Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 14, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | GREAT WEST LIFE & ANNUITY INSURANCE CO | |
Entity Central Index Key | 744,455 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 7,320,176 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed maturities, available-for-sale, at fair value (amortized cost $22,821,271 and $22,762,962) | $ 23,183,757 | $ 23,593,139 |
Fixed maturities, held-for-trading, at fair value (amortized cost $20,182 and $20,512) | 20,254 | 21,059 |
Mortgage loans on real estate (net of allowances of $773 and $773) | 4,151,760 | 4,005,187 |
Policy loans | 4,067,552 | 4,104,094 |
Short-term investments (amortized cost $297,520 and $350,266) | 297,520 | 350,266 |
Limited partnership interests | 53,120 | 45,540 |
Other investments | 17,918 | 17,997 |
Total investments | 31,791,881 | 32,137,282 |
Other assets: | ||
Cash and cash equivalents | 20,572 | 17,211 |
Reinsurance recoverable | 589,117 | 589,080 |
Deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”) | 632,548 | 518,510 |
Investment income due and accrued | 330,514 | 299,362 |
Collateral under securities lending agreements | 95,024 | 0 |
Due from parent and affiliates | 101,768 | 114,133 |
Goodwill | 137,683 | 137,683 |
Other intangible assets | 16,413 | 17,085 |
Other assets | 1,040,593 | 954,250 |
Assets of discontinued operations | 15,232 | 16,095 |
Separate account assets | 26,843,072 | 27,660,571 |
Total assets | 61,614,417 | 62,461,262 |
Policy benefit liabilities: | ||
Future policy benefits | 30,202,676 | 30,048,927 |
Policy and contract claims | 401,815 | 389,029 |
Policyholders’ funds | 247,781 | 280,578 |
Provision for policyholders’ dividends | 40,403 | 41,972 |
Undistributed earnings on participating business | 12,070 | 14,636 |
Total policy benefit liabilities | 30,904,745 | 30,775,142 |
General liabilities: | ||
Due to parent and affiliates | 559,754 | 553,901 |
Commercial paper | 85,882 | 99,886 |
Payable under securities lending agreements | 95,024 | 0 |
Deferred income tax liabilities, net | 50,926 | 93,203 |
Other liabilities | 854,700 | 812,875 |
Liabilities of discontinued operations | 15,232 | 16,095 |
Separate account liabilities | 26,843,072 | 27,660,571 |
Total liabilities | 59,409,335 | 60,011,673 |
Commitments and contingencies (See Note 13) | ||
Stockholder’s equity: | ||
Preferred stock, $1 par value, 50,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $1 par value, 50,000,000 shares authorized; 7,320,176 shares issued and outstanding | 7,320 | 7,320 |
Additional paid-in capital | 950,586 | 949,520 |
Accumulated other comprehensive income | 137,775 | 440,957 |
Retained earnings | 1,109,401 | 1,051,792 |
Total stockholder’s equity | 2,205,082 | 2,449,589 |
Total liabilities and stockholder’s equity | $ 61,614,417 | $ 62,461,262 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available-for-sale, amortized cost (in dollars) | $ 22,821,271 | $ 22,762,962 |
Fixed maturities, held for trading, amortized cost (in dollars) | 20,182 | 20,512 |
Mortgage loans on real estate, allowances (in dollars) | 773 | 773 |
Short-term investments, available-for-sale, amortized cost (in dollars) | $ 297,520 | $ 350,266 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, number of shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, number of shares issued | 0 | 0 |
Preferred stock, number of shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, number of shares authorized | 50,000,000 | 50,000,000 |
Common stock, number of shares issued | 7,320,176 | 7,320,176 |
Common stock, number of shares outstanding | 7,320,176 | 7,320,176 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Premium income | $ 144,682 | $ 152,241 |
Fee income | 275,964 | 255,116 |
Other revenue | 2,985 | 2,384 |
Net investment income | 338,141 | 313,471 |
Investment (losses) gains, net | (43,743) | (11,754) |
Total revenues | 718,029 | 711,458 |
Benefits and expenses: | ||
Life and other policy benefits | 187,544 | 170,289 |
(Decrease) increase in future policy benefits | (22,008) | 126 |
Interest credited or paid to contractholders | 161,283 | 153,946 |
Provision for policyholders’ share of losses on participating business | (516) | (2) |
Dividends to policyholders | 12,282 | 15,069 |
Total benefits | 338,585 | 339,428 |
General insurance expenses | 298,132 | 307,131 |
Amortization of DAC and VOBA | 11,292 | 5,322 |
Interest expense | 7,809 | 7,630 |
Total benefits and expenses | 655,818 | 659,511 |
Income before income taxes | 62,211 | 51,947 |
Income tax expense | 13,553 | 17,117 |
Net income | $ 48,658 | $ 34,830 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 48,658 | $ 34,830 | |
Components of other comprehensive (loss) income | |||
Unrealized holding (losses) gains, net, arising on available-for-sale fixed maturity investments | (459,680) | 130,229 | |
Unrealized holding (losses) gains, net, arising on cash flow hedges | (6,496) | (6,955) | |
Reclassification adjustment for (gains) losses, net, realized in net income | (5,587) | 1,475 | |
Net unrealized (losses) gains related to investments | (471,763) | 124,749 | |
Future policy benefits, DAC and VOBA adjustments | 87,408 | (28,466) | |
Employee benefit plan adjustment | 580 | 2,146 | |
Other comprehensive (loss) income before income taxes | (383,775) | 98,429 | |
Income tax (benefit) expense related to items of other comprehensive income | (80,593) | 34,450 | |
Other comprehensive income (loss) | [1] | (303,182) | 63,979 |
Total comprehensive (loss) income | $ (254,524) | $ 98,809 | |
[1] | Other comprehensive (loss) income includes the non-credit component of impaired (losses) gains, net, on fixed maturities available-for-sale in the amounts of $(16,222) and $(1,089) for the three months ended March 31, 2018 and 2017, respectively. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Non-credit component of impaired gains (losses) on fixed maturities available-for-sale | $ (16,222) | $ (1,089) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Stockholder's Equity - USD ($) $ in Thousands | Total | Calculated under revenue guidance in effect before topic 606 | Difference between revenue guidance in effect before and after ASC 606 | Common stock | Common stockCalculated under revenue guidance in effect before topic 606 | Additional paid-in capital | Additional paid-in capitalCalculated under revenue guidance in effect before topic 606 | Accumulated other comprehensive income | Accumulated other comprehensive incomeCalculated under revenue guidance in effect before topic 606 | Retained earnings | Retained earningsCalculated under revenue guidance in effect before topic 606 | Retained earningsDifference between revenue guidance in effect before and after ASC 606 | ||
Beginning balance at Dec. 31, 2016 | $ 2,012,321 | $ 7,293 | $ 863,031 | $ 235,875 | $ 906,122 | |||||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||||
Net income | 34,830 | 34,830 | ||||||||||||
Other comprehensive loss, net of income taxes | 63,979 | [1] | 63,979 | |||||||||||
Dividends | (77,000) | (77,000) | ||||||||||||
Capital contribution | 0 | |||||||||||||
Capital contribution - stock-based compensation | 420 | 420 | ||||||||||||
Ending balance at Mar. 31, 2017 | 2,034,550 | 7,293 | 863,451 | 299,854 | 863,952 | |||||||||
Beginning balance at Dec. 31, 2017 | 2,449,589 | $ 2,449,589 | 7,320 | $ 7,320 | 949,520 | $ 949,520 | 440,957 | $ 440,957 | $ 1,051,792 | |||||
Beginning balance (ASC 606) at Dec. 31, 2017 | 2,482,541 | $ 32,952 | 1,084,744 | $ 32,952 | ||||||||||
Increase (Decrease) in Stockholder's Equity | ||||||||||||||
Net income | 48,658 | 48,658 | ||||||||||||
Other comprehensive loss, net of income taxes | (303,182) | [1] | (303,182) | |||||||||||
Dividends | (24,001) | (24,001) | ||||||||||||
Capital contribution | [2] | 848 | ||||||||||||
Capital contribution - stock-based compensation | 218 | 218 | ||||||||||||
Ending balance at Mar. 31, 2018 | $ 2,205,082 | $ 7,320 | $ 950,586 | $ 137,775 | $ 1,109,401 | |||||||||
[1] | Other comprehensive (loss) income includes the non-credit component of impaired (losses) gains, net, on fixed maturities available-for-sale in the amounts of $(16,222) and $(1,089) for the three months ended March 31, 2018 and 2017, respectively. | |||||||||||||
[2] | In February 2018, the Company received a capital contribution from its parent, GWL&A Financial, in the amount of $848. No additional shares of the Company were issued in relation to this contribution. |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Cash flows from operating activities: | |||
Net cash (used in) provided by operating activities | $ 4,922 | $ (357,163) | |
Proceeds from sales, maturities and redemptions of investments: | |||
Fixed maturities, available-for-sale | 1,261,881 | 1,825,006 | |
Mortgage loans on real estate | 79,649 | 54,480 | |
Limited partnership interests and other investments | 2,585 | 3,106 | |
Purchases of investments: | |||
Fixed maturities, available-for-sale | (1,242,999) | (1,599,114) | |
Mortgage loans on real estate | (223,500) | (335,324) | |
Limited partnership interests and other investments | (6,805) | (4,555) | |
Net change in short-term investments | 61,688 | (439,510) | |
Net change in policy loans | 854 | 279 | |
Purchases of furniture, equipment, and software | (9,841) | (9,978) | |
Net cash used in investing activities | (76,488) | (505,610) | |
Cash flows from financing activities: | |||
Contract deposits | 700,628 | 778,744 | |
Contract withdrawals | (610,434) | (543,572) | |
Dividends paid | (24,001) | (77,000) | |
Capital contribution | 848 | [1] | 0 |
Payments for and interest paid on financing element derivatives, net | (938) | (1,870) | |
Net change in commercial paper borrowings | (14,004) | (404) | |
Net change in book overdrafts | 32,704 | (12,672) | |
Employee taxes paid for withheld shares | (32) | (180) | |
Net cash provided by financing activities | (84,771) | (143,046) | |
Net increase (decrease) in cash and cash equivalents | 3,361 | (5,401) | |
Cash and cash equivalents, beginning of year | 17,211 | 18,321 | |
Cash and cash equivalents, end of period | 20,572 | 12,920 | |
Net cash paid during the year for: | |||
Income taxes | (3,377) | (3,139) | |
Interest | (3,799) | (3,199) | |
Non-cash investing and financing transactions during the years: | |||
Share-based compensation expense | 218 | 420 | |
Fair value of assets acquired in settlement of fixed maturity investments | $ 12,336 | $ 0 | |
[1] | In February 2018, the Company received a capital contribution from its parent, GWL&A Financial, in the amount of $848. No additional shares of the Company were issued in relation to this contribution. |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization Great-West Life & Annuity Insurance Company (“GWLA”) and its subsidiaries (collectively, the “Company”) is a direct wholly-owned subsidiary of GWL&A Financial Inc. (“GWL&A Financial”), a holding company formed in 1998. GWL&A Financial is a direct wholly-owned subsidiary of Great-West Lifeco U.S. LLC (“Lifeco U.S.”) and an indirect wholly-owned subsidiary of Great-West Lifeco Inc. (“Lifeco”), a Canadian holding company. The Company offers a wide range of life insurance, retirement, and investment products to individuals, businesses, and other private and public organizations throughout the United States. The Company is an insurance company domiciled in the State of Colorado and is subject to regulation by the Colorado Division of Insurance. Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and the accounts of its subsidiaries over which it exercises control and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated balance sheet as of December 31, 2017 , which was derived from the Company’s audited consolidated financial statements, and the unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2018 , have been prepared in accordance with the instructions for Form 10-Q. In compliance with those instructions, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. As such, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . In the opinion of management, these statements include all normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of March 31, 2018 , and for all periods presented. The condensed consolidated results of operations and condensed consolidated statement of cash flows for the three months ended March 31, 2018 , are not necessarily indicative of the results or cash flows expected for the full year. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Application of Recent Accountin
Application of Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Application of Recent Accounting Pronouncements | Application of Recent Accounting Pronouncements Recently adopted accounting pronouncements In May, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, and all the related amendments to customer contracts (collectively “ASC 606”), effective for interim and annual periods beginning after December 15, 2017. ASC 606 supersedes nearly all existing revenue recognition guidance under U.S. GAAP; however, it did not impact the accounting for insurance and investment contracts within the scope of financial services insurance, leases, financial instruments and guarantees. The core principle of the model requires that an entity recognizes revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The update also requires increased disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. See Note 9 for additional information. On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The primary impact of ASC 606 to the Company relates to the accounting for certain contract costs and contract fulfillment costs, which were expensed as incurred under ASC 605. Under ASC 606, these costs are deferred and amortized over the expected life of the customer contract, which the Company determined to be 10 years . The Company presents these contract costs and contract fulfillment costs on the balance sheet as a part of the DAC and VOBA balance. The Company recorded a net increase to opening retained earnings of $32,952 , net of tax, as of January 1, 2018 due to the cumulative impact of adopting ASC 606. In January, 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , effective for interim and annual periods beginning after December 15, 2017. The amendments in this update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requiring equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income, eliminating certain disclosure requirements related to financial instruments measured at amortized cost, and adding disclosures related to the measurement categories of financial assets and financial liabilities. The primary impact to the Company’s condensed consolidated financial statements was that the Company’s limited partnership interests, that were accounted for under the cost method, are now measured at fair value with changes in the fair value recognized in net income. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) , effective for fiscal years and interim periods within those beginning after December 15, 2017. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The primary impacts to the Company’s condensed consolidated financial statement include reclassification of proceeds received from the settlement of corporate-owned life insurance policies (“COLI”) from cash flow from operations to cash flow from investing and reclassification of certain change in due to / from parent and affiliate from investing to operating. As the Company has retroactively applied this guidance as required by the ASU, the following updates were made to the condensed consolidated cash flow statement for the three months ended March 31, 2017 to conform to current year presentation: • Reclassification of proceeds received from the settlement of COLIs of $1,680 from cash flow from operations to cash flows from investing; and • Reclassification of change in due to / from parent and affiliate of $2,921 from cash flow from financing to cash flows from operations. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (a consensus of the Emerging Issues Task Force) , effective for fiscal years and interim periods within those beginning after December 15, 2017. This update requires organizations to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , effective for annual reporting periods beginning on or after December 15, 2017, and interim periods within those annual periods. This update requires organizations to disaggregate the service cost component from the other components of net benefit costs in the income statement and present it with other current compensation costs for the related employees while providing guidance for capitalization eligibility for service costs. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. Future adoption of new accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases , effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual period. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet with lease terms of more than 12 months and also disclose certain qualitative and quantitative information about leasing arrangements. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts and performing a completeness assessment over the lease population. The Company continues to evaluate the impact of this update on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments , effective for fiscal years and interim periods within those beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. This update amends guidance on the impairment of financial instruments by adding an impairment model that is based on expected losses rather than incurred losses and is intended to result in more timely recognition of losses. The standard also simplifies the accounting by decreasing the number of credit impairment models that an entity can use to account for debt instruments. The Company continues to evaluate the impact of this update on its condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other , effective for annual or any interim goodwill impairment tests after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The update eliminates Step 2 from the goodwill impairment test and will require management to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Any amount by which the carrying amount exceeds the reporting unit’s fair value (not to exceed the goodwill allocated to that reporting unit) is recognized as an impairment charge. The Company performs its goodwill impairment annually in the 4th quarter or more frequently if events or circumstances indicate that there may be justification for performing an interim test. The adoption of this standard is not anticipated to have a material impact on the condensed consolidated financial statements. |
Dividends
Dividends | 3 Months Ended |
Mar. 31, 2018 | |
Dividends [Abstract] | |
Dividends | Dividends The maximum amount of dividends, which can be paid to stockholders by insurance companies domiciled in the State of Colorado, is subject to restrictions relating to statutory surplus and statutory net gain from operations. Prior to the payment of any dividends, the Company seeks approval from the Colorado Insurance Commissioner. During the three months ended March 31, 2018 and 2017 , the Company paid dividends of $24,001 and $77,000 , respectively, to its parent, GWL&A Financial. |
Summary of Investments
Summary of Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Summary of Investments The following tables summarize fixed maturity investments classified as available-for-sale and the non-credit-related component of other-than-temporary impairments (“OTTI”) in accumulated other comprehensive income (loss) (“AOCI”): March 31, 2018 Amortized Gross unrealized Gross unrealized Estimated fair value OTTI (gain) loss Fixed maturities: cost gains losses and carrying value included in AOCI (1) U.S. government direct obligations and U.S. agencies $ 1,392,346 $ 32,603 $ 25,591 $ 1,399,358 $ — Obligations of U.S. states and their subdivisions 1,877,627 186,166 3,226 2,060,567 — Corporate debt securities (2) 15,555,511 380,876 246,981 15,689,406 (887 ) Asset-backed securities 1,592,351 76,838 18,172 1,651,017 (32,154 ) Residential mortgage-backed securities 137,413 2,278 1,109 138,582 (110 ) Commercial mortgage-backed securities 1,374,477 6,728 32,708 1,348,497 — Collateralized debt obligations 891,546 4,785 1 896,330 — Total fixed maturities $ 22,821,271 $ 690,274 $ 327,788 $ 23,183,757 $ (33,151 ) (1) Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses. OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities. (2) Includes perpetual debt investments with amortized cost of $89,267 and estimated fair value of $88,877 . December 31, 2017 Amortized Gross unrealized Gross unrealized Estimated fair value OTTI (gain) loss Fixed maturities: cost gains losses and carrying value included in AOCI (1) U.S. government direct obligations and U.S. agencies $ 1,837,748 $ 41,777 $ 7,883 $ 1,871,642 $ — Obligations of U.S. states and their subdivisions 1,872,120 220,507 1,655 2,090,972 — Corporate debt securities (2) 15,234,473 581,991 110,377 15,706,087 (1,018 ) Asset-backed securities 1,622,806 105,301 10,131 1,717,976 (56,735 ) Residential mortgage-backed securities 63,187 2,446 649 64,984 (140 ) Commercial mortgage-backed securities 1,352,906 17,692 12,989 1,357,609 — Collateralized debt obligations 779,722 4,227 80 783,869 — Total fixed maturities $ 22,762,962 $ 973,941 $ 143,764 $ 23,593,139 $ (57,893 ) (1) Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses. OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities. (2) Includes perpetual debt investments with amortized cost of $89,267 and estimated fair value of $87,348 . See Note 7 for additional discussion regarding fair value measurements. The amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale, based on estimated cash flows, are shown in the table below. Actual maturities will likely differ from these projections because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2018 Amortized cost Estimated fair value Maturing in one year or less $ 813,963 $ 826,233 Maturing after one year through five years 3,808,805 3,869,012 Maturing after five years through ten years 8,164,513 8,147,763 Maturing after ten years 4,993,140 5,270,972 Mortgage-backed and asset-backed securities 5,040,850 5,069,777 Total fixed maturities $ 22,821,271 $ 23,183,757 Mortgage-backed (commercial and residential) and asset-backed securities include those issued by the U.S. government and U.S. agencies. The following table summarizes information regarding the sales of securities classified as available-for-sale: Three Months Ended March 31, 2018 2017 Proceeds from sales $ 966,420 $ 1,580,522 Gross realized gains from sales 12,274 12,433 Gross realized losses from sales 6,283 15,257 Mortgage loans on real estate — The recorded investment of the mortgage loan portfolio categorized as performing was $4,152,533 and $4,005,960 as of March 31, 2018 and December 31, 2017 , respectively. The following table summarizes activity in the mortgage provision allowance: Three Months Ended March 31, 2018 Year Ended December 31, 2017 Commercial mortgages Commercial mortgages Beginning balance $ 773 $ 2,882 Provision increases — 157 Charge-off — (663 ) Recovery — (30 ) Provision decreases — (1,573 ) Ending balance $ 773 $ 773 Allowance ending balance by basis of impairment method: Collectively evaluated for impairment 773 773 Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method: $ 4,152,533 $ 4,005,960 Individually evaluated for impairment 2,871 2,942 Collectively evaluated for impairment 4,149,662 4,003,018 Limited partnership interests — Limited partnership interests represent the Company’s minority ownership interests in pooled investment funds that primarily make private equity investments across diverse industries and geographical focuses. The Company has determined its interest in each limited partnership to be considered a variable interest entity (“VIE”). Consolidation is not required as the Company is not deemed to be the primary beneficiary of the VIEs. The carrying value and maximum exposure to loss in relation to the activities of the VIEs was $53,120 and $45,540 at March 31, 2018 and December 31, 2017 , respectively. Securities lending — Securities with a cost or amortized cost of $128,151 and estimated fair values of $122,278 were on loan under the program at March 31, 2018 . There were no securities on loan at December 31, 2017 . The Company received cash of $95,024 and securities with a fair value of $31,424 as collateral at March 31, 2018 . The Company bears the risk of any deficiency in the amount of collateral available for return to a borrower due to a loss in an approved investment. Under the securities lending program the collateral pledged is, by definition, the securities loaned against the cash borrowed. The cash collateral liability under the securities lending program is $95,024 , and class of securities loaned consists entirely of corporate debt securities. The Company’s securities lending agreements are open agreements meaning the borrower can return and the Company can recall the loaned securities at any time. The assets and liabilities associated with securities lending program are not subject to master netting arrangements and are not offset in the condensed consolidated balance sheets. Unrealized losses on fixed maturity investments classified as available-for-sale — The following tables summarize unrealized investment losses, including the non-credit-related portion of OTTI losses reported in AOCI, by class of investment: March 31, 2018 Less than twelve months Twelve months or longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fixed maturities: fair value loss and OTTI fair value loss and OTTI fair value loss and OTTI U.S. government direct obligations and U.S. agencies $ 735,249 $ 19,678 $ 151,508 $ 5,913 $ 886,757 $ 25,591 Obligations of U.S. states and their subdivisions 94,712 1,113 37,455 2,113 132,167 3,226 Corporate debt securities 6,254,337 140,152 1,667,376 106,829 7,921,713 246,981 Asset-backed securities 667,026 10,231 209,018 7,941 876,044 18,172 Residential mortgage-backed securities 81,291 411 10,464 698 91,755 1,109 Commercial mortgage-backed securities 778,597 15,656 287,246 17,052 1,065,843 32,708 Collateralized debt obligations 21,000 1 — — 21,000 1 Total fixed maturities $ 8,632,212 $ 187,242 $ 2,363,067 $ 140,546 $ 10,995,279 $ 327,788 Total number of securities in an unrealized loss position 808 271 1,079 December 31, 2017 Less than twelve months Twelve months or longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fixed maturities: fair value loss and OTTI fair value loss and OTTI fair value loss and OTTI U.S. government direct obligations and U.S. agencies $ 755,861 $ 4,159 $ 230,447 $ 3,724 $ 986,308 $ 7,883 Obligations of U.S. states and their subdivisions 24,908 180 37,012 1,475 61,920 1,655 Corporate debt securities 2,229,585 19,568 2,036,323 90,809 4,265,908 110,377 Asset-backed securities 544,778 3,011 245,341 7,120 790,119 10,131 Residential mortgage-backed securities 4,405 23 11,416 626 15,821 649 Commercial mortgage-backed securities 342,820 2,451 295,164 10,538 637,984 12,989 Collateralized debt obligations 7,277 80 — — 7,277 80 Total fixed maturities $ 3,909,634 $ 29,472 $ 2,855,703 $ 114,292 $ 6,765,337 $ 143,764 Total number of securities in an unrealized loss position 368 293 661 Fixed maturity investments — Total unrealized losses and OTTI increased by $184,024 , or 128% , from December 31, 2017 to March 31, 2018 . The majority, or $157,770 , of the increase was in the less than twelve months category. The overall increase in unrealized losses was across most asset classes and reflects higher interest rates at March 31, 2018 , compared to December 31, 2017 , resulting in generally lower valuations of these fixed maturity securities. Total unrealized losses greater than twelve months increased by $26,254 from December 31, 2017 to March 31, 2018 . Corporate debt securities account for 76% , or $106,829 , of the unrealized losses and OTTI greater than twelve months at March 31, 2018 . Non-investment grade corporate debt securities account for $7,612 of the unrealized losses and OTTI greater than twelve months. Management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings. Asset-backed and commercial-backed securities account for 18% of the unrealized losses and OTTI greater than twelve months at March 31, 2018 . The present value of the cash flows expected to be collected is not less than amortized cost and management does not have the intent to sell these assets; therefore, an OTTI was not recognized in earnings. Other-than-temporary impairment recognition — The OTTI on fixed maturity securities where the loss portion is bifurcated and the credit related component is recognized in investment (losses) gains is summarized as follows: Three Months Ended March 31, 2018 2017 Beginning balance $ 62,231 $ 83,665 Reductions: Due to sales, maturities or payoffs during the period (1,510 ) — Due to increases in cash flows expected to be collected that are recognized over the remaining life of the security (7,946 ) (3,306 ) Ending balance $ 52,775 $ 80,359 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Derivative transactions are generally entered into pursuant to International Swaps and Derivatives Association (“ISDA”) Master Agreements or Master Securities Forward Transaction Agreements (“MSFTA”) with approved counterparties that provide for a single net payment to be made by one party to the other on a daily basis, periodic payment dates, or at the due date, expiration, or termination of the agreement. The ISDA Master Agreements contain provisions that would allow the counterparties to require immediate settlement of all derivative instruments in a net liability position if the Company were to default on any debt obligations over a certain threshold. The MSFTA contain provisions which do not stipulate a threshold for default and only apply to debt obligations between the Company and the specific counterparty. The aggregate fair value, inclusive of accrued income and expense, of derivative instruments with credit-risk-related contingent features that were in a net liability position was $138,689 and $93,761 as of March 31, 2018 , and December 31, 2017 , respectively. The Company had pledged collateral related to these derivatives of $117,240 and $42,750 as of March 31, 2018 , and December 31, 2017 , respectively, in the normal course of business. If the credit-risk-related contingent features were triggered on March 31, 2018 , the fair value of assets that could be required to settle the derivatives in a net liability position was $21,449 . At March 31, 2018 , and December 31, 2017 , the Company had pledged $128,868 and $52,330 of unrestricted cash collateral to counterparties in the normal course of business, while other counterparties had pledged $637 and $5,490 of unrestricted cash collateral to the Company to satisfy collateral netting agreements, respectively. At March 31, 2018 , the Company estimated $62,494 of net derivative gains related to cash flow hedges included in AOCI will be reclassified into net income within the next twelve months. Gains and losses included in AOCI are reclassified into net income when the hedged item affects earnings. Types of derivative instruments and derivative strategies Interest rate contracts Cash flow hedges Interest rate swap agreements are used to convert the interest rate on certain debt security investments and debt obligations from a floating rate to a fixed rate. Not designated as hedging instruments The Company enters into certain transactions in which derivatives are hedging an economic risk but hedge accounting is not elected. These derivative instruments include: exchange-traded interest rate swap futures, over-the-counter (“OTC”) interest rate swaptions, OTC interest rate swaps, exchange-traded Eurodollar interest rate futures, and treasury interest rate futures. Certain of the Company’s OTC derivatives are cleared and settled through the Chicago Mercantile Exchange ("CME") while others are bilateral contracts between the Company and a counterparty. In 2017, the CME amended its rulebook to classify variation margin transfers as settlement payments instead of collateral. The Company adjusts the fair value by the variation margin payments on derivatives cleared through the CME. The derivative instruments mentioned above are economic hedges and used to manage risk. These transactions are used to offset changes in liabilities including those in variable annuity products, hedge the economic effect of a large increase in interest rates, manage the potential variability in future interest payments due to a change in credited interest rates and the related change in cash flows due to increased surrenders, and manage interest rate risks of forecasted acquisitions of fixed rate maturity investments and forecasted liability pricing. Foreign currency contracts Cross-currency swaps and foreign currency forwards are used to manage the foreign currency exchange rate risk associated with investments denominated in other than U.S. dollars. The Company uses cross-currency swaps to convert interest and principal payments on foreign denominated debt instruments into U.S. dollars. Cross-currency swaps may be designated as cash flow hedges; however, hedge accounting is not always elected. The Company uses foreign currency forwards to reduce the risk of foreign currency exchange rate changes on proceeds received on sales of foreign denominated debt instruments; however, hedge accounting is not elected. Equity contracts The Company uses futures on equity indices to offset changes in guaranteed lifetime withdrawal benefit liabilities; however, hedge accounting is not elected. Other forward contracts The Company uses forward settling to be announced (“TBA”) securities to gain exposure to the investment risk and return of agency mortgage-backed securities (pass-throughs). These transactions enhance the return on the Company’s investment portfolio and provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual agency mortgage-backed pools. As the Company does not regularly accept delivery of such securities, they are accounted for as derivatives but hedge accounting is not elected. The following tables summarize the notional amount and fair value of derivative financial instruments, excluding embedded derivatives: March 31, 2018 Net derivatives Asset derivatives Liability derivatives Notional amount Fair value Fair value (1) Fair value (1) Hedge designation/derivative type: Derivatives designated as hedges: Cash flow hedges: Interest rate swaps $ 22,300 $ 6,156 $ 6,156 $ — Cross-currency swaps 864,609 (65,232 ) 10,404 75,636 Total cash flow hedges 886,909 (59,076 ) 16,560 75,636 Total derivatives designated as hedges 886,909 (59,076 ) 16,560 75,636 Derivatives not designated as hedges: Interest rate swaps 534,100 775 1,703 928 Futures on equity indices 57,609 — — — Interest rate futures 47,300 — — — Interest rate swaptions 172,761 135 135 — Other forward contracts 820,000 3,691 3,691 — Cross-currency swaps 612,733 (49,242 ) 12,882 62,124 Total derivatives not designated as hedges 2,244,503 (44,641 ) 18,411 63,052 Total derivative financial instruments $ 3,131,412 $ (103,717 ) $ 34,971 $ 138,688 (1) The estimated fair value includes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets. December 31, 2017 Net derivatives Asset derivatives Liability derivatives Notional amount Fair value Fair value (1) Fair value (1) Hedge designation/derivative type: Derivatives designated as hedges: Cash flow hedges: Interest rate swaps $ 388,800 $ 7,476 $ 7,476 $ — Cross-currency swaps 800,060 (31,358 ) 19,958 51,316 Total cash flow hedges 1,188,860 (23,882 ) 27,434 51,316 Total derivatives designated as hedges 1,188,860 (23,882 ) 27,434 51,316 Derivatives not designated as hedges: Interest rate swaps 519,100 1,902 3,530 1,628 Futures on equity indices 22,074 — — — Interest rate futures 60,700 — — — Interest rate swaptions 164,522 75 75 — Cross-currency swaps 612,733 (21,279 ) 20,320 41,599 Total derivatives not designated as hedges 1,379,129 (19,302 ) 23,925 43,227 Total derivative financial instruments $ 2,567,989 $ (43,184 ) $ 51,359 $ 94,543 (1) The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets. Notional amounts are used to express the extent of the Company’s involvement in derivative transactions and represent a standard measurement of the volume of its derivative activity. Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received. The average notional outstanding during the three months ended March 31, 2018 , was $747,900 , $1,461,328 , $89,085 , $170,701 , and $1,652,500 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively. The average notional outstanding during the year ended December 31, 2017 , was $905,977 , $1,323,398 , $108,438 , $162,896 , and $2,231,196 for interest rate swaps, cross-currency swaps, futures, swaptions, and other forward contracts, respectively. The following tables present the effect of derivative instruments in the condensed consolidated statements of income and comprehensive income reported by cash flow hedges and derivatives not designated as hedges, excluding embedded derivatives: Gain (loss) recognized in OCI on derivatives (Effective portion) Gain (loss) reclassified from OCI Three Months Ended March 31, Three Months Ended March 31, 2018 2017 2018 2017 Cash flow hedges: Interest rate swaps $ (1,012 ) $ (148 ) $ 928 $ 1,220 (A) Interest rate swaps 29,029 3,843 (255 ) (880 ) (B) Cross-currency swaps (34,513 ) (10,650 ) (526 ) 1,102 (A) Total cash flow hedges $ (6,496 ) $ (6,955 ) $ 147 $ 1,442 (A) Net investment income. (B) Interest expense. Gain (loss) on derivatives recognized in net income Three Months Ended March 31, 2018 2017 Derivatives not designated as hedging instruments: Futures on equity indices $ — (A) $ (684 ) (A) Futures on equity indices (641 ) (B) (1,284 ) (B) Interest rate swaps — (A) (1,549 ) (A) Interest rate swaps (10,966 ) (B) — (B) Interest rate futures — (A) (14 ) (A) Interest rate futures 48 (B) 5 (B) Interest rate swaptions — (A) (27 ) (A) Interest rate swaptions 36 (B) (74 ) (B) Other forward contracts — (A) 6,784 (A) Other forward contracts (20,368 ) (B) (5,597 ) (B) Cross-currency swaps — (A) (14,168 ) (A) Cross-currency swaps (28,144 ) (B) — (B) Total derivatives not designated as hedging instruments $ (60,035 ) $ (16,608 ) (A) Net investment income. (B) Represents investment (losses) gains, net. Embedded derivative - Guaranteed Lifetime Withdrawal Benefit The Company offers a guaranteed lifetime withdrawal benefit (“GLWB”) through a variable annuity or a contingent deferred annuity. The GLWB is deemed to be an embedded derivative. The GLWB is recorded at fair value within future policy benefits on the condensed consolidated balance sheets. Changes in fair value of the GLWB are recorded in investment (losses) gains, net in the condensed consolidated statements of income. The estimated fair value of the GLWB was $3,993 and $11,095 at March 31, 2018 , and December 31, 2017 , respectively. The changes in fair value of the GLWB were $7,102 and $1,670 for the three months ended March 31, 2018, and 2017 , respectively. |
Summary of Offsetting Assets an
Summary of Offsetting Assets and Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Offsetting [Abstract] | |
Summary of Offsetting Assets and Liabilities | Summary of Offsetting Assets and Liabilities The Company enters into derivative transactions and short-term reverse repurchase agreements with several approved counterparties. The Company’s derivative transactions are generally governed by MSFTA or ISDA Master Agreements which provide for legally enforceable set-off and close-out netting in the event of default or bankruptcy of the Company’s counterparties. The Company’s MSFTA and ISDA Master Agreements generally include provisions which require both the pledging and accepting of collateral in connection with its derivative transactions. These provisions have the effect of securing each party’s position to the extent of collateral held. Short-term reverse repurchase agreements also include collateral provisions with the counterparty. The following tables summarize the effect of master netting arrangements on the Company’s financial position in the normal course of business and in the event of default or bankruptcy of the Company’s counterparties: March 31, 2018 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (assets): recognized assets (1) instruments Cash collateral fair value Derivative instruments (2) $ 34,971 $ (31,280 ) $ (637 ) $ 3,054 Short-term reverse repurchase agreements (3) 15,900 (15,900 ) — — Total financial instruments (assets) $ 50,871 $ (47,180 ) $ (637 ) $ 3,054 March 31, 2018 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (liabilities): recognized liabilities (1) instruments Cash collateral fair value Derivative instruments (4) $ 138,689 $ (31,280 ) $ (107,344 ) $ 65 (1) The gross fair value of derivative instrument and short-term reverse repurchase agreement assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets. (2) The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. (3) The estimated fair value of short-term reverse repurchase agreement assets is reported in short-term investments in the condensed consolidated balance sheets. The collateral is held by an independent third-party custodian under a tri-party agreement. (4) The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. December 31, 2017 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (assets): recognized assets/liabilities (1) instruments Cash collateral fair value Derivative instruments (2) $ 52,738 $ (47,827 ) $ (4,911 ) $ — Short-term reverse repurchase agreements (3) 23,200 (23,200 ) — — Total financial instruments (assets) $ 75,938 $ (71,027 ) $ (4,911 ) $ — December 31, 2017 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (liabilities): recognized liabilities (1) instruments Cash collateral fair value Derivative instruments (4) $ 93,761 $ (47,827 ) $ (42,750 ) $ 3,184 (1) The gross fair value of derivative instrument and short-term reverse repurchase agreement assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets. (2) The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. (3) The estimated fair value of short-term reverse repurchase agreement assets is reported in short-term investments in the condensed consolidated balance sheets. The collateral is held by an independent third-party custodian under a tri-party agreement. (4) The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Recurring fair value measurements The following tables present the Company’s financial assets and liabilities carried at fair value on a recurring basis by fair value hierarchy category: Assets and liabilities measured at fair value on a recurring basis March 31, 2018 Quoted prices Significant in active other Significant Total Assets Fixed maturities available-for-sale: U.S. government direct obligations and U.S. agencies $ — $ 1,399,358 $ — $ 1,399,358 Obligations of U.S. states and their subdivisions — 2,060,567 — 2,060,567 Corporate debt securities — 15,680,119 9,287 15,689,406 Asset-backed securities — 1,651,017 — 1,651,017 Residential mortgage-backed securities — 138,582 — 138,582 Commercial mortgage-backed securities — 1,348,497 — 1,348,497 Collateralized debt obligations — 896,330 — 896,330 Total fixed maturities available-for-sale — 23,174,470 9,287 23,183,757 Fixed maturities held-for-trading: U.S. government direct obligations and U.S. agencies — 16,134 — 16,134 Corporate debt securities — 3,074 — 3,074 Commercial mortgage-backed securities — 1,046 — 1,046 Total fixed maturities held-for-trading — 20,254 — 20,254 Short-term investments 227,360 70,160 — 297,520 Limited partnership interests (1) — — — 53,120 Collateral under securities lending agreements — 95,024 — 95,024 Collateral under derivative counterparty collateral agreements 129,505 — — 129,505 Derivative instruments designated as hedges: Interest rate swaps — 6,156 — 6,156 Cross-currency swaps — 10,404 — 10,404 Derivative instruments not designated as hedges: Interest rate swaps — 1,703 — 1,703 Interest rate swaptions — 135 — 135 Other forward contracts — 3,691 — 3,691 Cross-currency swaps — 12,882 — 12,882 Total derivative instruments — 34,971 — 34,971 Separate account assets (1) 16,097,613 10,361,781 — 26,843,072 Total assets $ 16,454,478 $ 33,756,660 $ 9,287 $ 50,604,103 Liabilities Payable under securities lending agreements $ — $ 95,024 $ — $ 95,024 Collateral under derivative counterparty collateral agreements $ 637 $ — $ — $ 637 Derivative instruments designated as hedges: Cross-currency swaps — 75,636 — 75,636 Derivative instruments not designated as hedges: Interest rate swaps — 928 — 928 Other forward contracts — — — — Cross-currency swaps — 62,124 — 62,124 Total derivative instruments — 138,688 — 138,688 Embedded derivatives - GLWB — — 3,993 3,993 Separate account liabilities (2) 18 350,653 — 350,671 Total liabilities $ 655 $ 584,365 $ 3,993 $ 589,013 (1) Included in the total fair value amount are $384 million of separate account assets and $53 million of limited partnership interests as of March 31, 2018 for which the fair value is estimated using net asset value per unit as a practical expedient. (2) Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts. Assets and liabilities measured at fair value on a recurring basis December 31, 2017 Quoted prices Significant in active other Significant Total Assets Fixed maturities available-for-sale: U.S. government direct obligations and U.S. agencies $ — $ 1,871,642 $ — $ 1,871,642 Obligations of U.S. states and their subdivisions — 2,090,972 — 2,090,972 Corporate debt securities — 15,696,349 9,738 15,706,087 Asset-backed securities — 1,717,976 — 1,717,976 Residential mortgage-backed securities — 64,984 — 64,984 Commercial mortgage-backed securities — 1,357,609 — 1,357,609 Collateralized debt obligations — 783,869 — 783,869 Total fixed maturities available-for-sale — 23,583,401 9,738 23,593,139 Fixed maturities held-for-trading: U.S. government direct obligations and U.S. agencies — 16,836 — 16,836 Corporate debt securities — 3,156 — 3,156 Commercial mortgage-backed securities — 1,067 — 1,067 Total fixed maturities held-for-trading — 21,059 — 21,059 Short-term investments (1) 288,302 61,964 — 350,266 Collateral under derivative counterparty collateral agreements 57,820 — — 57,820 Derivative instruments designated as hedges: Interest rate swaps — 7,476 — 7,476 Cross-currency swaps — 19,958 — 19,958 Derivative instruments not designated as hedges: Interest rate swaps — 3,530 — 3,530 Interest rate swaptions — 75 — 75 Cross-currency swaps — 20,320 — 20,320 Total derivative instruments — 51,359 — 51,359 Separate account assets (1) 16,523,630 10,736,532 — 27,660,571 Total assets $ 16,869,752 $ 34,454,315 $ 9,738 $ 51,734,214 Liabilities Collateral under derivative counterparty collateral agreements $ 5,490 $ — $ — $ 5,490 Derivative instruments designated as hedges: Cross-currency swaps — 51,316 — 51,316 Derivative instruments not designated as hedges: Interest rate swaps — 1,628 — 1,628 Cross-currency swaps — 41,599 — 41,599 Total derivative instruments — 94,543 — 94,543 Embedded derivatives - GLWB — — 11,095 11,095 Separate account liabilities (2) 8 409,266 — 409,274 Total liabilities $ 5,498 $ 503,809 $ 11,095 $ 520,402 (1) Included in the total fair value amounts are $400 million of investments as of December 31, 2017 for which the fair value is estimated using net asset value per unit as a practical expedient. (2) Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts. The methods and assumptions used to estimate the fair value of the Company’s financial assets and liabilities carried at fair value on a recurring basis are as follows: Fixed maturity investments The fair values for fixed maturity investments are generally based upon evaluated prices from independent pricing services. In cases where these prices are not readily available, fair values are estimated by the Company. To determine estimated fair value for these instruments, the Company generally utilizes discounted cash flow models with market observable pricing inputs such as spreads, average life, and credit quality. Fair value estimates are made at a specific point in time, based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. Short-term investments and securities lending agreements The amortized cost of short-term investments, collateral under securities lending agreements, and payable under securities lending agreements is a reasonable estimate of fair value due to their short-term nature and high credit quality of the issuers. Derivative counterparty collateral agreements Included in other assets is cash collateral received from or pledged to derivative counterparties and included in other liabilities is the obligation to return the cash collateral to the counterparties. The carrying value of the collateral is a reasonable estimate of fair value. Derivative instruments Included in other assets and other liabilities are derivative financial instruments. The estimated fair values of OTC derivatives, primarily consisting of cross-currency swaps, interest rate swaps, interest rate swaptions, and other forward contracts, are the estimated amounts the Company would receive or pay to terminate the agreements at the end of each reporting period, taking into consideration current interest rates and other relevant factors. Embedded derivative - GLWB Significant unobservable inputs used in the fair value measurements of GLWB include long-term equity and interest rate implied volatility, mortality, and policyholder behavior assumptions, such as benefit utilization, lapses, and partial withdrawals. Limited partnership interests Limited partnership interests represent the Company’s minority ownership interests in pooled investment funds. These funds employ varying investment strategies that primarily make private equity investments across diverse industries and geographical focuses. The net asset value, determined using the partnership financial statement reported capital account adjusted for other relevant information which may impact the exit value of the investments, is used as a practical expedient to estimate fair value. Distributions by these investments are generated from investment gains, from operating income generated by the underlying investments of the funds, and from liquidation of the underlying assets of the funds which are estimated to be liquidated over the next one to 10 years . Separate account assets and liabilities Separate account assets and liabilities primarily include investments in mutual fund, fixed maturity, and short-term securities. Mutual funds are recorded at net asset value, which approximates fair value, on a daily basis. The fixed maturity and short-term investments are valued in the same manner, and using the same pricing sources and inputs as the fixed maturity and short-term investments of the Company. The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value: Recurring Level 3 financial assets and liabilities Three Months Ended March 31, 2018 Assets Liabilities Fixed maturities available-for-sale Embedded derivatives - GLWB Corporate debt securities Balances, January 1, 2018 $ 9,738 $ 11,095 Realized and unrealized gains (losses) included in: Net income (loss) — 7,102 Other comprehensive income (loss) (13 ) — Settlements (438 ) — Balances, March 31, 2018 $ 9,287 $ 3,993 Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at March 31, 2018 $ — $ 7,102 Recurring Level 3 financial assets and liabilities Three Months Ended March 31, 2017 Assets Liabilities Fixed maturities available-for-sale Embedded derivatives - GLWB Corporate debt securities Balances, January 1, 2017 $ 11,639 $ 5,712 Realized and unrealized gains (losses) included in: Net income (loss) — 1,670 Other comprehensive income (loss) (364 ) — Settlements (344 ) — Balances, March 31, 2017 $ 10,931 $ 4,042 Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at March 31, 2017 $ — $ 1,670 The following table presents significant unobservable inputs used during the valuation of certain liabilities categorized within Level 3 of the recurring fair value measurements table: Range Valuation Technique Unobservable Input March 31, 2018 December 31, 2017 Embedded derivatives - GLWB Risk neutral stochastic valuation methodology Equity volatility 15% - 30% 15% - 30% Swap curve 2.31% - 2.85% 1.69% - 2.54% Mortality rate Based on the Annuity 2000 Mortality Table Based on the Annuity 2000 Mortality Table Base Lapse rate 1% - 15% 1% - 15% Fair value of financial instruments The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments and investments not carried at fair value on a recurring basis: March 31, 2018 December 31, 2017 Fair value Fair value Carrying Estimated hierarchy Carrying Estimated hierarchy amount fair value level amount fair value level Assets Mortgage loans on real estate $ 4,151,760 $ 4,140,846 2 $ 4,005,187 $ 4,066,800 2 Policy loans 4,067,552 4,067,552 2 4,104,094 4,104,094 2 Limited partnership interests (1) — — 43,281 45,009 Other investments 10,349 40,613 3 11,507 41,588 3 Liabilities Annuity contract benefits without life contingencies $ 12,804,896 $ 12,484,424 2 $ 12,704,401 $ 12,647,309 2 Policyholders’ funds 247,781 247,781 2 280,578 280,578 2 Commercial paper 85,882 85,882 2 99,886 99,886 2 Notes payable 546,806 589,700 2 543,338 581,097 2 (1) The fair value of limited partnership interests as of December 31, 2017 is estimated using net asset value per unit as a practical expedient. |
Other Comprehensive Income
Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other Comprehensive Income | Other Comprehensive Income The following table presents the accumulated balances for each classification of other comprehensive income (loss): Three Months Ended March 31, 2018 Unrealized holding gains (losses) arising on (1) Unrealized holding gains (losses) arising on cash flow hedges (2) Future policy benefits, DAC and VOBA adjustments Employee benefit plan adjustment (3) Total Balances, January 1, 2018 $ 544,887 $ 103,529 $ (116,267 ) $ (91,192 ) $ 440,957 Change in estimate of tax reform impact 108,846 (83,806 ) (25,040 ) — — OCI before reclassifications (459,680 ) (6,496 ) 87,408 — (378,768 ) Deferred income tax benefit (expense) 96,534 1,364 (18,356 ) — 79,542 AOCI before reclassification, net of tax (363,146 ) (5,132 ) 69,052 — (299,226 ) Amounts reclassified from AOCI (5,440 ) (147 ) — 580 (5,007 ) Deferred income tax benefit (expense) 1,142 31 — (122 ) 1,051 Amounts reclassified from AOCI, net of tax (4,298 ) (116 ) — 458 (3,956 ) Balances, March 31, 2018 $ 286,289 $ 14,475 $ (72,255 ) $ (90,734 ) $ 137,775 (1) Reclassifications affect investment gains (losses), net on the consolidated statements of income. (2) Reclassifications affect net investment income on the consolidated statements of income, except for $255 (before tax) which affected interest expense for the three months ended March 31, 2018 . (3) The adjustments for defined benefit plans are included in the computation of net periodic (benefit) cost of employee benefit plans (see note 10 for additional details). The following table presents the accumulated balances for each classification of other comprehensive income (loss): Three Months Ended March 31, 2017 Unrealized holding gains (losses) arising on (1) Unrealized holding gains (losses) arising on cash flow hedges (2) Future policy benefits, DAC and VOBA adjustments Employee benefit plan adjustment (3) Total Balances, January 1, 2017 $ 311,748 $ 67,076 $ (58,646 ) $ (84,303 ) $ 235,875 OCI before reclassifications 130,229 (6,955 ) (28,466 ) — 94,808 Deferred income tax benefit (expense) (45,580 ) 2,434 9,963 — (33,183 ) AOCI before reclassification, net of tax 84,649 (4,521 ) (18,503 ) — 61,625 Amounts reclassified from AOCI 2,917 (1,442 ) — 2,146 3,621 Deferred income tax benefit (expense) (1,021 ) 505 — (751 ) (1,267 ) Amounts reclassified from AOCI, net of tax 1,896 (937 ) — 1,395 2,354 Balances, March 31, 2017 $ 398,293 $ 61,618 $ (77,149 ) $ (82,908 ) $ 299,854 (1) Reclassifications affect investment gains(losses), net on the consolidated statements of income. (2) Reclassifications affect net investment income on the consolidated statements of income, except for $880 (before tax) which affected interest expense for the three months ended March 31, 2017 . (3) The adjustments for defined benefit plans are included in the computation of net periodic (benefit) cost of employee benefit plans (see note 10 for additional details). |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Fee Income Revenue Recognition Fee income is recognized upon transfer of control of promised services when provided to customers in an amount that reflects the consideration expected to be received in exchange for those services. Fee income can be based on a rate per plan or per participant, percentage of assets under management or administration, or rate based on the services provided. Certain recordkeeping and administrative contracts include non-performance penalties if certain customer satisfaction metrics are not met. The Company estimates a reduction in fee income for non-performance penalties based on an analysis of historical loss. The sources of fee income from contracts with customers include: Administration, Recordkeeping, Servicing, and Distribution Fees Fees charged for providing recordkeeping, shareholder servicing and distribution of funds, administrative, trustee, and custodial services for retirement plan sponsors, plan participants, insurance policy holders and IRA account holders. Recordkeeping contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for the individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. These fees are primarily earned over time (i.e. services are rendered daily) and are calculated as a percentage of assets under administration or as a rate per plan or per participants in a plan. These fees also include service revenues that are recognized as services are rendered and are based upon established billing rates. Such services include loan processing and postage fees. Fees are generally invoiced quarterly and are either deducted directly from plan or participant assets or due within 30 days. Investment Advisory and Asset Management Fees Fees charged for investment advisory and asset management and administrative services to retirement plan sponsors, plan participants, insurance policyholders and IRA accountholders, and affiliates of the Company. These fees are primarily earned over time (i.e. services are rendered daily) and are calculated as a percentage of average daily net assets under management or are based upon established billing rates. Fees are generally invoiced quarterly and due within 30 days or are deducted directly from plan, participant, or other investment accounts. Other Fees Other fees includes insurance product related fees earned under the guidance of Topic 944, Financial Services - Insurance such as fees for certain variable annuity guaranteed death benefits and insurance risk charges. The following table presents fee income disaggregated by type of services and segment: Three months ended March 31, 2018 Individual Markets Empower Retirement Other Total Administration, recordkeeping and servicing fees $ 1,140 $ 157,851 $ — $ 158,991 Investment advisory and asset management fees 3,255 68,290 1,879 73,424 Other fee income 27,233 16,316 — 43,549 Total Fee Income $ 31,628 $ 242,457 $ 1,879 $ 275,964 At March 31, 2018, included in other assets are customer contract receivables of $238,142 . The Company did not have material bad debt expense during the three months ended March 31, 2018 . Assets Recognized from the Costs to Obtain and Fulfill a Contract The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it is expected that the costs are recoverable and the benefit of those costs will be longer than one year. The Company also recognizes an asset for costs that relate directly to fulfilling a contract that are expected to be recovered. At March 31, 2018 , the Company included deferred contract costs related to ASC 606 of $43,999 in the DAC and VOBA balance in the condensed consolidated balance sheet. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Net periodic cost (benefit) of the Defined Benefit Pension, Post-Retirement Medical, and Supplemental Executive Retirement plans included in general insurance expenses in the accompanying condensed consolidated statements of income includes the following components: Three Months Ended March 31, Defined Benefit Pension Plan Post-Retirement Medical Plan Supplemental Executive Total 2018 2017 2018 2017 2018 2017 2018 2017 Components of net periodic cost (benefit): Service cost $ — $ (2,067 ) $ 376 $ 357 $ — $ (4 ) $ 376 $ (1,714 ) Interest cost 5,709 6,121 172 188 339 405 6,220 6,714 Expected return on plan assets (5,331 ) (5,118 ) — — — — (5,331 ) (5,118 ) Amortization of unrecognized prior service costs (benefits) — — (69 ) (52 ) 81 125 12 73 Amortization of losses (gains) from earlier periods 584 2,199 (5 ) (113 ) (11 ) (13 ) 568 2,073 Net periodic cost (benefit) $ 962 $ 1,135 $ 474 $ 380 $ 409 $ 513 $ 1,845 $ 2,028 The Company expects to make payments of approximately $329 with respect to its Post-Retirement Medical Plan and $2,398 with respect to its Supplemental Executive Retirement Plan during the year ended December 31, 2018 . The Company does no t expect to make contributions to its Defined Benefit Pension Plan during the year ended December 31, 2018 . A December 31 measurement date is used for the employee benefit plans. The following table summarizes payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan: Three Months Ended March 31, 2018 2017 Payments to the Post-Retirement Medical Plan $ 82 $ 169 Payments to the Supplemental Executive Retirement Plan 599 834 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes is comprised of the following: Three Months Ended March 31, 2018 2017 Current (benefit) expense $ (15,771 ) $ 12,959 Deferred expense 29,324 4,158 Total income tax provision $ 13,553 $ 17,117 The following table presents a reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate: Three Months Ended March 31, 2018 2017 Statutory federal income tax rate 21.0 % 35.0 % Income tax effect of: Investment income not subject to federal tax (2.2 )% (3.3 )% Tax credits (0.6 )% (0.8 )% State income taxes, net of federal benefit 2.8 % 1.8 % Other, net 0.8 % 0.3 % Effective income tax rate 21.8 % 33.0 % The effective income tax rate from continuing operations was 21.8 percent for the three months ended March 31, 2018 , compared with 33 percent for the same period in 2017 . The decrease in effective income tax rate for the three months ended March 31, 2018 , compared with the same period in 2017 , was primarily the result of the passage of the Tax Reconciliation Act, which reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. The Company recorded an increase of $962 and an increase of $1,994 in unrecognized tax benefits during the three months ended March 31, 2018 , and 2017 , respectively. The Company anticipates additional increases to its unrecognized tax benefits of $3,000 to $4,000 in the next twelve months. The Company expects that the majority of the increase in its unrecognized tax benefits will not impact the effective tax rate. The Company files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations by tax authorities for years 2013 and prior. Tax years 2014 through 2016 are open to federal examination by the Internal Revenue Service (“IRS”). The Company does not expect significant increases or decreases to unrecognized tax benefits relating to federal, state, or local audits. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Chief Operating Decision Maker (“CODM”) of the Company is also the Chief Executive Officer (“CEO”) of the Company and Lifeco U.S. The CODM reviews the financial information for the purposes of assessing performance and allocating resources based upon the results of Lifeco U.S. and other U.S. affiliates prepared in accordance with International Financial Reporting Standards. The CODM, in his capacity as CEO of the Company, reviews the Company’s financial information only in connection with the quarterly and annual reports that are filed with the Securities and Exchange Commission (“SEC”). Consequently, the Company does not provide its discrete financial information to the CODM to be regularly reviewed to make decisions about resources to be allocated or to assess performance. For purposes of SEC reporting requirements, the Company has chosen to present its financial information in three segments, notwithstanding the above. The three segments are: Individual Markets, Empower Retirement, and Other. Individual Markets The Individual Markets reporting and operating segment distributes life insurance and individual annuity products to both individuals and businesses through various distribution channels. Life insurance products in-force include participating and non-participating term life, whole life, universal life, and variable universal life. Empower Retirement The Empower Retirement reporting and operating segment provides various retirement plan products and investment options as well as comprehensive administrative and record-keeping services for financial institutions and employers, which include educational, advisory, enrollment, and communication services for employer-sponsored defined contribution plans and associated defined benefit plans. Other The Company’s Other reporting segment is substantially comprised of activity under the assumption of reinsurance between Great-West Life & Annuity Insurance Company of South Carolina (“GWSC”), a wholly owned subsidiary, and The Canada Life Assurance Company (“CLAC”) (“the GWSC operating segment”), corporate items not directly allocated to the other operating segments, and interest expense on long-term debt. The accounting principles used to determine segment results are the same as those used in the consolidated financial statements. The Company evaluates performance of its reportable segments based on their profitability from operations after income taxes. Inter-segment transactions and balances have been eliminated in consolidation. The Company’s operations are not materially dependent on one or a few customers, brokers, or agents. The following tables summarize segment financial information: Three Months Ended March 31, 2018 Individual Empower Markets Retirement Other Total Revenue: Premium income $ 123,586 $ 589 $ 20,507 $ 144,682 Fee income 31,628 242,457 1,879 275,964 Other revenue — 2,985 — 2,985 Net investment income 197,329 129,009 11,803 338,141 Investment (losses) gains, net (16,670 ) (27,122 ) 49 (43,743 ) Total revenues 335,873 347,918 34,238 718,029 Benefits and expenses: Policyholder benefits 272,010 51,279 15,296 338,585 Operating expenses 42,602 259,881 14,750 317,233 Total benefits and expenses 314,612 311,160 30,046 655,818 Income before income taxes 21,261 36,758 4,192 62,211 Income tax expense 3,897 8,768 888 13,553 Net income $ 17,364 $ 27,990 $ 3,304 $ 48,658 Three Months Ended March 31, 2017 Individual Empower Markets Retirement Other Total Revenue: Premium income $ 131,559 $ 91 $ 20,591 $ 152,241 Fee income 25,981 227,320 1,815 255,116 Other revenue — 2,384 — 2,384 Net investment income 184,205 117,620 11,646 313,471 Realized investment gains (losses), net 584 (12,316 ) (22 ) (11,754 ) Total revenues 342,329 335,099 34,030 711,458 Benefits and expenses: Policyholder benefits 270,088 47,629 21,711 339,428 Operating expenses 38,386 255,764 25,933 320,083 Total benefits and expenses 308,474 303,393 47,644 659,511 Income (loss) before income taxes 33,855 31,706 (13,614 ) 51,947 Income tax expense (benefit) 11,650 10,426 (4,959 ) 17,117 Net income (loss) $ 22,205 $ 21,280 $ (8,655 ) $ 34,830 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The Company has a revolving credit facility agreement in the amount of $50,000 for general corporate purposes. The credit facility expires on March 1, 2023. Interest accrues at a rate dependent on various conditions and terms of borrowings. The agreement requires, among other things, the Company to maintain a minimum adjusted net worth of $1,022,680 , as defined in the credit facility agreement (compiled on the statutory accounting basis prescribed by the National Association of Insurance Commissioners), at anytime. The Company was in compliance with all covenants at March 31, 2018 and December 31, 2017 . At March 31, 2018 and December 31, 2017 , there were no outstanding amounts related to the credit facility. GWL&A Financial has a letter of credit for the benefit of GWSC for capital support in the amount of $70,000 and which renews annually until the Company terminates it under the provisions specified in the agreement. At March 31, 2018 and December 31, 2017 , there were no outstanding amounts related to the letter of credit. In addition, the Company has other letters of credit with a total amount of $9,095 , renewable annually for an indefinite period of time. At March 31, 2018 and December 31, 2017 , there were no outstanding amounts related to those letters of credit. The Company makes commitments to fund partnership interests, mortgage loans on real estate, and other investments in the normal course of its business. The amounts of these unfunded commitments at March 31, 2018 and December 31, 2017 , were as follows: March 31, 2018 December 31, 2017 Due in less than one year $ 368,500 $ 312,152 Due within one to three years — 1,090 Total $ 368,500 $ 313,242 Included in the total unfunded commitments at March 31, 2018 and December 31, 2017 , is $107,001 and $114,726 , respectively, related to limited partnership interests, all of which is due within one year from the dates indicated. Contingencies From time to time, the Company may be threatened with, or named as a defendant in, lawsuits, arbitrations, and administrative claims. Any such claims that are decided against the Company could harm the Company’s business. The Company is also subject to periodic regulatory audits and inspections which could result in fines or other disciplinary actions. Unfavorable outcomes in such matters may result in a material impact on the Company's financial position, results of operations, or cash flows. The Company is defending lawsuits relating to the costs and features of certain retirement or fund products. Management believes the claims are without merit and will defend these actions. Based on the information known, these actions will not have a material adverse effect on the consolidated financial position of the Company. The Company is involved in other various legal proceedings that arise in the ordinary course of its business. In the opinion of management, after consultation with counsel, the likelihood of loss from the resolution of these proceedings is remote and/or the estimated loss is not expected to have a material effect on the Company’s consolidated financial position, results of its operations, or cash flows. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 25, 2018, the Company’s Board of Directors declared dividends of $20,000 , paid on May 1, 2018, to its sole shareholder, GWL&A Financial. |
Organization and Basis of Pre23
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and the accounts of its subsidiaries over which it exercises control and are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated balance sheet as of December 31, 2017 , which was derived from the Company’s audited consolidated financial statements, and the unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2018 , have been prepared in accordance with the instructions for Form 10-Q. In compliance with those instructions, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. As such, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . In the opinion of management, these statements include all normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position, and cash flows as of March 31, 2018 , and for all periods presented. The condensed consolidated results of operations and condensed consolidated statement of cash flows for the three months ended March 31, 2018 , are not necessarily indicative of the results or cash flows expected for the full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
New Accounting Pronouncements | Recently adopted accounting pronouncements In May, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, and all the related amendments to customer contracts (collectively “ASC 606”), effective for interim and annual periods beginning after December 15, 2017. ASC 606 supersedes nearly all existing revenue recognition guidance under U.S. GAAP; however, it did not impact the accounting for insurance and investment contracts within the scope of financial services insurance, leases, financial instruments and guarantees. The core principle of the model requires that an entity recognizes revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The update also requires increased disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. See Note 9 for additional information. On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The primary impact of ASC 606 to the Company relates to the accounting for certain contract costs and contract fulfillment costs, which were expensed as incurred under ASC 605. Under ASC 606, these costs are deferred and amortized over the expected life of the customer contract, which the Company determined to be 10 years . The Company presents these contract costs and contract fulfillment costs on the balance sheet as a part of the DAC and VOBA balance. The Company recorded a net increase to opening retained earnings of $32,952 , net of tax, as of January 1, 2018 due to the cumulative impact of adopting ASC 606. In January, 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , effective for interim and annual periods beginning after December 15, 2017. The amendments in this update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments including requiring equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income, eliminating certain disclosure requirements related to financial instruments measured at amortized cost, and adding disclosures related to the measurement categories of financial assets and financial liabilities. The primary impact to the Company’s condensed consolidated financial statements was that the Company’s limited partnership interests, that were accounted for under the cost method, are now measured at fair value with changes in the fair value recognized in net income. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) , effective for fiscal years and interim periods within those beginning after December 15, 2017. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The primary impacts to the Company’s condensed consolidated financial statement include reclassification of proceeds received from the settlement of corporate-owned life insurance policies (“COLI”) from cash flow from operations to cash flow from investing and reclassification of certain change in due to / from parent and affiliate from investing to operating. As the Company has retroactively applied this guidance as required by the ASU, the following updates were made to the condensed consolidated cash flow statement for the three months ended March 31, 2017 to conform to current year presentation: • Reclassification of proceeds received from the settlement of COLIs of $1,680 from cash flow from operations to cash flows from investing; and • Reclassification of change in due to / from parent and affiliate of $2,921 from cash flow from financing to cash flows from operations. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (a consensus of the Emerging Issues Task Force) , effective for fiscal years and interim periods within those beginning after December 15, 2017. This update requires organizations to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , effective for annual reporting periods beginning on or after December 15, 2017, and interim periods within those annual periods. This update requires organizations to disaggregate the service cost component from the other components of net benefit costs in the income statement and present it with other current compensation costs for the related employees while providing guidance for capitalization eligibility for service costs. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. Future adoption of new accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases , effective for annual reporting periods beginning on or after December 15, 2018, and interim periods within those annual periods. Earlier application is permitted as of the beginning of an interim or annual period. This update requires organizations to recognize lease assets and lease liabilities on the balance sheet with lease terms of more than 12 months and also disclose certain qualitative and quantitative information about leasing arrangements. The Company’s implementation efforts are primarily focused on the review of its existing lease contracts and performing a completeness assessment over the lease population. The Company continues to evaluate the impact of this update on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Credit Losses: Measurement of Credit Losses on Financial Instruments , effective for fiscal years and interim periods within those beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018. This update amends guidance on the impairment of financial instruments by adding an impairment model that is based on expected losses rather than incurred losses and is intended to result in more timely recognition of losses. The standard also simplifies the accounting by decreasing the number of credit impairment models that an entity can use to account for debt instruments. The Company continues to evaluate the impact of this update on its condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other , effective for annual or any interim goodwill impairment tests after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The update eliminates Step 2 from the goodwill impairment test and will require management to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Any amount by which the carrying amount exceeds the reporting unit’s fair value (not to exceed the goodwill allocated to that reporting unit) is recognized as an impairment charge. The Company performs its goodwill impairment annually in the 4th quarter or more frequently if events or circumstances indicate that there may be justification for performing an interim test. The adoption of this standard is not anticipated to have a material impact on the condensed consolidated financial statements. |
Summary of Investments (Tables)
Summary of Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of fixed maturity investments classified as available-for-sale and the non-credit related components of other-than-temporary impairments (OTTI) in accumulated other comprehensive income (loss) (AOCI) | The following tables summarize fixed maturity investments classified as available-for-sale and the non-credit-related component of other-than-temporary impairments (“OTTI”) in accumulated other comprehensive income (loss) (“AOCI”): March 31, 2018 Amortized Gross unrealized Gross unrealized Estimated fair value OTTI (gain) loss Fixed maturities: cost gains losses and carrying value included in AOCI (1) U.S. government direct obligations and U.S. agencies $ 1,392,346 $ 32,603 $ 25,591 $ 1,399,358 $ — Obligations of U.S. states and their subdivisions 1,877,627 186,166 3,226 2,060,567 — Corporate debt securities (2) 15,555,511 380,876 246,981 15,689,406 (887 ) Asset-backed securities 1,592,351 76,838 18,172 1,651,017 (32,154 ) Residential mortgage-backed securities 137,413 2,278 1,109 138,582 (110 ) Commercial mortgage-backed securities 1,374,477 6,728 32,708 1,348,497 — Collateralized debt obligations 891,546 4,785 1 896,330 — Total fixed maturities $ 22,821,271 $ 690,274 $ 327,788 $ 23,183,757 $ (33,151 ) (1) Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses. OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities. (2) Includes perpetual debt investments with amortized cost of $89,267 and estimated fair value of $88,877 . December 31, 2017 Amortized Gross unrealized Gross unrealized Estimated fair value OTTI (gain) loss Fixed maturities: cost gains losses and carrying value included in AOCI (1) U.S. government direct obligations and U.S. agencies $ 1,837,748 $ 41,777 $ 7,883 $ 1,871,642 $ — Obligations of U.S. states and their subdivisions 1,872,120 220,507 1,655 2,090,972 — Corporate debt securities (2) 15,234,473 581,991 110,377 15,706,087 (1,018 ) Asset-backed securities 1,622,806 105,301 10,131 1,717,976 (56,735 ) Residential mortgage-backed securities 63,187 2,446 649 64,984 (140 ) Commercial mortgage-backed securities 1,352,906 17,692 12,989 1,357,609 — Collateralized debt obligations 779,722 4,227 80 783,869 — Total fixed maturities $ 22,762,962 $ 973,941 $ 143,764 $ 23,593,139 $ (57,893 ) (1) Indicates the amount of any OTTI (gain) loss included in AOCI that is included in gross unrealized gains and losses. OTTI (gain) loss included in AOCI, as presented above, includes both the initial recognition of non-credit losses and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities with previous non-credit impairment. The non-credit loss component of OTTI (gain) loss was in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities. (2) Includes perpetual debt investments with amortized cost of $89,267 and estimated fair value of $87,348 . |
Schedule of amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale | The amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale, based on estimated cash flows, are shown in the table below. Actual maturities will likely differ from these projections because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. March 31, 2018 Amortized cost Estimated fair value Maturing in one year or less $ 813,963 $ 826,233 Maturing after one year through five years 3,808,805 3,869,012 Maturing after five years through ten years 8,164,513 8,147,763 Maturing after ten years 4,993,140 5,270,972 Mortgage-backed and asset-backed securities 5,040,850 5,069,777 Total fixed maturities $ 22,821,271 $ 23,183,757 |
Summary of information regarding the sales of securities classified as available-for-sale | The following table summarizes information regarding the sales of securities classified as available-for-sale: Three Months Ended March 31, 2018 2017 Proceeds from sales $ 966,420 $ 1,580,522 Gross realized gains from sales 12,274 12,433 Gross realized losses from sales 6,283 15,257 |
Summary of activity in the mortgage provision allowance | The following table summarizes activity in the mortgage provision allowance: Three Months Ended March 31, 2018 Year Ended December 31, 2017 Commercial mortgages Commercial mortgages Beginning balance $ 773 $ 2,882 Provision increases — 157 Charge-off — (663 ) Recovery — (30 ) Provision decreases — (1,573 ) Ending balance $ 773 $ 773 Allowance ending balance by basis of impairment method: Collectively evaluated for impairment 773 773 Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method: $ 4,152,533 $ 4,005,960 Individually evaluated for impairment 2,871 2,942 Collectively evaluated for impairment 4,149,662 4,003,018 |
Schedule of unrealized investment losses, including the non-credit-related portion of OTTI losses reported in AOCI, by class of investment | The following tables summarize unrealized investment losses, including the non-credit-related portion of OTTI losses reported in AOCI, by class of investment: March 31, 2018 Less than twelve months Twelve months or longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fixed maturities: fair value loss and OTTI fair value loss and OTTI fair value loss and OTTI U.S. government direct obligations and U.S. agencies $ 735,249 $ 19,678 $ 151,508 $ 5,913 $ 886,757 $ 25,591 Obligations of U.S. states and their subdivisions 94,712 1,113 37,455 2,113 132,167 3,226 Corporate debt securities 6,254,337 140,152 1,667,376 106,829 7,921,713 246,981 Asset-backed securities 667,026 10,231 209,018 7,941 876,044 18,172 Residential mortgage-backed securities 81,291 411 10,464 698 91,755 1,109 Commercial mortgage-backed securities 778,597 15,656 287,246 17,052 1,065,843 32,708 Collateralized debt obligations 21,000 1 — — 21,000 1 Total fixed maturities $ 8,632,212 $ 187,242 $ 2,363,067 $ 140,546 $ 10,995,279 $ 327,788 Total number of securities in an unrealized loss position 808 271 1,079 December 31, 2017 Less than twelve months Twelve months or longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fixed maturities: fair value loss and OTTI fair value loss and OTTI fair value loss and OTTI U.S. government direct obligations and U.S. agencies $ 755,861 $ 4,159 $ 230,447 $ 3,724 $ 986,308 $ 7,883 Obligations of U.S. states and their subdivisions 24,908 180 37,012 1,475 61,920 1,655 Corporate debt securities 2,229,585 19,568 2,036,323 90,809 4,265,908 110,377 Asset-backed securities 544,778 3,011 245,341 7,120 790,119 10,131 Residential mortgage-backed securities 4,405 23 11,416 626 15,821 649 Commercial mortgage-backed securities 342,820 2,451 295,164 10,538 637,984 12,989 Collateralized debt obligations 7,277 80 — — 7,277 80 Total fixed maturities $ 3,909,634 $ 29,472 $ 2,855,703 $ 114,292 $ 6,765,337 $ 143,764 Total number of securities in an unrealized loss position 368 293 661 |
Other-than-temporary impairment recognition | The OTTI on fixed maturity securities where the loss portion is bifurcated and the credit related component is recognized in investment (losses) gains is summarized as follows: Three Months Ended March 31, 2018 2017 Beginning balance $ 62,231 $ 83,665 Reductions: Due to sales, maturities or payoffs during the period (1,510 ) — Due to increases in cash flows expected to be collected that are recognized over the remaining life of the security (7,946 ) (3,306 ) Ending balance $ 52,775 $ 80,359 |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of derivative financial instruments | The following tables summarize the notional amount and fair value of derivative financial instruments, excluding embedded derivatives: March 31, 2018 Net derivatives Asset derivatives Liability derivatives Notional amount Fair value Fair value (1) Fair value (1) Hedge designation/derivative type: Derivatives designated as hedges: Cash flow hedges: Interest rate swaps $ 22,300 $ 6,156 $ 6,156 $ — Cross-currency swaps 864,609 (65,232 ) 10,404 75,636 Total cash flow hedges 886,909 (59,076 ) 16,560 75,636 Total derivatives designated as hedges 886,909 (59,076 ) 16,560 75,636 Derivatives not designated as hedges: Interest rate swaps 534,100 775 1,703 928 Futures on equity indices 57,609 — — — Interest rate futures 47,300 — — — Interest rate swaptions 172,761 135 135 — Other forward contracts 820,000 3,691 3,691 — Cross-currency swaps 612,733 (49,242 ) 12,882 62,124 Total derivatives not designated as hedges 2,244,503 (44,641 ) 18,411 63,052 Total derivative financial instruments $ 3,131,412 $ (103,717 ) $ 34,971 $ 138,688 (1) The estimated fair value includes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets. December 31, 2017 Net derivatives Asset derivatives Liability derivatives Notional amount Fair value Fair value (1) Fair value (1) Hedge designation/derivative type: Derivatives designated as hedges: Cash flow hedges: Interest rate swaps $ 388,800 $ 7,476 $ 7,476 $ — Cross-currency swaps 800,060 (31,358 ) 19,958 51,316 Total cash flow hedges 1,188,860 (23,882 ) 27,434 51,316 Total derivatives designated as hedges 1,188,860 (23,882 ) 27,434 51,316 Derivatives not designated as hedges: Interest rate swaps 519,100 1,902 3,530 1,628 Futures on equity indices 22,074 — — — Interest rate futures 60,700 — — — Interest rate swaptions 164,522 75 75 — Cross-currency swaps 612,733 (21,279 ) 20,320 41,599 Total derivatives not designated as hedges 1,379,129 (19,302 ) 23,925 43,227 Total derivative financial instruments $ 2,567,989 $ (43,184 ) $ 51,359 $ 94,543 (1) The estimated fair value excludes accrued income and expense. The estimated fair value of all derivatives in an asset position is reported within other assets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the condensed consolidated balance sheets. |
Schedule of the effect of derivative instruments in the condensed consolidated statement of income reported by cash flow hedges, fair value hedges and economic hedges | The following tables present the effect of derivative instruments in the condensed consolidated statements of income and comprehensive income reported by cash flow hedges and derivatives not designated as hedges, excluding embedded derivatives: Gain (loss) recognized in OCI on derivatives (Effective portion) Gain (loss) reclassified from OCI Three Months Ended March 31, Three Months Ended March 31, 2018 2017 2018 2017 Cash flow hedges: Interest rate swaps $ (1,012 ) $ (148 ) $ 928 $ 1,220 (A) Interest rate swaps 29,029 3,843 (255 ) (880 ) (B) Cross-currency swaps (34,513 ) (10,650 ) (526 ) 1,102 (A) Total cash flow hedges $ (6,496 ) $ (6,955 ) $ 147 $ 1,442 (A) Net investment income. (B) Interest expense. Gain (loss) on derivatives recognized in net income Three Months Ended March 31, 2018 2017 Derivatives not designated as hedging instruments: Futures on equity indices $ — (A) $ (684 ) (A) Futures on equity indices (641 ) (B) (1,284 ) (B) Interest rate swaps — (A) (1,549 ) (A) Interest rate swaps (10,966 ) (B) — (B) Interest rate futures — (A) (14 ) (A) Interest rate futures 48 (B) 5 (B) Interest rate swaptions — (A) (27 ) (A) Interest rate swaptions 36 (B) (74 ) (B) Other forward contracts — (A) 6,784 (A) Other forward contracts (20,368 ) (B) (5,597 ) (B) Cross-currency swaps — (A) (14,168 ) (A) Cross-currency swaps (28,144 ) (B) — (B) Total derivatives not designated as hedging instruments $ (60,035 ) $ (16,608 ) (A) Net investment income. (B) Represents investment (losses) gains, net. |
Summary of Offsetting Assets 26
Summary of Offsetting Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Offsetting [Abstract] | |
Summary of the Company's financial instruments that are subject to master netting arrangements | The following tables summarize the effect of master netting arrangements on the Company’s financial position in the normal course of business and in the event of default or bankruptcy of the Company’s counterparties: March 31, 2018 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (assets): recognized assets (1) instruments Cash collateral fair value Derivative instruments (2) $ 34,971 $ (31,280 ) $ (637 ) $ 3,054 Short-term reverse repurchase agreements (3) 15,900 (15,900 ) — — Total financial instruments (assets) $ 50,871 $ (47,180 ) $ (637 ) $ 3,054 March 31, 2018 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (liabilities): recognized liabilities (1) instruments Cash collateral fair value Derivative instruments (4) $ 138,689 $ (31,280 ) $ (107,344 ) $ 65 (1) The gross fair value of derivative instrument and short-term reverse repurchase agreement assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets. (2) The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. (3) The estimated fair value of short-term reverse repurchase agreement assets is reported in short-term investments in the condensed consolidated balance sheets. The collateral is held by an independent third-party custodian under a tri-party agreement. (4) The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. December 31, 2017 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (assets): recognized assets/liabilities (1) instruments Cash collateral fair value Derivative instruments (2) $ 52,738 $ (47,827 ) $ (4,911 ) $ — Short-term reverse repurchase agreements (3) 23,200 (23,200 ) — — Total financial instruments (assets) $ 75,938 $ (71,027 ) $ (4,911 ) $ — December 31, 2017 Gross fair value not offset in balance sheets Gross fair value of Financial Net Financial instruments (liabilities): recognized liabilities (1) instruments Cash collateral fair value Derivative instruments (4) $ 93,761 $ (47,827 ) $ (42,750 ) $ 3,184 (1) The gross fair value of derivative instrument and short-term reverse repurchase agreement assets is not netted against offsetting liabilities for presentation on the condensed consolidated balance sheets. (2) The estimated fair value of derivative instrument assets is reported in other assets in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. (3) The estimated fair value of short-term reverse repurchase agreement assets is reported in short-term investments in the condensed consolidated balance sheets. The collateral is held by an independent third-party custodian under a tri-party agreement. (4) The estimated fair value of derivative instrument liabilities is reported in other liabilities in the condensed consolidated balance sheets. Derivative transactions entered into under ISDA master agreements include income and expense accruals. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities carried at fair value on a recurring basis | The following tables present the Company’s financial assets and liabilities carried at fair value on a recurring basis by fair value hierarchy category: Assets and liabilities measured at fair value on a recurring basis March 31, 2018 Quoted prices Significant in active other Significant Total Assets Fixed maturities available-for-sale: U.S. government direct obligations and U.S. agencies $ — $ 1,399,358 $ — $ 1,399,358 Obligations of U.S. states and their subdivisions — 2,060,567 — 2,060,567 Corporate debt securities — 15,680,119 9,287 15,689,406 Asset-backed securities — 1,651,017 — 1,651,017 Residential mortgage-backed securities — 138,582 — 138,582 Commercial mortgage-backed securities — 1,348,497 — 1,348,497 Collateralized debt obligations — 896,330 — 896,330 Total fixed maturities available-for-sale — 23,174,470 9,287 23,183,757 Fixed maturities held-for-trading: U.S. government direct obligations and U.S. agencies — 16,134 — 16,134 Corporate debt securities — 3,074 — 3,074 Commercial mortgage-backed securities — 1,046 — 1,046 Total fixed maturities held-for-trading — 20,254 — 20,254 Short-term investments 227,360 70,160 — 297,520 Limited partnership interests (1) — — — 53,120 Collateral under securities lending agreements — 95,024 — 95,024 Collateral under derivative counterparty collateral agreements 129,505 — — 129,505 Derivative instruments designated as hedges: Interest rate swaps — 6,156 — 6,156 Cross-currency swaps — 10,404 — 10,404 Derivative instruments not designated as hedges: Interest rate swaps — 1,703 — 1,703 Interest rate swaptions — 135 — 135 Other forward contracts — 3,691 — 3,691 Cross-currency swaps — 12,882 — 12,882 Total derivative instruments — 34,971 — 34,971 Separate account assets (1) 16,097,613 10,361,781 — 26,843,072 Total assets $ 16,454,478 $ 33,756,660 $ 9,287 $ 50,604,103 Liabilities Payable under securities lending agreements $ — $ 95,024 $ — $ 95,024 Collateral under derivative counterparty collateral agreements $ 637 $ — $ — $ 637 Derivative instruments designated as hedges: Cross-currency swaps — 75,636 — 75,636 Derivative instruments not designated as hedges: Interest rate swaps — 928 — 928 Other forward contracts — — — — Cross-currency swaps — 62,124 — 62,124 Total derivative instruments — 138,688 — 138,688 Embedded derivatives - GLWB — — 3,993 3,993 Separate account liabilities (2) 18 350,653 — 350,671 Total liabilities $ 655 $ 584,365 $ 3,993 $ 589,013 (1) Included in the total fair value amount are $384 million of separate account assets and $53 million of limited partnership interests as of March 31, 2018 for which the fair value is estimated using net asset value per unit as a practical expedient. (2) Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts. Assets and liabilities measured at fair value on a recurring basis December 31, 2017 Quoted prices Significant in active other Significant Total Assets Fixed maturities available-for-sale: U.S. government direct obligations and U.S. agencies $ — $ 1,871,642 $ — $ 1,871,642 Obligations of U.S. states and their subdivisions — 2,090,972 — 2,090,972 Corporate debt securities — 15,696,349 9,738 15,706,087 Asset-backed securities — 1,717,976 — 1,717,976 Residential mortgage-backed securities — 64,984 — 64,984 Commercial mortgage-backed securities — 1,357,609 — 1,357,609 Collateralized debt obligations — 783,869 — 783,869 Total fixed maturities available-for-sale — 23,583,401 9,738 23,593,139 Fixed maturities held-for-trading: U.S. government direct obligations and U.S. agencies — 16,836 — 16,836 Corporate debt securities — 3,156 — 3,156 Commercial mortgage-backed securities — 1,067 — 1,067 Total fixed maturities held-for-trading — 21,059 — 21,059 Short-term investments (1) 288,302 61,964 — 350,266 Collateral under derivative counterparty collateral agreements 57,820 — — 57,820 Derivative instruments designated as hedges: Interest rate swaps — 7,476 — 7,476 Cross-currency swaps — 19,958 — 19,958 Derivative instruments not designated as hedges: Interest rate swaps — 3,530 — 3,530 Interest rate swaptions — 75 — 75 Cross-currency swaps — 20,320 — 20,320 Total derivative instruments — 51,359 — 51,359 Separate account assets (1) 16,523,630 10,736,532 — 27,660,571 Total assets $ 16,869,752 $ 34,454,315 $ 9,738 $ 51,734,214 Liabilities Collateral under derivative counterparty collateral agreements $ 5,490 $ — $ — $ 5,490 Derivative instruments designated as hedges: Cross-currency swaps — 51,316 — 51,316 Derivative instruments not designated as hedges: Interest rate swaps — 1,628 — 1,628 Cross-currency swaps — 41,599 — 41,599 Total derivative instruments — 94,543 — 94,543 Embedded derivatives - GLWB — — 11,095 11,095 Separate account liabilities (2) 8 409,266 — 409,274 Total liabilities $ 5,498 $ 503,809 $ 11,095 $ 520,402 (1) Included in the total fair value amounts are $400 million of investments as of December 31, 2017 for which the fair value is estimated using net asset value per unit as a practical expedient. (2) Includes only separate account instruments which are carried at the fair value of the underlying liabilities owned by the separate accounts. |
Schedule of assets and liabilities measured at fair value on a recurring basis, for which Level 3 inputs are utilized to determine fair value | The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value: Recurring Level 3 financial assets and liabilities Three Months Ended March 31, 2018 Assets Liabilities Fixed maturities available-for-sale Embedded derivatives - GLWB Corporate debt securities Balances, January 1, 2018 $ 9,738 $ 11,095 Realized and unrealized gains (losses) included in: Net income (loss) — 7,102 Other comprehensive income (loss) (13 ) — Settlements (438 ) — Balances, March 31, 2018 $ 9,287 $ 3,993 Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at March 31, 2018 $ — $ 7,102 Recurring Level 3 financial assets and liabilities Three Months Ended March 31, 2017 Assets Liabilities Fixed maturities available-for-sale Embedded derivatives - GLWB Corporate debt securities Balances, January 1, 2017 $ 11,639 $ 5,712 Realized and unrealized gains (losses) included in: Net income (loss) — 1,670 Other comprehensive income (loss) (364 ) — Settlements (344 ) — Balances, March 31, 2017 $ 10,931 $ 4,042 Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities held at March 31, 2017 $ — $ 1,670 |
Schedule of significant unobservable inputs used during the valuation of liabilities categorized within Level 3 of the recurring fair value measurements table | The following table presents significant unobservable inputs used during the valuation of certain liabilities categorized within Level 3 of the recurring fair value measurements table: Range Valuation Technique Unobservable Input March 31, 2018 December 31, 2017 Embedded derivatives - GLWB Risk neutral stochastic valuation methodology Equity volatility 15% - 30% 15% - 30% Swap curve 2.31% - 2.85% 1.69% - 2.54% Mortality rate Based on the Annuity 2000 Mortality Table Based on the Annuity 2000 Mortality Table Base Lapse rate 1% - 15% 1% - 15% |
Summary of the carrying amounts and estimated fair values of financial instruments not carried at fair value on a recurring basis | The following tables summarize the carrying amounts and estimated fair values of the Company’s financial instruments and investments not carried at fair value on a recurring basis: March 31, 2018 December 31, 2017 Fair value Fair value Carrying Estimated hierarchy Carrying Estimated hierarchy amount fair value level amount fair value level Assets Mortgage loans on real estate $ 4,151,760 $ 4,140,846 2 $ 4,005,187 $ 4,066,800 2 Policy loans 4,067,552 4,067,552 2 4,104,094 4,104,094 2 Limited partnership interests (1) — — 43,281 45,009 Other investments 10,349 40,613 3 11,507 41,588 3 Liabilities Annuity contract benefits without life contingencies $ 12,804,896 $ 12,484,424 2 $ 12,704,401 $ 12,647,309 2 Policyholders’ funds 247,781 247,781 2 280,578 280,578 2 Commercial paper 85,882 85,882 2 99,886 99,886 2 Notes payable 546,806 589,700 2 543,338 581,097 2 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of accumulated balances for each classification of other comprehensive income (loss) | The following table presents the accumulated balances for each classification of other comprehensive income (loss): Three Months Ended March 31, 2018 Unrealized holding gains (losses) arising on (1) Unrealized holding gains (losses) arising on cash flow hedges (2) Future policy benefits, DAC and VOBA adjustments Employee benefit plan adjustment (3) Total Balances, January 1, 2018 $ 544,887 $ 103,529 $ (116,267 ) $ (91,192 ) $ 440,957 Change in estimate of tax reform impact 108,846 (83,806 ) (25,040 ) — — OCI before reclassifications (459,680 ) (6,496 ) 87,408 — (378,768 ) Deferred income tax benefit (expense) 96,534 1,364 (18,356 ) — 79,542 AOCI before reclassification, net of tax (363,146 ) (5,132 ) 69,052 — (299,226 ) Amounts reclassified from AOCI (5,440 ) (147 ) — 580 (5,007 ) Deferred income tax benefit (expense) 1,142 31 — (122 ) 1,051 Amounts reclassified from AOCI, net of tax (4,298 ) (116 ) — 458 (3,956 ) Balances, March 31, 2018 $ 286,289 $ 14,475 $ (72,255 ) $ (90,734 ) $ 137,775 (1) Reclassifications affect investment gains (losses), net on the consolidated statements of income. (2) Reclassifications affect net investment income on the consolidated statements of income, except for $255 (before tax) which affected interest expense for the three months ended March 31, 2018 . (3) The adjustments for defined benefit plans are included in the computation of net periodic (benefit) cost of employee benefit plans (see note 10 for additional details). The following table presents the accumulated balances for each classification of other comprehensive income (loss): Three Months Ended March 31, 2017 Unrealized holding gains (losses) arising on (1) Unrealized holding gains (losses) arising on cash flow hedges (2) Future policy benefits, DAC and VOBA adjustments Employee benefit plan adjustment (3) Total Balances, January 1, 2017 $ 311,748 $ 67,076 $ (58,646 ) $ (84,303 ) $ 235,875 OCI before reclassifications 130,229 (6,955 ) (28,466 ) — 94,808 Deferred income tax benefit (expense) (45,580 ) 2,434 9,963 — (33,183 ) AOCI before reclassification, net of tax 84,649 (4,521 ) (18,503 ) — 61,625 Amounts reclassified from AOCI 2,917 (1,442 ) — 2,146 3,621 Deferred income tax benefit (expense) (1,021 ) 505 — (751 ) (1,267 ) Amounts reclassified from AOCI, net of tax 1,896 (937 ) — 1,395 2,354 Balances, March 31, 2017 $ 398,293 $ 61,618 $ (77,149 ) $ (82,908 ) $ 299,854 (1) Reclassifications affect investment gains(losses), net on the consolidated statements of income. (2) Reclassifications affect net investment income on the consolidated statements of income, except for $880 (before tax) which affected interest expense for the three months ended March 31, 2017 . (3) The adjustments for defined benefit plans are included in the computation of net periodic (benefit) cost of employee benefit plans (see note 10 for additional details). |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Fee income disaggregated by type of services and segment | The following table presents fee income disaggregated by type of services and segment: Three months ended March 31, 2018 Individual Markets Empower Retirement Other Total Administration, recordkeeping and servicing fees $ 1,140 $ 157,851 $ — $ 158,991 Investment advisory and asset management fees 3,255 68,290 1,879 73,424 Other fee income 27,233 16,316 — 43,549 Total Fee Income $ 31,628 $ 242,457 $ 1,879 $ 275,964 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic cost (benefit) | Net periodic cost (benefit) of the Defined Benefit Pension, Post-Retirement Medical, and Supplemental Executive Retirement plans included in general insurance expenses in the accompanying condensed consolidated statements of income includes the following components: Three Months Ended March 31, Defined Benefit Pension Plan Post-Retirement Medical Plan Supplemental Executive Total 2018 2017 2018 2017 2018 2017 2018 2017 Components of net periodic cost (benefit): Service cost $ — $ (2,067 ) $ 376 $ 357 $ — $ (4 ) $ 376 $ (1,714 ) Interest cost 5,709 6,121 172 188 339 405 6,220 6,714 Expected return on plan assets (5,331 ) (5,118 ) — — — — (5,331 ) (5,118 ) Amortization of unrecognized prior service costs (benefits) — — (69 ) (52 ) 81 125 12 73 Amortization of losses (gains) from earlier periods 584 2,199 (5 ) (113 ) (11 ) (13 ) 568 2,073 Net periodic cost (benefit) $ 962 $ 1,135 $ 474 $ 380 $ 409 $ 513 $ 1,845 $ 2,028 |
Schedule of contributions to the Defined Benefit Pension Plan and payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan | The following table summarizes payments made to the Post-Retirement Medical Plan and the Supplemental Executive Retirement Plan: Three Months Ended March 31, 2018 2017 Payments to the Post-Retirement Medical Plan $ 82 $ 169 Payments to the Supplemental Executive Retirement Plan 599 834 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of the provision for income taxes | The provision for income taxes is comprised of the following: Three Months Ended March 31, 2018 2017 Current (benefit) expense $ (15,771 ) $ 12,959 Deferred expense 29,324 4,158 Total income tax provision $ 13,553 $ 17,117 |
Schedule of reconciliation between the statutory federal income tax rate and the Company's effective federal income tax rate | The following table presents a reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate: Three Months Ended March 31, 2018 2017 Statutory federal income tax rate 21.0 % 35.0 % Income tax effect of: Investment income not subject to federal tax (2.2 )% (3.3 )% Tax credits (0.6 )% (0.8 )% State income taxes, net of federal benefit 2.8 % 1.8 % Other, net 0.8 % 0.3 % Effective income tax rate 21.8 % 33.0 % |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of financial information related to segments | The following tables summarize segment financial information: Three Months Ended March 31, 2018 Individual Empower Markets Retirement Other Total Revenue: Premium income $ 123,586 $ 589 $ 20,507 $ 144,682 Fee income 31,628 242,457 1,879 275,964 Other revenue — 2,985 — 2,985 Net investment income 197,329 129,009 11,803 338,141 Investment (losses) gains, net (16,670 ) (27,122 ) 49 (43,743 ) Total revenues 335,873 347,918 34,238 718,029 Benefits and expenses: Policyholder benefits 272,010 51,279 15,296 338,585 Operating expenses 42,602 259,881 14,750 317,233 Total benefits and expenses 314,612 311,160 30,046 655,818 Income before income taxes 21,261 36,758 4,192 62,211 Income tax expense 3,897 8,768 888 13,553 Net income $ 17,364 $ 27,990 $ 3,304 $ 48,658 Three Months Ended March 31, 2017 Individual Empower Markets Retirement Other Total Revenue: Premium income $ 131,559 $ 91 $ 20,591 $ 152,241 Fee income 25,981 227,320 1,815 255,116 Other revenue — 2,384 — 2,384 Net investment income 184,205 117,620 11,646 313,471 Realized investment gains (losses), net 584 (12,316 ) (22 ) (11,754 ) Total revenues 342,329 335,099 34,030 711,458 Benefits and expenses: Policyholder benefits 270,088 47,629 21,711 339,428 Operating expenses 38,386 255,764 25,933 320,083 Total benefits and expenses 308,474 303,393 47,644 659,511 Income (loss) before income taxes 33,855 31,706 (13,614 ) 51,947 Income tax expense (benefit) 11,650 10,426 (4,959 ) 17,117 Net income (loss) $ 22,205 $ 21,280 $ (8,655 ) $ 34,830 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | The amounts of these unfunded commitments at March 31, 2018 and December 31, 2017 , were as follows: March 31, 2018 December 31, 2017 Due in less than one year $ 368,500 $ 312,152 Due within one to three years — 1,090 Total $ 368,500 $ 313,242 |
Application of Recent Account34
Application of Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Total stockholder’s equity | $ 2,205,082 | $ 2,034,550 | $ 2,449,589 | $ 2,012,321 | |
Retained earnings | 1,109,401 | 1,051,792 | |||
Cash flows from operating | (4,922) | 357,163 | |||
Cash flows from investing | (76,488) | (505,610) | |||
Cash flows from financing | $ 84,771 | 143,046 | |||
Expected life of customer contract | 10 years | ||||
Retained earnings | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Total stockholder’s equity | $ 1,109,401 | 863,952 | $ 906,122 | ||
ASC 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Total stockholder’s equity | 2,482,541 | ||||
ASC 606 | Retained earnings | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Total stockholder’s equity | 1,084,744 | ||||
ASC 606 | Difference between revenue guidance in effect before and after ASC 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Total stockholder’s equity | 32,952 | ||||
Retained earnings | $ 32,952 | ||||
ASC 606 | Difference between revenue guidance in effect before and after ASC 606 | Retained earnings | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Total stockholder’s equity | $ 32,952 | ||||
ASU 2016-15, COLI | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Cash flows from operating | (1,680) | ||||
Cash flows from investing | 1,680 | ||||
ASU 2016-15, Due to / from parent and affiliate | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Cash flows from operating | 2,921 | ||||
Cash flows from financing | $ (2,921) |
Dividends (Details)
Dividends (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Dividends [Abstract] | ||
Dividends paid to parent, GWL&A Financial | $ 24,001 | $ 77,000 |
Summary of Investments - SOI Fi
Summary of Investments - SOI Fixed Maturity AFS and non-credit OTTI in AOCI (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Securities available-for-sale | ||
Amortized cost | $ 22,821,271 | $ 22,762,962 |
Fixed maturities available-for-sale: | 23,183,757 | 23,593,139 |
Fixed maturities | ||
Securities available-for-sale | ||
Amortized cost | 22,821,271 | 22,762,962 |
Gross unrealized gains | 690,274 | 973,941 |
Gross unrealized losses | 327,788 | 143,764 |
Fixed maturities available-for-sale: | 23,183,757 | 23,593,139 |
OTTI (gain) loss included in AOCI | (33,151) | (57,893) |
U.S. government direct obligations and U.S. agencies | ||
Securities available-for-sale | ||
Amortized cost | 1,392,346 | 1,837,748 |
Gross unrealized gains | 32,603 | 41,777 |
Gross unrealized losses | 25,591 | 7,883 |
Fixed maturities available-for-sale: | 1,399,358 | 1,871,642 |
OTTI (gain) loss included in AOCI | 0 | 0 |
Obligations of U.S. states and their subdivisions | ||
Securities available-for-sale | ||
Amortized cost | 1,877,627 | 1,872,120 |
Gross unrealized gains | 186,166 | 220,507 |
Gross unrealized losses | 3,226 | 1,655 |
Fixed maturities available-for-sale: | 2,060,567 | 2,090,972 |
OTTI (gain) loss included in AOCI | 0 | 0 |
Corporate debt securities | ||
Securities available-for-sale | ||
Amortized cost | 15,555,511 | 15,234,473 |
Gross unrealized gains | 380,876 | 581,991 |
Gross unrealized losses | 246,981 | 110,377 |
Fixed maturities available-for-sale: | 15,689,406 | 15,706,087 |
OTTI (gain) loss included in AOCI | (887) | (1,018) |
Perpetual debt investments | ||
Securities available-for-sale | ||
Amortized cost | 89,267 | 89,267 |
Fixed maturities available-for-sale: | 88,877 | 87,348 |
Asset-backed securities | ||
Securities available-for-sale | ||
Amortized cost | 1,592,351 | 1,622,806 |
Gross unrealized gains | 76,838 | 105,301 |
Gross unrealized losses | 18,172 | 10,131 |
Fixed maturities available-for-sale: | 1,651,017 | 1,717,976 |
OTTI (gain) loss included in AOCI | (32,154) | (56,735) |
Residential mortgage-backed securities | ||
Securities available-for-sale | ||
Amortized cost | 137,413 | 63,187 |
Gross unrealized gains | 2,278 | 2,446 |
Gross unrealized losses | 1,109 | 649 |
Fixed maturities available-for-sale: | 138,582 | 64,984 |
OTTI (gain) loss included in AOCI | (110) | (140) |
Commercial mortgage-backed securities | ||
Securities available-for-sale | ||
Amortized cost | 1,374,477 | 1,352,906 |
Gross unrealized gains | 6,728 | 17,692 |
Gross unrealized losses | 32,708 | 12,989 |
Fixed maturities available-for-sale: | 1,348,497 | 1,357,609 |
OTTI (gain) loss included in AOCI | 0 | 0 |
Collateralized debt obligations | ||
Securities available-for-sale | ||
Amortized cost | 891,546 | 779,722 |
Gross unrealized gains | 4,785 | 4,227 |
Gross unrealized losses | 1 | 80 |
Fixed maturities available-for-sale: | 896,330 | 783,869 |
OTTI (gain) loss included in AOCI | $ 0 | $ 0 |
Summary of Investments - SOI 37
Summary of Investments - SOI Fixed Maturity AFS aging (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized cost | ||
Maturing in one year or less | $ 813,963 | |
Maturing after one year through five years | 3,808,805 | |
Maturing after five years through ten years | 8,164,513 | |
Maturing after ten years | 4,993,140 | |
Mortgage-backed and asset-backed securities | 5,040,850 | |
Amortized cost | 22,821,271 | $ 22,762,962 |
Estimated fair value | ||
Maturing in one year or less | 826,233 | |
Maturing after one year through five years | 3,869,012 | |
Maturing after five years through ten years | 8,147,763 | |
Maturing after ten years | 5,270,972 | |
Mortgage-backed and asset-backed securities | 5,069,777 | |
Estimated fair value | $ 23,183,757 | $ 23,593,139 |
Summary of Investments - SOI AF
Summary of Investments - SOI AFS Proceeds from sales (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from sales | $ 966,420 | $ 1,580,522 |
Gross realized gains from sales | 12,274 | 12,433 |
Gross realized losses from sales | $ 6,283 | $ 15,257 |
Summary of Investments - SOI Mo
Summary of Investments - SOI Mortgage loans on real estate (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Mortgages | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Recorded investment | $ 4,152,533 | $ 4,005,960 |
Summary of Investments - SOI 40
Summary of Investments - SOI Mortgage provision allowance rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | $ 773 | $ 2,882 | |
Provision increases | 0 | 157 | |
Charge-off | 0 | (663) | |
Recovery | 0 | (30) | |
Provision decreases | 0 | $ (1,573) | |
Ending balance | 773 | ||
Allowance ending balance by basis of impairment method: | |||
Collectively evaluated for impairment | 773 | $ 773 | |
Mortgage Loans on Real Estate | |||
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method: | |||
Recorded investment balance in the mortgage loan portfolio, gross of allowance, by basis of impairment method: | 4,152,533 | 4,005,960 | |
Individually evaluated for impairment | 2,871 | 2,942 | |
Collectively evaluated for impairment | $ 4,149,662 | $ 4,003,018 |
Summary of Investments - SOI Lt
Summary of Investments - SOI Ltd partnership Sec lending Special deposits (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Nature and activities of the VIEs and the effect on financial statements | ||
Carrying value to loss in relation to the activities of VIEs | $ 53,120,000 | $ 45,540,000 |
Maximum exposure to loss in relation to the activities of the VIEs | 53,120,000 | 45,540,000 |
Special deposits and securities lending | ||
Amortized cost | 128,151,000 | |
Securities loaned to third parties at fair value | 122,278,000 | 0 |
Collateral received | 95,024,000 | 0 |
Collateral fair value | 31,424,000 | |
Payable under securities lending agreements | 95,024,000 | $ 0 |
Corporate debt securities | ||
Special deposits and securities lending | ||
Payable under securities lending agreements | $ 95,024,000 |
Summary of Investments - SOI Un
Summary of Investments - SOI Unrealized losses fixed maturities AFS (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)position | Dec. 31, 2017USD ($)position | |
Fixed maturities | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | $ 8,632,212 | $ 3,909,634 |
Less than twelve months, Unrealized loss and OTTI | 187,242 | 29,472 |
Twelve months or longer, Estimated fair value | 2,363,067 | 2,855,703 |
Twelve months or longer, Unrealized loss and OTTI | 140,546 | 114,292 |
Total Estimated fair value | 10,995,279 | 6,765,337 |
Total Unrealized losses and OTTI | $ 327,788 | $ 143,764 |
Additional disclosure | ||
Total number of securities in an unrealized loss position, Less than twelve months | position | 808 | 368 |
Total number of securities in an unrealized loss position, twelve months or longer | position | 271 | 293 |
Total number of securities in an unrealized loss position | position | 1,079 | 661 |
Decrease (increase) in total unrealized losses and other-than-temporary impairment losses | $ (184,024) | |
Decrease (increase) in total unrealized losses and other-than-temporary impairment losses (as a percent) | (128.00%) | |
Increase (decrease) in the less than twelve months category | $ 157,770 | |
Increase (decrease) in greater than twelve months unrealized losses and other-than-temporary impairment losses | 26,254 | |
U.S. government direct obligations and U.S. agencies | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | 735,249 | $ 755,861 |
Less than twelve months, Unrealized loss and OTTI | 19,678 | 4,159 |
Twelve months or longer, Estimated fair value | 151,508 | 230,447 |
Twelve months or longer, Unrealized loss and OTTI | 5,913 | 3,724 |
Total Estimated fair value | 886,757 | 986,308 |
Total Unrealized losses and OTTI | 25,591 | 7,883 |
Obligations of U.S. states and their subdivisions | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | 94,712 | 24,908 |
Less than twelve months, Unrealized loss and OTTI | 1,113 | 180 |
Twelve months or longer, Estimated fair value | 37,455 | 37,012 |
Twelve months or longer, Unrealized loss and OTTI | 2,113 | 1,475 |
Total Estimated fair value | 132,167 | 61,920 |
Total Unrealized losses and OTTI | 3,226 | 1,655 |
Corporate debt securities | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | 6,254,337 | 2,229,585 |
Less than twelve months, Unrealized loss and OTTI | 140,152 | 19,568 |
Twelve months or longer, Estimated fair value | 1,667,376 | 2,036,323 |
Twelve months or longer, Unrealized loss and OTTI | 106,829 | 90,809 |
Total Estimated fair value | 7,921,713 | 4,265,908 |
Total Unrealized losses and OTTI | $ 246,981 | 110,377 |
Additional disclosure | ||
Unrealized losses and OTTI over twelve months on securities (as a percent) | 76.00% | |
Corporate debt securities | Non-investment grade | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Twelve months or longer, Unrealized loss and OTTI | $ 7,612 | |
Asset-backed securities | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | 667,026 | 544,778 |
Less than twelve months, Unrealized loss and OTTI | 10,231 | 3,011 |
Twelve months or longer, Estimated fair value | 209,018 | 245,341 |
Twelve months or longer, Unrealized loss and OTTI | 7,941 | 7,120 |
Total Estimated fair value | 876,044 | 790,119 |
Total Unrealized losses and OTTI | $ 18,172 | 10,131 |
Additional disclosure | ||
Unrealized losses and OTTI over twelve months on securities (as a percent) | 18.00% | |
Residential mortgage-backed securities | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | $ 81,291 | 4,405 |
Less than twelve months, Unrealized loss and OTTI | 411 | 23 |
Twelve months or longer, Estimated fair value | 10,464 | 11,416 |
Twelve months or longer, Unrealized loss and OTTI | 698 | 626 |
Total Estimated fair value | 91,755 | 15,821 |
Total Unrealized losses and OTTI | 1,109 | 649 |
Commercial mortgage-backed securities | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | 778,597 | 342,820 |
Less than twelve months, Unrealized loss and OTTI | 15,656 | 2,451 |
Twelve months or longer, Estimated fair value | 287,246 | 295,164 |
Twelve months or longer, Unrealized loss and OTTI | 17,052 | 10,538 |
Total Estimated fair value | 1,065,843 | 637,984 |
Total Unrealized losses and OTTI | 32,708 | 12,989 |
Collateralized debt obligations | ||
Unrealized losses on fixed maturity and equity investments classified as available-for-sale | ||
Less than twelve months, Estimated fair value | 21,000 | 7,277 |
Less than twelve months, Unrealized loss and OTTI | 1 | 80 |
Twelve months or longer, Estimated fair value | 0 | 0 |
Twelve months or longer, Unrealized loss and OTTI | 0 | 0 |
Total Estimated fair value | 21,000 | 7,277 |
Total Unrealized losses and OTTI | $ 1 | $ 80 |
Summary of Investments - SOI O
Summary of Investments - SOI OTTI table (Details) - Fixed maturities - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||
Beginning balance | $ 62,231 | $ 83,665 |
Due to sales, maturities or payoffs during the period | (1,510) | 0 |
Due to increases in cash flows expected to be collected that are recognized over the remaining life of the security | (7,946) | (3,306) |
Ending balance | $ 52,775 | $ 80,359 |
Derivative Financial Instrume44
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Derivative financial instruments | |||
Aggregate fair value of derivative instruments with credit-risk-related contingent features, in case of net liability position | $ 138,689 | $ 93,761 | |
Collateral under derivative counterparty collateral agreements | 107,344 | 42,750 | |
Fair value of assets required to settle the derivatives in, net liability position | 21,449 | ||
Additional collateral to satisfy collateral netting arrangements | 128,868 | 52,330 | |
Unrestricted cash collateral pledged | 637 | 4,911 | |
Net derivative gains estimated to be reclassified from accumulated other comprehensive income (loss) into net income within the next twelve months | 62,494 | ||
Net investment income | |||
Derivative financial instruments | |||
Change in fair value of GLWB | 7,102 | $ 1,670 | |
Policyholders' Funds | |||
Derivative financial instruments | |||
Embedded derivatives - GLWB | 3,993 | 11,095 | |
Interest rate swaps | |||
Derivative financial instruments | |||
Average notional amount of the derivative instruments | 747,900 | 905,977 | |
Cross-currency swaps | |||
Derivative financial instruments | |||
Average notional amount of the derivative instruments | 1,461,328 | 1,323,398 | |
Future | |||
Derivative financial instruments | |||
Average notional amount of the derivative instruments | 89,085 | 108,438 | |
Swaption | |||
Derivative financial instruments | |||
Average notional amount of the derivative instruments | 170,701 | 162,896 | |
Other forward contracts | |||
Derivative financial instruments | |||
Average notional amount of the derivative instruments | 1,652,500 | 2,231,196 | |
Other counterparties | |||
Derivative financial instruments | |||
Unrestricted cash collateral pledged | 637 | 5,490 | |
Pledged collateral | |||
Derivative financial instruments | |||
Collateral under derivative counterparty collateral agreements | $ 117,240 | $ 42,750 |
Derivative Financial Instrume45
Derivative Financial Instruments - Notional and Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | $ 3,131,412 | $ 2,567,989 | |
Derivative, Fair Value, Net | (103,717) | (43,184) | |
Asset derivatives, Fair value | 34,971 | 51,359 | |
Liability derivatives, Fair value | 138,688 | 94,543 | |
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | (60,035) | $ (16,608) | |
Interest rate swaps | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 0 | (1,549) | |
Interest rate swaps | Realized investment gains (losses) | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | (10,966) | 0 | |
Cross-currency swaps | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 0 | (14,168) | |
Cross-currency swaps | Realized investment gains (losses) | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | (28,144) | 0 | |
Futures on equity indices | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 0 | (684) | |
Futures on equity indices | Realized investment gains (losses) | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | (641) | (1,284) | |
Interest rate futures | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 0 | (14) | |
Interest rate futures | Realized investment gains (losses) | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 48 | 5 | |
Interest rate swaptions | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 0 | (27) | |
Interest rate swaptions | Realized investment gains (losses) | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 36 | (74) | |
Other forward contracts | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | 0 | 6,784 | |
Other forward contracts | Realized investment gains (losses) | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) on derivatives recognized in net income | (20,368) | (5,597) | |
Cash flow hedges: | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) recognized in OCI on derivatives (Effective portion) | (6,496) | (6,955) | |
Gain (loss) reclassified from OCI into net income (Effective portion) | 147 | 1,442 | |
Cash flow hedges: | Interest rate swaps | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) recognized in OCI on derivatives (Effective portion) | (1,012) | (148) | |
Gain (loss) reclassified from OCI into net income (Effective portion) | 928 | 1,220 | |
Cash flow hedges: | Interest rate swaps | Interest Expense | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) recognized in OCI on derivatives (Effective portion) | 29,029 | 3,843 | |
Gain (loss) reclassified from OCI into net income (Effective portion) | (255) | (880) | |
Cash flow hedges: | Cross-currency swaps | Net investment income | |||
Derivatives not designated as hedging instruments | |||
Gain (loss) recognized in OCI on derivatives (Effective portion) | (34,513) | (10,650) | |
Gain (loss) reclassified from OCI into net income (Effective portion) | (526) | $ 1,102 | |
Derivatives designated as hedges: | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 886,909 | 1,188,860 | |
Derivative, Fair Value, Net | (59,076) | (23,882) | |
Asset derivatives, Fair value | 16,560 | 27,434 | |
Liability derivatives, Fair value | 75,636 | 51,316 | |
Derivatives designated as hedges: | Cash flow hedges: | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 886,909 | 1,188,860 | |
Derivative, Fair Value, Net | (59,076) | (23,882) | |
Asset derivatives, Fair value | 16,560 | 27,434 | |
Liability derivatives, Fair value | 75,636 | 51,316 | |
Derivatives designated as hedges: | Cash flow hedges: | Interest rate swaps | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 22,300 | 388,800 | |
Derivative, Fair Value, Net | 6,156 | 7,476 | |
Asset derivatives, Fair value | 6,156 | 7,476 | |
Liability derivatives, Fair value | 0 | 0 | |
Derivatives designated as hedges: | Cash flow hedges: | Cross-currency swaps | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 864,609 | 800,060 | |
Derivative, Fair Value, Net | (65,232) | (31,358) | |
Asset derivatives, Fair value | 10,404 | 19,958 | |
Liability derivatives, Fair value | 75,636 | 51,316 | |
Derivatives not designated as hedges: | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 2,244,503 | 1,379,129 | |
Derivative, Fair Value, Net | (44,641) | (19,302) | |
Asset derivatives, Fair value | 18,411 | 23,925 | |
Liability derivatives, Fair value | 63,052 | 43,227 | |
Derivatives not designated as hedges: | Interest rate swaps | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 534,100 | 519,100 | |
Derivative, Fair Value, Net | 775 | 1,902 | |
Asset derivatives, Fair value | 1,703 | 3,530 | |
Liability derivatives, Fair value | 928 | 1,628 | |
Derivatives not designated as hedges: | Cross-currency swaps | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 612,733 | 612,733 | |
Derivative, Fair Value, Net | (49,242) | (21,279) | |
Asset derivatives, Fair value | 12,882 | 20,320 | |
Liability derivatives, Fair value | 62,124 | 41,599 | |
Derivatives not designated as hedges: | Futures on equity indices | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 57,609 | 22,074 | |
Derivative, Fair Value, Net | 0 | 0 | |
Asset derivatives, Fair value | 0 | 0 | |
Liability derivatives, Fair value | 0 | 0 | |
Derivatives not designated as hedges: | Interest rate futures | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 47,300 | 60,700 | |
Derivative, Fair Value, Net | 0 | 0 | |
Asset derivatives, Fair value | 0 | 0 | |
Liability derivatives, Fair value | 0 | 0 | |
Derivatives not designated as hedges: | Interest rate swaptions | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 172,761 | 164,522 | |
Derivative, Fair Value, Net | 135 | 75 | |
Asset derivatives, Fair value | 135 | 75 | |
Liability derivatives, Fair value | 0 | $ 0 | |
Derivatives not designated as hedges: | Other forward contracts | |||
Effect of derivative instruments in the condensed consolidated statement of income and comprehensive income | |||
Derivative, Notional Amount | 820,000 | ||
Derivative, Fair Value, Net | 3,691 | ||
Asset derivatives, Fair value | 3,691 | ||
Liability derivatives, Fair value | $ 0 |
Summary of Offsetting Assets 46
Summary of Offsetting Assets and Liabilities Summary of Offsetting Assets and Liabilities - Netting Arrangements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative instruments (assets) | ||
Gross fair value of recognized assets | $ 34,971 | $ 52,738 |
Financial instruments | 31,280 | 47,827 |
Cash collateral | (637) | (4,911) |
Net fair value | 3,054 | 0 |
Securities purchased under agreements to resell, gross | 15,900 | 23,200 |
Securities purchased under agreements to resell, not offset | (15,900) | (23,200) |
Securities purchased under agreements to resell, collateral, obligation to return cash | 0 | 0 |
Securities purchased under agreements to resell, offset against collateral, net of not subject to master netting arrangement, policy election | 0 | 0 |
Derivative asset, securities purchased under agreements to resell, securities borrowed | 50,871 | 75,938 |
Derivative asset, securities purchased under agreements to resell, securities borrowed, not offset | (47,180) | (71,027) |
Derivative asset, securities purchased under agreements to resell, securities borrowed, collateral, obligation to return cash | (637) | (4,911) |
Derivative asset, securities purchased under agreements to resell, securities borrowed, amount offset against collateral | 3,054 | 0 |
Derivatives instrument (liabilities) | ||
Gross fair value of recognized liabilities | 138,689 | 93,761 |
Financial instruments | 31,280 | 47,827 |
Amount of unrestricted cash collateral to counterparties in the normal course of business | 107,344 | 42,750 |
Net fair value | $ 65 | $ 3,184 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring by FV hierarchy (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Fixed maturities available-for-sale: | $ 23,183,757 | $ 23,593,139 |
Fixed maturities held-for-trading: | 20,254 | 21,059 |
Short-term investments | 297,520 | 350,266 |
Limited partnership interests | 53,120 | 45,540 |
Collateral under securities lending agreements | 95,024 | 0 |
Collateral under derivative counterparty collateral agreements | 107,344 | 42,750 |
Total derivative instruments | 34,971 | 51,359 |
Separate account assets | 26,843,072 | 27,660,571 |
Liabilities | ||
Payable under securities lending agreements | 95,024 | 0 |
Collateral under derivative counterparty collateral agreements | 637 | 4,911 |
Total derivative instruments | 138,688 | 94,543 |
Separate account liabilities | 26,843,072 | 27,660,571 |
Derivative instruments designated as hedges: | ||
Assets | ||
Total derivative instruments | 16,560 | 27,434 |
Liabilities | ||
Total derivative instruments | 75,636 | 51,316 |
Derivative instruments not designated as hedges: | ||
Assets | ||
Total derivative instruments | 18,411 | 23,925 |
Liabilities | ||
Total derivative instruments | 63,052 | 43,227 |
Derivative instruments not designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 1,703 | 3,530 |
Liabilities | ||
Total derivative instruments | 928 | 1,628 |
Derivative instruments not designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 12,882 | 20,320 |
Liabilities | ||
Total derivative instruments | 62,124 | 41,599 |
Derivative instruments not designated as hedges: | Interest rate swaptions | ||
Assets | ||
Total derivative instruments | 135 | 75 |
Liabilities | ||
Total derivative instruments | 0 | 0 |
Derivative instruments not designated as hedges: | Other forward contracts | ||
Assets | ||
Total derivative instruments | 3,691 | |
Liabilities | ||
Total derivative instruments | 0 | |
U.S. government direct obligations and U.S. agencies | ||
Assets | ||
Fixed maturities available-for-sale: | 1,399,358 | 1,871,642 |
Obligations of U.S. states and their subdivisions | ||
Assets | ||
Fixed maturities available-for-sale: | 2,060,567 | 2,090,972 |
Corporate debt securities | ||
Assets | ||
Fixed maturities available-for-sale: | 15,689,406 | 15,706,087 |
Liabilities | ||
Payable under securities lending agreements | 95,024 | |
Asset-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 1,651,017 | 1,717,976 |
Residential mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 138,582 | 64,984 |
Commercial mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 1,348,497 | 1,357,609 |
Collateralized debt obligations | ||
Assets | ||
Fixed maturities available-for-sale: | 896,330 | 783,869 |
Recurring basis | ||
Assets | ||
Fixed maturities available-for-sale: | 23,183,757 | 23,593,139 |
Fixed maturities held-for-trading: | 20,254 | 21,059 |
Short-term investments | 297,520 | 350,266 |
Limited partnership interests | 53,120 | |
Collateral under securities lending agreements | 95,024 | |
Collateral under derivative counterparty collateral agreements | 129,505 | 57,820 |
Total derivative instruments | 34,971 | 51,359 |
Separate account assets | 26,843,072 | 27,660,571 |
Total assets | 50,604,103 | 51,734,214 |
Separate account assets excluded | 384,000 | 400,000 |
Liabilities | ||
Payable under securities lending agreements | 95,024 | |
Collateral under derivative counterparty collateral agreements | 637 | 5,490 |
Total derivative instruments | 138,688 | 94,543 |
Embedded derivatives - GLWB | 3,993 | 11,095 |
Separate account liabilities | 350,671 | 409,274 |
Total liabilities | 589,013 | 520,402 |
Recurring basis | Derivative instruments designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 6,156 | 7,476 |
Recurring basis | Derivative instruments designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 10,404 | 19,958 |
Liabilities | ||
Total derivative instruments | 75,636 | 51,316 |
Recurring basis | Derivative instruments not designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 1,703 | 3,530 |
Liabilities | ||
Total derivative instruments | 928 | 1,628 |
Recurring basis | Derivative instruments not designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 12,882 | 20,320 |
Liabilities | ||
Total derivative instruments | 62,124 | 41,599 |
Recurring basis | Derivative instruments not designated as hedges: | Interest rate swaptions | ||
Assets | ||
Total derivative instruments | 135 | 75 |
Recurring basis | Derivative instruments not designated as hedges: | Other forward contracts | ||
Assets | ||
Total derivative instruments | 3,691 | |
Liabilities | ||
Total derivative instruments | 0 | |
Recurring basis | U.S. government direct obligations and U.S. agencies | ||
Assets | ||
Fixed maturities available-for-sale: | 1,399,358 | 1,871,642 |
Fixed maturities held-for-trading: | 16,134 | 16,836 |
Recurring basis | Obligations of U.S. states and their subdivisions | ||
Assets | ||
Fixed maturities available-for-sale: | 2,060,567 | 2,090,972 |
Recurring basis | Corporate debt securities | ||
Assets | ||
Fixed maturities available-for-sale: | 15,689,406 | 15,706,087 |
Fixed maturities held-for-trading: | 3,074 | 3,156 |
Recurring basis | Asset-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 1,651,017 | 1,717,976 |
Recurring basis | Residential mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 138,582 | 64,984 |
Recurring basis | Commercial mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 1,348,497 | 1,357,609 |
Fixed maturities held-for-trading: | 1,046 | 1,067 |
Recurring basis | Collateralized debt obligations | ||
Assets | ||
Fixed maturities available-for-sale: | 896,330 | 783,869 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Fixed maturities held-for-trading: | 0 | 0 |
Short-term investments | 227,360 | 288,302 |
Limited partnership interests | 0 | |
Collateral under securities lending agreements | 0 | |
Collateral under derivative counterparty collateral agreements | 129,505 | 57,820 |
Total derivative instruments | 0 | 0 |
Separate account assets | 16,097,613 | 16,523,630 |
Total assets | 16,454,478 | 16,869,752 |
Liabilities | ||
Payable under securities lending agreements | 0 | |
Collateral under derivative counterparty collateral agreements | 637 | 5,490 |
Total derivative instruments | 0 | 0 |
Embedded derivatives - GLWB | 0 | 0 |
Separate account liabilities | 18 | 8 |
Total liabilities | 655 | 5,498 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Derivative instruments designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Derivative instruments designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Liabilities | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Derivative instruments not designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Liabilities | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Derivative instruments not designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Liabilities | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Derivative instruments not designated as hedges: | Interest rate swaptions | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Derivative instruments not designated as hedges: | Other forward contracts | ||
Assets | ||
Total derivative instruments | 0 | |
Liabilities | ||
Total derivative instruments | 0 | |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | U.S. government direct obligations and U.S. agencies | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Fixed maturities held-for-trading: | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Obligations of U.S. states and their subdivisions | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Corporate debt securities | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Fixed maturities held-for-trading: | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Asset-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Residential mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Commercial mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Fixed maturities held-for-trading: | 0 | 0 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Collateralized debt obligations | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Recurring basis | Significant other observable inputs (Level 2) | ||
Assets | ||
Fixed maturities available-for-sale: | 23,174,470 | 23,583,401 |
Fixed maturities held-for-trading: | 20,254 | 21,059 |
Short-term investments | 70,160 | 61,964 |
Limited partnership interests | 0 | |
Collateral under securities lending agreements | 95,024 | |
Collateral under derivative counterparty collateral agreements | 0 | 0 |
Total derivative instruments | 34,971 | 51,359 |
Separate account assets | 10,361,781 | 10,736,532 |
Total assets | 33,756,660 | 34,454,315 |
Liabilities | ||
Payable under securities lending agreements | 95,024 | |
Collateral under derivative counterparty collateral agreements | 0 | 0 |
Total derivative instruments | 138,688 | 94,543 |
Embedded derivatives - GLWB | 0 | 0 |
Separate account liabilities | 350,653 | 409,266 |
Total liabilities | 584,365 | 503,809 |
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 6,156 | 7,476 |
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 10,404 | 19,958 |
Liabilities | ||
Total derivative instruments | 75,636 | 51,316 |
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 1,703 | 3,530 |
Liabilities | ||
Total derivative instruments | 928 | 1,628 |
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 12,882 | 20,320 |
Liabilities | ||
Total derivative instruments | 62,124 | 41,599 |
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Interest rate swaptions | ||
Assets | ||
Total derivative instruments | 135 | 75 |
Recurring basis | Significant other observable inputs (Level 2) | Derivative instruments not designated as hedges: | Other forward contracts | ||
Assets | ||
Total derivative instruments | 3,691 | |
Liabilities | ||
Total derivative instruments | 0 | |
Recurring basis | Significant other observable inputs (Level 2) | U.S. government direct obligations and U.S. agencies | ||
Assets | ||
Fixed maturities available-for-sale: | 1,399,358 | 1,871,642 |
Fixed maturities held-for-trading: | 16,134 | 16,836 |
Recurring basis | Significant other observable inputs (Level 2) | Obligations of U.S. states and their subdivisions | ||
Assets | ||
Fixed maturities available-for-sale: | 2,060,567 | 2,090,972 |
Recurring basis | Significant other observable inputs (Level 2) | Corporate debt securities | ||
Assets | ||
Fixed maturities available-for-sale: | 15,680,119 | 15,696,349 |
Fixed maturities held-for-trading: | 3,074 | 3,156 |
Recurring basis | Significant other observable inputs (Level 2) | Asset-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 1,651,017 | 1,717,976 |
Recurring basis | Significant other observable inputs (Level 2) | Residential mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 138,582 | 64,984 |
Recurring basis | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 1,348,497 | 1,357,609 |
Fixed maturities held-for-trading: | 1,046 | 1,067 |
Recurring basis | Significant other observable inputs (Level 2) | Collateralized debt obligations | ||
Assets | ||
Fixed maturities available-for-sale: | 896,330 | 783,869 |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Assets | ||
Fixed maturities available-for-sale: | 9,287 | 9,738 |
Fixed maturities held-for-trading: | 0 | 0 |
Short-term investments | 0 | 0 |
Limited partnership interests | 0 | |
Collateral under securities lending agreements | 0 | |
Collateral under derivative counterparty collateral agreements | 0 | 0 |
Total derivative instruments | 0 | 0 |
Separate account assets | 0 | 0 |
Total assets | 9,287 | 9,738 |
Liabilities | ||
Payable under securities lending agreements | 0 | |
Collateral under derivative counterparty collateral agreements | 0 | 0 |
Total derivative instruments | 0 | 0 |
Embedded derivatives - GLWB | 3,993 | 11,095 |
Separate account liabilities | 0 | 0 |
Total liabilities | 3,993 | 11,095 |
Recurring basis | Significant unobservable inputs (Level 3) | Derivative instruments designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Derivative instruments designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Liabilities | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Derivative instruments not designated as hedges: | Interest rate swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Liabilities | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Derivative instruments not designated as hedges: | Cross-currency swaps | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Liabilities | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Derivative instruments not designated as hedges: | Interest rate swaptions | ||
Assets | ||
Total derivative instruments | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Derivative instruments not designated as hedges: | Other forward contracts | ||
Assets | ||
Total derivative instruments | 0 | |
Liabilities | ||
Total derivative instruments | 0 | |
Recurring basis | Significant unobservable inputs (Level 3) | U.S. government direct obligations and U.S. agencies | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Fixed maturities held-for-trading: | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Obligations of U.S. states and their subdivisions | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Corporate debt securities | ||
Assets | ||
Fixed maturities available-for-sale: | 9,287 | 9,738 |
Fixed maturities held-for-trading: | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Asset-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Residential mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Commercial mortgage-backed securities | ||
Assets | ||
Fixed maturities available-for-sale: | 0 | 0 |
Fixed maturities held-for-trading: | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | Collateralized debt obligations | ||
Assets | ||
Fixed maturities available-for-sale: | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Minimum | |
Carrying amounts and estimated fair values of the financial instruments | |
Estimated liquidation period of underlying assets of the funds | 1 year |
Maximum | |
Carrying amounts and estimated fair values of the financial instruments | |
Estimated liquidation period of underlying assets of the funds | 10 years |
Fair Value Measurements - Rec49
Fair Value Measurements - Recurring basis Level 3 rollforward (Details) - Recurring basis - Level 3 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fixed maturities available-for-sale, Corporate debt securities | ||
Recurring Level 3 financial assets and liabilities | ||
Balance at the beginning of the period | $ 9,738 | $ 11,639 |
Net income (loss) | 0 | 0 |
Other comprehensive income (loss) | (13) | (364) |
Settlements | (438) | (344) |
Balance at the end of the period | 9,287 | 10,931 |
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities | 0 | 0 |
Embedded derivatives - GLWB | ||
Recurring Level 3 financial assets and liabilities | ||
Balance at the beginning of the period | 11,095 | 5,712 |
Net income (loss) | 7,102 | 1,670 |
Other comprehensive income (loss) | 0 | 0 |
Settlements | 0 | 0 |
Balance at the end of the period | 3,993 | 4,042 |
Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets and liabilities | $ 7,102 | $ 1,670 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 unobservable inputs (Details) - Recurring basis - Level 3 - Internal model pricing | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2016 | |
Minimum | ||
Unobservable Input | ||
Equity volatility | 15.00% | 15.00% |
Swap curve | 2.31% | 1.69% |
Base Lapse rate | 1.00% | 1.00% |
Maximum | ||
Unobservable Input | ||
Equity volatility | 30.00% | 30.00% |
Swap curve | 2.85% | 2.54% |
Base Lapse rate | 15.00% | 15.00% |
Fair Value Measurements - Rec51
Fair Value Measurements - Recurring not carried at FV (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Mortgage loans on real estate | $ 4,151,760 | $ 4,005,187 |
Policy loans | 4,067,552 | 4,104,094 |
Liabilities | ||
Policyholders’ funds | 247,781 | 280,578 |
Commercial paper | 85,882 | 99,886 |
Carrying amount | ||
Assets | ||
Mortgage loans on real estate | 4,151,760 | 4,005,187 |
Policy loans | 4,067,552 | 4,104,094 |
Limited partnership interests (1) | 0 | 43,281 |
Other investments | 10,349 | 11,507 |
Liabilities | ||
Annuity contract benefits without life contingencies | 12,804,896 | 12,704,401 |
Policyholders’ funds | 247,781 | 280,578 |
Commercial paper | 85,882 | 99,886 |
Notes payable | 546,806 | 543,338 |
Estimated fair value | ||
Assets | ||
Mortgage loans on real estate | 4,140,846 | 4,066,800 |
Policy loans | 4,067,552 | 4,104,094 |
Limited partnership interests (1) | 0 | 45,009 |
Other investments | 40,613 | 41,588 |
Liabilities | ||
Annuity contract benefits without life contingencies | 12,484,424 | 12,647,309 |
Policyholders’ funds | 247,781 | 280,578 |
Commercial paper | 85,882 | 99,886 |
Notes payable | $ 589,700 | $ 581,097 |
Other Comprehensive Income - OC
Other Comprehensive Income - OCI - Changes in Accumulated Other comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Comprehensive Income [Roll Forward] | ||
Beginning balance | $ 2,449,589 | $ 2,012,321 |
Deferred income tax benefit (expense) | (13,553) | (17,117) |
Ending balance | 2,205,082 | 2,034,550 |
Interest expense | 7,809 | 7,630 |
Unrealized holding gains / losses arising on fixed maturities, available-for- sale | ||
Other Comprehensive Income [Roll Forward] | ||
Beginning balance | 544,887 | 311,748 |
Change in estimate of tax reform impact | 108,846 | |
OCI before reclassifications | (459,680) | 130,229 |
Deferred income tax benefit (expense) | 96,534 | (45,580) |
AOCI before reclassification, net of tax | (363,146) | 84,649 |
Amounts reclassified from AOCI | (5,440) | 2,917 |
Deferred income tax benefit (expense) | 1,142 | (1,021) |
Amounts reclassified from AOCI, net of tax | (4,298) | 1,896 |
Ending balance | 286,289 | 398,293 |
Unrealized holding gains / losses arising on cash flow hedges | ||
Other Comprehensive Income [Roll Forward] | ||
Beginning balance | 103,529 | 67,076 |
Change in estimate of tax reform impact | (83,806) | |
OCI before reclassifications | (6,496) | (6,955) |
Deferred income tax benefit (expense) | 1,364 | 2,434 |
AOCI before reclassification, net of tax | (5,132) | (4,521) |
Amounts reclassified from AOCI | (147) | (1,442) |
Deferred income tax benefit (expense) | 31 | 505 |
Amounts reclassified from AOCI, net of tax | (116) | (937) |
Ending balance | 14,475 | 61,618 |
Unrealized holding gains / losses arising on cash flow hedges | Amount reclassified from accumulated other comprehensive income (loss) | ||
Other Comprehensive Income [Roll Forward] | ||
Interest expense | (255) | (880) |
Future policy benefits, DAC and VOBA adjustments | ||
Other Comprehensive Income [Roll Forward] | ||
Beginning balance | (116,267) | (58,646) |
Change in estimate of tax reform impact | (25,040) | |
OCI before reclassifications | 87,408 | (28,466) |
Deferred income tax benefit (expense) | (18,356) | 9,963 |
AOCI before reclassification, net of tax | 69,052 | (18,503) |
Amounts reclassified from AOCI | 0 | 0 |
Deferred income tax benefit (expense) | 0 | 0 |
Amounts reclassified from AOCI, net of tax | 0 | 0 |
Ending balance | (72,255) | (77,149) |
Employee benefit plan adjustment | ||
Other Comprehensive Income [Roll Forward] | ||
Beginning balance | (91,192) | (84,303) |
Change in estimate of tax reform impact | 0 | |
OCI before reclassifications | 0 | 0 |
Deferred income tax benefit (expense) | 0 | 0 |
AOCI before reclassification, net of tax | 0 | 0 |
Amounts reclassified from AOCI | 580 | 2,146 |
Deferred income tax benefit (expense) | (122) | (751) |
Amounts reclassified from AOCI, net of tax | 458 | 1,395 |
Ending balance | (90,734) | (82,908) |
Total | ||
Other Comprehensive Income [Roll Forward] | ||
Beginning balance | 440,957 | 235,875 |
Change in estimate of tax reform impact | 0 | |
OCI before reclassifications | (378,768) | 94,808 |
Deferred income tax benefit (expense) | 79,542 | (33,183) |
AOCI before reclassification, net of tax | (299,226) | 61,625 |
Amounts reclassified from AOCI | (5,007) | 3,621 |
Deferred income tax benefit (expense) | 1,051 | (1,267) |
Amounts reclassified from AOCI, net of tax | (3,956) | 2,354 |
Ending balance | $ 137,775 | $ 299,854 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Administration, recordkeeping and servicing fees | $ 158,991 | |
Investment advisory and asset management fees | 73,424 | |
Other fee income | 43,549 | |
Total Fee Income | 275,964 | $ 255,116 |
Customer contract receivables | 238,142 | |
Deferred contract costs | 43,999 | |
Individual Markets | ||
Disaggregation of Revenue [Line Items] | ||
Administration, recordkeeping and servicing fees | 1,140 | |
Investment advisory and asset management fees | 3,255 | |
Other fee income | 27,233 | |
Total Fee Income | 31,628 | 25,981 |
Empower Retirement | ||
Disaggregation of Revenue [Line Items] | ||
Administration, recordkeeping and servicing fees | 157,851 | |
Investment advisory and asset management fees | 68,290 | |
Other fee income | 16,316 | |
Total Fee Income | 242,457 | 227,320 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Administration, recordkeeping and servicing fees | 0 | |
Investment advisory and asset management fees | 1,879 | |
Other fee income | 0 | |
Total Fee Income | $ 1,879 | $ 1,815 |
Employee Benefit Plans - Net Pe
Employee Benefit Plans - Net Periodic Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Components of net periodic cost (benefit): | ||
Service cost | $ 376 | $ (1,714) |
Interest cost | 6,220 | 6,714 |
Expected return on plan assets | (5,331) | (5,118) |
Amortization of unrecognized prior service costs (benefits) | 12 | 73 |
Amortization of losses (gains) from earlier periods | 568 | 2,073 |
Net periodic cost (benefit) | 1,845 | 2,028 |
Defined Benefit Pension Plan | ||
Components of net periodic cost (benefit): | ||
Service cost | 0 | (2,067) |
Interest cost | 5,709 | 6,121 |
Expected return on plan assets | (5,331) | (5,118) |
Amortization of unrecognized prior service costs (benefits) | 0 | 0 |
Amortization of losses (gains) from earlier periods | 584 | 2,199 |
Net periodic cost (benefit) | 962 | 1,135 |
Post-Retirement Medical Plan | ||
Components of net periodic cost (benefit): | ||
Service cost | 376 | 357 |
Interest cost | 172 | 188 |
Expected return on plan assets | 0 | 0 |
Amortization of unrecognized prior service costs (benefits) | (69) | (52) |
Amortization of losses (gains) from earlier periods | (5) | (113) |
Net periodic cost (benefit) | 474 | 380 |
Payments made | 82 | 169 |
Supplemental Executive Retirement Plan | ||
Components of net periodic cost (benefit): | ||
Service cost | 0 | (4) |
Interest cost | 339 | 405 |
Expected return on plan assets | 0 | 0 |
Amortization of unrecognized prior service costs (benefits) | 81 | 125 |
Amortization of losses (gains) from earlier periods | (11) | (13) |
Net periodic cost (benefit) | 409 | 513 |
Payments made | $ 599 | $ 834 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) | Mar. 31, 2018USD ($) |
Post-Retirement Medical Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions | $ 329,000 |
Supplemental Employee Retirement Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions | 2,398,000 |
Defined Benefit Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Contingency [Line Items] | ||
Current (benefit) expense | $ (15,771) | $ 12,959 |
Deferred expense | 29,324 | 4,158 |
Total income tax provision | $ 13,553 | $ 17,117 |
Reconciliation between the statutory federal income tax rate and the effective income tax rate from continuing operations | ||
Statutory federal income tax rate | 21.00% | 35.00% |
Investment income not subject to federal tax | (2.20%) | (3.30%) |
Tax credits | (0.60%) | (0.80%) |
State income taxes, net of federal benefit | 2.80% | 1.80% |
Other, net | 0.80% | 0.30% |
Effective income tax rate | 21.80% | 33.00% |
Reconciliation of unrecognized tax benefits | ||
Increase (decrease) in unrecognized tax benefit | $ 962 | $ (1,994) |
Minimum | ||
Reconciliation of unrecognized tax benefits | ||
Additional increase to unrecognized tax benefits | 3,000 | |
Maximum | ||
Reconciliation of unrecognized tax benefits | ||
Additional increase to unrecognized tax benefits | $ 4,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 3 | |
Revenues | ||
Premium income | $ 144,682 | $ 152,241 |
Fee income | 275,964 | 255,116 |
Other revenue | 2,985 | 2,384 |
Net investment income | 338,141 | 313,471 |
Realized investment gains (losses), net | (43,743) | (11,754) |
Total revenues | 718,029 | 711,458 |
Benefits and expenses: | ||
Policyholder benefits | 338,585 | 339,428 |
Operating expenses | 317,233 | 320,083 |
Total benefits and expenses | 655,818 | 659,511 |
Income before income taxes | 62,211 | 51,947 |
Income tax expense | 13,553 | 17,117 |
Net income | 48,658 | 34,830 |
Individual Markets | ||
Revenues | ||
Premium income | 123,586 | 131,559 |
Fee income | 31,628 | 25,981 |
Other revenue | 0 | 0 |
Net investment income | 197,329 | 184,205 |
Realized investment gains (losses), net | (16,670) | 584 |
Total revenues | 335,873 | 342,329 |
Benefits and expenses: | ||
Policyholder benefits | 272,010 | 270,088 |
Operating expenses | 42,602 | 38,386 |
Total benefits and expenses | 314,612 | 308,474 |
Income before income taxes | 21,261 | 33,855 |
Income tax expense | 3,897 | 11,650 |
Net income | 17,364 | 22,205 |
Empower Retirement | ||
Revenues | ||
Premium income | 589 | 91 |
Fee income | 242,457 | 227,320 |
Other revenue | 2,985 | 2,384 |
Net investment income | 129,009 | 117,620 |
Realized investment gains (losses), net | (27,122) | (12,316) |
Total revenues | 347,918 | 335,099 |
Benefits and expenses: | ||
Policyholder benefits | 51,279 | 47,629 |
Operating expenses | 259,881 | 255,764 |
Total benefits and expenses | 311,160 | 303,393 |
Income before income taxes | 36,758 | 31,706 |
Income tax expense | 8,768 | 10,426 |
Net income | 27,990 | 21,280 |
Other | ||
Revenues | ||
Premium income | 20,507 | 20,591 |
Fee income | 1,879 | 1,815 |
Other revenue | 0 | 0 |
Net investment income | 11,803 | 11,646 |
Realized investment gains (losses), net | 49 | (22) |
Total revenues | 34,238 | 34,030 |
Benefits and expenses: | ||
Policyholder benefits | 15,296 | 21,711 |
Operating expenses | 14,750 | 25,933 |
Total benefits and expenses | 30,046 | 47,644 |
Income before income taxes | 4,192 | (13,614) |
Income tax expense | 888 | (4,959) |
Net income | $ 3,304 | $ (8,655) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments | ||
Unfunded commitments related to cost basis limited partnership interests, due in one year | $ 107,001,000 | $ 114,726,000 |
Revolving credit facility | ||
Commitments | ||
Amount of credit facility under agreement for general corporate purposes | 50,000,000 | |
Adjusted net worth required for each quarter | 1,022,680,000 | |
Amount outstanding | 0 | 0 |
Letter of credit | GWL&A Financial Inc. | ||
Commitments | ||
Amount of credit facility under agreement for general corporate purposes | 70,000,000 | |
Amount outstanding | 0 | 0 |
Other Letters of Credit | ||
Commitments | ||
Amount of credit facility under agreement for general corporate purposes | 9,095,000 | |
Amount outstanding | $ 0 | $ 0 |
Commitments and Contingencies59
Commitments and Contingencies - Unfunded Commitments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Due in less than one year | $ 368,500 | $ 312,152 |
Due within one to three years | 0 | 1,090 |
Total | $ 368,500 | $ 313,242 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | May 01, 2018USD ($) |
Subsequent event | |
Subsequent Event [Line Items] | |
Dividends payable | $ 20 |