |
Maturity Overnight and Continuous | Other corporate | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | [1] | 727 | 1,112 |
Maturity Overnight and Continuous | Equity securities | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | [1] | 1 | 0 |
Maturity up to 30 Days | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 1,874 | 920 | |
Maturity up to 30 Days | Japan government and agencies | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 1,874 | 920 | |
Maturity up to 30 Days | Public utilities | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 0 | 0 | |
Maturity up to 30 Days | Sovereign and supranational | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 0 | 0 | |
Maturity up to 30 Days | Banks/financial institutions | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 0 | 0 | |
Maturity up to 30 Days | Other corporate | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | 0 | 0 | |
Maturity up to 30 Days | Equity securities | |||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||
Securities Loaned, Including Not Subject to Master Netting Arrangement and Assets other than Securities Transferred | $ 0 | $ 0 | |
[1]The related loaned security, under the Company's U.S. securities lending program, can be returned to the Company at the transferee's discretion; therefore, they are classified as Overnight and Continuous. |
INVESTMENTS - Additional Inform
INVESTMENTS - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) investment | Sep. 30, 2021 USD ($) investment | Dec. 31, 2021 USD ($) | |
Schedule of Investments [Line Items] | ||||
Held to maturity securities transferred to available for sale securities, number of investments | investment | 0 | 0 | ||
Equity securities, FV-NI, unrealized gain (loss) | $ (21) | $ (313) | ||
Transitional real estate loan commitments | 982 | 982 | ||
Middle market loan program unfunded amount | 14 | 14 | $ 11 | |
Middle market loan commitments | 442 | 442 | ||
Held to maturity, fixed maturity securities, amortized cost | 17,472 | 17,472 | 22,008 | |
Loan Commitments, Allowance for Credit Loss | 26 | 26 | ||
Limited partnerships investment commitments | $ 2,100 | $ 2,100 | ||
Percentage that the lending policy requires that the fair value of the securities received as collateral be of the fair value of the loaned securities | 102% | 102% | ||
Percentage that the lending policy requires that the fair value of the unrestricted cash received as collateral be of the fair value of the loaned securities | 100% | 100% | ||
Securities Lending, Securities Received as Collateral | $ 7,000 | $ 7,000 | 6,800 | |
Financing Receivable, Troubled Debt Restructuring | 0 | 0 | $ 0 | |
Repurchase Agreements and Repurchase-to-Maturity Transactions Outstanding | 0 | 0 | $ 0 | |
Zero-credit-loss expectation | Japan government and agencies | ||||
Schedule of Investments [Line Items] | ||||
Held to maturity, fixed maturity securities, amortized cost | $ 16,600 | $ 16,600 | ||
CALIFORNIA | Commercial Mortgage and Transitional Real Estate Loans | Mortgages | ||||
Schedule of Investments [Line Items] | ||||
Concentration Risk, Percentage | 19% | |||
TEXAS | Commercial Mortgage and Transitional Real Estate Loans | Mortgages | ||||
Schedule of Investments [Line Items] | ||||
Concentration Risk, Percentage | 13% | |||
FLORIDA | Commercial Mortgage and Transitional Real Estate Loans | Mortgages | ||||
Schedule of Investments [Line Items] | ||||
Concentration Risk, Percentage | 10% |
DERIVATIVE INSTRUMENTS - Additi
DERIVATIVE INSTRUMENTS - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative, Notional Amount | $ 42,447 | $ 43,454 |
Derivative, net liability position, aggregate fair value | 1,500 | $ 904 |
Additional Collateral, Aggregate Fair Value | 77 | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ (5) | |
Maximum Length of Time Hedged in Cash Flow Hedge | 4 years | |
Senior notes | Interest rate swaps | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative, Notional Amount | $ 1,900 |
DERIVATIVE INSTRUMENTS - Summar
DERIVATIVE INSTRUMENTS - Summary of Balance Sheet Classification of Derivative Fair Value Amounts, as well as Gross Asset and Liability Fair Value Amounts (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 42,447 | $ 43,454 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 1,146 | 936 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 2,088 | 1,619 |
Cash flow hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 18 | 18 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 0 | 0 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 4 | 2 |
Cash flow hedges | Foreign currency swaps | Variable Interest Entity, Consolidated | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 18 | 18 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 0 | 0 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 4 | 2 |
Fair value hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 7,749 | 8,891 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 5 | 5 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 5 |
Fair value hedges | Foreign currency forwards | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 0 | 62 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 0 | 0 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 5 |
Fair value hedges | Foreign currency options | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 7,749 | 8,829 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 5 | 5 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 0 |
Net investment hedge | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 6,662 | 6,945 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 833 | 341 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 0 |
Net investment hedge | Foreign currency forwards | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 4,993 | 4,996 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 833 | 341 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 0 |
Net investment hedge | Foreign currency options | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 1,669 | 1,949 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 0 | 0 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 0 |
Non-qualifying strategies | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 28,018 | 27,600 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 308 | 590 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 2,084 | 1,612 |
Non-qualifying strategies | Foreign currency swaps | Variable Interest Entity, Consolidated | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 3,420 | 3,151 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 65 | 78 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 458 | 412 |
Non-qualifying strategies | Foreign currency swaps | Consolidated Entity Excluding Variable Interest Entities (VIE) | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 1,900 | 2,250 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 81 | 59 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 13 |
Non-qualifying strategies | Foreign currency forwards | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 5,843 | 15,953 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 162 | 450 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 1,035 | 1,133 |
Non-qualifying strategies | Foreign currency options | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 5,711 | 2,746 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 0 | 3 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 0 | 0 |
Non-qualifying strategies | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 11,130 | 3,500 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 0 | 0 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 590 | 54 |
Non-qualifying strategies | Forward bond purchase commitment | Variable Interest Entity, Consolidated | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 14 | 0 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 0 | 0 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | $ 1 | $ 0 |
DERIVATIVE INSTRUMENTS - Gains
DERIVATIVE INSTRUMENTS - Gains (Losses) Recognized on Fair Value Hedging Relationships (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Total gains (losses) recognized for derivatives | $ (15) | $ (6) | $ (41) | $ (21) | |
Gains (losses) on derivatives excluded from effectiveness testing | [1] | (15) | (5) | (41) | (15) |
Gains (losses) on derivatives included in effectiveness testing | [2] | 0 | (1) | 0 | (6) |
Gains (losses) recognized for hedged items | [2] | 0 | 1 | 0 | 9 |
Net realized gains (losses) recognized for fair value hedge | 0 | 0 | 0 | 3 | |
Fixed maturity securities | Foreign currency forwards | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Total gains (losses) recognized for derivatives | (1) | (5) | |||
Gains (losses) on derivatives excluded from effectiveness testing | [1] | 0 | 0 | ||
Gains (losses) on derivatives included in effectiveness testing | [2] | (1) | (5) | ||
Gains (losses) recognized for hedged items | [2] | 1 | 5 | ||
Net realized gains (losses) recognized for fair value hedge | 0 | 0 | |||
Fixed maturity securities | Foreign currency options | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Total gains (losses) recognized for derivatives | (15) | (5) | (41) | (16) | |
Gains (losses) on derivatives excluded from effectiveness testing | [1] | (15) | (5) | (41) | (15) |
Gains (losses) on derivatives included in effectiveness testing | [2] | 0 | 0 | 0 | (1) |
Gains (losses) recognized for hedged items | [2] | 0 | 0 | 0 | 4 |
Net realized gains (losses) recognized for fair value hedge | $ 0 | $ 0 | $ 0 | $ 3 | |
[1]Gains (losses) excluded from effectiveness testing includes the forward point on foreign currency forwards and time value change on foreign currency options which are reported in the consolidated statement of earnings as net investment gains (losses). It also includes the change in the fair value of the interest rate swaptions related to the time value of the swaptions which is recognized as a component of other comprehensive income (loss).[2]Gains and losses on foreign currency forwards and options and related hedged items are reported in the consolidated statement of earnings as net investment gains (losses). For interest rate swaptions and related hedged items, gains and losses included in the hedge assessment, premium amortization and time value amortization while the hedge items are still outstanding are reported within net investment income. The time value gains and losses for interest rate swaptions when the related hedged items are redeemed are reported in net investment gains and losses consistent with the impact of the hedged item. For the three-month and nine-month periods ended September 30, 2022 and 2021, gains and losses included in the hedge assessment on interest rate swaptions and related hedged items were immaterial. |
DERIVATIVE INSTRUMENTS - Schedu
DERIVATIVE INSTRUMENTS - Schedule of Interest Rate Fair Value Hedges Hedged Items (Details) - Fixed maturity securities - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Carrying Amount of Hedged Assets/ (Liabilities) | [1] | $ 2,166 | $ 3,038 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities) | $ 193 | $ 205 | |
[1]The balance includes hedging adjustment on discontinued hedging relationships of $193 in 2022 and $205 in 2021. |
DERIVATIVE INSTRUMENTS - Deriva
DERIVATIVE INSTRUMENTS - Derivatives and Hedging Instruments Gain (Loss) Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in other comprehensive income on derivative | $ 1 | $ 2 | $ 2 | $ 3 | |||||
Unrealized foreign currency translation gains (losses) during period | (447) | (93) | (1,693) | (646) | |||||
Derivative and non-derivative hedging instruments, gain (loss) recognized in other comprehensive income, before tax | [1] | 418 | 98 | 1,766 | 636 | ||||
Net investment income | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | [2] | 0 | (1) | 0 | (1) | ||||
Net investment gains (losses) | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (491) | (174) | (1,515) | (557) | |||||
Reclassification Out Of Accumulated Other Comprehensive Income | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Derivative instruments, cash flow hedges, gains (losses) reclassified from accumulated other comprehensive income into earnings | (1) | (1) | (3) | (3) | |||||
Derivative instruments, fair value hedges excluded component, gains (losses) reclassified from accumulated other comprehensive income into earnings | (1) | (1) | (1) | ||||||
Cash flow hedges | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in other comprehensive income on derivative | [1] | 1 | 1 | 2 | 2 | ||||
Cash flow hedges | Net investment income | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | [2] | 0 | 0 | 0 | 0 | ||||
Cash flow hedges | Net investment gains (losses) | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (1) | [3] | (1) | [3] | (3) | [4] | (3) | [4] | |
Cash flow hedges | Foreign currency swaps | Variable Interest Entity | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in other comprehensive income on derivative | [1] | 1 | 1 | 2 | 2 | ||||
Cash flow hedges | Foreign currency swaps | Variable Interest Entity | Net investment income | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | [2] | 0 | 0 | 0 | 0 | ||||
Cash flow hedges | Foreign currency swaps | Variable Interest Entity | Net investment gains (losses) | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (1) | (1) | (3) | (3) | |||||
Fair value hedges | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in other comprehensive income on derivative | [1] | 0 | 1 | 0 | 1 | ||||
Fair value hedges | Net investment income | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | [2] | 0 | (1) | 0 | (1) | ||||
Fair value hedges | Net investment gains (losses) | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (15) | (6) | (41) | (13) | |||||
Fair value hedges | Foreign currency options | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (15) | [3] | (5) | [3] | (41) | [4] | (12) | [4] | |
Fair value hedges | Interest rate swaptions | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in other comprehensive income on derivative | [1] | 0 | [3] | 1 | [3] | 0 | [4] | 1 | [4] |
Fair value hedges | Interest rate swaptions | Net investment income | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | [2] | 0 | [3] | (1) | [3] | 0 | [4] | (1) | [4] |
Fair value hedges | Interest rate swaptions | Net investment gains (losses) | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | 0 | [3] | (1) | [3] | 0 | [4] | (1) | [4] | |
Net investment hedge | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | 27 | (43) | (75) | 3 | |||||
Unrealized foreign currency translation gains (losses) during period | [1] | 417 | 96 | 1,764 | 633 | ||||
Net investment hedge | Foreign currency options | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (1) | (1) | (2) | (4) | |||||
Unrealized foreign currency translation gains (losses) during period | [1] | 0 | 0 | 0 | 0 | ||||
Net investment hedge | Non-derivative hedging instruments | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | 0 | 0 | 0 | 0 | |||||
Unrealized foreign currency translation gains (losses) during period | [1] | 181 | 41 | 705 | 237 | ||||
Net investment hedge | Foreign currency forwards | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | 28 | (42) | (73) | 7 | |||||
Unrealized foreign currency translation gains (losses) during period | [1] | 236 | 55 | 1,059 | 396 | ||||
Non-qualifying strategies | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (502) | (124) | (1,396) | (544) | |||||
Non-qualifying strategies | Foreign currency swaps | Variable Interest Entity | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (19) | (36) | (35) | (115) | |||||
Non-qualifying strategies | Foreign currency swaps | Consolidated Entity Excluding Variable Interest Entities (VIE) | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | 27 | 6 | 162 | 105 | |||||
Non-qualifying strategies | Foreign currency options | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (13) | 1 | |||||||
Non-qualifying strategies | Foreign currency forwards | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (252) | (84) | (966) | (527) | |||||
Non-qualifying strategies | Interest rate swaps | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | (257) | (9) | (523) | (6) | |||||
Non-qualifying strategies | Forward bond purchase commitment | Variable Interest Entity | |||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||
Gains (losses) recognized in income on derivative | $ (1) | $ (1) | $ (21) | $ (2) | |||||
[1] Gains and losses on cash flow hedges and the change in the fair value of interest rate swaptions related to the time value of the swaptions in fair value hedges are recorded as unrealized gains (losses). Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statement of comprehensive income (loss). Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail). |
DERIVATIVE INSTRUMENTS - Offset
DERIVATIVE INSTRUMENTS - Offsetting of Financial Assets and Derivative Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Offsetting Assets [Line Items] | ||
Gross amount of recognized derivative assets | $ 1,081 | $ 858 |
Gross amount of liabilities offset in balance sheet | 0 | 0 |
Net amount of derivative assets presented in balance sheet | 1,081 | 858 |
Financial instruments, amount not offset | (167) | (471) |
Derivative, collateral, obligation to return securities | (135) | (53) |
Derivative, collateral, obligation to return cash | (775) | (334) |
Derivative asset, fair value, amount offset against collateral, subject to master netting agreement | 4 | 0 |
Derivative asset, not subject to master netting arrangement | 65 | 78 |
Derivative asset, fair value, gross asset including not subject to master netting arrangement | 1,146 | 936 |
Net amount of derivative assets presented in balance sheet | 1,146 | 936 |
Derivative asset, fair value, amount offset against collateral | 69 | 78 |
Securities lending, gross amounts of recognized financial instruments | 2,691 | 2,124 |
Securities lending, gross amounts offset in balance sheet | 0 | 0 |
Securities lending, net amounts of assets presented in balance sheet | 2,691 | 2,124 |
Securities lending, carrying value of financial instruments not offset in balance sheet | 0 | 0 |
Securities lending, securities collateral, not offset in balance sheet | 0 | 0 |
Securities lending, cash collateral, not offset in balance sheet | (2,691) | (2,124) |
Securities lending, financial instruments, amount of assets offset against collateral | 0 | 0 |
Gross amount of recognized assets | 3,837 | 3,060 |
Gross amounts offset in balance sheet | 0 | 0 |
Net amounts of assets presented in balance sheet | 3,837 | 3,060 |
Carrying value of financial instruments not offset in balance sheet | (167) | (471) |
Securities collateral, not offset in balance sheet | (135) | (53) |
Cash collateral, not offset in balance sheet | (3,466) | (2,458) |
Financial instruments, amount of assets offset against collateral | 69 | 78 |
Over the Counter - Bilateral | ||
Offsetting Assets [Line Items] | ||
Gross amount of recognized derivative assets | 1,081 | 858 |
Gross amount of liabilities offset in balance sheet | 0 | 0 |
Net amount of derivative assets presented in balance sheet | 1,081 | 858 |
Financial instruments, amount not offset | (167) | (471) |
Derivative, collateral, obligation to return securities | (135) | (53) |
Derivative, collateral, obligation to return cash | (775) | (334) |
Derivative asset, fair value, amount offset against collateral, subject to master netting agreement | 4 | 0 |
Derivative asset, not subject to master netting arrangement | $ 65 | $ 78 |
DERIVATIVE INSTRUMENTS - Offs_2
DERIVATIVE INSTRUMENTS - Offsetting of Financial Liabilities and Derivative Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Offsetting Liabilities [Line Items] | ||
Gross amount of recognized derivative liabilities | $ 1,626 | $ 1,205 |
Gross amount of assets offset in balance sheet | 0 | 0 |
Derivative liability, fair value, amount not offset against collateral | 1,626 | 1,205 |
Financial instruments, amount not offset | (167) | (471) |
Derivative, collateral, right to reclaim securities | (793) | (662) |
Derivative, collateral, right to reclaim cash | (662) | (49) |
Derivative liability, fair value, amount offset against collateral, subject to master netting agreement | 4 | 23 |
Derivative liability, not subject to master netting arrangement | 462 | 414 |
Derivative liability, fair value, gross liability including not subject to master netting arrangement | 2,088 | 1,619 |
Net amount of derivative liabilities presented in balance sheet | 2,088 | 1,619 |
Derivative liability, fair value, amount offset against collateral | 466 | 437 |
Securities lending, gross amounts of recognized financial instruments, offsetting liabilities | 2,721 | 2,162 |
Securities lending, gross amounts offset in statement of financial position, offsetting liabilities | 0 | 0 |
Securities lending, net amounts of financial instruments presented in balance sheet, offsetting liabilities | 2,721 | 2,162 |
Securities lending, carrying value of financial instruments, liabilities not offset in balance sheet | (2,691) | (2,124) |
Securities lending, securities collateral, liabilities not offset in balance sheet | 0 | 0 |
Securities lending, cash collateral, liabilities not offset in balance sheet | 0 | 0 |
Securities lending, financial instruments, amount of liabilities offset against collateral | 30 | 38 |
Gross amounts of recognized financial instruments, offsetting liabilities | 4,809 | 3,781 |
Gross amounts offset in statement of financial position, offsetting liabilities | 0 | 0 |
Net amounts of financial instruments presented in balance sheet, offsetting liabilities | 4,809 | 3,781 |
Carrying value of financial instruments, liabilities not offset in balance sheet | (2,858) | (2,595) |
Securities collateral, liabilities not offset in balance sheet | (793) | (662) |
Cash collateral, liabilities not offset in balance sheet | (662) | (49) |
Financial instruments, amount of liabilities offset against collateral | 496 | 475 |
Over the Counter - Bilateral | ||
Offsetting Liabilities [Line Items] | ||
Gross amount of recognized derivative liabilities | 1,036 | 1,151 |
Gross amount of assets offset in balance sheet | 0 | 0 |
Derivative liability, fair value, amount not offset against collateral | 1,036 | 1,151 |
Financial instruments, amount not offset | (167) | (471) |
Derivative, collateral, right to reclaim securities | (793) | (662) |
Derivative, collateral, right to reclaim cash | (72) | (14) |
Derivative liability, fair value, amount offset against collateral, subject to master netting agreement | 4 | 4 |
Derivative liability, not subject to master netting arrangement | 462 | 414 |
OTC- Cleared | ||
Offsetting Liabilities [Line Items] | ||
Gross amount of recognized derivative liabilities | 590 | 54 |
Gross amount of assets offset in balance sheet | 0 | 0 |
Derivative liability, fair value, amount not offset against collateral | 590 | 54 |
Financial instruments, amount not offset | 0 | 0 |
Derivative, collateral, right to reclaim securities | 0 | 0 |
Derivative, collateral, right to reclaim cash | (590) | (35) |
Derivative liability, fair value, amount offset against collateral, subject to master netting agreement | $ 0 | $ 19 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy Levels of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Available for sale, fixed maturity securities | $ 73,643 | $ 98,696 |
Equity securities | 1,064 | 1,603 |
Other investments | 1,816 | 1,726 |
Cash and cash equivalents | 4,710 | 5,051 |
Asset derivatives | 1,146 | 936 |
Total assets | 82,379 | 108,012 |
Liabilities: | ||
Liability derivatives | 2,088 | 1,619 |
Total liabilities | 2,088 | 1,619 |
Foreign currency swaps | ||
Assets: | ||
Asset derivatives | 146 | 137 |
Liabilities: | ||
Liability derivatives | 462 | 427 |
Foreign currency forwards | ||
Assets: | ||
Asset derivatives | 995 | 791 |
Liabilities: | ||
Liability derivatives | 1,035 | 1,138 |
Foreign currency options | ||
Assets: | ||
Asset derivatives | 5 | 8 |
Interest rate swaps | ||
Liabilities: | ||
Liability derivatives | 590 | 54 |
Forward bond purchase commitment | ||
Liabilities: | ||
Liability derivatives | 1 | |
Government and agencies | ||
Assets: | ||
Available for sale, fixed maturity securities | 23,910 | 33,820 |
Municipalities | ||
Assets: | ||
Available for sale, fixed maturity securities | 2,276 | 3,036 |
Mortgage- and asset-backed securities | ||
Assets: | ||
Available for sale, fixed maturity securities | 2,009 | 1,246 |
Public utilities | ||
Assets: | ||
Available for sale, fixed maturity securities | 7,350 | 10,051 |
Sovereign and supranational | ||
Assets: | ||
Available for sale, fixed maturity securities | 862 | 1,115 |
Banks/financial institutions | ||
Assets: | ||
Available for sale, fixed maturity securities | 9,031 | 11,591 |
Other corporate | ||
Assets: | ||
Available for sale, fixed maturity securities | 28,205 | 37,837 |
Level 1 | ||
Assets: | ||
Available for sale, fixed maturity securities | 22,987 | 32,532 |
Equity securities | 801 | 1,340 |
Other investments | 1,816 | 1,726 |
Cash and cash equivalents | 4,710 | 5,051 |
Asset derivatives | 0 | 0 |
Total assets | 30,314 | 40,649 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Level 1 | Foreign currency swaps | ||
Assets: | ||
Asset derivatives | 0 | 0 |
Liabilities: | ||
Liability derivatives | 0 | 0 |
Level 1 | Foreign currency forwards | ||
Assets: | ||
Asset derivatives | 0 | 0 |
Liabilities: | ||
Liability derivatives | 0 | 0 |
Level 1 | Foreign currency options | ||
Assets: | ||
Asset derivatives | 0 | 0 |
Level 1 | Interest rate swaps | ||
Liabilities: | ||
Liability derivatives | 0 | 0 |
Level 1 | Forward bond purchase commitment | ||
Liabilities: | ||
Liability derivatives | 0 | |
Level 1 | Government and agencies | ||
Assets: | ||
Available for sale, fixed maturity securities | 22,987 | 32,532 |
Level 1 | Municipalities | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 1 | Mortgage- and asset-backed securities | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 1 | Public utilities | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 1 | Sovereign and supranational | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 1 | Banks/financial institutions | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 1 | Other corporate | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 2 | ||
Assets: | ||
Available for sale, fixed maturity securities | 49,036 | 64,866 |
Equity securities | 66 | 90 |
Other investments | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Asset derivatives | 1,146 | 936 |
Total assets | 50,248 | 65,892 |
Liabilities: | ||
Total liabilities | 2,088 | 1,619 |
Level 2 | Foreign currency swaps | ||
Assets: | ||
Asset derivatives | 146 | 137 |
Liabilities: | ||
Liability derivatives | 462 | 427 |
Level 2 | Foreign currency forwards | ||
Assets: | ||
Asset derivatives | 995 | 791 |
Liabilities: | ||
Liability derivatives | 1,035 | 1,138 |
Level 2 | Foreign currency options | ||
Assets: | ||
Asset derivatives | 5 | 8 |
Level 2 | Interest rate swaps | ||
Liabilities: | ||
Liability derivatives | 590 | 54 |
Level 2 | Forward bond purchase commitment | ||
Liabilities: | ||
Liability derivatives | 1 | |
Level 2 | Government and agencies | ||
Assets: | ||
Available for sale, fixed maturity securities | 923 | 1,288 |
Level 2 | Municipalities | ||
Assets: | ||
Available for sale, fixed maturity securities | 2,276 | 3,036 |
Level 2 | Mortgage- and asset-backed securities | ||
Assets: | ||
Available for sale, fixed maturity securities | 1,699 | 955 |
Level 2 | Public utilities | ||
Assets: | ||
Available for sale, fixed maturity securities | 6,843 | 9,558 |
Level 2 | Sovereign and supranational | ||
Assets: | ||
Available for sale, fixed maturity securities | 828 | 1,072 |
Level 2 | Banks/financial institutions | ||
Assets: | ||
Available for sale, fixed maturity securities | 8,883 | 11,546 |
Level 2 | Other corporate | ||
Assets: | ||
Available for sale, fixed maturity securities | 27,584 | 37,411 |
Level 3 | ||
Assets: | ||
Available for sale, fixed maturity securities | 1,620 | 1,298 |
Equity securities | 197 | 173 |
Other investments | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Asset derivatives | 0 | 0 |
Total assets | 1,817 | 1,471 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Level 3 | Foreign currency swaps | ||
Assets: | ||
Asset derivatives | 0 | 0 |
Liabilities: | ||
Liability derivatives | 0 | 0 |
Level 3 | Foreign currency forwards | ||
Assets: | ||
Asset derivatives | 0 | 0 |
Liabilities: | ||
Liability derivatives | 0 | 0 |
Level 3 | Foreign currency options | ||
Assets: | ||
Asset derivatives | 0 | 0 |
Level 3 | Interest rate swaps | ||
Liabilities: | ||
Liability derivatives | 0 | 0 |
Level 3 | Forward bond purchase commitment | ||
Liabilities: | ||
Liability derivatives | 0 | |
Level 3 | Government and agencies | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 3 | Municipalities | ||
Assets: | ||
Available for sale, fixed maturity securities | 0 | 0 |
Level 3 | Mortgage- and asset-backed securities | ||
Assets: | ||
Available for sale, fixed maturity securities | 310 | 291 |
Level 3 | Public utilities | ||
Assets: | ||
Available for sale, fixed maturity securities | 507 | 493 |
Level 3 | Sovereign and supranational | ||
Assets: | ||
Available for sale, fixed maturity securities | 34 | 43 |
Level 3 | Banks/financial institutions | ||
Assets: | ||
Available for sale, fixed maturity securities | 148 | 45 |
Level 3 | Other corporate | ||
Assets: | ||
Available for sale, fixed maturity securities | $ 621 | $ 426 |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy Levels of Assets and Liabilities Carried at Cost or Amortized Cost (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | $ 4,186 | $ 3,842 | ||
Assets: | ||||
Held to maturity, fixed maturity securities, amortized cost | 17,472 | 22,008 | ||
Held to maturity, fixed maturity securities, fair value | 20,085 | 26,869 | ||
Commercial mortgage and other loans | 13,459 | |||
Commercial mortgage and other loans, fair value | 13,189 | 11,996 | ||
Other investments carried at amortized cost | 30 | [1] | 22 | [2] |
Other investments carried at amortized cost, fair value | 30 | [1] | 22 | [2] |
Total financial instruments assets not carried at fair value | 30,955 | 33,808 | ||
Assets fair value disclosure financial instruments carried at cost | 33,304 | 38,887 | ||
Liabilities: | ||||
Other policyholders’ funds | 5,632 | 7,072 | ||
Other policyholders' funds fair value disclosure | 5,539 | 6,957 | ||
Notes payable | 7,393 | 7,839 | ||
Notes payable, fair value disclosure | 6,994 | 8,539 | ||
Total financial instrument liabilities not carried at fair value | 13,025 | 14,911 | ||
Liabilities fair value disclosure financial instruments carried at cost | 12,533 | 15,496 | ||
Government and agencies | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, amortized cost | 16,742 | 21,086 | ||
Held to maturity, fixed maturity securities, fair value | 19,225 | 25,699 | ||
Municipalities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, amortized cost | 264 | 335 | ||
Held to maturity, fixed maturity securities, fair value | 321 | 436 | ||
Public utilities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, amortized cost | 34 | 43 | ||
Held to maturity, fixed maturity securities, fair value | 41 | 55 | ||
Sovereign and supranational | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, amortized cost | 409 | 514 | ||
Held to maturity, fixed maturity securities, fair value | 477 | 650 | ||
Other corporate | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, amortized cost | 17 | 22 | ||
Held to maturity, fixed maturity securities, fair value | 21 | 29 | ||
Policy loans | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 195 | 236 | ||
Equity method investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 2,145 | 1,858 | ||
Level 1 | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 19,053 | 25,469 | ||
Commercial mortgage and other loans, fair value | 0 | 0 | ||
Other investments carried at amortized cost, fair value | 0 | [1] | 0 | [2] |
Assets fair value disclosure financial instruments carried at cost | 19,053 | 25,469 | ||
Liabilities: | ||||
Other policyholders' funds fair value disclosure | 0 | 0 | ||
Notes payable, fair value disclosure | 0 | 0 | ||
Liabilities fair value disclosure financial instruments carried at cost | 0 | 0 | ||
Level 1 | Government and agencies | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 19,053 | 25,469 | ||
Level 1 | Municipalities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 1 | Public utilities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 1 | Sovereign and supranational | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 1 | Other corporate | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 2 | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 1,032 | 1,400 | ||
Commercial mortgage and other loans, fair value | 0 | 0 | ||
Other investments carried at amortized cost, fair value | 30 | [1] | 22 | [2] |
Assets fair value disclosure financial instruments carried at cost | 1,062 | 1,422 | ||
Liabilities: | ||||
Other policyholders' funds fair value disclosure | 0 | 0 | ||
Notes payable, fair value disclosure | 6,237 | 8,280 | ||
Liabilities fair value disclosure financial instruments carried at cost | 6,237 | 8,280 | ||
Level 2 | Government and agencies | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 172 | 230 | ||
Level 2 | Municipalities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 321 | 436 | ||
Level 2 | Public utilities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 41 | 55 | ||
Level 2 | Sovereign and supranational | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 477 | 650 | ||
Level 2 | Other corporate | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 21 | 29 | ||
Level 3 | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Commercial mortgage and other loans, fair value | 13,189 | 11,996 | ||
Other investments carried at amortized cost, fair value | 0 | [1] | 0 | [2] |
Assets fair value disclosure financial instruments carried at cost | 13,189 | 11,996 | ||
Liabilities: | ||||
Other policyholders' funds fair value disclosure | 5,539 | 6,957 | ||
Notes payable, fair value disclosure | 757 | 259 | ||
Liabilities fair value disclosure financial instruments carried at cost | 6,296 | 7,216 | ||
Level 3 | Government and agencies | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 3 | Municipalities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 3 | Public utilities | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 3 | Sovereign and supranational | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | 0 | 0 | ||
Level 3 | Other corporate | ||||
Assets: | ||||
Held to maturity, fixed maturity securities, fair value | $ 0 | $ 0 | ||
[1]Excludes policy loans of $195 and equity method investments of $2,145, at carrying value[2]Excludes policy loans of $236 and equity method investments of $1,858, at carrying value |
FAIR VALUE MEASUREMENTS - Fai_3
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy Levels of Assets by Pricing Source, Securities Carried at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | $ 73,643 | $ 98,696 |
Equity securities | 1,064 | 1,603 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 22,987 | 32,532 |
Equity securities | 801 | 1,340 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 49,036 | 64,866 |
Equity securities | 66 | 90 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 1,620 | 1,298 |
Equity securities | 197 | 173 |
Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 867 | 1,430 |
Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 801 | 1,340 |
Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 66 | 90 |
Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Broker/other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 197 | 173 |
Broker/other | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Broker/other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Broker/other | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 197 | 173 |
Government and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 23,910 | 33,820 |
Government and agencies | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 22,987 | 32,532 |
Government and agencies | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 923 | 1,288 |
Government and agencies | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Government and agencies | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 23,557 | 33,340 |
Government and agencies | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 22,987 | 32,532 |
Government and agencies | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 570 | 808 |
Government and agencies | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Government and agencies | Internal valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 353 | 480 |
Government and agencies | Internal valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Government and agencies | Internal valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 353 | 480 |
Government and agencies | Internal valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Municipalities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 2,276 | 3,036 |
Municipalities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Municipalities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 2,276 | 3,036 |
Municipalities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Municipalities | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 1,975 | 2,222 |
Municipalities | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Municipalities | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 1,975 | 2,222 |
Municipalities | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Municipalities | Internal valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 301 | 814 |
Municipalities | Internal valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Municipalities | Internal valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 301 | 814 |
Municipalities | Internal valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Mortgage- and asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 2,009 | 1,246 |
Mortgage- and asset-backed securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Mortgage- and asset-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 1,699 | 955 |
Mortgage- and asset-backed securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 310 | 291 |
Mortgage- and asset-backed securities | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 1,676 | 955 |
Mortgage- and asset-backed securities | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Mortgage- and asset-backed securities | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 1,676 | 955 |
Mortgage- and asset-backed securities | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Mortgage- and asset-backed securities | Internal valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 3 | |
Mortgage- and asset-backed securities | Internal valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | |
Mortgage- and asset-backed securities | Internal valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 3 | |
Mortgage- and asset-backed securities | Internal valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | |
Mortgage- and asset-backed securities | Broker/other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 330 | 291 |
Mortgage- and asset-backed securities | Broker/other | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Mortgage- and asset-backed securities | Broker/other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 20 | 0 |
Mortgage- and asset-backed securities | Broker/other | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 310 | 291 |
Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 7,350 | 10,051 |
Public utilities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Public utilities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 6,843 | 9,558 |
Public utilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 507 | 493 |
Public utilities | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 3,717 | 4,527 |
Public utilities | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Public utilities | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 3,717 | 4,527 |
Public utilities | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Public utilities | Internal valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 3,126 | 5,031 |
Public utilities | Internal valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Public utilities | Internal valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 3,126 | 5,031 |
Public utilities | Internal valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Public utilities | Broker/other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 507 | 493 |
Public utilities | Broker/other | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Public utilities | Broker/other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Public utilities | Broker/other | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 507 | 493 |
Sovereign and supranational | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 862 | 1,115 |
Sovereign and supranational | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Sovereign and supranational | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 828 | 1,072 |
Sovereign and supranational | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 34 | 43 |
Sovereign and supranational | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 295 | 273 |
Sovereign and supranational | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Sovereign and supranational | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 295 | 273 |
Sovereign and supranational | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Sovereign and supranational | Internal valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 533 | 799 |
Sovereign and supranational | Internal valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Sovereign and supranational | Internal valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 533 | 799 |
Sovereign and supranational | Internal valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Sovereign and supranational | Broker/other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 34 | 43 |
Sovereign and supranational | Broker/other | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Sovereign and supranational | Broker/other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Sovereign and supranational | Broker/other | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 34 | 43 |
Banks/financial institutions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 9,031 | 11,591 |
Banks/financial institutions | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Banks/financial institutions | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 8,883 | 11,546 |
Banks/financial institutions | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 148 | 45 |
Banks/financial institutions | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 4,650 | 5,237 |
Banks/financial institutions | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Banks/financial institutions | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 4,650 | 5,237 |
Banks/financial institutions | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Banks/financial institutions | Internal valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 4,326 | 6,309 |
Banks/financial institutions | Internal valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Banks/financial institutions | Internal valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 4,233 | 6,309 |
Banks/financial institutions | Internal valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 93 | 0 |
Banks/financial institutions | Broker/other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 55 | 45 |
Banks/financial institutions | Broker/other | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Banks/financial institutions | Broker/other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Banks/financial institutions | Broker/other | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 55 | 45 |
Other corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 28,205 | 37,837 |
Other corporate | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Other corporate | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 27,584 | 37,411 |
Other corporate | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 621 | 426 |
Other corporate | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 22,427 | 29,495 |
Other corporate | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Other corporate | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 22,427 | 29,495 |
Other corporate | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Other corporate | Internal valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 5,349 | 7,916 |
Other corporate | Internal valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Other corporate | Internal valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 5,157 | 7,916 |
Other corporate | Internal valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 192 | 0 |
Other corporate | Broker/other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 429 | 426 |
Other corporate | Broker/other | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Other corporate | Broker/other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | 0 | 0 |
Other corporate | Broker/other | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale, fixed maturity securities | $ 429 | $ 426 |
FAIR VALUE MEASUREMENTS - Fai_4
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy Levels of Assets by Pricing Source, Securities Carried at Amortized Cost (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | $ 20,085 | $ 26,869 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 19,053 | 25,469 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 1,032 | 1,400 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Government and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 19,225 | 25,699 |
Government and agencies | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 19,053 | 25,469 |
Government and agencies | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 172 | 230 |
Government and agencies | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Government and agencies | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 19,225 | 25,699 |
Government and agencies | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 19,053 | 25,469 |
Government and agencies | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 172 | 230 |
Government and agencies | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Municipalities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 321 | 436 |
Municipalities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Municipalities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 321 | 436 |
Municipalities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Municipalities | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 321 | 436 |
Municipalities | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Municipalities | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 321 | 436 |
Municipalities | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Public utilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 41 | 55 |
Public utilities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Public utilities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 41 | 55 |
Public utilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Public utilities | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 41 | 55 |
Public utilities | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Public utilities | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 41 | 55 |
Public utilities | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Sovereign and supranational | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 477 | 650 |
Sovereign and supranational | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Sovereign and supranational | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 477 | 650 |
Sovereign and supranational | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Sovereign and supranational | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 232 | 313 |
Sovereign and supranational | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Sovereign and supranational | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 232 | 313 |
Sovereign and supranational | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Sovereign and supranational | Broker/other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 245 | 337 |
Sovereign and supranational | Broker/other | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Sovereign and supranational | Broker/other | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 245 | 337 |
Sovereign and supranational | Broker/other | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Other corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 21 | 29 |
Other corporate | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Other corporate | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 21 | 29 |
Other corporate | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Other corporate | Third party pricing vendor valuation technique | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 21 | 29 |
Other corporate | Third party pricing vendor valuation technique | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 0 | 0 |
Other corporate | Third party pricing vendor valuation technique | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | 21 | 29 |
Other corporate | Third party pricing vendor valuation technique | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held to maturity, fixed maturity securities, fair value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Investments and Derivatives Carried at Fair Value Classified as Level 3 (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | $ 1,797 | $ 1,095 | $ 1,471 | $ 1,021 |
Net investment gains (losses) included in earnings | (1) | (56) | 1 | (135) |
Unrealized gains (losses) included in other comprehensive income (loss) | (97) | (14) | (311) | (42) |
Purchases | 306 | 109 | 698 | 283 |
Issuances | 0 | 0 | 0 | 17 |
Sales | 0 | (8) | 0 | (31) |
Settlements | (232) | (8) | (314) | (35) |
Transfers into Level 3 | 68 | 0 | 496 | 55 |
Transfers out of Level 3 | (24) | (44) | (224) | (59) |
Balance, end of period | 1,817 | 1,074 | 1,817 | 1,074 |
Change in unrealized gains (losses) still held | (1) | (72) | (3) | (178) |
Foreign currency swaps | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance, beginning of period | 0 | (200) | 0 | (98) |
Net investment gains (losses) included in earnings | 0 | (57) | 0 | (158) |
Unrealized gains or losses included in other comprehensive income (loss) | 0 | 0 | 0 | (1) |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, end of period | 0 | (257) | 0 | (257) |
Changes in unrealized gain (losses) still held | 0 | (57) | 0 | (158) |
Fixed maturity securities | Mortgage- and asset-backed securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 311 | 258 | 291 | 224 |
Net investment gains (losses) included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) included in other comprehensive income (loss) | (12) | (4) | (81) | (19) |
Purchases | 56 | 35 | 222 | 99 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (21) | 0 | (59) | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | (24) | (39) | (63) | (54) |
Balance, end of period | 310 | 250 | 310 | 250 |
Change in unrealized gains (losses) still held | 0 | (4) | 0 | (19) |
Fixed maturity securities | Public utilities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 537 | 480 | 493 | 422 |
Net investment gains (losses) included in earnings | 1 | 0 | 2 | 0 |
Unrealized gains (losses) included in other comprehensive income (loss) | (30) | (3) | (111) | (13) |
Purchases | 7 | 54 | 35 | 132 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (8) | (8) | (40) | (18) |
Transfers into Level 3 | 0 | 0 | 128 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, end of period | 507 | 523 | 507 | 523 |
Change in unrealized gains (losses) still held | 1 | (3) | 1 | (13) |
Fixed maturity securities | Sovereign and supranational | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 36 | 45 | 43 | 48 |
Net investment gains (losses) included in earnings | 0 | 0 | 0 | 0 |
Unrealized gains (losses) included in other comprehensive income (loss) | (2) | 0 | (9) | (3) |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | (23) |
Settlements | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 23 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, end of period | 34 | 45 | 34 | 45 |
Change in unrealized gains (losses) still held | 0 | 0 | 0 | (3) |
Fixed maturity securities | Banks/financial institutions | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 91 | 38 | 45 | 24 |
Net investment gains (losses) included in earnings | 1 | 0 | 1 | 0 |
Unrealized gains (losses) included in other comprehensive income (loss) | (12) | 0 | (14) | (1) |
Purchases | 88 | 8 | 121 | 23 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (20) | 0 | (23) | 0 |
Transfers into Level 3 | 0 | 0 | 18 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, end of period | 148 | 46 | 148 | 46 |
Change in unrealized gains (losses) still held | 0 | 0 | 0 | (1) |
Fixed maturity securities | Other corporate | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 632 | 316 | 426 | 299 |
Net investment gains (losses) included in earnings | 0 | 2 | 0 | 2 |
Unrealized gains (losses) included in other comprehensive income (loss) | (41) | (7) | (96) | (5) |
Purchases | 145 | 0 | 267 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (183) | 0 | (185) | (17) |
Transfers into Level 3 | 68 | 0 | 350 | 32 |
Transfers out of Level 3 | 0 | (5) | (141) | (5) |
Balance, end of period | 621 | 306 | 621 | 306 |
Change in unrealized gains (losses) still held | 0 | (7) | 0 | (5) |
Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, beginning of period | 190 | 158 | 173 | 102 |
Net investment gains (losses) included in earnings | (3) | (1) | (2) | 21 |
Unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Purchases | 10 | 12 | 53 | 29 |
Issuances | 0 | 0 | 0 | 17 |
Sales | 0 | (8) | 0 | (8) |
Settlements | 0 | 0 | (7) | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | (20) | 0 |
Balance, end of period | 197 | 161 | 197 | 161 |
Change in unrealized gains (losses) still held | $ (2) | $ (1) | $ (4) | $ 21 |
FAIR VALUE MEASUREMENTS - Fai_5
FAIR VALUE MEASUREMENTS - Fair Value Measurement Inputs and Valuation Techniques (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | $ 73,643 | $ 98,696 |
Equity securities | 1,064 | 1,603 |
Assets, fair value | 82,379 | 108,012 |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 1,620 | 1,298 |
Equity securities | 197 | 173 |
Assets, fair value | 1,817 | 1,471 |
Net asset value valuation technique | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Equity securities | 197 | 173 |
Municipalities | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 2,276 | 3,036 |
Municipalities | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 0 | 0 |
Mortgage- and asset-backed securities | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 2,009 | 1,246 |
Mortgage- and asset-backed securities | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 310 | 291 |
Mortgage- and asset-backed securities | Consensus pricing valuation technique | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 310 | 291 |
Public utilities | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 7,350 | 10,051 |
Public utilities | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 507 | 493 |
Public utilities | Discounted cash flow technique | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 507 | 493 |
Sovereign and supranational | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 862 | 1,115 |
Sovereign and supranational | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 34 | 43 |
Sovereign and supranational | Discounted cash flow technique | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 34 | 43 |
Banks/financial institutions | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 9,031 | 11,591 |
Banks/financial institutions | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 148 | 45 |
Banks/financial institutions | Consensus pricing valuation technique | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 148 | 45 |
Other corporate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | 28,205 | 37,837 |
Other corporate | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | $ 621 | 426 |
Other corporate | Discounted cash flow technique | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available for sale, fixed maturity securities | $ 426 |
POLICY LIABILITIES - Changes in
POLICY LIABILITIES - Changes in Liability for Unpaid Policy Claims (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Unpaid Claims and Claims Expenses | ||||
Net balance, beginning of period | $ 4,836 | |||
Less claims paid during the period on claims incurred during: | ||||
Net balance, end of period | $ 4,516 | 4,516 | ||
Total liability for unpaid policy claims | 4,516 | $ 4,909 | 4,516 | $ 4,909 |
Health insurance | ||||
Liability for Unpaid Claims and Claims Expenses | ||||
Unpaid supplemental health claims, beginning of period | 3,779 | 4,162 | 4,067 | 4,389 |
Less reinsurance recoverables | 38 | 37 | 37 | 39 |
Net balance, beginning of period | 3,741 | 4,125 | 4,030 | 4,350 |
Add claims incurred during the period related to: | ||||
Current year | 1,689 | 1,720 | 5,007 | 5,302 |
Prior years | (151) | (215) | (512) | (739) |
Total incurred | 1,538 | 1,505 | 4,495 | 4,563 |
Less claims paid during the period on claims incurred during: | ||||
Current year | 1,148 | 1,279 | 2,703 | 2,947 |
Prior years | 214 | 219 | 1,554 | 1,676 |
Total paid | 1,362 | 1,498 | 4,257 | 4,623 |
Effect of foreign exchange rate changes on unpaid claims | (105) | (29) | (456) | (187) |
Net balance, end of period | 3,812 | 4,103 | 3,812 | 4,103 |
Add reinsurance recoverables | 50 | 39 | 50 | 39 |
Total liability for unpaid policy claims | 3,862 | 4,142 | 3,862 | 4,142 |
Life insurance | ||||
Less claims paid during the period on claims incurred during: | ||||
Total liability for unpaid policy claims | $ 654 | $ 767 | $ 654 | $ 767 |
POLICY LIABILITIES - Additional
POLICY LIABILITIES - Additional Information (Details) - Health insurance - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||||
Prior years claims and claims adjustment expense | $ (151) | $ (215) | $ (512) | $ (739) |
Aflac Japan | ||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||||
Prior years claims and claims adjustment expense | $ (321) | |||
Percentage of total prior year claims and claims adjustment expense | 63% | |||
Liability for unpaid claims and claims adjustment expense, foreign currency translation gain (loss), prior year claims adjustment expense | $ (83) | |||
Prior year claims and claims adjustment expense excluding effect of foreign currency | $ (404) | |||
Percentage of total prior year claims and claims adjustment expense excluding effect of foreign currency | 79% | |||
Aflac U.S. | ||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | ||||
Prior years claims and claims adjustment expense | $ (191) | |||
Percentage of total prior year claims and claims adjustment expense | 37% | |||
Prior year claims and claims adjustment expense from refinement of estimates | $ (63) |
REINSURANCE - Additional Inform
REINSURANCE - Additional Information (Details) $ in Millions, ¥ in Billions | Sep. 30, 2022 USD ($) | Sep. 30, 2022 JPY (¥) | Dec. 31, 2021 USD ($) |
Effects of Reinsurance [Line Items] | |||
Percent change in spot yen/dollar exchange rate | (20.60%) | (20.60%) | |
Percent change in ceded reserves | (19.10%) | (19.10%) | |
Aflac Japan | |||
Effects of Reinsurance [Line Items] | |||
Committed reinsurance facility | ¥ | ¥ 120 | ||
Aflac Japan | Closed Block | |||
Effects of Reinsurance [Line Items] | |||
Reinsurance deferred profit liability | $ 646 | $ 859 | |
Reinsurance recoverable | $ 761 | $ 937 |
REINSURANCE - Effect of Reinsur
REINSURANCE - Effect of Reinsurance on Premiums and Benefits and Claims (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Effects of Reinsurance [Line Items] | ||||
Direct premium income | $ 3,681 | $ 4,426 | $ 11,772 | $ 13,567 |
Net earned premiums | 3,651 | 4,372 | 11,679 | 13,406 |
Direct benefits and claims | 2,385 | 2,649 | 7,209 | 8,112 |
Benefits and claims, net | 2,340 | 2,609 | 7,125 | 7,996 |
Intercompany eliminations | ||||
Effects of Reinsurance [Line Items] | ||||
Ceded benefits and claims | 5 | 8 | 17 | 24 |
Assumed benefits and claims from other companies | (5) | (8) | (17) | (24) |
All other | ||||
Effects of Reinsurance [Line Items] | ||||
Ceded premiums | (20) | (19) | (55) | (54) |
Assumed premiums earned | 35 | 27 | 116 | 84 |
Ceded benefits and claims | (9) | (9) | (28) | (25) |
Assumed benefits and claims from other companies | 24 | 21 | 105 | 71 |
Aflac Japan | ||||
Effects of Reinsurance [Line Items] | ||||
Net earned premiums | 2,241 | 2,934 | 7,384 | 9,045 |
Aflac Japan | Closed Block | ||||
Effects of Reinsurance [Line Items] | ||||
Ceded premiums | (80) | (107) | (266) | (329) |
Assumed premiums earned | 35 | 45 | 112 | 138 |
Ceded benefits and claims | (103) | (94) | (276) | (288) |
Assumed benefits and claims from other companies | $ 43 | $ 42 | $ 115 | $ 126 |
NOTES PAYABLE AND LEASE OBLIG_3
NOTES PAYABLE AND LEASE OBLIGATIONS - Additional Information (Details) $ in Millions, ¥ in Billions | 1 Months Ended | |||
Sep. 30, 2022 JPY (¥) series | Aug. 31, 2022 JPY (¥) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 JPY (¥) | |
Debt Instrument [Line Items] | ||||
Number of senior notes issued | series | 4 | |||
Senior notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 73 | |||
1.075% senior notes due September 2029 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 33.4 | |||
Debt instrument, interest rate | 1.075% | 1.075% | ||
1.320% senior notes due December 2032 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 21.1 | |||
Debt instrument, interest rate | 1.32% | 1.32% | ||
1.594% senior notes due September 2037 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 6.5 | |||
Debt instrument, interest rate | 1.594% | 1.594% | ||
2.144% senior notes due September 2052 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 12 | |||
Debt instrument, interest rate | 2.144% | 2.144% | ||
Yen-denominated loans | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 107 | |||
Yen-denominated loan variable interest rate due August 2027 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 11.7 | ¥ 11.7 | ||
Debt instrument, interest rate | 0.34% | 0.34% | ||
Yen-denominated loan variable interest rate due August 2027 | Lower Limit | Tokyo Interbank Offered Rate (TIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread | 0.225% | |||
Yen-denominated loan variable interest rate due August 2027 | Upper Limit | Tokyo Interbank Offered Rate (TIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread | 0.625% | |||
Yen-denominated loan variable interest rate due August 2029 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 25.3 | ¥ 25.3 | ¥ 5 | |
Debt instrument, interest rate | 0.44% | 0.44% | 0.41% | |
Yen-denominated loan variable interest rate due August 2029 | Lower Limit | Tokyo Interbank Offered Rate (TIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread | 0.325% | |||
Yen-denominated loan variable interest rate due August 2029 | Upper Limit | Tokyo Interbank Offered Rate (TIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread | 0.725% | |||
Yen-denominated loan variable interest rate due August 2032 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | ¥ 70 | ¥ 70 | ¥ 25 | |
Debt instrument, interest rate | 0.59% | 0.59% | 0.56% | |
Yen-denominated loan variable interest rate due August 2032 | Lower Limit | Tokyo Interbank Offered Rate (TIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread | 0.475% | |||
Yen-denominated loan variable interest rate due August 2032 | Upper Limit | Tokyo Interbank Offered Rate (TIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread | 1.025% | |||
3.625% senior notes paid September 2022 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 3.625% | 3.625% | 3.625% | |
Debt instrument, repurchased amount | $ | $ 750 | |||
Notes payable | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, debt default, amount | $ | 0 | |||
Lines of credit | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, debt default, amount | $ | $ 0 |
NOTES PAYABLE AND LEASE OBLIG_4
NOTES PAYABLE AND LEASE OBLIGATIONS - Summary of Notes Payable (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | $ 7,518 | $ 7,956 | |
Finance lease obligations | 8 | 12 | |
Operating lease obligations | 117 | 105 | |
3.625% senior notes paid September 2022 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 0 | 748 | |
3.25% senior notes due March 2025 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | [1] | 448 | 448 |
1.125% senior sustainability notes due March 2026 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 398 | 397 | |
2.875% senior notes due October 2026 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 298 | 298 | |
3.60% senior notes due April 2030 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 992 | 991 | |
6.90% senior notes due December 2039 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 221 | 221 | |
6.45% senior notes due August 2040 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 254 | 255 | |
4.00% senior notes due October 2046 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 394 | 394 | |
4.750% senior notes due January 2049 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 542 | 541 | |
.300% senior notes due September 2025 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 84 | 107 | |
.932% senior notes due January 2027 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 413 | 520 | |
1.075% senior notes due September 2029 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 227 | 0 | |
.500% senior notes due December 2029 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 87 | 109 | |
.550% senior notes due March 2030 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 90 | 115 | |
1.159% senior notes due October 2030 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 201 | 254 | |
.633% senior notes due April 2031 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 203 | 259 | |
.843% senior notes due December 2031 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 64 | 81 | |
.750% senior notes due March 2032 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 139 | 179 | |
1.320% senior notes due December 2032 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 143 | 0 | |
.844% senior notes due April 2033 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 81 | 104 | |
1.488% senior notes due October 2033 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 104 | 131 | |
.934% senior notes due December 2034 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 67 | 85 | |
.830% senior notes due March 2035 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 71 | 91 | |
1.039% senior notes due April 2036 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 67 | 86 | |
1.594% senior notes due September 2037 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 44 | 0 | |
1.750% senior notes due October 2038 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 61 | 77 | |
1.122% senior notes due December 2039 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 43 | 54 | |
1.264% senior notes due April 2041 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 67 | 86 | |
2.108% subordinated notes due October 2047 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 410 | 517 | |
.963% subordinated bonds due April 2049 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 207 | 260 | |
1.560% senior notes due April 2051 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 135 | 172 | |
2.144% senior notes due September 2052 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 81 | 0 | |
Yen-denominated loan variable interest rate due August 2027 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 83 | 0 | |
Yen-denominated loan variable interest rate due August 2029 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | 179 | 43 | |
Yen-denominated loan variable interest rate due August 2032 | |||
Debt Instrument [Line Items] | |||
Notes payable and lease obligations | $ 495 | $ 216 | |
[1]Redeemed in October 2022 |
NOTES PAYABLE AND LEASE OBLIG_5
NOTES PAYABLE AND LEASE OBLIGATIONS - Summary of Notes Payable (Details 2) - JPY (¥) ¥ in Billions | Sep. 30, 2022 | Aug. 31, 2022 | Dec. 31, 2021 |
3.625% senior notes paid September 2022 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 3.625% | 3.625% | |
3.25% senior notes due March 2025 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 3.25% | 3.25% | |
1.125% senior sustainability notes due March 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.125% | 1.125% | |
2.875% senior notes due October 2026 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 2.875% | 2.875% | |
3.60% senior notes due April 2030 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 3.60% | 3.60% | |
6.90% senior notes due December 2039 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 6.90% | 6.90% | |
6.45% senior notes due August 2040 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 6.45% | 6.45% | |
4.00% senior notes due October 2046 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 4% | 4% | |
4.750% senior notes due January 2049 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 4.75% | 4.75% | |
.300% senior notes due September 2025 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.30% | 0.30% | |
Debt instrument, principal amount | ¥ 12.4 | ¥ 12.4 | |
.932% senior notes due January 2027 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.932% | 0.932% | |
Debt instrument, principal amount | ¥ 60 | ¥ 60 | |
1.075% senior notes due September 2029 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.075% | ||
Debt instrument, principal amount | ¥ 33.4 | ||
.500% senior notes due December 2029 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.50% | 0.50% | |
Debt instrument, principal amount | ¥ 12.6 | ¥ 12.6 | |
.550% senior notes due March 2030 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.55% | 0.55% | |
Debt instrument, principal amount | ¥ 13.3 | ¥ 13.3 | |
1.159% senior notes due October 2030 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.159% | 1.159% | |
Debt instrument, principal amount | ¥ 29.3 | ¥ 29.3 | |
.633% senior notes due April 2031 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.633% | 0.633% | |
Debt instrument, principal amount | ¥ 30 | ¥ 30 | |
.843% senior notes due December 2031 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.843% | 0.843% | |
Debt instrument, principal amount | ¥ 9.3 | ¥ 9.3 | |
.750% senior notes due March 2032 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.75% | 0.75% | |
Debt instrument, principal amount | ¥ 20.7 | ¥ 20.7 | |
1.320% senior notes due December 2032 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.32% | ||
Debt instrument, principal amount | ¥ 21.1 | ||
.844% senior notes due April 2033 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.844% | 0.844% | |
Debt instrument, principal amount | ¥ 12 | ¥ 12 | |
1.488% senior notes due October 2033 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.488% | 1.488% | |
Debt instrument, principal amount | ¥ 15.2 | ¥ 15.2 | |
.934% senior notes due December 2034 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.934% | 0.934% | |
Debt instrument, principal amount | ¥ 9.8 | ¥ 9.8 | |
.830% senior notes due March 2035 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.83% | 0.83% | |
Debt instrument, principal amount | ¥ 10.6 | ¥ 10.6 | |
1.039% senior notes due April 2036 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.039% | 1.039% | |
Debt instrument, principal amount | ¥ 10 | ¥ 10 | |
1.594% senior notes due September 2037 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.594% | ||
Debt instrument, principal amount | ¥ 6.5 | ||
1.750% senior notes due October 2038 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.75% | 1.75% | |
Debt instrument, principal amount | ¥ 8.9 | ¥ 8.9 | |
1.122% senior notes due December 2039 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.122% | 1.122% | |
Debt instrument, principal amount | ¥ 6.3 | ¥ 6.3 | |
1.264% senior notes due April 2041 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.264% | 1.264% | |
Debt instrument, principal amount | ¥ 10 | ¥ 10 | |
2.108% subordinated notes due October 2047 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 2.108% | 2.108% | |
Debt instrument, principal amount | ¥ 60 | ¥ 60 | |
.963% subordinated bonds due April 2049 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.963% | 0.963% | |
Debt instrument, principal amount | ¥ 30 | ¥ 30 | |
1.560% senior notes due April 2051 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 1.56% | 1.56% | |
Debt instrument, principal amount | ¥ 20 | ¥ 20 | |
2.144% senior notes due September 2052 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 2.144% | ||
Debt instrument, principal amount | ¥ 12 | ||
Yen-denominated loan variable interest rate due August 2027 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.34% | ||
Debt instrument, principal amount | ¥ 11.7 | ¥ 11.7 | |
Yen-denominated loan variable interest rate due August 2029 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.44% | 0.41% | |
Debt instrument, principal amount | ¥ 25.3 | 25.3 | ¥ 5 |
Yen-denominated loan variable interest rate due August 2032 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.59% | 0.56% | |
Debt instrument, principal amount | ¥ 70 | ¥ 70 | ¥ 25 |
NOTES PAYABLE AND LEASE OBLIG_6
NOTES PAYABLE AND LEASE OBLIGATIONS - Summary of Lines of Credit (Details) - 9 months ended Sep. 30, 2022 ¥ in Millions, $ in Millions | USD ($) | JPY (¥) |
$100 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | $ 100 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | The rate quoted by the bank and agreed upon at the time of borrowing | |
100.0 billion yen line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 5 years | |
Line of credit facility, maximum borrowing capacity | ¥ | ¥ 100,000 | |
Line of credit facility, amount outstanding | ¥ | 0 | |
Line of credit facility, interest rate description | A rate per annum equal to (a) TIBOR plus, the alternative applicable TIBOR margin during the availability period from the closing date to the commitment termination date or (b) the TIBOR rate offered by the agent to major banks in yen for the applicable period plus, the applicable alternative TIBOR margin during the term out period | |
$1 billion line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 5 years | |
Line of credit facility, maximum borrowing capacity | $ 1,000 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | A rate per annum equal to, at the Company's option, either, (a) USD London Interbank Offered Rate (LIBOR) for U.S. dollar denominated borrowings or TIBOR for Japanese yen denominated borrowings, in either case adjusted for certain costs, or (b) a base rate determined by reference to the highest of (1) the federal funds rate plus 1/2 of 1%, (2) the rate of interest for such day announced by Mizuho Bank, Ltd. as its prime rate, or (3) the eurocurrency rate for an interest period of one month plus 1.00%, in each case plus an applicable margin | |
$50 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 50 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | A rate per annum equal to, at the Parent Company's option, either (a) a rate determined by reference to USD LIBOR for the interest period relevant to such borrowing or (b) the base rate determined by reference to the highest of (a) the lender's U.S. dollar short-term commercial loan rate, (b) the federal funds rate plus 1/2 of 1% and (c) USD one-month LIBOR plus 1%. USD LIBOR is subject to replacement with Secured Overnight Financing Rate (SOFR) under certain circumstances | |
$250 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | $ 250 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | USD three-month LIBOR plus 75 basis points per annum | |
Debt instrument, term | 3 months | |
50.0 billion yen line of credit (Tranche 1) | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | ¥ | 50,000 | |
Line of credit facility, amount outstanding | ¥ | 0 | |
Line of credit facility, interest rate description | Three-month TIBOR plus 70 basis points per annum | |
Debt instrument, term | 3 months | |
50.0 billion yen line of credit (Tranche 2) | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | ¥ | 50,000 | |
Line of credit facility, amount outstanding | ¥ | 0 | |
Line of credit facility, interest rate description | Three-month TIBOR plus 70 basis points per annum | |
Debt instrument, term | 3 months | |
$25 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | $ 25 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | USD three-month LIBOR plus 75 basis points per annum | |
$15 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | $ 15 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | USD three-month LIBOR plus 75 basis points per annum | |
$300 thousand line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | $ 0.3 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | USD three-month LIBOR plus 75 basis points per annum | |
500 million yen line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | ¥ | 500 | |
Line of credit facility, amount outstanding | ¥ | 350 | |
Line of credit facility, interest rate description | A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period | |
900 million yen line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | ¥ | 900 | |
Line of credit facility, amount outstanding | ¥ | 0 | |
Line of credit facility, interest rate description | A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period | |
600 million yen line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | ¥ | 600 | |
Line of credit facility, amount outstanding | ¥ | ¥ 0 | |
Line of credit facility, interest rate description | A rate per annum equal to the short-term prime lending rates of banks appearing on the website for the Bank of Japan on the first day of the applicable period | |
$30 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility term | 364 days | |
Line of credit facility, maximum borrowing capacity | $ 30 | |
Line of credit facility, amount outstanding | $ 0 | |
Line of credit facility, interest rate description | USD three-month LIBOR plus 75 basis points per annum | |
Lower Limit | 100.0 billion yen line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.28% | |
Lower Limit | $1 billion line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.085% | |
Upper Limit | $100 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, term | 3 months | |
Upper Limit | 100.0 billion yen line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.45% | |
Upper Limit | $1 billion line of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.225% | |
Upper Limit | $50 million line of credit | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, term | 3 months |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jan. 01, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Taxes [Line Items] | |||||
Blended statutory income tax rate | (44.70%) | 20.20% | 1.60% | 19.70% | |
Income tax benefit from release of deferred tax liability | $ 695 | ||||
Income tax benefit from release of deferred tax liability, earnings per share, basic | $ 1.10 | ||||
Income tax benefit from release of deferred tax liability, earnings per share, diluted | $ 1.10 | ||||
Forecast | |||||
Income Taxes [Line Items] | |||||
Inflation Reduction Act, Alternative Minimum Corporate Tax Rate | 15% | ||||
Inflation Reduction Act, Excise Tax on Share Repurchases | 1% |
SHAREHOLDERS' EQUITY - Reconcil
SHAREHOLDERS' EQUITY - Reconciliation of Number of Shares of Common Stock (Detail) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Common Stock Issued [Roll Forward] | ||
Balance, beginning of period | 1,352,739 | 1,351,018 |
Exercise of stock options and issuance of restricted shares | 1,230 | 1,544 |
Balance, end of period | 1,353,969 | 1,352,562 |
Treasury Stock [Roll Forward] | ||
Balance, beginning of period | 700,607 | 658,564 |
Balance, end of period | 730,101 | 689,745 |
Shares outstanding, end of period | 623,868 | 662,817 |
Treasury Stock | ||
Treasury Stock [Roll Forward] | ||
Stock acquired under share repurchase program, shares | 30,249 | 32,186 |
Other purchases | 354 | 419 |
Shares issued to AFL Stock Plan | (787) | (967) |
Exercise of stock options | (108) | (240) |
Other dispositions | (214) | (217) |
SHAREHOLDERS' EQUITY - Anti-Dil
SHAREHOLDERS' EQUITY - Anti-Dilutive Share-Based Awards Excluded from Calculation of Diluted Earnings Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | ||||
Anti-dilutive share-based awards | 53 | 0 | 158 | 1 |
SHAREHOLDERS' EQUITY - Addition
SHAREHOLDERS' EQUITY - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Jan. 01, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stockholders Equity Note [Line Items] | |||||||||
Common stock, share repurchase, dollar amount | $ 651 | $ 650 | $ 523 | $ 527 | $ 500 | $ 668 | |||
Common stock, share repurchase, dollar amount | $ 1,801 | $ 1,676 | |||||||
Remaining common stock available for purchase under share repurchase authorizations | 25.6 | 25.6 | |||||||
Forecast | |||||||||
Stockholders Equity Note [Line Items] | |||||||||
Inflation Reduction Act, Excise Tax on Share Repurchases | 1% | ||||||||
Share Repurchase Program | |||||||||
Stockholders Equity Note [Line Items] | |||||||||
Stock acquired under share repurchase program, shares | 30.2 | 32.2 | |||||||
Common stock, share repurchase, dollar amount | $ 1,800 | $ 1,700 |
SHAREHOLDERS' EQUITY - Changes
SHAREHOLDERS' EQUITY - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning of period | $ (548) | $ 8,019 | $ 7,393 | $ 8,934 |
Other comprehensive income (loss) before reclassifications net of tax | (2,924) | (355) | (10,721) | (1,298) |
Amounts reclassified from accumulated other comprehensive income net of tax | (39) | (2) | (183) | 26 |
Other comprehensive income (loss), net of tax | (2,963) | (357) | (10,904) | (1,272) |
Balance, end of period | (3,511) | 7,662 | (3,511) | 7,662 |
Unrealized Foreign Currency Translation Gains (Losses) | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning of period | (3,289) | (1,661) | (2,013) | (1,109) |
Other comprehensive income (loss) before reclassifications net of tax | (1,166) | (99) | (2,442) | (651) |
Amounts reclassified from accumulated other comprehensive income net of tax | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax | (1,166) | (99) | (2,442) | (651) |
Balance, end of period | (4,455) | (1,760) | (4,455) | (1,760) |
Unrealized Gains (Losses) on Fixed Maturity Securities | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning of period | 2,930 | 9,992 | 9,602 | 10,361 |
Other comprehensive income (loss) before reclassifications net of tax | (1,753) | (251) | (8,272) | (632) |
Amounts reclassified from accumulated other comprehensive income net of tax | (46) | (10) | (199) | 2 |
Other comprehensive income (loss), net of tax | (1,799) | (261) | (8,471) | (630) |
Balance, end of period | 1,131 | 9,731 | 1,131 | 9,731 |
Unrealized gains (losses) on derivatives | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning of period | (29) | (33) | (30) | (34) |
Other comprehensive income (loss) before reclassifications net of tax | (1) | 0 | (1) | 0 |
Amounts reclassified from accumulated other comprehensive income net of tax | 1 | 2 | 2 | 3 |
Other comprehensive income (loss), net of tax | 0 | 2 | 1 | 3 |
Balance, end of period | (29) | (31) | (29) | (31) |
Pension liability adjustment | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning of period | (160) | (279) | (166) | (284) |
Other comprehensive income (loss) before reclassifications net of tax | (4) | (5) | (6) | (15) |
Amounts reclassified from accumulated other comprehensive income net of tax | 6 | 6 | 14 | 21 |
Other comprehensive income (loss), net of tax | 2 | 1 | 8 | 6 |
Balance, end of period | $ (158) | $ (278) | $ (158) | $ (278) |
SHAREHOLDERS' EQUITY - Reclassi
SHAREHOLDERS' EQUITY - Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Net investment gains (losses) | $ 199 | $ (171) | $ 885 | $ 224 | |||||
Acquisition and operating expenses | (1,377) | (1,515) | (4,287) | (4,584) | |||||
Income tax (expense) or benefit | 493 | (225) | (64) | (804) | |||||
Net of tax | $ 1,596 | $ 1,388 | $ 1,032 | $ 888 | $ 1,105 | $ 1,293 | $ 4,016 | $ 3,286 | |
U.S. federal statutory income tax rate | 21% | 21% | 21% | 21% | |||||
Reclassification Out Of Accumulated Other Comprehensive Income | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Net of tax | $ 39 | $ 2 | $ 183 | $ (26) | |||||
Reclassification Out Of Accumulated Other Comprehensive Income | Unrealized gains (losses) on available-for-sale securities | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Net investment gains (losses) | 58 | 13 | 252 | (2) | |||||
Income tax (expense) or benefit | [1] | (12) | (3) | (53) | 0 | ||||
Net of tax | 46 | 10 | 199 | (2) | |||||
Reclassification Out Of Accumulated Other Comprehensive Income | Unrealized gains (losses) on derivatives | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Net investment gains (losses) | (1) | (2) | (3) | (4) | |||||
Income tax (expense) or benefit | [1] | 0 | 0 | 1 | 1 | ||||
Net of tax | (1) | (2) | (2) | (3) | |||||
Reclassification Out Of Accumulated Other Comprehensive Income | Pension liability adjustment, actuarial gains (losses) | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Acquisition and operating expenses | [2] | (7) | (8) | (18) | (27) | ||||
Reclassification Out Of Accumulated Other Comprehensive Income | Pension liability adjustment, prior service (cost) credit | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Acquisition and operating expenses | [2] | 0 | 0 | 0 | 0 | ||||
Reclassification Out Of Accumulated Other Comprehensive Income | Pension liability adjustment | |||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||
Income tax (expense) or benefit | [1] | 1 | 2 | 4 | 6 | ||||
Net of tax | $ (6) | $ (6) | $ (14) | $ (21) | |||||
[1]Based on 21% tax rate[2]These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details). |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Detail) - USD ($) shares in Thousands, $ in Millions | 1 Months Ended | 9 Months Ended | ||
Feb. 28, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Proceeds from stock options exercised | $ 13 | $ 20 | ||
Tax benefit from exercise of stock options | $ 18 | $ 16 | ||
Long-Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, maximum number of shares issuable | 75,000 | |||
Share-based compensation arrangement by share-based payment award, maximum number of shares issuable other than options and stock appreciation rights | 38,000 | |||
Shares available for future grants under the long-term incentive plan | 35,700 | |||
Long-term incentive plan awards, term (in years) | 10 years | |||
Long-term incentive plan awards, vesting period | 3 years | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total compensation cost not yet recognized, restricted stock awards | $ 46 | |||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, number, shares | 2,475 | 2,557 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 1 year 8 months 12 days | |||
Restricted stock awards, grants in period | 1,099 | |||
Performance based Vesting Condition | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total compensation cost not yet recognized, restricted stock awards | $ 23 | |||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, number, shares | 1,800 | |||
Restricted stock awards, grants in period | 390 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Options Outstanding and Exercisable (Detail) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Options Outstanding - Stock Option Shares | shares | 1,657 |
Options Outstanding - Weighted-Average Remaining Term (Yrs) | 3 years |
Options Outstanding - Aggregate Intrinsic Value | $ | $ 40 |
Options Outstanding - Weighted-Average Exercise Price Per Share | $ / shares | $ 31.88 |
Options Exercisable - Stock Option Shares | shares | 1,657 |
Options Exercisable - Weighted-Average Remaining Term (Yrs.) | 3 years |
Options Exercisable - Aggregate Intrinsic Value | $ | $ 40 |
Options Exercisable - Weighted-Average Exercise Price Per Share | $ / shares | $ 31.88 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - Restricted Stock shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Shares | |
Beginning Balance | shares | 2,557 |
Granted | shares | 1,099 |
Canceled | shares | (54) |
Vested | shares | (1,127) |
Ending Balance | shares | 2,475 |
Weighted-Average Grant-Date Fair Value Per Share | |
Beginning Balance | $ / shares | $ 49.38 |
Granted | $ / shares | 66.70 |
Cancelled | $ / shares | 53.77 |
Vested | $ / shares | 49.58 |
Ending Balance | $ / shares | $ 56.09 |
BENEFIT PLANS - Additional Info
BENEFIT PLANS - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jan. 01, 2014 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Amount of years active employees have left to meet rule of 80 in order to be eligible for postretirement medical benefits | 5 years | ||||
Amount of years left to meet 15 year service requirement for active employees age 55 or older to be eligible for postretirement medical benefits | 5 years | ||||
Net periodic (benefit) cost, excluding service cost | $ 5 | $ 4 | $ 11 | $ 18 | |
Lower Limit | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Health care plan, retirement age and years of service combined years for eligibility (rule of 80) | 80 years | ||||
Health care plan, retirement age for eligibility, (in years) | 55 years | ||||
Health care plan, number of years of service for eligibility | 15 years | ||||
Japan | Pension Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Employer contributions | 25 | ||||
U.S. | Pension Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Employer contributions | $ 0 |
BENEFIT PLANS - Net Periodic (B
BENEFIT PLANS - Net Periodic (Benefit) Cost Included in Acquisition and Operating Expenses (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other Postretirement Benefits Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 1 | 0 | 1 | 1 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of net actuarial loss | 1 | 0 | 2 | 2 |
Net periodic (benefit) cost | 2 | 0 | 3 | 3 |
Japan | Pension Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 5 | 6 | 15 | 18 |
Interest cost | 1 | 1 | 4 | 3 |
Expected return on plan assets | (2) | (2) | (6) | (6) |
Amortization of net actuarial loss | 0 | 1 | 0 | 2 |
Net periodic (benefit) cost | 4 | 6 | 13 | 17 |
U.S. | Pension Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 6 | 7 | 19 | 21 |
Interest cost | 9 | 8 | 26 | 24 |
Expected return on plan assets | (11) | (11) | (32) | (31) |
Amortization of net actuarial loss | 6 | 7 | 16 | 23 |
Net periodic (benefit) cost | $ 10 | $ 11 | $ 29 | $ 37 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES - Additional Information (Details) $ in Millions, ¥ in Billions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2017 USD ($) | Sep. 30, 2022 JPY (¥) | Sep. 30, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | |||
Loss contingency accrual, insurance-related assessment, discount rate | 4.25% | ||
Loss contingency, discounted amount of insurance-related assessment liability | $ 62 | ||
Loss contingency, undiscounted amount of insurance-related assessment liability | 94 | ||
Loss contingency, insurance-related assessment, discounted amount of premium tax offset | 48 | ||
Loss contingency, insurance-related assessment, undiscounted amount of premium tax offset | 74 | ||
Loss contingency, loss in period | $ 14 | ||
Information Technology and Data Services Company Application Maintenance and Development Services | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Outsourcing agreement, remaining term | 4 years | 4 years | |
Outsourcing agreement, aggregate remaining cost | ¥ 6.7 | $ 46 |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional Information (Details) - 3.25% senior notes due March 2025 - USD ($) $ in Millions | Oct. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||
Debt instrument, interest rate | 3.25% | 3.25% | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, repurchased amount | $ 450 | ||
Debt instrument, interest rate | 3.25% |