| Liability for Future Policy Benefits and Unpaid Claims Disclosure |
FUTURE POLICY BENEFITS Liability for Future Policy Benefits – Traditional Business The Company reviews actual and anticipated experience compared to the assumptions used to establish policy benefits on a quarterly basis and will update those assumptions if evidence suggests that they should be revised. During the six months ended June 30, 2023, and 2022, there were no material changes to the Traditional business assumptions. The Company expects to complete its annual review and any necessary updates of cash flow assumptions used to calculate the liability for future policy benefits during the third quarter of each year. Updates may occur in other quarters if information becomes available during the quarter that indicates an assumption update is necessary. The following tables provide the balances of and changes in the Company’s liability for future policy benefits for long-duration reinsurance contracts for its Traditional business, which primarily consists of individual life, group life and critical illness reinsurance for the six months ended June 30, 2023 and 2022 (dollars in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2023: | | U.S. and Latin America – Traditional | | Canada – Traditional | | Europe, Middle East and Africa – Traditional | | Asia Pacific – Traditional | | Present Value of Expected Net Premiums | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 74,207 | | | $ | 21,330 | | | $ | 14,244 | | | $ | 40,506 | | | Effect of changes in cash flow assumptions | | — | | | — | | | — | | | (8) | | | Effect of actual variances from expected experience | | (83) | | | 347 | | | (51) | | | 50 | | | Adjusted balance, beginning of year | | 74,124 | | | 21,677 | | | 14,193 | | | 40,548 | | Issuances (1) | | 1,653 | | | 240 | | | 610 | | | 1,264 | | Interest accrual (2) | | 1,710 | | | 370 | | | 243 | | | 515 | | Net premiums collected (3) | | (2,534) | | | (466) | | | (696) | | | (997) | | Derecognition (4) | | (35) | | | — | | | — | | | — | | | Foreign currency translation | | 3 | | | 498 | | | 445 | | | (914) | | | Ending balance at original discount rate | | 74,921 | | | 22,319 | | | 14,795 | | | 40,416 | | | Effect of changes in discount rate assumptions | | (5,424) | | | (4,436) | | | (3,427) | | | (10,296) | | | Balance, end of period | | $ | 69,497 | | | $ | 17,883 | | | $ | 11,368 | | | $ | 30,120 | | | | | | | | | | | | Present Value of Expected Future Policy Benefits | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 85,285 | | | $ | 24,655 | | | $ | 15,454 | | | $ | 44,785 | | | Effect of changes in cash flow assumptions | | — | | | — | | | — | | | (8) | | | Effect of actual variances from expected experience | | (49) | | | 347 | | | (44) | | | 27 | | | Adjusted balance, beginning of year | | 85,236 | | | 25,002 | | | 15,410 | | | 44,804 | | Issuances (1) | | 1,653 | | | 240 | | | 610 | | | 1,264 | | Interest accrual (2) | | 1,972 | | | 474 | | | 259 | | | 588 | | Benefit payments (5) | | (2,801) | | | (507) | | | (682) | | | (894) | | Derecognition (4) | | (54) | | | — | | | — | | | — | | | Foreign currency translation | | 4 | | | 580 | | | 488 | | | (979) | | | Ending balance at original discount rate | | 86,010 | | | 25,789 | | | 16,085 | | | 44,783 | | | Effect of changes in discount rate assumptions | | (6,721) | | | (3,626) | | | (3,669) | | | (12,197) | | | Balance, end of period | | $ | 79,289 | | | $ | 22,163 | | | $ | 12,416 | | | $ | 32,586 | | | | | | | | | | | | Liability for future policy benefits | | $ | 9,792 | | | $ | 4,280 | | | $ | 1,048 | | | $ | 2,466 | | | Less: reinsurance recoverable | | (407) | | | (285) | | | (36) | | | (99) | | | Net liability for future policy benefits | | $ | 9,385 | | | $ | 3,995 | | | $ | 1,012 | | | $ | 2,367 | | | | | | | | | | | | Weighted-average duration of the liability (in years) | | 12 | | 15 | | 8 | | 17 | | Weighted-average interest accretion rate | | 4.7 | % | | 3.6 | % | | 3.4 | % | | 2.6 | % | | Weighted-average current discount rate | | 5.1 | % | | 4.6 | % | | 6.1 | % | | 4.2 | % |
(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts. (2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate. (3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments. (4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model. (5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions. | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2022: | | U.S. and Latin America – Traditional | | Canada – Traditional | | Europe, Middle East and Africa – Traditional | | Asia Pacific – Traditional | | Present Value of Expected Net Premiums | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 73,447 | | $ | 21,989 | | $ | 14,440 | | $ | 37,943 | | Effect of changes in cash flow assumptions | | — | | — | | — | | 58 | | Effect of actual variances from expected experience | | (250) | | (327) | | 215 | | (847) | | Adjusted balance, beginning of year | | 73,197 | | 21,662 | | 14,655 | | 37,154 | Issuances (1) | | 1,567 | | 400 | | 515 | | 2,145 | Interest accrual (2) | | 1,695 | | 379 | | 250 | | 479 | Net premiums collected (3) | | (2,488) | | (485) | | (679) | | (967) | Derecognition (4) | | — | | — | | — | | — | | Foreign currency translation | | — | | (404) | | (1,299) | | (1,892) | | Ending balance at original discount rate | | 73,971 | | 21,552 | | 13,442 | | 36,919 | | Effect of changes in discount rate assumptions | | (1,668) | | (4,736) | | (1,574) | | (9,770) | | Balance, end of period | | $ | 72,303 | | $ | 16,816 | | $ | 11,868 | | $ | 27,149 | | | | | | | | | | | Present Value of Expected Future Policy Benefits | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 84,075 | | $ | 25,440 | | $ | 15,664 | | $ | 41,971 | | Effect of changes in cash flow assumptions | | — | | — | | — | | 35 | | Effect of actual variances from expected experience | | (153) | | (310) | | 226 | | (798) | | Adjusted balance, beginning of year | | 83,922 | | 25,130 | | 15,890 | | 41,208 | Issuances (1) | | 1,571 | | 400 | | 516 | | 2,085 | Interest accrual (2) | | 1,945 | | 489 | | 266 | | 545 | Benefit payments (5) | | (2,798) | | (571) | | (669) | | (917) | Derecognition (4) | | — | | — | | — | | — | | Foreign currency translation | | — | | (465) | | (1,404) | | (2,035) | | Ending balance at original discount rate | | 84,640 | | 24,983 | | 14,599 | | 40,886 | | Effect of changes in discount rate assumptions | | (2,193) | | (4,050) | | (1,651) | | (11,532) | | Balance, end of period | | $ | 82,447 | | $ | 20,933 | | $ | 12,948 | | $ | 29,354 | | | | | | | | | | | Liability for future policy benefits | | $ | 10,144 | | $ | 4,117 | | $ | 1,080 | | $ | 2,205 | | Less: reinsurance recoverable | | (482) | | (279) | | (30) | | (98) | | Net liability for future policy benefits | | $ | 9,662 | | $ | 3,838 | | $ | 1,050 | | $ | 2,107 | | | | | | | | | | | Weighted-average duration of the liability (in years) | | 12 | | 15 | | 9 | | 16 | | Weighted-average interest accretion rate | | 4.7 | % | | 3.7 | % | | 3.6 | % | | 2.6 | % | | Weighted-average current discount rate | | 4.7 | % | | 4.8 | % | | 4.8 | % | | 4.4 | % |
(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts. (2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate. (3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments. (4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model. (5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions. Significant assumptions used to compute the liability for future policy benefits for the Traditional business include mortality, morbidity, lapse rates and discount rates (both accretion and current). The Company updated the underlying market data used to determine the current discount rate resulting in changes to the discount rate assumption used to measure the net liability for future policy benefits each period. The Company’s Traditional business actual-to-expected variances and the effects of changes in discount rate assumption for the six months ending June 30, 2023 and 2022, are summarized in the tables below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2023: | | Segment | | Net liability for future policy benefits at original discount rate | | Changes in cash flow assumptions | Actual-to-expected variance | | Impact of updating discount rate recognized in OCI | | Commentary | U.S. and Latin America – Traditional | | $11.1 billion | | None | $34 million | | $307 million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 0.1% increase | | | 0.3% increase | | 2.8% increase | | Canada – Traditional | | $3.5 billion | | None | $— | | $184 million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 4.4% increase | | | —% | | 5.5% increase | | Europe, Middle East and Africa – Traditional | | $1.3 billion | | None | $7 million | | $(73) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any material changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 6.6% increase | | | 0.6% increase | | 6.0% decrease | | Asia Pacific – Traditional | | $4.4 billion | | None | $(23) million | | $30 million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any material changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 2.1% increase | | | 0.5% decrease | | 0.7% increase | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2022: | | Segment | | Net liability for future policy benefits at original discount rate | | Changes in cash flow assumptions | Actual-to-expected variance | | Impact of updating discount rate recognized in OCI | | Commentary | U.S. and Latin America – Traditional | | $10.7 billion | | None | $97 million | | $(3,939) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. The actual-to-expected variance was predominately related to COVID-19. | | 0.4% increase | | | 0.9% increase | | 37.1% decrease | | Canada – Traditional | | $3.4 billion | | None | $17 million | | $(1,418) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 0.6% decrease | | | 0.5% increase | | 41.1% decrease | | Europe, Middle East and Africa – Traditional | | $1.2 billion | | None | $11 million | | $(242) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 5.5% decrease | | | 0.9% increase | | 19.8% decrease | | Asia Pacific – Traditional | | $4.0 billion | | $(23) million | $49 million | | $(745) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. The Company did update future premium assumptions as a result of anticipated management actions that will be effective in future periods. | | 1.5% decrease | | 0.6% decrease | 1.2% increase | | 18.5% decrease | |
Liability for Future Policy Benefits – Financial Solutions Business The Company reviews actual and anticipated experience compared to the assumptions used to establish policy benefits on a quarterly basis and will update those assumptions if evidence suggests that they should be revised. During the six months ended June 30, 2023, and 2022, there were no material changes to the Financial Solutions business assumptions. The Company expects to complete its annual review and any necessary updates of cash flow assumptions used to calculate the liability for future policy benefits during the third quarter of each year. Updates may occur in other quarters if information becomes available during the quarter that indicates an assumption update is necessary. The following tables provide the balances of and changes in the Company’s liability for future policy benefits, including the deferred profit liability related to the longevity business, for its Financial Solutions business, which primarily consists of longevity reinsurance, asset-intensive products, primarily annuities and financial reinsurance for the six months ending June 30, 2023 and 2022 (dollars in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2023: | | U.S. and Latin America – Financial Solutions | | Canada – Financial Solutions | | Europe, Middle East and Africa – Financial Solutions | | Asia Pacific – Financial Solutions | | Present Value of Expected Net Premiums | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 1,671 | | | $ | 3,394 | | | $ | 38,782 | | | $ | 1,605 | | | Effect of changes in cash flow assumptions | | — | | | — | | | 1 | | | — | | | Effect of actual variances from expected experience | | (18) | | | (3) | | | 200 | | | (3) | | | Adjusted balance, beginning of year | | 1,653 | | | 3,391 | | | 38,983 | | | 1,602 | | Issuances (1) | | 146 | | | — | | | 4,929 | | | 2,163 | | Interest accrual (2) | | 26 | | | 54 | | | 428 | | | 12 | | Net premiums collected (3) | | (225) | | | (168) | | | (2,186) | | | (1,528) | | Derecognition (4) | | — | | | — | | | — | | | — | | | Foreign currency translation | | 1 | | | 77 | | | 1,673 | | | (164) | | | Ending balance at original discount rate | | 1,601 | | | 3,354 | | | 43,827 | | | 2,085 | | | Effect of changes in discount rate assumptions | | (255) | | | (356) | | | (10,656) | | | 82 | | | Balance, end of period | | $ | 1,346 | | | $ | 2,998 | | | $ | 33,171 | | | $ | 2,167 | | | | | | | | | | | | Present Value of Expected Future Policy Benefits | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 5,823 | | | $ | 3,447 | | | $ | 44,330 | | | $ | 6,561 | | | Effect of changes in cash flow assumptions | | — | | | — | | | 1 | | | — | | | Effect of actual variances from expected experience | | (23) | | | (10) | | | 186 | | | (4) | | | Adjusted balance, beginning of year | | 5,800 | | | 3,437 | | | 44,517 | | | 6,557 | | Issuances (1) | | 154 | | | — | | | 4,929 | | | 2,209 | | Interest accrual (2) | | 114 | | | 55 | | | 508 | | | 39 | | Benefit payments (5) | | (270) | | | (166) | | | (1,782) | | | (132) | | Derecognition (4) | | — | | | — | | | — | | | — | | | Foreign currency translation | | (16) | | | 79 | | | 1,938 | | | (686) | | | Ending balance at original discount rate | | 5,782 | | | 3,405 | | | 50,110 | | | 7,987 | | | Effect of changes in discount rate assumptions | | (551) | | | (354) | | | (11,829) | | | (209) | | | Balance, end of period | | $ | 5,231 | | | $ | 3,051 | | | $ | 38,281 | | | $ | 7,778 | | | | | | | | | | | | Liability for future policy benefits | | $ | 3,885 | | | $ | 53 | | | $ | 5,110 | | | $ | 5,611 | | | Less: reinsurance recoverable | | — | | | — | | | — | | | — | | | Net liability for future policy benefits | | $ | 3,885 | | | $ | 53 | | | $ | 5,110 | | | $ | 5,611 | | | | | | | | | | | | Weighted-average duration of the liability (in years) | | 8 | | 7 | | 9 | | 16 | | Weighted-average interest accretion rate | | 3.6 | % | | 3.2 | % | | 2.1 | % | | 1.2 | % | | Weighted-average current discount rate | | 5.2 | % | | 4.8 | % | | 5.5 | % | | 1.6 | % |
(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts. (2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate. (3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments. (4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model. (5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions. | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2022: | | U.S. and Latin America – Financial Solutions | | Canada – Financial Solutions | | Europe, Middle East and Africa – Financial Solutions | | Asia Pacific – Financial Solutions | | Present Value of Expected Net Premiums | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 228 | | | $ | 3,329 | | | $ | 31,973 | | | $ | 1,051 | | | Effect of changes in cash flow assumptions | | — | | | — | | | — | | | — | | | Effect of actual variances from expected experience | | (6) | | | (7) | | | 366 | | | 98 | | | Adjusted balance, beginning of year | | 222 | | | 3,322 | | | 32,339 | | | 1,149 | | Issuances (1) | | — | | | 581 | | | 10,932 | | | 1,326 | | Interest accrual (2) | | 1 | | | 56 | | | 358 | | | 13 | | Net premiums collected (3) | | (14) | | | (181) | | | (1,542) | | | (681) | | Derecognition (4) | | — | | | — | | | — | | | — | | | Foreign currency translation | | — | | | (68) | | | (3,861) | | | (260) | | | Ending balance at original discount rate | | 209 | | | 3,710 | | | 38,226 | | | 1,547 | | | Effect of changes in discount rate assumptions | | (82) | | | (419) | | | (6,867) | | | 131 | | | Balance, end of period | | $ | 127 | | | $ | 3,291 | | | $ | 31,359 | | | $ | 1,678 | | | | | | | | | | | | Present Value of Expected Future Policy Benefits | | | | | | | | | | Beginning of year balance at original discount rate | | $ | 4,628 | | | $ | 3,393 | | | $ | 38,196 | | | $ | 6,062 | | | Effect of changes in cash flow assumptions | | — | | | — | | | — | | | — | | | Effect of actual variances from expected experience | | (27) | | | (14) | | | 354 | | | 98 | | | Adjusted balance, beginning of year | | 4,601 | | | 3,379 | | | 38,550 | | | 6,160 | | Issuances (1) | | — | | | 581 | | | 10,932 | | | 1,326 | | Interest accrual (2) | | 93 | | | 58 | | | 441 | | | 36 | | Benefit payments (5) | | (215) | | | (180) | | | (1,734) | | | (111) | | Derecognition (4) | | — | | | — | | | — | | | — | | | Foreign currency translation | | — | | | (70) | | | (4,469) | | | (1,060) | | | Ending balance at original discount rate | | 4,479 | | | 3,768 | | | 43,720 | | | 6,351 | | | Effect of changes in discount rate assumptions | | (246) | | | (415) | | | (7,448) | | | (97) | | | Balance, end of period | | $ | 4,233 | | | $ | 3,353 | | | $ | 36,272 | | | $ | 6,254 | | | | | | | | | | | | Liability for future policy benefits | | $ | 4,106 | | | $ | 62 | | | $ | 4,913 | | | $ | 4,576 | | | Less: reinsurance recoverable | | — | | | — | | | — | | | — | | | Net liability for future policy benefits | | $ | 4,106 | | | $ | 62 | | | $ | 4,913 | | | $ | 4,576 | | | | | | | | | | | | Weighted-average duration of the liability (in years) | | 9 | | 7 | | 9 | | 16 | | Weighted-average interest accretion rate | | 2.5 | % | | 3.3 | % | | 2.1 | % | | 1.6 | % | | Weighted-average current discount rate | | 4.7 | % | | 4.8 | % | | 3.9 | % | | 1.5 | % |
(1)Issuances: The present value, using the original discount rate, of the expected net premiums or the expected future policy benefits related to new reinsurance contracts that became effective during the current period and new policies assumed on existing contracts. (2)Interest accrual: The interest earned on the beginning present value of either the expected net premiums or the expected future policy benefits using the original interest rate. (3)Net premiums collected: The portion of gross premiums collected from the ceding company that is used to fund expected benefit payments. (4)Derecognition: Includes the effects of treaty recaptures and treaty amendments that resulted in the termination of an existing treaty and the issuance of a new treaty under the internal replacement model. (5)Benefit payments: The release of the present value, using the original discount rate, of the expected future policy benefits due to death, lapse/withdrawal, and other benefit payments based on current assumptions. Significant assumptions used to compute the liability for future policy benefits for the Financial Solutions business include mortality, morbidity, lapse rates and discount rates (both accretion and current). The Company updated the underlying market data used to determine the current discount rate resulting in changes to the discount rate assumption used to measure the net liability for future policy benefits. The Company’s Financial Solutions business actual-to-expected variances and the effects of changes in discount rate assumptions for the six months ended June 30, 2023 and 2022, are summarized in the tables below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2023: | | Segment | | Net liability for future policy benefits at original discount rate | | Changes in cash flow assumptions | | Actual-to-expected variance | | Impact of updating discount rate recognized in OCI | | Commentary | U.S. and Latin America – Financial Solutions | | $4.2 billion | | None | | $(5) million | | $37 million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 0.7% increase | | | | 0.1% decrease | | 0.9% increase | | Canada – Financial Solutions | | $51 million | | None | | $(7) million | | $1 million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 3.8% decrease | | | | 13.2% decrease | | 2% increase | | Europe, Middle East and Africa – Financial Solutions | | $6.3 billion | | None | | $(14) million | | $(259) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 13.2% increase | | | | 0.3% decrease | | 4.63% decrease | | Asia Pacific – Financial Solutions | | $5.9 billion | | None | | $(1) million | | $169 million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 19.1% increase | | | | —% | | 2.7% increase | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2022: | | Segment | | Net liability for future policy benefits at original discount rate | | Changes in cash flow assumptions | | Actual-to-expected variance | | Impact of updating discount rate recognized in OCI | | Commentary | U.S. and Latin America – Financial Solutions | | $4.3 billion | | None | | $(21) million | | $(711) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 3.0% decrease | | | | 0.5% decrease | | 16.2% decrease | | Canada – Financial Solutions | | $58 million | | None | | $(7) million | | $(13) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 9.4% decrease | | | | 10.9% decrease | | 20.3% decrease | | Europe, Middle East and Africa – Financial Solutions | | $5.5 billion | | None | | $(12) million | | $(1,087) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 11.7% decrease | | | | 0.2% decrease | | 17.5% decrease | | Asia Pacific – Financial Solutions | | $4.8 billion | | None | | $— | | $(231) million | | The Company reviewed the significant assumptions used to measure the liability for future policy benefits and did not make any changes to the segment’s mortality, morbidity, and lapse assumptions as actual experience was consistent with the underlying assumptions. | | 4.1% decrease | | | | —% | | 4.6% decrease | |
Reconciliation and Other Disclosures The reconciliation of the rollforward of the liability for future policy benefits to the condensed consolidated balance sheets as of June 30, 2023 and 2022 is as follows (dollars in millions): | | | | | | | | | | | | | | | | | June 30, | | | 2023 | | 2022 | | Liability for future policy benefits included in the rollforwards: | | | | | | Traditional: | | | | | | U.S. and Latin America | | $ | 9,792 | | $ | 10,144 | | Canada | | 4,280 | | 4,117 | | Europe, Middle East and Africa | | 1,048 | | 1,080 | | Asia Pacific | | 2,466 | | 2,205 | | Financial Solutions: | | | | | | U.S. and Latin America | | 3,885 | | | 4,106 | | | Canada | | 53 | | | 62 | | | Europe, Middle East and Africa | | 5,110 | | | 4,913 | | | Asia Pacific | | 5,611 | | | 4,576 | | | Other long-duration contracts | | 187 | | | 184 | | | Claims liability and incurred but not reported claims | | 5,289 | | | 5,085 | | | Unearned revenue liability | | 518 | | | 556 | | | Total liability for future policy benefits | | $ | 38,239 | | | $ | 37,028 | |
The amount of undiscounted and discounted expected future gross premiums and expected future benefit payments for the liability for future policy benefits included in the rollforwards as of June 30, 2023 and 2022 is as follows (dollars in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, | | | 2023 | | 2022 | | | Undiscounted | | Discounted | | Undiscounted | | Discounted | | Expected future gross premiums | | | | | | | | | | Traditional: | | | | | | | | | | U.S. and Latin America | | $ | 172,520 | | | $ | 81,058 | | | $ | 172,995 | | | $ | 84,638 | | | Canada | | 55,059 | | | 22,193 | | | 53,583 | | | 20,908 | | | Europe, Middle East and Africa | | 25,185 | | | 13,178 | | | 23,736 | | | 13,747 | | | Asia Pacific | | 91,057 | | | 38,197 | | | 82,264 | | | 34,636 | | | Financial Solutions: | | | | | | | | | | U.S. and Latin America | | 3,062 | | | 1,912 | | | 956 | | | 628 | | | Canada | | 4,749 | | | 3,141 | | | 5,255 | | | 3,428 | | | Europe, Middle East and Africa | | 67,116 | | | 36,502 | | | 52,745 | | | 34,604 | | | Asia Pacific | | 3,939 | | | 3,257 | | | 2,949 | | | 2,515 | | | | | | | | | | | | Expected future benefit payments | | | | | | | | | | Traditional: | | | | | | | | | | U.S. and Latin America | | $ | 181,424 | | | $ | 79,289 | | | $ | 181,945 | | | $ | 82,447 | | | Canada | | 58,011 | | | 22,163 | | | 57,185 | | | 20,933 | | | Europe, Middle East and Africa | | 24,714 | | | 12,416 | | | 23,198 | | | 12,948 | | | Asia Pacific | | 87,425 | | | 32,586 | | | 80,108 | | | 29,354 | | | Financial Solutions: | | | | | | | | | | U.S. and Latin America | | 9,066 | | | 5,231 | | | 7,249 | | | 4,233 | | | Canada | | 4,608 | | | 3,051 | | | 5,139 | | | 3,353 | | | Europe, Middle East and Africa | | 70,992 | | | 38,281 | | | 55,398 | | | 36,272 | | | Asia Pacific | | 10,844 | | | 7,778 | | | 8,317 | | | 6,254 | |
The amount of gross premiums and interest expense recognized in the consolidated statements of income for the liability for future policy benefits included in the rollforwards for the six months ended June 30, 2023 and 2022 is as follows (dollars in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross Premiums | | Interest Expense | | | June 30, | | June 30, | | | 2023 | | 2022 | | 2023 | | 2022 | | Traditional: | | | | | | | | | | U.S. and Latin America | | $ | 2,935 | | | $ | 2,879 | | | $ | 262 | | | $ | 250 | | | Canada | | 535 | | | 552 | | | 104 | | | 110 | | | Europe, Middle East and Africa | | 697 | | | 708 | | | 16 | | | 16 | | | Asia Pacific | | 1,257 | | | 1,237 | | | 73 | | | 66 | | | Financial Solutions: | | | | | | | | | | U.S. and Latin America | | 166 | | | 15 | | | 88 | | | 92 | | | Canada | | 46 | | | 48 | | | 1 | | | 2 | | | Europe, Middle East and Africa | | 335 | | | 319 | | | 80 | | | 83 | | | Asia Pacific | | 108 | | | 103 | | | 27 | | | 23 | | | Total | | $ | 6,079 | | | $ | 5,861 | | | $ | 651 | | | $ | 642 | |
There were no material charges incurred for the six months ended June 30, 2023 and 2022, resulting from net premiums exceeding gross premiums.
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