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Reserve for Future Policy Benefits and Contractholder Funds
 3 Months Ended
Mar. 31, 2023
Reserve for Future Policy Benefits and Contractholder Funds [Abstract]  
Reserve for Future Policy Benefits and Contractholder Funds
Note 9Reserve for Future Policy Benefits and Contractholder Funds
Rollforward of reserve for future policy benefits (1)
Three months ended March 31,
Accident and
health		Traditional
life		Total
($ in millions)202320222023202220232022
Present value of expected net premiums
Beginning balance$1,464 $1,785 $238 $254 $1,702 $2,039 
Beginning balance at original discount rate1,549 1,604 246 215 1,795 1,819 
Effect of changes in cash flow assumptions— — — — — — 
Effect of actual variances from expected experience(42)(49)5 20 (37)(29)
Adjusted beginning balance1,507 1,555 251 235 1,758 1,790 
Issuances199 173 17 4 216 177 
Interest accrual12 12 3 2 15 14 
Net premiums collected(95)(103)(12)(11)(107)(114)
Lapses and withdrawals— — — — — — 
Ending balance at original discount rate1,623 1,637 259 230 1,882 1,867 
Effect of changes in discount rate assumptions(62)65 (5)20 (67)85 
Ending balance1,561 1,702 254 250 1,815 1,952 
Present value of expected future policy benefits
Beginning balance2,229 2,796 524 673 2,753 3,469 
Beginning balance at original discount rate2,316 2,426 534 511 2,850 2,937 
Effect of changes in cash flow assumptions— — — — — — 
Effect of actual variances from expected experience(47)(53)4 19 (43)(34)
Adjusted beginning balance2,269 2,373 538 530 2,807 2,903 
Issuances199 172 16 4 215 176 
Interest accrual19 19 6 5 25 24 
Benefit payments(99)(110)(12)(8)(111)(118)
Lapses and withdrawals— — — — — — 
Ending balance at original discount rate2,388 2,454 548 531 2,936 2,985 
Effect of changes in discount rate assumptions(53)175 (1)94 (54)269 
Ending balance$2,335 $2,629 $547 $625 $2,882 $3,254 
Net reserve for future policy benefits (1)
$774 $927 $293 $375 $1,067 $1,302 
Less: reinsurance recoverables76 139 2 2 78 141 
Net reserve for future policy benefits, after reinsurance recoverables
$698 $788 $291 $373 $989 $1,161 
(1)Excludes $271 million and $264 million of reserves related to short-duration and other contracts as of March 31, 2023 and 2022, respectively.
Revenue and interest recognized in the condensed consolidated statements of operations
($ in millions)Three months ended March 31,
20232022
Revenues (1)
Accident and health$225 $253 
Traditional life25 22 
Total$250 $275 
Interest expense (2)
Accident and health$7 $7 
Traditional life3 3 
Total$10 $10 
(1) Total revenues reflects gross premiums used in the calculation for reserve for future policy benefits. Revenues included in Accident and health insurance premiums and contract charges on the Condensed Consolidated Statements of Operations reflect premium revenue recognized for traditional life insurance and long-duration and short-duration accident and health insurance contracts.
(2) Total interest expense presented as part of Accident, health and other policy benefits on the Condensed Consolidated Statements of Operations.
The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts.
As of March 31,
20232022
($ in millions)UndiscountedDiscountedUndiscountedDiscounted
Accident and health
Expected future gross premiums$5,068 $3,671 $5,219 $4,137 
Expected future benefits and expenses3,351 2,335 3,453 2,629 
Traditional life
Expected future gross premiums721 500 652 500 
Expected future benefits and expenses1,008 547 972 625 
Key assumptions used in calculating the reserve for future policy benefits
As of March 31,
Accident and healthTraditional life
2023202220232022
Weighted-average duration (in years)4.14.214.113.9
Weighted-average interest rates
Interest accretion rate (discount rate at contract issuance)5.09 %6.69 %5.50 %5.70 %
Current discount rate (upper-medium grade fixed income yield)4.58 2.76 5.03 3.54 
Significant assumptions To determine mortality and morbidity assumptions, the Company uses a combination of Company historical experience and industry data. Mortality and morbidity are monitored throughout the year. Historical experience is obtained through annual Company experience studies in the third quarter that consider the Company’s historical claim patterns. The lapse assumption is determined based on historical lapses of the Company’s insurance contracts.
The following table summarizes the ratio of actual to expected lapses used in the determination of the reserve for future policy benefits.
As of March 31,
Accident and healthTraditional life
2023202220232022
Lapses90 %111 %92 %95 %
Contractholder funds
Contractholder funds activity
Three months ended March 31,
($ in millions)20232022
Balance, beginning of year$879 $890 
Deposits33 35 
Interest credited8 8 
Benefits(4)(3)
Surrenders and partial withdrawals(5)(5)
Contract charges(30)(28)
Other adjustments(3)(6)
Balance, end of period$878 $891 
Components of contractholder funds
Interest-sensitive life insurance$830 $837 
Fixed annuities48 54 
Total $878 $891 
Weighted-average crediting rate4.27 %4.29 %
Net amount at risk (1)
$11,780 $12,101 
Cash surrender value$722 $728 
(1)Guaranteed benefit amounts in excess of the current account balances.
Account values: comparison of current crediting rate to guaranteed minimum crediting rate (1)
($ in millions)
                                                                                                                                                          Range of guaranteed minimum crediting rates
At guaranteed minimum
1-50 basis points above
Total
March 31, 2023
Less than 3%
$— $— $— 
3.00% - 3.49%
— 20 20 
3.50% - 3.99%
11 — 11 
4.00% - 4.49%
431 — 431 
4.50% - 4.99%
266 — 266 
5% or greater
69 — 69 
Non-account balances (2)
81 
Total$777 $20 $878 
March 31, 2022
Less than 3%
$— $— $— 
3.00% - 3.49%
— 6 6 
3.50% - 3.99%
12 — 12 
4.00% - 4.49%
438 — 438 
4.50% - 4.99%
272 — 272 
5% or greater
71 — 71 
Non-account balances (2)
92 
Total$793 $6 $891 
(1)Difference, in basis points, between rates being credited to contractholders and the respective guaranteed minimum crediting rates.
(2)Non-account balances include unearned revenue and amounts related to policies where a claim is either in the course of settlement or incurred but not reported. A claim on a life insurance policy results in the accrual of interest at a rate and over a period of time that is specified by state insurance regulations.