Segment Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

2. Segment Information

The Company is organized into three segments: Annuities; Life; and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other.

Annuities

The Annuities segment consists of a variety of variable, fixed, index-linked and income annuities designed to address contract holders’ needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security.

Life

The Life segment consists of insurance products and services, including term, universal, whole and variable life products designed to address policyholders’ needs for financial security and protected wealth transfer, which may be provided on a tax-advantaged basis.

Run-off

The Run-off segment consists of products that are no longer actively sold and are separately managed, including structured settlements, pension risk transfer contracts, certain company-owned life insurance policies, funding agreements and ULSG.

Corporate & Other

Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes long-term care and workers’ compensation business reinsured through 100% quota share reinsurance agreements and term life insurance sold direct to consumers, which is no longer being offered for new sales.

Financial Measures and Segment Accounting Policies

Adjusted earnings is a financial measure used by management to evaluate performance, allocate resources and facilitate comparisons to industry results. Consistent with GAAP guidance for segment reporting, adjusted earnings is also used to measure segment performance. The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by the investor community. Adjusted earnings should not be viewed as a substitute for net income (loss) available to BHF’s common shareholders and excludes net income (loss) attributable to noncontrolling interests and preferred stock dividends.

Adjusted earnings, which may be positive or negative, focuses on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends.

The following are significant items excluded from total revenues, net of income tax, in calculating adjusted earnings:

•Net investment gains (losses);

•Net derivative gains (losses) except earned income and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment; and

•Certain variable annuity GMIB fees (“GMIB Fees”).

The following are significant items excluded from total expenses, net of income tax, in calculating adjusted earnings:

•Amounts associated with benefits related to GMIBs (“GMIB Costs”);

•Amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”); and

•Amortization of DAC and VOBA related to: (i) net investment gains (losses), (ii) net derivative gains (losses), (iii) GMIB Fees and GMIB Costs and (iv) Market Value Adjustments.

The tax impact of the adjustments mentioned above is calculated net of the statutory tax rate, which could differ from the Company’s effective tax rate.

The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except for the adjustments to calculate adjusted earnings described above. In addition, segment accounting policies include the methods of capital allocation described below.

Segment investment and capitalization targets are based on statutory oriented risk principles and metrics. Segment invested assets backing liabilities are based on net statutory liabilities plus excess capital. For the variable annuity business, the excess capital held is based on the target statutory total asset requirement consistent with the Company’s variable annuity risk management strategy. For insurance businesses other than variable annuities, excess capital held is based on a percentage of required statutory risk-based capital (“RBC”). Assets in excess of those allocated to the segments, if any, are held in Corporate & Other. Segment net investment income reflects the performance of each segment’s respective invested assets.

Operating results by segment, as well as Corporate & Other, were as follows:

	Year Ended December 31, 2020
	Annuities		Life		Run-off		Corporate & Other		Total
	(In millions)
Pre-tax adjusted earnings	$	1,433	$	182	$	(1,655)	$	(332)	$	(372)
Provision for income tax expense (benefit)	266		34		(356)		(87)		(143)
Post-tax adjusted earnings	1,167		148		(1,299)		(245)		(229)
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		5		5
Less: Preferred stock dividends	—		—		—		44		44
Adjusted earnings	$	1,167	$	148	$	(1,299)	$	(294)	(278)
Adjustments for:
Net investment gains (losses)									278
Net derivative gains (losses)									(18)
Other adjustments to net income (loss)									(1,307)
Provision for income tax (expense) benefit									220
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders									$	(1,105)
Interest revenue	$	1,820	$	460	$	1,269	$	70
Interest expense	$	—	$	—	$	—	$	184

	Year Ended December 31, 2019
	Annuities		Life		Run-off		Corporate & Other		Total
	(In millions)
Pre-tax adjusted earnings	$	1,263	$	288	$	(580)	$	(301)	$	670
Provision for income tax expense (benefit)	235		57		(126)		(121)		45
Post-tax adjusted earnings	1,028		231		(454)		(180)		625
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		5		5
Less: Preferred stock dividends	—		—		—		21		21
Adjusted earnings	$	1,028	$	231	$	(454)	$	(206)	599
Adjustments for:
Net investment gains (losses)									112
Net derivative gains (losses)									(1,988)
Other adjustments to net income (loss)									154
Provision for income tax (expense) benefit									362
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders									$	(761)
Interest revenue	$	1,809	$	436	$	1,265	$	75
Interest expense	$	—	$	—	$	—	$	191

	Year Ended December 31, 2018
	Annuities		Life		Run-off		Corporate & Other		Total
	(In millions)
Pre-tax adjusted earnings	$	1,233	$	285	$	(57)	$	(431)	$	1,030
Provision for income tax expense (benefit)	210		57		(14)		(120)		133
Post-tax adjusted earnings	1,023		228		(43)		(311)		897
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		5		5
Less: Preferred stock dividends	—		—		—		—		—
Adjusted earnings	$	1,023	$	228	$	(43)	$	(316)	892
Adjustments for:
Net investment gains (losses)									(207)
Net derivative gains (losses)									702
Other adjustments to net income (loss)									(536)
Provision for income tax (expense) benefit									14
Net income (loss) available to Brighthouse Financial, Inc.’s common shareholders									$	865
Interest revenue	$	1,536	$	449	$	1,310	$	57
Interest expense	$	—	$	—	$	—	$	158

Total revenues by segment, as well as Corporate & Other, were as follows:

	Years Ended December 31,
	2020		2019		2018
	(In millions)
Annuities	$	4,563	$	4,648	$	4,567
Life	1,334		1,328		1,389
Run-off	1,938		2,009		2,112
Corporate & Other	156		176		152
Adjustments	512		(1,607)		745
Total	$	8,503	$	6,554	$	8,965

Total assets by segment, as well as Corporate & Other, were as follows at:

	December 31,
	2020		2019
	(In millions)
Annuities	$	172,233	$	156,965
Life	23,809		21,876
Run-off	38,366		35,112
Corporate & Other	13,461		13,306
Total	$	247,869	$	227,259

Total premiums, universal life and investment-type product policy fees and other revenues by major product group were as follows:

	Years Ended December 31,
	2020		2019		2018
	(In millions)
Annuity products	$	3,010	$	3,106	$	3,304
Life insurance products	1,619		1,709		1,827
Other products	13		36		1
Total	$	4,642	$	4,851	$	5,132

Substantially all of the Company’s premiums, universal life and investment-type product policy fees and other revenues originated in the U.S.

Revenues derived from any individual customer did not exceed 10% of premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2020, 2019 and 2018.