Segment Information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Information[Text Block]

During the third quarter of 2020, as the Company continued to reposition its business and implement strategies focusing on product features and sales, the composition of its reportable segments changed from five to four segments. The Chief Operating Decision Maker (“CODM”) manages the annuities and protection business as one operating segment, referred to as Retirement & Protection Solutions. The Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). In addition, the Company moved the Fixed Annuities and Fixed Indexed Annuities business to the Corporate & Other segment as a closed block. These segment reporting changes align with the way the CODM began assessing the performance of the Company’s reportable segments and other business activities effective in the third quarter of 2020. Certain prior period amounts have been revised to conform to the current presentation. The Company’s four reporting segments are Advice & Wealth Management, Asset Management, Retirement & Protection Solutions and Corporate & Other.

The accounting policies of the segments are the same as those of the Company, except for operating adjustments defined below, the method of capital allocation, the accounting for gains (losses) from intercompany revenues and expenses and not providing for income taxes on a segment basis.

Management uses segment adjusted operating measures in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by some securities analysts and investors. Consistent with GAAP accounting guidance for segment reporting, adjusted operating earnings is the Company’s measure of segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. The Company believes the presentation of segment adjusted operating earnings, as the Company measures it for management purposes, enhances the understanding of its business by reflecting the underlying performance of its core operations and facilitating a more meaningful trend analysis.

Management excludes mean reversion related impacts from the Company’s adjusted operating measures. The mean reversion related impact is defined as the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves.

Adjusted operating earnings is defined as adjusted operating net revenues less adjusted operating expenses. Adjusted operating net revenues and adjusted operating expenses exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual); the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization, and the reinsurance accrual; mean reversion related impacts (the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves); the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration and restructuring charges; and the impact of consolidating CIEs. The market impact on non-traditional long-duration products includes changes in embedded derivative values caused by changes in financial market conditions, net of changes in economic hedge values and unhedged items including the difference between assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and certain policyholder contract elections, net of related impacts on DAC and DSIC amortization. The market impact also includes certain valuation adjustments made in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures, including the impact on embedded derivative values of discounting projected benefits to reflect a current estimate of the Company’s life insurance subsidiary’s nonperformance spread.

The following tables summarize selected financial information by segment and reconciles segment totals to those reported on the consolidated financial statements:

	March 31, 2021		December 31, 2020
	(in millions)
Advice & Wealth Management	$	21,833	$	21,266
Asset Management	9,033		8,406
Retirement & Protection Solutions	113,658		114,850
Corporate & Other	21,213		21,361
Total assets	$	165,737	$	165,883

	Three Months Ended March 31,
	2021		2020
	(in millions)
Adjusted operating net revenues:
Advice & Wealth Management	$	1,879	$	1,695
Asset Management	828		686
Retirement & Protection Solutions	787		759
Corporate & Other	139		149
Less: Eliminations (1)	379		338
Total segment adjusted operating net revenues	3,254		2,951
Net realized gains (losses)	57		(20)
Revenue attributable to consolidated investment entities	34		16
Market impact on non-traditional long-duration products, net	5		55
Mean reversion related impacts	—		(1)
Total net revenues per Consolidated Statements of Operations	$	3,350	$	3,001

(1) Represents the elimination of intersegment revenues recognized for the three months ended March 31, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($250 million and $222 million, respectively); Asset Management ($13 million and $13 million, respectively); Retirement & Protection Solutions ($116 million and $104 million, respectively); and Corporate & Other (nil and $(1) million, respectively).

	Three Months Ended March 31,
	2021		2020
	(in millions)
Adjusted operating earnings:
Advice & Wealth Management	$	389	$	378
Asset Management	228		157
Retirement & Protection Solutions	183		167
Corporate & Other	(21)		(50)
Total segment adjusted operating earnings	779		652
Net realized gains (losses)	55		(20)
Net income (loss) attributable to consolidated investment entities	(1)		(2)
Market impact on non-traditional long-duration products, net	(396)		1,783
Mean reversion related impacts	56		(61)
Integration and restructuring charges	—		(1)
Pretax income per Consolidated Statements of Operations	$	493	$	2,351