Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2022 | |
Cover [Abstract] | |
Document Type | S-1/A |
Entity Registrant Name | PRINCIPAL LIFE INSURANCE CO |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000009712 |
Amendment Flag | false |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Fixed maturities, available-for-sale | $ 59,631.3 | $ 73,896.9 |
Fixed maturities, trading | 634 | 233.3 |
Equity securities | 53.1 | 508.2 |
Mortgage loans (2022 and 2021 include $1,179.7 million and $1,260.1 million related to consolidated variable interest entities) | 19,722.4 | 18,908.3 |
Real estate (2022 and 2021 include $649.0 million and $672.0 million related to consolidated variable interest entities) | 2,237.4 | 2,060.6 |
Policy loans | 770.2 | 705 |
Other investments | 3,261.3 | 2,836.7 |
Total investments | 86,309.7 | 99,149 |
Cash and cash equivalents (2022 and 2021 include $14.2 million and $30.1 million related to consolidated variable interest entities) | 3,329.3 | 1,228.6 |
Accrued investment income | 728.5 | 678.4 |
Reinsurance recoverable and deposit receivable | 22,029.3 | 1,186.3 |
Premiums due and other receivables | 4,196.5 | 611.8 |
Deferred acquisition costs | 4,679.4 | 3,749.1 |
Property and equipment | 831.7 | 862.2 |
Goodwill | 48.2 | 75.1 |
Other intangibles | 11.6 | 14.4 |
Separate account assets | 120,279.6 | 147,529 |
Other assets | 770.4 | 264.4 |
Total assets | 243,214.2 | 255,348.3 |
Liabilities | ||
Contractholder funds | 42,242.1 | 42,957.3 |
Future policy benefits and claims | 40,609 | 40,141.6 |
Other policyholder funds | 966.1 | 1,026 |
Long-term debt | 67.8 | 54 |
Deferred income taxes | 1,166.4 | 2,273.5 |
Separate account liabilities | 120,279.6 | 147,529 |
Funds withheld payable | 20,436.1 | |
Other liabilities (2022 and 2021 include $83.8 million and $56.1 million related to consolidated variable interest entities) | 10,267.4 | 8,658.2 |
Total liabilities | 236,034.5 | 242,639.6 |
Stockholder's equity | ||
Common stock, par value $1.00 per share; 5.0 million shares authorized; 2.5 million shares issued and outstanding (wholly owned indirectly by Principal Financial Group, Inc.) | 2.5 | 2.5 |
Additional paid-in capital | 6,331.1 | 6,340.9 |
Retained earnings | 6,209.9 | 2,976.6 |
Accumulated other comprehensive income (loss) | (5,367.6) | 3,370.9 |
Total stockholder's equity attributable to Principal Life Insurance Company | 7,175.9 | 12,690.9 |
Noncontrolling interest | 3.8 | 17.8 |
Total stockholder's equity | 7,179.7 | 12,708.7 |
Total liabilities and stockholder's equity | $ 243,214.2 | $ 255,348.3 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Mortgage loans | $ 19,722.4 | $ 18,908.3 |
Real estate | 2,237.4 | 2,060.6 |
Cash and Cash Equivalents, at Carrying Value | 3,329.3 | 1,228.6 |
Other liabilities | $ 10,267.4 | $ 8,658.2 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 5 | 5 |
Common stock, issued (in shares) | 2.5 | 2.5 |
Common stock, outstanding (in shares) | 2.5 | 2.5 |
Aggregate consolidated variable interest entities | ||
Mortgage loans | $ 1,179.7 | $ 1,260.1 |
Real estate | 649 | 672 |
Cash and Cash Equivalents, at Carrying Value | 14.2 | 30.1 |
Other liabilities | $ 83.8 | $ 56.1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Revenues | ||||
Premiums and other considerations | $ 5,264.3 | $ 4,714 | $ 5,880.8 | |
Fees and other revenues | 2,207.9 | 2,679.6 | 2,353.6 | |
Net investment income (loss) | 2,852.3 | 3,633.7 | 3,324.9 | |
Net realized capital gains (losses) | [1] | (1.2) | (18.5) | 105.6 |
Net realized capital gains (losses) on funds withheld assets | [1] | 749.4 | ||
Change in fair value of funds withheld embedded derivative | 3,652.8 | 0 | 0 | |
Total revenues | 14,725.5 | 11,008.8 | 11,664.9 | |
Expenses | ||||
Benefits, claims and settlement expenses | 5,650.7 | 6,482.6 | 7,837.5 | |
Dividends to policyholders | 94.8 | 94.8 | 120.2 | |
Operating expenses | 3,139.2 | 2,744.6 | 2,479.7 | |
Total expenses | 8,884.7 | 9,322 | 10,437.4 | |
Income (loss) before income taxes | 5,840.8 | 1,686.8 | 1,227.5 | |
Income taxes (benefits) | 1,117.6 | 233.2 | 160.1 | |
Net income (loss) | 4,723.2 | 1,453.6 | 1,067.4 | |
Net income (loss) attributable to noncontrolling interest | 62.2 | 24.3 | 19.4 | |
Net income (loss) attributable to Principal Life Insurance Company | $ 4,661 | $ 1,429.3 | $ 1,048 | |
[1] Includes realized and unrealized gains (losses). See Note 5, Investments, for further details. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Comprehensive Income | |||
Net income (loss) | $ 4,723.2 | $ 1,453.6 | $ 1,067.4 |
Other comprehensive income (loss), net: | |||
Net unrealized gains (losses) on available-for-sale securities | (8,848.4) | (653.1) | 1,396.7 |
Net unrealized gains (losses) on derivative instruments | (19.8) | 33.6 | (35.2) |
Net unrecognized postretirement benefit obligation | (2.1) | 1.5 | 4.7 |
Other comprehensive income (loss) | (8,870.3) | (618) | 1,366.2 |
Comprehensive income (loss) | (4,147.1) | 835.6 | 2,433.6 |
Comprehensive income (loss) attributable to noncontrolling interest | 62.2 | 24.3 | 19.4 |
Comprehensive income (loss) attributable to Principal Life Insurance Company | $ (4,209.3) | $ 811.3 | $ 2,414.2 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholder's Equity - USD ($) $ in Millions | Common stock | Additional paid-in capital | Retained earnings (accumulated deficit) Effects of implementation of accounting change | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interest | Effects of implementation of accounting change | Total |
Balances (ASU 2016-13 - CECL) at Dec. 31, 2019 | $ (6.7) | |||||||
Balances at Dec. 31, 2019 | $ 2.5 | $ 6,331.5 | $ 2,410.8 | $ 2,620.7 | $ 23.2 | $ 11,388.7 | ||
Increase (decrease) in stockholder's equity | ||||||||
Capital distributions to parent | (14.1) | (14.1) | ||||||
Stock-based compensation | 26.8 | (2.4) | 24.4 | |||||
Dividends to parent | (650) | (650) | ||||||
Distributions to noncontrolling interest | (33.4) | (33.4) | ||||||
Contributions from noncontrolling interest | 6 | 6 | ||||||
Net income (loss) | 1,048 | 19.4 | 1,067.4 | |||||
Other comprehensive income (loss) | 1,366.2 | 1,366.2 | ||||||
Balances (ASU 2016-13 - CECL) at Dec. 31, 2020 | $ (6.7) | $ (6.7) | ||||||
Balances at Dec. 31, 2020 | 2.5 | 6,344.2 | 2,799.7 | 3,986.9 | 15.2 | 13,148.5 | ||
Increase (decrease) in stockholder's equity | ||||||||
Capital distributions to parent | (16.3) | (16.3) | ||||||
Stock-based compensation | 27.6 | (2.4) | 0.1 | 25.3 | ||||
Dividends to parent | (1,250) | (1,250) | ||||||
Distributions to noncontrolling interest | (27.5) | (27.5) | ||||||
Contributions from noncontrolling interest | 7.4 | 7.4 | ||||||
Purchase of subsidiary shares from noncontrolling interest | (14.9) | (1.7) | (16.6) | |||||
Net liabilities transferred to affiliate due to change in benefit plan sponsorship | 0.3 | 2 | 2.3 | |||||
Net income (loss) | 1,429.3 | 24.3 | 1,453.6 | |||||
Other comprehensive income (loss) | (618) | (618) | ||||||
Balances at Dec. 31, 2021 | 2.5 | 6,340.9 | 2,976.6 | 3,370.9 | 17.8 | 12,708.7 | ||
Increase (decrease) in stockholder's equity | ||||||||
Capital distributions to parent | (30.3) | (30.3) | ||||||
Stock-based compensation | 24.8 | (2.7) | 22.1 | |||||
Dividends to parent | (1,425) | (1,425) | ||||||
Distributions to noncontrolling interest | (81.1) | (81.1) | ||||||
Contributions from noncontrolling interest | 7.3 | 7.3 | ||||||
Purchase of subsidiary shares from noncontrolling interest | (4.3) | (2.4) | (6.7) | |||||
Adjustments for reinsurance | 131.8 | 131.8 | ||||||
Net income (loss) | 4,661 | 62.2 | 4,723.2 | |||||
Other comprehensive income (loss) | (8,870.3) | (8,870.3) | ||||||
Balances at Dec. 31, 2022 | $ 2.5 | $ 6,331.1 | $ 6,209.9 | $ (5,367.6) | $ 3.8 | $ 7,179.7 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Operating activities | ||||
Net income (loss) | $ 4,723.2 | $ 1,453.6 | $ 1,067.4 | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Net realized capital (gains) losses | [1] | 1.2 | 18.5 | (105.6) |
Net realized capital (gains) losses on funds withheld assets | [1] | (749.4) | ||
Change in fair value of funds withheld embedded derivative | (3,652.8) | 0 | 0 | |
Depreciation and amortization expense | 175.1 | 149.5 | 128.6 | |
Amortization of deferred acquisition costs and contract costs | 391 | 291.5 | 394.1 | |
Additions to deferred acquisition costs and contract costs | (387.7) | (469.4) | (462.6) | |
Amortization of reinsurance (gain) loss | 84.5 | (18) | 67.4 | |
Stock-based compensation | 22.1 | 25.2 | 24.9 | |
(Income) loss from equity method investments, net of dividends received | (42.9) | (54.2) | 30.3 | |
Changes in: | ||||
Accrued investment income | (50.1) | 9.3 | (21.2) | |
Net cash flows for trading securities and equity securities with operating intent | (389) | (7.9) | 9.3 | |
Premiums due and other receivables | (3,587.4) | 7.3 | 101 | |
Contractholder and policyholder liabilities and dividends | 1,472.9 | 1,709.6 | 1,968.8 | |
Current and deferred income taxes (benefits) | 905.2 | 161.5 | 423.1 | |
Real estate acquired through operating activities | (164.4) | (73.7) | (16.5) | |
Real estate sold through operating activities | 1.4 | 195.4 | ||
Funds withheld, net of reinsurance recoverable and deposit receivable | 3,750.3 | (105.5) | (75.3) | |
Other assets and liabilities | 420.6 | 17.9 | (218.7) | |
Other | 548.4 | 428.2 | 454.2 | |
Net adjustments | (1,252.4) | 2,091.2 | 2,897.2 | |
Net cash provided by (used in) operating activities | 3,470.8 | 3,544.8 | 3,964.6 | |
Investing activities | ||||
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases | (18,288.2) | (15,068.4) | (13,769.2) | |
Fixed maturities available-for-sale and equity securities with intent to hold: Sales | 12,685.1 | 1,701.7 | 1,969.3 | |
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities | 6,566.9 | 10,475.1 | 8,398.4 | |
Mortgage loans acquired or originated | (3,633.2) | (5,016.8) | (3,006.9) | |
Mortgage loans sold or repaid | 2,513.2 | 2,626.6 | 2,297.3 | |
Real estate acquired | (245.2) | (281.4) | (230.6) | |
Real estate sold | 373.9 | 133.7 | 2.3 | |
Net (purchases) sales of property and equipment | (68.4) | (91.9) | (60.8) | |
Net change in other investments | (218.1) | (149.4) | (295) | |
Net cash provided by (used in) investing activities | (314) | (5,670.8) | (4,695.2) | |
Financing activities | ||||
Payments for financing element derivatives | (50.6) | (39.9) | (30.9) | |
Purchase of subsidiary shares from noncontrolling interest | (6.7) | (16.6) | ||
Dividends paid to parent | (1,425) | (1,250) | (650) | |
Distributions to parent | (30.3) | (16.3) | (14.1) | |
Issuance of long-term debt | 15.4 | 13.7 | ||
Principal repayments of long-term debt | (2.1) | (1.8) | (65.8) | |
Investment contract deposits | 6,881.3 | 8,868.3 | 9,817.3 | |
Investment contract withdrawals | (7,524.6) | (8,760.5) | (8,786) | |
Net increase (decrease) in banking operation deposits | 1,086.3 | 2,922.9 | 569.7 | |
Other | 0.2 | 0.2 | ||
Net cash provided by (used in) financing activities | (1,056.1) | 1,706.1 | 854.1 | |
Net increase (decrease) in cash and cash equivalents | 2,100.7 | (419.9) | 123.5 | |
Cash and cash equivalents at beginning of period | 1,228.6 | 1,648.5 | 1,525 | |
Cash and cash equivalents at end of period | 3,329.3 | 1,228.6 | 1,648.5 | |
Supplemental information: | ||||
Cash paid for interest | 2.6 | 2.2 | 2.2 | |
Cash paid for (received from) income taxes | 43.5 | 46.3 | (202.8) | |
Asset changes resulting from deconsolidation of residential whole loan securitizations: | ||||
Decrease in mortgage loans | (220.7) | |||
Increase in fixed maturities, available-for-sale | 167.6 | |||
Assets transferred in kind for settlement to reinsurer | $ (428.5) | |||
Changes from re-designation of other postretirement employee benefits ("OPEB") plan assets to cover non-retiree benefits: | ||||
Increases in equity securities re-designated from funded status of OPEB plan | 548.1 | |||
Increases in other investments re-designated from funded status of OPEB plan | 117.5 | |||
Decrease in tax receivable re-designated from funded status of OPEB plan | (9.1) | |||
Decrease in accumulated other comprehensive income ("AOCI") due to reclassifying excess assets out of funded status of OPEB plan | 9.1 | |||
Decrease in other assets due to reclassifying excess assets out of funded status of OPEB plan | (665.6) | |||
Assets received in kind from pension risk transfer transactions | $ 109.5 | $ 1,325.2 | ||
[1] Includes realized and unrealized gains (losses). See Note 5, Investments, for further details. |
Nature of Operations and Signif
Nature of Operations and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Nature of Operations and Significant Accounting Policies | |
Nature of Operations and Significant Accounting Policies | 1. Nature of Operations and Significant Accounting Policies Description of Business Principal Life Insurance Company (“PLIC”) along with its consolidated subsidiaries is a diversified financial services organization offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and insurance in the U.S. We are a direct wholly owned subsidiary of Principal Financial Services, Inc. (“PFS”), which in turn is a direct wholly owned subsidiary of Principal Financial Group, Inc. (“PFG”). Basis of Presentation The accompanying consolidated financial statements include the accounts of PLIC and all other entities in which we directly or indirectly have a controlling financial interest as well as those variable interest entities (“VIEs”) in which we are the primary beneficiary. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All significant intercompany accounts and transactions have been eliminated. Uncertainties, including those associated with the novel coronavirus (“COVID-19”), may impact our business, results of operations, financial condition and liquidity. Our use of estimates and assumptions affect amounts reported and disclosed and includes, but is not limited to, the fair value of investments in the absence of quoted market values, investment impairments and valuation allowances, the fair value of derivatives, funds withheld embedded derivative, deferred acquisition costs (“DAC”) and other actuarial balances, the liability for future policy benefits and claims, the value of other postretirement benefits and accounting for income taxes and the valuation of deferred tax assets. Our estimates and assumptions could change in the future. Our results of operations and financial condition may also be impacted by other uncertainties including evolving regulatory, legislative and standard-setter accounting interpretations and guidance. During the second quarter of 2022, we closed a coinsurance with funds withheld reinsurance transaction with Talcott Life &Annuity Re, Ltd. (“Talcott Life & Annuity Re”), a limited liability company organized under the laws of the Cayman Islands and an affiliate of Talcott Resolution Life, Inc., a subsidiary of Sixth Street, pursuant to which we ceded our in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee (“ULSG”) blocks of business (the “Reinsurance Transaction”). The economics of the Reinsurance Transaction were effective as of January 1, 2022. As such, we recorded impacts for January through June 2022 in our second quarter 2022 results. See Note 10, Reinsurance, for further details. Reclassifications have been made to prior periods to report the reinsurance recoverable and deposit receivable on the consolidated statements of financial position. Those amounts were previously reported in premiums due and other receivables. Certain reclassifications have been made to prior period consolidated statements of cash flows to conform to the December 31, 2022, presentation. This included presenting separate line items within operating activities for amortization of reinsurance (gain) loss and funds withheld, net of reinsurance recoverable and deposit receivable, among other reclassifications. We evaluated subsequent events through March 30, 2023, which was the date our consolidated financial statements were issued. Consolidation We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a VIE or a voting interest entity (“VOE”). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity’s most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 4, Variable Interest Entities. If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method. Recent Accounting Pronouncements Description Date of adoption Effect on our consolidated financial statements or other significant matters Standards not yet adopted: Targeted improvements to the accounting for long-duration insurance contracts This authoritative guidance updates certain requirements in the accounting for long-duration insurance and annuity contracts. 1. The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts will be reviewed and updated periodically. Cash flow assumptions will be reviewed at least annually and updated when necessary with the impact recognized in net income. Discount rate assumptions are prescribed as the current upper-medium grade (low credit risk) fixed income instrument yield and will be updated quarterly with the impact recognized in other comprehensive income (“OCI”). 2. Market risk benefits, which are contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other-than-nominal capital market risk, are measured at fair value. The periodic change in fair value is recognized in net income with the exception of the periodic change in fair value related to our own nonperformance risk, which is recognized in OCI. 3. DAC and other actuarial balances for all insurance and annuity contracts will be amortized on a constant basis over the expected term of the related contracts. 4. Additional disclosures are required, including disaggregated rollforwards of significant insurance liabilities and other account balances as well as disclosures about significant inputs, judgments, assumptions and methods used in measurement. The guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC will be applied on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented (January 1, 2021, also referred to as the transition date) based on their existing carrying amounts. An entity may elect to apply the changes retrospectively. The guidance for market risk benefits will be applied retrospectively. January 1, 2023 We created a governance framework and a plan to support implementation of the standard. Our implementation and evaluation process included, but was not limited to the following: ● identifying and documenting contracts and contract features in scope of the guidance; ● identifying the actuarial models, systems and processes to be updated; ● evaluating and selecting our systems solutions for implementing the new guidance; ● building models and evaluating preliminary output as models are developed; ● evaluating and finalizing our key accounting policies; ● assessing the impact to our chart of accounts; ● developing format and content of new disclosures; ● conducting financial dry runs using model output and updated chart of accounts; ● evaluating transition requirements and impacts and ● establishing and documenting appropriate internal controls. This guidance will change how we account for many of our insurance and annuity products. The transition date impact from adoption of this standard is a decrease to our total stockholders’ equity of approximately $4.2 billion, of which approximately $4.1 billion impacted AOCI and approximately $0.1 billion impacted retained earnings. The most significant driver of the AOCI adjustment is due to the requirement to update the discount rate assumption to reflect an upper-medium grade fixed-income instrument, which will generally be equivalent to a single-A interest rate matched to the duration characteristics of our insurance liabilities. The most significant driver of the retained earnings adjustment is the valuation of contracts as market risk benefits. Description Date of adoption Effect on our consolidated financial statements or other significant matters Troubled debt restructurings and vintage disclosures This authoritative guidance eliminates the accounting requirements for troubled debt restructurings (“TDRs”) by creditors and enhances the disclosure requirements for certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. The update requires entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The amendments in this update should be applied prospectively, except for the transition method related to the recognition and measurement of troubled debt restructurings, for which an entity has the option to apply a modified retrospective transition method. Early adoption is permitted. January 1, 2023 The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. Targeted improvements to accounting for hedging activities — portfolio layer method This authoritative guidance intends to further align the economics of a company’s risk management activities in its financial statements with hedge accounting requirements. The guidance expands the current single-layer method to allow multiple hedge layers of a single closed portfolio. Non-prepayable assets can also be included in the same portfolio. This guidance also clarifies the current guidance on accounting for fair value basis adjustments applicable to both a single hedged layer and multiple hedged layers. Upon adoption, the application of these hedge strategies would be applied prospectively. Early adoption is permitted. January 1, 2023 This guidance will not have a material impact on our consolidated financial statements. Standards adopted: Simplifying the accounting for income taxes This authoritative guidance simplifies the accounting for income taxes by removing certain exceptions, including exceptions related to the incremental approach for intraperiod tax allocation, calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. Also, the guidance clarifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill and enacted changes in tax laws or rates. It specifies that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, although an entity may elect to do so. The guidance will be applied based on varying transition methods defined by amendment. Early adoption is permitted. January 1, 2021 This guidance did not have a material impact on our consolidated financial statements. Facilitation of the effects of reference rate reform on financial reporting This authoritative guidance provides optional expedients and exceptions for contracts and hedging relationships affected by reference rate reform. An entity may elect not to apply certain modification accounting requirements to contracts affected by reference rate reform and instead account for the modified contract as a continuation of the existing contract. Also, an entity may apply optional expedients to continue hedge accounting for hedging relationships in which the critical terms change due to reference rate reform. This guidance eases the financial reporting impacts of reference rate reform on contracts and hedging relationships and is effective until December 31, 2022. A subsequent amendment issued in December 2022 extended the relief date from December 31, 2022, to December 31, 2024, and was effective upon issuance. March 12, 2020 We adopted the guidance upon issuance prospectively and elected the applicable optional expedients and exceptions for contracts and hedging relationships impacted by reference rate reform through December 31, 2024. The guidance did not have an impact on our consolidated financial statements upon adoption. Description Date of adoption Effect on our consolidated financial statements or other significant matters Goodwill impairment testing This authoritative guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 (which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill) from the goodwill impairment test. A goodwill impairment loss will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. January 1, 2020 This guidance reduced complexity and costs associated with performing a Step 2 test, should one be needed in the future. This guidance did not have a material impact on our consolidated financial statements at adoption. Credit losses This authoritative guidance requires entities to use a current expected credit loss (“CECL”) model to measure impairment for most financial assets that are not recorded at fair value through net income. Under the CECL model, an entity will estimate lifetime expected credit losses considering available relevant information about historical events, current conditions and reasonable and supportable forecasts. The CECL model does not apply to available-for-sale debt securities; however, the credit loss calculation and subsequent recoveries for available-for-sale securities are required to be recorded through an allowance. This guidance also expands the required credit loss disclosures. January 1, 2020 We adopted the guidance using the modified retrospective approach. A cumulative effect adjustment of $6.7 million was recorded as a decrease to retained earnings. We recorded an offsetting increase in the allowance for credit loss for mortgage loans, reinsurance recoverables and commitments and a decrease for deferred tax impacts. See Note 5, Investments, for further details. When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. Each of the standards listed above is in varying stages in our implementation process based on its issuance and adoption dates. We are on track to implement guidance by the respective effective dates. Use of Estimates in the Preparation of Financial Statements The preparation of our consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The most critical estimates include those used in determining: ● the fair value of investments in the absence of quoted market values; ● investment impairments and valuation allowances; ● the fair value of and accounting for derivatives; ● the DAC and other actuarial balances where the amortization is based on estimated gross profits (“EGPs”); ● the liability for future policy benefits and claims; ● the value of our other postretirement benefit obligation and ● accounting for income taxes and the valuation of deferred tax assets. A description of such critical estimates is incorporated within the discussion of the related accounting policies that follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Actual results could differ from these estimates. Closed Block We operate a closed block (“Closed Block”) for the benefit of individual participating dividend-paying policies in force at the time of the 1998 mutual insurance holding company (“MIHC”) formation. See Note 7, Closed Block, for further details. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, money market instruments and other debt issues with a maturity date of three months or less when purchased. Investments Fixed maturities include bonds, asset-backed securities (“ABS”), redeemable preferred stock and certain non-redeemable preferred securities. Equity securities include mutual funds, common stock and non-redeemable preferred stock. We classify fixed maturities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. Equity securities are also carried at fair value. See Note 16, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to fixed maturities, available-for-sale, excluding those in fair value hedging relationships, are reflected in stockholder’s equity, net of adjustments associated with DAC and related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Mark-to-market adjustments on fixed maturities, trading are reflected in net realized capital gains (losses). Unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships are reflected in net investment income. Mark-to-market adjustments related to certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reflected in net investment income. The amortized cost of fixed maturities includes cost adjusted for amortization of premiums and discounts, computed using the interest method. The amortized cost of fixed maturities, available-for-sale is adjusted for changes in fair value of the hedged portions of securities in fair value hedging relationships and excludes accrued interest receivable. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Fixed maturities, available-for-sale are subject to an allowance for credit loss and changes in the allowance are reported in net income as a component of net realized capital gains (losses). Interest income, as well as prepayment fees and the amortization of the related premium or discount, is reported in net investment income. For loan-backed and structured securities, we recognize income using a constant effective yield based on currently anticipated cash flows. Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Amortized cost excludes accrued interest receivable. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income, as well as prepayment of fees and the amortization of the related premium or discount, is reported in net investment income on the consolidated statements of operations. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Any changes in the loan valuation allowances are reported in net realized capital gains (losses) on the consolidated statements of operations. See Note 5, Investments, for further details of our valuation allowance. Our commercial and residential mortgage loan portfolios can include loans that have been modified. We assess loan modifications on a case-by-case basis to evaluate whether a TDR has occurred. In response to COVID-19, the Coronavirus Aid, Relief and Economic Security Act, which was subsequently amended by the Consolidated Appropriations Act, 2021, (collectively the “CARES Act”) provides a temporary suspension of TDR accounting for certain COVID-19 related loan modifications where the loan was not more than 30 days past due as of December 31, 2019. We elected the TDR relief in the CARES Act beginning in the second quarter of 2020. The CARES Act TDR relief does not apply to modifications completed subsequent to the earlier of 60 days after the national emergency related to COVID-19 ends, or January 1, 2022. In addition, the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (As Revised on April 7, 2020) (“Interagency Statement”) provides additional guidance to determine if a short-term COVID-19 related loan modification is a TDR. We consider the CARES Act and the Interagency Statement when assessing loan modifications to determine whether a TDR has occurred. As of January 1, 2022, the TDR relief ended. See Note 5, Investments, under the caption “Mortgage Loan Modifications” for further details. Real estate investments are reported at cost less accumulated depreciation. The initial cost bases of properties acquired through loan foreclosures are the lower of the fair market values of the properties at the time of foreclosure or the outstanding loan balance. Buildings and land improvements are generally depreciated on the straight-line method over the estimated useful life of improvements and tenant improvement costs are depreciated on the straight-line method over the term of the related lease. We recognize impairment losses for properties when indicators of impairment are present and a property’s expected undiscounted cash flows are not sufficient to recover the property’s carrying value. In such cases, the cost basis of the property is reduced to fair value. Real estate expected to be disposed is carried at the lower of cost or fair value, less cost to sell, with valuation allowances established accordingly and depreciation no longer recognized. The carrying amount of real estate held for sale was $238.6 million and $74.2 million as of December 31, 2022 and 2021, respectively. Any impairment losses and any changes in valuation allowances are reported in net income. Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not designated as hedges, we report gains and losses related to the following in net realized capital gains (losses) on the consolidated statements of operations: mark-to-market adjustments on equity securities, mark-to-market adjustments on fixed maturities, trading, mark-to-market adjustments on certain investment funds, mark-to-market adjustments on derivatives not designated as hedges, cash flow hedge gains (losses) when the hedged item impacts realized capital gains (losses), changes in the valuation allowance for fixed maturities, available-for-sale and certain financing receivables, impairments of real estate held for investment, impairments of equity method investments. Investment gains and losses on sales of certain real estate held for sale due to investment strategy and mark-to-market adjustments on certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reported as net investment income and are excluded from net realized capital gains (losses). Policy loans and certain other investments are reported at cost. Interests in unconsolidated entities, joint ventures and partnerships are generally accounted for using the equity method. We had certain real estate ventures for which the fair value option had been elected in prior periods. See Note 16, Fair Value Measurements, for detail on these investments. Derivatives Overview Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices or the values of securities. Derivatives generally used by us include swaps, options, futures and forwards. Derivative positions are either assets or liabilities in the consolidated statements of financial position and are measured at fair value, generally by obtaining quoted market prices or through the use of pricing models. See Note 16, Fair Value Measurements, for policies related to the determination of fair value. Fair values can be affected by changes in interest rates, foreign exchange rates, financial indices, values of securities, credit spreads, and market volatility and liquidity. Accounting and Financial Statement Presentation We designate derivatives as either: (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, including those denominated in a foreign currency (“fair value hedge”); (b) a hedge of a forecasted transaction or the exposure to variability of cash flows to be received or paid related to a recognized asset or liability, including those denominated in a foreign currency (“cash flow hedge”) or (c) a derivative not designated as a hedging instrument. Our accounting for the ongoing changes in fair value of a derivative depends on the intended use of the derivative and the designation, as described above, and is determined when the derivative contract is entered into or at the time of redesignation. Hedge accounting is used for derivatives that are specifically designated in advance as hedges and that reduce our exposure to an indicated risk by having a high correlation between changes in the value of the derivatives and the items being hedged at both the inception of the hedge and throughout the hedge period. Cash flows associated with derivatives are included within operating and financing activities in the consolidated statements of cash flows. Fair Value Hedges. Cash Flow Hedges. Non-Hedge Derivatives. Hedge Documentation and Effectiveness Testing. We use qualitative and quantitative methods to assess hedge effectiveness. Qualitative methods may include monitoring changes to terms and conditions and counterparty credit ratings. Quantitative methods may include statistical tests including regression analysis and minimum variance and dollar offset techniques. For last-of-layer method hedges, the assessment of hedge effectiveness includes confirming we expect the hedged last layer amount to be outstanding at the end of the hedging relationship. Termination of Hedge Accounting. If it is determined that a derivative no longer qualifies as an effective hedge, the derivative will continue to be carried on the consolidated statements of financial position at its fair value, with changes in fair value recognized prospectively in net realized capital gains (losses). The asset or liability under a fair value hedge will no longer be adjusted for changes in fair value pursuant to hedging rules and the existing basis adjustment is amortized to the consolidated statements of operations line associated with the asset or liability. If a last-of-layer method hedging relationship is discontinued, the outstanding basis adjustment is allocated to the individual assets in the closed portfolio and those amounts are amortized consistent with the amortization of other discounts or premiums associated with those assets. The component of AOCI related to discontinued cash flow hedges that are no longer highly effective is amortized to the consolidated statements of operations consistent with the net income impacts of the original hedged cash flows. If a cash flow hedge is discontinued because it is probable the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income. Embedded Derivatives. Contractholder and Policyholder Liabilities Contractholder and policyholder liabilities (contractholder funds, future policy benefits and claims and other policyholder funds) include reserves for investment contracts, individual and group annuities that provide periodic income payments, universal life insurance, variable universal life insurance, indexed universal life insurance, term life insurance, participating traditional individual life insurance, group dental and vision insurance, group critical illness, group accident, paid family and medical leave (“PFML”), group short-term and long-term disability insurance, group life insurance, individual disability insurance and long-term care insurance. It also includes a provision for dividends on participating policies. Investment contracts are contractholders’ funds on deposit with us and generally include reserves for pension and annuity contracts. Reserves on investment contracts are equal to the cumulative deposits less any applicable charges and withdrawals plus credited interest. Reserves for universal life, variable universal life and indexed universal life insurance contracts are equal to cumulative deposits less charges plus credited interest, which represents the account balances that accrue to the benefit of the policyholders. We hold additional reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years; universal life, variable universal life and indexed universal life insurance contracts that contain no lapse guarantee features; and annuities with guaranteed minimum death benefits. Reserves for individual and group annuities that provide periodic income payments, nonparticipating term life insurance and disability income contracts are computed on a basis of assumed investment yield, mortality, morbidity and expenses, including a provision for adverse deviation, which generally varies by plan, year of issue and policy duration. Investment yield is based on our experience. Mortality, morbidity and withdrawal rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience. For long-duration insurance contracts, significant changes in experience or assumptions may require us to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves may also be established for short-duration contracts to provide for expected future losses. Reserves for participating life insurance contracts are based on the net level premium reserve for death and endowment policy benefits. This net level premium reserve is calculated based on dividend fund interest rates and mortality rates guaranteed in calculating the cash surrender values described in the contract. Participating business represented approximately 3%, 4% and 5% of our life insurance in force and 17%, 18% and 20% of the number of life insurance policies in force as of December 31, 2022, 2021 and 2020, respectively. Participating business represented approximately 18%, 26% and 30% of life insurance premiums for the years ended December 31, 2022, 2021 and 2020, respectively. The amount of dividends to p |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | 2. Related Party Transactions Expense Agreements We have entered into various related party transactions with our ultimate parent and its other affiliates. During the years ended December 31, 2022, 2021 and 2020, we received $606.0 million, $647.2 million and $568.1 million, respectively, of expense reimbursements from affiliated entities, which are net of amounts paid for brand licensing agreements with PFS. Cash Advance Agreement We and our direct parent, PFS, are parties to a cash advance agreement, which allows us, collectively, to pool our available cash with other affiliates in order to more efficiently and effectively invest our cash. The cash advance agreement allows (i) us to advance cash to PFS in aggregate principal amounts not to exceed $1.0 billion, with such advanced amounts earning interest at the daily 30-day LIBOR rate (the “Internal Crediting Rate”); and (ii) PFS to advance cash to us in aggregate principal amounts not to exceed $1.0 billion, with such advance amounts paying interest at the Internal Crediting Rate plus 10 basis points to reimburse PFS for the costs incurred in maintaining short-term investing and borrowing programs. Under this cash advance agreement, we had a receivable (payable) to PFS of $86.0 million and $(75.1) million as of December 31, 2022 and 2021, respectively, and earned interest of $4.2 million, $0.1 million and $0.0 million during 2022, 2021 and 2020, respectively. Reinsurance We and an affiliated entity, Principal National Life Insurance Company, are parties to a reinsurance agreement to reinsure certain life insurance business. Under this agreement, we had an assumed reinsurance liability of $5,393.7 million and $5,098.9 million as of December 31, 2022 and 2021, respectively. In addition, we recognized premiums and other fees of $847.5 million, $809.3 million and $749.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, associated with this agreement. Furthermore, we recognized expenses of $995.7 million, $1,088.9 million and $1,038.9 million for the years ended December 31, 2022, 2021 and 2020, respectively, associated with this agreement. Notes Receivable As of December 31, 2022, we had the following notes receivable from PFS related to the sale of interests in subsidiaries (1) a 10-year 10-year Distribution of Affiliated Products We receive commission fees, distribution fees and service fees from Principal Securities, Inc. and Principal Global Investors, LLC (“PGI LLC”). Furthermore, we receive management and administrative fees for investments our products sold in the Principal Mutual Funds and Principal Variable Contracts. Fees and other revenues were $412.6 million, $471.2 million and $395.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. In addition, we pay commission expense to affiliated registered representatives within Principal Securities, Inc. to sell proprietary products. Commission expense was $81.5 million, $95.7 million and $80.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. Benefit Plans Effective January 2021, PFG became the sponsor of the Long-Term Care Assistance Plan for both employees and individual field agents. Prior to January 2021, we were the sponsor of this plan. In connection with the change in sponsorship, we transferred a $2.9 million benefit liability for the underfunded status of the plan to PFG. See Note 13, Employee and Agent Benefits, for further details. PFG is the sponsor of the qualified defined contribution plans for both employees and individual field agents. We were allocated plan expenses from PFG of $41.3 million, $36.5 million and $33.1 million during 2022, 2021 and 2020, respectively. PFG is also the sponsor of the nonqualified deferred compensation plans for select employees and individual field agents. We were allocated plan expenses from PFG of $2.3 million, $2.1 million and $1.8 million during 2022, 2021 and 2020, respectively. PFG is the sponsor of the defined benefit pension plans for both employees and individual field agents. We were allocated $55.4 million, $58.6 million and $51.0 million of pension expense from PFG during 2022, 2021 and 2020, respectively. Other Agreements PGI LLC provides asset management services for us. We recognized $109.3 million, $114.9 million and $101.1 million of asset management fee expense for the years ended December 31, 2022, 2021 and 2020, respectively. Pursuant to certain regulatory requirements or otherwise in the ordinary course of business, we guarantee certain payments of our affiliates and have agreements with affiliates to provide and/or receive management, administrative and other services, all of which, individually and in the aggregate, are immaterial to our business, financial condition and net income. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 3. Goodwill and Other Intangible Assets Goodwill The carrying amount of goodwill did not change during 2021. The changes in the carrying amount of goodwill reported in our segments during 2022 were as follows: Retirement U.S. and Income Insurance Solutions Solutions Corporate Consolidated (in millions) Balance as of January 1, 2022 $ 18.8 $ 56.3 $ — $ 75.1 Impairment (1) — (26.9) — (26.9) Balance as of December 31, 2022 $ 18.8 $ 29.4 $ — $ 48.2 (1) Resulted from a change in the allocation of equity following the Reinsurance Transaction. Finite Lived Intangible Assets Amortized intangible assets that continue to be subject to amortization over a weighted average remaining expected life of 12 years were as follows: December 31, 2022 2021 (in millions) Gross carrying value $ 34.9 $ 41.4 Accumulated amortization 23.3 27.0 Net carrying value $ 11.6 $ 14.4 During December 31, 2022 and December 31, 2021, we fully amortized other finite lived intangible assets of $6.5 million and $0.0 million, respectively. The amortization expense for intangible assets with finite useful lives was $2.8 million, $2.8 million and $2.4 million for 2022, 2021 and 2020, respectively. As of December 31, 2022, the estimated amortization expense for the next five years is as follows (in millions): Year ending December 31: 2023 $ 1.0 2024 1.0 2025 1.0 2026 1.0 2027 1.0 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities | |
Variable Interest Entities | 4. Variable Interest Entities We have relationships with various types of entities which may be VIEs. Certain VIEs are consolidated in our financial results. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Consolidation” for further details of our consolidation accounting policies. We did not provide financial or other support to investees designated as VIEs for the periods ended December 31, 2022 and December 31, 2021. Consolidated Variable Interest Entities Real Estate We invest in several real estate limited partnerships and limited liability companies. The entities invest in real estate properties. Certain of these entities are VIEs based on the combination of our significant economic interest and related voting rights. We determined we are the primary beneficiary as a result of our power to control the entities through our significant ownership. Due to the nature of these real estate investments, the investment balance will fluctuate as we purchase and sell interests in the entities and as capital expenditures are made to improve the underlying real estate. Residential Mortgage Loans We invest in ABS trusts. The trusts issue various collateralized mortgage obligation certificates and purchase residential mortgage loans. The trusts are considered VIEs due to insufficient equity to sustain themselves. We concluded we are the primary beneficiary as we purchase substantially all of the certificates and have the obligation to absorb losses that could potentially be significant to the VIEs. We deconsolidated a trust during the fourth quarter of 2022 as we no longer held substantially all of the certificates. Assets and Liabilities of Consolidated Variable Interest Entities The carrying amounts of our consolidated VIE assets, which can only be used to settle obligations of consolidated VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse were as follows: December 31, 2022 December 31, 2021 Total Total Total Total assets liabilities assets liabilities (in millions) Real estate (1) $ 689.6 $ 42.2 $ 709.6 $ 36.1 Residential mortgage loans (2) 1,182.6 41.8 1,263.2 20.3 Total $ 1,872.2 $ 84.0 $ 1,972.8 $ 56.4 (1) The assets of the real estate VIEs primarily include real estate, other investments and cash. Liabilities primarily include other liabilities. (2) The assets of the residential mortgage loans VIEs primarily include residential mortgage loans. The liabilities primarily include other liabilities. Unconsolidated Variable Interest Entities We hold a variable interest in a number of VIEs where we are not the primary beneficiary. Our investments in these VIEs are reported in fixed maturities, available-for-sale; fixed maturities, trading and other investments in the consolidated statements of financial position and are described below. Unconsolidated VIEs include certain commercial mortgage-backed securities (“CMBS”), residential mortgage-backed pass-through securities (“RMBS”) and other ABS. All of these entities were deemed VIEs because the equity within these entities is insufficient to sustain them. We determined we are not the primary beneficiary in the entities within these categories of investments. This determination was based primarily on the fact we do not own the class of security that controls the unilateral right to replace the special servicer or equivalent function. We invest in cash collateralized debt obligations, collateralized bond obligations, collateralized loan obligations and other collateralized structures, which are VIEs due to insufficient equity to sustain the entities. We have determined we are not the primary beneficiary of these entities primarily because we do not control the economic performance of the entities and were not involved with the design of the entities or because we do not have a potentially significant variable interest in the entities for which we are the asset manager. We have invested in various VIE trusts and similar entities as a debt holder. Most of these entities are classified as VIEs due to insufficient equity to sustain them. In addition, we have an entity classified as a VIE based on the combination of our significant economic interest and lack of voting rights. We have determined we are not the primary beneficiary primarily because we do not control the economic performance of the entities and were not involved with the design of the entities. We have invested in partnerships and other funds, which are classified as VIEs. The entities are VIEs as equity holders lack the power to control the most significant activities of the entities because the equity holders do not have either the ability by a simple majority to exercise substantive kick-out rights or substantive participating rights. We have determined we are not the primary beneficiary because we do not have the power to direct the most significant activities of the entities. As previously discussed, we sponsor and invest in certain investment funds that are VIEs. We determined we are not the primary beneficiary of the VIEs for which we are the asset manager but do not have a potentially significant variable interest in the funds. The carrying value and maximum loss exposure for our unconsolidated VIEs were as follows: Maximum exposure to Asset carrying value loss (1) (in millions) December 31, 2022 Fixed maturities, available-for-sale: Corporate $ 111.8 $ 127.2 Residential mortgage-backed pass-through securities 2,170.9 2,362.1 Commercial mortgage-backed securities 4,827.5 5,529.7 Collateralized debt obligations (2) 4,560.2 4,813.4 Other debt obligations 6,483.3 7,537.2 Fixed maturities, trading: Residential mortgage-backed pass-through securities 5.4 5.4 Commercial mortgage-backed securities 83.4 83.4 Collateralized debt obligations (2) 5.7 5.7 Other debt obligations 80.0 80.0 Other investments: Other limited partnership and fund interests 1,088.5 1,765.4 December 31, 2021 Fixed maturities, available-for-sale: Corporate $ 142.1 $ 136.9 Residential mortgage-backed pass-through securities 2,342.3 2,296.9 Commercial mortgage-backed securities 5,513.7 5,388.7 Collateralized debt obligations (2) 3,533.5 3,539.1 Other debt obligations 7,441.8 7,368.3 Fixed maturities, trading: Residential mortgage-backed pass-through securities 8.4 8.4 Commercial mortgage-backed securities 24.6 24.6 Collateralized debt obligations (2) 7.5 7.5 Other debt obligations 8.2 8.2 Other investments: Other limited partnership and fund interests 862.6 1,447.0 (1) Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees and similar provisions for our other investments. A carrying value of zero is used if distributions have been received in excess of our investment, resulting in a negative carrying value for the investment. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager . (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments | |
Investments | 5. Investments Our investments include assets backing reserves as part of a coinsurance with funds withheld agreement. The funds withheld invested assets are reported within their respective line items, primarily consisting of fixed maturities available-for-sale, mortgage loans and other investments. See Note 10, Reinsurance, for more information on the funds withheld invested assets. Fixed Maturities and Equity Securities The amortized cost, gross unrealized gains and losses, allowance for credit loss and fair value of fixed maturities, available-for-sale were as follows: Gross Gross Allowance Amortized unrealized unrealized for credit cost (1) gains losses loss Fair value (in millions) December 31, 2022 Fixed maturities, available-for-sale: U.S. government and agencies $ 1,964.6 $ 0.1 $ 248.8 $ — $ 1,715.9 Non-U.S. governments 565.3 18.9 63.8 — 520.4 States and political subdivisions 7,280.1 14.8 1,126.6 — 6,168.3 Corporate 37,495.4 219.5 4,530.1 — 33,184.8 Residential mortgage-backed pass-through securities 2,362.1 6.0 197.2 — 2,170.9 Commercial mortgage-backed securities 5,529.7 0.9 703.1 — 4,827.5 Collateralized debt obligations (2) 4,698.9 4.5 143.2 — 4,560.2 Other debt obligations 7,207.8 6.0 730.4 0.1 6,483.3 Total fixed maturities, available-for-sale $ 67,103.9 $ 270.7 $ 7,743.2 $ 0.1 $ 59,631.3 December 31, 2021 Fixed maturities, available-for-sale: U.S. government and agencies $ 1,826.8 $ 144.5 $ 34.3 $ — $ 1,937.0 Non-U.S. governments 821.6 127.5 2.0 — 947.1 States and political subdivisions 8,210.3 1,022.4 16.3 — 9,216.4 Corporate 39,345.7 3,750.2 126.3 4.5 42,965.1 Residential mortgage-backed pass-through securities 2,296.9 57.6 12.2 — 2,342.3 Commercial mortgage-backed securities 5,388.6 156.3 30.9 0.3 5,513.7 Collateralized debt obligations (2) 3,539.1 4.0 9.6 — 3,533.5 Other debt obligations 7,368.3 130.6 57.0 0.1 7,441.8 Total fixed maturities, available-for-sale $ 68,797.3 $ 5,393.1 $ 288.6 $ 4.9 $ 73,896.9 (1) Amortized cost excludes accrued interest receivable of $575.8 million and $538.6 million as of December 31, 2022 and 2021, respectively. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. The amortized cost and fair value of fixed maturities available-for-sale as of December 31, 2022, by expected maturity, were as follows: Amortized cost Fair value (in millions) Due in one year or less $ 1,606.3 $ 1,593.4 Due after one year through five years 8,297.6 7,950.4 Due after five years through ten years 11,046.5 10,029.5 Due after ten years 26,355.0 22,016.1 Subtotal 47,305.4 41,589.4 Mortgage-backed and other asset-backed securities 19,798.5 18,041.9 Total $ 67,103.9 $ 59,631.3 Actual maturities may differ because borrowers may have the right to call or prepay obligations. Our portfolio is diversified by industry, issuer and asset class. Credit concentrations are managed to established limits. Net Investment Income The major components of net investment income are shown below and are net of amounts on funds withheld invested assets that are passed directly to the reinsurer. See Note 10, Reinsurance, for further details. For the year ended December 31, 2022 2021 2020 (in millions) Fixed maturities, available-for-sale $ 1,734.4 $ 2,483.8 $ 2,469.0 Fixed maturities, trading 19.6 8.7 9.2 Equity securities (35.4) 1.7 3.3 Mortgage loans 619.9 692.4 669.8 Real estate 276.2 194.4 180.8 Policy loans 34.4 36.2 38.2 Cash and cash equivalents 37.6 1.7 9.5 Derivatives 171.3 28.2 (1.9) Other 194.7 362.0 106.8 Total 3,052.7 3,809.1 3,484.7 Investment expenses (200.4) (175.4) (159.8) Net investment income $ 2,852.3 $ 3,633.7 $ 3,324.9 Net Realized Capital Gains and Losses The major components of net realized capital gains (losses) on investments are shown below and are net of amounts on funds withheld invested assets that are passed directly to the reinsurer. See Note 10, Reinsurance, for further details. The amounts below do not include net realized capital gains (losses) on funds withheld assets that are not passed to the reinsurer, which are separately reported on the consolidated statements of operations. For the year ended December 31, 2022 2021 2020 (in millions) Fixed maturities, available-for-sale: Gross gains $ 38.9 $ 50.4 $ 118.7 Gross losses (120.7) (26.9) (45.0) Net credit losses (1) (11.5) (34.5) (22.6) Hedging, net (0.7) (9.5) (9.7) Fixed maturities, trading (2) (25.3) (6.6) 6.2 Equity securities (3) (7.4) (0.5) 1.8 Mortgage loans (74.1) 5.3 (14.3) Derivatives 86.9 (4.2) 28.5 Other 112.7 8.0 42.0 Net realized capital gains (losses) $ (1.2) $ (18.5) $ 105.6 (1) Net credit losses include adjustments to the credit loss valuation allowance, write-offs and recoveries on available-for-sale securities. (2) Unrealized gains (losses) on fixed maturities, trading still held at the reporting date were $(24.5) million, $(6.4) million and $6.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. This excludes $1.4 million of unrealized losses on fixed maturities, trading still held at the reporting date for the year ended December 31, 2022, that were reported in net realized capital gains (losses) on funds withheld assets. (3) Unrealized gains (losses) on equity securities still held at the reporting date were $(7.1) million, $(0.1) million and $1.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. This excludes $1.7 million unrealized losses on equity securities still held at the reporting date for the year ended December 31, 2022, that were reported in net realized capital gains (losses) on funds withheld assets. Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were $12,273.0 million, $1,609.0 million and $1,968.8 million in 2022, 2021 and 2020, respectively. Allowance for Credit Loss We have a process in place to identify fixed maturity securities that could potentially require an allowance for credit loss. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions and other similar factors. This process also involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. Each reporting period, all securities in an unrealized loss position are reviewed to determine whether a decline in value is due to credit. Relevant facts and circumstances considered include: (1) the extent the fair value is below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events and (4) for structured securities, the adequacy of the expected cash flows. To the extent we determine an unrealized loss is due to credit, an allowance for credit loss is recognized through a reduction to net income. We estimate the amount of the allowance for credit loss as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The ABS cash flow estimates are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate security cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or liquidations using bond specific facts and circumstances including timing, security interests and loss severity. We do not measure a credit loss allowance on accrued interest receivable because we write off the accrued interest receivable balance to net investment income in a timely manner when we have concern regarding collectability. Amounts on fixed maturities, available-for-sale deemed to be uncollectible are written off and removed from the allowance for credit loss. A write-off may also occur if we intend to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity. A rollforward of the allowance for credit loss by major security type was as follows. For the year ended December 31, 2022 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ 4.5 $ — $ 0.3 $ — $ 0.1 $ 4.9 Reductions for securities sold during the period — — — (8.7) — — — — (8.7) Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — 4.2 — — — — 4.2 Write-offs charged against allowance — — — — — (0.3) — — (0.3) Ending balance $ — $ — $ — $ — $ — $ — $ — $ 0.1 $ 0.1 For the year ended December 31, 2021 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ — $ — $ 4.3 $ 2.2 $ — $ 6.5 Additions for credit losses not previously recorded — — — 16.9 — 0.4 — 0.1 17.4 Reductions for securities sold during the period — — — (12.4) — — — — (12.4) Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — — — 2.4 0.4 — 2.8 Write-offs charged against allowance — — — — — (6.8) (2.6) — (9.4) Ending balance $ — $ — $ — $ 4.5 $ — $ 0.3 $ — $ 0.1 $ 4.9 Accrued interest written off to net investment income $ — $ — $ — $ 0.2 $ — $ — $ — $ — $ 0.2 For the year ended December 31, 2020 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance (2) $ — $ — $ — $ — $ — $ — $ — $ — $ — Additions for credit losses not previously recorded — — — 7.0 — 2.9 0.1 — 10.0 Reductions for securities sold during the period — — — (7.0) — — — — (7.0) Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — — — 4.0 2.1 — 6.1 Write-offs charged against allowance — — — — — (2.6) — — (2.6) Ending balance $ — $ — $ — $ — $ — $ 4.3 $ 2.2 $ — $ 6.5 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) The allowance for credit loss associated with fixed maturities, available-for-sale was applied prospectively upon adoption of authoritative guidance effective January 1, 2020. During 2022 and 2020, we did not write off any accrued interest to net investment income. Available-for-Sale Securities in Unrealized Loss Positions Without an Allowance for Credit Loss For available-for-sale securities with unrealized losses for which an allowance for credit loss has not been recorded, the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows: December 31, 2022 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1) U.S. government and agencies $ 1,505.5 $ 207.0 $ 180.4 $ 41.8 $ 1,685.9 $ 248.8 Non-U.S. governments 373.0 56.7 19.9 7.1 392.9 63.8 States and political subdivisions 5,243.6 999.7 387.8 126.9 5,631.4 1,126.6 Corporate 26,668.2 3,875.1 2,625.4 654.9 29,293.6 4,530.0 Residential mortgage-backed pass-through securities 1,201.7 97.6 574.8 104.7 1,776.5 202.3 Commercial mortgage-backed securities 3,622.3 480.7 1,113.9 220.9 4,736.2 701.6 Collateralized debt obligations (2) 2,830.1 88.8 1,327.2 54.4 4,157.3 143.2 Other debt obligations 3,412.6 290.7 2,266.7 434.4 5,679.3 725.1 Total fixed maturities, available-for-sale $ 44,857.0 $ 6,096.3 $ 8,496.1 $ 1,645.1 $ 53,353.1 $ 7,741.4 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. Of the available-for-sale fixed maturities within our consolidated portfolio in a gross unrealized loss position, 94% were investment grade (rated AAA through BBB-) with an average price of 87 (carrying value/amortized cost) as of December 31, 2022. Gross unrealized losses in our fixed maturities portfolio increased during the year ended December 31, 2022, primarily due to an increase in interest rates and a widening of credit spreads. For those securities that had been in a continuous unrealized loss position for less than twelve months, our consolidated portfolio held 7,589 securities reflecting an average price of 88 as of December 31, 2022. Of this portfolio, 95% was investment grade (rated AAA through BBB-) as of December 31, 2022, with associated unrealized losses of $5,920.4 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, our consolidated portfolio held 1,654 securities reflecting an average price of 84 and an average credit rating of AA- as of December 31, 2022. Corporate securities with unrealized losses had an average price of 80 and an average credit rating of BBB+. Collateralized mortgage obligation securities with unrealized losses had an average price of 81 and an average credit rating of AAA. Commercial mortgage-backed securities with unrealized losses had an average price of 83 and an average credit rating of AA+. States and political subdivision securities with unrealized losses had an average price of 75 and an average credit rating of AA-. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. Because we expected to recover our amortized cost, we did not record an allowance for credit loss on these securities as of December 31, 2022. Because it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be at maturity, we did not write down these investments to fair value. December 31, 2021 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1) U.S. government and agencies $ 128.2 $ 3.4 $ 386.3 $ 30.9 $ 514.5 $ 34.3 Non-U.S. governments 57.5 2.0 — — 57.5 2.0 States and political subdivisions 681.0 10.3 100.3 6.0 781.3 16.3 Corporate 4,538.4 59.0 1,252.3 67.1 5,790.7 126.1 Residential mortgage-backed pass- through securities 945.6 10.0 76.7 2.2 1,022.3 12.2 Commercial mortgage-backed securities 1,293.3 15.4 289.8 15.3 1,583.1 30.7 Collateralized debt obligations (2) 1,571.0 2.8 423.9 6.7 1,994.9 9.5 Other debt obligations 3,837.3 48.0 211.0 8.9 4,048.3 56.9 Total fixed maturities, available-for-sale $ 13,052.3 $ 150.9 $ 2,740.3 $ 137.1 $ 15,792.6 $ 288.0 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. Of the available-for-sale fixed maturities within our consolidated portfolio in a gross unrealized loss position, 91% were investment grade (rated AAA through BBB-) with an average price of 98 (carrying value/amortized cost) as of December 31, 2021. Gross unrealized losses in our fixed maturities portfolio increased during the year ended December 31, 2021, primarily due to an increase in interest rates, partially offset by tightening of credit spreads. For those securities that had been in a continuous unrealized loss position for less than twelve months, our consolidated portfolio held 1,805 securities reflecting an average price of 99 as of December 31, 2021. Of this portfolio, 90% was investment grade (rated AAA through BBB-) as of December 31, 2021, with associated unrealized losses of $138.9 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, our consolidated portfolio held 459 securities reflecting an average price of 95 and an average credit rating of A+ as of December 31, 2021. Corporate securities with unrealized losses had an average price of 95 and an average credit rating of BBB+. U.S. government and agency securities with unrealized losses had an average price of 93 and an average credit rating of AAA. Commercial mortgage-backed securities with unrealized losses had an average price of 95 and an average credit rating of AAA. Collateralized debt obligation securities with unrealized losses had an average price of 98 and an average credit rating of AA+. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. Because we expected to recover our amortized cost, we did not record an allowance for credit loss on these securities as of December 31, 2021. Because it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be at maturity, we did not write down these investments to fair value. Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments The net unrealized gains and losses on investments in available-for-sale securities and the net unrealized gains and losses on derivative instruments in cash flow hedge relationships are reported as separate components of stockholder’s equity. The cumulative amount of net unrealized gains and losses on available-for-sale securities and derivative instruments in cash flow hedge relationships net of adjustments related to DAC and related actuarial balances, policyholder liabilities, noncontrolling interest and applicable income taxes was as follows: December 31, 2022 December 31, 2021 (in millions) Net unrealized gains (losses) on fixed maturities, available-for-sale (1) $ (7,552.8) $ 5,094.3 Net unrealized gains on derivative instruments 50.8 80.1 Adjustments for assumed changes in amortization patterns 649.7 (266.1) Adjustments for assumed changes in policyholder liabilities 3.4 (664.8) Net unrealized gains on other investments and noncontrolling interest adjustments 2.9 2.9 Provision for deferred income tax benefits (taxes) 1,464.1 (891.9) Net unrealized gains (losses) on available-for-sale securities and derivative instruments $ (5,381.9) $ 3,354.5 (1) Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships. Financing Receivables Mortgage Loans Mortgage loans consist of commercial and residential mortgage loans. Our commercial mortgage loan portfolio consists primarily of non-recourse, fixed rate mortgages on stabilized properties. Our residential mortgage loan portfolio is composed of first lien and home equity mortgages. Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Amortized cost excludes accrued interest receivable. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income, as well as prepayment of fees and the amortization of the related premium or discount, is reported in net investment income on the consolidated statements of operations. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Any changes in the loan valuation allowances are reported in net realized capital gains (losses) on the consolidated statements of operations. Further details relating to our valuation allowance are included under the caption “Financing Receivables Valuation Allowance.” Reinsurance Recoverable and Deposit Receivable Our reinsurance recoverables include amounts due from reinsurers for paid or unpaid claims, claims incurred but not reported or policy benefits. We cede life, disability, medical and long-term care insurance as well as fixed annuity contracts with significant life insurance risk to other insurance companies through reinsurance. Deposit receivables include amounts due from the reinsurer for fixed annuity contracts without significant life insurance risk recorded using the deposit method of accounting. Credit Quality Information for Financing Receivables The amortized cost of our financing receivables by credit risk and vintage was as follows: As of December 31, 2022 2022 2021 2020 2019 2018 Prior Total (in millions) Commercial mortgage loans: A- and above $ 995.9 $ 2,182.5 $ 1,753.8 $ 2,177.2 $ 2,130.8 $ 4,555.1 $ 13,795.3 BBB+ thru BBB- 371.8 412.8 149.7 391.6 222.6 676.4 2,224.9 BB+ thru BB- 104.0 — — — 8.9 66.5 179.4 B+ and below — — — — 8.3 35.5 43.8 Total $ 1,471.7 $ 2,595.3 $ 1,903.5 $ 2,568.8 $ 2,370.6 $ 5,333.5 $ 16,243.4 Residential mortgage loans: Performing $ 1,101.4 $ 1,669.1 $ 364.5 $ 99.2 $ 51.2 $ 253.6 $ 3,539.0 Non-performing 8.0 4.7 1.8 1.0 0.6 4.4 20.5 Total $ 1,109.4 $ 1,673.8 $ 366.3 $ 100.2 $ 51.8 $ 258.0 $ 3,559.5 Reinsurance recoverable and deposit receivable $ 22,032.0 As of December 31, 2021 2021 2020 2019 2018 2017 Prior Total (in millions) Commercial mortgage loans: A- and above $ 2,194.1 $ 1,676.5 $ 2,385.6 $ 2,334.9 $ 1,374.9 $ 4,336.8 $ 14,302.8 BBB+ thru BBB- 255.0 299.3 270.1 105.2 297.7 370.5 1,597.8 BB+ thru BB- 17.5 — — — — 50.7 68.2 B+ and below — — — 8.8 — 30.1 38.9 Total $ 2,466.6 $ 1,975.8 $ 2,655.7 $ 2,448.9 $ 1,672.6 $ 4,788.1 $ 16,007.7 Residential mortgage loans: Performing $ 1,973.0 $ 429.5 $ 123.5 $ 67.0 $ 80.2 $ 265.9 $ 2,939.1 Non-performing — 1.8 0.6 — 0.8 2.0 5.2 Total $ 1,973.0 $ 431.3 $ 124.1 $ 67.0 $ 81.0 $ 267.9 $ 2,944.3 Reinsurance recoverable and deposit receivable $ 1,189.0 The amortized cost of commercial mortgage loans and residential mortgage loans excluded accrued interest receivable of $55.9 million and $9.8 million, respectively, as of December 31, 2022. The amortized cost of commercial mortgage loans and residential mortgage loans excluded accrued interest receivable of $59.0 million and $7.2 million, respectively, as of December 31, 2021. Financing Receivables Credit Monitoring Commercial Mortgage Loan Credit Risk Profile Based on Internal Rating We actively monitor and manage our commercial mortgage loan portfolio. All commercial mortgage loans are analyzed regularly and substantially all are internally rated, based on a proprietary risk rating cash flow model, in order to monitor the financial quality of these assets. The model stresses expected cash flows at various levels and at different points in time depending on the durability of the income stream, which includes our assessment of factors such as location (macro and micro markets), tenant quality and lease expirations. Our internal rating analysis presents expected losses in terms of an S&P Global (“S&P”) bond equivalent rating for commercial mortgage loans. As the credit risk for commercial mortgage loans increases, we adjust our internal ratings downward with loans in the category “B+ and below” having the highest risk for credit loss. Internal ratings on commercial mortgage loans are updated at least annually and potentially more often for certain loans with material changes in collateral value or occupancy and for loans on an internal “watch list”. Commercial mortgage loans that require more frequent and detailed attention are identified and placed on an internal “watch list”. Among the criteria that may indicate a potential problem are significant negative changes in ratios of loan to value or contract rents to debt service, major tenant vacancies or bankruptcies, borrower sponsorship problems, late payments, delinquent taxes and loan relief/restructuring requests. Residential Mortgage Loan Credit Risk Profile Based on Performance Status Our residential mortgage loan portfolio is monitored based on performance of the loans. Monitoring on a residential mortgage loan increases when the loan is delinquent or earlier if there is an indication of potential impairment. We define non-performing residential mortgage loans as loans 90 days or greater delinquent or on non-accrual status. Non-Accrual Financing Receivables Financing receivables are placed on non-accrual status if we have concern regarding the collectability of future payments or if a financing receivable has matured without being paid off or extended. Factors considered may include conversations with the borrower, loss of major tenant, bankruptcy of borrower or major tenant, decreased property cash flow for commercial mortgage loans or number of days past due and other circumstances for residential mortgage loans. Based on an assessment as to the collectability of the principal, a determination is made to apply any payments received either against the principal, against the valuation allowance or according to the contractual terms. When a financing receivable is placed on non-accrual status, the accrued unpaid interest receivable is reversed against interest income. Accrual of interest resumes after factors resulting in doubts about collectability have improved. The amortized cost of financing receivables on non-accrual status was as follows: December 31, 2022 Amortized cost Beginning Ending of nonaccrual amortized cost amortized cost assets without on nonaccrual on nonaccrual a valuation status status allowance (in millions) Commercial mortgage loans $ 8.7 $ 43.8 $ — Residential mortgage loans 3.4 16.0 0.6 Total $ 12.1 $ 59.8 $ 0.6 December 31, 2021 Amortized cost Beginning Ending of nonaccrual amortized cost amortized cost assets without on nonaccrual on nonaccrual a valuation status status allowance (in millions) Commercial mortgage loans $ — $ 8.7 $ — Residential mortgage loans 9.1 3.4 0.7 Total $ 9.1 $ 12.1 $ 0.7 Interest income recognized on non-accrual financing receivables was as follows: For the year ended December 31, 2022 2021 2020 (in millions) Commercial mortgage loans $ 0.9 $ 0.5 $ — Total $ 0.9 $ 0.5 $ — The aging of our financing receivables, based on amortized cost, was as follows: December 31, 2022 90 days or 30-59 days 60-89 days more past Total past due past due due past due Current Total (1) (in millions) Commercial mortgage loans $ — $ — $ 8.3 $ 8.3 $ 16,235.1 $ 16,243.4 Residential mortgage loans 35.9 2.4 12.4 50.7 3,508.8 3,559.5 Total $ 35.9 $ 2.4 $ 20.7 $ 59.0 $ 19,743.9 $ 19,802.9 December 31, 2021 90 days or 30-59 days 60-89 days more past Total past due past due due past due Current Total (1) (in millions) Commercial mortgage loans $ — $ — $ — $ — $ 16,007.7 $ 16,007.7 Residential mortgage loa |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 6. Derivative Financial Instruments Derivatives are generally used to hedge or reduce exposure to market risks associated with assets held or expected to be purchased or sold and liabilities incurred or expected to be incurred. Derivatives are used to change the characteristics of our asset/liability mix consistent with our risk management activities. Derivatives are also used in asset replication strategies. Types of Derivative Instruments Interest Rate Contracts Interest rate risk is the risk we will incur economic losses due to adverse changes in interest rates. Sources of interest rate risk include the difference between the maturity and interest rate changes of assets with the liabilities they support, timing differences between the pricing of liabilities and the purchase or procurement of assets and changing cash flow profiles from original projections due to prepayment options embedded within asset and liability contracts. We use various derivatives to manage our exposure to fluctuations in interest rates. Interest rate swaps are contracts in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and/or floating rate interest amounts based upon designated market rates or rate indices and an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by any party. Cash is paid or received based on the terms of the swap. We use interest rate swaps primarily to more closely match the interest rate characteristics of assets and liabilities and to mitigate the risks arising from timing mismatches between assets and liabilities (including duration mismatches). We also use interest rate swaps to hedge against changes in the value of assets we anticipate acquiring and other anticipated transactions and commitments. Interest rate swaps are used to hedge against changes in the value of the guaranteed minimum withdrawal benefit (“GMWB”) liability. The GMWB rider on our variable annuity products provides for guaranteed minimum withdrawal benefits regardless of the actual performance of various equity and/or fixed income funds available with the product. Additionally, we utilize interest rate swaps to replicate the returns of floating rate assets. Interest rate options, including interest rate caps and interest rate floors, which can be combined to form interest rate collars, are contracts that entitle the purchaser to pay or receive the amounts, if any, by which a specified market rate exceeds a cap strike interest rate, or falls below a floor strike interest rate, respectively, at specified dates. We use interest rate options to manage prepayment risks in our assets and minimum guaranteed interest rates and lapse risks in our liabilities. A swaption is an option to enter into an interest rate swap at a future date. We have purchased swaptions to hedge interest rate exposure for certain assets and liabilities. Swaptions not only hedge against the downside risk, but also allow us to take advantage of any upside benefits. In exchange-traded futures transactions, we agree to purchase or sell a specified number of contracts, the values of which are determined by the values of designated classes of securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. We enter into exchange-traded futures with regulated futures commissions merchants who are members of a trading exchange. We use exchange-traded futures to hedge against changes in value of the GMWB liability. Interest rate forwards, including to be announced (“TBA”) forwards, bond forwards and treasury forwards are contracts to take delivery of a fixed income security at a specified price at a future date. TBA forwards deliver government guaranteed mortgage-backed securities. Bond forwards and treasury forwards deliver corporate or municipal and U.S. Treasury bonds, respectively. At inception of the TBA and treasury forward contracts, we do not intend to take physical delivery. We intend to take delivery of the bond forwards referencing corporate or municipal bonds. We have used TBA forwards to gain exposure to the investment risk and return of agency mortgage-backed security pools in order to reduce asset and liability duration mismatch. Treasury forwards are used to hedge against changes in the value of the GMWB liability. Bond forwards are used to gain leverage through synthetic exposure during the forward period and fix the purchase price of a bond at a specified date in future. Foreign Exchange Contracts Foreign currency risk is the risk we will incur economic losses due to adverse fluctuations in foreign currency exchange rates. This risk arises from foreign currency-denominated funding agreements issued to nonqualified institutional investors in the international market and foreign currency-denominated fixed maturities we invest in. We use various derivatives to manage our exposure to fluctuations in foreign currency exchange rates. Currency swaps are contracts in which we agree with other parties to exchange, at specified intervals, a series of principal and interest payments in one currency for that of another currency. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. The interest payments are primarily fixed-to-fixed rate; however, they may also be fixed-to-floating rate or floating-to-fixed rate. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date. We use currency swaps to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. Currency forwards are contracts in which we agree with other parties to deliver or receive a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. We use currency forwards to hedge certain foreign-denominated real estate funds. Equity Contracts Equity risk is the risk that we will incur economic losses due to adverse fluctuations in common stock prices. We use various derivatives to manage our exposure to equity risk, which arises from products in which the return or interest we credit is tied to an external equity index as well as products subject to minimum contractual guarantees. We purchase equity call spreads (“option collars”) to hedge the equity participation rates promised to contractholders in conjunction with our fixed deferred annuity and universal life products that credit interest based on changes in an external equity index. We use exchange-traded futures and equity put options to hedge against changes in the value of the GMWB liability related to the GMWB rider on our variable annuity product. The premium associated with certain options is paid quarterly over the life of the option contract. We use exchange-traded futures to hedge against changes in value of the GMWB liability. Credit Contracts Credit risk relates to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest. We use credit default swaps to enhance the return on our investment portfolio by providing comparable exposure to fixed income securities that might not be available in the primary market. They are also used to hedge credit exposures in our investment portfolio. Credit derivatives are used to sell or buy credit protection on an identified name or names on an unfunded or synthetic basis in return for receiving or paying a quarterly premium. The premium generally corresponds to a referenced name’s credit spread at the time the agreement is executed. In cases where we sell protection, we also buy a quality cash bond to match against the credit default swap, thereby entering into a synthetic transaction replicating a cash security. When selling protection, if there is an event of default by the referenced name, as defined by the agreement, we are obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced security in a principal amount equal to the notional value of the credit default swap. Other Contracts Embedded Derivatives. We offer group annuity contracts that have guaranteed separate accounts as an investment option. We have fixed deferred annuities and universal life products that credit interest based on changes in an external equity index. We also have certain variable annuity products with a GMWB rider, which allows the customer to make withdrawals of a specified annual amount, either for a fixed number of years or for the lifetime of the customer, even if the account value is fully exhausted. Declines in the equity markets may increase our exposure to benefits under contracts with the GMWB. We economically hedge the exposure in these contracts, as previously explained. We have a funds withheld payable associated with our coinsurance with funds withheld agreement with Talcott Life & Annuity Re. The funds withheld payable has an embedded total return swap as the total return of the funds withheld assets are transferred to Talcott Life & Annuity Re, which is not based on our own creditworthiness. Exposure Our risk of loss is typically limited to the fair value of our derivative instruments and not to the notional or contractual amounts of these derivatives. We are also exposed to credit losses in the event of nonperformance of the counterparties. Our current credit exposure is limited to the value of derivatives that have become favorable to us. This credit risk is minimized by purchasing such agreements from financial institutions with high credit ratings and by establishing and monitoring exposure limits. We also utilize various credit enhancements, including collateral and credit triggers to reduce the credit exposure to our derivative instruments. Derivatives may be exchange-traded or they may be privately negotiated contracts, which are usually referred to as over-the-counter (“OTC”) derivatives. Certain of our OTC derivatives are cleared and settled through central clearing counterparties (“OTC cleared”), while others are bilateral contracts between two counterparties (“bilateral OTC”). Our derivative transactions are generally documented under International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements. Management believes that such agreements provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Under such agreements, in connection with an early termination of a transaction, we are permitted to set off our receivable from a counterparty against our payables to the same counterparty arising out of all included transactions. For reporting purposes, we do not offset fair value amounts of bilateral OTC derivatives for the right to reclaim cash collateral or the obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparties under master netting agreements. OTC cleared derivatives have variation margin that is legally characterized as settlement of the derivative exposure, which reduces their fair value in the consolidated statements of financial position. We posted $730.6 million and $164.8 million in cash and securities under collateral arrangements as of December 31, 2022 and December 31, 2021, respectively, to satisfy collateral and initial margin requirements associated with our derivative credit support agreements and FCM agreements. Certain of our derivative instruments contain provisions that require us to maintain an investment grade rating from each of the major credit rating agencies on our debt. If the ratings on our debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value, inclusive of accrued interest, of all derivative instruments with credit-risk-related contingent features that were in a liability position without regard to netting under derivative credit support annex agreements as of December 31, 2022 and December 31, 2021, was $613.0 million and $145.7 million, respectively. Cleared derivatives have contingent features that require us to post excess margin as required by the FCM. The terms surrounding excess margin vary by FCM agreement. With respect to derivatives containing collateral provisions, we posted collateral and initial margin of $730.6 million and $164.8 million as of December 31, 2022 and December 31, 2021, respectively, in the normal course of business, which reflects netting under derivative agreements. If the credit-risk-related contingent features underlying these agreements were triggered on December 31, 2022, we would be required to post an additional $87.8 million of collateral to our counterparties. As of December 31, 2022 and December 31, 2021, we had received $142.6 million and $204.4 million, respectively, of cash collateral associated with our derivative credit support annex agreements and FCM agreements, for which we recorded a corresponding liability reflecting our obligation to return the collateral. Notional amounts are used to express the extent of our involvement in derivative transactions and represent a standard measurement of the volume of our derivative activity. Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received, except for contracts such as currency swaps. Credit exposure represents the gross amount owed to us under derivative contracts as of the valuation date. The notional amounts and credit exposure of our derivative financial instruments by type were as follows: December 31, 2022 December 31, 2021 (in millions) Notional amounts of derivative instruments Interest rate contracts: Interest rate swaps $ 52,249.9 $ 47,927.4 Interest rate options 4,418.9 2,373.9 Interest rate forwards 2,527.5 2,181.6 Interest rate futures 877.5 1,774.5 Foreign exchange contracts: Currency swaps 1,389.8 958.9 Currency forwards 32.0 6.8 Equity contracts: Equity options 2,049.3 2,378.2 Equity futures 574.1 150.4 Credit contracts: Credit default swaps 400.0 295.0 Other contracts: Embedded derivatives 30,461.7 9,430.5 Total notional amounts at end of period $ 94,980.7 $ 67,477.2 Credit exposure of derivative instruments Interest rate contracts: Interest rate swaps $ 64.2 $ 205.9 Interest rate options 41.7 24.5 Interest rate forwards 0.1 15.3 Foreign exchange contracts: Currency swaps 139.2 51.1 Currency forwards 0.9 0.4 Equity contracts: Equity options 16.5 37.3 Credit contracts: Credit default swaps 3.6 2.7 Total gross credit exposure 266.2 337.2 Less: collateral received 158.8 234.0 Net credit exposure $ 107.4 $ 103.2 The fair value of our derivative instruments classified as assets and liabilities was as follows: Derivative assets (1) Derivative liabilities (2) December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 (in millions) Derivatives designated as hedging instruments Interest rate contracts $ 20.0 $ 4.1 $ 105.1 $ 19.0 Foreign exchange contracts 134.6 48.4 19.3 17.2 Total derivatives designated as hedging instruments $ 154.6 $ 52.5 $ 124.4 $ 36.2 Derivatives not designated as hedging instruments Interest rate contracts $ 81.1 $ 233.4 $ 439.9 $ 13.0 Foreign exchange contracts 0.9 0.4 0.4 — Equity contracts 16.5 37.3 45.6 90.9 Credit contracts 3.5 2.6 2.0 2.2 Other contracts — — (3,711.7) 320.9 Total derivatives not designated as hedging instruments 102.0 273.7 (3,223.8) 427.0 Total derivative instruments $ 256.6 $ 326.2 $ (3,099.4) $ 463.2 (1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivatives with a net liability fair value of $(58.9) million and $320.9 million as of December 31, 2022 and December 31, 2021, respectively, are reported with contractholder funds on the consolidated statements of financial position. Embedded derivatives with a net (asset) liability fair value of $(3,652.8) million as of December 31, 2022, are reported with funds withheld payable on the consolidated statements of financial position. Credit Derivatives Sold When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. Our credit derivative contracts sold reference a single name or reference security (referred to as “single name credit default swaps”). These instruments are either referenced in an OTC credit derivative transaction or embedded within an investment structure that has been fully consolidated into our financial statements. These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also may have purchased credit protection with identical underlyings to certain of our sold protection transactions. As of December 31, 2022 and December 31, 2021, we did not purchase credit protection relating to our sold protection transactions. In certain circumstances, our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name. The following tables show our credit default swap protection sold by types of contract, types of referenced/underlying asset class and external agency rating for the underlying reference security. The maximum future payments are undiscounted and have not been reduced by the effect of any offsetting transactions, collateral or recourse features described above. December 31, 2022 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 40.0 $ 0.4 $ 40.0 2.5 BBB 190.0 2.2 190.0 3.1 BB 20.0 (0.2) 20.0 4.5 Sovereign A 20.0 0.2 20.0 2.5 Total credit default swap protection sold $ 270.0 $ 2.6 $ 270.0 3.1 December 31, 2021 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 20.0 $ 0.4 $ 20.0 3.5 BBB 110.0 1.7 110.0 3.0 Sovereign A 20.0 0.5 20.0 3.5 Total credit default swap protection sold $ 150.0 $ 2.6 $ 150.0 3.1 Fair Value and Cash Flow Hedges Fair Value Hedges We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets and have used them to align the interest rate characteristics of certain liabilities. In general, these swaps are used in asset and liability management to modify duration, which is a measure of sensitivity to interest rate changes. The net interest effect of interest rate swap transactions for derivatives in fair value hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. The following amounts were recorded on the consolidated statements of financial position related to cumulative basis adjustments for fair value hedges. The amortized cost includes the amortized cost basis and the fair value hedging basis adjustment. Cumulative amount of fair value hedging basis adjustment Line item in the consolidated statements increase/(decrease) included in the of financial position in which the Amortized cost of hedged item amortized cost of the hedged item hedged item is included December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 (in millions) Fixed maturities, available-for-sale (1) Active hedging relationships $ 3,498.6 $ 1,859.9 $ (153.4) $ (7.1) Discontinued hedging relationships 48.8 79.7 1.3 2.8 Total fixed maturities, available-for-sale in active or discontinued hedging relationships $ 3,547.4 $ 1,939.6 $ (152.1) $ (4.3) (1) These amounts include the amortized cost basis of closed portfolios used to designate last-of-layer hedging relationships in which the hedged last layer amount is expected to remain at the end of the hedging relationship. As of December 31, 2022 and December 31, 2021, the amortized cost basis of the closed portfolios used in these hedging relationships was $3,256.9 million and $1,390.4 million, respectively, the cumulative basis adjustments associated with these hedging relationships was $(102.4) million and $(3.9) million, respectively, and the amount of the designated hedged items were $1,110.0 million and $510.0 million, respectively. Cash Flow Hedges We utilize floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial assets and liabilities and forecasted transactions. We enter into currency exchange swap agreements to convert both principal and interest payments of certain foreign denominated assets and liabilities into U.S. dollar denominated fixed-rate instruments to eliminate the exposure to future currency volatility on those items. We use bond forwards and have used floating-to-fixed rate interest rate swaps to hedge forecasted transactions. The net interest effect of interest rate swap and currency swap transactions for derivatives in cash flow hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. The maximum length of time we are hedging our exposure to the variability in future cash flows for forecasted transactions, excluding those related to the payments of variable interest on existing financial assets and liabilities, is 8.4 years. As of December 31, 2022, we had $102.1 million of net losses reported in AOCI on the consolidated statements of financial position related to active hedges of forecasted transactions. If a hedged forecasted transaction is no longer probable of occurring, cash flow hedge accounting is discontinued. If it is probable that the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income. The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of financial position. Amount of gain (loss) recognized in AOCI on derivatives Derivatives in cash flow for the year ended December 31, hedging relationships Related hedged item 2022 2021 2020 (in millions) Interest rate contracts Fixed maturities, available-for-sale $ (102.1) $ — $ (3.0) Interest rate contracts Investment contracts 15.9 4.1 — Foreign exchange contracts Fixed maturities, available-for-sale 84.2 53.4 (37.1) Total $ (2.0) $ 57.5 $ (40.1) We expect to reclassify net gains of $18.7 million from AOCI into net income in the next 12 months, which includes both net deferred gains on discontinued hedges and net gains on periodic settlements of active hedges. Actual amounts may vary from this amount as a result of market conditions. Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations The following tables show the effect of derivatives in fair value and cash flow hedging relationships and the related hedged items on the consolidated statements of operations. For the year ended December 31, 2022 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 2,852.3 $ (1.2) $ 5,650.7 Gains on fair value hedging relationships: Interest rate contracts: Loss recognized on hedged item $ (154.4) $ — $ — Gain recognized on derivatives 151.6 — — Amortization of hedged item basis adjustments (1.3) — — Amounts related to periodic settlements on derivatives 5.2 — — Total gain recognized for fair value hedging relationships $ 1.1 $ — $ — Gains on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 9.0 $ — $ (0.1) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 18.5 — Amounts related to periodic settlements on derivatives — — 3.7 Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 0.6 — Amounts related to periodic settlements on derivatives 14.5 — — Total gain recognized for cash flow hedging relationships $ 23.5 $ 19.1 $ 3.6 For the year ended December 31, 2021 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 3,633.7 $ (18.5) $ 6,482.6 Losses on fair value hedging relationships: Interest rate contracts: Loss recognized on hedged item $ (28.7) $ — $ — Gain recognized on derivatives 28.6 — — Amortization of hedged item basis adjustments (1.8) — — Amounts related to periodic settlements on derivatives (10.0) — — Total loss recognized for fair value hedging relationships $ (11.9) $ — $ — Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 15.4 $ — $ (0.1) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 1.0 — Amounts related to periodic settlements on derivatives — — (0.4) Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 9.2 — Amounts related to periodic settlements on derivatives 9.6 — — Total gain (loss) recognized for cash flow hedging relationships $ 25.0 $ 10.2 $ (0.5) For the year ended December 31, 2020 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 3,324.9 $ 105.6 $ 7,837.5 Losses on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 3.3 $ — $ — Loss recognized on derivatives (3.9) — — Amortization of hedged item basis adjustments (2.5) — — Amounts related to periodic settlements on derivatives (6.2) — — Total loss recognized for fair value hedging relationships $ (9.3) $ — $ — Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 18.1 $ 2.7 $ (0.1) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 0.1 — Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 6.3 — Amounts related to periodic settlements on derivatives 8.2 — — Total gain (loss) recognized for cash flow hedging relationships $ 26.3 $ 9.1 $ (0.1) Derivatives Not Designated as Hedging Instruments Our use of futures, certain swaptions and swaps, option collars, options and forwards are effective from an economic standpoint, but they have not been designated as hedges for financial reporting purposes. As such, periodic changes in the market value of these instruments, which includes mark-to-market gains and losses as well as periodic and final settlements, primarily flow directly into net realized capital gains (losses) on the consolidated statements of operations. However, the change in fair value of the funds withheld embedded derivative is separately reported on the consolidated statements of operations. The following table shows the effect of derivatives not designated as hedging instruments, including fair value changes of embedded derivatives that have been bifurcated from the host contract, on the consolidated statements of operations. Amount of gain (loss) recognized in net income on derivatives for the year ended December 31, Derivatives not designated as hedging instruments 2022 2021 2020 (in millions) Interest rate contracts $ (317.7) $ (33.8) $ 342.7 Foreign exchange contracts 1.4 (4.7) 7.7 Equity contracts 20.7 (81.1) (95.8) Credit contracts 0.1 0.1 1.8 Other contracts (1) 4,024.8 86.0 (247.3) Total $ 3,729.3 $ (33.5) $ 9.1 (1) Includes the change in the fair value of the funds withheld embedded derivative. |
Closed Block
Closed Block | 12 Months Ended |
Dec. 31, 2022 | |
Closed Block | |
Closed Block | 7. Closed Block In connection with the 1998 MIHC formation, we formed a Closed Block to provide reasonable assurance to policyholders included therein that, after the formation of the MIHC, assets would be available to maintain dividends in aggregate in accordance with the 1997 policy dividend scales, if the experience underlying such scales continued. Our assets were allocated to the Closed Block in an amount that produces cash flows which, together with anticipated revenue from policies and contracts included in the Closed Block, were expected to be sufficient to support the Closed Block policies. This includes, but is not limited to, provisions for payment of claims, certain expenses, charges and taxes, and to provide for continuation of policy and contract dividends in aggregate in accordance with the 1997 dividend scales, if the experience underlying such scales continues, and to allow for appropriate adjustments in such scales, if such experience changes. Due to adjustable life policies being included in the Closed Block, the Closed Block is charged with amounts necessary to properly fund for certain adjustments, such as face amount and premium increases, that are made to these policies after the Closed Block inception date. These amounts are referred to as Funding Adjustment Charges. Assets allocated to the Closed Block inure solely to the benefit of the holders of policies included in the Closed Block. Closed Block assets and liabilities are carried on the same basis as other similar assets and liabilities. We will continue to pay guaranteed benefits under all policies, including the policies within the Closed Block, in accordance with their terms. If the assets allocated to the Closed Block, the investment cash flows from those assets and the revenues from the policies included in the Closed Block, including investment income thereon, prove to be insufficient to pay the benefits guaranteed under the policies included in the Closed Block, we will be required to make such payments from our general funds. No additional policies were added to the Closed Block, nor was the Closed Block affected in any other way, as a result of the demutualization. A policyholder dividend obligation (“PDO”) is required to be established for higher than expected earnings in the Closed Block that will need to be paid as dividends unless future performance of the Closed Block is less favorable than originally expected. A model of the Closed Block was established to produce the pattern of expected earnings, assets and liabilities in the Closed Block. These projections are utilized to determine ratios that will allow us to compare actual cumulative earnings to expected cumulative earnings and determine the amount of the PDO. As of December 31, 2022 and 2021, the PDO was $0.0 million and $210.7 million, respectively. Closed Block liabilities and assets designated to the Closed Block were as follows: December 31, 2022 December 31, 2021 (in millions) Closed Block liabilities Future policy benefits and claims $ 3,128.1 $ 3,286.0 Other policyholder funds 5.1 5.3 Policyholder dividends payable 168.2 176.6 Policyholder dividend obligation — 210.7 Other liabilities 24.9 8.8 Total Closed Block liabilities 3,326.3 3,687.4 Assets designated to the Closed Block Fixed maturities, available-for-sale 1,690.2 2,191.6 Fixed maturities, trading 2.0 2.4 Equity securities 0.8 1.0 Mortgage loans 544.9 554.9 Policy loans 407.4 425.2 Other investments 62.2 48.4 Total investments 2,707.5 3,223.5 Cash and cash equivalents 62.0 19.7 Accrued investment income 30.3 32.6 Reinsurance recoverable and deposit receivable 3.9 5.1 Premiums due and other receivables 4.1 3.3 Deferred tax asset 62.0 24.6 Other assets 0.1 — Total assets designated to the Closed Block 2,869.9 3,308.8 Excess of Closed Block liabilities over assets designated to the Closed Block 456.4 378.6 Amounts included in accumulated other comprehensive income (111.9) 0.6 Maximum future earnings to be recognized from Closed Block assets and liabilities $ 344.5 $ 379.2 Closed Block revenues and expenses were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Revenues Premiums and other considerations $ 178.0 $ 196.1 $ 217.6 Net investment income 129.1 137.6 143.6 Net realized capital gains (losses) (21.2) (4.6) 16.0 Total revenues 285.9 329.1 377.2 Expenses Benefits, claims and settlement expenses 184.3 212.0 212.8 Dividends to policyholders 92.5 92.6 117.8 Operating expenses 2.2 2.3 2.7 Total expenses 279.0 306.9 333.3 Closed Block revenues, net of Closed Block expenses, before income taxes 6.9 22.2 43.9 Income taxes 0.7 3.9 8.4 Closed Block revenues, net of Closed Block expenses and income taxes 6.2 18.3 35.5 Funding adjustments and other transfers 28.5 (4.0) (2.2) Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustments $ 34.7 $ 14.3 $ 33.3 The change in maximum future earnings of the Closed Block was as follows: For the year ended December 31, 2022 2021 2020 (in millions) Beginning of year $ 379.2 $ 393.5 $ 426.9 Effects of implementation of accounting changes (1) — — 0.1 End of year 344.5 379.2 393.5 Change in maximum future earnings $ (34.7) $ (14.3) $ (33.3) (1) Includes the effects of implementation of accounting changes related to credit losses in 2020. We charge the Closed Block with U.S. federal income taxes, payroll taxes, state and local premium taxes and other state or local taxes, licenses and fees as provided in the plan of reorganization. |
Deferred Acquisition Costs
Deferred Acquisition Costs | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Acquisition Costs | |
Deferred Acquisition Costs | 8. Deferred Acquisition Costs Acquisition costs deferred and amortized were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Balance at beginning of year $ 3,749.1 $ 3,398.5 $ 3,509.9 Costs deferred during the year 378.9 461.2 456.6 Amortized to expense during the year (1) (383.4) (284.2) (386.9) Adjustment related to unrealized (gains) losses on available-for-sale securities and derivative instruments (2) 934.8 173.6 (181.1) Balance at end of year $ 4,679.4 $ 3,749.1 $ 3,398.5 (1) Includes adjustments for revisions to estimated gross profits. Amortization for the year ended December 31, 2022, includes the impact from re-cohorting. Refer to Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Actuarial Balance Re-Cohorting” for further details. (2) The adjustment for the year ended December 31, 2022, includes the impact from re-cohorting. Refer to Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Actuarial Balance Re-Cohorting” for further details. |
Insurance Liabilities
Insurance Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Insurance Liabilities | |
Insurance Liabilities | 9. Insurance Liabilities Contractholder Funds Major components of contractholder funds in the consolidated statements of financial position were as follows: December 31, 2022 2021 (in millions) Liabilities for investment contracts: Liabilities for individual annuities $ 7,739.3 $ 10,652.3 GICs 13,787.7 12,206.0 Funding agreements 12,318.7 11,685.5 Other investment contracts 1,005.6 997.1 Total liabilities for investment contracts 34,851.3 35,540.9 Universal life and other reserves 7,390.8 7,416.4 Total contractholder funds $ 42,242.1 $ 42,957.3 Our GICs and funding agreements contain provisions limiting or prohibiting early surrenders, which typically include penalties for early surrenders, minimum notice requirements or, in the case of funding agreements with survivor options, minimum pre-death holding periods and specific maximum amounts. Funding agreements include those issued directly to nonqualified institutional investors and those issued to the FHLB Des Moines under their membership funding programs. As of December 31, 2022 and 2021, $4,275.5 million and $4,252.4 million, respectively, of liabilities were outstanding with respect to issuances under the program with FHLB Des Moines. In addition, we have five separate programs where the funding agreements have been issued directly or indirectly to unconsolidated special purpose entities. Claims for principal and interest under funding agreements are afforded equal priority to claims of life insurance and annuity policyholders under insolvency provisions of Iowa Insurance Laws. We were authorized to issue up to $4.0 billion of funding agreements under a program established in 1998 to support the prospective issuance of medium term notes by an unaffiliated entity in non-U.S. markets. As of December 31, 2022 and 2021, $75.6 million and $75.0 million, respectively, of liabilities were outstanding with respect to the issuance outstanding under this program. In addition, we were authorized to issue up to $7.0 billion of funding agreements under a program established in 2001 to support the prospective issuance of medium term notes by an unaffiliated entity in both domestic and international markets. The unaffiliated entity is an unconsolidated special purpose entity. As of December 31, 2022 and 2021, $201.9 million and $201.8 million, respectively, of liabilities were being held with respect to issuances outstanding under this program. We do not anticipate any new issuance activity under this program, given our December 2005 termination of the dealership agreement for this program and the availability of the program established in 2011 described below. We were authorized to issue up to $5.0 billion of funding agreements under a program that was originally established in 2011 to support the prospective issuance of medium term notes by an unaffiliated entity in both domestic and international markets. The unaffiliated entity is an unconsolidated special purpose entity. In June 2015, this program was amended to authorize issuance of up to an additional $4.0 billion. In November 2017, this program was amended to authorize issuance of up to an additional $4.0 billion. In February 2021, this program was amended to authorize issuance of up to an additional $4.0 billion. As of December 31, 2022 and 2021, $7,765.7 million and $7,156.3 million, respectively, of liabilities were being held with respect to issuances outstanding under this program. Our payment obligations on each funding agreement issued under this program are guaranteed by PFG. The program established in 2011 is not registered with the United States Securities and Exchange Commission (“SEC”). Liability for Unpaid Claims The liability for unpaid claims is reported in future policy benefits and claims within our consolidated statements of financial position. Activity associated with unpaid claims was as follows: For the year ended December 31, 2022 2021 2020 (in millions) Balance at beginning of year $ 2,659.4 $ 2,534.9 $ 2,365.5 Less: reinsurance recoverable 442.1 436.9 403.8 Net balance at beginning of year 2,217.3 2,098.0 1,961.7 Incurred: Current year 1,664.2 1,572.5 1,376.8 Prior years 32.1 7.2 26.6 Total incurred 1,696.3 1,579.7 1,403.4 Payments: Current year 1,093.2 1,025.0 863.8 Prior years 465.4 435.4 403.3 Total payments 1,558.6 1,460.4 1,267.1 Net balance at end of year 2,355.0 2,217.3 2,098.0 Plus: reinsurance recoverable 478.1 442.1 436.9 Balance at end of year $ 2,833.1 $ 2,659.4 $ 2,534.9 Amounts not included in the rollforward above: Claim adjustment expense liabilities $ 59.7 $ 59.5 $ 57.8 Incurred liability adjustments relating to prior years, which affected current operations during 2022, 2021 and 2020, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims. Short-Duration Contracts Claims Development The following tables present undiscounted information about claims development by incurral year, including separate information about incurred claims and paid claims net of reinsurance for the periods indicated. The tables also include information on incurred but not reported claims and the cumulative number of reported claims. The tables present information for the number of years for which claims incurred typically remain outstanding, but do not exceed ten years. The data is disaggregated into groupings of claims with similar characteristics, such as duration of the claim payment period and average claim amount, and with consideration to the overall size of the groupings. Outstanding liabilities equal total net incurred claims less total net paid claims plus outstanding liabilities for net unpaid claims of prior years. LTD and Group Life Waiver Claims Incurred Cumulative but not number of reported reported Net incurred claims (1) claims claims December 31, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2022 2022 ($ in millions) Incurral year 2013 $ 219.3 $ 203.3 $ 188.4 $ 190.7 $ 182.3 $ 179.5 $ 177.1 $ 173.4 $ 174.5 $ 174.5 $ 0.1 7,051 2014 242.2 231.4 214.4 218.1 206.2 201.9 202.0 199.3 199.8 0.1 7,604 2015 231.0 227.2 217.2 215.3 208.2 210.0 211.8 210.5 0.1 7,181 2016 229.8 228.4 219.4 219.5 214.4 218.7 221.9 0.1 6,167 2017 238.4 239.7 243.1 245.8 245.2 246.5 0.1 6,082 2018 239.4 245.1 239.2 239.8 235.3 0.1 5,774 2019 255.2 248.4 240.4 240.2 5.7 5,945 2020 252.1 231.0 221.1 8.4 5,913 2021 259.7 244.5 4.0 5,484 2022 274.3 109.8 3,422 Total net incurred claims $ 2,268.6 Net cumulative paid claims (1) December 31, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (in millions) Incurral year 2013 $ 12.5 $ 55.0 $ 81.4 $ 97.0 $ 106.4 $ 116.4 $ 123.2 $ 129.0 $ 134.9 $ 139.6 2014 16.1 66.0 96.3 111.8 122.3 132.4 140.8 147.2 153.3 2015 16.9 67.0 98.0 114.6 126.8 137.1 146.5 154.0 2016 16.2 70.6 105.6 124.9 136.8 147.2 157.1 2017 17.8 76.5 115.0 135.9 151.7 165.4 2018 20.1 79.9 115.7 135.7 150.3 2019 19.2 79.7 117.5 136.4 2020 20.6 78.8 113.1 2021 19.8 79.0 2022 19.6 Total net paid claims 1,267.8 All outstanding liabilities for unpaid claims prior to 2013 net of reinsurance 239.5 Total outstanding liabilities for unpaid claims net of reinsurance $ 1,240.3 (1) 2013-2021 unaudited. Dental, Vision, STD, Critical Illness, Accident and PFML Claims Incurred Cumulative but not number of reported reported Net incurred claims (1) claims claims December 31, 2021 2022 2022 2022 ($ in millions) Incurral year 2021 $ 826.0 $ 814.1 $ — 3,749,753 2022 924.4 56.5 4,114,456 Total net incurred claims $ 1,738.5 Net cumulative paid claims (1) December 31, 2021 2022 (in millions) Incurral year 2021 $ 753.4 $ 813.3 2022 845.5 Total net paid claims 1,658.8 All outstanding liabilities for unpaid claims prior to 2021 net of reinsurance — Total outstanding liabilities for unpaid claims net of reinsurance $ 79.7 (1) 2021 unaudited. Group Life Claims Incurred Cumulative but not number of reported reported Net incurred claims (1) claims claims December 31, 2021 2022 2022 2022 ($ in millions) Incurral year 2021 $ 317.6 $ 321.5 $ 0.8 7,079 2022 279.3 24.7 5,368 Total net incurred claims $ 600.8 Net cumulative paid claims (1) December 31, 2021 2022 (in millions) Incurral year 2021 $ 243.9 $ 314.3 2022 218.3 Total net paid claims 532.6 All outstanding liabilities for unpaid claims prior to 2021 net of reinsurance 5.0 Total outstanding liabilities for unpaid claims net of reinsurance $ 73.2 (1) 2021 unaudited. Reconciliation of Unpaid Claims to Liability for Unpaid Claims Our reconciliation of net outstanding liabilities for unpaid claims of short-duration contracts to the liability for unpaid claims follows: December 31, 2022 Dental, Vision, STD, LTD and Group Life Critical Illness, Waiver Accident and PFML Group Life Consolidated (in millions) Net outstanding liabilities for unpaid claims $ 1,240.3 $ 79.7 $ 73.2 $ 1,393.2 Reconciling items: Reinsurance recoverable on unpaid claims 45.3 — 0.4 45.7 Impact of discounting (209.4) — — (209.4) Liability for unpaid claims - short-duration contracts $ 1,076.2 $ 79.7 $ 73.6 1,229.5 Insurance contracts other than short-duration 1,603.6 Liability for unpaid claims $ 2,833.1 Claim Duration and Payout Our historical average percentage of claims paid in each year from incurral was as follows: December 31, 2022 (1) Dental, Vision, STD, LTD and Group Life Critical Illness, Year Waiver Accident and PFML Group Life 1 7.9 % 91.8 % 79.6 % 2 24.7 8.0 18.5 3 15.4 4 8.3 5 5.8 6 5.2 7 4.3 8 3.4 9 3.2 10 2.6 (1) Unaudited. Discounting The following table provides the carrying amount of liabilities reported at present value for short-duration contract unpaid claims. We use a range of discount rates to derive the present value of the unpaid claims. The ranges of discount rates as well as the aggregate amount of discount deducted to derive the liabilities for unpaid claims and interest accretion recognized are also disclosed. Interest accretion is included in benefits, claims and settlement expenses within our consolidated statements of operations. Dental, Vision, STD, LTD and Group Life Critical Illness, Waiver Accident and PFML Group Life ($ in millions) Carrying amount of liabilities for unpaid claims December 31, 2022 $ 1,076.2 $ 79.7 $ 73.6 December 31, 2021 1,057.5 73.1 80.2 Range of discount rates December 31, 2022 2.8 - 7.0 % — - — % — - — % December 31, 2021 2.8 - 7.0 — - — — - — Aggregate amount of discount December 31, 2022 $ 209.4 $ — $ — December 31, 2021 208.0 — — Interest accretion For the year ended: December 31, 2022 $ 33.0 $ — $ — December 31, 2021 33.8 — — December 31, 2020 33.9 — — |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
Reinsurance | |
Reinsurance | 10. Reinsurance We reinsure a portion of the insurance risks associated with our individual disability, traditional life, universal life, medical and long-term care insurance as well as retail fixed annuity contracts with significant life insurance risk through reinsurance agreements with unaffiliated reinsurance companies, primarily on a quota share, excess loss, yearly renewable term or coinsurance basis. During the second quarter of 2022, we closed a coinsurance with funds withheld reinsurance transaction with Talcott Life & Annuity Re in which we ceded our in-force U.S. retail fixed annuity and ULSG blocks of business. The economics of the transaction were effective as of January 1, 2022. We use both the reinsurance and deposit methods of accounting for this transaction. For further information about this transaction, refer to Note 1, Nature of Operations and Significant Accounting Policies. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. As of December 31, 2022, and December 31, 2021, we had $14,128.4 million and $1,186.3 million of net ceded reinsurance recoverables, respectively, which does not reflect potentially offsetting impacts of collateral. As of December 31, 2022, and December 31, 2021, $13,660.1 million, or 99.7%, and $578.0 million, or 95.5%, were with our five largest ceded reinsurers, respectively. The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Premiums and other considerations: Direct $ 5,216.5 $ 4,869.7 $ 6,050.4 Assumed 503.5 494.3 439.5 Ceded (455.7) (650.0) (609.1) Net premiums and other considerations $ 5,264.3 $ 4,714.0 $ 5,880.8 Benefits, claims and settlement expenses: Direct $ 6,448.3 $ 6,351.5 $ 7,615.8 Assumed 775.0 796.1 746.4 Ceded (1,572.6) (665.0) (524.7) Net benefits, claims and settlement expenses $ 5,650.7 $ 6,482.6 $ 7,837.5 As of December 31, 2022, we had a $7,900.9 million reinsurance deposit receivable. Refer to Note 5, Investments, for information on our financing receivables valuation allowance related to the reinsurance recoverable and deposit receivable. Cost of Reinsurance A reinsurance asset or liability is established to spread the expected net reinsurance costs or profits over the expected term of the contracts. The cost of reinsurance asset and liability are reported in premiums due and other receivables and liability for future policy benefits and claims, respectively, on the consolidated statements of financial position. The cost of reinsurance asset and liability included on the consolidated statements of financial position were as follows: December 31, 2022 December 31, 2021 (in millions) Cost of reinsurance asset $ 3,689.2 $ 46.5 Cost of reinsurance liability $ 84.2 $ 22.1 Cost of reinsurance amortization of $84.5 million, $(18.0) million and $67.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, was reported in benefits, claims and settlement expenses on the consolidated statements of operations. Funds Withheld The following assets were held in support of our reserves associated with our coinsurance with funds withheld agreement and are reported in the line items shown on the consolidated statements of financial position. December 31, 2022 (in millions) Fixed maturities, available-for-sale $ 15,693.5 Fixed maturities, trading 100.8 Equity securities 11.0 Mortgage loans 2,810.8 Other investments 179.8 Cash and cash equivalents 1,762.9 Accrued interest income 178.7 Net other liabilities (33.6) Net assets $ 20,703.9 Certain assets are reported at amortized cost while the fair value of those assets is reflected in the funds withheld payable. We had a $20,436.1 million funds withheld payable as of December 31, 2022, which was net of a $3,652.8 million embedded derivative asset. The change in fair value of the embedded derivative was a gain of $3,652.8 million, $0.0 million and $0.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. While the economic benefits of the funds withheld assets flow to Talcott Life & Annuity Re, we retain legal ownership of the assets within the funds withheld account. Guidelines are in place to ensure the investment risk is appropriately managed. Net investment income and net realized capital gains (losses) related to the assets on the consolidated statements of operations is reported net of the amounts that flow to Talcott Life & Annuity Re. The realized gains and losses that do not flow to Talcott Life & Annuity Re are reported in net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations. Following are the components of net investment income on the funds withheld assets that were passed to Talcott Life & Annuity Re. For the year ended December 31, 2022 (in millions) Fixed maturities, available-for-sale $ 745.9 Fixed maturities, trading 2.0 Equity securities 0.6 Mortgage loans 98.4 Cash and cash equivalents 18.2 Other 4.8 Total 869.9 Investment expenses (20.5) Net investment income $ 849.4 Following are the components of net realized capital gains (losses) on the funds withheld assets that were passed to Talcott Life & Annuity Re. For the year ended December 31, 2022 (in millions) Fixed maturities, available-for-sale $ (235.5) Fixed maturities, trading (6.4) Equity securities (2.4) Mortgage loans (24.8) Derivatives 2.7 Other 3.3 Net realized capital losses $ (263.1) |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Debt | 11. Debt Short-Term Debt The components of short-term debt were as follows: December 31, 2022 Financing Short-term debt Obligor/Applicant structure Maturity Capacity outstanding (in millions) PLIC Credit facility October 2027 $ 800.0 $ — Total $ 800.0 $ — December 31, 2021 Financing Short-term debt Obligor/Applicant structure Maturity Capacity outstanding (in millions) PFG, PFS, PLIC as co-borrowers Credit facility November 2023 $ 600.0 $ — PFG, PFS, PLIC and Principal Financial Services V (UK) Ltd as co-borrowers Credit facility November 2023 200.0 — Total $ 800.0 $ — Our revolving credit facilities are committed and available for general corporate purposes. These credit facilities also provide 100% back-stop support for our commercial paper program, of which we had no outstanding balances as of both December 31, 2022 and 2021. Long-Term Debt The components of long-term debt were as follows: December 31, 2022 Principal Net unamortized discount, premium and debt issuance costs Carrying amount (in millions) Non-recourse mortgages and notes payable $ 67.1 $ 0.7 $ 67.8 Total long-term debt $ 67.1 $ 0.7 $ 67.8 December 31, 2021 Principal Net unamortized discount, premium and debt issuance costs Carrying amount (in millions) Non-recourse mortgages and notes payable $ 53.8 $ 0.2 $ 54.0 Total long-term debt $ 53.8 $ 0.2 $ 54.0 The non-recourse mortgages and notes payable are primarily financings for real estate developments. Outstanding principal balances as of December 31, 2022, ranged from $3.0 million to $15.9 million per development with interest rates ranging from 3.5% to 4.8%. Outstanding principal balances as of December 31, 2021, ranged from $3.1 million to $14.4 million per development with interest rates ranging from 3.5% to 4.8%. Outstanding debt is secured by the underlying real estate properties, which were reported as real estate on our consolidated statements of financial position with a carrying value of $317.6 million and $198.3 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022, future annual maturities of long-term debt were as follows (in millions): Year ending December 31: 2023 $ 25.3 2024 32.7 2025 0.4 2026 6.5 2027 0.1 Thereafter 2.8 Total future maturities of long-term debt $ 67.8 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes Income Taxes (Benefits) Our income taxes (benefits) were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Current income taxes (benefits): U.S. federal $ (142.9) $ 96.9 $ 19.1 State 21.7 11.4 12.6 Tax benefit of operating loss carryforward — — (0.1) Total current income taxes (benefits) (121.2) 108.3 31.6 Deferred income taxes (benefits): U.S. federal 1,243.3 124.4 128.5 State (4.5) 0.5 — Total deferred income taxes 1,238.8 124.9 128.5 Income taxes $ 1,117.6 $ 233.2 $ 160.1 Our income before income taxes was as follows: For the year ended December 31, 2022 2021 2020 (in millions) Domestic $ 5,840.8 $ 1,686.8 $ 1,227.5 Total income before income taxes $ 5,840.8 $ 1,686.8 $ 1,227.5 Effective Income Tax Rate Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between the U.S. corporate income tax rate and the effective income tax rate was as follows: For the year ended December 31, 2022 2021 2020 U.S. corporate income tax rate 21 % 21 % 21 % Dividends received deduction (1) (4) (6) Tax credits (1) (3) (3) Interest exclusion from taxable income — (1) (1) Low income housing tax credit amortization — 1 1 Other — — 1 Effective income tax rate 19 % 14 % 13 % Unrecognized Tax Benefits Our changes in unrecognized tax benefits were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Balance at beginning of period $ 43.9 $ 45.8 $ 57.2 Additions based on tax positions related to the current year — 1.3 1.3 Additions for tax positions of prior years — — 17.4 Reductions for tax positions related to the current year (3.3) (3.2) (3.2) Settlements — — (13.4) Expired statute of limitations — — (13.5) Balance at end of period (1) $ 40.6 $ 43.9 $ 45.8 (1) Our 2022 effective income tax rate would not be impacted if unrecognized tax benefits were recognized. We recognize interest and penalties related to uncertain tax positions in operating expenses within the consolidated statements of operations. As of December 31, 2022, 2021 and 2020, we had recognized $1.4 million, $1.2 million and $1.1 million of accumulated pre-tax interest and penalties related to unrecognized tax benefits, respectively. We do not believe there is a reasonable possibility the total amount of the unrecognized tax benefits will significantly increase or decrease in the next twelve months considering recent settlements and the status of current and pending Internal Revenue Service (“IRS”) examinations. Net Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Our significant components of net deferred income taxes were as follows: December 31, 2022 2021 (in millions) Deferred income tax assets: Net unrealized losses on available-for-sale securities $ 1,611.9 $ — Tax credit carryforwards 65.8 — Employee benefits 26.4 54.2 Intangible assets 17.6 — Gross deferred income tax assets 1,721.7 54.2 Valuation allowance (12.3) (2.8) Total deferred income tax assets 1,709.4 51.4 Deferred income tax liabilities: Deferred acquisition costs (811.0) (594.5) Investments, including derivatives (187.6) (278.0) Funds withheld embedded derivative (767.1) — Net unrealized gains on available-for-sale securities — (1,070.7) Real estate (140.0) (141.7) Insurance liabilities (728.8) (21.6) Intangible assets — (7.7) Gain on sale of discontinued operations (1) (182.1) (189.5) Other deferred income tax liabilities (48.4) (21.2) Total deferred income tax liabilities (2,865.0) (2,324.9) Total net deferred income tax liabilities $ (1,155.6) $ (2,273.5) (1) Represents a deferred intercompany gain on the sale of PGI LLC to PFS, which was allocated to stockholder’s equity as the result of a taxable common control transaction on the standalone financials of the transferring entity. Our net deferred income taxes by jurisdiction were as follows: December 31, 2022 2021 (in millions) Deferred income tax assets: State $ 10.8 $ — Net deferred income tax assets 10.8 — Deferred income tax liabilities: U.S. federal (1,166.4) (2,245.1) State — (28.4) Net deferred income tax liabilities (1,166.4) (2,273.5) Total net deferred income tax liabilities $ (1,155.6) $ (2,273.5) In management’s judgment, total deferred income tax assets are more likely than not to be realized. Included in the deferred income tax asset are tax credit carryforwards available to offset future taxable income or income taxes. As of December 31, 2022 and 2021, we had tax credit carryforwards for U.S. federal income tax purposes of $65.8 million and $0.0 million, respectively, primarily attributable to a reinsurance transaction that occurred during 2022. As of December 31, 2022, these carryforwards are anticipated to be utilized before their 2042 expiration, therefore, no valuation allowance has been provided for the related deferred income tax asset. As of both December 31, 2022 and 2021, state net operating loss carryforwards were $0.3 million and will expire between 2032 and 2040. As of December 31, 2022, all accumulated state net operating loss carryforwards are anticipated to be utilized before expiration; therefore, no valuation allowance has been provided for the related deferred income tax assets. Effects of Tax Legislation The Inflation Reduction Act of 2022 (“IRA 2022”) was enacted by the U.S. government on August 16, 2022. The IRA 2022 implements a new corporate alternative minimum tax (the Book Minimum Tax or “BMT”) effective January 1, 2023. We are expected to be an “Applicable Corporation,” which requires computation of our U.S. federal income tax liability under two systems, the U.S. regular corporate tax (“RCT”) and the BMT. Although the BMT may apply in any given year when tentative minimum tax (“TMT”) then exceeds the RCT liability, as a “prepayment” the BMT generates a corresponding alternative minimum tax credit (“AMTC”). The AMTC is accounted for as a deferred tax asset (“DTA”) with an indefinite carryover life recoverable in years when the RCT liability then exceeds TMT. The tax accounting consequences of a change in tax law is required to be recognized in the period legislation is enacted. Generally, a company is also required to consider the impact of new tax law on realizability of its DTAs, including determination of whether a change to their valuation allowance amounts is necessary. We made an accounting policy election to disregard our BMT status when evaluating DTAs under the RCT system associated with the IRA 2022. Other Tax Information Income tax returns are filed in U.S. federal jurisdiction as well as various states where we and one or more of our subsidiaries conduct business. Although determined by jurisdiction, with few exceptions our tax uncertainties relate primarily to U.S. federal income tax matters. The IRS has completed examination of our consolidated U.S. federal income tax returns for years prior to 2013 and did not exam 2013 and 2014. IRS claims for refund for tax years 2004 through 2008, following settlement of a partnership matter with the Department of Justice in March 2019, were finalized in 2020 and have been received in full as of December 31, 2021. IRS claims for refund filed for tax years 2006 through 2008 were received in September 2020. In 2019, an IRS 30-day letter on examination of tax years 2009 through 2012 was received, the proposed adjustments found acceptable, and associated tax settlements subsequently occurred in 2020 prior to expiration of the extended statute of limitations. As of December 31, 2022 and 2021, we had $20.7 million and $16.8 million, respectively, of current income tax receivables associated with outstanding audit issues. The IRS is currently auditing PFG’s consolidated U.S. federal income tax returns for tax years 2015 - 2018. The U.S. federal statute of limitations expired for years prior to 2009, except for pending audit issues. The extended statute expired on June 30, 2021, for 2009 through 2012 although effectively settled, and the original statute has expired for both 2013 and 2014. Tax years 2015 and forward remain open through statute extensions or the normal statute of limitations. The ultimate settlement of earlier tax years can be adjusted into subsequent tax years regardless of statute status. We do not expect the results of these audits, subsequent related adjustments or developments in other tax areas for all open tax years to significantly change the possible increase in the amount of unrecognized tax benefits, but the outcome of tax reviews is uncertain and unforeseen results can occur. We believe we have adequate defenses against, or sufficient provisions for, contested issues, but final resolution could take several years depending on whether legal remedies are pursued. Consequently, we do not believe issues that might arise in tax years subsequent to 2014 will have a material impact on our net income. |
Employee and Agent Benefits
Employee and Agent Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Employee and Agent Benefits | |
Employee and Agent Benefits | 13. Employee and Agent Benefits PFG provides a U.S. qualified defined benefit pension plan, covering U.S. employees that meet certain eligibility requirements and certain agents contracted on or before December 31, 2018. A final average pay benefit formula has been in place for plan participants employed prior to January 1, 2002. For agents, this formula ended on December 31, 2018, and for employees the formula ended on December 31, 2022. The final average pay benefit is based on the years of service and generally the employee’s or agent’s average annual compensation during the last five years prior to the earliest of termination, retirement or the formula end date. A cash balance benefit was added on January 1, 2002. A participant’s cash balance account is credited with an amount based on the participant’s salary, age and service. These credits accrue with interest. For plan participants hired on and after January 1, 2002, only the cash balance benefit applies. For pre-2002 participants, the pension benefit earned prior to the final average pay formula end date is the greater of the final average pay benefit or the cash balance benefit earned before the end date. They will also earn a new cash balance benefit for service after the formula end date. We reflect pension expense through our expense allocation agreement with PFG. In addition, PFG sponsors non-qualified defined benefit plans subject to Section 409A of the Internal Revenue Code. This plan is for certain highly compensated employees and agents to replace the benefit that cannot be provided by the qualified defined benefit pension plan due to IRS limits. These nonqualified plans generally parallel the qualified plan but offer different payment options. No agent will become a new participant in the nonqualified plan after December 31, 2018. We provide certain health care, life insurance and long-term care benefits for retired employees, their beneficiaries and covered dependents (“other postretirement benefits”). While virtually all U.S. employees continue to have access to the postretirement health care and life insurance benefits, only those U.S. employees that were hired prior to January 1, 2002, and retired prior to January 1, 2011, (post-65 medical) or January 1, 2020, (life insurance and pre-65 medical) were eligible to receive subsidized benefits. All others pay the full cost of coverage. The long-term care plan was subsidized only for those who retired prior to January 1, 2000, and is no longer accessible. The subsidy level for all benefits varies by plan, age, service and retirement date. Our policy is to fund the cost of providing retiree benefits in the years the employees are providing service, taking into account the funded status of the trust. PFG is the sponsor of the post-65 retiree medical plan for both employees and individual field agents. Obligations and Funded Status The combined funded status, reconciled to amounts recognized in the consolidated statements of financial position relating to the other postretirement employee benefits plans, was as follows: December 31, 2022 2021 (in millions) Change in benefit obligation Benefit obligation at beginning of year $ (79.2) $ (92.5) Interest cost (1.9) (1.8) Actuarial gain 17.0 6.4 Participant contributions (6.4) (6.1) Benefits paid 11.9 11.9 Plan transfer due to change in sponsorship — 2.9 Benefit obligation at end of year $ (58.6) $ (79.2) Change in plan assets Fair value of plan assets at beginning of year $ 89.5 $ 751.1 Actual return on plan assets (15.0) (0.8) Employer contribution 1.4 1.5 Participant contributions 6.4 6.1 Benefits paid (11.9) (11.9) Assets re-designated for non-retiree benefits — (656.5) Fair value of plan assets at end of year $ 70.4 $ 89.5 Amount recognized in statement of financial position Other assets $ 11.8 $ 10.3 Total $ 11.8 $ 10.3 Amount recognized in accumulated other comprehensive income Total net actuarial gain $ (18.1) $ (20.7) Pre-tax accumulated other comprehensive income $ (18.1) $ (20.7) Other Postretirement Plan Changes and Plan Gains/Losses For the year ended December 31, 2022, the other postretirement benefit plans had an actuarial gain primarily due to an increase in the discount rates and actual medical claims costs being lower than previously expected. For the year ended December 31, 2021, the other postretirement benefit plans had an actuarial gain primarily due to an increase in the discount rate and actual, along with projected, medical claim costs being lower than previously expected. Effective January 1, 2021, the Long-Term Care Assistance Plan merged with the Principal Welfare Plan for Medicare Eligible Retirees and PFG became the plan sponsor. The result of the plan merger was a liability of $2.9 million moving to PFG. In addition, the net unrecognized actuarial loss of $2.0 million and the prior period service cost of $0.7 million from the long-term care plan moved to PFG with the plan merger. Effective January 1, 2021, $656.5 million of assets in excess of the expected liability to cover the postretirement medical benefits for retirees were re-designated for non-retiree benefits. The elections were made pursuant to plan provisions, which provide for assets in excess of 125% of expected liabilities to fund other benefits covered under the plans. The re-designated assets, net of associated tax receivable impacts related to a tax adjustment to accumulated other comprehensive income, are not included as part of the asset balances presented in the footnote as they no longer qualify as plan assets in accordance with U.S. GAAP. The re-designated assets are included in equity securities and other investments on our consolidated statements of financial position beginning January 1, 2021. We did not have any other postretirement benefit plans with an accumulated postretirement benefit obligation in excess of plan assets. Components of Other Postretirement Benefits Net Periodic Benefit Cost For the year ended December 31, 2022 2021 2020 (in millions) Interest cost $ 1.9 $ 1.8 $ 2.4 Expected return on plan assets (3.7) (3.5) (34.8) Amortization of prior service cost — — 0.1 Recognized net actuarial (gain) loss (0.9) (0.4) 0.2 Net periodic benefit income $ (2.7) $ (2.1) $ (32.1) The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations. For the other postretirement benefit plans, actuarial gains and losses were amortized with use of the corridors allowed. For the other postretirement benefit plans, amounts recognized in pre-tax accumulated other comprehensive (income) loss were as follows: For the year ended December 31, 2022 2021 (in millions) Other changes recognized in accumulated other comprehensive (income) loss Net actuarial (gain) loss $ 1.7 $ (4.1) Prior service benefit — (0.7) Amortization of net gain 0.9 0.4 Total recognized in pre-tax accumulated other comprehensive (income) loss $ 2.6 $ (4.4) Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive income $ (0.1) $ (6.5) Net actuarial (gain) loss and net prior service cost benefit have been recognized in AOCI. Assumptions Weighted-average assumptions used for other postretirement benefit plans to determine benefit obligations as disclosed under the Obligations and Funded Status section December 31, 2022 2021 Discount rate 5.05 % 2.55 % Rate of compensation increase N/A N/A Weighted average assumptions used for other postretirement benefit plans to determine net periodic benefit cost For the year ended December 31, 2022 2021 2020 Discount rate (1) 2.55 % 2.15 % 2.95 % Expected long-term return on plan assets 4.25 % 4.25 % 4.95 % Rate of compensation increase N/A N/A N/A % (1) During the second quarter 2020, subsidy increases provided under the long-term care plan were capped at 5% per calendar year. This change was remeasured as of March 31, 2020. A discount rate of 2.95% was used until the remeasurement date at which time a discount rate of 2.90% was used. For other postretirement benefits, the discount rate is determined by projecting future benefit payments inherent in the accumulated postretirement benefit obligation, and discounting those cash flows using a spot yield curve for high quality corporate bonds. The plans’ expected benefit payments are discounted to determine a present value using the yield curve and the discount rate is the level rate that produces the same present value. The 4.25% expected long-term return on plan assets for 2022 was based on the weighted average expected long-term asset returns for the medical, life and long-term care plans. The expected long-term rates for the home office medical/life and agent medical/life plans were 4.25% and 4.25%, respectively. Assumed Health Care Cost Trend Rates Used to Determine Net Periodic Benefit Cost December 31, 2022 2021 Health care cost trend rate assumed for next year under age 65 7.00 % 7.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50 % 4.50 % Year that the rate reaches the ultimate trend rate (under age 65) 2031 2030 Other Postretirement Benefit Plan Assets Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. ● Level 1 — Fair values are based on unadjusted quoted prices in active markets for identical assets. ● Level 2 — Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset, either directly or indirectly. ● Level 3 — Fair values are based on significant unobservable inputs for the asset. Our other postretirement benefit plan assets consist of cash, investments in fixed income security portfolios and investments in equity security portfolios. Because of the nature of cash, its carrying amount approximates fair value. The fair value of fixed income investment funds, U.S. equity portfolios and international equity portfolios is based on quoted prices in active markets for identical assets. The fair value of the other postretirement benefit plans’ assets by asset category as of the most recent measurement date was as follows: December 31, 2022 Assets Fair value hierarchy level measured at fair value Level 1 Level 2 Level 3 (in millions) Asset category Cash and cash equivalents $ 0.5 $ 0.5 $ — $ — Fixed income security portfolios (1) 34.7 34.7 — — U.S. equity portfolios (2) 25.6 25.6 — — International equity portfolios (3) 9.6 9.6 — — Total $ 70.4 $ 70.4 $ — $ — December 31, 2021 Assets Fair value hierarchy level measured at fair value Level 1 Level 2 Level 3 (in millions) Asset category Cash and cash equivalents $ 0.5 $ 0.5 $ — $ — Fixed income security portfolios (1) 41.8 41.8 — — U.S. equity portfolios (2) 32.9 32.9 — — International equity portfolios (3) 14.3 14.3 — — Total $ 89.5 $ 89.5 $ — $ — (1) The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to, corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations. (2) The portfolios invest primarily in publicly traded equity securities of large U.S. companies. (3) The portfolios invest primarily in publicly traded equity securities of non-U.S. companies. We have established an investment policy that provides the investment objectives and guidelines for the other postretirement benefit plans. Our investment strategy is to achieve the following: ● Obtain a reasonable long-term return consistent with the level of risk assumed and at a cost of operation within prudent levels. Performance benchmarks are monitored. ● Ensure sufficient liquidity to meet the emerging benefit liabilities for the plans. ● Provide for diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the other postretirement benefit plans consistent with market and economic risk. In administering the other postretirement benefit plans’ asset allocation strategies, we consider the projected liability stream of benefit payments, the relationship between current and projected assets of the plan and the projected actuarial liabilities streams, the historical performance of capital markets adjusted for the perception of future short-and long-term capital market performance and the perception of future economic conditions. According to our investment policy, the target asset allocation for the other postretirement benefit plans is: Asset category Target allocation Fixed income security portfolios 50 % U.S. equity portfolios 35 % International equity portfolios 15 % Estimated Future Benefit Payments The estimated future benefit payments, which reflect expected future service are: Other postretirement benefits (gross benefit payments, including prescription drug benefits) (in millions) Year ending December 31: 2023 $ 11.6 2024 10.7 2025 9.7 2026 8.6 2027 7.6 2028-2032 30.1 The above table reflects the total estimated future benefits to be paid from the plan, including both our share of the benefit cost and the participants’ share of the cost, which is funded by their contributions to the plan. The assumptions used in calculating the estimated future benefit payments are the same as those used to measure the benefit obligation for the year ended December 31, 2022. |
Contingencies, Guarantees, Inde
Contingencies, Guarantees, Indemnifications and Leases | 12 Months Ended |
Dec. 31, 2022 | |
Contingencies, Guarantees, Indemnifications and Leases | |
Contingencies, Guarantees, Indemnifications and Leases | 14. Contingencies, Guarantees, Indemnifications and Leases Litigation and Regulatory Contingencies We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation products and services, individual life insurance, specialty benefits insurance and our investment activities. Some of the lawsuits may be class actions, or purport to be, and some may include claims for unspecified or substantial punitive and treble damages. We may discuss such litigation in one of three ways. We accrue a charge to income and disclose legal matters for which the chance of loss is probable and for which the amount of loss can be reasonably estimated. We may disclose contingencies for which the chance of loss is reasonably possible and provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Finally, we may voluntarily disclose loss contingencies for which the chance of loss is remote in order to provide information concerning matters that potentially expose us to possible losses. In addition, regulatory bodies such as state insurance departments, the SEC, the Financial Industry Regulatory Authority, the Department of Labor and other regulatory agencies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, Employee Retirement Income Security Act (“ERISA”) and laws governing the activities of broker-dealers. We receive requests from regulators and other governmental authorities relating to industry issues and may receive additional requests, including subpoenas and interrogatories, in the future. On November 12, 2014, Frederick Rozo filed a class action lawsuit in the United States District Court for the Southern District of Iowa against PFG and us. PFG was later dismissed as a defendant. The Plaintiff alleged that defendants breached fiduciary duties and engaged in prohibited transactions under ERISA in connection with a general account guaranteed product known as the Principal Fixed Income Option (“PFIO”). On May 12, 2017, the district court certified a nationwide class of participants and beneficiaries who had funds invested in one of the PFIO contracts. On September 25, 2018, the district court granted our motion for summary judgment. On February 3, 2020, the Eighth Circuit Court of Appeals reversed that ruling and remanded the case back to the district court. A bench trial was held before the district court in November 2020. The court issued its ruling on April 8, 2021, finding in our favor on all claims. The Plaintiff appealed this ruling to the Eighth Circuit Court of Appeals, which upheld the decision in our favor on September 2, 2022. The Plaintiff did not appeal the Eighth Circuit Court of Appeals’ decision; as such, the district court’s ruling in our favor stands. While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe any such matter will have a material adverse effect on our business or financial position. As of December 31, 2022, we had no estimated loss accrued related to the legal matter discussed above because we believe the chance of loss from this matter is not probable and the amount of loss cannot be reasonably estimated. To the extent such matters present a reasonably possible chance of loss, we are generally not able to estimate the possible loss or range of loss associated therewith. The outcome of such matters is always uncertain and unforeseen results can occur. It is possible that such outcomes could require us to pay damages or make other expenditures or establish accruals in amounts that we could not estimate at December 31, 2022. Guarantees and Indemnifications In the normal course of business, we have provided guarantees to our ultimate parent, PFG, related to benefit payments of the nonqualified pension plans and the nonqualified deferred compensation plans. We also provided guarantees to third parties primarily related to a former subsidiary. The terms of these agreements range in duration and often are not explicitly defined. The maximum exposure under these agreements as of December 31, 2022, was approximately $125.0 million. At inception, the fair value of such guarantees was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in agreements with such parties, the sale of assets held as collateral that can be liquidated in the event performance is required under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in a particular quarter or annual period. We are also subject to various other indemnification obligations issued in conjunction with divestitures, acquisitions and financing transactions whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications would not result in a material adverse effect on our business or financial position. While the likelihood is remote, performance under these indemnifications could materially affect net income in a particular quarter or annual period. Guaranty Funds Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. A state’s fund assesses its members based on their pro rata market share of written premiums in the state for the classes of insurance for which the insolvent insurer was engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. We accrue liabilities for guaranty fund assessments when an assessment is probable, can be reasonably estimated and when the event obligating us to pay has occurred. While we cannot predict the amount and timing of any future assessments, we have established reserves we believe are adequate for assessments relating to insurance companies that are currently subject to insolvency proceedings. As of December 31, 2022 and 2021, the liability balance for guaranty fund assessments, which is not discounted, was $20.6 million and $21.0 million, respectively, and was reported within other liabilities in the consolidated statements of financial position. As of both December 31, 2022 and 2021, $9.7 million related to premium tax offsets were included in premiums due and other receivables in the consolidated statements of financial position. Leases As a lessee, we lease office space, data processing equipment, office furniture and office equipment under various operating leases. We also lease buildings and hardware storage equipment under finance leases. Lease assets and liabilities are recognized at the commencement of a lease based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. Lease term may include options to extend or terminate the lease when it is reasonably certain we will exercise the option. Leases with an initial term of twelve months or less are not recorded on the consolidated statements of financial position. We recognize lease expense for leases on a straight-line basis over the lease term. Some of our lease agreements include payments for property taxes, insurance, utilities or common area maintenance, which are not based on an index or rate. These payments are recognized in net income in the period in which the obligation has occurred. We sublease certain office space to third parties, which are primarily operating leases. We record sublease income on a straight-line basis over the lease term. The lease assets and liabilities were as follows: December 31, 2022 2021 (in millions) Assets Operating lease assets (1) $ 116.9 $ 125.6 Finance lease assets (1) 82.4 94.2 Total lease assets $ 199.3 $ 219.8 Liabilities Operating lease liabilities (2) $ 112.2 $ 118.3 Finance lease liabilities (2) 83.0 94.8 Total lease liabilities $ 195.2 $ 213.1 (1) Operating and finance lease assets are primarily reported within property and equipment on the consolidated statements of financial position. (2) Operating and finance lease liabilities are reported within other liabilities on the consolidated statements of financial position. The lease cost was as follows: For the year ended December 31, 2022 2021 2020 (in millions) Finance lease cost (1) Amortization of right-of-use assets $ 34.0 $ 30.5 $ 20.4 Interest on lease liabilities 1.2 1.0 1.0 Operating lease cost (1) 34.6 37.6 30.5 Other lease cost (1) (2) 9.5 7.3 5.8 Sublease income (3) (1.5) (1.7) (1.6) Total lease cost $ 77.8 $ 74.7 $ 56.1 (1) Finance, operating and other lease costs are primarily included in operating expenses on the consolidated statements of operations. (2) Other lease cost primarily reflects variable and short-term lease costs. (3) Sublease income is included in fees and other revenues on the consolidated statements of operations. Payments for operating leases for the years ended December 31, 2022, 2021 and 2020, were $32.0 million, $36.0 million and $40.7 million, respectively. Payments for finance leases for the years ended December 31, 2022, 2021 and 2020, were $35.1 million, $31.4 million and $21.2 million, respectively. The following represents future payments due by period for lease obligations: Operating leases Finance leases Total (in millions) For the twelve months ending December 31: 2023 $ 25.6 $ 35.0 $ 60.6 2024 22.3 30.2 52.5 2025 18.8 14.6 33.4 2026 15.7 5.0 20.7 2027 11.6 0.4 12.0 2028 and thereafter 32.2 — 32.2 Total lease payments 126.2 85.2 211.4 Less: interest 14.0 2.2 16.2 Present value of lease liabilities $ 112.2 $ 83.0 $ 195.2 The weighted-average remaining lease term and weighted-average discount rates were as follows: For the year ended December 31, 2022 2021 2020 Weighted-average remaining lease term (in years): Operating leases 7.7 7.8 8.1 Finance leases 2.8 3.2 3.0 Weighted-average discount rate: Operating leases 2.5 % 2.2 % 2.4 % Finance leases 1.7 % 1.1 % 1.8 % |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 15. Stockholder’s Equity Other Comprehensive Income (Loss) For the year ended December 31, 2022 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ (12,980.4) $ 2,753.0 $ (10,227.4) Reclassification adjustment for losses included in net income (1) 333.3 (70.4) 262.9 Adjustments for assumed changes in amortization patterns 926.6 (194.6) 732.0 Adjustments for assumed changes in policyholder liabilities 486.1 (102.0) 384.1 Net unrealized losses on available-for-sale securities (11,234.4) 2,386.0 (8,848.4) Net unrealized losses on derivative instruments during the period (1.3) 0.3 (1.0) Reclassification adjustment for gains included in net income (2) (28.0) 5.8 (22.2) Adjustments for assumed changes in amortization patterns 7.3 (1.6) 5.7 Adjustments for assumed changes in policyholder liabilities (2.9) 0.6 (2.3) Net unrealized losses on derivative instruments (24.9) 5.1 (19.8) Unrecognized postretirement benefit obligation during the period (1.7) 0.4 (1.3) Amortization of amounts included in net periodic benefit cost (3) (0.9) 0.1 (0.8) Net unrecognized postretirement benefit obligation (2.6) 0.5 (2.1) Other comprehensive loss $ (11,261.9) $ 2,391.6 $ (8,870.3) For the year ended December 31, 2021 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ (2,313.3) $ 490.5 $ (1,822.8) Reclassification adjustment for losses included in net income (1) 20.5 (4.3) 16.2 Adjustments for assumed changes in amortization patterns 171.4 (36.0) 135.4 Adjustments for assumed changes in policyholder liabilities 1,288.6 (270.5) 1,018.1 Net unrealized losses on available-for-sale securities (832.8) 179.7 (653.1) Net unrealized gains on derivative instruments during the period 66.7 (14.0) 52.7 Reclassification adjustment for gains included in net income (2) (25.5) 5.4 (20.1) Adjustments for assumed changes in amortization patterns (0.2) — (0.2) Adjustments for assumed changes in policyholder liabilities 1.6 (0.4) 1.2 Net unrealized gains on derivative instruments 42.6 (9.0) 33.6 Unrecognized postretirement benefit obligation during the period 2.3 (0.5) 1.8 Amortization of amounts included in net periodic benefit cost (3) (0.4) 0.1 (0.3) Net unrecognized postretirement benefit obligation 1.9 (0.4) 1.5 Other comprehensive loss $ (788.3) $ 170.3 $ (618.0) For the year ended December 31, 2020 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 3,268.3 $ (690.8) $ 2,577.5 Reclassification adjustment for gains included in net income (1) (41.4) 9.4 (32.0) Adjustments for assumed changes in amortization patterns (179.0) 37.6 (141.4) Adjustments for assumed changes in policyholder liabilities (1,275.1) 267.7 (1,007.4) Net unrealized gains on available-for-sale securities 1,772.8 (376.1) 1,396.7 Net unrealized losses on derivative instruments during the period (28.1) 6.5 (21.6) Reclassification adjustment for gains included in net income (2) (27.1) 5.1 (22.0) Adjustments for assumed changes in amortization patterns 2.7 (0.5) 2.2 Adjustments for assumed changes in policyholder liabilities 7.8 (1.6) 6.2 Net unrealized losses on derivative instruments (44.7) 9.5 (35.2) Unrecognized postretirement benefit obligation during the period 5.7 (1.2) 4.5 Amortization of amounts included in net periodic benefit cost (3) 0.3 (0.1) 0.2 Net unrecognized postretirement benefit obligation 6.0 (1.3) 4.7 Other comprehensive income $ 1,734.1 $ (367.9) $ 1,366.2 (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations. (2) See Note 6, Derivative Financial Instruments, under the caption “Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations” for further details. (3) Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 13, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details. Accumulated Other Comprehensive Income (Loss) Noncredit Net unrealized component of Net unrealized Unrecognized Accumulated gains (losses) on impairment losses gains postretirement other available-for-sale on fixed maturities on derivative benefit comprehensive securities (1) available-for-sale instruments obligation income (loss) (in millions) Balances as of January 1, 2020 $ 2,602.9 $ (44.1) $ 53.7 $ 8.2 $ 2,620.7 Other comprehensive income during the period, net of adjustments 1,428.7 — (13.2) 4.5 1,420.0 Amounts reclassified from AOCI (32.0) — (22.0) 0.2 (53.8) Other comprehensive income 1,396.7 — (35.2) 4.7 1,366.2 Effects of implementation of accounting change related to credit losses, net (44.1) 44.1 — — — Balances as of December 31, 2020 3,955.5 — 18.5 12.9 3,986.9 Other comprehensive loss during the period, net of adjustments (669.3) — 53.7 1.8 (613.8) Amounts reclassified from AOCI 16.2 — (20.1) (0.3) (4.2) Other comprehensive loss (653.1) — 33.6 1.5 (618.0) Net assets transferred to affiliate due to change in benefit plan sponsorship — — — 2.0 2.0 Balances as of December 31, 2021 3,302.4 — 52.1 16.4 3,370.9 Other comprehensive loss during the period, net of adjustments (9,111.3) — 2.4 (1.3) (9,110.2) Amounts reclassified from AOCI 262.9 — (22.2) (0.8) 239.9 Other comprehensive loss (8,848.4) — (19.8) (2.1) (8,870.3) Adjustments for reinsurance (2) 124.4 — 7.4 — 131.8 Balances as of December 31, 2022 $ (5,421.6) $ — $ 39.7 $ 14.3 $ (5,367.6) (1) Net unrealized losses on available-for-sale debt securities for which an allowance for credit loss has been recorded were $1.8 million, $0.6 million and $ 2.6 million as of December 31, 2022, 2021 and 2020, respectively. (2) Reflects the January 1, 2022, balance associated with our ULSG business that was ceded to Talcott Life & Annuity Re. Dividend Limitations Under Iowa law, we may pay dividends or make other distributions only from the earned surplus arising from our business and must receive the prior approval of the Commissioner of Insurance of the State of Iowa (“the Commissioner”) to pay stockholder dividends or make any other distribution if such distribution would exceed certain statutory limitations. Iowa law gives the Commissioner discretion to disapprove requests for distributions in excess of these limitations. Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10% of our statutory policyholder surplus as of the previous year-end or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus. Based on this limitation and 2022 statutory results, we could pay approximately $430.1 million in ordinary stockholder dividends in 2023 without prior regulatory approval. However, because the dividend test is based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2023, some or all of such dividends may be extraordinary and require regulatory approval. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 16. Fair Value Measurements We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment contracts, are excluded from these fair value disclosure requirements. Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety considering factors specific to the asset or liability. ● Level 1 — Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 — Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3 — Fair values are based on at least one significant unobservable input for the asset or liability. Determination of Fair Value The following discussion describes the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis. The techniques utilized in estimating the fair value of financial instruments are reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below. Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate prices through an investment analyst review process, which includes validation through direct interaction with external sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review process, which includes validation through direct interaction with external sources and use of internal models or other relevant information. We did not make any significant changes to our valuation processes during 2022. Fixed Maturities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. When available, the fair value of fixed maturities is based on quoted prices of identical assets in active markets. These are reflected in Level 1 and primarily include U.S. Treasury bonds and actively traded redeemable corporate preferred securities. When quoted prices of identical assets in active markets are not available, our first priority is to obtain prices from third party pricing vendors. We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. Fixed maturities with validated prices from pricing services, which includes the majority of our public fixed maturities in all asset classes, are generally reflected in Level 2. Also included in Level 2 are corporate bonds when quoted market prices are not available, for which an internal model using substantially all observable inputs or a matrix pricing valuation approach is used. In the matrix approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is assigned a risk spread based on studies of observable public market data from the investment professionals assigned to specific security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation of an individual security within each pricing category may also be impacted by company specific factors. If we are unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to the asset class, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing relevant market information, to the extent available and where at least one significant unobservable input is utilized. These are reflected in Level 3 in the fair value hierarchy and can include fixed maturities across all asset classes. As of December 31, 2022, less than 4% of our total fixed maturities were Level 3 securities valued using internal pricing models. The primary inputs, by asset class, for valuations of the majority of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below. U.S. Government and Agencies/Non-U.S. Governments States and Political Subdivisions Corporate RMBS, CMBS, Collateralized Debt Obligations and Other Debt Obligations Equity Securities Equity securities include mutual funds, common stock and non-redeemable preferred stock. Fair values of equity securities are determined using quoted prices in active markets for identical assets when available, which are reflected in Level 1. When quoted prices are not available, we may utilize internal valuation methodologies appropriate for the specific asset that use observable inputs such as underlying share prices or the net asset value (“NAV”), which are reflected in Level 2. Fair values might also be determined using broker quotes or through the use of internal models or analysis that incorporate significant assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities, which are reflected in Level 3. Derivatives The fair values of exchange-traded derivatives are determined through quoted market prices, which are reflected in Level 1. Exchange-traded derivatives include futures that are settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of OTC cleared derivatives are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses utilize the secured overnight financing rate (“SOFR”) curve in their valuation. Variation margin associated with OTC cleared derivatives is settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of bilateral OTC derivative instruments are determined using either pricing valuation models that utilize market observable inputs or broker quotes. The majority of our bilateral OTC derivatives are valued with models that use market observable inputs, which are reflected in Level 2. Significant inputs include contractual terms, interest rates, currency exchange rates, credit spread curves, equity prices and volatilities. These valuation models consider projected discounted cash flows, relevant swap curves and appropriate implied volatilities. Certain bilateral OTC derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes based on models that do not reflect the result of market transactions, which are reflected in Level 3. Our non-cleared derivative contracts are generally documented under ISDA Master Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the SOFR curve to value our positions. Counterparty credit risk is routinely monitored to ensure our adjustment for nonperformance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral or variation margin equal to the difference in the daily market values of those contracts that eliminates the nonperformance risk on these trades. Interest Rate Contracts. Foreign Exchange Contracts. Equity Contracts. Credit Contracts. Other Investments Other investments reported at fair value include invested assets of consolidated sponsored investment funds, unconsolidated sponsored investment funds, other investment funds reported at fair value, equity method real estate investments for which the fair value option was elected and certain redeemable and nonredeemable preferred stock. The fair value of investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we would be able to initiate a transaction. Investments for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Investments that do not have a quoted price in an active market are reflected in Level 2. Equity method real estate investments for which the fair value option was elected were reflected in Level 3. The equity method real estate investments consisted of underlying real estate and debt. The real estate fair value was estimated using a discounted cash flow valuation model that utilized public real estate market data inputs such as transaction prices, market rents, vacancy levels, leasing absorption, market cap rates and discount rates. The debt fair value was estimated using a discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The last equity method real estate investment for which the fair value option was elected was sold in the third quarter of 2021. The fair value of certain redeemable and nonredeemable preferred stock is based on an internal model using unobservable inputs, which is reflected in Level 3. The redeemable preferred stock was sold in the third quarter of 2020. Cash Equivalents Certain cash equivalents are reported at fair value on a recurring basis and include money market instruments and other short-term investments with maturities of three months or less. Fair values of these cash equivalents may be determined using public quotations, when available, which are reflected in Level 1. When public quotations are not available, because of the highly liquid nature of these assets, carrying amounts may be used to approximate fair values, which are reflected in Level 2. Separate Account Assets Separate account assets include equity securities, debt securities, cash equivalents and derivative instruments, for which fair values are determined as previously described, and are reflected in Level 1, Level 2 and Level 3. Separate account assets also include commercial mortgage loans, for which the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit quality and maturity of the loans. The market clearing spreads vary based on mortgage type, weighted average life, rating and liquidity. These are reflected in Level 3. Finally, separate account assets include real estate, for which the fair value is estimated using discounted cash flow valuation models that utilize various public real estate market data inputs. In addition, each property is appraised annually by an independent appraiser. The real estate included in separate account assets is recorded net of related mortgage encumbrances for which the fair value is estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The real estate within the separate accounts is reflected in Level 3. Investment and Universal Life Contracts Certain universal life, annuity and other investment contracts include embedded derivatives that have been bifurcated from the host contract and are measured at fair value on a recurring basis, which are reflected in Level 3. The key assumptions for calculating the fair value of the embedded derivative liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility and correlations) and policyholder behavior assumptions (such as lapse, mortality, utilization and withdrawal patterns). Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The embedded derivative liabilities are valued using models that incorporate a spread reflecting our own creditworthiness. The assumption for our own nonperformance risk for investment contracts and any embedded derivatives bifurcated from certain universal life, annuity and investment contracts is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Funds Withheld Payable The funds withheld payable includes an embedded derivative that has been bifurcated from the host contract and is measured at fair value on a recurring basis, which is reflected in Level 3. The fair value is determined based on the change in the estimated fair value of the underlying funds withheld investments. The fair value of these assets is determined as previously described. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis were as follows: December 31, 2022 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (4) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,715.9 $ — $ 1,354.0 $ 361.9 $ — Non-U.S. governments 520.4 — — 520.4 — States and political subdivisions 6,168.3 — — 6,099.2 69.1 Corporate 33,184.8 — 26.6 31,589.9 1,568.3 Residential mortgage-backed pass-through securities 2,170.9 — — 2,170.9 — Commercial mortgage-backed securities 4,827.5 — — 4,824.1 3.4 Collateralized debt obligations (1) 4,560.2 — — 4,504.0 56.2 Other debt obligations 6,483.3 — — 6,015.5 467.8 Total fixed maturities, available-for-sale 59,631.3 — 1,380.6 56,085.9 2,164.8 Fixed maturities, trading 634.0 — 78.6 449.2 106.2 Equity securities 53.1 — 14.8 38.3 — Derivative assets (2) 256.6 — — 256.5 0.1 Other investments 82.8 81.4 — — 1.4 Cash equivalents 2,776.4 — 930.3 1,846.1 — Sub-total excluding separate account assets 63,434.2 81.4 2,404.3 58,676.0 2,272.5 Separate account assets 120,279.6 9,120.9 91,424.2 18,700.4 1,034.1 Total assets $ 183,713.8 $ 9,202.3 $ 93,828.5 $ 77,376.4 $ 3,306.6 Liabilities Investment and universal life contracts (3) $ 58.9 $ — $ — $ — $ 58.9 Funds withheld payable embedded derivative (3) 3,652.8 — — — 3,652.8 Derivative liabilities (2) (612.3) — — (608.2) (4.1) Total liabilities $ 3,099.4 $ — $ — $ (608.2) $ 3,707.6 Net assets $ 186,813.2 $ 9,202.3 $ 93,828.5 $ 76,768.2 $ 7,014.2 December 31, 2021 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (4) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,937.0 $ — $ 1,587.0 $ 350.0 $ — Non-U.S. governments 947.1 — — 947.1 — States and political subdivisions 9,216.4 — — 9,124.0 92.4 Corporate 42,965.1 — 41.5 42,089.3 834.3 Residential mortgage-backed pass-through securities 2,342.3 — — 2,342.3 — Commercial mortgage-backed securities 5,513.7 — — 5,494.5 19.2 Collateralized debt obligations (1) 3,533.5 — — 3,447.7 85.8 Other debt obligations 7,441.8 — — 7,399.7 42.1 Total fixed maturities, available-for-sale 73,896.9 — 1,628.5 71,194.6 1,073.8 Fixed maturities, trading 233.3 — 0.5 227.9 4.9 Equity securities 508.2 — 463.5 44.7 — Derivative assets (2) 326.2 — — 325.6 0.6 Other investments 94.1 92.7 — — 1.4 Cash equivalents 753.0 — — 753.0 — Sub-total excluding separate account assets 75,811.7 92.7 2,092.5 72,545.8 1,080.7 Separate account assets 147,529.0 8,942.9 114,735.5 22,904.6 946.0 Total assets $ 223,340.7 $ 9,035.6 $ 116,828.0 $ 95,450.4 $ 2,026.7 Liabilities Investment and universal life contracts (3) $ (320.9) $ — $ — $ — $ (320.9) Derivative liabilities (2) (142.3) — — (142.3) — Total liabilities $ (463.2) $ — $ — $ (142.3) $ (320.9) Net assets $ 222,877.5 $ 9,035.6 $ 116,828.0 $ 95,308.1 $ 1,705.8 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 6, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. (3) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative could be in either an asset or (liability) position. (4) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $7.8 million and $10.2 million as of December 31, 2022 and December 31, 2021, respectively. Separate account assets using the NAV practical expedient consist of hedge funds and a real estate fund with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these funds. Changes in Level 3 Fair Value Measurements The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows: For the year ended December 31, 2022 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included other and Transfers Transfers as of January 1, in net comprehensive settlements into out of December 31, 2022 income (2) income (3) (4) Level 3 Level 3 2022 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 92.4 $ — $ (23.5) $ (1.6) $ 12.0 $ (10.2) $ 69.1 Corporate 834.3 (4.8) (28.6) 626.3 176.3 (35.2) 1,568.3 Commercial mortgage-backed securities 19.2 — (1.0) (4.6) — (10.2) 3.4 Collateralized debt obligations 85.8 — (1.0) 151.8 — (180.4) 56.2 Other debt obligations 42.1 (0.3) (20.4) 474.2 — (27.8) 467.8 Total fixed maturities, available-for-sale 1,073.8 (5.1) (74.5) 1,246.1 188.3 (263.8) 2,164.8 Fixed maturities, trading 4.9 (0.6) — 72.9 29.0 — 106.2 Other investments 1.4 — — — — — 1.4 Separate account assets (1) 946.0 112.0 — (23.9) — — 1,034.1 Liabilities Investment and universal life contracts (320.9) 363.9 — 15.9 — — 58.9 Funds withheld payable embedded derivative — 3,652.8 — — — — 3,652.8 Derivatives Net derivative assets (liabilities) 0.6 (4.0) (0.3) — — (0.3) (4.0) For the year ended December 31, 2021 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included Included in issuances balance as of in net other and Transfers Transfers as of January 1, income comprehensive settlements into out of December 31, 2021 (2) income (3) (4) Level 3 Level 3 2021 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ 12.5 $ (0.4) $ 80.3 $ — $ 92.4 Corporate 290.8 (21.9) 7.8 381.8 175.8 — 834.3 Commercial mortgage-backed securities 13.2 (1.0) (0.4) 7.4 — — 19.2 Collateralized debt obligations 27.2 (2.0) 1.7 397.4 72.1 (410.6) 85.8 Other debt obligations 29.2 — 0.4 16.9 20.6 (25.0) 42.1 Total fixed maturities, available-for-sale 360.4 (24.9) 22.0 803.1 348.8 (435.6) 1,073.8 Fixed maturities, trading — — — 4.9 — — 4.9 Other investments 30.0 12.4 — (41.0) — — 1.4 Separate account assets (1) 8,893.2 313.8 — (8,261.0) — — 946.0 Liabilities Investment and universal life contracts (414.4) 67.0 — 26.5 — — (320.9) Derivatives Net derivative assets (liabilities) (5.1) (5.0) — 10.7 — — 0.6 For the year ended December 31, 2020 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included Included in issuances balance as of in net other and Transfers Transfers as of January 1, income comprehensive settlements into out of December 31, 2020 (2) income (3) (4) Level 3 Level 3 2020 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 81.7 $ (0.9) $ 5.2 $ 118.0 $ 342.0 $ (255.2) $ 290.8 Commercial mortgage-backed securities 12.9 (1.3) 1.4 (0.1) 0.3 — 13.2 Collateralized debt obligations 199.0 (2.3) (21.8) 182.5 — (330.2) 27.2 Other debt obligations 91.3 — (1.4) (37.9) 46.1 (68.9) 29.2 Total fixed maturities, available-for-sale 384.9 (4.5) (16.6) 262.5 388.4 (654.3) 360.4 Fixed maturities, trading 0.3 — — — — (0.3) — Other investments 34.2 6.3 — (10.5) — — 30.0 Separate account assets (1) 8,966.7 463.5 — (537.0) — — 8,893.2 Liabilities Investment and universal life contracts (151.2) (244.0) — (19.2) — — (414.4) Derivatives Net derivative assets (liabilities) 11.6 9.8 — — — (26.5) (5.1) (1) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. (2) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses) included in net income relating to positions still held were: For the year ended December 31, 2022 2021 2020 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ (1.3) $ (4.6) $ — Commercial mortgage-backed securities — (1.0) (1.2) Collateralized debt obligations — (2.0) (2.2) Total fixed maturities, available-for-sale (1.3) (7.6) (3.4) Fixed maturities, trading (0.6) — — Other investments — 12.5 5.3 Separate account assets 89.8 90.5 385.5 Liabilities Investment and universal life contracts 349.4 65.9 (251.1) Funds withheld payable embedded derivative 3,652.8 — — Derivatives Net derivative assets (liabilities) (4.0) — 9.9 (3) Changes in unrealized gains (losses) included in OCI relating to positions still held were : For the year ended December 31, 2022 2021 2020 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ (21.7) $ 12.5 $ — Corporate (19.8) (0.7) 11.9 Commercial mortgage-backed securities (0.5) (0.4) 1.5 Collateralized debt obligations — 1.9 (0.3) Total fixed maturities, available-for-sale (42.0) 13.3 13.1 Derivatives Net derivative assets (liabilities) (0.2) — — (4) Gross purchases, sales, issuances and settlements were: For the year ended December 31, 2022 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (1.6) $ (1.6) Corporate 817.3 (50.4) — (140.6) 626.3 Commercial mortgage-backed securities — (4.1) — (0.5) (4.6) Collateralized debt obligations 151.9 — — (0.1) 151.8 Other debt obligations 487.4 (8.2) — (5.0) 474.2 Total fixed maturities, available-for-sale 1,456.6 (62.7) — (147.8) 1,246.1 Fixed maturities, trading 106.9 (32.6) — (1.4) 72.9 Separate account assets (5) 11.8 (4.5) (50.0) 18.8 (23.9) Liabilities Investment and universal life contracts — — (7.4) 23.3 15.9 For the year ended December 31, 2021 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (0.4) $ (0.4) Corporate 626.6 (84.3) — (160.5) 381.8 Commercial mortgage-backed securities 7.7 — — (0.3) 7.4 Collateralized debt obligations 422.7 — — (25.3) 397.4 Other debt obligations 45.1 — — (28.2) 16.9 Total fixed maturities, available-for-sale 1,102.1 (84.3) — (214.7) 803.1 Fixed maturities, trading 4.9 — — — 4.9 Other investments — (41.0) — — (41.0) Separate account assets (5) 38.5 (8,206.2) (191.5) 98.2 (8,261.0) Liabilities Investment and universal life contracts — — (16.4) 42.9 26.5 Derivatives Net derivative assets (liabilities) — 10.7 — — 10.7 For the year ended December 31, 2020 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 169.2 $ (5.5) $ — $ (45.7) $ 118.0 Commercial mortgage-backed securities — — — (0.1) (0.1) Collateralized debt obligations 182.0 — — 0.5 182.5 Other debt obligations 14.3 — — (52.2) (37.9) Total fixed maturities, available-for-sale 365.5 (5.5) — (97.5) 262.5 Other investments 0.5 (11.0) — — (10.5) Separate account assets (5) 309.2 (656.7) (396.1) 206.6 (537.0) Liabilities Investment and universal life contracts — — (41.0) 21.8 (19.2) (5) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. Transfers Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels were as follows: For the year ended December 31, 2022 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ 12.0 $ — $ 10.2 Corporate — 176.3 — 35.2 Commercial mortgage-backed securities — — — 10.2 Collateralized debt obligations — — — 180.4 Other debt obligations — — — 27.8 Total fixed maturities, available-for-sale — 188.3 — 263.8 Fixed maturities, trading — 29.0 — — Derivatives Net derivative assets (liabilities) — — — 0.3 For the year ended December 31, 2021 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — 80.3 $ — $ — Corporate — 175.8 — — Collateralized debt obligations — 72.1 — 410.6 Other debt obligations — 20.6 — 25.0 Total fixed maturities, available-for-sale — 348.8 — 435.6 For the year ended December 31, 2020 Transfers out |
Statutory Insurance Financial I
Statutory Insurance Financial Information | 12 Months Ended |
Dec. 31, 2022 | |
Statutory Insurance Financial Information | |
Statutory Insurance Financial Information | 17. Statutory Insurance Financial Information We, the largest indirect subsidiary of PFG, prepare statutory financial statements in accordance with the accounting practices prescribed or permitted by the Insurance Division of the Department of Commerce of the State of Iowa (the “Iowa Insurance Division”). The Iowa Insurance Division recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company to determine its solvency under the Iowa Insurance Law. The National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures Manual has been adopted as a component of prescribed practices by the State of Iowa. The Commissioner has the right to permit other specific practices that deviate from prescribed practices. Statutory accounting practices differ from U.S. GAAP primarily due to charging policy acquisition costs to expense as incurred, establishing reserves using different actuarial assumptions, valuing investments on a different basis and not admitting certain assets, including certain net deferred income tax assets. We cede certain term, universal life and Closed Block life insurance statutory reserves to our affiliated reinsurance subsidiaries on a funds withheld coinsurance basis. The reserves are secured by cash, invested assets and financing provided by highly rated third parties. As of December 31, 2022 and 2021, our affiliated reinsurance subsidiaries assumed statutory reserves of $17,815.1 million and $10,085.7 million from us, respectively. In the states of Vermont and Delaware, the affiliated reinsurers had permitted and prescribed practices allowing for the admissibility of certain assets backing these reserves. As of December 31, 2022 and 2021, assets admitted under these practices totaled $3,748.4 million and $4,146.0 million, respectively. Additionally, one of our affiliated reinsurance subsidiaries in Vermont ceded $9,956.9 million of the ULSG reserves it assumed from us to Talcott Life & Annuity Re as of December 31, 2022. Life and health insurance companies are subject to certain risk-based capital (“RBC”) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life and health insurance company is to be determined based on the various risk factors related to it. As of December 31, 2022, we met the minimum RBC requirements. Our statutory net income (loss) and statutory capital and surplus were as follows: As of or for the year ended December 31, 2022 2021 2020 (in millions) Statutory net income (loss) $ (1,563.1) $ 864.0 $ 915.9 Statutory capital and surplus 4,304.4 5,375.2 5,682.4 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information | |
Segment Information | 18. Segment Information We provide financial products and services through the following segments: Retirement and Income Solutions and U.S. Insurance Solutions. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels. The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment is organized into Retirement and Income Solutions — Fee, which includes workplace savings and retirement solutions (formerly known as “full service accumulation”), trust and custody services and individual variable annuities; and Retirement and Income Solutions — Spread, which includes investment only, pension risk transfer, banking services and our exited retail fixed annuities business. The U.S. Insurance Solutions segment focuses on solutions for small-to-mid sized businesses and their employees. The segment is organized into Specialty Benefits insurance, which provides group dental and vision insurance, individual and group disability insurance, group life insurance, critical illness, accident, paid family and medical leave and non-medical fee-for-service claims administration; and Individual Life insurance, which includes universal life, variable universal life, indexed universal life, traditional life insurance and our exited ULSG business. The Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to other segments based on the nature of such items. Results of our exited group medical and long-term care insurance businesses are reported in this segment. Management uses segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax income (loss) from exited business, pre-tax other adjustments that management believes are not indicative of overall operating trends and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business. The pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings: ● Periodic settlements and accruals on derivative instruments not designated as hedging instruments, ● Certain market value adjustments of derivatives and embedded derivatives and ● Certain market value adjustments of derivative instruments used to economically hedge embedded derivatives. Pre-tax income (loss) from exited business includes amounts associated with our exited U.S. retail fixed annuity and ULSG businesses, including strategic review costs and impacts, amortization of reinsurance gain (loss), impacts to actuarial balances of reinsured businesses, net realized capital gains (losses) on funds withheld assets and the change in fair value of the funds withheld embedded derivative. The strategic review costs and impacts primarily include actuarial balance re-cohorting impacts resulting from the Strategic Review and costs to close the Reinsurance Transaction. Impacts to actuarial balances of reinsured business primarily include DAC amortization. Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain market value adjustments to fee revenues, ● Recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services, ● Related changes in the amortization pattern of DAC and related actuarial balances, ● Certain hedge accounting market value expense adjustments and ● Net realized capital gains (losses) distributed. Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding: ● Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact on: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain market value adjustments to fee revenues, ● Recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services. ● Pre-tax revenues from exited business, ● Pre-tax other adjustments and income taxes of equity method investments and ● Pre-tax other adjustments management believes are not indicative of overall operating trends. The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) OPEB cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of other postretirement benefit costs. The Corporate segment reflects the non-service components of other postretirement benefit costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions PFG took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes. The following tables summarize select financial information by segment, including operating revenues for our products and services, and reconcile segment totals to those reported in the consolidated financial statements: December 31, 2022 December 31, 2021 (in millions) Assets: Retirement and Income Solutions $ 202,518.1 $ 220,777.3 U.S. Insurance Solutions 39,907.5 32,344.7 Corporate 788.6 2,226.3 Total consolidated assets $ 243,214.2 $ 255,348.3 For the year ended December 31, 2022 2021 2020 (in millions) Operating revenues by segment: Retirement and Income Solutions: Retirement and Income Solutions — Fee $ 2,236.2 $ 2,141.7 $ 1,808.8 Retirement and Income Solutions — Spread 3,721.3 4,187.3 5,353.7 Total Retirement and Income Solutions (1) 5,957.5 6,329.0 7,162.5 U.S. Insurance Solutions: Specialty Benefits insurance 2,981.6 2,706.8 2,522.7 Individual Life insurance 1,325.9 2,047.1 1,945.8 Eliminations (0.3) (0.1) (0.1) Total U.S. Insurance Solutions 4,307.2 4,753.8 4,468.4 Corporate 60.5 67.4 37.9 Total segment operating revenues 10,325.2 11,150.2 11,668.8 Net realized capital losses, net of related revenue adjustments (46.9) (141.4) (3.9) Revenues from exited business (2) 4,447.2 — — Total revenues per consolidated statements of operations $ 14,725.5 $ 11,008.8 $ 11,664.9 Pre-tax operating earnings (losses) by segment: Retirement and Income Solutions $ 1,159.9 $ 1,292.4 $ 1,065.7 U.S. Insurance Solutions 526.8 461.8 232.1 Corporate (117.2) (40.7) (3.9) Total segment pre-tax operating earnings 1,569.5 1,713.5 1,293.9 Pre-tax net realized capital losses, as adjusted (3) (88.0) (51.0) (85.8) Pre-tax income from exited business (4) 4,297.1 — — Adjustments related to equity method investments and noncontrolling interest 62.2 24.3 19.4 Income before income taxes per consolidated statements of operations $ 5,840.8 $ 1,686.8 $ 1,227.5 (1) Reflects inter-segment revenues of $27.2 million, $18.9 million and $18.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. (2) Revenues from exited business is derived as follows: For the year ended December 31, 2022 2021 2020 (in millions) Revenues from exited business: Change in fair value of funds withheld embedded derivative $ 3,652.8 $ — $ — Net realized capital gains on funds withheld assets 749.4 — — Strategic review costs and impacts 32.4 — — Amortization of reinsurance gain 12.6 — — Total revenues from exited business $ 4,447.2 $ — $ — (3) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the year ended December 31, 2022 2021 2020 (in millions) Net realized capital gains (losses): Net realized capital gains (losses) $ (1.2) $ (18.5) $ 105.6 Derivative and hedging-related revenue adjustments (41.7) (119.4) (119.3) Market value adjustments to fee revenues 0.7 (0.6) (1.6) Recognition of front-end fee revenue (4.7) (2.9) 11.4 Net realized capital losses, net of related revenue adjustments (46.9) (141.4) (3.9) Amortization of deferred acquisition costs and other actuarial balances 2.5 11.1 (26.8) Capital (gains) losses distributed 0.5 (0.5) (0.1) Market value adjustments of embedded derivatives (44.1) 79.8 (55.0) Pre-tax net realized capital losses, as adjusted (a) $ (88.0) $ (51.0) $ (85.8) (a) As adjusted before noncontrolling interest capital gains (losses). (4) Pre-tax income (loss) from exited business included: For the year ended December 31, 2022 2021 2020 (in millions) Pre-tax income from exited business: Change in fair value of funds withheld embedded derivative $ 3,652.8 $ — $ — Net realized capital gains on funds withheld assets 749.4 — — Strategic review costs and impacts (57.1) — — Amortization of reinsurance loss (82.5) — — Impacts to actuarial balances of reinsured business 34.5 — — Total pre-tax income from exited business $ 4,297.1 $ — $ — The following is a summary of income tax expense (benefit) allocated to our segments for purposes of determining non-GAAP operating earnings. Segment income taxes are reconciled to income taxes reported on our consolidated statements of operations. For the year ended December 31, 2022 2021 2020 (in millions) Income tax expense (benefit) by segment: Retirement and Income Solutions $ 138.8 $ 170.4 $ 133.3 U.S. Insurance Solutions 100.7 90.5 46.3 Corporate (8.2) (14.3) (6.3) Total segment income taxes from operating earnings 231.3 246.6 173.3 Tax benefit related to net realized capital losses, as adjusted (21.7) (13.5) (13.2) Tax expense related to exited business (1) 908.0 — — Certain adjustments related to equity method investments — 0.1 — Total income taxes per consolidated statements of operations $ 1,117.6 $ 233.2 $ 160.1 (1) Income tax expense related to exited business is derived as follows: For the year ended December 31, 2022 2021 2020 (in millions) Income tax expense related to exited business: Change in fair value of funds withheld embedded derivative $ 767.1 $ — $ — Net realized capital gains on funds withheld assets 157.4 — — Strategic review costs and impacts (6.3) — — Amortization of reinsurance gain (17.4) — — Impacts to actuarial balances of reinsured business 7.2 — — Total income tax expense related to exited business $ 908.0 $ — $ — The following is a summary of depreciation and amortization expense allocated to our segments for purposes of determining pre-tax operating earnings. Segment depreciation and amortization is reconciled to depreciation and amortization included in operating expenses in our consolidated statements of operations. For the year ended December 31, 2022 2021 2020 (in millions) Depreciation and amortization expense by segment: Retirement and Income Solutions $ 58.0 $ 53.0 $ 38.8 U.S. Insurance Solutions 18.9 19.3 20.2 Corporate 5.2 9.8 4.4 Total segment depreciation and amortization expense included in pre-tax operating earnings 82.1 82.1 63.4 Depreciation and amortization expense related to exited business 26.9 — — Total depreciation and amortization expense included in our consolidated statements of operations $ 109.0 $ 82.1 $ 63.4 |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenues from Contracts with Customers | |
Revenues from Contracts with Customers | 19. Revenues from Contracts with Customers The following tables summarize disaggregation of revenues from contracts with customers, including select financial information by segment, and reconcile totals to those reported in the consolidated financial statements. Revenues from contracts with customers are included in fees and other revenues on the consolidated statements of operations. For the year ended December 31, 2022 2021 2020 (in millions) Revenue from contracts with customers by segment: Retirement and Income Solutions: Retirement and Income Solutions — Fee $ 522.2 $ 399.3 $ 250.5 Retirement and Income Solutions — Spread 11.4 9.9 8.6 Total Retirement and Income Solutions 533.6 409.2 259.1 U.S. Insurance Solutions: Specialty Benefits insurance 12.2 12.1 12.1 Individual Life insurance 64.4 60.1 48.4 Eliminations — (0.1) (0.1) Total U.S. Insurance Solutions 76.6 72.1 60.4 Corporate (0.8) (1.0) (0.8) Total segment revenue from contracts with customers 609.4 480.3 318.7 Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) 1,557.5 2,202.8 2,025.1 Pre-tax other adjustments (2) 41.0 (3.5) 9.8 Total fees and other revenues per consolidated statements of operations $ 2,207.9 $ 2,679.6 $ 2,353.6 (1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards. (2) Pre-tax other adjustments relate to revenues from exited business and the recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and certain market value adjustments to fee revenues. Retirement and Income Solutions - Fee Retirement and Income Solutions - Fee offers service and trust agreements for defined contribution retirement plans, including 401(k) plans, 403(b) plans, and employee stock ownership plans. The investment components of these service agreements are in the form of mutual fund offerings. In addition, plan sponsor retirement plan trust and custody services are also available through our trust company. Furthermore, services and trust agreements are offered to non-retirement customers including insurance companies, endowments and other financial institutions. Fees and other revenues are earned for administrative activities performed for the defined contribution retirement plans including recordkeeping and reporting as well as trust and custody, asset management and investment services. Fees and other revenues are earned for administrative activities performed for non-retirement plan customers including trust and custody services, defined benefit administration and investment management activities. The majority of these activities are performed daily over time. Fee-for-service transactions are also provided upon client request. These services are considered distinct or grouped into a bundle until a distinct performance obligation is identified. Some performance obligations are considered a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer. Fees and other revenues can be based on a fixed contractual rate for these services or can be variable based upon contractual rates applied to the market value of the client’s investment portfolio each day. If the consideration for this series of performance obligations is based on daily market value, it is considered variable each day as the services are performed over time. The consideration becomes unconstrained and thus recognized as revenue for each day’s series of distinct services once the market value of the clients’ investment portfolios is determined at market close or carried over at the end of the day for days when the market is closed. Additionally, fixed fees and other revenues are recognized point-in-time as fee-for-service transactions upon completion. The types of revenues from contracts with customers were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Administrative service fee revenue $ 519.2 $ 395.9 $ 248.4 Other fee revenue 3.0 3.4 2.1 Total revenues from contracts with customers 522.2 399.3 250.5 Fees and other revenues not within the scope of revenue recognition guidance 1,187.0 1,299.6 1,130.4 Total fees and other revenues 1,709.2 1,698.9 1,380.9 Premiums and other considerations — 0.5 4.9 Net investment income 527.0 442.3 423.0 Total operating revenues $ 2,236.2 $ 2,141.7 $ 1,808.8 Retirement and Income Solutions - Spread Retirement and Income Solutions — Spread offers individual retirement accounts (“IRAs”) through Principal Bank, which are primarily funded by retirement savings rolled over from qualified retirement plans. The IRAs are held in savings accounts, money market accounts and certificates of deposit. Revenues are earned through fees as the performance of establishing and maintaining IRA accounts is completed. Fee-for-service transactions are also provided upon client request. The establishment fees and annual maintenance fees are accrued into earnings over a period of time using the average account life. Upfront and recurring bank fees are related to performance obligations that have the same pattern of transfer to the customer and are recognized in income over time with control transferred to the customers utilizing the output method. These fees are based on a fixed contractual rate. Fixed fees and other revenues are also recognized point-in-time as fee-for-service transactions upon completion. Additionally, commission income is earned on advisory services provided to customers. The revenues are earned over time as the service is performed based upon contractual rates applied to the market value of the clients’ portfolios. The types of revenues from contracts with customers were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Deposit account fee revenue $ 10.2 $ 9.2 $ 8.4 Commission income 1.2 0.7 0.2 Total revenues from contracts with customers 11.4 9.9 8.6 Fees and other revenues not within the scope of revenue recognition guidance 2.9 7.9 9.5 Total fees and other revenues 14.3 17.8 18.1 Premiums and other considerations 1,959.7 1,883.1 3,216.0 Net investment income 1,747.3 2,286.4 2,119.6 Total operating revenues $ 3,721.3 $ 4,187.3 $ 5,353.7 U.S. Insurance Solutions Fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for fee-for-service products, nonqualified benefit plans, separate accounts and dental networks. Services within contracts are not distinct on their own; however, we combine the services into a distinct bundle and account for the bundle as a single performance obligation, which is satisfied over time utilizing the output method as services are rendered. The transaction price corresponds with the performance completed to date, for which the value is recognized as revenue during the period. Variability of consideration is resolved at the end of each period and payments are due when billed. Commission income is earned through sponsored brokerage services. Performance obligations are satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule is recognized as revenue. The types of revenues from contracts with customers were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Specialty Benefits insurance: Administrative service fees $ 12.2 $ 12.1 $ 12.1 Total revenues from contracts with customers 12.2 12.1 12.1 Fees and other revenues not within the scope of revenue recognition guidance 18.5 19.0 19.2 Total fees and other revenues 30.7 31.1 31.3 Premiums and other considerations 2,771.1 2,496.5 2,330.8 Net investment income 179.8 179.2 160.6 Total operating revenues $ 2,981.6 $ 2,706.8 $ 2,522.7 For the year ended December 31, 2022 2021 2020 (in millions) Individual Life insurance: Administrative service fees $ 26.9 $ 26.2 $ 21.6 Commission income 37.5 33.9 26.8 Total revenues from contracts with customers 64.4 60.1 48.4 Fees and other revenues not within the scope of revenue recognition guidance 333.2 858.8 849.5 Total fees and other revenues 397.6 918.9 897.9 Premiums and other considerations 535.9 333.9 329.1 Net investment income 392.4 794.3 718.8 Total operating revenues $ 1,325.9 $ 2,047.1 $ 1,945.8 Corporate The Corporate segment includes inter-segment eliminations of fees and other revenues. The types of revenues from contracts with customers were as follows: For the year ended December 31, 2022 2021 2020 (in millions) Eliminations $ (0.8) $ (1.0) $ (0.8) Total revenues from contracts with customers (0.8) (1.0) (0.8) Fees and other revenues not within the scope of revenue recognition guidance 15.9 17.5 16.5 Total fees and other revenues 15.1 16.5 15.7 Premiums and other considerations (2.1) — — Net investment income 47.5 50.9 22.2 Total operating revenues $ 60.5 $ 67.4 $ 37.9 Contract Costs Sales compensation and other incremental costs of obtaining a contract are capitalized and amortized over the period of contract benefit if the costs are expected to be recovered. The contract cost asset, which is included in other assets on the consolidated statements of financial position, was $43.0 million and $41.8 million as of December 31, 2022 and 2021, respectively. We apply the practical expedient for certain costs where we recognize the incremental costs of obtaining these contracts as an expense when incurred if the amortization period of the assets is one year or less. These costs, along with costs that are not deferrable, are included in operating expenses on the consolidated statements of operations. Deferred contract costs consist primarily of commissions and variable compensation. We amortize capitalized contract costs on a straight-line basis over the expected contract life, reflecting lapses as they are incurred. Deferred contract costs are subject to impairment testing on an annual basis, or when a triggering event occurs that could warrant an impairment. To the extent future revenues less future maintenance expenses are not adequate to cover the asset balance, an impairment is recognized. For the years ended December 31, 2022, 2021 and 2020, $7.6 million, $7.4 million and $7.2 million, respectively, of amortization expense was recorded in operating expenses on the consolidated statements of operations and no impairment loss was recognized in relation to the costs capitalized. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | 20. Stock-Based Compensation Plans As of December 31, 2022, our ultimate parent, PFG, sponsored the 2021 Stock Incentive Plan, the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the Amended and Restated 2010 Stock Incentive Plan and the Stock Incentive Plan (“Stock-Based Compensation Plans”), which resulted in expense to us. No new grants will be made under the 2014 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan or the Stock Incentive Plan. Under the terms of the 2021 Stock Incentive Plan grants may be nonqualified stock options, incentive stock options qualifying under Section 422 of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units or other stock-based awards. To date, PFG has not granted any incentive stock options, restricted stock or performance units under any plans. As part of our fair value process, for each stock-based compensation plan, we assess the impact of material nonpublic information on PFG’s share price or expected volatility, as applicable, at the time of grant. No awards in 2022 required a fair value adjustment. For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against net income for stock-based awards granted under the Stock-Based Compensation Plans was as follows: For the year ended December 31, 2022 2021 2020 (in millions) Compensation cost $ 22.2 $ 25.2 $ 24.4 Related income tax benefit 4.6 4.3 4.0 Capitalized as part of an asset 1.2 1.4 1.5 Nonqualified Stock Options No nonqualified stock options were granted to employees during 2022. Previously, nonqualified stock options were granted to certain employees under the 2014 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan and the Stock Incentive Plan. Options outstanding were granted at an exercise price equal to the fair market value of PFG common stock on the date of grant and expire ten years after the grant date. These options have graded vesting over a three-year period, except in the case of specific types of terminations. The fair value of stock options is estimated using the Black-Scholes option pricing model. The following is a summary of the assumptions used in this model for the stock options granted during the period: For the year ended December 31, Options 2022 2021 2020 Expected volatility — % 34.2 % 25.7 % Expected term (in years) — 7.0 7.0 Risk-free interest rate — % 1.2 % 1.3 % Expected dividend yield — % 3.82 % 4.33 % Weighted average estimated fair value $ — $ 15.67 $ 9.64 We determine expected volatility based on a combination of historical volatility using daily price observations and implied volatility from traded options on PFG common stock. We believe that incorporating both historical and implied volatility into our expected volatility assumption calculation better reflects market expectations. The expected term represents the period of time that options granted are expected to be outstanding. We determine expected term using historical exercise and employee termination data. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. The dividend yield is based on historical dividend distributions compared to the closing price of PFG common shares on the grant date. As of December 31, 2022, we had $0.8 million of total unrecognized compensation cost related to nonvested stock options. The cost is expected to be recognized over a weighted-average service period of approximately 1.0 years. Performance Share Awards Performance share awards were granted to certain employees under the 2021 Stock Incentive Plan, 2014 Stock Incentive Plan and the Amended and Restated 2010 Stock Incentive Plan. The performance share awards are treated as an equity award and are paid in shares. Effective in 2022, we added a relative total shareholder return modifier to the performance share awards under which the number of shares ultimately granted is also impacted by our actual shareholder return relative to PFG’s S&P 500 Financial Sector Index peer group. The fair value of performance share awards is determined using a Monte Carlo simulation model. Whether the performance shares are earned depends upon the participant’s continued employment through the performance period (except in the case of specific types of terminations) and PFG’s performance against three-year goals set at the beginning of the performance period. Performance goals based on various PFG factors must be achieved for any of the performance shares to be earned. If the performance requirements are not met, the performance shares will be forfeited, no compensation cost will be recognized and any previously recognized compensation cost will be reversed. These awards have no maximum contractual term. Dividend equivalents are credited on performance shares outstanding as of the record date. These dividend equivalents are only paid on the shares released. The weighted-average grant-date fair value of performance share awards granted during 2022, 2021 and 2020 was $66.62, $58.68 and $51.73, respectively. As of December 31, 2022, we had $8.4 million of total unrecognized compensation cost related to nonvested performance share awards granted. The cost is expected to be recognized over a weighted-average service period of approximately 1.8 years. Restricted Stock Units Restricted stock units were granted to certain employees and agents under the 2021 Stock Incentive Plan and the 2014 Stock Incentive Plan. Restricted stock units are treated as equity awards and are paid in shares. Under these plans, awards have graded or cliff vesting over a three-year service period. When service for PFG ceases (except in the case of specific types of terminations), all vesting stops and unvested units are forfeited. These awards have no maximum contractual term. Dividend equivalents are credited on restricted stock units outstanding as of the record date. These dividend equivalents are only paid on the shares released. The fair value of restricted stock units is determined based on the closing stock price of PFG common shares on the grant date. The weighted-average grant-date fair value of restricted stock units granted during 2022, 2021 and 2020 was $69.80, $59.38 and $49.33, respectively. As of December 31, 2022, we had $32.8 million of total unrecognized compensation cost related to nonvested restricted stock unit awards granted under these plans. The cost is expected to be recognized over a weighted-average period of approximately 1.8 years. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan, participating employees have the opportunity to purchase shares of PFG common stock on a quarterly basis. Employees may purchase up to $25,000 in PFG stock value annually. Employees may purchase shares of our common stock at a price equal to 90% of the shares’ fair market value as of the end of the purchase period. Prior to 2022 employees were able to purchase shares of our common stock at a price equal to 85% of the shares’ fair market value as of the beginning or end of the purchase period, whichever was lower. We recognize compensation expense for the fair value of the discount granted to employees participating in the employee stock purchase plan in the period of grant. Shares of the Employee Stock Purchase Plan are treated as an equity award. The weighted-average fair value of the discount on the stock purchased was $7.31, $15.64 and $11.33 during 2022, 2021 and 2020, respectively. |
Schedule I - Summary of Investm
Schedule I - Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
Schedule I - Summary of Investments - Other Than Investments in Related Parties | |
Schedule I - Summary of Investments - Other Than Investments in Related Parties | Schedule I — Summary of Investments — Other Than Investments in Related Parties December 31, 2022 Amount as shown in the consolidated statement of Fair financial Type of Investment Cost value position (in millions) Fixed maturities, available-for-sale: U.S Treasury securities and obligations of U.S government corporations and agencies $ 1,964.6 $ 1,715.9 $ 1,715.9 States, municipalities and political subdivisions 7,280.1 6,168.3 6,168.3 Foreign governments 565.3 520.4 520.4 Public utilities 4,637.7 3,983.8 3,983.8 Redeemable preferred stock 157.5 128.1 128.1 All other corporate bonds 32,700.2 29,072.9 29,072.9 Residential mortgage-backed securities 2,362.1 2,170.9 2,170.9 Commercial mortgage-backed securities 5,529.7 4,827.5 4,827.5 Collateralized debt obligations 4,698.9 4,560.2 4,560.2 Other debt obligations 7,207.8 6,483.3 6,483.3 Total fixed maturities, available-for-sale 67,103.9 59,631.3 59,631.3 Fixed maturities, trading 634.0 634.0 634.0 Equity securities: Banks, trust and insurance companies 38.2 38.2 38.2 Non-redeemable preferred stock 14.9 14.9 14.9 Total equity securities 53.1 53.1 53.1 Mortgage loans 19,722.4 XXXX 19,722.4 Real estate, net: Other real estate 2,237.4 XXXX 2,237.4 Policy loans 770.2 XXXX 770.2 Other investments 3,261.3 XXXX 3,261.3 Total investments $ 93,782.3 XXXX $ 86,309.7 |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2022 | |
Schedule III - Supplementary Insurance Information | |
Schedule III - Supplementary Insurance Information | Schedule III — Supplementary Insurance Information As of December 31, 2022 and 2021 and for each of the years ended December 31, 2022, 2021 and 2020 Contractholder Deferred Future policy and other acquisition benefits and policyholder Segment costs claims funds (in millions) 2022: Retirement and Income Solutions $ 1,271.5 $ 28,322.9 $ 35,262.8 U.S. Insurance Solutions 3,407.9 12,128.2 7,943.3 Corporate — 157.9 2.1 Total $ 4,679.4 $ 40,609.0 $ 43,208.2 2021: Retirement and Income Solutions $ 819.4 $ 27,716.5 $ 35,941.4 U.S. Insurance Solutions 2,929.7 12,262.1 8,039.6 Corporate — 163.0 2.3 Total $ 3,749.1 $ 40,141.6 $ 43,983.3 Schedule III — Supplementary Insurance Information - (continued) As of December 31, 2022 and 2021 and for each of the years ended December 31, 2022, 2021 and 2020 Amortization of Premiums and Net Benefits, claims deferred Other other investment and settlement acquisition operating Segment considerations income (1) expenses costs expenses (1) (in millions) 2022: Retirement and Income Solutions $ 1,959.7 $ 2,252.3 $ 3,228.6 $ 134.2 $ 1,519.6 U.S. Insurance Solutions 3,306.7 560.2 2,421.1 249.2 1,019.0 Corporate (2.1) 39.8 1.0 — 217.2 Total $ 5,264.3 $ 2,852.3 $ 5,650.7 $ 383.4 $ 2,755.8 2021: Retirement and Income Solutions $ 1,883.6 $ 2,674.4 $ 3,450.1 $ 116.8 $ 1,383.0 U.S. Insurance Solutions 2,830.4 907.9 3,031.7 167.4 994.4 Corporate — 51.4 0.8 — 83.0 Total $ 4,714.0 $ 3,633.7 $ 6,482.6 $ 284.2 $ 2,460.4 2020: Retirement and Income Solutions $ 3,221.0 $ 2,457.6 $ 4,899.3 $ 82.2 $ 1,138.3 U.S. Insurance Solutions 2,659.8 842.0 2,937.2 304.7 932.9 Corporate — 25.3 1.0 — 21.6 Total $ 5,880.8 $ 3,324.9 $ 7,837.5 $ 386.9 $ 2,092.8 (1) Allocations of net investment income and certain operating expenses are based on a number of assumptions and estimates, and reported operating results would change by segment if different methods were applied. |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
Schedule IV - Reinsurance | |
Schedule IV - Reinsurance | Schedule IV — Reinsurance As of December 31, 2022, 2021 and 2020 and for each of the years then ended Percentage Ceded to Assumed of amount Gross other from other assumed amount companies companies Net amount to net ($ in millions) 2022: Life insurance in force $ 317,116.8 $ 222,711.4 $ 374,462.3 $ 468,867.7 79.9 % Premiums: Life insurance and annuities $ 2,824.1 $ 297.9 $ 503.5 $ 3,029.7 16.6 % Accident and health insurance 2,392.4 157.8 — 2,234.6 — % Total $ 5,216.5 $ 455.7 $ 503.5 $ 5,264.3 9.6 % 2021: Life insurance in force (1) $ 299,318.1 $ 195,641.7 $ 367,764.8 $ 471,441.1 78.0 % Premiums: Life insurance and annuities $ 2,693.4 $ 494.3 $ 494.3 $ 2,693.4 18.4 % Accident and health insurance 2,176.3 155.7 — 2,020.6 — % Total $ 4,869.7 $ 650.0 $ 494.3 $ 4,714.0 10.5 % 2020: Life insurance in force (1) $ 294,161.3 $ 183,067.9 $ 331,394.6 $ 442,488.0 74.9 % Premiums: Life insurance and annuities $ 4,013.8 $ 452.5 $ 439.5 $ 4,000.8 11.0 % Accident and health insurance 2,036.6 156.6 — 1,880.0 — % Total $ 6,050.4 $ 609.1 $ 439.5 $ 5,880.8 7.5 % (1) We identified immaterial corrections related to life insurance in force amounts reported in 2021 and 2020, which were updated in the 2022 Schedule IV above. |
Nature of Operations and Sign_2
Nature of Operations and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Nature of Operations and Significant Accounting Policies | |
Basis of Presentation - Policy | Basis of Presentation The accompanying consolidated financial statements include the accounts of PLIC and all other entities in which we directly or indirectly have a controlling financial interest as well as those variable interest entities (“VIEs”) in which we are the primary beneficiary. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All significant intercompany accounts and transactions have been eliminated. Uncertainties, including those associated with the novel coronavirus (“COVID-19”), may impact our business, results of operations, financial condition and liquidity. Our use of estimates and assumptions affect amounts reported and disclosed and includes, but is not limited to, the fair value of investments in the absence of quoted market values, investment impairments and valuation allowances, the fair value of derivatives, funds withheld embedded derivative, deferred acquisition costs (“DAC”) and other actuarial balances, the liability for future policy benefits and claims, the value of other postretirement benefits and accounting for income taxes and the valuation of deferred tax assets. Our estimates and assumptions could change in the future. Our results of operations and financial condition may also be impacted by other uncertainties including evolving regulatory, legislative and standard-setter accounting interpretations and guidance. During the second quarter of 2022, we closed a coinsurance with funds withheld reinsurance transaction with Talcott Life &Annuity Re, Ltd. (“Talcott Life & Annuity Re”), a limited liability company organized under the laws of the Cayman Islands and an affiliate of Talcott Resolution Life, Inc., a subsidiary of Sixth Street, pursuant to which we ceded our in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee (“ULSG”) blocks of business (the “Reinsurance Transaction”). The economics of the Reinsurance Transaction were effective as of January 1, 2022. As such, we recorded impacts for January through June 2022 in our second quarter 2022 results. See Note 10, Reinsurance, for further details. Reclassifications have been made to prior periods to report the reinsurance recoverable and deposit receivable on the consolidated statements of financial position. Those amounts were previously reported in premiums due and other receivables. Certain reclassifications have been made to prior period consolidated statements of cash flows to conform to the December 31, 2022, presentation. This included presenting separate line items within operating activities for amortization of reinsurance (gain) loss and funds withheld, net of reinsurance recoverable and deposit receivable, among other reclassifications. We evaluated subsequent events through March 30, 2023, which was the date our consolidated financial statements were issued. |
Consolidation - Policy | Consolidation We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a VIE or a voting interest entity (“VOE”). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity’s most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 4, Variable Interest Entities. If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method. |
Recent Accounting Pronouncements - Policy | Recent Accounting Pronouncements Description Date of adoption Effect on our consolidated financial statements or other significant matters Standards not yet adopted: Targeted improvements to the accounting for long-duration insurance contracts This authoritative guidance updates certain requirements in the accounting for long-duration insurance and annuity contracts. 1. The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts will be reviewed and updated periodically. Cash flow assumptions will be reviewed at least annually and updated when necessary with the impact recognized in net income. Discount rate assumptions are prescribed as the current upper-medium grade (low credit risk) fixed income instrument yield and will be updated quarterly with the impact recognized in other comprehensive income (“OCI”). 2. Market risk benefits, which are contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other-than-nominal capital market risk, are measured at fair value. The periodic change in fair value is recognized in net income with the exception of the periodic change in fair value related to our own nonperformance risk, which is recognized in OCI. 3. DAC and other actuarial balances for all insurance and annuity contracts will be amortized on a constant basis over the expected term of the related contracts. 4. Additional disclosures are required, including disaggregated rollforwards of significant insurance liabilities and other account balances as well as disclosures about significant inputs, judgments, assumptions and methods used in measurement. The guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC will be applied on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented (January 1, 2021, also referred to as the transition date) based on their existing carrying amounts. An entity may elect to apply the changes retrospectively. The guidance for market risk benefits will be applied retrospectively. January 1, 2023 We created a governance framework and a plan to support implementation of the standard. Our implementation and evaluation process included, but was not limited to the following: ● identifying and documenting contracts and contract features in scope of the guidance; ● identifying the actuarial models, systems and processes to be updated; ● evaluating and selecting our systems solutions for implementing the new guidance; ● building models and evaluating preliminary output as models are developed; ● evaluating and finalizing our key accounting policies; ● assessing the impact to our chart of accounts; ● developing format and content of new disclosures; ● conducting financial dry runs using model output and updated chart of accounts; ● evaluating transition requirements and impacts and ● establishing and documenting appropriate internal controls. This guidance will change how we account for many of our insurance and annuity products. The transition date impact from adoption of this standard is a decrease to our total stockholders’ equity of approximately $4.2 billion, of which approximately $4.1 billion impacted AOCI and approximately $0.1 billion impacted retained earnings. The most significant driver of the AOCI adjustment is due to the requirement to update the discount rate assumption to reflect an upper-medium grade fixed-income instrument, which will generally be equivalent to a single-A interest rate matched to the duration characteristics of our insurance liabilities. The most significant driver of the retained earnings adjustment is the valuation of contracts as market risk benefits. Description Date of adoption Effect on our consolidated financial statements or other significant matters Troubled debt restructurings and vintage disclosures This authoritative guidance eliminates the accounting requirements for troubled debt restructurings (“TDRs”) by creditors and enhances the disclosure requirements for certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. The update requires entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The amendments in this update should be applied prospectively, except for the transition method related to the recognition and measurement of troubled debt restructurings, for which an entity has the option to apply a modified retrospective transition method. Early adoption is permitted. January 1, 2023 The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. Targeted improvements to accounting for hedging activities — portfolio layer method This authoritative guidance intends to further align the economics of a company’s risk management activities in its financial statements with hedge accounting requirements. The guidance expands the current single-layer method to allow multiple hedge layers of a single closed portfolio. Non-prepayable assets can also be included in the same portfolio. This guidance also clarifies the current guidance on accounting for fair value basis adjustments applicable to both a single hedged layer and multiple hedged layers. Upon adoption, the application of these hedge strategies would be applied prospectively. Early adoption is permitted. January 1, 2023 This guidance will not have a material impact on our consolidated financial statements. Standards adopted: Simplifying the accounting for income taxes This authoritative guidance simplifies the accounting for income taxes by removing certain exceptions, including exceptions related to the incremental approach for intraperiod tax allocation, calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. Also, the guidance clarifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill and enacted changes in tax laws or rates. It specifies that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, although an entity may elect to do so. The guidance will be applied based on varying transition methods defined by amendment. Early adoption is permitted. January 1, 2021 This guidance did not have a material impact on our consolidated financial statements. Facilitation of the effects of reference rate reform on financial reporting This authoritative guidance provides optional expedients and exceptions for contracts and hedging relationships affected by reference rate reform. An entity may elect not to apply certain modification accounting requirements to contracts affected by reference rate reform and instead account for the modified contract as a continuation of the existing contract. Also, an entity may apply optional expedients to continue hedge accounting for hedging relationships in which the critical terms change due to reference rate reform. This guidance eases the financial reporting impacts of reference rate reform on contracts and hedging relationships and is effective until December 31, 2022. A subsequent amendment issued in December 2022 extended the relief date from December 31, 2022, to December 31, 2024, and was effective upon issuance. March 12, 2020 We adopted the guidance upon issuance prospectively and elected the applicable optional expedients and exceptions for contracts and hedging relationships impacted by reference rate reform through December 31, 2024. The guidance did not have an impact on our consolidated financial statements upon adoption. Description Date of adoption Effect on our consolidated financial statements or other significant matters Goodwill impairment testing This authoritative guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 (which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill) from the goodwill impairment test. A goodwill impairment loss will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. January 1, 2020 This guidance reduced complexity and costs associated with performing a Step 2 test, should one be needed in the future. This guidance did not have a material impact on our consolidated financial statements at adoption. Credit losses This authoritative guidance requires entities to use a current expected credit loss (“CECL”) model to measure impairment for most financial assets that are not recorded at fair value through net income. Under the CECL model, an entity will estimate lifetime expected credit losses considering available relevant information about historical events, current conditions and reasonable and supportable forecasts. The CECL model does not apply to available-for-sale debt securities; however, the credit loss calculation and subsequent recoveries for available-for-sale securities are required to be recorded through an allowance. This guidance also expands the required credit loss disclosures. January 1, 2020 We adopted the guidance using the modified retrospective approach. A cumulative effect adjustment of $6.7 million was recorded as a decrease to retained earnings. We recorded an offsetting increase in the allowance for credit loss for mortgage loans, reinsurance recoverables and commitments and a decrease for deferred tax impacts. See Note 5, Investments, for further details. When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. Each of the standards listed above is in varying stages in our implementation process based on its issuance and adoption dates. We are on track to implement guidance by the respective effective dates. |
Use of Estimates in the Preparation of Financial Statements - Policy | Use of Estimates in the Preparation of Financial Statements The preparation of our consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The most critical estimates include those used in determining: ● the fair value of investments in the absence of quoted market values; ● investment impairments and valuation allowances; ● the fair value of and accounting for derivatives; ● the DAC and other actuarial balances where the amortization is based on estimated gross profits (“EGPs”); ● the liability for future policy benefits and claims; ● the value of our other postretirement benefit obligation and ● accounting for income taxes and the valuation of deferred tax assets. A description of such critical estimates is incorporated within the discussion of the related accounting policies that follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Actual results could differ from these estimates. |
Closed Block - Policy | Closed Block We operate a closed block (“Closed Block”) for the benefit of individual participating dividend-paying policies in force at the time of the 1998 mutual insurance holding company (“MIHC”) formation. See Note 7, Closed Block, for further details. |
Cash and Cash Equivalents - Policy | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, money market instruments and other debt issues with a maturity date of three months or less when purchased. |
Investments - Policy | Investments Fixed maturities include bonds, asset-backed securities (“ABS”), redeemable preferred stock and certain non-redeemable preferred securities. Equity securities include mutual funds, common stock and non-redeemable preferred stock. We classify fixed maturities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. Equity securities are also carried at fair value. See Note 16, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to fixed maturities, available-for-sale, excluding those in fair value hedging relationships, are reflected in stockholder’s equity, net of adjustments associated with DAC and related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Mark-to-market adjustments on fixed maturities, trading are reflected in net realized capital gains (losses). Unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships are reflected in net investment income. Mark-to-market adjustments related to certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reflected in net investment income. The amortized cost of fixed maturities includes cost adjusted for amortization of premiums and discounts, computed using the interest method. The amortized cost of fixed maturities, available-for-sale is adjusted for changes in fair value of the hedged portions of securities in fair value hedging relationships and excludes accrued interest receivable. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Fixed maturities, available-for-sale are subject to an allowance for credit loss and changes in the allowance are reported in net income as a component of net realized capital gains (losses). Interest income, as well as prepayment fees and the amortization of the related premium or discount, is reported in net investment income. For loan-backed and structured securities, we recognize income using a constant effective yield based on currently anticipated cash flows. Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Amortized cost excludes accrued interest receivable. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income, as well as prepayment of fees and the amortization of the related premium or discount, is reported in net investment income on the consolidated statements of operations. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Any changes in the loan valuation allowances are reported in net realized capital gains (losses) on the consolidated statements of operations. See Note 5, Investments, for further details of our valuation allowance. Our commercial and residential mortgage loan portfolios can include loans that have been modified. We assess loan modifications on a case-by-case basis to evaluate whether a TDR has occurred. In response to COVID-19, the Coronavirus Aid, Relief and Economic Security Act, which was subsequently amended by the Consolidated Appropriations Act, 2021, (collectively the “CARES Act”) provides a temporary suspension of TDR accounting for certain COVID-19 related loan modifications where the loan was not more than 30 days past due as of December 31, 2019. We elected the TDR relief in the CARES Act beginning in the second quarter of 2020. The CARES Act TDR relief does not apply to modifications completed subsequent to the earlier of 60 days after the national emergency related to COVID-19 ends, or January 1, 2022. In addition, the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (As Revised on April 7, 2020) (“Interagency Statement”) provides additional guidance to determine if a short-term COVID-19 related loan modification is a TDR. We consider the CARES Act and the Interagency Statement when assessing loan modifications to determine whether a TDR has occurred. As of January 1, 2022, the TDR relief ended. See Note 5, Investments, under the caption “Mortgage Loan Modifications” for further details. Real estate investments are reported at cost less accumulated depreciation. The initial cost bases of properties acquired through loan foreclosures are the lower of the fair market values of the properties at the time of foreclosure or the outstanding loan balance. Buildings and land improvements are generally depreciated on the straight-line method over the estimated useful life of improvements and tenant improvement costs are depreciated on the straight-line method over the term of the related lease. We recognize impairment losses for properties when indicators of impairment are present and a property’s expected undiscounted cash flows are not sufficient to recover the property’s carrying value. In such cases, the cost basis of the property is reduced to fair value. Real estate expected to be disposed is carried at the lower of cost or fair value, less cost to sell, with valuation allowances established accordingly and depreciation no longer recognized. The carrying amount of real estate held for sale was $238.6 million and $74.2 million as of December 31, 2022 and 2021, respectively. Any impairment losses and any changes in valuation allowances are reported in net income. Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not designated as hedges, we report gains and losses related to the following in net realized capital gains (losses) on the consolidated statements of operations: mark-to-market adjustments on equity securities, mark-to-market adjustments on fixed maturities, trading, mark-to-market adjustments on certain investment funds, mark-to-market adjustments on derivatives not designated as hedges, cash flow hedge gains (losses) when the hedged item impacts realized capital gains (losses), changes in the valuation allowance for fixed maturities, available-for-sale and certain financing receivables, impairments of real estate held for investment, impairments of equity method investments. Investment gains and losses on sales of certain real estate held for sale due to investment strategy and mark-to-market adjustments on certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reported as net investment income and are excluded from net realized capital gains (losses). Policy loans and certain other investments are reported at cost. Interests in unconsolidated entities, joint ventures and partnerships are generally accounted for using the equity method. We had certain real estate ventures for which the fair value option had been elected in prior periods. See Note 16, Fair Value Measurements, for detail on these investments. |
Derivatives - Policy | Derivatives Overview Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices or the values of securities. Derivatives generally used by us include swaps, options, futures and forwards. Derivative positions are either assets or liabilities in the consolidated statements of financial position and are measured at fair value, generally by obtaining quoted market prices or through the use of pricing models. See Note 16, Fair Value Measurements, for policies related to the determination of fair value. Fair values can be affected by changes in interest rates, foreign exchange rates, financial indices, values of securities, credit spreads, and market volatility and liquidity. Accounting and Financial Statement Presentation We designate derivatives as either: (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, including those denominated in a foreign currency (“fair value hedge”); (b) a hedge of a forecasted transaction or the exposure to variability of cash flows to be received or paid related to a recognized asset or liability, including those denominated in a foreign currency (“cash flow hedge”) or (c) a derivative not designated as a hedging instrument. Our accounting for the ongoing changes in fair value of a derivative depends on the intended use of the derivative and the designation, as described above, and is determined when the derivative contract is entered into or at the time of redesignation. Hedge accounting is used for derivatives that are specifically designated in advance as hedges and that reduce our exposure to an indicated risk by having a high correlation between changes in the value of the derivatives and the items being hedged at both the inception of the hedge and throughout the hedge period. Cash flows associated with derivatives are included within operating and financing activities in the consolidated statements of cash flows. Fair Value Hedges. Cash Flow Hedges. Non-Hedge Derivatives. Hedge Documentation and Effectiveness Testing. We use qualitative and quantitative methods to assess hedge effectiveness. Qualitative methods may include monitoring changes to terms and conditions and counterparty credit ratings. Quantitative methods may include statistical tests including regression analysis and minimum variance and dollar offset techniques. For last-of-layer method hedges, the assessment of hedge effectiveness includes confirming we expect the hedged last layer amount to be outstanding at the end of the hedging relationship. Termination of Hedge Accounting. If it is determined that a derivative no longer qualifies as an effective hedge, the derivative will continue to be carried on the consolidated statements of financial position at its fair value, with changes in fair value recognized prospectively in net realized capital gains (losses). The asset or liability under a fair value hedge will no longer be adjusted for changes in fair value pursuant to hedging rules and the existing basis adjustment is amortized to the consolidated statements of operations line associated with the asset or liability. If a last-of-layer method hedging relationship is discontinued, the outstanding basis adjustment is allocated to the individual assets in the closed portfolio and those amounts are amortized consistent with the amortization of other discounts or premiums associated with those assets. The component of AOCI related to discontinued cash flow hedges that are no longer highly effective is amortized to the consolidated statements of operations consistent with the net income impacts of the original hedged cash flows. If a cash flow hedge is discontinued because it is probable the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income. Embedded Derivatives. |
Contractholder and Policyholder Liabilities - Policy | Contractholder and Policyholder Liabilities Contractholder and policyholder liabilities (contractholder funds, future policy benefits and claims and other policyholder funds) include reserves for investment contracts, individual and group annuities that provide periodic income payments, universal life insurance, variable universal life insurance, indexed universal life insurance, term life insurance, participating traditional individual life insurance, group dental and vision insurance, group critical illness, group accident, paid family and medical leave (“PFML”), group short-term and long-term disability insurance, group life insurance, individual disability insurance and long-term care insurance. It also includes a provision for dividends on participating policies. Investment contracts are contractholders’ funds on deposit with us and generally include reserves for pension and annuity contracts. Reserves on investment contracts are equal to the cumulative deposits less any applicable charges and withdrawals plus credited interest. Reserves for universal life, variable universal life and indexed universal life insurance contracts are equal to cumulative deposits less charges plus credited interest, which represents the account balances that accrue to the benefit of the policyholders. We hold additional reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years; universal life, variable universal life and indexed universal life insurance contracts that contain no lapse guarantee features; and annuities with guaranteed minimum death benefits. Reserves for individual and group annuities that provide periodic income payments, nonparticipating term life insurance and disability income contracts are computed on a basis of assumed investment yield, mortality, morbidity and expenses, including a provision for adverse deviation, which generally varies by plan, year of issue and policy duration. Investment yield is based on our experience. Mortality, morbidity and withdrawal rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience. For long-duration insurance contracts, significant changes in experience or assumptions may require us to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves may also be established for short-duration contracts to provide for expected future losses. Reserves for participating life insurance contracts are based on the net level premium reserve for death and endowment policy benefits. This net level premium reserve is calculated based on dividend fund interest rates and mortality rates guaranteed in calculating the cash surrender values described in the contract. Participating business represented approximately 3%, 4% and 5% of our life insurance in force and 17%, 18% and 20% of the number of life insurance policies in force as of December 31, 2022, 2021 and 2020, respectively. Participating business represented approximately 18%, 26% and 30% of life insurance premiums for the years ended December 31, 2022, 2021 and 2020, respectively. The amount of dividends to policyholders is declared annually by our Board of Directors. The amount of dividends to be paid to policyholders is determined after consideration of several factors including interest, mortality, morbidity and other expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by us. At the end of the reporting period, we establish a dividend liability for the pro rata portion of the dividends expected to be paid on or before the next policy anniversary date. Some of our policies and contracts require payment of fees or other policyholder assessments in advance for services that will be rendered over the estimated lives of the policies and contracts. These payments are established as unearned revenue liabilities upon receipt and included in other policyholder funds in the consolidated statements of financial position. These unearned revenue reserves are amortized to net income over the estimated lives of these policies and contracts in relation to the emergence of EGPs. Short-Duration Contracts We include the following group products in our short-duration insurance contracts disclosures: long-term disability (“LTD”), group life waiver, dental, vision, short-term disability (“STD”), critical illness, accident, PFML and group life. Future policy benefits and claims include reserves for group life and disability insurance that provide periodic income payments. These reserves are computed using assumptions of mortality, morbidity and investment performance. These assumptions are based on our experience, industry results, emerging trends and future expectations. Future policy benefits and claims also include reserves for incurred but unreported group disability, dental, vision, critical illness, accident, PFML and life insurance claims. We recognize claims costs in the period the service was provided to our policyholders. However, claims costs incurred in a particular period are not known with certainty until after we receive, process and pay the claims. We determine the amount of this liability using actuarial methods based on historical claim payment patterns as well as emerging cost trends, where applicable, to determine our estimate of claim liabilities. We have defined claim frequency as follows for each short-duration product: ● LTD: Claim frequency is based on submitted reserve claim counts. ● Group Life Waiver: Claim frequency is based on submitted reserve claim counts, consistent with LTD. ● Dental and Vision: Claim frequency is based on the claim form, which may include one or more procedures. ● STD, Critical Illness, Accident and PFML: Claim frequency is based on submitted claims. ● Group Life: Claim frequency is based on submitted life claims (lives, not coverages). We did not make any significant changes to our methodologies or assumptions used to calculate the liability for unpaid claims for short-duration contracts during 2022. Liability for Unpaid Claims The liability for unpaid claims for both long-duration and short-duration contracts is an estimate of the ultimate net cost of reported and unreported losses not yet settled. This liability is estimated using actuarial analyses and case basis evaluations. Although considerable variability is inherent in such estimates, we believe the liability for unpaid claims is adequate. These estimates are continually reviewed and, as adjustments to this liability become necessary, such adjustments are reflected in net income. Our liability for unpaid claims does not include any allocated claim adjustment expenses. We incur claim adjustment expenses for both long-duration and short-duration contracts that cannot be allocated to a specific claim. Our claim adjustment expense liability is estimated using actuarial analyses based on historical trends of expenses and expected claim runout patterns. See Note 9, Insurance Liabilities, under the caption “Liability for Unpaid Claims” for further details. |
Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits - Policy | Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits Products with fixed and guaranteed premiums and benefits consist principally of whole life and term life insurance policies and individual disability income. Premiums from these products are recognized as premium revenue when due. Related policy benefits and expenses for individual life products are associated with earned premiums and result in the recognition of profits over the expected term of the policies and contracts. Immediate annuities with life contingencies include products with fixed and guaranteed annuity considerations and benefits and consist principally of group and individual single premium annuities with life contingencies. Annuity considerations from these products are recognized as premium revenue. However, the collection of these annuity considerations does not represent the completion of the earnings process, as we establish annuity reserves using estimates for mortality and investment assumptions, which include provision for adverse deviation as required by U.S. GAAP. We anticipate profits to emerge over the life of the annuity products as we earn investment income, pay benefits and release reserves. Group life, dental, vision, critical illness, accident, PFML and disability premiums are generally recorded as premium revenue over the term of the coverage. Certain group contracts contain experience premium refund provisions based on a pre-defined formula that reflects their claim experience. Experience premium refunds reduce revenue over the term of the coverage and are adjusted to reflect current experience. Related policy benefits and expenses are associated with earned premiums and result in the recognition of profits over the term of the policies and contracts. Fees for contracts providing claim processing or other administrative services are recorded as revenue over the period the service is provided. Universal life-type policies are insurance contracts with terms that are not fixed. Amounts received as payments for such contracts are not reported as premium revenues. Revenues for universal life-type insurance contracts consist of policy charges for the cost of insurance, policy initiation and administration, surrender charges and other fees that have been assessed against policy account values and investment income. Policy benefits and claims that are charged to expense include interest credited to contracts and benefit claims incurred in the period in excess of related policy account balances. Investment contracts do not subject us to significant risks arising from policyholder mortality or morbidity and consist primarily of guaranteed investment contracts (“GICs”), funding agreements and certain deferred annuities. Amounts received as payments for investment contracts are established as investment contract liability balances and are not reported as premium revenues. Revenues for investment contracts consist of investment income and policy administration charges. Investment contract benefits that are charged to expense include benefit claims incurred in the period in excess of related investment contract liability balances and interest credited to investment contract liability balances. Fees and other revenues are earned for administrative services performed including recordkeeping, trust and custody and reporting services for retirement savings plans, insurance companies, endowments and other financial institutions and other products. Fees and other revenues received for performance of administrative services are recognized as revenue when earned, typically when the service is performed. |
Deferred Acquisition Costs - Policy | Deferred Acquisition Costs Incremental direct costs of contract acquisition as well as certain costs directly related to acquisition activities (underwriting, policy issuance and processing, medical and inspection and sales force contract selling) for the successful acquisition of new and renewal insurance policies and investment contract business are capitalized to the extent recoverable. Commissions and other incremental direct costs for the acquisition of long-term service contracts are also capitalized to the extent recoverable. Maintenance costs and acquisition costs that are not deferrable are charged to net income as incurred. DAC for universal life-type insurance contracts and certain investment contracts are amortized over the expected lifetime of the contracts in relation to EGPs or, in certain circumstances, estimated gross revenues (“EGR”). This amortization is adjusted in the current period when EGPs or EGRs are revised. EGRs include similar assumptions as the revenue component of EGPs and the changes of future estimates and reflection of actual experience and market conditions is done in the same manner as EGPs. For individual variable universal life insurance, individual variable annuities and group annuities that have separate account U.S. equity investment options, we utilize a mean reversion methodology (reversion to the mean assumption), a common industry practice, to determine the future domestic equity market growth rate assumption used for the calculation of EGPs. DAC for participating life insurance policies are amortized in proportion to estimated gross margins (“EGM”) rather than EGPs. EGMs include similar assumption items as EGPs. We stopped selling participating business in the early 2000s. Some products allow for underwritten death benefit increases and cost of living adjustments, resulting in a small amount of new DAC each year, and the amortization schedules are modified as appropriate. DAC for non-participating term life insurance and individual disability policies are amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policyholder liabilities. Once these assumptions are made for a given policy or group of policies, they will not be changed over the life of the policy unless a loss recognition event occurs. DAC on insurance policies and investment contracts are subject to recoverability testing at the time of policy issue and loss recognition testing on an annual basis, or when an event occurs that may warrant loss recognition. If loss recognition or impairment is necessary, DAC would be written off to the extent it is determined that future policy premiums and investment income or gross profits are not adequate to cover related losses and expenses. DAC on short-duration group benefits policies are amortized over the estimated term of the underlying contracts. |
Deferred Acquisition Costs on Internal Replacements - Policy | Deferred Acquisition Costs on Internal Replacements All insurance and investment contract modifications and replacements are reviewed to determine if the internal replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing DAC, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing DAC, sales inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over to the new contract. |
Long-Term Debt - Policy | Long-Term Debt Long-term debt includes notes payable, nonrecourse mortgages and other debt with a maturity date greater than one year at the date of issuance. Current maturities of long-term debt are classified as long-term debt in our consolidated statements of financial position. Long-term debt is primarily recorded at the unpaid principal balance, net of unamortized discount, premium and issuance costs. |
Reinsurance - Policy | Reinsurance We enter into reinsurance agreements with other companies in the normal course of business in order to limit losses and minimize exposure to significant risks. We evaluate each insurance agreement to determine whether the agreement provides indemnification against loss or liability related to insurance risk. For agreements that expose the reinsurer to reasonable possibility of significant loss from insurance risk, the reinsurance method of accounting is used for the agreement. Assets and liabilities related to reinsurance ceded are reported on a gross basis on the consolidated statements of financial position. Insurance liabilities are reported before the effects of reinsurance and we record an offsetting reinsurance recoverable, net of valuation allowance. Premiums and expenses are reported net of reinsurance ceded on the consolidated statements of operations. If an agreement does not expose the reinsurer to reasonable possibility of significant loss from insurance risk, the deposit method of accounting is used for the agreement. We record a deposit receivable, net of valuation allowance, if necessary. The deposit receivable is adjusted as amounts are paid or received on the underlying contracts. Accretion on the deposit receivable is calculated using an effective interest method and is reported in fees and other revenues and operating expense on the consolidated statements of operations. The cost of reinsurance related to long-duration contracts is amortized over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. We have entered into coinsurance with funds withheld reinsurance agreements in which we record a funds withheld payable that contains an embedded derivative for which the fair value is estimated based on the change in fair value of the assets supporting the funds withheld payable. The change in fair value of the funds withheld embedded derivative is separately reported on the consolidated statements of operations. Gains and losses that do not flow to the reinsurer are reported in net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations. For further information about reinsurance, refer to Note 10, Reinsurance. For further information about the financing receivables valuation allowance on the reinsurance recoverable and deposit receivable, refer to Note 5, Investments. |
Separate Accounts - Policy | Separate Accounts The separate accounts are legally segregated and are not subject to the claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations. As of December 31, 2022 and 2021, the separate accounts included a separate account valued at $101.4 million and $95.1 million, respectively, which primarily included shares of PFG common stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under Principal Mutual Holding Company’s 2001 demutualization. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations. |
Income Taxes - Policy | As of December 31, 2022 and 2021, the separate accounts included a separate account valued at $101.4 million and $95.1 million, respectively, which primarily included shares of PFG common stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under Principal Mutual Holding Company’s 2001 demutualization. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations. |
Nature of Operations and Sign_3
Nature of Operations and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Nature of Operations and Significant Accounting Policies | |
Actuarial recohorting pre-tax impacts to comprehensive income (table) | For the year ended December 31, 2022 (in millions) Increase to income before taxes Deferred acquisition costs amortization (1) $ (106.6) Cost of reinsurance amortization (2) 4.2 Unearned revenue liability amortization (3) 32.4 Change in additional liability for certain benefit features (2) 139.7 Total increase to income before income taxes 69.7 Increase to pre-tax other comprehensive income Deferred acquisition cost unrealized losses (5.6) Cost of reinsurance unrealized gains 8.7 Unearned revenue liability unrealized gains 8.5 Change in additional liability for certain benefit features unrealized gains 24.3 Total increase to pre-tax other comprehensive income 35.9 Total increase to pre-tax comprehensive income $ 105.6 (1) Reported in operating expenses. (2) Reported in benefits, claims and settlement expenses. (3) Reported in fees and other revenues . |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill (Table) | Retirement U.S. and Income Insurance Solutions Solutions Corporate Consolidated (in millions) Balance as of January 1, 2022 $ 18.8 $ 56.3 $ — $ 75.1 Impairment (1) — (26.9) — (26.9) Balance as of December 31, 2022 $ 18.8 $ 29.4 $ — $ 48.2 (1) Resulted from a change in the allocation of equity following the Reinsurance Transaction. Finite Lived Intangible Assets |
Finite Lived Intangible Assets (Table) | December 31, 2022 2021 (in millions) Gross carrying value $ 34.9 $ 41.4 Accumulated amortization 23.3 27.0 Net carrying value $ 11.6 $ 14.4 |
Other Finite Lived Intangible Assets Estimated Amortization Expense (Table) | Year ending December 31: 2023 $ 1.0 2024 1.0 2025 1.0 2026 1.0 2027 1.0 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities | |
Carrying Amounts of Assets and Liabilities of Consolidated Variable Interest Entities (Table) | December 31, 2022 December 31, 2021 Total Total Total Total assets liabilities assets liabilities (in millions) Real estate (1) $ 689.6 $ 42.2 $ 709.6 $ 36.1 Residential mortgage loans (2) 1,182.6 41.8 1,263.2 20.3 Total $ 1,872.2 $ 84.0 $ 1,972.8 $ 56.4 (1) The assets of the real estate VIEs primarily include real estate, other investments and cash. Liabilities primarily include other liabilities. (2) The assets of the residential mortgage loans VIEs primarily include residential mortgage loans. The liabilities primarily include other liabilities. |
Asset Carrying Value and Maximum Loss Exposure of Unconsolidated Variable Interest Entities (Table) | Maximum exposure to Asset carrying value loss (1) (in millions) December 31, 2022 Fixed maturities, available-for-sale: Corporate $ 111.8 $ 127.2 Residential mortgage-backed pass-through securities 2,170.9 2,362.1 Commercial mortgage-backed securities 4,827.5 5,529.7 Collateralized debt obligations (2) 4,560.2 4,813.4 Other debt obligations 6,483.3 7,537.2 Fixed maturities, trading: Residential mortgage-backed pass-through securities 5.4 5.4 Commercial mortgage-backed securities 83.4 83.4 Collateralized debt obligations (2) 5.7 5.7 Other debt obligations 80.0 80.0 Other investments: Other limited partnership and fund interests 1,088.5 1,765.4 December 31, 2021 Fixed maturities, available-for-sale: Corporate $ 142.1 $ 136.9 Residential mortgage-backed pass-through securities 2,342.3 2,296.9 Commercial mortgage-backed securities 5,513.7 5,388.7 Collateralized debt obligations (2) 3,533.5 3,539.1 Other debt obligations 7,441.8 7,368.3 Fixed maturities, trading: Residential mortgage-backed pass-through securities 8.4 8.4 Commercial mortgage-backed securities 24.6 24.6 Collateralized debt obligations (2) 7.5 7.5 Other debt obligations 8.2 8.2 Other investments: Other limited partnership and fund interests 862.6 1,447.0 (1) Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees and similar provisions for our other investments. A carrying value of zero is used if distributions have been received in excess of our investment, resulting in a negative carrying value for the investment. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager . (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments | |
Available-for-Sale Securities (Table) | Gross Gross Allowance Amortized unrealized unrealized for credit cost (1) gains losses loss Fair value (in millions) December 31, 2022 Fixed maturities, available-for-sale: U.S. government and agencies $ 1,964.6 $ 0.1 $ 248.8 $ — $ 1,715.9 Non-U.S. governments 565.3 18.9 63.8 — 520.4 States and political subdivisions 7,280.1 14.8 1,126.6 — 6,168.3 Corporate 37,495.4 219.5 4,530.1 — 33,184.8 Residential mortgage-backed pass-through securities 2,362.1 6.0 197.2 — 2,170.9 Commercial mortgage-backed securities 5,529.7 0.9 703.1 — 4,827.5 Collateralized debt obligations (2) 4,698.9 4.5 143.2 — 4,560.2 Other debt obligations 7,207.8 6.0 730.4 0.1 6,483.3 Total fixed maturities, available-for-sale $ 67,103.9 $ 270.7 $ 7,743.2 $ 0.1 $ 59,631.3 December 31, 2021 Fixed maturities, available-for-sale: U.S. government and agencies $ 1,826.8 $ 144.5 $ 34.3 $ — $ 1,937.0 Non-U.S. governments 821.6 127.5 2.0 — 947.1 States and political subdivisions 8,210.3 1,022.4 16.3 — 9,216.4 Corporate 39,345.7 3,750.2 126.3 4.5 42,965.1 Residential mortgage-backed pass-through securities 2,296.9 57.6 12.2 — 2,342.3 Commercial mortgage-backed securities 5,388.6 156.3 30.9 0.3 5,513.7 Collateralized debt obligations (2) 3,539.1 4.0 9.6 — 3,533.5 Other debt obligations 7,368.3 130.6 57.0 0.1 7,441.8 Total fixed maturities, available-for-sale $ 68,797.3 $ 5,393.1 $ 288.6 $ 4.9 $ 73,896.9 (1) Amortized cost excludes accrued interest receivable of $575.8 million and $538.6 million as of December 31, 2022 and 2021, respectively. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. |
Fixed Maturities Available-for-Sale by Contractual Maturity (Table) | Amortized cost Fair value (in millions) Due in one year or less $ 1,606.3 $ 1,593.4 Due after one year through five years 8,297.6 7,950.4 Due after five years through ten years 11,046.5 10,029.5 Due after ten years 26,355.0 22,016.1 Subtotal 47,305.4 41,589.4 Mortgage-backed and other asset-backed securities 19,798.5 18,041.9 Total $ 67,103.9 $ 59,631.3 |
Net Investment Income (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Fixed maturities, available-for-sale $ 1,734.4 $ 2,483.8 $ 2,469.0 Fixed maturities, trading 19.6 8.7 9.2 Equity securities (35.4) 1.7 3.3 Mortgage loans 619.9 692.4 669.8 Real estate 276.2 194.4 180.8 Policy loans 34.4 36.2 38.2 Cash and cash equivalents 37.6 1.7 9.5 Derivatives 171.3 28.2 (1.9) Other 194.7 362.0 106.8 Total 3,052.7 3,809.1 3,484.7 Investment expenses (200.4) (175.4) (159.8) Net investment income $ 2,852.3 $ 3,633.7 $ 3,324.9 |
Net Realized Capital Gains and Losses (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Fixed maturities, available-for-sale: Gross gains $ 38.9 $ 50.4 $ 118.7 Gross losses (120.7) (26.9) (45.0) Net credit losses (1) (11.5) (34.5) (22.6) Hedging, net (0.7) (9.5) (9.7) Fixed maturities, trading (2) (25.3) (6.6) 6.2 Equity securities (3) (7.4) (0.5) 1.8 Mortgage loans (74.1) 5.3 (14.3) Derivatives 86.9 (4.2) 28.5 Other 112.7 8.0 42.0 Net realized capital gains (losses) $ (1.2) $ (18.5) $ 105.6 (1) Net credit losses include adjustments to the credit loss valuation allowance, write-offs and recoveries on available-for-sale securities. (2) Unrealized gains (losses) on fixed maturities, trading still held at the reporting date were $(24.5) million, $(6.4) million and $6.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. This excludes $1.4 million of unrealized losses on fixed maturities, trading still held at the reporting date for the year ended December 31, 2022, that were reported in net realized capital gains (losses) on funds withheld assets. (3) Unrealized gains (losses) on equity securities still held at the reporting date were $(7.1) million, $(0.1) million and $1.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. This excludes $1.7 million unrealized losses on equity securities still held at the reporting date for the year ended December 31, 2022, that were reported in net realized capital gains (losses) on funds withheld assets. |
Allowance for credit loss (Tables) | For the year ended December 31, 2022 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ 4.5 $ — $ 0.3 $ — $ 0.1 $ 4.9 Reductions for securities sold during the period — — — (8.7) — — — — (8.7) Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — 4.2 — — — — 4.2 Write-offs charged against allowance — — — — — (0.3) — — (0.3) Ending balance $ — $ — $ — $ — $ — $ — $ — $ 0.1 $ 0.1 For the year ended December 31, 2021 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ — $ — $ 4.3 $ 2.2 $ — $ 6.5 Additions for credit losses not previously recorded — — — 16.9 — 0.4 — 0.1 17.4 Reductions for securities sold during the period — — — (12.4) — — — — (12.4) Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — — — 2.4 0.4 — 2.8 Write-offs charged against allowance — — — — — (6.8) (2.6) — (9.4) Ending balance $ — $ — $ — $ 4.5 $ — $ 0.3 $ — $ 0.1 $ 4.9 Accrued interest written off to net investment income $ — $ — $ — $ 0.2 $ — $ — $ — $ — $ 0.2 For the year ended December 31, 2020 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance (2) $ — $ — $ — $ — $ — $ — $ — $ — $ — Additions for credit losses not previously recorded — — — 7.0 — 2.9 0.1 — 10.0 Reductions for securities sold during the period — — — (7.0) — — — — (7.0) Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — — — 4.0 2.1 — 6.1 Write-offs charged against allowance — — — — — (2.6) — — (2.6) Ending balance $ — $ — $ — $ — $ — $ 4.3 $ 2.2 $ — $ 6.5 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) The allowance for credit loss associated with fixed maturities, available-for-sale was applied prospectively upon adoption of authoritative guidance effective January 1, 2020. |
Available-for-Sale Securities in Unrealized Loss Positions Without an Allowance for Credit Loss (Table) | December 31, 2022 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1) U.S. government and agencies $ 1,505.5 $ 207.0 $ 180.4 $ 41.8 $ 1,685.9 $ 248.8 Non-U.S. governments 373.0 56.7 19.9 7.1 392.9 63.8 States and political subdivisions 5,243.6 999.7 387.8 126.9 5,631.4 1,126.6 Corporate 26,668.2 3,875.1 2,625.4 654.9 29,293.6 4,530.0 Residential mortgage-backed pass-through securities 1,201.7 97.6 574.8 104.7 1,776.5 202.3 Commercial mortgage-backed securities 3,622.3 480.7 1,113.9 220.9 4,736.2 701.6 Collateralized debt obligations (2) 2,830.1 88.8 1,327.2 54.4 4,157.3 143.2 Other debt obligations 3,412.6 290.7 2,266.7 434.4 5,679.3 725.1 Total fixed maturities, available-for-sale $ 44,857.0 $ 6,096.3 $ 8,496.1 $ 1,645.1 $ 53,353.1 $ 7,741.4 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. December 31, 2021 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1) U.S. government and agencies $ 128.2 $ 3.4 $ 386.3 $ 30.9 $ 514.5 $ 34.3 Non-U.S. governments 57.5 2.0 — — 57.5 2.0 States and political subdivisions 681.0 10.3 100.3 6.0 781.3 16.3 Corporate 4,538.4 59.0 1,252.3 67.1 5,790.7 126.1 Residential mortgage-backed pass- through securities 945.6 10.0 76.7 2.2 1,022.3 12.2 Commercial mortgage-backed securities 1,293.3 15.4 289.8 15.3 1,583.1 30.7 Collateralized debt obligations (2) 1,571.0 2.8 423.9 6.7 1,994.9 9.5 Other debt obligations 3,837.3 48.0 211.0 8.9 4,048.3 56.9 Total fixed maturities, available-for-sale $ 13,052.3 $ 150.9 $ 2,740.3 $ 137.1 $ 15,792.6 $ 288.0 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. |
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Table) | December 31, 2022 December 31, 2021 (in millions) Net unrealized gains (losses) on fixed maturities, available-for-sale (1) $ (7,552.8) $ 5,094.3 Net unrealized gains on derivative instruments 50.8 80.1 Adjustments for assumed changes in amortization patterns 649.7 (266.1) Adjustments for assumed changes in policyholder liabilities 3.4 (664.8) Net unrealized gains on other investments and noncontrolling interest adjustments 2.9 2.9 Provision for deferred income tax benefits (taxes) 1,464.1 (891.9) Net unrealized gains (losses) on available-for-sale securities and derivative instruments $ (5,381.9) $ 3,354.5 (1) Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships. |
Financing Receivable Credit Quality Indicators (Table) | As of December 31, 2022 2022 2021 2020 2019 2018 Prior Total (in millions) Commercial mortgage loans: A- and above $ 995.9 $ 2,182.5 $ 1,753.8 $ 2,177.2 $ 2,130.8 $ 4,555.1 $ 13,795.3 BBB+ thru BBB- 371.8 412.8 149.7 391.6 222.6 676.4 2,224.9 BB+ thru BB- 104.0 — — — 8.9 66.5 179.4 B+ and below — — — — 8.3 35.5 43.8 Total $ 1,471.7 $ 2,595.3 $ 1,903.5 $ 2,568.8 $ 2,370.6 $ 5,333.5 $ 16,243.4 Residential mortgage loans: Performing $ 1,101.4 $ 1,669.1 $ 364.5 $ 99.2 $ 51.2 $ 253.6 $ 3,539.0 Non-performing 8.0 4.7 1.8 1.0 0.6 4.4 20.5 Total $ 1,109.4 $ 1,673.8 $ 366.3 $ 100.2 $ 51.8 $ 258.0 $ 3,559.5 Reinsurance recoverable and deposit receivable $ 22,032.0 As of December 31, 2021 2021 2020 2019 2018 2017 Prior Total (in millions) Commercial mortgage loans: A- and above $ 2,194.1 $ 1,676.5 $ 2,385.6 $ 2,334.9 $ 1,374.9 $ 4,336.8 $ 14,302.8 BBB+ thru BBB- 255.0 299.3 270.1 105.2 297.7 370.5 1,597.8 BB+ thru BB- 17.5 — — — — 50.7 68.2 B+ and below — — — 8.8 — 30.1 38.9 Total $ 2,466.6 $ 1,975.8 $ 2,655.7 $ 2,448.9 $ 1,672.6 $ 4,788.1 $ 16,007.7 Residential mortgage loans: Performing $ 1,973.0 $ 429.5 $ 123.5 $ 67.0 $ 80.2 $ 265.9 $ 2,939.1 Non-performing — 1.8 0.6 — 0.8 2.0 5.2 Total $ 1,973.0 $ 431.3 $ 124.1 $ 67.0 $ 81.0 $ 267.9 $ 2,944.3 Reinsurance recoverable and deposit receivable $ 1,189.0 |
Non-Accrual Financing Receivables (Table) | December 31, 2022 Amortized cost Beginning Ending of nonaccrual amortized cost amortized cost assets without on nonaccrual on nonaccrual a valuation status status allowance (in millions) Commercial mortgage loans $ 8.7 $ 43.8 $ — Residential mortgage loans 3.4 16.0 0.6 Total $ 12.1 $ 59.8 $ 0.6 December 31, 2021 Amortized cost Beginning Ending of nonaccrual amortized cost amortized cost assets without on nonaccrual on nonaccrual a valuation status status allowance (in millions) Commercial mortgage loans $ — $ 8.7 $ — Residential mortgage loans 9.1 3.4 0.7 Total $ 9.1 $ 12.1 $ 0.7 |
Schedule of Interest Income Recognized on Non-accrual Financing Receivables (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Commercial mortgage loans $ 0.9 $ 0.5 $ — Total $ 0.9 $ 0.5 $ — |
Financing Receivables Aging (Table) | December 31, 2022 90 days or 30-59 days 60-89 days more past Total past due past due due past due Current Total (1) (in millions) Commercial mortgage loans $ — $ — $ 8.3 $ 8.3 $ 16,235.1 $ 16,243.4 Residential mortgage loans 35.9 2.4 12.4 50.7 3,508.8 3,559.5 Total $ 35.9 $ 2.4 $ 20.7 $ 59.0 $ 19,743.9 $ 19,802.9 December 31, 2021 90 days or 30-59 days 60-89 days more past Total past due past due due past due Current Total (1) (in millions) Commercial mortgage loans $ — $ — $ — $ — $ 16,007.7 $ 16,007.7 Residential mortgage loans 27.6 2.9 4.5 35.0 2,909.3 2,944.3 Total $ 27.6 $ 2.9 $ 4.5 $ 35.0 $ 18,917.0 $ 18,952.0 (1) As of both December 31, 2022 and 2021, no reinsurance recoverables or deposit receivables were considered past due. |
Financing Receivables Valuation Allowance (Table) | For the year ended December 31, 2022 Commercial Residential Reinsurance mortgage loans mortgage loans recoverables Total (in millions) Beginning balance $ 42.0 $ 1.7 $ 2.7 $ 46.4 Provision 33.5 1.2 — 34.7 Charge-offs — (0.2) — (0.2) Recoveries — 2.3 — 2.3 Ending balance $ 75.5 $ 5.0 $ 2.7 $ 83.2 For the year ended December 31, 2021 Commercial Residential Reinsurance mortgage loans mortgage loans recoverables Total (in millions) Beginning balance $ 40.5 $ 5.7 $ 2.7 $ 48.9 Provision (1) 1.5 (7.2) — (5.7) Charge-offs — (0.5) — (0.5) Recoveries — 3.7 — 3.7 Ending balance $ 42.0 $ 1.7 $ 2.7 $ 46.4 For the year ended December 31, 2020 Commercial Residential Reinsurance mortgage loans mortgage loans recoverables Total (in millions) Beginning balance $ 25.9 $ 2.6 $ 2.5 $ 31.0 Provision (2) 14.6 1.1 0.2 15.9 Charge-offs — (1.0) — (1.0) Recoveries — 3.0 — 3.0 Ending balance $ 40.5 $ 5.7 $ 2.7 $ 48.9 (1) During the year ended December 31, 2021, certain valuation allowances for residential mortgage loans were released. This release was a result of further adjustments to our current and forecasted environmental factors management believed to be relevant as global economic activity improved from previously adverse impacts due to COVID-19. (2) During the year ended December 31, 2020, COVID-19 adversely impacted global economic activity and contributed to significant volatility in financial markets. As a result, certain current and forecasted environmental factors management believed to be relevant were adjusted, resulting in an increase in the valuation allowance for commercial and residential mortgage loans. |
Mortgage Loans Purchased and Sold (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Commercial mortgage loans: Purchased $ 261.3 $ — $ 45.7 Residential mortgage loans: Purchased (1) 1,805.2 2,272.4 1,021.4 Sold 512.8 — — (1) Includes mortgage loans purchased by residential mortgage loan VIEs. |
Commercial Mortgage Loans by Geographic Distribution and Property Type Distribution (Table) | December 31, 2022 December 31, 2021 Amortized Percent Amortized Percent cost of total cost of total ($ in millions) Geographic distribution New England $ 513.3 3.2 % $ 587.1 3.7 % Middle Atlantic 4,518.8 27.8 4,550.2 28.4 East North Central 653.9 4.0 625.3 3.9 West North Central 371.9 2.3 339.4 2.1 South Atlantic 2,565.5 15.8 2,471.9 15.4 East South Central 340.6 2.1 379.8 2.4 West South Central 1,208.8 7.4 1,247.8 7.8 Mountain 940.9 5.8 928.0 5.8 Pacific 5,129.7 31.6 4,878.2 30.5 Total $ 16,243.4 100.0 % $ 16,007.7 100.0 % Property type distribution Office $ 4,331.8 26.7 % $ 4,801.0 29.9 % Retail 1,502.5 9.2 1,625.5 10.2 Industrial 3,246.4 20.0 2,975.7 18.6 Apartments 6,848.3 42.2 6,255.2 39.1 Hotel 72.5 0.4 85.7 0.5 Mixed use/other 241.9 1.5 264.6 1.7 Total $ 16,243.4 100.0 % $ 16,007.7 100.0 % |
Mortgage Loans Modified as a Troubled Debt Restructuring (Table) | For the year ended December 31, 2022 TDRs TDRs in payment default Number of Recorded Number of Recorded contracts investment contracts investment (in millions) (in millions) Commercial mortgage loans 1 $ 35.5 — $ — Total 1 $ 35.5 — $ — |
Minority Interests in Unconsolidated Entities-Balance Sheet (Table) | December 31, 2022 2021 (in millions) Total assets $ 128,765.7 $ 106,743.2 Total liabilities 12,335.4 11,862.3 Total equity $ 116,430.3 $ 94,880.9 Net investment in unconsolidated entities $ 1,275.5 $ 957.1 |
Minority Interests in Unconsolidated Entities-Income Statement (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Total revenues $ 36,915.1 $ 17,674.2 $ 11,761.4 Net income 33,194.6 14,083.1 7,350.8 Our share of net income of unconsolidated entities 119.5 229.6 46.4 |
Financial Assets Subject to Netting Agreements (Table) | Gross amounts not offset in the consolidated statements of financial position Gross amount of recognized Financial Collateral assets (1) instruments (2) received Net amount (in millions) December 31, 2022 Derivative assets $ 256.6 $ (133.5) $ (120.8) $ 2.3 Reverse repurchase agreements 112.9 — (112.9) — Total $ 369.5 $ (133.5) $ (233.7) $ 2.3 December 31, 2021 Derivative assets $ 326.2 $ (99.6) $ (219.2) $ 7.4 (1) The gross amount of recognized derivative assets is reported with other investments on the consolidated statements of financial position. The gross amounts of derivative assets are not netted against offsetting liabilities for presentation on the consolidated statements of financial position. (2) Represents amount of offsetting derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets for presentation on the consolidated statements of financial position. |
Financial Liabilities Subject to Netting Agreements (Table) | Gross amounts not offset in the consolidated statements of financial position Gross amount of recognized Financial Collateral liabilities (1) instruments (2) pledged Net amount (in millions) December 31, 2022 Derivative liabilities $ 612.3 $ (133.5) $ (467.2) $ 11.6 December 31, 2021 Derivative liabilities $ 142.3 $ (99.6) $ (41.9) $ 0.8 (1) The gross amount of recognized derivative liabilities is reported with other liabilities on the consolidated statements of financial position. The above excludes derivative liabilities, which are primarily embedded derivatives that are not subject to master netting agreements or similar agreements. The gross amounts of derivative liabilities are not netted against offsetting assets for presentation on the consolidated statements of financial position. (2) Represents amount of offsetting derivative assets that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative liabilities for presentation on the consolidated statements of financial position. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Financial Instruments | |
Derivative Financial Instruments, Exposure (Table) | December 31, 2022 December 31, 2021 (in millions) Notional amounts of derivative instruments Interest rate contracts: Interest rate swaps $ 52,249.9 $ 47,927.4 Interest rate options 4,418.9 2,373.9 Interest rate forwards 2,527.5 2,181.6 Interest rate futures 877.5 1,774.5 Foreign exchange contracts: Currency swaps 1,389.8 958.9 Currency forwards 32.0 6.8 Equity contracts: Equity options 2,049.3 2,378.2 Equity futures 574.1 150.4 Credit contracts: Credit default swaps 400.0 295.0 Other contracts: Embedded derivatives 30,461.7 9,430.5 Total notional amounts at end of period $ 94,980.7 $ 67,477.2 Credit exposure of derivative instruments Interest rate contracts: Interest rate swaps $ 64.2 $ 205.9 Interest rate options 41.7 24.5 Interest rate forwards 0.1 15.3 Foreign exchange contracts: Currency swaps 139.2 51.1 Currency forwards 0.9 0.4 Equity contracts: Equity options 16.5 37.3 Credit contracts: Credit default swaps 3.6 2.7 Total gross credit exposure 266.2 337.2 Less: collateral received 158.8 234.0 Net credit exposure $ 107.4 $ 103.2 |
Derivative Financial Instruments, Fair Value Disclosures (Table) | Derivative assets (1) Derivative liabilities (2) December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 (in millions) Derivatives designated as hedging instruments Interest rate contracts $ 20.0 $ 4.1 $ 105.1 $ 19.0 Foreign exchange contracts 134.6 48.4 19.3 17.2 Total derivatives designated as hedging instruments $ 154.6 $ 52.5 $ 124.4 $ 36.2 Derivatives not designated as hedging instruments Interest rate contracts $ 81.1 $ 233.4 $ 439.9 $ 13.0 Foreign exchange contracts 0.9 0.4 0.4 — Equity contracts 16.5 37.3 45.6 90.9 Credit contracts 3.5 2.6 2.0 2.2 Other contracts — — (3,711.7) 320.9 Total derivatives not designated as hedging instruments 102.0 273.7 (3,223.8) 427.0 Total derivative instruments $ 256.6 $ 326.2 $ (3,099.4) $ 463.2 (1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivatives with a net liability fair value of $(58.9) million and $320.9 million as of December 31, 2022 and December 31, 2021, respectively, are reported with contractholder funds on the consolidated statements of financial position. Embedded derivatives with a net (asset) liability fair value of $(3,652.8) million as of December 31, 2022, are reported with funds withheld payable on the consolidated statements of financial position. |
Credit Derivatives Sold (Table) | December 31, 2022 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 40.0 $ 0.4 $ 40.0 2.5 BBB 190.0 2.2 190.0 3.1 BB 20.0 (0.2) 20.0 4.5 Sovereign A 20.0 0.2 20.0 2.5 Total credit default swap protection sold $ 270.0 $ 2.6 $ 270.0 3.1 December 31, 2021 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 20.0 $ 0.4 $ 20.0 3.5 BBB 110.0 1.7 110.0 3.0 Sovereign A 20.0 0.5 20.0 3.5 Total credit default swap protection sold $ 150.0 $ 2.6 $ 150.0 3.1 |
Fair Value Hedges (Table) | Cumulative amount of fair value hedging basis adjustment Line item in the consolidated statements increase/(decrease) included in the of financial position in which the Amortized cost of hedged item amortized cost of the hedged item hedged item is included December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 (in millions) Fixed maturities, available-for-sale (1) Active hedging relationships $ 3,498.6 $ 1,859.9 $ (153.4) $ (7.1) Discontinued hedging relationships 48.8 79.7 1.3 2.8 Total fixed maturities, available-for-sale in active or discontinued hedging relationships $ 3,547.4 $ 1,939.6 $ (152.1) $ (4.3) (1) These amounts include the amortized cost basis of closed portfolios used to designate last-of-layer hedging relationships in which the hedged last layer amount is expected to remain at the end of the hedging relationship. As of December 31, 2022 and December 31, 2021, the amortized cost basis of the closed portfolios used in these hedging relationships was $3,256.9 million and $1,390.4 million, respectively, the cumulative basis adjustments associated with these hedging relationships was $(102.4) million and $(3.9) million, respectively, and the amount of the designated hedged items were $1,110.0 million and $510.0 million, respectively. |
Cash Flow Hedges (Table) | Amount of gain (loss) recognized in AOCI on derivatives Derivatives in cash flow for the year ended December 31, hedging relationships Related hedged item 2022 2021 2020 (in millions) Interest rate contracts Fixed maturities, available-for-sale $ (102.1) $ — $ (3.0) Interest rate contracts Investment contracts 15.9 4.1 — Foreign exchange contracts Fixed maturities, available-for-sale 84.2 53.4 (37.1) Total $ (2.0) $ 57.5 $ (40.1) |
Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations (Table) | For the year ended December 31, 2022 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 2,852.3 $ (1.2) $ 5,650.7 Gains on fair value hedging relationships: Interest rate contracts: Loss recognized on hedged item $ (154.4) $ — $ — Gain recognized on derivatives 151.6 — — Amortization of hedged item basis adjustments (1.3) — — Amounts related to periodic settlements on derivatives 5.2 — — Total gain recognized for fair value hedging relationships $ 1.1 $ — $ — Gains on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 9.0 $ — $ (0.1) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 18.5 — Amounts related to periodic settlements on derivatives — — 3.7 Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 0.6 — Amounts related to periodic settlements on derivatives 14.5 — — Total gain recognized for cash flow hedging relationships $ 23.5 $ 19.1 $ 3.6 For the year ended December 31, 2021 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 3,633.7 $ (18.5) $ 6,482.6 Losses on fair value hedging relationships: Interest rate contracts: Loss recognized on hedged item $ (28.7) $ — $ — Gain recognized on derivatives 28.6 — — Amortization of hedged item basis adjustments (1.8) — — Amounts related to periodic settlements on derivatives (10.0) — — Total loss recognized for fair value hedging relationships $ (11.9) $ — $ — Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 15.4 $ — $ (0.1) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 1.0 — Amounts related to periodic settlements on derivatives — — (0.4) Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 9.2 — Amounts related to periodic settlements on derivatives 9.6 — — Total gain (loss) recognized for cash flow hedging relationships $ 25.0 $ 10.2 $ (0.5) For the year ended December 31, 2020 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 3,324.9 $ 105.6 $ 7,837.5 Losses on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 3.3 $ — $ — Loss recognized on derivatives (3.9) — — Amortization of hedged item basis adjustments (2.5) — — Amounts related to periodic settlements on derivatives (6.2) — — Total loss recognized for fair value hedging relationships $ (9.3) $ — $ — Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 18.1 $ 2.7 $ (0.1) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 0.1 — Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 6.3 — Amounts related to periodic settlements on derivatives 8.2 — — Total gain (loss) recognized for cash flow hedging relationships $ 26.3 $ 9.1 $ (0.1) |
Derivatives Not Designated as Hedging Instruments (Table) | Amount of gain (loss) recognized in net income on derivatives for the year ended December 31, Derivatives not designated as hedging instruments 2022 2021 2020 (in millions) Interest rate contracts $ (317.7) $ (33.8) $ 342.7 Foreign exchange contracts 1.4 (4.7) 7.7 Equity contracts 20.7 (81.1) (95.8) Credit contracts 0.1 0.1 1.8 Other contracts (1) 4,024.8 86.0 (247.3) Total $ 3,729.3 $ (33.5) $ 9.1 (1) Includes the change in the fair value of the funds withheld embedded derivative. |
Closed Block (Tables)
Closed Block (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Closed Block | |
Closed Block Liabilities and Assets Designated to the Closed Block (Table) | December 31, 2022 December 31, 2021 (in millions) Closed Block liabilities Future policy benefits and claims $ 3,128.1 $ 3,286.0 Other policyholder funds 5.1 5.3 Policyholder dividends payable 168.2 176.6 Policyholder dividend obligation — 210.7 Other liabilities 24.9 8.8 Total Closed Block liabilities 3,326.3 3,687.4 Assets designated to the Closed Block Fixed maturities, available-for-sale 1,690.2 2,191.6 Fixed maturities, trading 2.0 2.4 Equity securities 0.8 1.0 Mortgage loans 544.9 554.9 Policy loans 407.4 425.2 Other investments 62.2 48.4 Total investments 2,707.5 3,223.5 Cash and cash equivalents 62.0 19.7 Accrued investment income 30.3 32.6 Reinsurance recoverable and deposit receivable 3.9 5.1 Premiums due and other receivables 4.1 3.3 Deferred tax asset 62.0 24.6 Other assets 0.1 — Total assets designated to the Closed Block 2,869.9 3,308.8 Excess of Closed Block liabilities over assets designated to the Closed Block 456.4 378.6 Amounts included in accumulated other comprehensive income (111.9) 0.6 Maximum future earnings to be recognized from Closed Block assets and liabilities $ 344.5 $ 379.2 |
Closed Block Revenues and Expenses (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Revenues Premiums and other considerations $ 178.0 $ 196.1 $ 217.6 Net investment income 129.1 137.6 143.6 Net realized capital gains (losses) (21.2) (4.6) 16.0 Total revenues 285.9 329.1 377.2 Expenses Benefits, claims and settlement expenses 184.3 212.0 212.8 Dividends to policyholders 92.5 92.6 117.8 Operating expenses 2.2 2.3 2.7 Total expenses 279.0 306.9 333.3 Closed Block revenues, net of Closed Block expenses, before income taxes 6.9 22.2 43.9 Income taxes 0.7 3.9 8.4 Closed Block revenues, net of Closed Block expenses and income taxes 6.2 18.3 35.5 Funding adjustments and other transfers 28.5 (4.0) (2.2) Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustments $ 34.7 $ 14.3 $ 33.3 |
Change in Maximum Future Earnings of the Closed Block (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Beginning of year $ 379.2 $ 393.5 $ 426.9 Effects of implementation of accounting changes (1) — — 0.1 End of year 344.5 379.2 393.5 Change in maximum future earnings $ (34.7) $ (14.3) $ (33.3) (1) Includes the effects of implementation of accounting changes related to credit losses in 2020. |
Deferred Acquisition Costs (Tab
Deferred Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Acquisition Costs | |
Deferred Acquisition Costs Rollforward (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Balance at beginning of year $ 3,749.1 $ 3,398.5 $ 3,509.9 Costs deferred during the year 378.9 461.2 456.6 Amortized to expense during the year (1) (383.4) (284.2) (386.9) Adjustment related to unrealized (gains) losses on available-for-sale securities and derivative instruments (2) 934.8 173.6 (181.1) Balance at end of year $ 4,679.4 $ 3,749.1 $ 3,398.5 (1) Includes adjustments for revisions to estimated gross profits. Amortization for the year ended December 31, 2022, includes the impact from re-cohorting. Refer to Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Actuarial Balance Re-Cohorting” for further details. (2) The adjustment for the year ended December 31, 2022, includes the impact from re-cohorting. Refer to Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Actuarial Balance Re-Cohorting” for further details. |
Insurance Liabilities (Tables)
Insurance Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Contractholder Funds (Table) | December 31, 2022 2021 (in millions) Liabilities for investment contracts: Liabilities for individual annuities $ 7,739.3 $ 10,652.3 GICs 13,787.7 12,206.0 Funding agreements 12,318.7 11,685.5 Other investment contracts 1,005.6 997.1 Total liabilities for investment contracts 34,851.3 35,540.9 Universal life and other reserves 7,390.8 7,416.4 Total contractholder funds $ 42,242.1 $ 42,957.3 |
Liability for Unpaid Claims (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Balance at beginning of year $ 2,659.4 $ 2,534.9 $ 2,365.5 Less: reinsurance recoverable 442.1 436.9 403.8 Net balance at beginning of year 2,217.3 2,098.0 1,961.7 Incurred: Current year 1,664.2 1,572.5 1,376.8 Prior years 32.1 7.2 26.6 Total incurred 1,696.3 1,579.7 1,403.4 Payments: Current year 1,093.2 1,025.0 863.8 Prior years 465.4 435.4 403.3 Total payments 1,558.6 1,460.4 1,267.1 Net balance at end of year 2,355.0 2,217.3 2,098.0 Plus: reinsurance recoverable 478.1 442.1 436.9 Balance at end of year $ 2,833.1 $ 2,659.4 $ 2,534.9 Amounts not included in the rollforward above: Claim adjustment expense liabilities $ 59.7 $ 59.5 $ 57.8 |
Reconciliation of unpaid claims to liability for unpaid claims (Table) | December 31, 2022 Dental, Vision, STD, LTD and Group Life Critical Illness, Waiver Accident and PFML Group Life Consolidated (in millions) Net outstanding liabilities for unpaid claims $ 1,240.3 $ 79.7 $ 73.2 $ 1,393.2 Reconciling items: Reinsurance recoverable on unpaid claims 45.3 — 0.4 45.7 Impact of discounting (209.4) — — (209.4) Liability for unpaid claims - short-duration contracts $ 1,076.2 $ 79.7 $ 73.6 1,229.5 Insurance contracts other than short-duration 1,603.6 Liability for unpaid claims $ 2,833.1 |
Claim Duration and Payout (Table) | December 31, 2022 (1) Dental, Vision, STD, LTD and Group Life Critical Illness, Year Waiver Accident and PFML Group Life 1 7.9 % 91.8 % 79.6 % 2 24.7 8.0 18.5 3 15.4 4 8.3 5 5.8 6 5.2 7 4.3 8 3.4 9 3.2 10 2.6 (1) Unaudited. |
Discounting (Table) | Dental, Vision, STD, LTD and Group Life Critical Illness, Waiver Accident and PFML Group Life ($ in millions) Carrying amount of liabilities for unpaid claims December 31, 2022 $ 1,076.2 $ 79.7 $ 73.6 December 31, 2021 1,057.5 73.1 80.2 Range of discount rates December 31, 2022 2.8 - 7.0 % — - — % — - — % December 31, 2021 2.8 - 7.0 — - — — - — Aggregate amount of discount December 31, 2022 $ 209.4 $ — $ — December 31, 2021 208.0 — — Interest accretion For the year ended: December 31, 2022 $ 33.0 $ — $ — December 31, 2021 33.8 — — December 31, 2020 33.9 — — |
Long-Term Disability/Group Life Waiver | |
Claims Development (Table) | Incurred Cumulative but not number of reported reported Net incurred claims (1) claims claims December 31, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2022 2022 ($ in millions) Incurral year 2013 $ 219.3 $ 203.3 $ 188.4 $ 190.7 $ 182.3 $ 179.5 $ 177.1 $ 173.4 $ 174.5 $ 174.5 $ 0.1 7,051 2014 242.2 231.4 214.4 218.1 206.2 201.9 202.0 199.3 199.8 0.1 7,604 2015 231.0 227.2 217.2 215.3 208.2 210.0 211.8 210.5 0.1 7,181 2016 229.8 228.4 219.4 219.5 214.4 218.7 221.9 0.1 6,167 2017 238.4 239.7 243.1 245.8 245.2 246.5 0.1 6,082 2018 239.4 245.1 239.2 239.8 235.3 0.1 5,774 2019 255.2 248.4 240.4 240.2 5.7 5,945 2020 252.1 231.0 221.1 8.4 5,913 2021 259.7 244.5 4.0 5,484 2022 274.3 109.8 3,422 Total net incurred claims $ 2,268.6 Net cumulative paid claims (1) December 31, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (in millions) Incurral year 2013 $ 12.5 $ 55.0 $ 81.4 $ 97.0 $ 106.4 $ 116.4 $ 123.2 $ 129.0 $ 134.9 $ 139.6 2014 16.1 66.0 96.3 111.8 122.3 132.4 140.8 147.2 153.3 2015 16.9 67.0 98.0 114.6 126.8 137.1 146.5 154.0 2016 16.2 70.6 105.6 124.9 136.8 147.2 157.1 2017 17.8 76.5 115.0 135.9 151.7 165.4 2018 20.1 79.9 115.7 135.7 150.3 2019 19.2 79.7 117.5 136.4 2020 20.6 78.8 113.1 2021 19.8 79.0 2022 19.6 Total net paid claims 1,267.8 All outstanding liabilities for unpaid claims prior to 2013 net of reinsurance 239.5 Total outstanding liabilities for unpaid claims net of reinsurance $ 1,240.3 (1) 2013-2021 unaudited. |
Dental/Vision/Short-Term Disability/Critical Illness/Accident/PFML | |
Claims Development (Table) | Incurred Cumulative but not number of reported reported Net incurred claims (1) claims claims December 31, 2021 2022 2022 2022 ($ in millions) Incurral year 2021 $ 826.0 $ 814.1 $ — 3,749,753 2022 924.4 56.5 4,114,456 Total net incurred claims $ 1,738.5 Net cumulative paid claims (1) December 31, 2021 2022 (in millions) Incurral year 2021 $ 753.4 $ 813.3 2022 845.5 Total net paid claims 1,658.8 All outstanding liabilities for unpaid claims prior to 2021 net of reinsurance — Total outstanding liabilities for unpaid claims net of reinsurance $ 79.7 (1) 2021 unaudited. |
Group Life | |
Claims Development (Table) | Incurred Cumulative but not number of reported reported Net incurred claims (1) claims claims December 31, 2021 2022 2022 2022 ($ in millions) Incurral year 2021 $ 317.6 $ 321.5 $ 0.8 7,079 2022 279.3 24.7 5,368 Total net incurred claims $ 600.8 Net cumulative paid claims (1) December 31, 2021 2022 (in millions) Incurral year 2021 $ 243.9 $ 314.3 2022 218.3 Total net paid claims 532.6 All outstanding liabilities for unpaid claims prior to 2021 net of reinsurance 5.0 Total outstanding liabilities for unpaid claims net of reinsurance $ 73.2 (1) 2021 unaudited. |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Reinsurance | |
Schedule of information pertaining to effects of reinsurance on premiums and other considerations and policy and contract benefits | For the year ended December 31, 2022 2021 2020 (in millions) Premiums and other considerations: Direct $ 5,216.5 $ 4,869.7 $ 6,050.4 Assumed 503.5 494.3 439.5 Ceded (455.7) (650.0) (609.1) Net premiums and other considerations $ 5,264.3 $ 4,714.0 $ 5,880.8 Benefits, claims and settlement expenses: Direct $ 6,448.3 $ 6,351.5 $ 7,615.8 Assumed 775.0 796.1 746.4 Ceded (1,572.6) (665.0) (524.7) Net benefits, claims and settlement expenses $ 5,650.7 $ 6,482.6 $ 7,837.5 |
Schedule of information pertaining to cost of reinsurance asset and liability included on the consolidated statements of financial position | December 31, 2022 December 31, 2021 (in millions) Cost of reinsurance asset $ 3,689.2 $ 46.5 Cost of reinsurance liability $ 84.2 $ 22.1 |
Schedule of assets held in support of reserves associated with coinsurance with funds withheld agreement | December 31, 2022 (in millions) Fixed maturities, available-for-sale $ 15,693.5 Fixed maturities, trading 100.8 Equity securities 11.0 Mortgage loans 2,810.8 Other investments 179.8 Cash and cash equivalents 1,762.9 Accrued interest income 178.7 Net other liabilities (33.6) Net assets $ 20,703.9 |
Schedule of components of net investment income on the funds withheld assets that were passed to coinsurer | For the year ended December 31, 2022 (in millions) Fixed maturities, available-for-sale $ 745.9 Fixed maturities, trading 2.0 Equity securities 0.6 Mortgage loans 98.4 Cash and cash equivalents 18.2 Other 4.8 Total 869.9 Investment expenses (20.5) Net investment income $ 849.4 |
Schedule of components of net realized gains (losses) on the funds withheld assets that were passed to coinsurer | For the year ended December 31, 2022 (in millions) Fixed maturities, available-for-sale $ (235.5) Fixed maturities, trading (6.4) Equity securities (2.4) Mortgage loans (24.8) Derivatives 2.7 Other 3.3 Net realized capital losses $ (263.1) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Short-Term Debt (Table) | December 31, 2022 Financing Short-term debt Obligor/Applicant structure Maturity Capacity outstanding (in millions) PLIC Credit facility October 2027 $ 800.0 $ — Total $ 800.0 $ — December 31, 2021 Financing Short-term debt Obligor/Applicant structure Maturity Capacity outstanding (in millions) PFG, PFS, PLIC as co-borrowers Credit facility November 2023 $ 600.0 $ — PFG, PFS, PLIC and Principal Financial Services V (UK) Ltd as co-borrowers Credit facility November 2023 200.0 — Total $ 800.0 $ — |
Long-Term Debt (Table) | December 31, 2022 Principal Net unamortized discount, premium and debt issuance costs Carrying amount (in millions) Non-recourse mortgages and notes payable $ 67.1 $ 0.7 $ 67.8 Total long-term debt $ 67.1 $ 0.7 $ 67.8 December 31, 2021 Principal Net unamortized discount, premium and debt issuance costs Carrying amount (in millions) Non-recourse mortgages and notes payable $ 53.8 $ 0.2 $ 54.0 Total long-term debt $ 53.8 $ 0.2 $ 54.0 |
Future Annual Maturities of Long-Term Debt (Table) | As of December 31, 2022, future annual maturities of long-term debt were as follows (in millions): Year ending December 31: 2023 $ 25.3 2024 32.7 2025 0.4 2026 6.5 2027 0.1 Thereafter 2.8 Total future maturities of long-term debt $ 67.8 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Tax Expense (Benefit) from Continuing Operations (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Current income taxes (benefits): U.S. federal $ (142.9) $ 96.9 $ 19.1 State 21.7 11.4 12.6 Tax benefit of operating loss carryforward — — (0.1) Total current income taxes (benefits) (121.2) 108.3 31.6 Deferred income taxes (benefits): U.S. federal 1,243.3 124.4 128.5 State (4.5) 0.5 — Total deferred income taxes 1,238.8 124.9 128.5 Income taxes $ 1,117.6 $ 233.2 $ 160.1 |
Income Before Income Taxes, Domestic and Foreign (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Domestic $ 5,840.8 $ 1,686.8 $ 1,227.5 Total income before income taxes $ 5,840.8 $ 1,686.8 $ 1,227.5 |
Reconciliation Between U.S. Corporate Income Tax Rate and Effective Income Tax Rate from Continuing Operations (Table) | For the year ended December 31, 2022 2021 2020 U.S. corporate income tax rate 21 % 21 % 21 % Dividends received deduction (1) (4) (6) Tax credits (1) (3) (3) Interest exclusion from taxable income — (1) (1) Low income housing tax credit amortization — 1 1 Other — — 1 Effective income tax rate 19 % 14 % 13 % |
Changes in Unrecognized Tax Benefits (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Balance at beginning of period $ 43.9 $ 45.8 $ 57.2 Additions based on tax positions related to the current year — 1.3 1.3 Additions for tax positions of prior years — — 17.4 Reductions for tax positions related to the current year (3.3) (3.2) (3.2) Settlements — — (13.4) Expired statute of limitations — — (13.5) Balance at end of period (1) $ 40.6 $ 43.9 $ 45.8 (1) Our 2022 effective income tax rate would not be impacted if unrecognized tax benefits were recognized. We recognize interest and penalties related to uncertain tax positions in operating expenses within the consolidated statements of operations. |
Components of Net Deferred Income Taxes (Table) | December 31, 2022 2021 (in millions) Deferred income tax assets: Net unrealized losses on available-for-sale securities $ 1,611.9 $ — Tax credit carryforwards 65.8 — Employee benefits 26.4 54.2 Intangible assets 17.6 — Gross deferred income tax assets 1,721.7 54.2 Valuation allowance (12.3) (2.8) Total deferred income tax assets 1,709.4 51.4 Deferred income tax liabilities: Deferred acquisition costs (811.0) (594.5) Investments, including derivatives (187.6) (278.0) Funds withheld embedded derivative (767.1) — Net unrealized gains on available-for-sale securities — (1,070.7) Real estate (140.0) (141.7) Insurance liabilities (728.8) (21.6) Intangible assets — (7.7) Gain on sale of discontinued operations (1) (182.1) (189.5) Other deferred income tax liabilities (48.4) (21.2) Total deferred income tax liabilities (2,865.0) (2,324.9) Total net deferred income tax liabilities $ (1,155.6) $ (2,273.5) (1) Represents a deferred intercompany gain on the sale of PGI LLC to PFS, which was allocated to stockholder’s equity as the result of a taxable common control transaction on the standalone financials of the transferring entity. |
Net Deferred Income Taxes by Jurisdiction (Table) | December 31, 2022 2021 (in millions) Deferred income tax assets: State $ 10.8 $ — Net deferred income tax assets 10.8 — Deferred income tax liabilities: U.S. federal (1,166.4) (2,245.1) State — (28.4) Net deferred income tax liabilities (1,166.4) (2,273.5) Total net deferred income tax liabilities $ (1,155.6) $ (2,273.5) |
Employee and Agent Benefits (Ta
Employee and Agent Benefits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Assumed Health Care Cost Trend Rates (Table) | December 31, 2022 2021 Health care cost trend rate assumed for next year under age 65 7.00 % 7.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50 % 4.50 % Year that the rate reaches the ultimate trend rate (under age 65) 2031 2030 |
Other postretirement benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Obligations and Funded Status (Table) | December 31, 2022 2021 (in millions) Change in benefit obligation Benefit obligation at beginning of year $ (79.2) $ (92.5) Interest cost (1.9) (1.8) Actuarial gain 17.0 6.4 Participant contributions (6.4) (6.1) Benefits paid 11.9 11.9 Plan transfer due to change in sponsorship — 2.9 Benefit obligation at end of year $ (58.6) $ (79.2) Change in plan assets Fair value of plan assets at beginning of year $ 89.5 $ 751.1 Actual return on plan assets (15.0) (0.8) Employer contribution 1.4 1.5 Participant contributions 6.4 6.1 Benefits paid (11.9) (11.9) Assets re-designated for non-retiree benefits — (656.5) Fair value of plan assets at end of year $ 70.4 $ 89.5 Amount recognized in statement of financial position Other assets $ 11.8 $ 10.3 Total $ 11.8 $ 10.3 Amount recognized in accumulated other comprehensive income Total net actuarial gain $ (18.1) $ (20.7) Pre-tax accumulated other comprehensive income $ (18.1) $ (20.7) |
Components of Net Periodic Benefit Cost (Income) (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Interest cost $ 1.9 $ 1.8 $ 2.4 Expected return on plan assets (3.7) (3.5) (34.8) Amortization of prior service cost — — 0.1 Recognized net actuarial (gain) loss (0.9) (0.4) 0.2 Net periodic benefit income $ (2.7) $ (2.1) $ (32.1) |
Amounts Recognized in Net Periodic Benefit Cost and Accumulated Other Comprehensive (Income) Loss (Table) | For the year ended December 31, 2022 2021 (in millions) Other changes recognized in accumulated other comprehensive (income) loss Net actuarial (gain) loss $ 1.7 $ (4.1) Prior service benefit — (0.7) Amortization of net gain 0.9 0.4 Total recognized in pre-tax accumulated other comprehensive (income) loss $ 2.6 $ (4.4) Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive income $ (0.1) $ (6.5) |
Weighted-Average Assumptions Used to Determine Benefit Obligations (Table) | December 31, 2022 2021 Discount rate 5.05 % 2.55 % Rate of compensation increase N/A N/A |
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost (Table) | For the year ended December 31, 2022 2021 2020 Discount rate (1) 2.55 % 2.15 % 2.95 % Expected long-term return on plan assets 4.25 % 4.25 % 4.95 % Rate of compensation increase N/A N/A N/A % (1) During the second quarter 2020, subsidy increases provided under the long-term care plan were capped at 5% per calendar year. This change was remeasured as of March 31, 2020. A discount rate of 2.95% was used until the remeasurement date at which time a discount rate of 2.90% was used. |
Fair Value of Plan Assets (Table) | December 31, 2022 Assets Fair value hierarchy level measured at fair value Level 1 Level 2 Level 3 (in millions) Asset category Cash and cash equivalents $ 0.5 $ 0.5 $ — $ — Fixed income security portfolios (1) 34.7 34.7 — — U.S. equity portfolios (2) 25.6 25.6 — — International equity portfolios (3) 9.6 9.6 — — Total $ 70.4 $ 70.4 $ — $ — December 31, 2021 Assets Fair value hierarchy level measured at fair value Level 1 Level 2 Level 3 (in millions) Asset category Cash and cash equivalents $ 0.5 $ 0.5 $ — $ — Fixed income security portfolios (1) 41.8 41.8 — — U.S. equity portfolios (2) 32.9 32.9 — — International equity portfolios (3) 14.3 14.3 — — Total $ 89.5 $ 89.5 $ — $ — (1) The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to, corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations. (2) The portfolios invest primarily in publicly traded equity securities of large U.S. companies. (3) The portfolios invest primarily in publicly traded equity securities of non-U.S. companies. |
Target Asset Allocation (Table) | Asset category Target allocation Fixed income security portfolios 50 % U.S. equity portfolios 35 % International equity portfolios 15 % |
Estimated Future Benefit Payments (Table) | Other postretirement benefits (gross benefit payments, including prescription drug benefits) (in millions) Year ending December 31: 2023 $ 11.6 2024 10.7 2025 9.7 2026 8.6 2027 7.6 2028-2032 30.1 |
Contingencies, Guarantees, In_2
Contingencies, Guarantees, Indemnifications and Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Contingencies, Guarantees, Indemnifications and Leases | |
Lease Assets and Liabilities (Table) | December 31, 2022 2021 (in millions) Assets Operating lease assets (1) $ 116.9 $ 125.6 Finance lease assets (1) 82.4 94.2 Total lease assets $ 199.3 $ 219.8 Liabilities Operating lease liabilities (2) $ 112.2 $ 118.3 Finance lease liabilities (2) 83.0 94.8 Total lease liabilities $ 195.2 $ 213.1 (1) Operating and finance lease assets are primarily reported within property and equipment on the consolidated statements of financial position. (2) Operating and finance lease liabilities are reported within other liabilities on the consolidated statements of financial position. |
Lease Cost (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Finance lease cost (1) Amortization of right-of-use assets $ 34.0 $ 30.5 $ 20.4 Interest on lease liabilities 1.2 1.0 1.0 Operating lease cost (1) 34.6 37.6 30.5 Other lease cost (1) (2) 9.5 7.3 5.8 Sublease income (3) (1.5) (1.7) (1.6) Total lease cost $ 77.8 $ 74.7 $ 56.1 (1) Finance, operating and other lease costs are primarily included in operating expenses on the consolidated statements of operations. (2) Other lease cost primarily reflects variable and short-term lease costs. (3) Sublease income is included in fees and other revenues on the consolidated statements of operations. |
Future Payments Due by Period for Lease Obligations (Table) | Operating leases Finance leases Total (in millions) For the twelve months ending December 31: 2023 $ 25.6 $ 35.0 $ 60.6 2024 22.3 30.2 52.5 2025 18.8 14.6 33.4 2026 15.7 5.0 20.7 2027 11.6 0.4 12.0 2028 and thereafter 32.2 — 32.2 Total lease payments 126.2 85.2 211.4 Less: interest 14.0 2.2 16.2 Present value of lease liabilities $ 112.2 $ 83.0 $ 195.2 |
Weighted-Average Remaining Lease Term and Weighted-Average Discount Rates (Table) | For the year ended December 31, 2022 2021 2020 Weighted-average remaining lease term (in years): Operating leases 7.7 7.8 8.1 Finance leases 2.8 3.2 3.0 Weighted-average discount rate: Operating leases 2.5 % 2.2 % 2.4 % Finance leases 1.7 % 1.1 % 1.8 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Other Comprehensive Income (Loss) (Table) | For the year ended December 31, 2022 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ (12,980.4) $ 2,753.0 $ (10,227.4) Reclassification adjustment for losses included in net income (1) 333.3 (70.4) 262.9 Adjustments for assumed changes in amortization patterns 926.6 (194.6) 732.0 Adjustments for assumed changes in policyholder liabilities 486.1 (102.0) 384.1 Net unrealized losses on available-for-sale securities (11,234.4) 2,386.0 (8,848.4) Net unrealized losses on derivative instruments during the period (1.3) 0.3 (1.0) Reclassification adjustment for gains included in net income (2) (28.0) 5.8 (22.2) Adjustments for assumed changes in amortization patterns 7.3 (1.6) 5.7 Adjustments for assumed changes in policyholder liabilities (2.9) 0.6 (2.3) Net unrealized losses on derivative instruments (24.9) 5.1 (19.8) Unrecognized postretirement benefit obligation during the period (1.7) 0.4 (1.3) Amortization of amounts included in net periodic benefit cost (3) (0.9) 0.1 (0.8) Net unrecognized postretirement benefit obligation (2.6) 0.5 (2.1) Other comprehensive loss $ (11,261.9) $ 2,391.6 $ (8,870.3) For the year ended December 31, 2021 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ (2,313.3) $ 490.5 $ (1,822.8) Reclassification adjustment for losses included in net income (1) 20.5 (4.3) 16.2 Adjustments for assumed changes in amortization patterns 171.4 (36.0) 135.4 Adjustments for assumed changes in policyholder liabilities 1,288.6 (270.5) 1,018.1 Net unrealized losses on available-for-sale securities (832.8) 179.7 (653.1) Net unrealized gains on derivative instruments during the period 66.7 (14.0) 52.7 Reclassification adjustment for gains included in net income (2) (25.5) 5.4 (20.1) Adjustments for assumed changes in amortization patterns (0.2) — (0.2) Adjustments for assumed changes in policyholder liabilities 1.6 (0.4) 1.2 Net unrealized gains on derivative instruments 42.6 (9.0) 33.6 Unrecognized postretirement benefit obligation during the period 2.3 (0.5) 1.8 Amortization of amounts included in net periodic benefit cost (3) (0.4) 0.1 (0.3) Net unrecognized postretirement benefit obligation 1.9 (0.4) 1.5 Other comprehensive loss $ (788.3) $ 170.3 $ (618.0) For the year ended December 31, 2020 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 3,268.3 $ (690.8) $ 2,577.5 Reclassification adjustment for gains included in net income (1) (41.4) 9.4 (32.0) Adjustments for assumed changes in amortization patterns (179.0) 37.6 (141.4) Adjustments for assumed changes in policyholder liabilities (1,275.1) 267.7 (1,007.4) Net unrealized gains on available-for-sale securities 1,772.8 (376.1) 1,396.7 Net unrealized losses on derivative instruments during the period (28.1) 6.5 (21.6) Reclassification adjustment for gains included in net income (2) (27.1) 5.1 (22.0) Adjustments for assumed changes in amortization patterns 2.7 (0.5) 2.2 Adjustments for assumed changes in policyholder liabilities 7.8 (1.6) 6.2 Net unrealized losses on derivative instruments (44.7) 9.5 (35.2) Unrecognized postretirement benefit obligation during the period 5.7 (1.2) 4.5 Amortization of amounts included in net periodic benefit cost (3) 0.3 (0.1) 0.2 Net unrecognized postretirement benefit obligation 6.0 (1.3) 4.7 Other comprehensive income $ 1,734.1 $ (367.9) $ 1,366.2 (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations. (2) See Note 6, Derivative Financial Instruments, under the caption “Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations” for further details. (3) Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 13, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details. |
Accumulated Other Comprehensive Income (Loss) (Table) | Noncredit Net unrealized component of Net unrealized Unrecognized Accumulated gains (losses) on impairment losses gains postretirement other available-for-sale on fixed maturities on derivative benefit comprehensive securities (1) available-for-sale instruments obligation income (loss) (in millions) Balances as of January 1, 2020 $ 2,602.9 $ (44.1) $ 53.7 $ 8.2 $ 2,620.7 Other comprehensive income during the period, net of adjustments 1,428.7 — (13.2) 4.5 1,420.0 Amounts reclassified from AOCI (32.0) — (22.0) 0.2 (53.8) Other comprehensive income 1,396.7 — (35.2) 4.7 1,366.2 Effects of implementation of accounting change related to credit losses, net (44.1) 44.1 — — — Balances as of December 31, 2020 3,955.5 — 18.5 12.9 3,986.9 Other comprehensive loss during the period, net of adjustments (669.3) — 53.7 1.8 (613.8) Amounts reclassified from AOCI 16.2 — (20.1) (0.3) (4.2) Other comprehensive loss (653.1) — 33.6 1.5 (618.0) Net assets transferred to affiliate due to change in benefit plan sponsorship — — — 2.0 2.0 Balances as of December 31, 2021 3,302.4 — 52.1 16.4 3,370.9 Other comprehensive loss during the period, net of adjustments (9,111.3) — 2.4 (1.3) (9,110.2) Amounts reclassified from AOCI 262.9 — (22.2) (0.8) 239.9 Other comprehensive loss (8,848.4) — (19.8) (2.1) (8,870.3) Adjustments for reinsurance (2) 124.4 — 7.4 — 131.8 Balances as of December 31, 2022 $ (5,421.6) $ — $ 39.7 $ 14.3 $ (5,367.6) (1) Net unrealized losses on available-for-sale debt securities for which an allowance for credit loss has been recorded were $1.8 million, $0.6 million and $ 2.6 million as of December 31, 2022, 2021 and 2020, respectively. (2) Reflects the January 1, 2022, balance associated with our ULSG business that was ceded to Talcott Life & Annuity Re. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value (Table) | December 31, 2022 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (4) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,715.9 $ — $ 1,354.0 $ 361.9 $ — Non-U.S. governments 520.4 — — 520.4 — States and political subdivisions 6,168.3 — — 6,099.2 69.1 Corporate 33,184.8 — 26.6 31,589.9 1,568.3 Residential mortgage-backed pass-through securities 2,170.9 — — 2,170.9 — Commercial mortgage-backed securities 4,827.5 — — 4,824.1 3.4 Collateralized debt obligations (1) 4,560.2 — — 4,504.0 56.2 Other debt obligations 6,483.3 — — 6,015.5 467.8 Total fixed maturities, available-for-sale 59,631.3 — 1,380.6 56,085.9 2,164.8 Fixed maturities, trading 634.0 — 78.6 449.2 106.2 Equity securities 53.1 — 14.8 38.3 — Derivative assets (2) 256.6 — — 256.5 0.1 Other investments 82.8 81.4 — — 1.4 Cash equivalents 2,776.4 — 930.3 1,846.1 — Sub-total excluding separate account assets 63,434.2 81.4 2,404.3 58,676.0 2,272.5 Separate account assets 120,279.6 9,120.9 91,424.2 18,700.4 1,034.1 Total assets $ 183,713.8 $ 9,202.3 $ 93,828.5 $ 77,376.4 $ 3,306.6 Liabilities Investment and universal life contracts (3) $ 58.9 $ — $ — $ — $ 58.9 Funds withheld payable embedded derivative (3) 3,652.8 — — — 3,652.8 Derivative liabilities (2) (612.3) — — (608.2) (4.1) Total liabilities $ 3,099.4 $ — $ — $ (608.2) $ 3,707.6 Net assets $ 186,813.2 $ 9,202.3 $ 93,828.5 $ 76,768.2 $ 7,014.2 December 31, 2021 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (4) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,937.0 $ — $ 1,587.0 $ 350.0 $ — Non-U.S. governments 947.1 — — 947.1 — States and political subdivisions 9,216.4 — — 9,124.0 92.4 Corporate 42,965.1 — 41.5 42,089.3 834.3 Residential mortgage-backed pass-through securities 2,342.3 — — 2,342.3 — Commercial mortgage-backed securities 5,513.7 — — 5,494.5 19.2 Collateralized debt obligations (1) 3,533.5 — — 3,447.7 85.8 Other debt obligations 7,441.8 — — 7,399.7 42.1 Total fixed maturities, available-for-sale 73,896.9 — 1,628.5 71,194.6 1,073.8 Fixed maturities, trading 233.3 — 0.5 227.9 4.9 Equity securities 508.2 — 463.5 44.7 — Derivative assets (2) 326.2 — — 325.6 0.6 Other investments 94.1 92.7 — — 1.4 Cash equivalents 753.0 — — 753.0 — Sub-total excluding separate account assets 75,811.7 92.7 2,092.5 72,545.8 1,080.7 Separate account assets 147,529.0 8,942.9 114,735.5 22,904.6 946.0 Total assets $ 223,340.7 $ 9,035.6 $ 116,828.0 $ 95,450.4 $ 2,026.7 Liabilities Investment and universal life contracts (3) $ (320.9) $ — $ — $ — $ (320.9) Derivative liabilities (2) (142.3) — — (142.3) — Total liabilities $ (463.2) $ — $ — $ (142.3) $ (320.9) Net assets $ 222,877.5 $ 9,035.6 $ 116,828.0 $ 95,308.1 $ 1,705.8 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 6, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. (3) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative could be in either an asset or (liability) position. (4) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $7.8 million and $10.2 million as of December 31, 2022 and December 31, 2021, respectively. Separate account assets using the NAV practical expedient consist of hedge funds and a real estate fund with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these funds. |
Reconciliation for All Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Table) | For the year ended December 31, 2022 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included other and Transfers Transfers as of January 1, in net comprehensive settlements into out of December 31, 2022 income (2) income (3) (4) Level 3 Level 3 2022 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 92.4 $ — $ (23.5) $ (1.6) $ 12.0 $ (10.2) $ 69.1 Corporate 834.3 (4.8) (28.6) 626.3 176.3 (35.2) 1,568.3 Commercial mortgage-backed securities 19.2 — (1.0) (4.6) — (10.2) 3.4 Collateralized debt obligations 85.8 — (1.0) 151.8 — (180.4) 56.2 Other debt obligations 42.1 (0.3) (20.4) 474.2 — (27.8) 467.8 Total fixed maturities, available-for-sale 1,073.8 (5.1) (74.5) 1,246.1 188.3 (263.8) 2,164.8 Fixed maturities, trading 4.9 (0.6) — 72.9 29.0 — 106.2 Other investments 1.4 — — — — — 1.4 Separate account assets (1) 946.0 112.0 — (23.9) — — 1,034.1 Liabilities Investment and universal life contracts (320.9) 363.9 — 15.9 — — 58.9 Funds withheld payable embedded derivative — 3,652.8 — — — — 3,652.8 Derivatives Net derivative assets (liabilities) 0.6 (4.0) (0.3) — — (0.3) (4.0) For the year ended December 31, 2021 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included Included in issuances balance as of in net other and Transfers Transfers as of January 1, income comprehensive settlements into out of December 31, 2021 (2) income (3) (4) Level 3 Level 3 2021 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ 12.5 $ (0.4) $ 80.3 $ — $ 92.4 Corporate 290.8 (21.9) 7.8 381.8 175.8 — 834.3 Commercial mortgage-backed securities 13.2 (1.0) (0.4) 7.4 — — 19.2 Collateralized debt obligations 27.2 (2.0) 1.7 397.4 72.1 (410.6) 85.8 Other debt obligations 29.2 — 0.4 16.9 20.6 (25.0) 42.1 Total fixed maturities, available-for-sale 360.4 (24.9) 22.0 803.1 348.8 (435.6) 1,073.8 Fixed maturities, trading — — — 4.9 — — 4.9 Other investments 30.0 12.4 — (41.0) — — 1.4 Separate account assets (1) 8,893.2 313.8 — (8,261.0) — — 946.0 Liabilities Investment and universal life contracts (414.4) 67.0 — 26.5 — — (320.9) Derivatives Net derivative assets (liabilities) (5.1) (5.0) — 10.7 — — 0.6 For the year ended December 31, 2020 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included Included in issuances balance as of in net other and Transfers Transfers as of January 1, income comprehensive settlements into out of December 31, 2020 (2) income (3) (4) Level 3 Level 3 2020 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 81.7 $ (0.9) $ 5.2 $ 118.0 $ 342.0 $ (255.2) $ 290.8 Commercial mortgage-backed securities 12.9 (1.3) 1.4 (0.1) 0.3 — 13.2 Collateralized debt obligations 199.0 (2.3) (21.8) 182.5 — (330.2) 27.2 Other debt obligations 91.3 — (1.4) (37.9) 46.1 (68.9) 29.2 Total fixed maturities, available-for-sale 384.9 (4.5) (16.6) 262.5 388.4 (654.3) 360.4 Fixed maturities, trading 0.3 — — — — (0.3) — Other investments 34.2 6.3 — (10.5) — — 30.0 Separate account assets (1) 8,966.7 463.5 — (537.0) — — 8,893.2 Liabilities Investment and universal life contracts (151.2) (244.0) — (19.2) — — (414.4) Derivatives Net derivative assets (liabilities) 11.6 9.8 — — — (26.5) (5.1) (1) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. (2) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses) included in net income relating to positions still held were: For the year ended December 31, 2022 2021 2020 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ (1.3) $ (4.6) $ — Commercial mortgage-backed securities — (1.0) (1.2) Collateralized debt obligations — (2.0) (2.2) Total fixed maturities, available-for-sale (1.3) (7.6) (3.4) Fixed maturities, trading (0.6) — — Other investments — 12.5 5.3 Separate account assets 89.8 90.5 385.5 Liabilities Investment and universal life contracts 349.4 65.9 (251.1) Funds withheld payable embedded derivative 3,652.8 — — Derivatives Net derivative assets (liabilities) (4.0) — 9.9 (3) Changes in unrealized gains (losses) included in OCI relating to positions still held were : For the year ended December 31, 2022 2021 2020 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ (21.7) $ 12.5 $ — Corporate (19.8) (0.7) 11.9 Commercial mortgage-backed securities (0.5) (0.4) 1.5 Collateralized debt obligations — 1.9 (0.3) Total fixed maturities, available-for-sale (42.0) 13.3 13.1 Derivatives Net derivative assets (liabilities) (0.2) — — (4) Gross purchases, sales, issuances and settlements were: For the year ended December 31, 2022 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (1.6) $ (1.6) Corporate 817.3 (50.4) — (140.6) 626.3 Commercial mortgage-backed securities — (4.1) — (0.5) (4.6) Collateralized debt obligations 151.9 — — (0.1) 151.8 Other debt obligations 487.4 (8.2) — (5.0) 474.2 Total fixed maturities, available-for-sale 1,456.6 (62.7) — (147.8) 1,246.1 Fixed maturities, trading 106.9 (32.6) — (1.4) 72.9 Separate account assets (5) 11.8 (4.5) (50.0) 18.8 (23.9) Liabilities Investment and universal life contracts — — (7.4) 23.3 15.9 For the year ended December 31, 2021 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (0.4) $ (0.4) Corporate 626.6 (84.3) — (160.5) 381.8 Commercial mortgage-backed securities 7.7 — — (0.3) 7.4 Collateralized debt obligations 422.7 — — (25.3) 397.4 Other debt obligations 45.1 — — (28.2) 16.9 Total fixed maturities, available-for-sale 1,102.1 (84.3) — (214.7) 803.1 Fixed maturities, trading 4.9 — — — 4.9 Other investments — (41.0) — — (41.0) Separate account assets (5) 38.5 (8,206.2) (191.5) 98.2 (8,261.0) Liabilities Investment and universal life contracts — — (16.4) 42.9 26.5 Derivatives Net derivative assets (liabilities) — 10.7 — — 10.7 For the year ended December 31, 2020 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 169.2 $ (5.5) $ — $ (45.7) $ 118.0 Commercial mortgage-backed securities — — — (0.1) (0.1) Collateralized debt obligations 182.0 — — 0.5 182.5 Other debt obligations 14.3 — — (52.2) (37.9) Total fixed maturities, available-for-sale 365.5 (5.5) — (97.5) 262.5 Other investments 0.5 (11.0) — — (10.5) Separate account assets (5) 309.2 (656.7) (396.1) 206.6 (537.0) Liabilities Investment and universal life contracts — — (41.0) 21.8 (19.2) (5) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. |
Transfers (Table) | For the year ended December 31, 2022 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ 12.0 $ — $ 10.2 Corporate — 176.3 — 35.2 Commercial mortgage-backed securities — — — 10.2 Collateralized debt obligations — — — 180.4 Other debt obligations — — — 27.8 Total fixed maturities, available-for-sale — 188.3 — 263.8 Fixed maturities, trading — 29.0 — — Derivatives Net derivative assets (liabilities) — — — 0.3 For the year ended December 31, 2021 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — 80.3 $ — $ — Corporate — 175.8 — — Collateralized debt obligations — 72.1 — 410.6 Other debt obligations — 20.6 — 25.0 Total fixed maturities, available-for-sale — 348.8 — 435.6 For the year ended December 31, 2020 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for- sale: Corporate $ — $ 342.0 $ — $ 255.2 Commercial mortgage-backed securities — 0.3 — — Collateralized debt obligations — — — 330.2 Other debt obligations — 46.1 — 68.9 Total fixed maturities, available-for-sale — 388.4 — 654.3 Fixed maturities, trading — — — 0.3 Derivatives Net derivative assets (liabilities) — — — 26.5 |
Quantitative Information about Level 3 Fair Value Measurements (Table) | December 31, 2022 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 1,479.9 Discounted cash flow Discount rate (1) 2.7 %- 33.1 % 11.0 % Illiquidity premium 0 basis points (“bps”)- 467 bps 50 bps Comparability adjustment (16) bps- 0 bps (11) bps Collateralized debt obligations 39.5 Discounted cash flow Discount rate (1) 4.4 % 4.4 % Comparability adjustment 55 bps 55 bps Other debt obligations 467.8 Discounted cash flow Discount rate (1) 5.6 %- 8.2 % 7.6 % Illiquidity premium 0 bps- 260 bps 220 bps Comparability adjustment 1 bps- 139 bps 77 bps Fixed maturities, trading 92.5 Discounted cash flow Discount rate (1) 9.6 %- 15.2 % 11.0 % Separate account assets 1,034.1 Discounted cash flow - real estate Discount rate (1) 5.5 %- 10.0 % 7.0 % Terminal capitalization rate 4.5 %- 9.5 % 5.8 % Average market rent growth rate 2.0 %- 3.8 % 3.0 % Discounted cash flow - real estate debt Loan to value 43.6 %- 62.2 % 50.6 % Market interest rate 5.3 %- 8.6 % 6.6 % Liabilities Investment and universal life contracts (6) 58.9 Discounted cash flow Long duration interest rate 2.4 %- 4.1 % (3) 3.7 % Long-term equity market volatility 17.8 %- 36.9 % 21.9 % Nonperformance risk 0.9 %- 2.0 % 1.6 % Utilization rate See note (4) Lapse rate 1.3 %- 9.0 % 4.7 % Mortality rate See note (5) December 31, 2021 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 829.9 Discounted cash flow Discount rate (1) 0.9 %- 15.5 % 6.8 % Illiquidity premium 0 bps- 70 bps 6 bps Market comparables Potential loss severity 39.4 % 39.4 % Probability of default 100.0 % 100.0 % Commercial mortgage-backed securities 3.5 Discounted cash flow Discount rate (1) 3.7 % 3.7 % Collateralized debt obligations 45.9 Discounted cash flow Discount rate (1) 3.0 %- 5.3 % 4.0 % Illiquidity premium 0 bps- 385 bps 255 bps Other debt obligations 22.1 Discounted cash flow Discount rate (1) 3.0 %- 10.0 % 3.3 % Illiquidity premium 225 bps- 500 bps 237 bps Fixed maturities, trading 4.9 Discounted cash flow Discount rate (1) 7.5 % 7.5 % Separate account assets 946.0 Discounted cash flow - mortgage loans Discount rate (1) 1.4 % 1.4 % Credit spread rate 120 bps 120 bps Discounted cash flow - real estate Discount rate (1) 5.3 %- 10.0 % 6.6 % Terminal capitalization rate 4.3 %- 9.3 % 5.6 % Average market rent growth rate 1.6 %- 3.6 % 2.7 % Discounted cash flow - real estate debt Loan to value 40.1 %- 58.5 % 46.0 % Market interest rate 2.5 %- 3.1 % 2.7 % Liabilities Investment and universal life contracts (6) (320.9) Discounted cash flow Long duration interest rate 1.9 % (3) 1.9 % Long-term equity market volatility 19.8 %- 32.5 % 22.5 % Nonperformance risk 0.3 %- 1.1 % 0.9 % Utilization rate See note (4) Lapse rate 1.3 %- 9.0 % 4.7 % Mortality rate See note (5) (1) Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable. (2) Revenue multiples are amounts used when we have determined market participants would use such multiples to value the investments. (3) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates. (4) This input factor is the number of contractholders taking withdrawals as well as the amount and timing of the withdrawals and a range does not provide a meaningful presentation. (5) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation. (6) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. |
Fair Value Option (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Real estate ventures Change in fair value pre-tax gain (1) $ — $ 12.5 $ 5.3 (1) |
Financial Instruments Not Reported at Fair Value (Table) | December 31, 2022 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 19,722.4 $ 17,847.1 $ — $ — $ 17,847.1 Policy loans 770.2 749.5 — — 749.5 Other investments 230.0 217.4 — 112.9 104.5 Cash and cash equivalents 552.9 552.9 552.9 — — Reinsurance deposit receivable 7,900.9 6,859.9 — — 6,859.9 Cash collateral receivable 262.8 262.8 262.8 — — Investment contracts (34,919.4) (31,915.2) — (7,278.9) (24,636.3) Long-term debt (67.8) (60.5) — — (60.5) Separate account liabilities (107,227.6) (106,410.4) — — (106,410.4) Bank deposits (1) (352.4) (336.3) — (336.3) — Cash collateral payable (285.1) (285.1) (285.1) — — December 31, 2021 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 18,908.3 $ 19,842.3 $ — $ — $ 19,842.3 Policy loans 705.0 888.9 — — 888.9 Other investments 290.4 281.2 — 185.0 96.2 Cash and cash equivalents 475.6 475.6 475.6 — — Cash collateral receivable 2.0 2.0 2.0 — — Investment contracts (35,249.5) (35,534.9) — (7,454.3) (28,080.6) Long-term debt (54.0) (38.0) — — (38.0) Separate account liabilities (131,096.8) (130,152.8) — — (130,152.8) Bank deposits (1) (373.3) (372.8) — (372.8) — Cash collateral payable (204.4) (204.4) (204.4) — — (1) Excludes deposit liabilities without defined or contractual maturities. |
Statutory Insurance Financial_2
Statutory Insurance Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Statutory Insurance Financial Information | |
Statutory Net Income (Loss) and Statutory Capital and Surplus of Principal Life (Table) | As of or for the year ended December 31, 2022 2021 2020 (in millions) Statutory net income (loss) $ (1,563.1) $ 864.0 $ 915.9 Statutory capital and surplus 4,304.4 5,375.2 5,682.4 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information | |
Reconciliation of Assets from Segment to Consolidated (Table) | December 31, 2022 December 31, 2021 (in millions) Assets: Retirement and Income Solutions $ 202,518.1 $ 220,777.3 U.S. Insurance Solutions 39,907.5 32,344.7 Corporate 788.6 2,226.3 Total consolidated assets $ 243,214.2 $ 255,348.3 |
Reconciliation of Operating Revenues and Pre-tax Operating Earnings (Losses) by Segment (Table) | (3) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the year ended December 31, 2022 2021 2020 (in millions) Net realized capital gains (losses): Net realized capital gains (losses) $ (1.2) $ (18.5) $ 105.6 Derivative and hedging-related revenue adjustments (41.7) (119.4) (119.3) Market value adjustments to fee revenues 0.7 (0.6) (1.6) Recognition of front-end fee revenue (4.7) (2.9) 11.4 Net realized capital losses, net of related revenue adjustments (46.9) (141.4) (3.9) Amortization of deferred acquisition costs and other actuarial balances 2.5 11.1 (26.8) Capital (gains) losses distributed 0.5 (0.5) (0.1) Market value adjustments of embedded derivatives (44.1) 79.8 (55.0) Pre-tax net realized capital losses, as adjusted (a) $ (88.0) $ (51.0) $ (85.8) (a) As adjusted before noncontrolling interest capital gains (losses). |
Revenues from exited business (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Revenues from exited business: Change in fair value of funds withheld embedded derivative $ 3,652.8 $ — $ — Net realized capital gains on funds withheld assets 749.4 — — Strategic review costs and impacts 32.4 — — Amortization of reinsurance gain 12.6 — — Total revenues from exited business $ 4,447.2 $ — $ — |
Pre-tax income (loss) from exited business (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Pre-tax income from exited business: Change in fair value of funds withheld embedded derivative $ 3,652.8 $ — $ — Net realized capital gains on funds withheld assets 749.4 — — Strategic review costs and impacts (57.1) — — Amortization of reinsurance loss (82.5) — — Impacts to actuarial balances of reinsured business 34.5 — — Total pre-tax income from exited business $ 4,297.1 $ — $ — |
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Income tax expense (benefit) by segment: Retirement and Income Solutions $ 138.8 $ 170.4 $ 133.3 U.S. Insurance Solutions 100.7 90.5 46.3 Corporate (8.2) (14.3) (6.3) Total segment income taxes from operating earnings 231.3 246.6 173.3 Tax benefit related to net realized capital losses, as adjusted (21.7) (13.5) (13.2) Tax expense related to exited business (1) 908.0 — — Certain adjustments related to equity method investments — 0.1 — Total income taxes per consolidated statements of operations $ 1,117.6 $ 233.2 $ 160.1 (1) Income tax expense related to exited business is derived as follows: |
Income tax expense related to exited business | |
Reconciliation of Depreciation and Amortization Expense from Segments to Consolidated (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Depreciation and amortization expense by segment: Retirement and Income Solutions $ 58.0 $ 53.0 $ 38.8 U.S. Insurance Solutions 18.9 19.3 20.2 Corporate 5.2 9.8 4.4 Total segment depreciation and amortization expense included in pre-tax operating earnings 82.1 82.1 63.4 Depreciation and amortization expense related to exited business 26.9 — — Total depreciation and amortization expense included in our consolidated statements of operations $ 109.0 $ 82.1 $ 63.4 |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Revenue from contracts with customers by segment: Retirement and Income Solutions: Retirement and Income Solutions — Fee $ 522.2 $ 399.3 $ 250.5 Retirement and Income Solutions — Spread 11.4 9.9 8.6 Total Retirement and Income Solutions 533.6 409.2 259.1 U.S. Insurance Solutions: Specialty Benefits insurance 12.2 12.1 12.1 Individual Life insurance 64.4 60.1 48.4 Eliminations — (0.1) (0.1) Total U.S. Insurance Solutions 76.6 72.1 60.4 Corporate (0.8) (1.0) (0.8) Total segment revenue from contracts with customers 609.4 480.3 318.7 Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) 1,557.5 2,202.8 2,025.1 Pre-tax other adjustments (2) 41.0 (3.5) 9.8 Total fees and other revenues per consolidated statements of operations $ 2,207.9 $ 2,679.6 $ 2,353.6 (1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards. (2) Pre-tax other adjustments relate to revenues from exited business and the recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and certain market value adjustments to fee revenues. |
Retirement and Income Solutions | Retirement and Income Solutions - Fee | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Administrative service fee revenue $ 519.2 $ 395.9 $ 248.4 Other fee revenue 3.0 3.4 2.1 Total revenues from contracts with customers 522.2 399.3 250.5 Fees and other revenues not within the scope of revenue recognition guidance 1,187.0 1,299.6 1,130.4 Total fees and other revenues 1,709.2 1,698.9 1,380.9 Premiums and other considerations — 0.5 4.9 Net investment income 527.0 442.3 423.0 Total operating revenues $ 2,236.2 $ 2,141.7 $ 1,808.8 |
Retirement and Income Solutions | Retirement and Income Solutions - Spread | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Deposit account fee revenue $ 10.2 $ 9.2 $ 8.4 Commission income 1.2 0.7 0.2 Total revenues from contracts with customers 11.4 9.9 8.6 Fees and other revenues not within the scope of revenue recognition guidance 2.9 7.9 9.5 Total fees and other revenues 14.3 17.8 18.1 Premiums and other considerations 1,959.7 1,883.1 3,216.0 Net investment income 1,747.3 2,286.4 2,119.6 Total operating revenues $ 3,721.3 $ 4,187.3 $ 5,353.7 |
U.S. Insurance Solutions | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Specialty Benefits insurance: Administrative service fees $ 12.2 $ 12.1 $ 12.1 Total revenues from contracts with customers 12.2 12.1 12.1 Fees and other revenues not within the scope of revenue recognition guidance 18.5 19.0 19.2 Total fees and other revenues 30.7 31.1 31.3 Premiums and other considerations 2,771.1 2,496.5 2,330.8 Net investment income 179.8 179.2 160.6 Total operating revenues $ 2,981.6 $ 2,706.8 $ 2,522.7 For the year ended December 31, 2022 2021 2020 (in millions) Individual Life insurance: Administrative service fees $ 26.9 $ 26.2 $ 21.6 Commission income 37.5 33.9 26.8 Total revenues from contracts with customers 64.4 60.1 48.4 Fees and other revenues not within the scope of revenue recognition guidance 333.2 858.8 849.5 Total fees and other revenues 397.6 918.9 897.9 Premiums and other considerations 535.9 333.9 329.1 Net investment income 392.4 794.3 718.8 Total operating revenues $ 1,325.9 $ 2,047.1 $ 1,945.8 |
Corporate | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Eliminations $ (0.8) $ (1.0) $ (0.8) Total revenues from contracts with customers (0.8) (1.0) (0.8) Fees and other revenues not within the scope of revenue recognition guidance 15.9 17.5 16.5 Total fees and other revenues 15.1 16.5 15.7 Premiums and other considerations (2.1) — — Net investment income 47.5 50.9 22.2 Total operating revenues $ 60.5 $ 67.4 $ 37.9 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Disclosures (Table) | For the year ended December 31, 2022 2021 2020 (in millions) Compensation cost $ 22.2 $ 25.2 $ 24.4 Related income tax benefit 4.6 4.3 4.0 Capitalized as part of an asset 1.2 1.4 1.5 |
Nonqualified Stock Options Fair Value (Table) | For the year ended December 31, Options 2022 2021 2020 Expected volatility — % 34.2 % 25.7 % Expected term (in years) — 7.0 7.0 Risk-free interest rate — % 1.2 % 1.3 % Expected dividend yield — % 3.82 % 4.33 % Weighted average estimated fair value $ — $ 15.67 $ 9.64 |
Nature of Operations and Sign_4
Nature of Operations and Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Recent Accounting Pronouncements | |||||
Total stockholders' equity | $ 7,175.9 | $ 12,690.9 | |||
Stockholders' Equity | 7,179.7 | 12,708.7 | $ 13,148.5 | $ 11,388.7 | |
Retained earnings (accumulated deficit) | |||||
Recent Accounting Pronouncements | |||||
Stockholders' Equity | 6,209.9 | 2,976.6 | 2,799.7 | 2,410.8 | |
AOCI | |||||
Recent Accounting Pronouncements | |||||
Total stockholders' equity | (5,367.6) | 3,370.9 | 3,986.9 | 2,620.7 | |
Stockholders' Equity | $ (5,367.6) | $ 3,370.9 | 3,986.9 | 2,620.7 | |
ASU 2016-13 - CECL | Effects of implementation of accounting change | |||||
Recent Accounting Pronouncements | |||||
Stockholders' Equity | (6.7) | ||||
ASU 2016-13 - CECL | Retained earnings (accumulated deficit) | Effects of implementation of accounting change | |||||
Recent Accounting Pronouncements | |||||
Stockholders' Equity | $ (6.7) | $ (6.7) | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Effects of implementation of accounting change | |||||
Recent Accounting Pronouncements | |||||
Total stockholders' equity | $ (4,200) | ||||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Retained earnings (accumulated deficit) | Effects of implementation of accounting change | |||||
Recent Accounting Pronouncements | |||||
Total stockholders' equity | (100) | ||||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | AOCI | Effects of implementation of accounting change | |||||
Recent Accounting Pronouncements | |||||
Total stockholders' equity | $ (4,100) |
Nature of Operations and Sign_5
Nature of Operations and Significant Accounting Policies - Cash and Cash Equivalents, Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash and Cash Equivalents | ||
Maximum maturity period when purchased for investments to be included in cash and cash equivalents | 3 months | |
Investments | ||
Real estate held for sale | $ 238.6 | $ 74.2 |
Nature of Operations and Sign_6
Nature of Operations and Significant Accounting Policies - Contractholder and Policyholder Liabilities (Details) - Individual Life insurance | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contractholder and Policyholder Liabilities | |||
Participating business as a percentage of life insurance in force (as a percent) | 3% | 4% | 5% |
Participating business as a percentage of life insurance policies in force (as a percent) | 17% | 18% | 20% |
Participating business as a percentage of life insurance premiums (as a percent) | 18% | 26% | 30% |
Nature of Operations and Sign_7
Nature of Operations and Significant Accounting Policies - Other Various Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Long-Term Debt | ||
Minimum maturity period at date of issuance for debt to be classified as long-term | 1 year | |
Separate Accounts | ||
Separate account that primarily includes shares of Principal Financial Group, Inc. stock that were allocated and issued to eligible participants of qualified employee benefit plans as part of the 2001 demutualization | $ 101.4 | $ 95.1 |
Nature of Operations and Sign_8
Nature of Operations and Significant Accounting Policies - Pre-tax Impacts To Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Increase to income before taxes | |||
Deferred acquisition costs amortization | $ (383.4) | $ (284.2) | $ (386.9) |
Cost of reinsurance amortization | (84.5) | 18 | (67.4) |
Income (loss) before income taxes | 5,840.8 | $ 1,686.8 | $ 1,227.5 |
Adjustment related to actuarial balance re-cohorting | |||
Increase to income before taxes | |||
Deferred acquisition costs amortization | (106.6) | ||
Cost of reinsurance amortization | 4.2 | ||
Unearned revenue liability amortization | 32.4 | ||
Change in additional liability for certain benefit features | 139.7 | ||
Income (loss) before income taxes | 69.7 | ||
Increase to pre-tax other comprehensive income | |||
Deferred acquisition cost unrealized losses | (5.6) | ||
Cost of reinsurance unrealized gains | 8.7 | ||
Unearned revenue liability unrealized gains | 8.5 | ||
Change in additional liability for certain benefit features unrealized gains | 24.3 | ||
Total increase to pre-tax other comprehensive income | 35.9 | ||
Total increase to pre-tax comprehensive income | $ 105.6 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Jan. 01, 2021 | |
Related Party Transactions | |||||
Premiums assumed from other companies | $ 503.5 | $ 494.3 | $ 439.5 | ||
PFG | Benefit Plans | Long-Term Care Assistance Plan | |||||
Related Party Transactions | |||||
Benefit liability | $ 2.9 | $ 2.9 | |||
Affiliated Entities | Related party transactions resulting in expense reimbursements | |||||
Related Party Transactions | |||||
Expenses reimbursed | 606 | 647.2 | 568.1 | ||
PFG | Benefit Plans | Nonqualified Plan | Deferred Compensation Plans | |||||
Related Party Transactions | |||||
Expenses to related parties | 2.3 | 2.1 | 1.8 | ||
PFG | Benefit Plans | Deferred Compensation Plan | Qualified Plan | |||||
Related Party Transactions | |||||
Expenses to related parties | 41.3 | 36.5 | 33.1 | ||
PFG | Benefit Plans | Pension benefits | |||||
Related Party Transactions | |||||
Expenses to related parties | 55.4 | 58.6 | 51 | ||
PFS | Cash Advance Agreement | |||||
Related Party Transactions | |||||
Amounts due from (to) related party | 86 | (75.1) | |||
Interest earned from related party | 4.2 | 0.1 | 0 | ||
PFS | Cash Advance Agreement | Maximum | |||||
Related Party Transactions | |||||
Aggregate principal amount for advanced cash | 1,000 | ||||
PFS | Notes Receivable | Notes Receivable | |||||
Related Party Transactions | |||||
Interest earned from related party | 5.9 | 7.2 | 8.5 | ||
PFS | Notes Receivable | Notes Receivable | Note Receivable 2.87% interest rate | |||||
Related Party Transactions | |||||
Aggregate principal amount for advanced cash | $ 156 | ||||
Term of credit facility | 10 years | ||||
Interest rate (as a percent) | 2.87% | ||||
PFS | Notes Receivable | Notes Receivable | Note receivable 2.885% interest rate | |||||
Related Party Transactions | |||||
Aggregate principal amount for advanced cash | $ 300 | ||||
Term of credit facility | 10 years | ||||
Interest rate (as a percent) | 2.885% | ||||
PLIC | PFS | Cash Advance Agreement | Maximum | |||||
Related Party Transactions | |||||
Aggregate principal amount for advanced cash | $ 1,000 | ||||
PLIC | PFS | Cash Advance Agreement | LIBOR rate | |||||
Related Party Transactions | |||||
Spread added to LIBOR to determine Internal Crediting Rate (as a percent) | 0.10% | ||||
Principal National Life Insurance Company | Reinsurance | |||||
Related Party Transactions | |||||
Expenses to related parties | $ 995.7 | 1,088.9 | 1,038.9 | ||
Assumed reinsurance liability | 5,393.7 | 5,098.9 | |||
Premiums assumed from other companies | 847.5 | 809.3 | 749.3 | ||
Principal Securities, Inc. | Distribution of Affiliated Products | |||||
Related Party Transactions | |||||
Commission expense | 81.5 | 95.7 | 80.4 | ||
PGI LLC | Asset Management Services Agreement | |||||
Related Party Transactions | |||||
Expenses to related parties | 109.3 | 114.9 | 101.1 | ||
Principal Securities, Inc. and Principal Global Investors, LLC ("PGI LLC") | Distribution of Affiliated Products | |||||
Related Party Transactions | |||||
Revenue from related parties | $ 412.6 | $ 471.2 | $ 395.8 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Changes in Goodwill (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Changes in Goodwill | |
Beginning balance, Goodwill | $ 75.1 |
Goodwill impairment | (26.9) |
Ending balance, Goodwill | 48.2 |
Retirement and Income Solutions | |
Changes in Goodwill | |
Beginning balance, Goodwill | 18.8 |
Ending balance, Goodwill | 18.8 |
U.S. Insurance Solutions | |
Changes in Goodwill | |
Beginning balance, Goodwill | 56.3 |
Goodwill impairment | (26.9) |
Ending balance, Goodwill | $ 29.4 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Asset Disclosures | |||
Gross carrying amount | $ 34.9 | $ 41.4 | |
Accumulated amortization | 23.3 | 27 | |
Net carrying amount | 11.6 | 14.4 | |
Amortization expense for intangible assets with finite useful lives | 2.8 | 2.8 | $ 2.4 |
Estimated amortization expense for the next five years | |||
Year 1: Finite lived intangible assets amortization | 1 | ||
Year 2: Finite lived intangible assets amortization | 1 | ||
Year 3: Finite lived intangible assets amortization | 1 | ||
Year 4: Finite lived intangible assets amortization | 1 | ||
Year 5: Finite lived intangible assets amortization | 1 | ||
Other finite lived intangible assets | |||
Finite Lived Intangible Asset Disclosures | |||
Finite lived intangible assets fully amortized during the period | $ 6.5 | $ 0 |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated VIEs (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | $ 243,214.2 | $ 255,348.3 |
Total liabilities | 236,034.5 | 242,639.6 |
Aggregate consolidated variable interest entities | ||
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | 1,872.2 | 1,972.8 |
Total liabilities | 84 | 56.4 |
Real estate VIE | ||
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | 689.6 | 709.6 |
Total liabilities | 42.2 | 36.1 |
Residential mortgage loans VIE | ||
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | 1,182.6 | 1,263.2 |
Total liabilities | $ 41.8 | $ 20.3 |
Variable Interest Entities - Un
Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | $ 243,214.2 | $ 255,348.3 |
Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Carrying value used if distributions received are in excess of investment | 0 | |
Corporate debt securities | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 111.8 | 142.1 |
Maximum exposure to loss | 127.2 | 136.9 |
Residential mortgage-backed pass-through securities | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 2,170.9 | 2,342.3 |
Maximum exposure to loss | 2,362.1 | 2,296.9 |
Residential mortgage-backed pass-through securities | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 5.4 | 8.4 |
Maximum exposure to loss | 5.4 | 8.4 |
Commercial mortgage-backed securities | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 4,827.5 | 5,513.7 |
Maximum exposure to loss | 5,529.7 | 5,388.7 |
Commercial mortgage-backed securities | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 83.4 | 24.6 |
Maximum exposure to loss | 83.4 | 24.6 |
Collateralized debt obligations | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 4,560.2 | 3,533.5 |
Maximum exposure to loss | 4,813.4 | 3,539.1 |
Collateralized debt obligations | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 5.7 | 7.5 |
Maximum exposure to loss | 5.7 | 7.5 |
Other debt obligations | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 6,483.3 | 7,441.8 |
Maximum exposure to loss | 7,537.2 | 7,368.3 |
Other debt obligations | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 80 | 8.2 |
Maximum exposure to loss | 80 | 8.2 |
Other investments: Other limited partnership and fund interests | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 1,088.5 | 862.6 |
Maximum exposure to loss | $ 1,765.4 | $ 1,447 |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Available-for-sale securities | |||
Amortized cost, fixed maturities | $ 67,103.9 | $ 68,797.3 | |
Gross unrealized gains, fixed maturities | 270.7 | 5,393.1 | |
Gross unrealized losses, fixed maturities | 7,743.2 | 288.6 | |
Allowance, fixed maturities | 0.1 | 4.9 | $ 6.5 |
Fair value, fixed maturities | 59,631.3 | 73,896.9 | |
Accrued interest receivable | 575.8 | 538.6 | |
U.S. government and agencies | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 1,964.6 | 1,826.8 | |
Gross unrealized gains, fixed maturities | 0.1 | 144.5 | |
Gross unrealized losses, fixed maturities | 248.8 | 34.3 | |
Fair value, fixed maturities | 1,715.9 | 1,937 | |
Non-U.S. governments | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 565.3 | 821.6 | |
Gross unrealized gains, fixed maturities | 18.9 | 127.5 | |
Gross unrealized losses, fixed maturities | 63.8 | 2 | |
Fair value, fixed maturities | 520.4 | 947.1 | |
States and political subdivisions | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 7,280.1 | 8,210.3 | |
Gross unrealized gains, fixed maturities | 14.8 | 1,022.4 | |
Gross unrealized losses, fixed maturities | 1,126.6 | 16.3 | |
Fair value, fixed maturities | 6,168.3 | 9,216.4 | |
Corporate debt securities | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 37,495.4 | 39,345.7 | |
Gross unrealized gains, fixed maturities | 219.5 | 3,750.2 | |
Gross unrealized losses, fixed maturities | 4,530.1 | 126.3 | |
Allowance, fixed maturities | 4.5 | ||
Fair value, fixed maturities | 33,184.8 | 42,965.1 | |
Residential mortgage-backed pass-through securities | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 2,362.1 | 2,296.9 | |
Gross unrealized gains, fixed maturities | 6 | 57.6 | |
Gross unrealized losses, fixed maturities | 197.2 | 12.2 | |
Fair value, fixed maturities | 2,170.9 | 2,342.3 | |
Commercial mortgage-backed securities | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 5,529.7 | 5,388.6 | |
Gross unrealized gains, fixed maturities | 0.9 | 156.3 | |
Gross unrealized losses, fixed maturities | 703.1 | 30.9 | |
Allowance, fixed maturities | 0.3 | 4.3 | |
Fair value, fixed maturities | 4,827.5 | 5,513.7 | |
Collateralized debt obligations | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 4,698.9 | 3,539.1 | |
Gross unrealized gains, fixed maturities | 4.5 | 4 | |
Gross unrealized losses, fixed maturities | 143.2 | 9.6 | |
Allowance, fixed maturities | $ 2.2 | ||
Fair value, fixed maturities | 4,560.2 | 3,533.5 | |
Other debt obligations | |||
Available-for-sale securities | |||
Amortized cost, fixed maturities | 7,207.8 | 7,368.3 | |
Gross unrealized gains, fixed maturities | 6 | 130.6 | |
Gross unrealized losses, fixed maturities | 730.4 | 57 | |
Allowance, fixed maturities | 0.1 | 0.1 | |
Fair value, fixed maturities | $ 6,483.3 | $ 7,441.8 |
Investments - Amortization by E
Investments - Amortization by Expected Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized cost of fixed maturities available-for-sale | ||
Due in one year or less | $ 1,606.3 | |
Due after one year through five years | 8,297.6 | |
Due after five years through ten years | 11,046.5 | |
Due after ten years | 26,355 | |
Subtotal | 47,305.4 | |
Mortgage-backed and other asset-backed securities | 19,798.5 | |
Amortized cost, fixed maturities | 67,103.9 | $ 68,797.3 |
Fair value of fixed maturities available-for-sale | ||
Due in one year or less | 1,593.4 | |
Due after one year through five years | 7,950.4 | |
Due after five years through ten years | 10,029.5 | |
Due after ten years | 22,016.1 | |
Subtotal | 41,589.4 | |
Mortgage-backed and other asset-backed securities | 18,041.9 | |
Fair value, fixed maturities | $ 59,631.3 | $ 73,896.9 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Major categories of net investment income | |||
Gross investment income (loss) | $ 3,052.7 | $ 3,809.1 | $ 3,484.7 |
Investment expenses | (200.4) | (175.4) | (159.8) |
Net investment income (loss) | 2,852.3 | 3,633.7 | 3,324.9 |
Fixed maturities | Available-for-sale | |||
Major categories of net investment income | |||
Gross investment income (loss) | 1,734.4 | 2,483.8 | 2,469 |
Fixed maturities | Trading | |||
Major categories of net investment income | |||
Gross investment income (loss) | 19.6 | 8.7 | 9.2 |
Equity securities | |||
Major categories of net investment income | |||
Gross investment income (loss) | (35.4) | 1.7 | 3.3 |
Mortgage loans | |||
Major categories of net investment income | |||
Gross investment income (loss) | 619.9 | 692.4 | 669.8 |
Real estate. | |||
Major categories of net investment income | |||
Gross investment income (loss) | 276.2 | 194.4 | 180.8 |
Policy loans | |||
Major categories of net investment income | |||
Gross investment income (loss) | 34.4 | 36.2 | 38.2 |
Cash and cash equivalents | |||
Major categories of net investment income | |||
Gross investment income (loss) | 37.6 | 1.7 | 9.5 |
Derivatives | |||
Major categories of net investment income | |||
Gross investment income (loss) | 171.3 | 28.2 | (1.9) |
Other investment types | |||
Major categories of net investment income | |||
Gross investment income (loss) | $ 194.7 | $ 362 | $ 106.8 |
Investments - Net Realized Capi
Investments - Net Realized Capital Gains and Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Major components of net realized capital gains (losses) on investments | ||||
Fixed maturities, available-for-sale: Gross gains | $ 38.9 | $ 50.4 | $ 118.7 | |
Fixed maturities, available-for-sale: Gross losses | (120.7) | (26.9) | (45) | |
Fixed maturities, available-for-sale: Net credit losses | (11.5) | (34.5) | (22.6) | |
Fixed maturities, available-for-sale: Hedging, net | (0.7) | (9.5) | (9.7) | |
Fixed maturities, trading | (25.3) | (6.6) | 6.2 | |
Equity securities | (7.4) | (0.5) | 1.8 | |
Mortgage loans gains (losses) | (74.1) | 5.3 | (14.3) | |
Derivative net realized capital gains (losses) | 86.9 | (4.2) | 28.5 | |
Other gains (losses) | 112.7 | 8 | 42 | |
Net realized capital gains (losses) | [1] | (1.2) | (18.5) | 105.6 |
Unrealized gains (losses) on fixed maturities, trading | (24.5) | (6.4) | 6.9 | |
Unrealized gains (losses) on fixed maturities, trading, reported in net realized capital gains (losses) on funds withheld assets | 1.4 | |||
Unrealized gains (losses) on equity securities | (7.1) | (0.1) | 1.9 | |
Unrealized gains (losses) on equity securities reported in net realized capital gains (losses) on funds withheld assets | 1.7 | |||
Proceeds from sales of investments | ||||
Proceeds from sales of investments in fixed maturities, available-for-sale | $ 12,273 | $ 1,609 | $ 1,968.8 | |
[1] Includes realized and unrealized gains (losses). See Note 5, Investments, for further details. |
Investments - Allowance for Cre
Investments - Allowance for Credit Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Rollforward of the allowance for credit loss by major security type | |||
Beginning balance | $ 4.9 | $ 6.5 | |
Additions for credit losses not previously recorded | 17.4 | $ 6.1 | |
Reductions for securities sold during the period | (8.7) | (12.4) | (7) |
Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period | 4.2 | 2.8 | 10 |
Write-offs charged against allowance | (0.3) | (9.4) | (2.6) |
Ending balance | 0.1 | 4.9 | 6.5 |
Accrued interest written off to net investment income | 0.2 | ||
Corporate debt securities | |||
Rollforward of the allowance for credit loss by major security type | |||
Beginning balance | 4.5 | ||
Additions for credit losses not previously recorded | 16.9 | ||
Reductions for securities sold during the period | (8.7) | (12.4) | (7) |
Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period | 4.2 | 7 | |
Ending balance | 4.5 | ||
Accrued interest written off to net investment income | 0.2 | ||
Commercial mortgage-backed securities | |||
Rollforward of the allowance for credit loss by major security type | |||
Beginning balance | 0.3 | 4.3 | |
Additions for credit losses not previously recorded | 0.4 | 4 | |
Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period | 2.4 | 2.9 | |
Write-offs charged against allowance | (0.3) | (6.8) | (2.6) |
Ending balance | 0.3 | 4.3 | |
Collateralized debt obligations | |||
Rollforward of the allowance for credit loss by major security type | |||
Beginning balance | 2.2 | ||
Additions for credit losses not previously recorded | 2.1 | ||
Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period | 0.4 | 0.1 | |
Write-offs charged against allowance | (2.6) | ||
Ending balance | $ 2.2 | ||
Other debt obligations | |||
Rollforward of the allowance for credit loss by major security type | |||
Beginning balance | 0.1 | ||
Additions for credit losses not previously recorded | 0.1 | ||
Ending balance | $ 0.1 | $ 0.1 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses for Fixed Maturities (Details) $ in Millions | Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) security |
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 44,857 | $ 13,052.3 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 6,096.3 | 150.9 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 8,496.1 | 2,740.3 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 1,645.1 | 137.1 |
Fixed maturities, Total, Fair value | 53,353.1 | 15,792.6 |
Fixed maturities, Total, Gross unrealized losses | $ 7,741.4 | $ 288 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Percent Investment Grade (as a percent) | 94% | 91% |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Average Price (percent of carrying value to amortized cost) | 87% | 98% |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less Than Twelve Months | 7,589 | 1,805 |
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Less Than Twelve Months (percent of carrying value to amortized cost) | 88% | 99% |
Available-for-sale Securities in Unrealized Loss Positions, Percent Investment Grade, Less Than Twelve Months (as a percent) | 95% | 90% |
Available-for-sale Securities in Unrealized Loss Position, Aggregate Losses On Investment Grade Investments, Less Than Twelve Months | $ 5,920.4 | $ 138.9 |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Twelve Months or Longer | security | 1,654 | 459 |
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 84% | 95% |
U.S. government and agencies | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 1,505.5 | $ 128.2 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 207 | 3.4 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 180.4 | 386.3 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 41.8 | 30.9 |
Fixed maturities, Total, Fair value | 1,685.9 | 514.5 |
Fixed maturities, Total, Gross unrealized losses | 248.8 | $ 34.3 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 93% | |
Non-U.S. governments | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 373 | $ 57.5 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 56.7 | 2 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 19.9 | |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 7.1 | |
Fixed maturities, Total, Fair value | 392.9 | 57.5 |
Fixed maturities, Total, Gross unrealized losses | 63.8 | 2 |
States and political subdivisions | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 5,243.6 | 681 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 999.7 | 10.3 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 387.8 | 100.3 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 126.9 | 6 |
Fixed maturities, Total, Fair value | 5,631.4 | 781.3 |
Fixed maturities, Total, Gross unrealized losses | $ 1,126.6 | 16.3 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 75% | |
Corporate debt securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 26,668.2 | 4,538.4 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 3,875.1 | 59 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 2,625.4 | 1,252.3 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 654.9 | 67.1 |
Fixed maturities, Total, Fair value | 29,293.6 | 5,790.7 |
Fixed maturities, Total, Gross unrealized losses | $ 4,530 | $ 126.1 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 80% | 95% |
Residential mortgage-backed pass-through securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 1,201.7 | $ 945.6 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 97.6 | 10 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 574.8 | 76.7 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 104.7 | 2.2 |
Fixed maturities, Total, Fair value | 1,776.5 | 1,022.3 |
Fixed maturities, Total, Gross unrealized losses | 202.3 | 12.2 |
Commercial mortgage-backed securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 3,622.3 | 1,293.3 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 480.7 | 15.4 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 1,113.9 | 289.8 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 220.9 | 15.3 |
Fixed maturities, Total, Fair value | 4,736.2 | 1,583.1 |
Fixed maturities, Total, Gross unrealized losses | $ 701.6 | $ 30.7 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 83% | |
Collateralized mortgage obligation security | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 2,830.1 | |
Fixed maturities, Less than twelve months, Gross unrealized losses | 88.8 | |
Fixed maturities, Greater than or equal to twelve months, Fair value | 1,327.2 | |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 54.4 | |
Fixed maturities, Total, Fair value | 4,157.3 | |
Fixed maturities, Total, Gross unrealized losses | $ 143.2 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 81% | 95% |
Collateralized debt obligations | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 3,412.6 | $ 1,571 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 290.7 | 2.8 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 2,266.7 | 423.9 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 434.4 | 6.7 |
Fixed maturities, Total, Fair value | 5,679.3 | 1,994.9 |
Fixed maturities, Total, Gross unrealized losses | $ 725.1 | $ 9.5 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 98% | |
Other debt obligations | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 3,837.3 | |
Fixed maturities, Less than twelve months, Gross unrealized losses | 48 | |
Fixed maturities, Greater than or equal to twelve months, Fair value | 211 | |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 8.9 | |
Fixed maturities, Total, Fair value | 4,048.3 | |
Fixed maturities, Total, Gross unrealized losses | $ 56.9 |
Investments - Net Unrealized Ga
Investments - Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments | ||
Net unrealized gains (losses) on fixed maturities, available-for-sale | $ (7,552.8) | $ 5,094.3 |
Net unrealized gains (losses) on derivative instruments | 50.8 | 80.1 |
Adjustments for assumed changes in amortization patterns | 649.7 | (266.1) |
Adjustments for assumed changes in policyholder liabilities | 3.4 | (664.8) |
Net unrealized gains (losses) on other investments and noncontrolling interest adjustments | 2.9 | 2.9 |
Provision for deferred income tax benefits (taxes) | 1,464.1 | (891.9) |
Net unrealized gains (losses) on available-for-sale securities and derivative instruments | $ (5,381.9) | $ 3,354.5 |
Investments - Mortgage Loan Cre
Investments - Mortgage Loan Credit Monitoring (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Vintage year, Mortgage loans | ||
Mortgage loans, Total amortized cost | $ 19,802.9 | $ 18,952 |
Reinsurance recoverable and deposit receivable | 22,032 | 1,189 |
Accrued interest receivable | 575.8 | 538.6 |
Commercial mortgage loans | ||
Vintage year, Mortgage loans | ||
2022 | 1,471.7 | |
2021 | 2,595.3 | 2,466.6 |
2020 | 1,903.5 | 1,975.8 |
2019 | 2,568.8 | 2,655.7 |
2018 | 2,370.6 | 2,448.9 |
2017 | 1,672.6 | |
Prior | 5,333.5 | |
Prior | 4,788.1 | |
Mortgage loans, Total amortized cost | 16,243.4 | 16,007.7 |
Accrued interest receivable | 55.9 | 59 |
Commercial mortgage loans | A- and above | ||
Vintage year, Mortgage loans | ||
2022 | 995.9 | |
2021 | 2,182.5 | 2,194.1 |
2020 | 1,753.8 | 1,676.5 |
2019 | 2,177.2 | 2,385.6 |
2018 | 2,130.8 | 2,334.9 |
2017 | 1,374.9 | |
Prior | 4,555.1 | |
Prior | 4,336.8 | |
Mortgage loans, Total amortized cost | 13,795.3 | 14,302.8 |
Commercial mortgage loans | BBB+ thru BBB- | ||
Vintage year, Mortgage loans | ||
2022 | 371.8 | |
2021 | 412.8 | 255 |
2020 | 149.7 | 299.3 |
2019 | 391.6 | 270.1 |
2018 | 222.6 | 105.2 |
2017 | 297.7 | |
Prior | 676.4 | |
Prior | 370.5 | |
Mortgage loans, Total amortized cost | 2,224.9 | 1,597.8 |
Commercial mortgage loans | BB+ thru BB- | ||
Vintage year, Mortgage loans | ||
2022 | 104 | |
2021 | 17.5 | |
2018 | 8.9 | |
Prior | 66.5 | |
Prior | 50.7 | |
Mortgage loans, Total amortized cost | 179.4 | 68.2 |
Commercial mortgage loans | B+ and below | ||
Vintage year, Mortgage loans | ||
2018 | 8.3 | 8.8 |
Prior | 35.5 | |
Prior | 30.1 | |
Mortgage loans, Total amortized cost | 43.8 | 38.9 |
Residential mortgage loans | ||
Vintage year, Mortgage loans | ||
2022 | 1,109.4 | |
2021 | 1,673.8 | 1,973 |
2020 | 366.3 | 431.3 |
2019 | 100.2 | 124.1 |
2018 | 51.8 | 67 |
2017 | 81 | |
Prior | 258 | |
Prior | 267.9 | |
Mortgage loans, Total amortized cost | 3,559.5 | 2,944.3 |
Accrued interest receivable | 9.8 | 7.2 |
Residential mortgage loans | Performing | ||
Vintage year, Mortgage loans | ||
2022 | 1,101.4 | |
2021 | 1,669.1 | 1,973 |
2020 | 364.5 | 429.5 |
2019 | 99.2 | 123.5 |
2018 | 51.2 | 67 |
2017 | 80.2 | |
Prior | 253.6 | |
Prior | 265.9 | |
Mortgage loans, Total amortized cost | 3,539 | 2,939.1 |
Residential mortgage loans | Non-performing | ||
Vintage year, Mortgage loans | ||
2022 | 8 | |
2021 | 4.7 | |
2020 | 1.8 | 1.8 |
2019 | 1 | 0.6 |
2018 | 0.6 | |
2017 | 0.8 | |
Prior | 4.4 | |
Prior | 2 | |
Mortgage loans, Total amortized cost | $ 20.5 | $ 5.2 |
Mortgage loans, Days delinquent to be considered non-performing | 90 days |
Investments - Financing Receiva
Investments - Financing Receivable, Non-Accrual and Aging (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing receivables, non-accrual and aging disclosures | |||
Financing receivables, Non-accrual status | $ 59.8 | $ 12.1 | $ 9.1 |
Financing receivables, Non-accrual assets without a valuation allowance | 0.6 | 0.7 | |
Financing receivables, Nonaccrual, Interest Income | 0.9 | 0.5 | |
Mortgage loans, Total amortized cost | 19,802.9 | 18,952 | |
Reinsurance recoverable and deposit receivable | 22,032 | 1,189 | |
Current | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 19,743.9 | 18,917 | |
Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 59 | 35 | |
Reinsurance recoverable and deposit receivable | 0 | 0 | |
30 to 59 Days Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 35.9 | 27.6 | |
60 to 89 Days Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 2.4 | 2.9 | |
90 Days or More Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 20.7 | 4.5 | |
Commercial mortgage loans | |||
Financing receivables, non-accrual and aging disclosures | |||
Financing receivables, Non-accrual status | 43.8 | 8.7 | |
Financing receivables, Nonaccrual, Interest Income | 0.9 | 0.5 | |
Mortgage loans, Total amortized cost | 16,243.4 | 16,007.7 | |
Commercial mortgage loans | Current | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 16,235.1 | 16,007.7 | |
Commercial mortgage loans | Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 8.3 | ||
Commercial mortgage loans | 90 Days or More Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 8.3 | ||
Residential mortgage loans | |||
Financing receivables, non-accrual and aging disclosures | |||
Financing receivables, Non-accrual status | 16 | 3.4 | $ 9.1 |
Financing receivables, Non-accrual assets without a valuation allowance | 0.6 | 0.7 | |
Mortgage loans, Total amortized cost | 3,559.5 | 2,944.3 | |
Residential mortgage loans | Current | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 3,508.8 | 2,909.3 | |
Residential mortgage loans | Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 50.7 | 35 | |
Residential mortgage loans | 30 to 59 Days Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 35.9 | 27.6 | |
Residential mortgage loans | 60 to 89 Days Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 2.4 | 2.9 | |
Residential mortgage loans | 90 Days or More Past Due | |||
Financing receivables, non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | $ 12.4 | $ 4.5 |
Investments - Mortgage Loans (D
Investments - Mortgage Loans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 19,802.9 | $ 18,952 | |
Commercial mortgage loans | |||
Mortgage loan disclosures | |||
Mortgage loans, purchased | 261.3 | $ 45.7 | |
Mortgage loans, Total amortized cost | $ 16,243.4 | $ 16,007.7 | |
Percent of mortgage loans (as a percent) | 100% | 100% | |
Commercial mortgage loans | Office | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 4,331.8 | $ 4,801 | |
Percent of mortgage loans (as a percent) | 26.70% | 29.90% | |
Commercial mortgage loans | Retail | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 1,502.5 | $ 1,625.5 | |
Percent of mortgage loans (as a percent) | 9.20% | 10.20% | |
Commercial mortgage loans | Industrial | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 3,246.4 | $ 2,975.7 | |
Percent of mortgage loans (as a percent) | 20% | 18.60% | |
Commercial mortgage loans | Apartments | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 6,848.3 | $ 6,255.2 | |
Percent of mortgage loans (as a percent) | 42.20% | 39.10% | |
Commercial mortgage loans | Hotel | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 72.5 | $ 85.7 | |
Percent of mortgage loans (as a percent) | 0.40% | 0.50% | |
Commercial mortgage loans | Mixed use/other | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 241.9 | $ 264.6 | |
Percent of mortgage loans (as a percent) | 1.50% | 1.70% | |
Commercial mortgage loans | New England | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 513.3 | $ 587.1 | |
Percent of mortgage loans (as a percent) | 3.20% | 3.70% | |
Commercial mortgage loans | Middle Atlantic | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 4,518.8 | $ 4,550.2 | |
Percent of mortgage loans (as a percent) | 27.80% | 28.40% | |
Commercial mortgage loans | East North Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 653.9 | $ 625.3 | |
Percent of mortgage loans (as a percent) | 4% | 3.90% | |
Commercial mortgage loans | West North Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 371.9 | $ 339.4 | |
Percent of mortgage loans (as a percent) | 2.30% | 2.10% | |
Commercial mortgage loans | South Atlantic | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 2,565.5 | $ 2,471.9 | |
Percent of mortgage loans (as a percent) | 15.80% | 15.40% | |
Commercial mortgage loans | East South Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 340.6 | $ 379.8 | |
Percent of mortgage loans (as a percent) | 2.10% | 2.40% | |
Commercial mortgage loans | West South Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 1,208.8 | $ 1,247.8 | |
Percent of mortgage loans (as a percent) | 7.40% | 7.80% | |
Commercial mortgage loans | Mountain | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 940.9 | $ 928 | |
Percent of mortgage loans (as a percent) | 5.80% | 5.80% | |
Commercial mortgage loans | Pacific | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 5,129.7 | $ 4,878.2 | |
Percent of mortgage loans (as a percent) | 31.60% | 30.50% | |
Residential mortgage loans | |||
Mortgage loan disclosures | |||
Mortgage loans, purchased | $ 1,805.2 | $ 2,272.4 | $ 1,021.4 |
Mortgage loans, sold | 512.8 | ||
Mortgage loans, Total amortized cost | $ 3,559.5 | $ 2,944.3 |
Investments - Mortgage Loan Val
Investments - Mortgage Loan Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Mortgage loans and reinsurance recoverables, Changes in financing receivable valuation allowance | |||
Charge-offs: Financing receivable valuation allowance | $ (0.2) | ||
Total, Changes in financing receivable valuation allowance | |||
Beginning balance valuation allowance | 46.4 | $ 48.9 | $ 31 |
Provision | 34.7 | (5.7) | 15.9 |
Charge-offs | (0.5) | (1) | |
Recoveries | 2.3 | 3.7 | 3 |
Ending balance valuation allowance | 83.2 | 46.4 | 48.9 |
Commercial mortgage loans | |||
Mortgage loans and reinsurance recoverables, Changes in financing receivable valuation allowance | |||
Beginning balance, Financing receivable valuation allowance | 42 | 40.5 | 25.9 |
Provision: Financing receivable valuation allowance | 33.5 | 1.5 | 14.6 |
Ending balance, Financing receivable valuation allowance | $ 75.5 | 42 | 40.5 |
Total, Changes in financing receivable valuation allowance | |||
Mortgage loans, Days delinquent to be analyzed for valuation allowance | 60 days | ||
Residential mortgage loans | |||
Mortgage loans and reinsurance recoverables, Changes in financing receivable valuation allowance | |||
Beginning balance, Financing receivable valuation allowance | $ 1.7 | 5.7 | 2.6 |
Provision: Financing receivable valuation allowance | 1.2 | (7.2) | 1.1 |
Charge-offs: Financing receivable valuation allowance | (0.2) | (0.5) | (1) |
Recoveries: Financing receivable valuation allowance | 2.3 | 3.7 | 3 |
Ending balance, Financing receivable valuation allowance | $ 5 | 1.7 | 5.7 |
Total, Changes in financing receivable valuation allowance | |||
Mortgage loans, Days delinquent to be analyzed for valuation allowance | 60 days | ||
Reinsurance recoverables | |||
Mortgage loans and reinsurance recoverables, Changes in financing receivable valuation allowance | |||
Beginning balance, Financing receivable valuation allowance | $ 2.7 | 2.7 | 2.5 |
Provision: Financing receivable valuation allowance | 0.2 | ||
Ending balance, Financing receivable valuation allowance | $ 2.7 | $ 2.7 | $ 2.7 |
Investments - Mortgage Loan Mod
Investments - Mortgage Loan Modifications (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) contract | |
Financing Receivable, Modifications [Line Items] | |
Number of contracts | contract | 1 |
Recorded investment | $ | $ 35.5 |
Commercial mortgage loans | |
Financing Receivable, Modifications [Line Items] | |
Number of contracts | contract | 1 |
Recorded investment | $ | $ 35.5 |
Investments - Real Estate (Deta
Investments - Real Estate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Real estate | |||
Depreciation expense on invested real estate | $ 66.1 | $ 67.4 | $ 65.2 |
Accumulated depreciation on invested real estate | $ 708.5 | $ 652 |
Investments - Other Investments
Investments - Other Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summarized financial information of unconsolidated entities | ||||
Total assets | $ 243,214.2 | $ 255,348.3 | ||
Total liabilities | 236,034.5 | 242,639.6 | ||
Total stockholders' equity | 7,179.7 | 12,708.7 | $ 13,148.5 | $ 11,388.7 |
Total revenues | 14,725.5 | 11,008.8 | 11,664.9 | |
Net income (loss) | 4,723.2 | 1,453.6 | 1,067.4 | |
Other Types of Investments | ||||
Cash surrender value of company owned life insurance | 1,115.6 | 1,032.1 | ||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Summarized financial information of unconsolidated entities | ||||
Total assets | 128,765.7 | 106,743.2 | ||
Total liabilities | 12,335.4 | 11,862.3 | ||
Total stockholders' equity | 116,430.3 | 94,880.9 | ||
Total revenues | 36,915.1 | 17,674.2 | 11,761.4 | |
Net income (loss) | 33,194.6 | 14,083.1 | 7,350.8 | |
Our share of net income of unconsolidated entities | 119.5 | 229.6 | $ 46.4 | |
Net Investment in unconsolidated entities | ||||
Summarized financial information of unconsolidated entities | ||||
Net investment in unconsolidated entities | $ 1,275.5 | $ 957.1 |
Investments - Securities Posted
Investments - Securities Posted as Collateral (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Securities Posted as Collateral | ||
Mortgage loans | $ 19,722.4 | $ 18,908.3 |
Pledged as collateral | ||
Securities Posted as Collateral | ||
Fixed maturities available-for-sale and trading securities posted as collateral for a reinsurance arrangement, derivative credit support annex (collateral) agreements, Futures Commission Merchant agreements, a lending arrangement and an obligation under funding agreements with Federal Home Loan Bank of Des Moines | 3,567.6 | 2,507 |
Pledged as collateral | Funding agreements with Federal Home Loan Bank | ||
Securities Posted as Collateral | ||
Mortgage loans | 6,411 | 5,195.9 |
Pledged as collateral with right to be sold or repledged | ||
Securities Posted as Collateral | ||
Securities posted as collateral eligible to be sold or repledged | $ 503.8 | $ 186 |
Investments - Balance Sheet Off
Investments - Balance Sheet Offsetting, Assets (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | $ 369.5 | |
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position | (133.5) | |
Collateral received, financial assets | (233.7) | |
Net amount of assets subject to netting agreements | 2.3 | |
Derivative assets | ||
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | 256.6 | $ 326.2 |
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position | (133.5) | (99.6) |
Collateral received, financial assets | (120.8) | (219.2) |
Net amount of assets subject to netting agreements | 2.3 | $ 7.4 |
Reverse repurchase agreements | ||
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | 112.9 | |
Collateral received, financial assets | $ (112.9) |
Investments - Balance Sheet O_2
Investments - Balance Sheet Offsetting, Liabilities (Details) - Derivative liabilities - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Financial Liability Offsetting | ||
Gross amount of recognized liabilities subject to netting agreements | $ 612.3 | $ 142.3 |
Amount of assets that offset the gross amount of liabilities subject to netting agreements not offset in statement of financial position | (133.5) | (99.6) |
Collateral pledged, financial liabilities | (467.2) | (41.9) |
Net amount of liabilities subject to netting agreements | $ 11.6 | $ 0.8 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Notional Amounts and Credit Exposure (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative Financial Instruments, exposure | ||
Cash and securities posted under collateral arrangements associated with derivative credit support agreements and Futures Commission Merchant agreements | $ 730.6 | $ 164.8 |
Aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position | 613 | 145.7 |
Collateral and initial margin posted supporting derivatives with credit-risk-related contingent features that were in a liability position | 730.6 | 164.8 |
Additional collateral required to be posted if derivative credit-risk-related contingent features were triggered | 87.8 | |
Cash collateral received associated with derivative credit support annex agreements and Futures Commission Merchant agreements | 142.6 | 204.4 |
Notional amount | 94,980.7 | 67,477.2 |
Gross credit exposure | 266.2 | 337.2 |
Less: collateral received | 158.8 | 234 |
Net credit exposure | 107.4 | 103.2 |
Interest rate swaps | ||
Derivative Financial Instruments, exposure | ||
Cash exchanged under contract | 0 | |
Principal payments made under contract | 0 | |
Notional amount | 52,249.9 | 47,927.4 |
Gross credit exposure | 64.2 | 205.9 |
Interest rate options | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 4,418.9 | 2,373.9 |
Gross credit exposure | 41.7 | 24.5 |
Interest rate forwards | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 2,527.5 | 2,181.6 |
Gross credit exposure | 0.1 | 15.3 |
Interest rate futures | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 877.5 | 1,774.5 |
Currency swaps | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 1,389.8 | 958.9 |
Gross credit exposure | 139.2 | 51.1 |
Currency forwards | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 32 | 6.8 |
Gross credit exposure | 0.9 | 0.4 |
Equity options | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 2,049.3 | 2,378.2 |
Gross credit exposure | 16.5 | 37.3 |
Equity futures | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 574.1 | 150.4 |
Credit default swaps | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 400 | 295 |
Gross credit exposure | 3.6 | 2.7 |
Embedded derivative financial instruments | ||
Derivative Financial Instruments, exposure | ||
Notional amount | $ 30,461.7 | $ 9,430.5 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Derivatives (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Derivatives, fair value disclosures | ||
Derivative instruments, assets | $ 256.6 | $ 326.2 |
Derivative instruments, liabilities | (3,099.4) | 463.2 |
Fair value of embedded derivative liabilities reported with contractholder funds | (58.9) | 320.9 |
Fair value of net (asset) liability embedded derivative reported with funds withheld payable | (3,652.8) | |
Derivatives designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 154.6 | 52.5 |
Derivative instruments, liabilities | 124.4 | 36.2 |
Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 102 | 273.7 |
Derivative instruments, liabilities | (3,223.8) | 427 |
Interest rate contracts | Derivatives designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 20 | 4.1 |
Derivative instruments, liabilities | 105.1 | 19 |
Interest rate contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 81.1 | 233.4 |
Derivative instruments, liabilities | 439.9 | 13 |
Foreign exchange contracts | Derivatives designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 134.6 | 48.4 |
Derivative instruments, liabilities | 19.3 | 17.2 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 0.9 | 0.4 |
Derivative instruments, liabilities | 0.4 | |
Equity contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 16.5 | 37.3 |
Derivative instruments, liabilities | 45.6 | 90.9 |
Credit contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 3.5 | 2.6 |
Derivative instruments, liabilities | 2 | 2.2 |
Other contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, liabilities | $ (3,711.7) | $ 320.9 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Credit Derivatives Sold (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Credit default swaps | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 270 | $ 150 |
Fair value | 2.6 | 2.6 |
Maximum future payments | $ 270 | $ 150 |
Weighted average expected life | 3 years 1 month 6 days | 3 years 1 month 6 days |
Single name credit default swaps | Corporate debt securities | A | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 40 | $ 20 |
Fair value | 0.4 | 0.4 |
Maximum future payments | $ 40 | $ 20 |
Weighted average expected life | 2 years 6 months | 3 years 6 months |
Single name credit default swaps | Corporate debt securities | BBB | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 190 | $ 110 |
Fair value | 2.2 | 1.7 |
Maximum future payments | $ 190 | $ 110 |
Weighted average expected life | 3 years 1 month 6 days | 3 years |
Single name credit default swaps | Corporate debt securities | BB | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 20 | |
Fair value | (0.2) | |
Maximum future payments | $ 20 | |
Weighted average expected life | 4 years 6 months | |
Single name credit default swaps | Sovereign | A | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 20 | $ 20 |
Fair value | 0.2 | 0.5 |
Maximum future payments | $ 20 | $ 20 |
Weighted average expected life | 2 years 6 months | 3 years 6 months |
Derivative Financial Instrume_6
Derivative Financial Instruments - Fair Value Hedges (Details) - Fixed maturities, available-for-sale - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Hedges | ||
Amortized cost of hedged item - Active hedging relationships | $ 3,498.6 | $ 1,859.9 |
Amortized cost of hedged item - Discontinued hedging relationships | 48.8 | 79.7 |
Amortized cost of hedged item - Active or discontinued hedging relationships | 3,547.4 | 1,939.6 |
Cumulative amount of fair value hedging basis adjustment - Active hedging relationships | (153.4) | (7.1) |
Cumulative amount of fair value hedging basis adjustment - Discontinued hedging relationships | 1.3 | 2.8 |
Cumulative amount of fair value hedging basis adjustment - Active or discontinued hedging relationships | (152.1) | (4.3) |
Amortized cost basis of closed portfolio used in last-of-layer hedging relationship | 3,256.9 | 1,390.4 |
Cumulative basis adjustments associated with last-of-layer hedging relationship | (102.4) | (3.9) |
Amount of hedged item in last-of-layer hedging relationship | $ 1,110 | $ 510 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flow Hedges | |||
Maximum length of time hedging exposure to variability in future cash flows for forecasted transactions | 8 years 4 months 24 days | ||
Net losses reported in AOCI related to active cash flow hedges of forecasted transactions | $ 102.1 | ||
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | (2) | $ 57.5 | $ (40.1) |
Net gains (losses) expected to be reclassified from accumulated OCI into net income in the next 12 months | 18.7 | ||
Interest rate contracts | Fixed maturities, available-for-sale | |||
Cash Flow Hedges | |||
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | (102.1) | (3) | |
Interest rate contracts | Investment contracts | |||
Cash Flow Hedges | |||
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | 15.9 | 4.1 | |
Foreign exchange contracts | Fixed maturities, available-for-sale | |||
Cash Flow Hedges | |||
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | $ 84.2 | $ 53.4 | $ (37.1) |
Derivative Financial Instrume_8
Derivative Financial Instruments - Effect of Hedges on Consolidated Statements of Operations (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Gains (losses) recognized for hedging relationships | ||||
Net investment income (loss) | $ 2,852.3 | $ 3,633.7 | $ 3,324.9 | |
Net realized capital gains (losses) | [1] | (1.2) | (18.5) | 105.6 |
Benefits, claims and settlement expenses | 5,650.7 | 6,482.6 | 7,837.5 | |
Fair Value Hedges | Interest rate contracts | Net investment income | ||||
Gains (losses) recognized for hedging relationships | ||||
Gain (loss) recognized on hedged item | (154.4) | (28.7) | 3.3 | |
Gain (loss) recognized on derivatives | 151.6 | 28.6 | (3.9) | |
Amortization of hedged item basis adjustments | (1.3) | (1.8) | (2.5) | |
Amounts related to periodic settlements on derivatives | 5.2 | (10) | (6.2) | |
Total gain (loss) recognized for hedging relationships | 1.1 | (11.9) | (9.3) | |
Cash Flow Hedges | Net investment income | ||||
Gains (losses) recognized for hedging relationships | ||||
Total gain (loss) recognized for hedging relationships | 23.5 | 25 | 26.3 | |
Cash Flow Hedges | Net realized capital gains (losses) | ||||
Gains (losses) recognized for hedging relationships | ||||
Total gain (loss) recognized for hedging relationships | 19.1 | 10.2 | 9.1 | |
Cash Flow Hedges | Benefits, claims and settlement expenses | ||||
Gains (losses) recognized for hedging relationships | ||||
Total gain (loss) recognized for hedging relationships | 3.6 | (0.5) | (0.1) | |
Cash Flow Hedges | Interest rate contracts | Gain (loss) reclassified from AOCI on derivatives | ||||
Gains (losses) recognized for hedging relationships | ||||
Net investment income (loss) | 9 | 15.4 | 18.1 | |
Net realized capital gains (losses) | 2.7 | |||
Benefits, claims and settlement expenses | (0.1) | (0.1) | (0.1) | |
Cash Flow Hedges | Interest rate contracts | Net realized capital gains (losses) | ||||
Gains (losses) recognized for hedging relationships | ||||
Gain (loss) reclassified from AOCI into net income as a result that a forecasted transaction is no longer probable of occurring | 18.5 | 1 | 0.1 | |
Cash Flow Hedges | Interest rate contracts | Benefits, claims and settlement expenses | ||||
Gains (losses) recognized for hedging relationships | ||||
Amounts related to periodic settlements on derivatives | 3.7 | (0.4) | ||
Cash Flow Hedges | Foreign exchange contracts | Gain (loss) reclassified from AOCI on derivatives | ||||
Gains (losses) recognized for hedging relationships | ||||
Net realized capital gains (losses) | 0.6 | 9.2 | 6.3 | |
Cash Flow Hedges | Foreign exchange contracts | Net investment income | ||||
Gains (losses) recognized for hedging relationships | ||||
Amounts related to periodic settlements on derivatives | $ 14.5 | $ 9.6 | $ 8.2 | |
[1] Includes realized and unrealized gains (losses). See Note 5, Investments, for further details. |
Derivative Financial Instrume_9
Derivative Financial Instruments - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | |||
Amount of gain (loss) recognized in net income on derivatives | $ 3,729.3 | $ (33.5) | $ 9.1 |
Interest rate contracts | |||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | |||
Amount of gain (loss) recognized in net income on derivatives | (317.7) | (33.8) | 342.7 |
Foreign exchange contracts | |||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | |||
Amount of gain (loss) recognized in net income on derivatives | 1.4 | (4.7) | 7.7 |
Equity contracts | |||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | |||
Amount of gain (loss) recognized in net income on derivatives | 20.7 | (81.1) | (95.8) |
Credit contracts | |||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | |||
Amount of gain (loss) recognized in net income on derivatives | 0.1 | 0.1 | 1.8 |
Other contracts | |||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | |||
Amount of gain (loss) recognized in net income on derivatives | $ 4,024.8 | $ 86 | $ (247.3) |
Closed Block - Assets and Liabi
Closed Block - Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Closed Block liabilities and assets designated to the Closed Block | ||||
Closed Block liabilities: Policyholder dividend obligation | $ 0 | $ 210.7 | ||
Closed Block liabilities | ||||
Closed Block liabilities: Future policy benefits and claims | 3,128.1 | 3,286 | ||
Closed Block liabilities: Other policyholder funds | 5.1 | 5.3 | ||
Closed Block liabilities: Policyholder dividends payable | 168.2 | 176.6 | ||
Closed Block liabilities: Policyholder dividend obligation | 0 | 210.7 | ||
Closed Block liabilities: Other liabilities | 24.9 | 8.8 | ||
Total Closed Block liabilities | 3,326.3 | 3,687.4 | ||
Assets designated to the Closed Block | ||||
Closed Block assets: Fixed maturities, available-for-sale | 1,690.2 | 2,191.6 | ||
Closed Block assets: Fixed maturities, trading | 2 | 2.4 | ||
Closed Block assets: Equity securities | 0.8 | 1 | ||
Closed Block assets: Mortgage loans | 544.9 | 554.9 | ||
Closed Block assets: Policy loans | 407.4 | 425.2 | ||
Closed Block assets: Other investments | 62.2 | 48.4 | ||
Closed Block assets: Total investments | 2,707.5 | 3,223.5 | ||
Closed Block assets: Cash and cash equivalents | 62 | 19.7 | ||
Closed Block assets: Accrued investment income | 30.3 | 32.6 | ||
Closed Block assets: Reinsurance recoverable and deposit receivable | 3.9 | 5.1 | ||
Closed Block assets: Premiums due and other receivables | 4.1 | 3.3 | ||
Closed Block assets: Deferred tax asset | 62 | 24.6 | ||
Closed Block assets: Other assets | 0.1 | |||
Total assets designated to the Closed Block | 2,869.9 | 3,308.8 | ||
Excess of Closed Block liabilities over assets designated to the Closed Block | 456.4 | 378.6 | ||
Amounts included in accumulated other comprehensive income (loss) | (111.9) | 0.6 | ||
Maximum future earnings to be recognized from Closed Block assets and liabilities | $ 344.5 | $ 379.2 | $ 393.5 | $ 426.9 |
Closed Block - Revenues and Exp
Closed Block - Revenues and Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Closed Block: Premiums and other considerations | $ 178 | $ 196.1 | $ 217.6 |
Closed Block: Net investment income (loss) | 129.1 | 137.6 | 143.6 |
Closed Block: Net realized capital gains (losses) | (21.2) | (4.6) | 16 |
Closed Block: Total revenues | 285.9 | 329.1 | 377.2 |
Expenses | |||
Closed Block: Benefits, claims and settlement expenses | 184.3 | 212 | 212.8 |
Closed Block: Dividends to policyholders | 92.5 | 92.6 | 117.8 |
Closed Block: Operating expenses | 2.2 | 2.3 | 2.7 |
Closed Block: Total expenses | 279 | 306.9 | 333.3 |
Closed Block revenues, net of Closed Block expenses, before income taxes | 6.9 | 22.2 | 43.9 |
Closed Block: Income taxes (benefits) | 0.7 | 3.9 | 8.4 |
Closed Block revenues, net of Closed Block expenses and income taxes | 6.2 | 18.3 | 35.5 |
Funding adjustments and other transfers | 28.5 | (4) | (2.2) |
Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustments | $ 34.7 | $ 14.3 | $ 33.3 |
Closed Block - Change in Maximu
Closed Block - Change in Maximum Future Earnings (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in maximum future earnings of the Closed Block | |||
Maximum future earnings to be recognized from Closed Block assets and liabilities, beginning of year | $ 379.2 | $ 393.5 | $ 426.9 |
Effects of implementation of accounting changes | 0.1 | ||
Maximum future earnings to be recognized from Closed Block assets and liabilities, end of year | 344.5 | 379.2 | 393.5 |
Change in maximum future earnings | $ (34.7) | $ (14.3) | $ (33.3) |
Deferred Acquisition Costs (Det
Deferred Acquisition Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in deferred acquisition costs | |||
Balance at beginning of year, deferred acquisition costs | $ 3,749.1 | $ 3,398.5 | $ 3,509.9 |
Costs deferred during the year | 378.9 | 461.2 | 456.6 |
Amortization of deferred acquisition costs | (383.4) | (284.2) | (386.9) |
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivative instruments | 934.8 | 173.6 | (181.1) |
Balance at end of year, deferred acquisition costs | $ 4,679.4 | $ 3,749.1 | $ 3,398.5 |
Insurance Liabilities - Compone
Insurance Liabilities - Components of Contractholder Funds (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Liabilities for investment contracts: | ||
Liabilities for individual annuities | $ 7,739.3 | $ 10,652.3 |
GICs | 13,787.7 | 12,206 |
Funding agreements | 12,318.7 | 11,685.5 |
Other investment contracts | 1,005.6 | 997.1 |
Total liabilities for investment contracts | 34,851.3 | 35,540.9 |
Universal life and other reserves | 7,390.8 | 7,416.4 |
Contractholder funds | $ 42,242.1 | $ 42,957.3 |
Insurance Liabilities - Contrac
Insurance Liabilities - Contractholder Funding Agreements (Details) $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Feb. 28, 2021 USD ($) | Nov. 30, 2017 USD ($) | Jun. 30, 2015 USD ($) | Dec. 31, 2011 USD ($) | Dec. 31, 2001 USD ($) | Dec. 31, 1998 USD ($) | |
Funding agreement disclosures | ||||||||
Number of separate funding agreement programs | item | 5 | |||||||
Funding agreements | $ 12,318.7 | $ 11,685.5 | ||||||
FHLB Des Moines funding agreement program | ||||||||
Funding agreement disclosures | ||||||||
Funding agreements | 4,275.5 | 4,252.4 | ||||||
1998 Funding agreement program | ||||||||
Funding agreement disclosures | ||||||||
Maximum authorized amount of funding agreements to be issued | $ 4,000 | |||||||
Funding agreements | 75.6 | 75 | ||||||
2001 Funding agreement program | ||||||||
Funding agreement disclosures | ||||||||
Maximum authorized amount of funding agreements to be issued | $ 7,000 | |||||||
Funding agreements | 201.9 | 201.8 | ||||||
2011 Funding agreement program | ||||||||
Funding agreement disclosures | ||||||||
Maximum authorized amount of funding agreements to be issued | $ 5,000 | |||||||
Funding agreements | $ 7,765.7 | $ 7,156.3 | ||||||
Additional maximum authorized amount of funding agreements to be issued | $ 4,000 | $ 4,000 | $ 4,000 |
Insurance Liabilities - Liabili
Insurance Liabilities - Liability for Unpaid Claims (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in unpaid claims | |||
Balance at beginning of period, unpaid claims | $ 2,659.4 | $ 2,534.9 | $ 2,365.5 |
Balance at beginning of period, reinsurance recoverables for unpaid claims | 442.1 | 436.9 | 403.8 |
Net balance at beginning of period, unpaid claims | 2,217.3 | 2,098 | 1,961.7 |
Incurred: | |||
Incurred: Current year | 1,664.2 | 1,572.5 | 1,376.8 |
Incurred: Prior years | 32.1 | 7.2 | 26.6 |
Total incurred | 1,696.3 | 1,579.7 | 1,403.4 |
Payments: | |||
Payments: Current year | 1,093.2 | 1,025 | 863.8 |
Payments: Prior years | 465.4 | 435.4 | 403.3 |
Total payments | 1,558.6 | 1,460.4 | 1,267.1 |
Net balance at end of period, unpaid claims | 2,355 | 2,217.3 | 2,098 |
Balance at end of period, reinsurance recoverables for unpaid claims | 478.1 | 442.1 | 436.9 |
Balance at end of period, unpaid claims | 2,833.1 | 2,659.4 | 2,534.9 |
Amount not included in the rollforward above: | |||
Claim adjustment expense liabilities | $ 59.7 | $ 59.5 | $ 57.8 |
Insurance Liabilities - Claims
Insurance Liabilities - Claims Development Tables (Details) $ in Thousands | Dec. 31, 2022 USD ($) claim | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2016 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2014 USD ($) | Dec. 31, 2013 USD ($) |
Claims Development | ||||||||||
Total outstanding liabilities for unpaid claims net of reinsurance | $ 1,393,200 | |||||||||
Long-Term Disability/Group Life Waiver | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 2,268,600 | |||||||||
Net cumulative paid claims | 1,267,800 | |||||||||
Liability for unpaid claims net, not separately presented | 239,500 | |||||||||
Total outstanding liabilities for unpaid claims net of reinsurance | 1,240,300 | |||||||||
Long-Term Disability/Group Life Waiver | Incurral year 2013 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 174,500 | $ 174,500 | $ 173,400 | $ 177,100 | $ 179,500 | $ 182,300 | $ 190,700 | $ 188,400 | $ 203,300 | $ 219,300 |
Incurred but not reported claims | $ 100 | |||||||||
Cumulative number of reported claims | claim | 7,051 | |||||||||
Net cumulative paid claims | $ 139,600 | 134,900 | 129,000 | 123,200 | 116,400 | 106,400 | 97,000 | 81,400 | 55,000 | $ 12,500 |
Long-Term Disability/Group Life Waiver | Incurral year 2014 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 199,800 | 199,300 | 202,000 | 201,900 | 206,200 | 218,100 | 214,400 | 231,400 | 242,200 | |
Incurred but not reported claims | $ 100 | |||||||||
Cumulative number of reported claims | claim | 7,604 | |||||||||
Net cumulative paid claims | $ 153,300 | 147,200 | 140,800 | 132,400 | 122,300 | 111,800 | 96,300 | 66,000 | $ 16,100 | |
Long-Term Disability/Group Life Waiver | Incurral year 2015 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 210,500 | 211,800 | 210,000 | 208,200 | 215,300 | 217,200 | 227,200 | 231,000 | ||
Incurred but not reported claims | $ 100 | |||||||||
Cumulative number of reported claims | claim | 7,181 | |||||||||
Net cumulative paid claims | $ 154,000 | 146,500 | 137,100 | 126,800 | 114,600 | 98,000 | 67,000 | $ 16,900 | ||
Long-Term Disability/Group Life Waiver | Incurral year 2016 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 221,900 | 218,700 | 214,400 | 219,500 | 219,400 | 228,400 | 229,800 | |||
Incurred but not reported claims | $ 100 | |||||||||
Cumulative number of reported claims | claim | 6,167 | |||||||||
Net cumulative paid claims | $ 157,100 | 147,200 | 136,800 | 124,900 | 105,600 | 70,600 | $ 16,200 | |||
Long-Term Disability/Group Life Waiver | Incurral year 2017 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 246,500 | 245,200 | 245,800 | 243,100 | 239,700 | 238,400 | ||||
Incurred but not reported claims | $ 100 | |||||||||
Cumulative number of reported claims | claim | 6,082 | |||||||||
Net cumulative paid claims | $ 165,400 | 151,700 | 135,900 | 115,000 | 76,500 | $ 17,800 | ||||
Long-Term Disability/Group Life Waiver | Incurral year 2018 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 235,300 | 239,800 | 239,200 | 245,100 | 239,400 | |||||
Incurred but not reported claims | $ 100 | |||||||||
Cumulative number of reported claims | claim | 5,774 | |||||||||
Net cumulative paid claims | $ 150,300 | 135,700 | 115,700 | 79,900 | $ 20,100 | |||||
Long-Term Disability/Group Life Waiver | Incurral year 2019 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 240,200 | 240,400 | 248,400 | 255,200 | ||||||
Incurred but not reported claims | $ 5,700 | |||||||||
Cumulative number of reported claims | claim | 5,945 | |||||||||
Net cumulative paid claims | $ 136,400 | 117,500 | 79,700 | $ 19,200 | ||||||
Long-Term Disability/Group Life Waiver | Incurral year 2020 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 221,100 | 231,000 | 252,100 | |||||||
Incurred but not reported claims | $ 8,400 | |||||||||
Cumulative number of reported claims | claim | 5,913 | |||||||||
Net cumulative paid claims | $ 113,100 | 78,800 | $ 20,600 | |||||||
Long-Term Disability/Group Life Waiver | Incurral year 2021 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 244,500 | 259,700 | ||||||||
Incurred but not reported claims | $ 4,000 | |||||||||
Cumulative number of reported claims | claim | 5,484 | |||||||||
Net cumulative paid claims | $ 79,000 | 19,800 | ||||||||
Long-Term Disability/Group Life Waiver | Incurral year 2022 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 274,300 | |||||||||
Incurred but not reported claims | $ 109,800 | |||||||||
Cumulative number of reported claims | claim | 3,422 | |||||||||
Net cumulative paid claims | $ 19,600 | |||||||||
Dental/Vision/Short Term Disability/Critical Illness/Accident/PFML Claims | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 1,738,500 | |||||||||
Net cumulative paid claims | 1,658,800 | |||||||||
Total outstanding liabilities for unpaid claims net of reinsurance | 79,700 | |||||||||
Dental/Vision/Short Term Disability/Critical Illness/Accident/PFML Claims | Incurral year 2021 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | $ 814,100 | 826,000 | ||||||||
Cumulative number of reported claims | claim | 3,749,753 | |||||||||
Net cumulative paid claims | $ 813,300 | 753,400 | ||||||||
Dental/Vision/Short Term Disability/Critical Illness/Accident/PFML Claims | Incurral year 2022 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 924,400 | |||||||||
Incurred but not reported claims | $ 56,500 | |||||||||
Cumulative number of reported claims | claim | 4,114,456 | |||||||||
Net cumulative paid claims | $ 845,500 | |||||||||
Group Life | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 600,800 | |||||||||
Net cumulative paid claims | 532,600 | |||||||||
Liability for unpaid claims net, not separately presented | 5,000 | |||||||||
Total outstanding liabilities for unpaid claims net of reinsurance | 73,200 | |||||||||
Group Life | Incurral year 2021 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 321,500 | 317,600 | ||||||||
Incurred but not reported claims | $ 800 | |||||||||
Cumulative number of reported claims | claim | 7,079 | |||||||||
Net cumulative paid claims | $ 314,300 | $ 243,900 | ||||||||
Group Life | Incurral year 2022 | ||||||||||
Claims Development | ||||||||||
Net incurred claims | 279,300 | |||||||||
Incurred but not reported claims | $ 24,700 | |||||||||
Cumulative number of reported claims | claim | 5,368 | |||||||||
Net cumulative paid claims | $ 218,300 |
Insurance Liabilities - Reconci
Insurance Liabilities - Reconciliation of Unpaid Claims to Liability for Unpaid Claims Table (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Net outstanding liabilities for unpaid claims | $ 1,393.2 | |||
Reconciling items | ||||
Reinsurance recoverable on unpaid claims | 45.7 | |||
Impact of discounting | (209.4) | |||
Liability for unpaid claims - short duration contracts | 1,229.5 | |||
Insurance contracts other than short duration | 1,603.6 | |||
Liability for unpaid claims | 2,833.1 | $ 2,659.4 | $ 2,534.9 | $ 2,365.5 |
Long-Term Disability/Group Life Waiver | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Net outstanding liabilities for unpaid claims | 1,240.3 | |||
Reconciling items | ||||
Reinsurance recoverable on unpaid claims | 45.3 | |||
Impact of discounting | (209.4) | (208) | ||
Liability for unpaid claims - short duration contracts | 1,076.2 | 1,057.5 | ||
Dental/Vision/Short-Term Disability/Critical Illness/Accident/PFML | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Net outstanding liabilities for unpaid claims | 79.7 | |||
Reconciling items | ||||
Liability for unpaid claims - short duration contracts | 79.7 | 73.1 | ||
Group Life | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Net outstanding liabilities for unpaid claims | 73.2 | |||
Reconciling items | ||||
Reinsurance recoverable on unpaid claims | 0.4 | |||
Liability for unpaid claims - short duration contracts | $ 73.6 | $ 80.2 |
Insurance Liabilities - Claim D
Insurance Liabilities - Claim Duration and Payout Table (Details) | Dec. 31, 2022 |
Long-Term Disability/Group Life Waiver | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 7.90% |
Year 2 | 24.70% |
Year 3 | 15.40% |
Year 4 | 8.30% |
Year 5 | 5.80% |
Year 6 | 5.20% |
Year 7 | 4.30% |
Year 8 | 3.40% |
Year 9 | 3.20% |
Year 10 | 2.60% |
Dental/Vision/Short-Term Disability/Critical Illness/Accident/PFML | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 91.80% |
Year 2 | 8% |
Group Life | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 79.60% |
Year 2 | 18.50% |
Insurance Liabilities - Discoun
Insurance Liabilities - Discounting Table (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Short-duration Insurance Contracts, Discounted Liabilities [Line Items] | |||
Carrying amount of liabilities for unpaid claims | $ 1,229.5 | ||
Aggregate amount of discount | 209.4 | ||
Long-Term Disability/Group Life Waiver | |||
Short-duration Insurance Contracts, Discounted Liabilities [Line Items] | |||
Carrying amount of liabilities for unpaid claims | 1,076.2 | $ 1,057.5 | |
Aggregate amount of discount | 209.4 | 208 | |
Interest accretion | $ 33 | $ 33.8 | $ 33.9 |
Short-Duration Insurance Contract, Discounted Liability, Interest Accretion, Statement of Financial Position [Extensible Enumeration] | Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense | Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense | Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense |
Long-Term Disability/Group Life Waiver | Minimum | |||
Short-duration Insurance Contracts, Discounted Liabilities [Line Items] | |||
Discount rate | 2.80% | 2.80% | |
Long-Term Disability/Group Life Waiver | Maximum | |||
Short-duration Insurance Contracts, Discounted Liabilities [Line Items] | |||
Discount rate | 7% | 7% | |
Dental/Vision/Short-Term Disability/Critical Illness/Accident/PFML | |||
Short-duration Insurance Contracts, Discounted Liabilities [Line Items] | |||
Carrying amount of liabilities for unpaid claims | $ 79.7 | $ 73.1 | |
Group Life | |||
Short-duration Insurance Contracts, Discounted Liabilities [Line Items] | |||
Carrying amount of liabilities for unpaid claims | $ 73.6 | $ 80.2 |
Reinsurance (Details)
Reinsurance (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | |
Ceded Credit Risk [Line Items] | ||
Net ceded reinsurance recoverables | $ 14,128.4 | $ 1,186.3 |
Reinsurance deposit receivable | 7,900.9 | |
Reinsurer Concentration Risk | Net ceded reinsurance recoverables | Five largest ceded reinsurers | ||
Ceded Credit Risk [Line Items] | ||
Net ceded reinsurance recoverables | $ 13,660.1 | $ 578 |
Concentration risk percentage | 99.70% | 95.50% |
Number of largest ceded reinsurers | item | 5 | 5 |
Reinsurance - Effects Of Reinsu
Reinsurance - Effects Of Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Premiums and other considerations: | |||
Premiums and other considerations, Direct | $ 5,216.5 | $ 4,869.7 | $ 6,050.4 |
Premiums and other considerations, Assumed | 503.5 | 494.3 | 439.5 |
Premiums and other considerations, Ceded | (455.7) | (650) | (609.1) |
Net premiums and other considerations | 5,264.3 | 4,714 | 5,880.8 |
Benefits, claims and settlement expenses: | |||
Benefits, claims and settlement expenses, Direct | 6,448.3 | 6,351.5 | 7,615.8 |
Benefits, claims and settlement expenses, Assumed | 775 | 796.1 | 746.4 |
Benefits, claims and settlement expenses, Ceded | (1,572.6) | (665) | (524.7) |
Net benefits, claims and settlement expenses | $ 5,650.7 | $ 6,482.6 | $ 7,837.5 |
Reinsurance - Cost of Reinsuran
Reinsurance - Cost of Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reinsurance | |||
Cost of reinsurance asset | $ 3,689.2 | $ 46.5 | |
Cost of reinsurance liability | 84.2 | 22.1 | |
Cost of reinsurance amortization | $ 84.5 | $ (18) | $ 67.4 |
Reinsurance - Funds Withheld (D
Reinsurance - Funds Withheld (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | $ 20,703.9 | ||
Funds withheld payable | 20,436.1 | ||
Embedded derivative asset | 3,652.8 | ||
Change in fair value of funds withheld embedded derivative | 3,652.8 | $ 0 | $ 0 |
Fixed maturities, available-for-sale | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 15,693.5 | ||
Fixed maturities, trading | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 100.8 | ||
Equity securities | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 11 | ||
Mortgage loans | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 2,810.8 | ||
Other investments | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 179.8 | ||
Cash and cash equivalents | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 1,762.9 | ||
Accrued interest income | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 178.7 | ||
Net other assets (liabilities) | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net asset (liability) | $ (33.6) |
Reinsurance - Components of Net
Reinsurance - Components of Net Investment Income on Funds Withheld Assets (Details) - Talcott Life & Annuity Re $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Reinsurance | |
Total | $ 869.9 |
Investment expenses | (20.5) |
Net investment income | 849.4 |
Fixed maturities, available-for-sale | |
Reinsurance | |
Total | 745.9 |
Fixed maturities, trading | |
Reinsurance | |
Total | 2 |
Equity securities | |
Reinsurance | |
Total | 0.6 |
Mortgage loans | |
Reinsurance | |
Total | 98.4 |
Cash and cash equivalents | |
Reinsurance | |
Total | 18.2 |
Other | |
Reinsurance | |
Total | $ 4.8 |
Reinsurance - Components of N_2
Reinsurance - Components of Net Realized Capital Gains (Losses) on Funds Withheld Assets (Details) - Talcott Life & Annuity Re $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Reinsurance | |
Net realized capital losses | $ (263.1) |
Fixed maturities, available-for-sale | |
Reinsurance | |
Net realized capital losses | (235.5) |
Fixed maturities, trading | |
Reinsurance | |
Net realized capital losses | (6.4) |
Equity securities | |
Reinsurance | |
Net realized capital losses | (2.4) |
Mortgage loans | |
Reinsurance | |
Net realized capital losses | (24.8) |
Derivatives | |
Reinsurance | |
Net realized capital losses | 2.7 |
Other | |
Reinsurance | |
Net realized capital losses | $ 3.3 |
Debt - Short-Term Debt (Details
Debt - Short-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Short-Term Debt | ||
Credit facilities | $ 800 | $ 800 |
Credit facility maturing in October 2027 | PLIC | ||
Short-Term Debt | ||
Credit facilities | $ 800 | |
Credit facility maturing November 2023 | PFG, PFS, PLIC as co-borrowers | ||
Short-Term Debt | ||
Credit facilities | 600 | |
Credit facility maturing November 2023 | PFG, PFS, PLIC and Principal Financial Services V (UK) Ltd as co-borrowers | ||
Short-Term Debt | ||
Credit facilities | 200 | |
Commercial paper | ||
Short-Term Debt | ||
Support provided by back-stop facility for commercial paper program (as a percent) | 100% | |
Back-stop facility outstanding balances | $ 0 | $ 0 |
Debt - Components of Long-Term
Debt - Components of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Long-Term Debt | ||
Long-term debt principal | $ 67.1 | $ 53.8 |
Net unamortized discount, premium and debt issuance costs | 0.7 | 0.2 |
Long-term debt carrying amount | 67.8 | 54 |
Mortgages and notes payable | Non-recourse | ||
Long-Term Debt | ||
Long-term debt principal | 67.1 | 53.8 |
Net unamortized discount, premium and debt issuance costs | 0.7 | 0.2 |
Long-term debt carrying amount | $ 67.8 | $ 54 |
Debt - Non-Recourse Mortgages a
Debt - Non-Recourse Mortgages and Notes Payable (Details) - Mortgages and notes payable - Non-recourse - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Long-Term Debt | ||
Real estate | $ 317.6 | $ 198.3 |
Minimum | ||
Long-Term Debt | ||
Outstanding principal balances per real estate development | $ 3 | $ 3.1 |
Interest rate (as a percent) | 3.50% | 3.50% |
Maximum | ||
Long-Term Debt | ||
Outstanding principal balances per real estate development | $ 15.9 | $ 14.4 |
Interest rate (as a percent) | 4.80% | 4.80% |
Debt - Future Maturities of Lon
Debt - Future Maturities of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Future maturities of long-term debt | ||
Year 1: Long-term debt maturities | $ 25.3 | |
Year 2: Long-term debt maturities | 32.7 | |
Year 3: Long-term debt maturities | 0.4 | |
Year 4: Long-term debt maturities | 6.5 | |
Year 5: Long-term debt maturities | 0.1 | |
Year 6 and thereafter: Long-term debt maturities | 2.8 | |
Long-term debt carrying amount | $ 67.8 | $ 54 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense and Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Current income taxes (benefits): U.S. federal | $ (142.9) | $ 96.9 | $ 19.1 |
Current income taxes (benefits): State | 21.7 | 11.4 | 12.6 |
Current income taxes (benefits): Tax benefit of operating loss carryforwards | (0.1) | ||
Total current income taxes (benefits) | (121.2) | 108.3 | 31.6 |
Deferred income taxes (benefits): U.S. federal | 1,243.3 | 124.4 | 128.5 |
Deferred income taxes (benefits): State | (4.5) | 0.5 | |
Total deferred income taxes (benefits) | 1,238.8 | 124.9 | 128.5 |
Income taxes (benefits) | 1,117.6 | 233.2 | 160.1 |
Income (loss) before income taxes | |||
Income (loss) before income taxes - domestic | 5,840.8 | 1,686.8 | 1,227.5 |
Income (loss) before income taxes | $ 5,840.8 | $ 1,686.8 | $ 1,227.5 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation between the U.S. corporate income tax rate and the effective income tax rate from continuing operations | |||
U.S. corporate income tax rate (as a percent) | 21% | 21% | 21% |
Dividends received deduction (as a percent) | (1.00%) | (4.00%) | (6.00%) |
Tax credits (as a percent) | (1.00%) | (3.00%) | (3.00%) |
Interest exclusion from taxable income (as a percent) | (1.00%) | (1.00%) | |
Low income housing tax credit amortization (as a percent) | 1% | 1% | |
Other income tax rate impacts (as a percent) | 1% | ||
Effective income tax rate (as a percent) | 19% | 14% | 13% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in Unrecognized Tax Benefits | |||
Beginning balance, Unrecognized tax benefits | $ 43.9 | $ 45.8 | $ 57.2 |
Additions based on tax positions related to the current year | 1.3 | 1.3 | |
Additions for tax positions of prior years | 17.4 | ||
Reductions for tax positions related to the current year | (3.3) | (3.2) | (3.2) |
Settlements | (13.4) | ||
Expired statute of limitations | (13.5) | ||
Ending balance, Unrecognized tax benefits | 40.6 | 43.9 | 45.8 |
Accumulated pre-tax interest and penalties related to unrecognized tax benefits | $ 1.4 | $ 1.2 | $ 1.1 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes and Other (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets: | ||
Net unrealized losses on available-for-sale securities | $ 1,611.9 | |
Tax credit carryforwards | 65.8 | |
Employee benefits | 26.4 | $ 54.2 |
Intangible assets | 17.6 | |
Gross deferred income tax assets | 1,721.7 | 54.2 |
Valuation allowance | (12.3) | (2.8) |
Total deferred income tax assets | 1,709.4 | 51.4 |
Deferred income tax liabilities: | ||
Deferred income tax liabilities: Deferred acquisition costs | (811) | (594.5) |
Investments, including derivative assets | (187.6) | (278) |
Funds withheld embedded derivative | (767.1) | |
Net unrealized gains on available-for-sale securities | (1,070.7) | |
Deferred income tax liabilities: Real estate | (140) | (141.7) |
Insurance liabilities | (728.8) | (21.6) |
Intangible assets | (7.7) | |
Gain on sale of discontinued operations | (182.1) | (189.5) |
Other deferred income tax liabilities | (48.4) | (21.2) |
Total deferred income tax liabilities | (2,865) | (2,324.9) |
Total net deferred income tax liabilities | (1,155.6) | (2,273.5) |
Net deferred income taxes by jurisdiction | ||
Net deferred income tax assets | 10.8 | |
Net deferred income tax liabilities | (1,166.4) | (2,273.5) |
Total net deferred income tax liabilities | (1,155.6) | (2,273.5) |
Current income tax receivables associated with outstanding audit issues | ||
Current income tax (receivables) payables associated with outstanding audit issues | (20.7) | (16.8) |
U.S. Federal | ||
Deferred income tax assets: | ||
Tax credit carryforwards | 65.8 | 0 |
Net deferred income taxes by jurisdiction | ||
Net deferred income tax liabilities | (1,166.4) | (2,245.1) |
Net operating loss carryforwards valuation allowance | 0 | |
State | ||
Net deferred income taxes by jurisdiction | ||
Net deferred income tax assets | 10.8 | |
Net deferred income tax liabilities | (28.4) | |
Net operating loss carryforwards valuation allowance | 0 | |
Deferred income tax disclosures-operating loss carryforwards | ||
Net operating loss carryforwards | $ 0.3 | $ 0.3 |
Employee and Agent Benefits - P
Employee and Agent Benefits - Plan Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Pension benefits | |
Defined Benefit Plan Disclosures | |
Period of employment used to calculate average annual compensation for the final average pay benefit | 5 years |
Employee and Agent Benefits - B
Employee and Agent Benefits - Benefit Obligation and Funded Status (Details) - Other postretirement benefits - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in benefit obligation | |||
Benefit obligation at beginning of year | $ (79.2) | $ (92.5) | |
Interest cost | (1.9) | (1.8) | $ (2.4) |
Actuarial gain (loss) | 17 | 6.4 | |
Participant contributions | (6.4) | (6.1) | |
Benefits paid | 11.9 | 11.9 | |
Plan transfer due to change in sponsorship | 2.9 | ||
Benefit obligation at end of year | (58.6) | (79.2) | (92.5) |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 89.5 | 751.1 | |
Actual return on plan assets | (15) | (0.8) | |
Employer contribution | 1.4 | 1.5 | |
Participant contributions | 6.4 | 6.1 | |
Benefits paid | (11.9) | (11.9) | |
Assets re-designated for non-retiree benefits | (656.5) | ||
Fair value of plan assets at end of year | 70.4 | 89.5 | $ 751.1 |
Amount recognized in statement of financial position | |||
Amount recognized in other assets | 11.8 | 10.3 | |
Total assets (liabilities) recognized in statement of financial position | 11.8 | 10.3 | |
Amount recognized in accumulated other comprehensive (income) loss | |||
Total net actuarial (gain) loss | (18.1) | (20.7) | |
Pre-tax accumulated other comprehensive (income) loss | $ (18.1) | $ (20.7) |
Employee and Agent Benefits - O
Employee and Agent Benefits - Other Postretirement Plan Changes and Plan Gains Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | |
Other postretirement benefits | |||||
Defined Benefit Plan Disclosures | |||||
Benefit liability | $ 58.6 | $ 79.2 | $ 92.5 | ||
Net unrecognized actuarial loss | $ 17 | $ 6.4 | |||
Prior period service cost | $ 0.1 | ||||
Amount of assets in excess of expected liability for retirees, re-designated for non-retiree benefits | $ 656.5 | ||||
Percentage of assets in excess of expected liabilities to fund other benefits covered under the plans | 125% | ||||
Long-Term Care Assistance Plan | PFG | Benefit Plans | |||||
Defined Benefit Plan Disclosures | |||||
Benefit liability | $ 2.9 | $ 2.9 | |||
Net unrecognized actuarial loss | 2 | ||||
Prior period service cost | $ 0.7 |
Employee and Agent Benefits - N
Employee and Agent Benefits - Net Periodic Benefit Cost (Details) - Other postretirement benefits - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of Net Periodic Benefit Cost (Income) | |||
Interest cost | $ 1.9 | $ 1.8 | $ 2.4 |
Interest cost, location on consolidated statements of operations | Operating expenses | Operating expenses | Operating expenses |
Expected return on plan assets | $ (3.7) | $ (3.5) | $ (34.8) |
Expected return on plan assets, location on consolidated statements of operations | Operating expenses | Operating expenses | Operating expenses |
Amortization of prior service (benefit) cost | $ 0.1 | ||
Amortization of prior service (benefit) cost, location on consolidated statements of operations | Operating expenses | Operating expenses | Operating expenses |
Recognized net actuarial (gain) loss | $ (0.9) | $ (0.4) | $ 0.2 |
Recognized net actuarial (gain) loss, location on consolidated statements of operations | Operating expenses | Operating expenses | Operating expenses |
Net periodic benefit cost (income) | $ (2.7) | $ (2.1) | $ (32.1) |
Other changes recognized in accumulated other comprehensive (income) loss | |||
Net actuarial (gain) loss | 1.7 | (4.1) | |
Prior service (benefit) cost | (0.7) | ||
Amortization of gain (loss) | 0.9 | 0.4 | |
Total recognized in pre-tax accumulated other comprehensive (income) loss | 2.6 | (4.4) | |
Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss | $ (0.1) | $ (6.5) |
Employee and Agent Benefits - W
Employee and Agent Benefits - Weighted Average Assumptions (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension benefits | ||||||
Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section | ||||||
Discount rate: Benefit obligation (as a percent) | 5.05% | 2.55% | ||||
Other postretirement benefits | ||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||
Discount rate: Net periodic benefit cost (as a percent) | 2.95% | 2.90% | 2.55% | 2.15% | 2.95% | |
Expected long-term return on plan assets: Net periodic benefit cost (as a percent) | 4.25% | 4.25% | 4.95% | |||
Assumed Health Care Cost Trend Rates | ||||||
Health care cost trend rate assumed for next year under age 65 (as a percent) | 7% | 7% | ||||
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) (as a percent) | 4.50% | 4.50% | ||||
Year that the health care cost trend rate reaches the ultimate trend rate under age 65 (calendar year) | 2031 | 2030 | ||||
Home office medical and life plans | ||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||
Expected long-term return on plan assets: Net periodic benefit cost (as a percent) | 4.25% | |||||
Agent medical and life plans | ||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||
Expected long-term return on plan assets: Net periodic benefit cost (as a percent) | 4.25% | |||||
Long-term care plans | ||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||
Subsidy increase cap allowed per calendar year (as a percent) | 5% |
Employee and Agent Benefits - F
Employee and Agent Benefits - Fair Value of Plan Assets (Details) - Other postretirement benefits - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | $ 70.4 | $ 89.5 | $ 751.1 |
Cash and cash equivalents | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 0.5 | 0.5 | |
Fixed income security portfolios | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 34.7 | 41.8 | |
U.S. equity portfolios | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 25.6 | 32.9 | |
International equity portfolios | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 9.6 | 14.3 | |
Fair value hierarchy Level 1 | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 70.4 | 89.5 | |
Fair value hierarchy Level 1 | Cash and cash equivalents | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 0.5 | 0.5 | |
Fair value hierarchy Level 1 | Fixed income security portfolios | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 34.7 | 41.8 | |
Fair value hierarchy Level 1 | U.S. equity portfolios | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | 25.6 | 32.9 | |
Fair value hierarchy Level 1 | International equity portfolios | |||
Defined benefit plan, fair value of plan assets | |||
Fair value of plan assets | $ 9.6 | $ 14.3 |
Employee and Agent Benefits - T
Employee and Agent Benefits - Target Plan Asset Allocation (Details) - Other postretirement benefits | Dec. 31, 2022 |
U.S. equity portfolios | |
Asset category target allocation | |
Asset category target allocation | 35% |
International equity portfolios | |
Asset category target allocation | |
Asset category target allocation | 15% |
Fixed income security portfolios | |
Asset category target allocation | |
Asset category target allocation | 50% |
Employee and Agent Benefits - C
Employee and Agent Benefits - Contributions and Estimated Future Benefit Payments (Details) - Other postretirement benefits $ in Millions | Dec. 31, 2022 USD ($) |
Estimated Future Benefit Payments | |
Estimated future benefit payments, Year 1 | $ 11.6 |
Estimated future benefit payments, Year 2 | 10.7 |
Estimated future benefit payments, Year 3 | 9.7 |
Estimated future benefit payments, Year 4 | 8.6 |
Estimated future benefit payments, Year 5 | 7.6 |
Estimated future benefit payments, Years 6-10 | $ 30.1 |
Contingencies, Guarantees, In_3
Contingencies, Guarantees, Indemnifications and Leases - Guarantees and Indemnifications (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Guaranty Funds | ||
Undiscounted liability balance for guaranty fund assessments | $ 20.6 | $ 21 |
Premium tax offsets | 9.7 | $ 9.7 |
Guarantees to third parties primarily related to former subsidiaries and joint ventures | ||
Guarantees and Indemnifications | ||
Maximum exposure under guarantees | 125 | |
Lawsuit alleging breach of fiduciary duty related to PFIO | ||
Loss contingencies - disclosures | ||
Estimated losses accrued related to legal matters | $ 0 |
Contingencies, Guarantees, In_4
Contingencies, Guarantees, Indemnifications and Leases - Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assets | |||
Operating lease assets | $ 116.9 | $ 125.6 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | |
Finance lease assets | $ 82.4 | $ 94.2 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | |
Total lease assets | $ 199.3 | $ 219.8 | |
Liabilities | |||
Operating lease liabilities | $ 112.2 | $ 118.3 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities | Other Liabilities | |
Finance lease liabilities | $ 83 | $ 94.8 | |
Finance Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities | Other Liabilities | |
Total lease liabilities | $ 195.2 | $ 213.1 | |
Finance lease cost: | |||
Amortization of right-of-use assets | 34 | 30.5 | $ 20.4 |
Interest on lease liabilities | 1.2 | 1 | 1 |
Operating lease cost | 34.6 | 37.6 | 30.5 |
Other lease cost | 9.5 | 7.3 | 5.8 |
Sublease income | (1.5) | (1.7) | (1.6) |
Total lease cost | 77.8 | 74.7 | 56.1 |
Payments for operating leases | 32 | 36 | 40.7 |
Payments for finance leases | 35.1 | 31.4 | $ 21.2 |
Operating leases, payments due for the twelve months ending December 31: | |||
2023 | 25.6 | ||
2024 | 22.3 | ||
2025 | 18.8 | ||
2026 | 15.7 | ||
2027 | 11.6 | ||
2028 and thereafter | 32.2 | ||
Total lease payments | 126.2 | ||
Less: interest | 14 | ||
Present value of lease liabilities | 112.2 | 118.3 | |
Finance leases, payments due for the twelve months ending December 31: | |||
2023 | 35 | ||
2024 | 30.2 | ||
2025 | 14.6 | ||
2026 | 5 | ||
2027 | 0.4 | ||
Total lease payments | 85.2 | ||
Less: interest | 2.2 | ||
Present value of lease liabilities | 83 | 94.8 | |
Total leases, payments due for the twelve months ending December 31: | |||
2023 | 60.6 | ||
2024 | 52.5 | ||
2025 | 33.4 | ||
2026 | 20.7 | ||
2027 | 12 | ||
2028 and thereafter | 32.2 | ||
Total lease payments | 211.4 | ||
Less: interest | 16.2 | ||
Present value of lease liabilities | $ 195.2 | $ 213.1 | |
Weighted-average remaining lease term and weighted-average discount rates | |||
Weighted average remaining lease term, Operating leases | 7 years 8 months 12 days | 7 years 9 months 18 days | 8 years 1 month 6 days |
Weighted average remaining lease term, Finance leases | 2 years 9 months 18 days | 3 years 2 months 12 days | 3 years |
Weighted-average discount rate, Operating leases | 2.50% | 2.20% | 2.40% |
Weighted-average discount rate, Finance leases | 1.70% | 1.10% | 1.80% |
Stockholders' Equity - Other Co
Stockholders' Equity - Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Comprehensive Income (Loss) | |||
Other comprehensive income (loss), pre-tax | $ (11,261.9) | $ (788.3) | $ 1,734.1 |
Other comprehensive income (loss), tax | 2,391.6 | 170.3 | (367.9) |
Other comprehensive income (loss) | (8,870.3) | (618) | 1,366.2 |
Net unrealized gains (losses) on available-for-sale securities including NCI | |||
Other Comprehensive Income (Loss) | |||
Other comprehensive income (loss) before reclassifications, pre-tax | (12,980.4) | (2,313.3) | 3,268.3 |
Adjustments for assumed changes in amortization patterns, pre-tax | 926.6 | 171.4 | (179) |
Adjustments for assumed changes in policyholder liabilities, pre-tax | 486.1 | 1,288.6 | (1,275.1) |
Other comprehensive income (loss), pre-tax | (11,234.4) | (832.8) | 1,772.8 |
Other comprehensive income (loss) before reclassifications, tax | 2,753 | 490.5 | (690.8) |
Reclassification from accumulated other comprehensive income, tax | (70.4) | (4.3) | 9.4 |
Adjustments for assumed changes in amortization patterns, tax | (194.6) | (36) | 37.6 |
Adjustments for assumed changes in policyholder liabilities, tax | (102) | (270.5) | 267.7 |
Other comprehensive income (loss), tax | 2,386 | 179.7 | (376.1) |
Other comprehensive income (loss) before reclassifications, after-tax | (10,227.4) | (1,822.8) | 2,577.5 |
Reclassification from accumulated other comprehensive income, after-tax | 262.9 | 16.2 | (32) |
Adjustments for assumed changes in amortization patterns, after-tax | 732 | 135.4 | (141.4) |
Adjustments for assumed changes in policyholder liabilities, after-tax | 384.1 | 1,018.1 | (1,007.4) |
Other comprehensive income (loss) | (8,848.4) | (653.1) | 1,396.7 |
Net unrealized gains (losses) on available-for-sale securities including NCI | Net realized capital gains (losses) | |||
Other Comprehensive Income (Loss) | |||
Reclassification from accumulated other comprehensive income, pre-tax | 333.3 | 20.5 | (41.4) |
Net unrealized gains (losses) on derivative instruments including NCI. | |||
Other Comprehensive Income (Loss) | |||
Other comprehensive income (loss) before reclassifications, pre-tax | (1.3) | 66.7 | (28.1) |
Reclassification from accumulated other comprehensive income, pre-tax | (28) | (25.5) | (27.1) |
Adjustments for assumed changes in amortization patterns, pre-tax | 7.3 | (0.2) | 2.7 |
Adjustments for assumed changes in policyholder liabilities, pre-tax | (2.9) | 1.6 | 7.8 |
Other comprehensive income (loss), pre-tax | (24.9) | 42.6 | (44.7) |
Other comprehensive income (loss) before reclassifications, tax | 0.3 | (14) | 6.5 |
Reclassification from accumulated other comprehensive income, tax | 5.8 | 5.4 | 5.1 |
Adjustments for assumed changes in amortization patterns, tax | (1.6) | (0.5) | |
Adjustments for assumed changes in policyholder liabilities, tax | 0.6 | (0.4) | (1.6) |
Other comprehensive income (loss), tax | 5.1 | (9) | 9.5 |
Other comprehensive income (loss) before reclassifications, after-tax | (1) | 52.7 | (21.6) |
Reclassification from accumulated other comprehensive income, after-tax | (22.2) | (20.1) | (22) |
Adjustments for assumed changes in amortization patterns, after-tax | 5.7 | (0.2) | 2.2 |
Adjustments for assumed changes in policyholder liabilities, after-tax | (2.3) | 1.2 | 6.2 |
Other comprehensive income (loss) | (19.8) | 33.6 | (35.2) |
Unrecognized postretirement benefit obligation including NCI | |||
Other Comprehensive Income (Loss) | |||
Other comprehensive income (loss) before reclassifications, pre-tax | (1.7) | 2.3 | 5.7 |
Other comprehensive income (loss), pre-tax | (2.6) | 1.9 | 6 |
Other comprehensive income (loss) before reclassifications, tax | 0.4 | (0.5) | (1.2) |
Reclassification from accumulated other comprehensive income, tax | 0.1 | 0.1 | (0.1) |
Other comprehensive income (loss), tax | 0.5 | (0.4) | (1.3) |
Other comprehensive income (loss) before reclassifications, after-tax | (1.3) | 1.8 | 4.5 |
Reclassification from accumulated other comprehensive income, after-tax | (0.8) | (0.3) | 0.2 |
Other comprehensive income (loss) | (2.1) | 1.5 | 4.7 |
Unrecognized postretirement benefit obligation including NCI | Operating expense | |||
Other Comprehensive Income (Loss) | |||
Reclassification from accumulated other comprehensive income, pre-tax | $ (0.9) | $ (0.4) | $ 0.3 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | $ 12,690.9 | ||
Purchase of subsidiary shares from noncontrolling interest | (6.7) | $ (16.6) | |
Adjustments for reinsurance | 131.8 | ||
Balances | 7,175.9 | 12,690.9 | |
Accumulated other comprehensive income (loss) | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | 3,370.9 | 3,986.9 | $ 2,620.7 |
Other comprehensive income (loss) during the period, net of adjustments | (9,110.2) | (613.8) | 1,420 |
Amounts reclassified to accumulated other comprehensive income (loss) | 239.9 | (4.2) | (53.8) |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | (8,870.3) | (618) | 1,366.2 |
Net assets transferred to affiliate due to change in benefit plan sponsorship | 2 | ||
Adjustments for reinsurance | 131.8 | ||
Balances | (5,367.6) | 3,370.9 | 3,986.9 |
Net unrealized gains (losses) on available-for-sale securities | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | 3,302.4 | 3,955.5 | 2,602.9 |
Other comprehensive income (loss) during the period, net of adjustments | (9,111.3) | (669.3) | 1,428.7 |
Amounts reclassified to accumulated other comprehensive income (loss) | 262.9 | 16.2 | (32) |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | (8,848.4) | (653.1) | 1,396.7 |
Adjustments for reinsurance | 124.4 | ||
Balances | (5,421.6) | 3,302.4 | 3,955.5 |
Net unrealized gains (losses) on available-for-sale debt securities with allowance for credit losses | (1.8) | (0.6) | (2.6) |
Net unrealized gains (losses) on available-for-sale securities | ASU 2016-13 - CECL | Effects of implementation of accounting change | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | (44.1) | ||
Balances | (44.1) | ||
Noncredit component of impairment losses on fixed maturities available-for-sale | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | (44.1) | ||
Noncredit component of impairment losses on fixed maturities available-for-sale | ASU 2016-13 - CECL | Effects of implementation of accounting change | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | 44.1 | ||
Balances | 44.1 | ||
Net unrealized gains (losses) on derivative instruments | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | 52.1 | 18.5 | 53.7 |
Other comprehensive income (loss) during the period, net of adjustments | 2.4 | 53.7 | (13.2) |
Amounts reclassified to accumulated other comprehensive income (loss) | (22.2) | (20.1) | (22) |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | (19.8) | 33.6 | (35.2) |
Adjustments for reinsurance | 7.4 | ||
Balances | 39.7 | 52.1 | 18.5 |
Unrecognized postretirement benefit obligations | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | 16.4 | 12.9 | 8.2 |
Other comprehensive income (loss) during the period, net of adjustments | (1.3) | 1.8 | 4.5 |
Amounts reclassified to accumulated other comprehensive income (loss) | (0.8) | (0.3) | 0.2 |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | (2.1) | 1.5 | 4.7 |
Net assets transferred to affiliate due to change in benefit plan sponsorship | 2 | ||
Balances | $ 14.3 | $ 16.4 | $ 12.9 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividend Limitations (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Stockholders' Equity | |
Dividend limitation as percentage of statutory policyholder surplus (as a percent) | 10% |
Dividends that can be paid in upcoming calendar year without exceeding statutory limitation | $ 430.1 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | $ 59,631.3 | $ 73,896.9 |
Fixed maturities, trading | 634 | 233.3 |
Equity securities | 53.1 | 508.2 |
Derivative instruments, assets | 256.6 | 326.2 |
Separate account assets | 120,279.6 | 147,529 |
Investment and universal life contracts | 58.9 | (320.9) |
Amount measured at net asset value | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Unfunded commitments of investments measured using NAV | $ 7.8 | 10.2 |
Maximum | ||
Fixed maturities valued using internal pricing models | ||
Maximum fixed maturities classified as Level 3 assets, percent valued using internal pricing models (as a percent) | 4% | |
U.S. government and agencies | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | $ 1,715.9 | 1,937 |
Non-U.S. governments | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 520.4 | 947.1 |
States and political subdivisions | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,168.3 | 9,216.4 |
Corporate debt securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 33,184.8 | 42,965.1 |
Residential mortgage-backed pass-through securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,170.9 | 2,342.3 |
Commercial mortgage-backed securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,827.5 | 5,513.7 |
Collateralized debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,560.2 | 3,533.5 |
Other debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,483.3 | 7,441.8 |
Recurring Fair Value Measurements | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 59,631.3 | 73,896.9 |
Fixed maturities, trading | 634 | 233.3 |
Equity securities | 53.1 | 508.2 |
Derivative instruments, assets | 256.6 | 326.2 |
Other investments | 82.8 | 94.1 |
Cash equivalents | 2,776.4 | 753 |
Sub-total excluding separate account assets | 63,434.2 | 75,811.7 |
Separate account assets | 120,279.6 | 147,529 |
Total assets | 183,713.8 | 223,340.7 |
Investment and universal life contracts | 58.9 | (320.9) |
Funds withheld payable embedded derivative | 3,652.8 | |
Derivative liabilities | (612.3) | (142.3) |
Total liabilities | 3,099.4 | (463.2) |
Net assets (liabilities) | 186,813.2 | 222,877.5 |
Recurring Fair Value Measurements | Amount measured at net asset value | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Other investments | 81.4 | 92.7 |
Sub-total excluding separate account assets | 81.4 | 92.7 |
Separate account assets | 9,120.9 | 8,942.9 |
Total assets | 9,202.3 | 9,035.6 |
Net assets (liabilities) | 9,202.3 | 9,035.6 |
Recurring Fair Value Measurements | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,380.6 | 1,628.5 |
Fixed maturities, trading | 78.6 | 0.5 |
Equity securities | 14.8 | 463.5 |
Cash equivalents | 930.3 | |
Sub-total excluding separate account assets | 2,404.3 | 2,092.5 |
Separate account assets | 91,424.2 | 114,735.5 |
Total assets | 93,828.5 | 116,828 |
Net assets (liabilities) | 93,828.5 | 116,828 |
Recurring Fair Value Measurements | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 56,085.9 | 71,194.6 |
Fixed maturities, trading | 449.2 | 227.9 |
Equity securities | 38.3 | 44.7 |
Derivative instruments, assets | 256.5 | 325.6 |
Cash equivalents | 1,846.1 | 753 |
Sub-total excluding separate account assets | 58,676 | 72,545.8 |
Separate account assets | 18,700.4 | 22,904.6 |
Total assets | 77,376.4 | 95,450.4 |
Derivative liabilities | (608.2) | (142.3) |
Total liabilities | (608.2) | (142.3) |
Net assets (liabilities) | 76,768.2 | 95,308.1 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,164.8 | 1,073.8 |
Fixed maturities, trading | 106.2 | 4.9 |
Derivative instruments, assets | 0.1 | 0.6 |
Other investments | 1.4 | 1.4 |
Sub-total excluding separate account assets | 2,272.5 | 1,080.7 |
Separate account assets | 1,034.1 | 946 |
Total assets | 3,306.6 | 2,026.7 |
Investment and universal life contracts | 58.9 | (320.9) |
Funds withheld payable embedded derivative | 3,652.8 | |
Derivative liabilities | (4.1) | |
Total liabilities | 3,707.6 | (320.9) |
Net assets (liabilities) | 7,014.2 | 1,705.8 |
Recurring Fair Value Measurements | U.S. government and agencies | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,715.9 | 1,937 |
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,354 | 1,587 |
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 361.9 | 350 |
Recurring Fair Value Measurements | Non-U.S. governments | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 520.4 | 947.1 |
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 520.4 | 947.1 |
Recurring Fair Value Measurements | States and political subdivisions | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,168.3 | 9,216.4 |
Recurring Fair Value Measurements | States and political subdivisions | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,099.2 | 9,124 |
Recurring Fair Value Measurements | States and political subdivisions | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 69.1 | 92.4 |
Recurring Fair Value Measurements | Corporate debt securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 33,184.8 | 42,965.1 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 26.6 | 41.5 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 31,589.9 | 42,089.3 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,568.3 | 834.3 |
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,170.9 | 2,342.3 |
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,170.9 | 2,342.3 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,827.5 | 5,513.7 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,824.1 | 5,494.5 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 3.4 | 19.2 |
Recurring Fair Value Measurements | Collateralized debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,560.2 | 3,533.5 |
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,504 | 3,447.7 |
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 56.2 | 85.8 |
Recurring Fair Value Measurements | Other debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,483.3 | 7,441.8 |
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,015.5 | 7,399.7 |
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | $ 467.8 | $ 42.1 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Fair Value Measurements (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax |
Beginning balance, net derivative assets (liabilities) | $ 0.6 | $ (5.1) | $ 11.6 |
Total realized/unrealized gains (losses) included in net income, net derivative assets (liabilities) | $ (4) | $ (5) | $ 9.8 |
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative |
Total realized/unrealized gains (losses) included in other comprehensive income, net derivative assets (liabilities) | $ (0.3) | ||
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax |
Net purchases, sales, issuances and settlements, net derivative assets (liabilities) | $ 10.7 | ||
Transfers out of Level 3, net derivative assets (liabilities) | $ (0.3) | $ (26.5) | |
Ending balance, net derivative assets (liabilities) | (4) | 0.6 | (5.1) |
Changes in unrealized gains (losses) included in net income relating to positions still held, net derivative assets (liabilities) | (4) | 9.9 | |
Gross purchases, sales, issuances and settlements | |||
Sales, net derivative assets (liabilities) | 10.7 | ||
Net purchases, sales, issuances and settlements, net derivative assets (liabilities) | 10.7 | ||
Investment and universal life contracts | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, liabilities | (320.9) | (414.4) | (151.2) |
Total realized/unrealized gains (losses) included in net income, liabilities | 363.9 | 67 | (244) |
Net purchases, sales, issuances and settlements, liabilities | 15.9 | 26.5 | (19.2) |
Ending balance, liabilities | 58.9 | (320.9) | (414.4) |
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities | 349.4 | 65.9 | (251.1) |
Gross purchases, sales, issuances and settlements | |||
Issuances, liabilities | (7.4) | (16.4) | (41) |
Settlements, liabilities | 23.3 | 42.9 | 21.8 |
Net purchases, sales, issuances and settlements, liabilities | 15.9 | 26.5 | (19.2) |
Funds withheld payable embedded derivative | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Total realized/unrealized gains (losses) included in net income, assets | 3,652.8 | ||
Ending balance, assets | 3,652.8 | ||
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities | 3,652.8 | ||
Derivative liabilities | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Changes in unrealized gains (losses) included in OCI relating to positions still held, liabilities | (0.2) | ||
Fixed maturities | Available-for-sale | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 1,073.8 | 360.4 | 384.9 |
Total realized/unrealized gains (losses) included in net income, assets | (5.1) | (24.9) | (4.5) |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (74.5) | 22 | (16.6) |
Net purchases, sales, issuances and settlements, assets | 1,246.1 | 803.1 | 262.5 |
Transfers into Level 3, assets | 188.3 | 348.8 | 388.4 |
Transfers out of Level 3, assets | (263.8) | (435.6) | (654.3) |
Ending balance, assets | 2,164.8 | 1,073.8 | 360.4 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (1.3) | (7.6) | (3.4) |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (42) | 13.3 | 13.1 |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 1,456.6 | 1,102.1 | 365.5 |
Sales, assets | (62.7) | (84.3) | (5.5) |
Settlements, assets | (147.8) | (214.7) | (97.5) |
Net purchases, sales, issuances and settlements, assets | 1,246.1 | 803.1 | 262.5 |
Fixed maturities | Trading | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 4.9 | 0.3 | |
Total realized/unrealized gains (losses) included in net income, assets | (0.6) | ||
Net purchases, sales, issuances and settlements, assets | 72.9 | 4.9 | |
Transfers into Level 3, assets | 29 | ||
Transfers out of Level 3, assets | (0.3) | ||
Ending balance, assets | 106.2 | 4.9 | |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 106.9 | 4.9 | |
Sales, assets | (32.6) | ||
Settlements, assets | (1.4) | ||
Net purchases, sales, issuances and settlements, assets | 72.9 | 4.9 | |
States and political subdivisions | Available-for-sale | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 92.4 | ||
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (23.5) | 12.5 | |
Net purchases, sales, issuances and settlements, assets | (1.6) | (0.4) | |
Transfers into Level 3, assets | 12 | 80.3 | |
Transfers out of Level 3, assets | (10.2) | ||
Ending balance, assets | 69.1 | 92.4 | |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (21.7) | 12.5 | |
Gross purchases, sales, issuances and settlements | |||
Settlements, assets | (1.6) | (0.4) | |
Net purchases, sales, issuances and settlements, assets | (1.6) | (0.4) | |
Corporate debt securities | Available-for-sale | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 834.3 | 290.8 | 81.7 |
Total realized/unrealized gains (losses) included in net income, assets | (4.8) | (21.9) | (0.9) |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (28.6) | 7.8 | 5.2 |
Net purchases, sales, issuances and settlements, assets | 626.3 | 381.8 | 118 |
Transfers into Level 3, assets | 176.3 | 175.8 | 342 |
Transfers out of Level 3, assets | (35.2) | (255.2) | |
Ending balance, assets | 1,568.3 | 834.3 | 290.8 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (1.3) | (4.6) | |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (19.8) | (0.7) | 11.9 |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 817.3 | 626.6 | 169.2 |
Sales, assets | (50.4) | (84.3) | (5.5) |
Settlements, assets | (140.6) | (160.5) | (45.7) |
Net purchases, sales, issuances and settlements, assets | 626.3 | 381.8 | 118 |
Commercial mortgage-backed securities | Available-for-sale | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 19.2 | 13.2 | 12.9 |
Total realized/unrealized gains (losses) included in net income, assets | (1) | (1.3) | |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (1) | (0.4) | 1.4 |
Net purchases, sales, issuances and settlements, assets | (4.6) | 7.4 | (0.1) |
Transfers into Level 3, assets | 0.3 | ||
Transfers out of Level 3, assets | (10.2) | ||
Ending balance, assets | 3.4 | 19.2 | 13.2 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (1) | (1.2) | |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (0.5) | (0.4) | 1.5 |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 7.7 | ||
Sales, assets | (4.1) | ||
Settlements, assets | (0.5) | (0.3) | (0.1) |
Net purchases, sales, issuances and settlements, assets | (4.6) | 7.4 | (0.1) |
Collateralized debt obligations | Available-for-sale | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 85.8 | 27.2 | 199 |
Total realized/unrealized gains (losses) included in net income, assets | (2) | (2.3) | |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (1) | 1.7 | (21.8) |
Net purchases, sales, issuances and settlements, assets | 151.8 | 397.4 | 182.5 |
Transfers into Level 3, assets | 72.1 | ||
Transfers out of Level 3, assets | (180.4) | (410.6) | (330.2) |
Ending balance, assets | 56.2 | 85.8 | 27.2 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (2) | (2.2) | |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | 1.9 | (0.3) | |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 151.9 | 422.7 | 182 |
Settlements, assets | (0.1) | (25.3) | 0.5 |
Net purchases, sales, issuances and settlements, assets | 151.8 | 397.4 | 182.5 |
Other debt obligations | Available-for-sale | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 42.1 | 29.2 | 91.3 |
Total realized/unrealized gains (losses) included in net income, assets | (0.3) | ||
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (20.4) | 0.4 | (1.4) |
Net purchases, sales, issuances and settlements, assets | 474.2 | 16.9 | (37.9) |
Transfers into Level 3, assets | 20.6 | 46.1 | |
Transfers out of Level 3, assets | (27.8) | (25) | (68.9) |
Ending balance, assets | 467.8 | 42.1 | 29.2 |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 487.4 | 45.1 | 14.3 |
Sales, assets | (8.2) | ||
Settlements, assets | (5) | (28.2) | (52.2) |
Net purchases, sales, issuances and settlements, assets | 474.2 | 16.9 | (37.9) |
Other investments | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 1.4 | 30 | 34.2 |
Total realized/unrealized gains (losses) included in net income, assets | 12.4 | 6.3 | |
Net purchases, sales, issuances and settlements, assets | (41) | (10.5) | |
Ending balance, assets | 1.4 | 1.4 | 30 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | 12.5 | 5.3 | |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 0.5 | ||
Sales, assets | (41) | (11) | |
Net purchases, sales, issuances and settlements, assets | (41) | (10.5) | |
Fixed maturities, trading. | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (0.6) | ||
Separate account assets | |||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | |||
Beginning balance, assets | 946 | 8,893.2 | 8,966.7 |
Total realized/unrealized gains (losses) included in net income, assets | 112 | 313.8 | 463.5 |
Net purchases, sales, issuances and settlements, assets | (23.9) | (8,261) | (537) |
Ending balance, assets | 1,034.1 | 946 | 8,893.2 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | 89.8 | 90.5 | 385.5 |
Gross purchases, sales, issuances and settlements | |||
Purchases, assets | 11.8 | 38.5 | 309.2 |
Sales, assets | (4.5) | (8,206.2) | (656.7) |
Issuances, assets | (50) | (191.5) | (396.1) |
Settlements, assets | 18.8 | 98.2 | 206.6 |
Net purchases, sales, issuances and settlements, assets | $ (23.9) | $ (8,261) | $ (537) |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative assets | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 3 into Level 2, net derivative assets (liabilities) | $ 0.3 | $ 26.5 | |
Available-for-sale | Fixed maturities | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 2 into Level 3 | 188.3 | $ 348.8 | 388.4 |
Transfers out of Level 3 into Level 2 | 263.8 | 435.6 | 654.3 |
Available-for-sale | States and political subdivisions | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 2 into Level 3 | 12 | 80.3 | |
Transfers out of Level 3 into Level 2 | 10.2 | ||
Available-for-sale | Corporate debt securities | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 2 into Level 3 | 176.3 | 175.8 | 342 |
Transfers out of Level 3 into Level 2 | 35.2 | 255.2 | |
Available-for-sale | Commercial mortgage-backed securities | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 2 into Level 3 | 0.3 | ||
Transfers out of Level 3 into Level 2 | 10.2 | ||
Available-for-sale | Collateralized debt obligations | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 2 into Level 3 | 72.1 | ||
Transfers out of Level 3 into Level 2 | 180.4 | 410.6 | 330.2 |
Available-for-sale | Other debt obligations | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 2 into Level 3 | 20.6 | 46.1 | |
Transfers out of Level 3 into Level 2 | 27.8 | $ 25 | 68.9 |
Trading | Fixed maturities | |||
Fair Value Hierarchy Levels Transfers | |||
Transfers out of Level 2 into Level 3 | $ 29 | ||
Transfers out of Level 3 into Level 2 | $ 0.3 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information for Level 3 Measurements (Details) - Recurring Fair Value Measurements | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) item |
Unobservable inputs | ||
Assets measured at fair value | $ | $ 183,713,800,000 | $ 223,340,700,000 |
Liabilities measured at fair value | $ | 3,099,400,000 | (463,200,000) |
Fair value hierarchy Level 3 | ||
Unobservable inputs | ||
Assets measured at fair value | $ | 3,306,600,000 | 2,026,700,000 |
Liabilities measured at fair value | $ | 3,707,600,000 | (320,900,000) |
Fair value hierarchy Level 3 | Trading | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 92,500,000 | $ 4,900,000 |
Fair value hierarchy Level 3 | Trading | Discounted cash flow | Discount rate | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.075 | |
Fair value hierarchy Level 3 | Trading | Discounted cash flow | Discount rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, trading, Input | 0.096 | |
Fair value hierarchy Level 3 | Trading | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, trading, Input | 0.152 | |
Fair value hierarchy Level 3 | Trading | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.075 | |
Fixed maturities, trading, Input | 0.110 | |
Fair value hierarchy Level 3 | Investment and universal life contracts | ||
Unobservable inputs | ||
Liabilities measured at fair value | $ | $ 58,900,000 | $ (320,900,000) |
Embedded derivative, Valuation technique | Discounted cash flow | Discounted cash flow |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Minimum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.024 | |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Maximum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.041 | 0.019 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.019 | |
Embedded derivative, Input | 0.037 | |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Minimum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.178 | 0.198 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Maximum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.369 | 0.325 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.219 | 0.225 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Non-performance risk | Minimum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.009 | 0.003 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Non-performance risk | Maximum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.020 | 0.011 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Non-performance risk | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.016 | 0.009 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Lapse rate | Minimum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.013 | 0.013 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Lapse rate | Maximum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.090 | 0.090 |
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Lapse rate | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.047 | 0.047 |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 1,479,900,000 | $ 829,900,000 |
Fixed maturities, available-for-sale, Valuation technique | Discounted cash flow | |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.027 | 0.009 |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.331 | 0.155 |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.110 | 0.068 |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0 | 0 |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0467 | 0.0070 |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0050 | 0.0006 |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Comparability adjustment | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | (0.0016) | |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Comparability adjustment | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0 | |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Comparability adjustment | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | (0.0011) | |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Market comparables | Probability of default | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 1 | |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Market comparables | Probability of default | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 1 | |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Market comparables | Potential loss severity | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.394 | |
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Market comparables | Potential loss severity | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.394 | |
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 3,500,000 | |
Fixed maturities, available-for-sale, Valuation technique | Discounted cash flow | |
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale | Discounted cash flow | Discount rate | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.037 | |
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.037 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 39,500,000 | $ 45,900,000 |
Fixed maturities, available-for-sale, Valuation technique | Discounted cash flow | Discounted cash flow |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.044 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.030 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.053 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.044 | 0.040 |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0385 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0255 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0055 | |
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0055 | |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 467,800,000 | $ 22,100,000 |
Fixed maturities, available-for-sale, Valuation technique | Discounted cash flow | Discounted cash flow |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.056 | 0.030 |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.082 | 0.100 |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.076 | 0.033 |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0 | 0.0225 |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0260 | 0.0500 |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0220 | 0.0237 |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0001 | |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0139 | |
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0077 | |
Fair value hierarchy Level 3 | Separate account assets | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 1,034,100,000 | $ 946,000,000 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Discount rate | ||
Unobservable inputs | ||
Separate account assets, Input | 0.014 | |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.014 | |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Credit spread rate | ||
Unobservable inputs | ||
Separate account assets, Input | 0.0120 | |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Credit spread rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.0120 | |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.055 | 0.053 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.100 | 0.100 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.070 | 0.066 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.045 | 0.043 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.095 | 0.093 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.058 | 0.056 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.020 | 0.016 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.038 | 0.036 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.030 | 0.027 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.436 | 0.401 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.622 | 0.585 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.506 | 0.460 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.053 | |
Separate account assets, Input | 0.025 | |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.086 | 0.031 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.066 | 0.027 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Option on Consolidated VIEs and Equity Method Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Real Estate Ventures | ||
Fair Value Option, Quantitative Disclosures | ||
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected | $ 12.5 | $ 5.3 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Not Reported at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Assets (liabilities) | ||
Mortgage loans | $ 19,722.4 | $ 18,908.3 |
Policy loans | 770.2 | 705 |
Reinsurance deposit receivable | 7,900.9 | |
Long-term debt | (67.8) | (54) |
Carrying amount | ||
Assets (liabilities) | ||
Mortgage loans | 19,722.4 | 18,908.3 |
Policy loans | 770.2 | 705 |
Other investments | 230 | 290.4 |
Cash and cash equivalents not required to be reported at fair value | 552.9 | 475.6 |
Reinsurance deposit receivable | 7,900.9 | |
Cash collateral receivable | 262.8 | 2 |
Investment contracts | (34,919.4) | (35,249.5) |
Long-term debt | (67.8) | (54) |
Separate account liabilities | (107,227.6) | (131,096.8) |
Bank deposits | (352.4) | (373.3) |
Cash collateral payable | (285.1) | (204.4) |
Assets (liabilities) measured at fair value | ||
Assets (liabilities) | ||
Mortgage loans | 17,847.1 | 19,842.3 |
Policy loans | 749.5 | 888.9 |
Other investments | 217.4 | 281.2 |
Cash and cash equivalents not required to be reported at fair value | 552.9 | 475.6 |
Reinsurance deposit receivable | 6,859.9 | |
Cash collateral receivable | 262.8 | 2 |
Investment contracts | (31,915.2) | (35,534.9) |
Long-term debt | (60.5) | (38) |
Separate account liabilities | (106,410.4) | (130,152.8) |
Bank deposits | (336.3) | (372.8) |
Cash collateral payable | (285.1) | (204.4) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 1 | ||
Assets (liabilities) | ||
Cash and cash equivalents not required to be reported at fair value | 552.9 | 475.6 |
Cash collateral receivable | 262.8 | 2 |
Cash collateral payable | (285.1) | (204.4) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 2 | ||
Assets (liabilities) | ||
Other investments | 112.9 | 185 |
Investment contracts | (7,278.9) | (7,454.3) |
Bank deposits | (336.3) | (372.8) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 3 | ||
Assets (liabilities) | ||
Mortgage loans | 17,847.1 | 19,842.3 |
Policy loans | 749.5 | 888.9 |
Other investments | 104.5 | 96.2 |
Reinsurance deposit receivable | 6,859.9 | |
Investment contracts | (24,636.3) | (28,080.6) |
Long-term debt | (60.5) | (38) |
Separate account liabilities | $ (106,410.4) | $ (130,152.8) |
Statutory Insurance Financial_3
Statutory Insurance Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statutory disclosures | |||
Statutory reserves assumed by affiliated reinsurance subsidiaries | $ 17,815.1 | $ 10,085.7 | |
Admitted assets under prescribed and permitted statutory accounting practices | 3,748.4 | 4,146 | |
Statutory net income (loss) | (1,563.1) | 864 | $ 915.9 |
Statutory capital and surplus | 4,304.4 | $ 5,375.2 | $ 5,682.4 |
ULSG reserves assumed by affiliated reinsurance subsidiaries and then ceded to a third party reinsurer | $ 9,956.9 |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Assets to Consolidated (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Information: Assets | ||
Total assets | $ 243,214.2 | $ 255,348.3 |
Retirement and Income Solutions | ||
Segment Information: Assets | ||
Total assets | 202,518.1 | 220,777.3 |
U.S. Insurance Solutions | ||
Segment Information: Assets | ||
Total assets | 39,907.5 | 32,344.7 |
Corporate | ||
Segment Information: Assets | ||
Total assets | $ 788.6 | $ 2,226.3 |
Segment Information - Reconci_2
Segment Information - Reconciliation of Segment Operating Revenues and Earnings to Consolidated (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Net realized capital gains (losses), net of related revenue adjustments | $ (46.9) | $ (141.4) | $ (3.9) |
Revenues from exited business | 4,447.2 | ||
Total revenues | 14,725.5 | 11,008.8 | 11,664.9 |
Pre-tax net realized capital gains (losses), as adjusted | (88) | (51) | (85.8) |
Pre-tax income (loss) from exited business | 4,297.1 | ||
Income (loss) before income taxes | 5,840.8 | 1,686.8 | 1,227.5 |
Retirement and Income Solutions | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Inter-segment revenues | 27.2 | 18.9 | 18.9 |
Operating Segments | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 10,325.2 | 11,150.2 | 11,668.8 |
Pre-tax operating earnings (losses) | 1,569.5 | 1,713.5 | 1,293.9 |
Pre-tax income (loss) from exited business | 4,297.1 | ||
Operating Segments | Retirement and Income Solutions | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 5,957.5 | 6,329 | 7,162.5 |
Pre-tax operating earnings (losses) | 1,159.9 | 1,292.4 | 1,065.7 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 2,236.2 | 2,141.7 | 1,808.8 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 3,721.3 | 4,187.3 | 5,353.7 |
Operating Segments | U.S. Insurance Solutions | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 4,307.2 | 4,753.8 | 4,468.4 |
Pre-tax operating earnings (losses) | 526.8 | 461.8 | 232.1 |
Operating Segments | U.S. Insurance Solutions | Specialty Benefits insurance | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 2,981.6 | 2,706.8 | 2,522.7 |
Operating Segments | U.S. Insurance Solutions | Individual Life insurance | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 1,325.9 | 2,047.1 | 1,945.8 |
Operating Segments | U.S. Insurance Solutions | Eliminations. | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | (0.3) | (0.1) | (0.1) |
Operating Segments | Corporate | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Operating revenues | 60.5 | 67.4 | 37.9 |
Pre-tax operating earnings (losses) | (117.2) | (40.7) | (3.9) |
Reconciling Items | |||
Operating Revenue And Profit (Loss) From Segments To Consolidated | |||
Net realized capital gains (losses), net of related revenue adjustments | (46.9) | (141.4) | (3.9) |
Pre-tax net realized capital gains (losses), as adjusted | (88) | (51) | (85.8) |
Pre-tax income (loss) from exited business | 908 | ||
Earnings adjustments related to equity method investments and noncontrolling interest | $ 62.2 | $ 24.3 | $ 19.4 |
Segment Information - Revenues
Segment Information - Revenues from exited business (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Revenues from exited business: | ||||
Change in fair value of funds withheld embedded derivative | $ 3,652.8 | $ 0 | $ 0 | |
Net realized capital gains (losses) on funds withheld assets | [1] | 749.4 | ||
Strategic review costs and impacts | 32.4 | |||
Amortization of reinsurance gain | 12.6 | |||
Total revenues from exited business | $ 4,447.2 | |||
[1] Includes realized and unrealized gains (losses). See Note 5, Investments, for further details. |
Segment Information - Pre-tax n
Segment Information - Pre-tax net Realized Capital Gains (Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Segment Information: Net realized capital gains (losses), as adjusted | ||||
Net realized capital gains (losses) | [1] | $ (1.2) | $ (18.5) | $ 105.6 |
Derivative and hedging-related revenue adjustments | (41.7) | (119.4) | (119.3) | |
Market value adjustments to fee revenues | 0.7 | (0.6) | (1.6) | |
Recognition of front-end fee revenue | (4.7) | (2.9) | 11.4 | |
Net realized capital gains (losses), net of related revenue adjustments | (46.9) | (141.4) | (3.9) | |
Amortization of deferred acquisition costs and other actuarial balances | 2.5 | 11.1 | (26.8) | |
Capital (gains) losses distributed | 0.5 | (0.5) | (0.1) | |
Market value adjustments of embedded derivatives | (44.1) | 79.8 | (55) | |
Pre-tax net realized capital gains (losses), as adjusted | (88) | (51) | (85.8) | |
Reconciling Items | ||||
Segment Information: Net realized capital gains (losses), as adjusted | ||||
Net realized capital gains (losses), net of related revenue adjustments | (46.9) | (141.4) | (3.9) | |
Pre-tax net realized capital gains (losses), as adjusted | $ (88) | $ (51) | $ (85.8) | |
[1] Includes realized and unrealized gains (losses). See Note 5, Investments, for further details. |
Segment Information - Pre-tax i
Segment Information - Pre-tax income (loss) from exited business (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Pre-tax income (loss) from exited business: | ||||
Change in fair value of funds withheld embedded derivative | $ 3,652.8 | $ 0 | $ 0 | |
Net realized capital gains (losses) on funds withheld assets | [1] | 749.4 | ||
Amortization of reinsurance gain (loss) | (84.5) | $ 18 | $ (67.4) | |
Total pre-tax income (loss) from exited business | 4,297.1 | |||
Operating Segments | ||||
Pre-tax income (loss) from exited business: | ||||
Change in fair value of funds withheld embedded derivative | 3,652.8 | |||
Net realized capital gains (losses) on funds withheld assets | 749.4 | |||
Strategic review costs and impacts on pre-tax income (loss) | (57.1) | |||
Amortization of reinsurance gain (loss) | (82.5) | |||
Impacts to actuarial balances of reinsured business | 34.5 | |||
Total pre-tax income (loss) from exited business | 4,297.1 | |||
Reconciling Items | ||||
Pre-tax income (loss) from exited business: | ||||
Change in fair value of funds withheld embedded derivative | 767.1 | |||
Net realized capital gains (losses) on funds withheld assets | 157.4 | |||
Strategic review costs and impacts on pre-tax income (loss) | (6.3) | |||
Amortization of reinsurance gain (loss) | (17.4) | |||
Impacts to actuarial balances of reinsured business | 7.2 | |||
Total pre-tax income (loss) from exited business | $ 908 | |||
[1] Includes realized and unrealized gains (losses). See Note 5, Investments, for further details. |
Segment Information - Income Ta
Segment Information - Income Tax Expense by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Information: Income tax expense (benefit) | |||
Income taxes (benefits) | $ 1,117.6 | $ 233.2 | $ 160.1 |
Operating Segments | |||
Segment Information: Income tax expense (benefit) | |||
Total segment income tax expense (benefit) from operating earnings (losses) | 231.3 | 246.6 | 173.3 |
Reconciling Items | |||
Segment Information: Income tax expense (benefit) | |||
Tax expense (benefit) related to net realized capital gains (losses), as adjusted | (21.7) | (13.5) | (13.2) |
Tax expense related to exited business | 908 | ||
Tax expense (benefit) associated with certain adjustments related to equity method investments | 0.1 | ||
Retirement and Income Solutions | Operating Segments | |||
Segment Information: Income tax expense (benefit) | |||
Total segment income tax expense (benefit) from operating earnings (losses) | 138.8 | 170.4 | 133.3 |
U.S. Insurance Solutions | Operating Segments | |||
Segment Information: Income tax expense (benefit) | |||
Total segment income tax expense (benefit) from operating earnings (losses) | 100.7 | 90.5 | 46.3 |
Corporate | Operating Segments | |||
Segment Information: Income tax expense (benefit) | |||
Total segment income tax expense (benefit) from operating earnings (losses) | $ (8.2) | $ (14.3) | $ (6.3) |
Segment Information - Depreciat
Segment Information - Depreciation and Amortization Expense by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Information: Depreciation and amortization expense | |||
Total segment depreciation and amortization expense included in pre-tax operating earnings | $ 82.1 | $ 82.1 | $ 63.4 |
Depreciation and amortization expense related to exited business | 26.9 | ||
Depreciation and amortization expense | 109 | 82.1 | 63.4 |
Retirement and Income Solutions | |||
Segment Information: Depreciation and amortization expense | |||
Depreciation and amortization expense | 58 | 53 | 38.8 |
U.S. Insurance Solutions | |||
Segment Information: Depreciation and amortization expense | |||
Depreciation and amortization expense | 18.9 | 19.3 | 20.2 |
Corporate | |||
Segment Information: Depreciation and amortization expense | |||
Depreciation and amortization expense | $ 5.2 | $ 9.8 | $ 4.4 |
Revenues from Contracts with _3
Revenues from Contracts with Customers - Disaggregation by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total fees and other revenues per consolidated statements of operations | $ 2,207.9 | $ 2,679.6 | $ 2,353.6 |
Operating Segments | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | 609.4 | 480.3 | 318.7 |
Operating Segments | Retirement and Income Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | 533.6 | 409.2 | 259.1 |
Operating Segments | U.S. Insurance Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | 76.6 | 72.1 | 60.4 |
Operating Segments | Corporate | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | (0.8) | (1) | (0.8) |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 15.9 | 17.5 | 16.5 |
Total fees and other revenues per consolidated statements of operations | 15.1 | 16.5 | 15.7 |
Operating Segments | Retirement and Income Solutions - Fee | Retirement and Income Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | 522.2 | 399.3 | 250.5 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 1,187 | 1,299.6 | 1,130.4 |
Total fees and other revenues per consolidated statements of operations | 1,709.2 | 1,698.9 | 1,380.9 |
Operating Segments | Retirement and Income Solutions - Spread | Retirement and Income Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | 11.4 | 9.9 | 8.6 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 2.9 | 7.9 | 9.5 |
Total fees and other revenues per consolidated statements of operations | 14.3 | 17.8 | 18.1 |
Operating Segments | Specialty Benefits insurance | U.S. Insurance Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | 12.2 | 12.1 | 12.1 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 18.5 | 19 | 19.2 |
Total fees and other revenues per consolidated statements of operations | 30.7 | 31.1 | 31.3 |
Operating Segments | Individual Life insurance | U.S. Insurance Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | 64.4 | 60.1 | 48.4 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 333.2 | 858.8 | 849.5 |
Total fees and other revenues per consolidated statements of operations | 397.6 | 918.9 | 897.9 |
Operating Segments | U.S. Insurance Solutions Eliminations | U.S. Insurance Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total segment revenue from contracts with customers | (0.1) | (0.1) | |
Reconciling Items | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 1,557.5 | 2,202.8 | 2,025.1 |
Pre-tax other adjustments | $ 41 | $ (3.5) | $ 9.8 |
Revenues from Contracts with _4
Revenues from Contracts with Customers - Disaggregation within Segments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total fees and other revenues | $ 2,207.9 | $ 2,679.6 | $ 2,353.6 |
Premiums and other considerations | 5,264.3 | 4,714 | 5,880.8 |
Net investment income (loss) | 2,852.3 | 3,633.7 | 3,324.9 |
Retirement and Income Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Premiums and other considerations | 1,959.7 | 1,883.6 | 3,221 |
Net investment income (loss) | 2,252.3 | 2,674.4 | 2,457.6 |
U.S. Insurance Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Premiums and other considerations | 3,306.7 | 2,830.4 | 2,659.8 |
Net investment income (loss) | 560.2 | 907.9 | 842 |
Corporate | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Premiums and other considerations | (2.1) | ||
Net investment income (loss) | 39.8 | 51.4 | 25.3 |
Operating Segments | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 609.4 | 480.3 | 318.7 |
Total operating revenues | 10,325.2 | 11,150.2 | 11,668.8 |
Operating Segments | Retirement and Income Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 533.6 | 409.2 | 259.1 |
Total operating revenues | 5,957.5 | 6,329 | 7,162.5 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 522.2 | 399.3 | 250.5 |
Fees and other revenues not within the scope of revenue recognition guidance | 1,187 | 1,299.6 | 1,130.4 |
Total fees and other revenues | 1,709.2 | 1,698.9 | 1,380.9 |
Premiums and other considerations | 0.5 | 4.9 | |
Net investment income (loss) | 527 | 442.3 | 423 |
Total operating revenues | 2,236.2 | 2,141.7 | 1,808.8 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee | Administrative service fee revenue | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 519.2 | 395.9 | 248.4 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee | Other fee revenue | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 3 | 3.4 | 2.1 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 11.4 | 9.9 | 8.6 |
Fees and other revenues not within the scope of revenue recognition guidance | 2.9 | 7.9 | 9.5 |
Total fees and other revenues | 14.3 | 17.8 | 18.1 |
Premiums and other considerations | 1,959.7 | 1,883.1 | 3,216 |
Net investment income (loss) | 1,747.3 | 2,286.4 | 2,119.6 |
Total operating revenues | 3,721.3 | 4,187.3 | 5,353.7 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread | Deposit account fee revenue | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 10.2 | 9.2 | 8.4 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread | Commission income | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 1.2 | 0.7 | 0.2 |
Operating Segments | U.S. Insurance Solutions | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 76.6 | 72.1 | 60.4 |
Total operating revenues | 4,307.2 | 4,753.8 | 4,468.4 |
Operating Segments | U.S. Insurance Solutions | Specialty Benefits insurance | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 12.2 | 12.1 | 12.1 |
Fees and other revenues not within the scope of revenue recognition guidance | 18.5 | 19 | 19.2 |
Total fees and other revenues | 30.7 | 31.1 | 31.3 |
Premiums and other considerations | 2,771.1 | 2,496.5 | 2,330.8 |
Net investment income (loss) | 179.8 | 179.2 | 160.6 |
Total operating revenues | 2,981.6 | 2,706.8 | 2,522.7 |
Operating Segments | U.S. Insurance Solutions | Specialty Benefits insurance | Administrative service fee revenue | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 12.2 | 12.1 | 12.1 |
Operating Segments | U.S. Insurance Solutions | Individual Life insurance | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 64.4 | 60.1 | 48.4 |
Fees and other revenues not within the scope of revenue recognition guidance | 333.2 | 858.8 | 849.5 |
Total fees and other revenues | 397.6 | 918.9 | 897.9 |
Premiums and other considerations | 535.9 | 333.9 | 329.1 |
Net investment income (loss) | 392.4 | 794.3 | 718.8 |
Total operating revenues | 1,325.9 | 2,047.1 | 1,945.8 |
Operating Segments | U.S. Insurance Solutions | Individual Life insurance | Administrative service fee revenue | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 26.9 | 26.2 | 21.6 |
Operating Segments | U.S. Insurance Solutions | Individual Life insurance | Commission income | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | 37.5 | 33.9 | 26.8 |
Operating Segments | Corporate | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | (0.8) | (1) | (0.8) |
Fees and other revenues not within the scope of revenue recognition guidance | 15.9 | 17.5 | 16.5 |
Total fees and other revenues | 15.1 | 16.5 | 15.7 |
Premiums and other considerations | (2.1) | ||
Net investment income (loss) | 47.5 | 50.9 | 22.2 |
Total operating revenues | 60.5 | 67.4 | 37.9 |
Operating Segments | Corporate | Revenue by type - Eliminations | |||
Revenues from Contracts with Customers - Disaggregation of Revenues | |||
Total revenues from contracts with customers | $ (0.8) | $ (1) | $ (0.8) |
Revenues from Contracts with _5
Revenues from Contracts with Customers - Contract Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract costs | |||
Contract cost asset | $ 43 | $ 41.8 | |
Practical expedient, incremental costs of obtaining a contract | true | ||
Amortization expense of contract cost asset | $ 7.6 | 7.4 | $ 7.2 |
Impairment loss for contract cost asset | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Stock-Based Awards (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation Plans | |||
Stock-Based Compensation Plans - Disclosures | |||
Compensation cost | $ 22.2 | $ 25.2 | $ 24.4 |
Related income tax benefit | 4.6 | 4.3 | 4 |
Capitalized as part of an asset | $ 1.2 | $ 1.4 | $ 1.5 |
2014 Stock Incentive Plan, Amended and Restated 2010 Stock Incentive Plan and Stock Incentive Plan | |||
Stock-Based Compensation Plans - Disclosures | |||
Number of shares that will be granted | 0 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Nonqualified Stock Options, Assumptions and Other Disclosures (Details) - Nonqualified Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to estimate fair value of stock options granted during period | |||
Weighted-average expected volatility (as a percent) | 34.20% | 25.70% | |
Weighted-average expected term | 0 years | 7 years | 7 years |
Weighted-average risk-free interest rate (as a percent) | 1.20% | 1.30% | |
Weighted-average expected dividend yield (as a percent) | 3.82% | 4.33% | |
Weighted-average estimated fair value of stock options granted (in dollars per share) | $ 15.67 | $ 9.64 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Nonqualified Stock Options, Activity (Details) - Nonqualified Stock Options shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Stock-Based Compensation Plans - Disclosures | |
Options granted (in shares) | shares | 0 |
Unrecognized compensation costs | $ | $ 0.8 |
Weighted-average service period over which unrecognized compensation costs will be recognized | 1 year |
2014 Stock Incentive Plan, Amended and Restated 2010 Stock Incentive Plan and Stock Incentive Plan | |
Stock-Based Compensation Plans - Disclosures | |
Option expiration period | 10 years |
Vesting period | 3 years |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Performance Share Awards and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Performance Share Awards | |||
Stock-Based Compensation Plans - Disclosures | |||
Performance period for goals | 3 years | ||
Change in nonvested units outstanding | |||
Awards or units granted, Weighted-average grant-date fair value (in dollars per share) | $ 66.62 | $ 58.68 | $ 51.73 |
Other award and unit disclosures | |||
Unrecognized compensation costs | $ 8.4 | ||
Weighted-average service period over which unrecognized compensation costs will be recognized | 1 year 9 months 18 days | ||
Restricted Stock Units | |||
Change in nonvested units outstanding | |||
Awards or units granted, Weighted-average grant-date fair value (in dollars per share) | $ 69.80 | $ 59.38 | $ 49.33 |
2014 Stock Incentive Plan, Amended and Restated 2010 Stock Incentive Plan and Stock Incentive Plan | Restricted Stock Units | |||
Other award and unit disclosures | |||
Unrecognized compensation costs | $ 32.8 | ||
Weighted-average service period over which unrecognized compensation costs will be recognized | 1 year 9 months 18 days |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation Plans - Disclosures | |||
Weighted-average fair value of discount on employee stock purchase plan (in dollars per share) | $ 7.31 | $ 15.64 | $ 11.33 |
Maximum value of company common stock that can be purchased by an employee per year | $ 25,000 | ||
Employee purchase price as a percent of fair market value (as a percent) | 90% | 85% |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments - Other Than Investments in Related Parties (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | $ 93,782.3 |
Amount as shown in the Consolidated Statement of Financial Position | 86,309.7 |
Fixed maturities | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 67,103.9 |
Value | 59,631.3 |
Amount as shown in the Consolidated Statement of Financial Position | 59,631.3 |
Fixed maturities | Trading | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 634 |
Value | 634 |
Amount as shown in the Consolidated Statement of Financial Position | 634 |
U.S. government and agencies | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 1,964.6 |
Value | 1,715.9 |
Amount as shown in the Consolidated Statement of Financial Position | 1,715.9 |
States and political subdivisions | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 7,280.1 |
Value | 6,168.3 |
Amount as shown in the Consolidated Statement of Financial Position | 6,168.3 |
Non-U.S. governments | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 565.3 |
Value | 520.4 |
Amount as shown in the Consolidated Statement of Financial Position | 520.4 |
Public utilities | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 4,637.7 |
Value | 3,983.8 |
Amount as shown in the Consolidated Statement of Financial Position | 3,983.8 |
Redeemable preferred stock | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 157.5 |
Value | 128.1 |
Amount as shown in the Consolidated Statement of Financial Position | 128.1 |
All other corporate bonds | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 32,700.2 |
Value | 29,072.9 |
Amount as shown in the Consolidated Statement of Financial Position | 29,072.9 |
Residential mortgage-backed pass-through securities | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 2,362.1 |
Value | 2,170.9 |
Amount as shown in the Consolidated Statement of Financial Position | 2,170.9 |
Commercial mortgage-backed securities | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 5,529.7 |
Value | 4,827.5 |
Amount as shown in the Consolidated Statement of Financial Position | 4,827.5 |
Collateralized debt obligations | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 4,698.9 |
Value | 4,560.2 |
Amount as shown in the Consolidated Statement of Financial Position | 4,560.2 |
Other debt obligations | Available-for-sale | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 7,207.8 |
Value | 6,483.3 |
Amount as shown in the Consolidated Statement of Financial Position | 6,483.3 |
Equity securities | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 53.1 |
Value | 53.1 |
Amount as shown in the Consolidated Statement of Financial Position | 53.1 |
Common stocks: Banks, trust and insurance companies | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 38.2 |
Value | 38.2 |
Amount as shown in the Consolidated Statement of Financial Position | 38.2 |
Non-redeemable preferred stock | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 14.9 |
Value | 14.9 |
Amount as shown in the Consolidated Statement of Financial Position | 14.9 |
Mortgage loans | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 19,722.4 |
Amount as shown in the Consolidated Statement of Financial Position | 19,722.4 |
Other real estate | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 2,237.4 |
Amount as shown in the Consolidated Statement of Financial Position | 2,237.4 |
Policy loans | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 770.2 |
Amount as shown in the Consolidated Statement of Financial Position | 770.2 |
Investments: Other investments | |
Summary of Investments - Other Than Investments in Related Parties | |
Cost | 3,261.3 |
Amount as shown in the Consolidated Statement of Financial Position | $ 3,261.3 |
Schedule III - Supplementary _2
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Supplementary Insurance Information | ||||
Deferred acquisition costs | $ 4,679.4 | $ 3,749.1 | $ 3,398.5 | $ 3,509.9 |
Future policy benefits and claims | 40,609 | 40,141.6 | ||
Contractholder and other policyholder funds | 43,208.2 | 43,983.3 | ||
Premiums and other considerations | 5,264.3 | 4,714 | 5,880.8 | |
Net investment income | 2,852.3 | 3,633.7 | 3,324.9 | |
Benefits, claims and settlement expenses | 5,650.7 | 6,482.6 | 7,837.5 | |
Amortization of deferred acquisition costs | 383.4 | 284.2 | 386.9 | |
Other operating expenses | 2,755.8 | 2,460.4 | 2,092.8 | |
Retirement and Income Solutions | ||||
Supplementary Insurance Information | ||||
Deferred acquisition costs | 1,271.5 | 819.4 | ||
Future policy benefits and claims | 28,322.9 | 27,716.5 | ||
Contractholder and other policyholder funds | 35,262.8 | 35,941.4 | ||
Premiums and other considerations | 1,959.7 | 1,883.6 | 3,221 | |
Net investment income | 2,252.3 | 2,674.4 | 2,457.6 | |
Benefits, claims and settlement expenses | 3,228.6 | 3,450.1 | 4,899.3 | |
Amortization of deferred acquisition costs | 134.2 | 116.8 | 82.2 | |
Other operating expenses | 1,519.6 | 1,383 | 1,138.3 | |
U.S. Insurance Solutions | ||||
Supplementary Insurance Information | ||||
Deferred acquisition costs | 3,407.9 | 2,929.7 | ||
Future policy benefits and claims | 12,128.2 | 12,262.1 | ||
Contractholder and other policyholder funds | 7,943.3 | 8,039.6 | ||
Premiums and other considerations | 3,306.7 | 2,830.4 | 2,659.8 | |
Net investment income | 560.2 | 907.9 | 842 | |
Benefits, claims and settlement expenses | 2,421.1 | 3,031.7 | 2,937.2 | |
Amortization of deferred acquisition costs | 249.2 | 167.4 | 304.7 | |
Other operating expenses | 1,019 | 994.4 | 932.9 | |
Corporate | ||||
Supplementary Insurance Information | ||||
Future policy benefits and claims | 157.9 | 163 | ||
Contractholder and other policyholder funds | 2.1 | 2.3 | ||
Premiums and other considerations | (2.1) | |||
Net investment income | 39.8 | 51.4 | 25.3 | |
Benefits, claims and settlement expenses | 1 | 0.8 | 1 | |
Other operating expenses | $ 217.2 | $ 83 | $ 21.6 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Life insurance in force | |||
Life insurance in force gross amount | $ 317,116.8 | $ 299,318.1 | $ 294,161.3 |
Life insurance in force ceded to other companies | 222,711.4 | 195,641.7 | 183,067.9 |
Life insurance in force assumed from other companies | 374,462.3 | 367,764.8 | 331,394.6 |
Life insurance in force net amount | $ 468,867.7 | $ 471,441.1 | $ 442,488 |
Life insurance in force, percentage of amount assumed to net (as a percent) | 79.90% | 78% | 74.90% |
Premiums: | |||
Premiums gross amount | $ 5,216.5 | $ 4,869.7 | $ 6,050.4 |
Premiums ceded to other companies | 455.7 | 650 | 609.1 |
Premiums assumed from other companies | 503.5 | 494.3 | 439.5 |
Premiums net amount | $ 5,264.3 | $ 4,714 | $ 5,880.8 |
Premiums percentage of amount assumed to net (as a percent) | 9.60% | 10.50% | 7.50% |
Life insurance and annuities | |||
Premiums: | |||
Premiums gross amount | $ 2,824.1 | $ 2,693.4 | $ 4,013.8 |
Premiums ceded to other companies | 297.9 | 494.3 | 452.5 |
Premiums assumed from other companies | 503.5 | 494.3 | 439.5 |
Premiums net amount | $ 3,029.7 | $ 2,693.4 | $ 4,000.8 |
Premiums percentage of amount assumed to net (as a percent) | 16.60% | 18.40% | 11% |
Accident and health insurance | |||
Premiums: | |||
Premiums gross amount | $ 2,392.4 | $ 2,176.3 | $ 2,036.6 |
Premiums ceded to other companies | 157.8 | 155.7 | 156.6 |
Premiums net amount | $ 2,234.6 | $ 2,020.6 | $ 1,880 |