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Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables)
12 Months Ended
Dec. 31, 2018
Reserve for Life-Contingent Contract Benefits and Contractholder Funds  
Reserve for life-contingent contract benefits
Reserve for life-contingent contract benefits
 
 
As of December 31,
($ in millions)
 
2018
 
2017
Immediate fixed annuities:
 
 
 
 
Structured settlement annuities
 
$
6,701

 
$
6,994

Other immediate fixed annuities
 
1,714

 
1,855

Traditional life insurance
 
2,808

 
2,722

Accident and health insurance
 
876

 
893

Other
 
109

 
85

Total reserve for life-contingent contract benefits
 
$
12,208

 
$
12,549

Key assumptions generally used in calculating the reserve for life-contingent contract benefits
Key assumptions generally used in calculating the reserve for life-contingent contract benefits
Product
 
Mortality
 
Interest rate
 
Estimation method
Structured settlement annuities
 
U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy
 
Interest rate assumptions range from 2.9% to 9.0%
 
Present value of contractually specified future benefits
Other immediate fixed annuities
 
1983 group annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table; 1983 individual annuity mortality table with internal modifications
 
Interest rate assumptions range from 0.0% to 11.5%
 
Present value of expected future benefits based on historical experience
Traditional life insurance
 
Actual company experience plus loading
 
Interest rate assumptions range from 2.5% to 11.3%
 
Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims
Accident and health insurance
 
Actual company experience plus loading
 
Interest rate assumptions range from 3.0% to 7.0%
 
Unearned premium; additional contract reserves for mortality risk and unpaid claims
Other:
Variable annuity guaranteed minimum death benefits (1)
 
Annuity 2012 mortality table with internal modifications
 
Interest rate assumptions range from 2.0% to 5.8%
 
Projected benefit ratio applied to cumulative assessments
(1) 
In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”).
Contractholder funds
Contractholder funds
 
 
As of December 31,
($ in millions)
 
2018
 
2017
Interest-sensitive life insurance
 
$
8,229

 
$
8,190

Investment contracts:
 
 
 
 
Fixed annuities
 
9,681

 
10,828

Other investment contracts
 
461

 
416

Total contractholder funds
 
$
18,371

 
$
19,434

Key contract provisions relating to contractholder funds
Key contract provisions of contractholder funds
Product
 
Interest rate
 
Withdrawal/surrender charges
Interest-sensitive life insurance
 
Interest rates credited range from 0.0% to 10.5% for equity-indexed life (whose returns are indexed to the S&P 500) and 1.0% to 6.0% for all other products
 
Either a percentage of account balance or dollar amount grading off generally over 20 years
Fixed annuities
 
Interest rates credited range from 0.0% to 9.8% for immediate annuities; (8.0)% to 10.8% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 0.1% to 6.0% for all other products
 
Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 13.5% of fixed annuities are subject to market value adjustment for discretionary withdrawals
Other investment contracts:
Guaranteed minimum income, accumulation and withdrawal benefits on variable (1) and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities
 
Interest rates used in establishing reserves range from 1.7% to 10.3%
 
Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract
(1) 
In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with Prudential.
Contractholder funds activity
Contractholder funds activity
 
 
For the years ended December 31,
($ in millions)
 
2018
 
2017
 
2016
Balance, beginning of year
 
$
19,434

 
$
20,260

 
$
21,295

Deposits
 
1,109

 
1,130

 
1,164

Interest credited
 
650

 
687

 
722

Benefits
 
(844
)
 
(901
)
 
(966
)
Surrenders and partial withdrawals
 
(1,135
)
 
(999
)
 
(1,053
)
Maturities of and interest payments on institutional products
 

 

 
(86
)
Contract charges
 
(824
)
 
(826
)
 
(829
)
Net transfers from separate accounts
 
6

 
5

 
5

Other adjustments
 
(25
)
 
78

 
8

Balance, end of year
 
$
18,371

 
$
19,434

 
$
20,260

Variable annuity contracts with guarantees
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees.
($ in millions)
 
As of December 31,
 
 
2018
 
2017
In the event of death
 
 
 
 
Separate account value
 
$
2,711

 
$
3,344

Net amount at risk (1)
 
$
605

 
$
454

Average attained age of contractholders
 
71 years

 
70 years

At annuitization (includes income benefit guarantees)
 
 
 
 
Separate account value
 
$
778

 
$
944

Net amount at risk (2)
 
$
264

 
$
202

Weighted average waiting period until annuitization options available
 
None

 
None

For cumulative periodic withdrawals
 
 
 
 
Separate account value
 
$
190

 
$
253

Net amount at risk (3)
 
$
16

 
$
10

Accumulation at specified dates
 
 
 
 
Separate account value
 
$
129

 
$
170

Net amount at risk (4)
 
$
26

 
$
17

Weighted average waiting period until guarantee date
 
4 years

 
5 years

(1) 
Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date.
(2) 
Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance.
(3) 
Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date.
(4) 
Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance.
Liabilities for guarantees
Summary of liabilities for guarantees
($ in millions)
 
Liability for guarantees related to death benefits and interest-sensitive life products
 
Liability for guarantees related to income benefits
 
Liability for guarantees related to accumulation and withdrawal benefits
 
Total
Balance, December 31, 2017 (1)
 
$
262

 
$
29

 
$
79

 
$
370

Less reinsurance recoverables
 
87

 
25

 
34

 
146

Net balance as of December 31, 2017
 
175


4


45


224

Incurred guarantee benefits
 
24

 

 
13

 
37

Paid guarantee benefits
 
(2
)
 

 

 
(2
)
Net change
 
22

 

 
13


35

Net balance as of December 31, 2018
 
197

 
4

 
58

 
259

Plus reinsurance recoverables
 
111

 
35

 
39

 
185

Balance, December 31, 2018 (2)
 
$
308


$
39


$
97


$
444

 
 
 
 
 
 
 
 
 
Balance, December 31, 2016 (3)
 
$
244

 
$
44

 
$
77

 
$
365

Less reinsurance recoverables
 
101

 
40

 
43

 
184

Net balance as of December 31, 2016
 
143


4


34


181

Incurred guarantee benefits
 
34

 

 
11

 
45

Paid guarantee benefits
 
(2
)
 

 

 
(2
)
Net change
 
32




11


43

Net balance as of December 31, 2017
 
175

 
4

 
45

 
224

Plus reinsurance recoverables
 
87

 
25

 
34

 
146

Balance, December 31, 2017 (1)
 
$
262


$
29


$
79


$
370

(1) 
Included in the total liability balance as of December 31, 2017 are reserves for variable annuity death benefits of $85 million, variable annuity income benefits of $26 million, variable annuity accumulation benefits of $22 million, variable annuity withdrawal benefits of $12 million and other guarantees of $225 million.
(2) 
Included in the total liability balance as of December 31, 2018 are reserves for variable annuity death benefits of $109 million, variable annuity income benefits of $36 million, variable annuity accumulation benefits of $25 million, variable annuity withdrawal benefits of $14 million and other guarantees of $260 million.
(3) 
Included in the total liability balance as of December 31, 2016 are reserves for variable annuity death benefits of $100 million, variable annuity income benefits of $40 million, variable annuity accumulation benefits of $34 million, variable annuity withdrawal benefits of $9 million and other guarantees of $182 million.