Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

The following table illustrates the effect of adopting ASU 2018-12 in the condensed consolidated balance sheets:


(Dollars in millions)	June 30, 2023		December 31, 2022
			As originally reported		As adjusted		Difference
Reinsurance recoverable	$	694	$	640	$	665	$	25
Prepaid reinsurance premiums	95		79		51		(28)
Deferred policy acquisition costs	1,109		1,014		1,013		(1)
Total assets	31,352		29,736		29,732		(4)
Life policy and investment contract reserves	3,038		3,059		3,015		(44)
Deferred income tax	1,158		1,045		1,054		9
Total liabilities	20,322		19,205		19,170		(35)
Retained earnings	12,235		11,702		11,711		9
Accumulated other comprehensive income	(626)		(636)		(614)		22
Total shareholders' equity	11,030		10,531		10,562		31
Total liabilities and shareholders' equity	31,352		29,736		29,732		(4)

The following table illustrates the effect of adopting ASU 2018-12 in the condensed consolidated statements of income and condensed consolidated statements of comprehensive income:


(Dollars in millions, except per share data)	Three months ended June 30,
	2023		2022
			As originally reported		As adjusted		Difference
Earned premiums	$	1,943	$	1,773	$	1,773	$	—

Insurance losses and contract holders' benefits	1,340		1,309		1,322		13
Underwriting, acquisition and insurance expenses	579		534		533		(1)

Deferred income tax expense	81		(263)		(265)		(2)

Net Income (Loss)	534		(808)		(818)		(10)
Change in life policy reserves, reinsurance recoverable and other, net of tax	23		1		143		142
Other comprehensive income (loss)	(99)		(482)		(340)		142
Comprehensive Income (Loss)	435		(1,290)		(1,158)		132
Net income (loss) per share:
Basic	$	3.40	$	(5.06)	$	(5.12)	$	(0.06)
Diluted	3.38		(5.06)		(5.12)		(0.06)

(Dollars in millions, except per share data)	Six months ended June 30,
	2023		2022
			As originally reported		As adjusted		Difference
Earned premiums	$	3,861	$	3,463	$	3,466	$	3

Insurance losses and contract holders' benefits	2,738		2,348		2,354		6
Underwriting, acquisition and insurance expenses	1,135		1,053		1,053		—

Deferred income tax expense	108		(391)		(391)		—

Net Income (Loss)	759		(1,081)		(1,084)		(3)
Change in life policy reserves, reinsurance recoverable and other, net of tax	(13)		1		298		297
Other comprehensive income (loss)	(12)		(1,071)		(774)		297
Comprehensive Income (Loss)	747		(2,152)		(1,858)		294
Net income (loss) per share:
Basic	$	4.83	$	(6.76)	$	(6.77)	$	(0.01)
Diluted	4.80		(6.76)		(6.77)		(0.01)

The table below shows the ASU 2018-12 adoption impacts to the life policy and investment contract reserves as of January 1, 2021 (transition date), pretax:


(Dollars in millions)	Term		Whole life		Deferred annuity		Universal life		Other		Total
At January 1, 2021
Balance, pre-adoption at December 31, 2020	$	901	$	363	$	761	$	567	$	323	$	2,915
Removal of shadow adjustments	—		—		—		—		13		13
Net premiums in excess of gross premiums	14		1		—		—		—		15
Remeasurement at market value discount rates	372		245		—		—		—		617
Balance, post-adoption at January 1, 2021	$	1,287	$	609	$	761	$	567	$	336	$	3,560

The table below shows the ASU 2018-12 adoption impacts to the life reinsurance recoverable asset as of January 1, 2021, pretax:


(Dollars in millions)	Term		Whole life		Deferred annuity		Universal life		Other		Total
At January 1, 2021
Balance, pre-adoption at December 31, 2020	$	113	$	26	$	—	$	—	$	78	$	217
Remeasurement at market value discount rates	29		18		—		—		—		47
Other adjustments	20		1		—		2		—		23
Balance, post-adoption at January 1, 2021	$	162	$	45	$	—	$	2	$	78	$	287