Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2023

Accumulated Other Comprehensive Income [Abstract]

The adoption of ASU 2018-12 on January 1, 2023 resulted in restatement of certain amounts below. See Note 1, Accounting Policies, for further discussion. Accumulated other comprehensive income (AOCI) includes changes in unrealized gains and losses on investments, changes in pension obligations and changes in life policy reserves, reinsurance recoverable and other as follows:


(Dollars in millions)	Three months ended September 30,
	2023						2022
	Before tax		Income tax		Net		Before tax		Income tax		Net
Investments:
AOCI, beginning of period	$	(838)	$	(179)	$	(659)	$	(564)	$	(119)	$	(445)


OCI before investment gains and losses, net, recognized in net income	(369)		(79)		(290)		(514)		(109)		(405)
Investment gains and losses, net, recognized in net income	—		—		—		—		—		—
OCI	(369)		(79)		(290)		(514)		(109)		(405)
AOCI, end of period	$	(1,207)	$	(258)	$	(949)	$	(1,078)	$	(228)	$	(850)

Pension obligations:
AOCI, beginning of period	$	29	$	7	$	22	$	27	$	7	$	20
OCI excluding amortization recognized in net income	—		—		—		—		—		—
Amortization recognized in net income	—		—		—		—		—		—
OCI	—		—		—		—		—		—
AOCI, end of period	$	29	$	7	$	22	$	27	$	7	$	20

Life policy reserves, reinsurance recoverable and other:
AOCI, beginning of period	$	13	$	2	$	11	$	(67)	$	(14)	$	(53)


OCI before investment gains and losses, net, recognized in net income	111		22		89		120		25		95
Investment gains and losses, net, recognized in net income	—		—		—		—		—		—
OCI	111		22		89		120		25		95
AOCI, end of period	$	124	$	24	$	100	$	53	$	11	$	42

Summary of AOCI:
AOCI, beginning of period	$	(796)	$	(170)	$	(626)	$	(604)	$	(126)	$	(478)


Investments OCI	(369)		(79)		(290)		(514)		(109)		(405)
Pension obligations OCI	—		—		—		—		—		—
Life policy reserves, reinsurance recoverable and other OCI	111		22		89		120		25		95
Total OCI	(258)		(57)		(201)		(394)		(84)		(310)
AOCI, end of period	$	(1,054)	$	(227)	$	(827)	$	(998)	$	(210)	$	(788)


(Dollars in millions)	Nine months ended September 30,
	2023						2022
	Before tax		Income tax		Net		Before tax		Income tax		Net
Investments:
AOCI, beginning of period	$	(847)	$	(182)	$	(665)	$	792	$	165	$	627


OCI before investment gains and losses, net, recognized in net income	(364)		(77)		(287)		(1,867)		(392)		(1,475)
Investment gains and losses, net, recognized in net income	4		1		3		(3)		(1)		(2)
OCI	(360)		(76)		(284)		(1,870)		(393)		(1,477)
AOCI, end of period	$	(1,207)	$	(258)	$	(949)	$	(1,078)	$	(228)	$	(850)

Pension obligations:
AOCI, beginning of period	$	36	$	9	$	27	$	27	$	7	$	20
OCI excluding amortization recognized in net income	(5)		(2)		(3)		—		—		—
Amortization recognized in net income	(2)		—		(2)		—		—		—
OCI	(7)		(2)		(5)		—		—		—
AOCI, end of period	$	29	$	7	$	22	$	27	$	7	$	20

Life policy reserves, reinsurance recoverable and other:
AOCI, beginning of period	$	29	$	5	$	24	$	1	$	—	$	1
Cumulative effect of change in accounting for long duration insurance contracts	—		—		—		(445)		(93)		(352)
Adjusted AOCI, beginning of period	29		5		24		(444)		(93)		(351)
OCI before investment gains and losses, net, recognized in net income	95		19		76		497		104		393
Investment gains and losses, net, recognized in net income	—		—		—		—		—		—
OCI	95		19		76		497		104		393
AOCI, end of period	$	124	$	24	$	100	$	53	$	11	$	42

Summary of AOCI:
AOCI, beginning of period	$	(782)	$	(168)	$	(614)	$	820	$	172	$	648
Cumulative effect of change in accounting for long duration insurance contracts	—		—		—		(445)		(93)		(352)
Adjusted AOCI, beginning of period	(782)		(168)		(614)		375		79		296
Investments OCI	(360)		(76)		(284)		(1,870)		(393)		(1,477)
Pension obligations OCI	(7)		(2)		(5)		—		—		—
Life policy reserves, reinsurance recoverable and other OCI	95		19		76		497		104		393
Total OCI	(272)		(59)		(213)		(1,373)		(289)		(1,084)
AOCI, end of period	$	(1,054)	$	(227)	$	(827)	$	(998)	$	(210)	$	(788)

Investment gains and losses, net, and other investment gains and losses, net, are recorded in the investment gains and losses, net, line item in the condensed consolidated statements of income. Amortization of pension obligations is recorded in the insurance losses and contract holders' benefits and underwriting, acquisition and insurance expenses line items in the condensed consolidated statements of income.