Reserve for Future Policy Benefits and Contractholder Funds

12 Months Ended

Dec. 31, 2021

Reserve for Future Policy Benefits and Contractholder Funds

Reserve for Future Policy Benefits and Contractholder Funds

Note 10 Reserve for Future Policy Benefits and Contractholder Funds

Reserve for future policy benefits
	As of December 31,
($ in millions)	2021		2020
Traditional life insurance and other	$	313	$	299
Accident and health insurance	960		729
Reserve for future policy benefits	$	1,273	$	1,028

Key assumptions generally used in calculating the reserve for future policy benefits
Product	Mortality	Interest rate	Estimation method
Traditional life insurance	Actual company experience plus loading	Interest rate assumptions range from 1.8% to 7.0%	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 2.8% to 7.0%	Unearned premium; additional contract reserves for mortality risk and unpaid claims

Accident and health short-duration contracts

The following presents information about incurred and paid claims development as of December 31, 2021, net of recoverables, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included in the net incurred claims amounts. See Note 2 for the accounting policy and methodology for determining reserves for future policy benefits, including both reported and IBNR claims. The information about incurred and paid claims development for the 2017 to 2021 years, as of December 31, 2021, is presented as required supplementary information.

Group and individual accident and health

($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables										IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										As of December 31, 2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	211	$	186	$	183	$	183	$	183	$	—	302,100
2018	—		235		205		203		203		—		269,095
2019	—		—		257		239		242		—		306,998
2020	—		—		—		297		293		9		410,031
2021	—		—		—		—		424		152		465,525
							Total		$	1,345
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	105	$	178	$	182	$	183	$	183
2018	—		126		201		203		203
2019	—		—		158		234		242
2020	—		—		—		184		284
2021	—		—		—		—		272
							Total		$	1,184
All outstanding liabilities before 2017, net of recoverables									—
Liabilities for claims and claim adjustment expenses, net of recoverables									$	161

Reconciliation of the net incurred and paid claims development tables above to the reserve for future policy benefits
($ in millions)	As of December 31, 2021
Net outstanding liabilities
Group and individual accident and health short-duration contracts	$	161
Other accident and health short-duration contracts	28
Long duration accident and health insurance	617
Long duration traditional life insurance and other	313
Net reserve for future policy benefits	1,119
Recoverables
Group and individual accident and health short-duration contracts	38
Other accident and health short-duration contracts	—
Insurance lines other than short-duration	116
Gross reserve for future policy benefits	$	1,273

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2021
	1 year		2 years		3 years		4 years		5 years
Group and individual accident and health	62.6	%	35.1	%	1.9	%	0.4	%	—	%

Contractholder funds for interest-sensitive life insurance were $853 million and $857 million as of December 31, 2021 and 2020, respectively.

Contractholder funds activity
	For the years ended December 31,
($ in millions)	2021		2020		2019
Balance, beginning of year	$	857	$	915	$	898
Deposits	118		121		126
Interest credited	34		33		34
Benefits	(41)		(34)		(11)
Surrenders and partial withdrawals	(23)		(61)		(21)
Contract charges	(107)		(123)		(114)
Other adjustments	70		6		3
Balance, end of year	$	908	$	857	$	915