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Long-duration insurance contracts
 3 Months Ended
Mar. 31, 2024
Insurance [Abstract]  
Long-duration insurance contracts

Note 16. Long-duration insurance contracts

A summary of our long-duration life, annuity and health insurance benefits liabilities as of March 31, 2024 and 2023, disaggregated for our two primary product categories, periodic payment annuities and life and health insurance, follows. Other liabilities include incurred-but-not reported claims and claims in the course of settlement. Amounts are in millions.

 

March 31,

 

 

2024

 

 

2023

 

Periodic payment annuity

$

10,749

 

 

$

11,174

 

Life and health

 

4,259

 

 

 

5,633

 

Other

 

2,979

 

 

 

3,130

 

 

$

17,987

 

 

$

19,937

 

 

Notes to Consolidated Financial Statements

Note 16. Long-duration insurance contracts

Reconciliations of periodic payment annuity and life and health insurance benefits liabilities for the first quarter of 2024 and 2023 follow (in millions). The information reflects the changes in discounted present values of expected future policy benefits and expected future net premiums before reinsurance ceded. Net premiums represent the portion of expected gross premiums that are required to provide for future policy benefits and variable expenses.

 

Periodic payment annuity

 

 

Life and health

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Expected future policy benefits:

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

$

11,212

 

 

$

10,640

 

 

$

52,665

 

 

$

52,008

 

Balance at the beginning of the year - original discount rates

 

11,681

 

 

 

11,549

 

 

 

65,871

 

 

 

63,584

 

Effect of cash flow assumption changes

 

—

 

 

 

—

 

 

 

(34

)

 

 

(1

)

Effect of actual versus expected experience

 

2

 

 

 

1

 

 

 

(12,870

)

 

 

(519

)

Change in benefits, net

 

(115

)

 

 

(116

)

 

 

(449

)

 

 

(747

)

Interest accrual

 

136

 

 

 

133

 

 

 

284

 

 

 

425

 

Foreign currency effect

 

2

 

 

 

19

 

 

 

(389

)

 

 

47

 

Balance at March 31 - original discount rates

 

11,706

 

 

 

11,586

 

 

 

52,413

 

 

 

62,789

 

Effect of changes in discount rate assumptions

 

(957

)

 

 

(412

)

 

 

(11,627

)

 

 

(12,169

)

Balance at March 31

$

10,749

 

 

$

11,174

 

 

$

40,786

 

 

$

50,620

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected future net premiums:

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

 

 

 

 

 

 

$

46,916

 

 

$

46,129

 

Balance at the beginning of the year - original discount rates

 

 

 

 

 

 

 

58,731

 

 

 

56,535

 

Effect of cash flow assumption changes

 

 

 

 

 

 

 

(25

)

 

 

2

 

Effect of actual versus expected experience

 

 

 

 

 

 

 

(11,278

)

 

 

(413

)

Change in premiums, net

 

 

 

 

 

 

 

(407

)

 

 

(660

)

Interest accrual

 

 

 

 

 

 

 

251

 

 

 

371

 

Foreign currency effect

 

 

 

 

 

 

 

(358

)

 

 

47

 

Balance at March 31 - original discount rates

 

 

 

 

 

 

 

46,914

 

 

 

55,882

 

Effect of changes in discount rate assumptions

 

 

 

 

 

 

 

(10,387

)

 

 

(10,895

)

Balance at March 31

 

 

 

 

 

 

$

36,527

 

 

$

44,987

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities for future policy benefits:

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31

$

10,749

 

 

$

11,174

 

 

$

4,259

 

 

$

5,633

 

Reinsurance recoverables

 

—

 

 

 

—

 

 

 

(50

)

 

 

(1,565

)

Balance at March 31, net of reinsurance recoverables

$

10,749

 

 

$

11,174

 

 

$

4,209

 

 

$

4,068

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities for future life and health policy benefits and reinsurance recoverables declined in the first quarter of 2024, primarily attributable to the commutations of certain life reinsurance contracts. The impacts of contract commutations on expected future policy benefits and future net premiums were reflected in effects of actual versus expected experience.

Notes to Consolidated Financial Statements

Note 16. Long-duration insurance contracts

Other information relating to our long-duration insurance liabilities as of March 31, 2024 and 2023 follows (dollars in millions).

 

Periodic payment annuity

 

 

Life and health

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Undiscounted expected future gross premiums

$

—

 

 

$

—

 

 

$

95,514

 

 

$

107,831

 

Discounted expected future gross premiums

 

—

 

 

 

—

 

 

 

56,585

 

 

 

64,421

 

Undiscounted expected future benefits

 

30,953

 

 

 

31,244

 

 

 

86,800

 

 

 

102,881

 

Weighted average discount rate

 

5.4

%

 

 

5.0

%

 

 

4.9

%

 

 

4.9

%

Weighted average accretion rate

 

4.8

%

 

 

4.8

%

 

 

2.7

%

 

 

3.2

%

Weighted average duration

17 years

 

 

18 years

 

 

13 years

 

 

14 years

 

Gross premiums earned and interest expense before reinsurance ceded for the first quarter of 2024 and 2023 were as follows (in millions).

 

Gross premiums

 

 

Interest expense

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Periodic payment annuity

$

—

 

 

$

—

 

 

$

136

 

 

$

133

 

Life and health

 

944

 

 

 

1,004

 

 

 

33

 

 

 

54