Corebridge Financial Inc
For the period ended Dec 31, 2024. Filed Feb 13, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 13, 2025
CRBG$34.09-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-15.
0001889539-24-000006
Item 7. |Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0001889539-25-000014
Item 7. |Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 920 previous paragraphs and 824 current paragraphs.
573 unchanged; 175 reworded; 74 added; 149 removed; 23 previous and 2 current paragraphs rearranged.
Tables are not compared: 91 previous and 87 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (74)
Current report
Corebridge | 2024 Form 10-K 70
Current report
Corebridge | 2024 Form 10-K 71
Current report
As of December 31, 2024, $24.9 billion of reserves had been ceded to Fortitude Re.
Current report
For additional information on our reinsurance agreements with Fortitude Re, see Note 7 to the Consolidated Financial Statements.
Current report
For additional information on our Strategic Partnership with Blackstone, see “Investments” below.
Current report
For additional information on our Investment Management Agreements with BlackRock, see “Investments” below.
Current report
For example, on March 6, 2024, the SEC adopted final rules that require registrants, including Corebridge, to disclose certain climate-related information in registration statements and annual reports. The final rules require registrants to disclose, among other things: the impacts of material climate-related risks; the processes for identifying, assessing and managing such risks; information about the oversight of climate-related risks by the board of directors and management’s role in managing material climate-related risks; and information about any climate-related targets or goals that are material to a registrant's business, results of operations, or financial condition. The final rules also require, if material, disclosure of registrants’ Scope 1 and/or Scope 2 greenhouse gas emissions. In addition, registrants must disclose certain information in their audited financial statements, including aggregate expenditures expensed and losses as well as capitalized costs and charges, in each case as a result of severe weather events and other natural conditions, subject to de minimis disclosure thresholds.
Current report
The final rules include a phased-in compliance period beginning in fiscal year 2025 for large accelerated filers such as Corebridge. Numerous legal challenges were filed after the rule’s adoption, which lawsuits have been consolidated in the Eighth Circuit. On April 4, 2024, the SEC exercised its discretion to stay the final rules pending completion of judicial review in the U.S. Court of Appeals for the Eighth Circuit. Corebridge is evaluating the potential impacts of these new requirements. However, if these requirements are implemented following completion of judicial review, they may increase the complexity of Corebridge’s periodic reporting as a U.S. public company and are expected to result in additional compliance and reporting costs.
Current report
In addition, on April 25, 2024, the Department of Labor (“DOL”) published a final rule in the Federal Register updating the definition for when a person is an “investment advice fiduciary” for purposes of transactions with ERISA qualified plans, related plan participants and IRAs. The DOL also published changes with respect to existing prohibited transactions exemptions (“PTEs”) relating to such advice, including PTE 84-24 and PTE 2020-02. Orders staying the rule’s September 23, 2024 effective date were issued by the U.S. District Courts for the Eastern District of Texas and the Northern District of Texas on July 25, 2024 and July 26, 2024, respectively, in connection with separate lawsuits challenging the rule. On September 20, 2024, DOL filed a notice of appeal confirming its intent to appeal these two orders to the United States Court of Appeals for the Fifth Circuit. We are actively monitoring the progress of the litigation while continuing to evaluate potential impact of the DOL rule to our business.
Current report
•lower policyholder benefits of $2.7 billion primarily on new pension risk transfer business;
Current report
•lower net realized losses of $1.7 billion primarily driven by lower losses on the Fortitude Re balances and index-linked interest credited embedded derivatives, net of related hedges partially offset by higher losses on sales of fixed maturities;
Current report
•higher net investment income of $1.2 billion primarily driven by higher base portfolio income and higher variable investment income;
Current report
•lower premiums of $3.1 billion primarily on new pension risk transfer business;
Current report
•lower policyholder benefits of $2.7 billion primarily on new pension risk transfer business;
Current report
•higher net investment income of $1.2 billion primarily driven by higher base portfolio income and higher variable investment income;
Current report
•higher policy fee income of $104 million, primarily due to higher average variable annuity separate account assets driven by increases in the equity markets and higher GMWB fees from fixed and fixed index annuity growth.
Current report
•lower premiums of $3.1 billion primarily on new pension risk transfer business; and
Current report
•Individual Retirement – consists of fixed annuities, fixed index annuities, registered index linked annuities and variable annuities.
Current report
•higher policy fee income of $117 million, primarily due to higher average variable annuity separate account assets driven by increases in the equity markets and higher GMWB fees from fixed and fixed index annuity growth.
Current report
•higher amortization of DAC and DSI of $41 million due to growth in fixed and fixed index annuity business; and
Current report
•higher non-deferrable insurance commissions of $33 million primarily due to continued growth in the fixed index annuity business and higher variable annuity separate account assets.
Current report
•lower spread income of $101 million due to lower base spread income of $107 million reflecting lower base portfolio income and higher crediting rates partially offset by an increase in variable investment income of $6 million primarily due to higher alternative investment income.
Current report
(b) Includes International life underwriting margin of $33 million, $226 million and $245 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Current report
(c)2024 includes a $5 million favorable impact from the of annual actuarial assumption update.
Current report
Reported APTOI reflects the results of AIG Life U.K. until April 2024 and Laya until October 2023.
Current report
•lower domestic general operating expenses of $22 million, driven by expense efficiencies.
Current report
•unfavorable impact of $29 million from the annual review and update of actuarial assumptions in 2024 compared to a favorable impact of $19 million from the annual review and update of actuarial assumptions in 2023.
Current report
AUMA decreased $225 million in the year ended December 31, 2024 compared to the prior year-end due to interest rate movements.
Current report
Includes International life underwriting margin of $33 million, $226 million and $245 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Current report
Premiums and deposits decreased $625 million for the year ended December 31, 2024 compared to the prior year, reflecting the sale of AIG Life U.K. on April 8, 2024. Total U.S. life premiums and deposits increased primarily due to higher Term Life premiums.
Showing the first 40 of 74 passages. Open the source sections for the rest.
Removed paragraphs (149)
Previous report
Following the sale of AIG’s majority ownership interest in Fortitude Holdings and a restructuring transaction involving Fortitude Holdings and Fortitude Re Bermuda, AIG retained a 3.5% ownership interest in Fortitude Re Bermuda and one seat on its Board of Managers. On October 1, 2021, AIG, Inc. contributed its remaining 3.5% ownership interest in Fortitude Re Bermuda to us. At March 31, 2022, our ownership interest in Fortitude Re Bermuda was reduced from 3.5% to 2.46% due to a round of equity financing by third-party investors, in which we did not participate, that closed on March 31, 2022. As of December 31, 2023, $30.6 billion of reserves related to business written by multiple wholly-owned AIG subsidiaries, including $26.8 billion of reserves related to Corebridge, had been ceded to Fortitude Re.
Previous report
The income tax expense (benefit) and the tax impact in OCI was computed using the U.S. statutory tax rate of 21%.
Previous report
Various assets supporting the Fortitude Re funds withheld arrangements are reported at amortized cost, and as such, changes in the fair value of these assets are not reflected in the financial statements. However, changes in the fair value of these assets are included in the embedded derivative in the Fortitude Re funds withheld arrangement and the appreciation (depreciation) of the assets is the primary driver of the Comprehensive income (loss) reflected above.
Previous report
For further details on this transaction, see Note 8 to the Consolidated Financial Statements.
Previous report
•With the transition of risk free rates to the SOFR curve, our discounting of fees has been reduced, resulting in a one-time favorable impact to the MRB liability.
Previous report
•Net impact on pre-tax income of $77 million was primarily driven by fund basis changes that impacted our actual to expected model outcomes, lower equity markets and term structure moves in the interest rate volatility market, partially offset by increases in interest rates.
Previous report
The following table presents the increase in adjusted pre-tax operating income and pre-tax income resulting from the annual update of actuarial assumptions, which occurs in the third quarter of each year, by financial statement line item as reported in the Consolidated Statements of Income (Loss):
Previous report
The following table presents the increase in adjusted pre-tax operating income resulting from the annual update in actuarial assumptions, which occurs in the third quarter of each year, by segment and product line:
Previous report
Adoption of Targeted Improvements to the Accounting for Long-Duration Contracts
Previous report
In August 2018, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update with the objective of making targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity.
Previous report
The Company adopted targeted improvements to the accounting for long duration contracts (the “standard” or “LDTI”) on January 1, 2023, with a transition date of January 1, 2021 (as described in additional detail below).
Previous report
The Company adopted the standard using the modified retrospective transition method relating to liabilities for traditional and limited payment contracts and DAC. The Company also adopted the standard in relation to MRBs on a full retrospective basis. As of the January 1, 2021 transition date, the impact of the adoption of the standard was a net decrease to beginning AOCI of $2.3 billion and a net increase to beginning Shareholders’ net investment of $1.2 billion.
Previous report
The net increase in Shareholders’ net investment resulted from:
Previous report
•the reclassification of the cumulative effect of non-performance adjustments related to our products in Individual Retirement and Group Retirement operating segments that are currently measured at fair value (e.g., living benefit guarantees associated with variable annuities),
Previous report
•a reduction from the difference between the fair value and carrying value of benefits not previously measured at fair value (e.g., death benefit guarantees associated with variable annuities).
Previous report
•the reclassification of the cumulative effect of non-performance adjustments discussed above,
Previous report
•changes to the discount rate which will most significantly impact our Life Insurance and Institutional Markets segments,
Previous report
•the removal of DAC, unearned revenue reserves, sales inducement assets and certain future policyholder benefit balances recorded in AOCI related to changes in unrealized appreciation (depreciation) on investments.
Previous report
On December 15, 2021, Corebridge and Blackstone Real Estate Income Trust (“BREIT”), a long-term, perpetual capital vehicle affiliated with Blackstone, completed the acquisition by BREIT of Corebridge’s interests in a U.S. affordable housing portfolio for $4.9 billion, in an all cash transaction, resulting in a pre-tax gain of $3.0 billion. We recognized $186 million of APTOI related to the U.S. affordable housing portfolio, primarily consisting of net investment income of $309 million offset by interest expense of $107 million for the year ended December 31, 2021.
Previous report
Following the IPO, AIG owns a less than 80% interest in Corebridge, resulting in tax deconsolidation of Corebridge Parent and its subsidiaries from the AIG Consolidated Tax Group. Upon the tax deconsolidation from the AIG Consolidated Tax Group, after assessing the relative weight of all positive and negative evidence, we concluded that absent any prudent and feasible tax planning strategies, our net operating losses and foreign tax credit carryforwards generated by the non-life insurance companies would more likely than not expire unutilized and at the time of tax deconsolidation a valuation allowance related to the tax attribute carryforwards and other deferred tax assets for the Non-Life Group was necessary. In addition, under applicable law, the AGC Group will not be permitted to join in the filing of a U.S. consolidated federal income tax return with the Non-Life Group for the five-year waiting period. Instead, the AGC Group is expected to file separately as members of the AGC consolidated U.S. federal income tax return during the five-year waiting period. Following the five-year waiting period, the AGC Group is expected to join the U.S. consolidated federal income tax return in 2028. Principles similar to the foregoing may apply to state and local income tax liabilities in jurisdictions that conform to federal rules. We continue to assess our need for a valuation allowance and as of year ended December 31, 2023, the balance sheet reflects a valuation allowance of $162 million related to our tax attribute carryforwards and a portion of certain other deferred tax assets that are no longer more-likely-than-not to be realized.
Previous report
For further discussion on tax impacts from the IPO and valuation allowance, see Note 24 to the Consolidated Financial Statements.
Previous report
On February 8, 2021, we announced the execution of a definitive agreement with Touchstone Investments, Inc. (“Touchstone”), an indirect wholly-owned subsidiary of Western & Southern Financial Group, to sell certain assets of our retail mutual funds business. This sale consisted of the reorganization of twelve of the retail mutual funds managed by our subsidiary SunAmerica Asset Management LLC (“SAAMCo”) into certain Touchstone funds and was subject to certain conditions, including approval of the fund reorganizations by the retail mutual fund boards of directors/trustees and fund shareholders. The transaction closed on July 16, 2021, at which time we received initial proceeds and recognized a gain on the sale of $103 million. Concurrently, the twelve retail mutual funds managed by SAAMCo, with $6.8 billion in assets, were reorganized into Touchstone funds. Additional consideration has been and may be earned over a three-year period based on asset levels in certain reorganized funds. Six retail mutual funds managed by SAAMCo and not included in the transaction were liquidated. We continue to retain our fund management platform and capabilities dedicated to our variable annuity insurance products.
Previous report
In connection with our separation from AIG, we have incurred and expect to continue to incur one-time and recurring expenses. We estimate that our one-time expenses will be between approximately $350 million and $450 million on a pre-tax basis from January 1, 2022. As of December 31, 2023, we have incurred approximately $425 million of one-time expenses on a pre-tax basis. These expenses primarily relate to replicating and replacing functions, systems and infrastructure provided by AIG; rebranding; and accounting advisory, consulting and actuarial fees. We expect to incur the majority of these costs by December 31, 2023. In addition to these separation costs, we expect to incur costs related to the evolution of our investments organization to reflect our strategic partnerships with key external managers, our implementation of BlackRock’s “Aladdin” investment management technology platform and our expected reduction in fees for asset management services.
Previous report
In addition, as part of Corebridge Forward, we aim to achieve an annual run rate expense reduction of approximately $400 million on a pre-tax basis and expect the majority of the reduction to be achieved within 24 months of the IPO. Through December 31, 2023 we have acted upon or contracted approximately $351 million of exit run rate savings on a pre-tax basis. Corebridge Forward is expected to have a cumulative cost to achieve of approximately $300 million on a pre-tax basis. As of December 31, 2023, the cost to achieve has been approximately $168 million.
Previous report
We expect our target market of individuals planning for retirement to continue to grow with the size of the U.S. population age 65 and over that is expected to increase by approximately 30% by 2030 from 2020. In addition, we believe that reduced employer-paid retirement benefits will drive an increasing need for our individual retirement solutions. Further, consumers in the United States continue to prefer purchasing life insurance and retirement products through an agent or advisor, which positions us favorably given our broad distribution platform and in-house advisory capabilities. We continue to seek opportunities to develop new products and adapt our existing products to the growing needs of individuals to plan, save for and achieve secure financial futures.
Previous report
In our life insurance business, we have an international location in the UK, whose local currency is the British pound. Trends in revenue and expense reported in U.S. dollars can differ significantly from those measured in original currencies. While currency volatility affects financial statement line item components of income and expenses, since our international businesses transact in local currencies, the impact is significantly mitigated. These currencies may continue to fluctuate, in either direction, and such fluctuations may affect premiums, fees and expenses reported in U.S. dollars, as well as financial statement line item comparability.
Previous report
(a)Excludes deposits from the assets of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale. Deposits from these retail mutual funds was $259 million for the year ended December 31, 2021.
Previous report
*Excludes fee income of $54 million for the year ended December 31, 2021, related to the assets of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale.
Previous report
*Affordable housing is a component of variable investment income.
Previous report
*Excludes net flows of $(1.4) billion for the year ended December 31, 2021, related to the retail mutual funds business that was sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale.
Previous report
•lower realized gains of $9.7 billion primarily driven by losses on the Fortitude Re funds withheld embedded derivative;
Showing the first 40 of 149 passages. Open the source sections for the rest.
Reworded paragraphs (175)
Previous wording
Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we use certain terms and abbreviations, which are summarized in the Glossary and Acronyms.
Current wording
Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we use certain terms and abbreviations, which are summarized in the Glossary, Certain Important Terms and Acronyms.
Previous wording
This MD&A addresses the consolidated financial condition of Corebridge as of December 31, 2023, compared with December 31, 2022, and its consolidated results of operations for the years ended December 31, 2023, 2022 and 2021. In addition to historical data, this discussion contains forward-looking statements about our business operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the“Management’s Discussion and Analysis of Results of Operations and Financial Condition,” the audited Consolidated Financial Statements and the “Risk Factors” section and the statements under “Cautionary Statements Regarding Forward-Looking Information,” included elsewhere in this Annual Report on Form 10-K.
Current wording
This MD&A addresses the consolidated financial condition of Corebridge as of December 31, 2024, compared with December 31, 2023, and its consolidated results of operations for the years ended December 31, 2024, 2023 and 2022. In addition to historical data, this discussion contains forward-looking statements about our business operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the Consolidated Financial Statements and the statements under “Cautionary Statements Regarding Forward-Looking Information,” included elsewhere in this Annual Report on Form 10-K , “Financial Statements and Supplementary Data” and the “Risk Factors” section.
Previous wording
•General operating and other expenses include expenses associated with conducting our business, including salaries, other employee-related compensation and other operating expenses such as professional services or travel;
Current wording
•General operating expenses include expenses associated with conducting our business, including salaries, other employee-related compensation and other operating expenses such as professional services or travel;
Previous wording
In 2018, AIG established Fortitude Re, a wholly-owned subsidiary of Fortitude Group Holdings, LLC (“Fortitude Holdings”), in a series of reinsurance transactions related to certain of AIG’s legacy operations. In February 2018, AGL, VALIC and USL entered into modco agreements with Fortitude Re, a registered Class 4 and Class E reinsurer in Bermuda.
Current wording
In 2018, AIG established Fortitude Re, a wholly-owned subsidiary of Fortitude Group Holdings, LLC (“Fortitude Holdings”), in a series of reinsurance transactions related to certain of AIG’s legacy operations. In February 2018, AGL, VALIC and USL entered into modco agreements with Fortitude Re, a registered Class 4 and Class E reinsurer in Bermuda. Following the sale of AIG’s majority ownership interest in Fortitude Holdings, AIG contributed its remaining ownership in Fortitude Re Bermuda and its one seat on its Board of Managers to us. As of December 31, 2024, our ownership interest in Fortitude Re was 2.46%.
Previous wording
Our net income experiences ongoing volatility as a result of the reinsurance agreements, which, as described above, give rise to a funds withheld payable that contains an embedded derivative. However, this net income volatility is almost entirely offset with a corresponding change in OCI, which reflects the fair value change from the investment portfolio supporting the funds withheld payable, which is primarily available-for-sale securities, resulting in minimal impact to our comprehensive income (loss) and equity attributable to Corebridge. Beginning in the fourth quarter of 2021, the Company elected the fair value option on the acquisition of certain new fixed maturity securities, helping reduce the mismatch over time.
Current wording
Our net income experiences ongoing volatility as a result of the reinsurance agreements, which, as described above, give rise to a funds withheld payable that contains an embedded derivative. However, this net income volatility is almost entirely offset with a corresponding change in OCI, which reflects the fair value change from the investment portfolio supporting the funds withheld payable, which is primarily available-for-sale securities, resulting in minimal impact to our comprehensive income (loss) and equity attributable to Corebridge. The Company has also elected the fair value option on the acquisition of certain new fixed maturity securities, helping reduce the mismatch over time.
Previous wording
For information regarding Corebridge’s impact of Variable Annuity Guaranteed Benefit Riders and Hedging for the year ended December 31, 2021 recast to reflect the adoption of LTDI, see Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on June 5, 2023
Current wording
For additional information regarding Corebridge’s impact of Variable Annuity Guaranteed Benefit Riders and Hedging, see “Future Policy Benefits, Policyholder Contract Deposits and Market Risk Benefits and Update of Actuarial Assumptions and Models — Variable Annuity Guaranteed Benefits and Hedging Results.”
Previous wording
Embedded Derivatives for Fixed Index Annuity and Index Universal Life Products
Current wording
Embedded Derivatives for Fixed Index Annuity, Registered Index Linked Annuity and Index Universal Life Products
Previous wording
Fixed index annuity contracts contain index interest credits which are accounted for as embedded derivatives and our index universal life insurance products also contain embedded derivatives. Policyholders may elect to rebalance among the various accounts within the product at specified renewal dates. At the end of each index term, we generally have the opportunity to re-price the index component by establishing different participation rates or caps on index credited rates. The index crediting feature of these products results in the recognition of an embedded derivative that is required to be bifurcated from the host contract and carried at fair value with changes in the fair value of the liabilities recorded in Net realized gains (losses). Option pricing models are used to estimate fair value, taking into account assumptions for future index growth rates, volatility of the index, future interest rates and our ability to adjust the participation rate and the cap on index credited rates in light of market conditions and policyholder behavior assumptions.
Current wording
Fixed index annuity and registered index linked annuity contracts contain index interest credits which are accounted for as embedded derivatives and our index universal life insurance products also contain embedded derivatives. In contrast to fixed index annuity contracts, registered index linked annuity contract owners also accept limited exposure to negative index interest credits in return for higher potential positive index credits. Policyholders may elect to rebalance among the various crediting strategies within the product at specified renewal dates. At the end of each index term, we generally have the opportunity to re-price the index component by establishing different participation rates or caps on index credited rates. The index crediting feature of these products results in the recognition of an embedded derivative that is required to be bifurcated from the host contract and carried at fair value with changes in the fair value of the liabilities recorded in Net realized gains (losses). Option pricing models are used to estimate fair value, taking into account assumptions for future index growth rates, volatility of the index, future interest rates and our ability to adjust the participation rate and the cap on index credited rates in light of market conditions and policyholder behavior assumptions.
Previous wording
The following table summarizes the fair values of the embedded derivatives for fixed index annuity and index universal life products:
Current wording
The following table summarizes the fair values of the embedded derivatives for fixed index annuity, registered index linked annuity and index universal life products:
Previous wording
Most of the fixed annuities, fixed index annuities, variable annuity products and universal life insurance products we offer maintain policyholder deposits that are reported as liabilities and classified within either separate account liabilities or policyholder contract deposits. Our products and riders also impact liabilities for future policyholder benefits and unearned revenues and assets for DAC and DSI. The valuation of these assets and liabilities (other than deposits) is based on differing accounting methods depending on the product, each of which requires numerous assumptions and considerable judgment. The accounting guidance applied in the valuation of these assets and liabilities includes, but is not limited to, the following: (i) traditional life and limited pay insurance products for which actual experience is reflected in the liability and assumptions are reviewed and updated at least annually, if necessary, with the recognition and parenthetical presentation of any resulting re-measurement gain or loss in policyholder benefits (except for discount rate changes) in the income statement; (ii) certain product guarantees for which benefit liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments; (iii) certain product guarantees reported as market risk benefits or index crediting features accounted for as embedded derivatives which are carried at fair value; and (iv) unearned revenue and assets for DAC, VOBA and DSI which are amortized on a constant level basis over the expected term of the related contracts using assumptions consistent with those used in estimating the related liability for future policy benefits, or any other related balances, for those corresponding contracts, as applicable.
Current wording
Most of the fixed annuities, fixed index annuities, registered index linked annuities, variable annuities and universal life insurance products we offer maintain policyholder deposits that are reported as liabilities and classified within either separate account liabilities or policyholder contract deposits. Our products and riders also impact liabilities for future policyholder benefits and unearned revenues and assets for DAC and DSI. The valuation of these assets and liabilities (other than deposits) is based on differing accounting methods depending on the product, each of which requires numerous assumptions and considerable judgment. The accounting guidance applied in the valuation of these assets and liabilities includes, but is not limited to, the following: (i) traditional life and limited pay insurance products for which actual experience is reflected in the liability and assumptions are reviewed and updated at least annually, if necessary, with the recognition and parenthetical presentation of any resulting re-measurement gain or loss in policyholder benefits (except for discount rate changes) in the income statement; (ii) certain product guarantees for which benefit liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments; (iii) certain product guarantees reported as market risk benefits or index crediting features accounted for as embedded derivatives which are carried at fair value; and (iv) unearned revenue and assets for DAC, VOBA and DSI which are amortized on a constant level basis over the expected term of the related contracts using assumptions consistent with those used in estimating the related liability for future policy benefits, or any other related balances, for those corresponding contracts, as applicable.
Previous wording
For further details of our accounting policies and related judgments pertaining to assumption updates, see “Future Policy Benefits, Policyholder Contract Deposits and Market Risk Benefits—Significant Reinsurance Agreements, Variable Annuity Guaranteed Benefits and Hedging Results and Actuarial Updates—Update of Actuarial Assumptions and Models” and “Accounting Policies and Pronouncements—Critical Accounting Estimates—Market Risk Benefits, Valuation of Embedded Derivatives for Fixed Index Annuity and Index Universal Life Products, Guaranteed Benefit Features of Variable Annuity, Fixed Annuity and Fixed Index Annuity Products, and Future Policy Benefits for Life, Accident and Health Insurance Contracts.”
Current wording
For further details of our accounting policies and related judgments pertaining to assumption updates, see “Future Policy Benefits, Policyholder Contract Deposits and Market Risk Benefits and Update of Actuarial Assumptions and Models—Update of Actuarial Assumptions and Models”, herein and “Accounting Policies and Pronouncements—Critical Accounting Estimates—Market Risk Benefits, Valuation of Embedded Derivatives for Fixed Index Annuity, Registered Index Linked Annuity and Index Universal Life Products, Guaranteed Benefit Features of Variable Annuity, Fixed Annuity and Fixed Index Annuity Products, and Future Policy Benefits for Life, Accident and Health Insurance Contracts.”
Previous wording
Our business is affected by industry and economic factors such as interest rates; geopolitical stability (including theongoing armed conflicts between Ukraine and Russia and in the Middle East); credit and equity market conditions; currency exchange rates; regulation; tax policy; competition; and general economic, market and political conditions. We continued to operate under challenging market conditions in 2023 and 2022 characterized by factors such as the impact of COVID-19 and the related governmental and societal responses, interest rate volatility, inflationary pressures, an uneven global economic recovery and global trade tensions. Responses by central banks and monetary authorities with respect to inflation, growth concerns and other macroeconomic factors have also affected global exchange rates and volatility.
Current wording
Our business is affected by industry and economic factors such as changes in interest rates and credit spreads; geopolitical tensions (including theongoing armed conflicts between Ukraine and Russia and in the Middle East); credit and equity market conditions; currency exchange rates; regulation; tax policy; competition; and general economic, market and political conditions. We continued to operate under market conditions in 2024 and 2023 characterized by factors such as higher interest rates, inflationary pressures, an uneven global economic recovery and global trade tensions. Responses by central banks and monetary authorities with respect to inflation, growth concerns and other macroeconomic factors have also affected global exchange rates and volatility.
Previous wording
Our hedging costs could also be significantly impacted by changes in the level of equity markets as rebalancing and option costs are tied to the equity market volatility. These hedging costs are partially offset by our rider fees that are tied to the level of the VIX. As rebalancing and option costs increase or decrease, the rider fees will increase or decrease partially offsetting the hedging costs incurred.
Current wording
Our hedging costs could also be significantly impacted by changes in the level of equity markets as rebalancing and option costs are tied to the equity market volatility. These hedging costs are partially offset by our rider fees that are tied to the level of the volatility index (“VIX”). As rebalancing and option costs increase or decrease, the rider fees will increase or decrease partially offsetting the hedging costs incurred.
Previous wording
See “Risk Factors—Risks Relating to Market Conditions—We are exposed to risk from equity market declines or volatility.”
Current wording
For additional information see “Risk Factors—Risks Relating to Market Conditions—We are exposed to risk from equity market declines or volatility.”
Previous wording
See “Risk Factors—Risks Relating to Market Conditions—Our business is highly dependent on economic and capital market conditions.”
Current wording
For additional information see “Risk Factors—Risks Relating to Market Conditions—Our business is highly dependent on economic and capital market conditions.”
Previous wording
A rising interest rate environment benefits our spread income as we reinvest cash flows from existing business at higher rates and should have a positive impact on sales of spread-based products resulting in an increase in our base net investment spreads.
Current wording
A rising interest rate environment benefits our spread income as we reinvest cash flows from existing business at higher rates and should have a positive impact on sales of spread-based products.
Previous wording
As of December 31, 2023, increases in key rates have improved yields on new investments, which are now higher than the yield on maturities and redemptions that we are experiencing on our existing portfolios. Furthermore, the impact of interest rate increases is further reflected in our results as these rate increases have also reduced the value of fixed income assets that are held in the variable annuity separate accounts and brokerage and advisory assets, and accordingly, have adversely impacted the fees that are charged on these accounts. We actively manage our exposure to the interest rate environment through portfolio construction and asset-liability management, including spread management strategies for our investment-oriented products and economic hedging of interest rate risk from guarantee features in our variable annuities, but we may not be able to fully mitigate our interest rate risk by matching exposure of our assets relative to our liabilities.
Current wording
As of December 31, 2024, new investments continue to have higher yields than the yield on maturities and redemptions that we are experiencing in our existing portfolios. We actively manage our exposure to the interest rate environment through portfolio construction and asset-liability management, including spread management strategies for our investment-oriented products and economic hedging of interest rate risk from guarantee features in our variable annuities, but we may not be able to fully mitigate our interest rate risk by matching exposure of our assets relative to our liabilities.
Previous wording
The rising rate environment and our partnership with Blackstone have provided a strong tailwind for fixed and fixed index annuity sales, however, higher interest rates have also resulted in an increase in surrenders. Rising interest rates could continue to create the potential for increased sales but could also drive higher surrenders relative to what we have already experienced. Fixed annuities have surrender charge periods, generally in the three-to-seven-year range. Fixed index annuities have surrender charge periods, generally in the five-to-ten-year range, and within our Group Retirement segment, certain of our fixed investment options are subject to other withdrawal restrictions, which may help mitigate increased early surrenders in a rising rate environment. In addition, older contracts that have higher minimum interest rates and continue to be attractive to contract holders have driven better than expected persistency in fixed annuities, although the liabilities for such contracts have continued to decrease over time in amount and as a percentage of the total annuity portfolio. We closely monitor surrenders of fixed annuities as contracts with lower minimum interest rates come out of the surrender charge period.
Current wording
Rising interest rates could create the potential for increased sales but could also drive higher surrenders relative to what we have already experienced. Fixed annuities have surrender charge periods, generally in the three-to-seven-year range. Fixed index annuities have surrender charge periods, generally in the five-to-ten-year range, and within our Group Retirement segment, certain of our fixed investment options are subject to other withdrawal restrictions, which may help mitigate increased early surrenders in a rising rate environment. In addition, older contracts that have higher minimum interest rates and continue to be attractive to contract holders have driven better than expected persistency in fixed annuities, although the liabilities for such contracts have continued to decrease over time in amount and as a percentage of the total annuity portfolio. We closely monitor surrenders of fixed annuities as contracts with lower minimum interest rates come out of the surrender charge period.
Previous wording
For investment-oriented products, including universal life insurance, and variable, fixed and fixed index annuities, in each of our operating and reportable segments, our spread management strategies include disciplined pricing and product design for new business, modifying or limiting the sale of products that do not achieve targeted spreads, using asset-liability management to match assets to liabilities to the extent practicable and actively managing crediting rates to help mitigate some of the pressure on investment spreads. Renewal crediting rate management is guided by specific contract provisions designed to allow crediting rates to be reset at pre-established intervals and subject to minimum crediting rate guarantees. We expect to continue to adjust crediting rates on in-force business, as appropriate, to be responsive to changing rate environments. As interest rates rise, we may need to raise crediting rates on in-force business for competitive and other reasons, potentially offsetting a portion of the additional investment income resulting from investing in a higher interest rate environment.
Current wording
For investment-oriented products, including universal life insurance, and variable, fixed, fixed index and registered index linked annuities in each of our operating and reportable segments, our spread management strategies include disciplined pricing and product design for new business, modifying or limiting the sale of products that do not achieve targeted spreads, using asset-liability management to match assets to liabilities to the extent practicable and actively managing crediting rates to help mitigate some of the pressure on investment spreads. Renewal crediting rate management is guided by specific contract provisions designed to allow crediting rates to be reset at pre-established intervals and subject to minimum crediting rate guarantees. We expect to continue to adjust crediting rates on in-force business, as appropriate, to be responsive to changing rate environments. As interest rates rise, we may need to raise crediting rates on in-force business for competitive and other reasons, potentially offsetting a portion of the additional investment income resulting from investing in a higher interest rate environment.
Previous wording
Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products, 54% and 64% were crediting at the contractual minimum guaranteed interest rate at December 31, 2023 and December 31, 2022, respectively. The percentages of fixed account values of our annuity products that are currently crediting at rates above 1% were 50% and 55% at December 31, 2023 and December 31, 2022, respectively. In the universal life insurance products in our Life Insurance business, 59% and 62% of the account values were crediting at the contractual minimum guaranteed interest rate at December 31, 2023 and December 31, 2022, respectively. These businesses continue to focus on pricing discipline and strategies to manage the minimum guaranteed interest crediting rates offered on new sales in the context of regulatory requirements and competitive positioning.
Current wording
Of the aggregate fixed account values of our Individual Retirement and Group Retirement annuity products, 47% and 54% were crediting at the contractual minimum guaranteed interest rate at December 31, 2024 and December 31, 2023, respectively. In the universal life insurance products in our Life Insurance business, 59% and 59% of the account values were crediting at the contractual minimum guaranteed interest rate at December 31, 2024 and December 31, 2023, respectively. These businesses continue to focus on pricing discipline and strategies to manage the minimum guaranteed interest crediting rates offered on new sales in the context of regulatory requirements and competitive positioning.
Previous wording
For additional information on our investment and asset-liability management strategies, see “Investments.”
Current wording
For additional information on our investment and asset-liability management strategies, see “Investments” below.
Previous wording
For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see “Business—Regulation.”
Current wording
For information regarding our regulation and supervision by different regulatory authorities in the United States and abroad, see “Business—Regulation—U.S. Regulation” and “Business—Regulation—International Regulation.”
Previous wording
Adjusted pre-tax operating income (“APTOI”)is derived by excluding the items set forth below from income from operations before income tax. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and recording adjustments to APTOI that we believe to be common in our industry. We believe the adjustments to pre-tax income are useful for gaining an understanding of our overall results of operations.
Current wording
Adjusted pre-tax operating income (“APTOI”)is derived by excluding the items set forth below from income (loss) before income tax expense (benefit). These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and recording adjustments to APTOI that we believe to be common in our industry. We believe the adjustments to pre-tax income are useful for gaining an understanding of our overall results of operations.
Previous wording
The modco reinsurance agreements with Fortitude Re transfer the economics of the invested assets supporting the reinsurance agreements to Fortitude Re. Accordingly, the net investment income on Fortitude Re funds withheld assets and the net realized gains (losses) on Fortitude Re funds withheld assets are excluded from APTOI. Similarly, changes in the Fortitude Re funds withheld embedded derivative are also excluded from APTOI.
Current wording
The modified coinsurance (“modco”) reinsurance agreements with Fortitude Re transfer the economics of the invested assets supporting the reinsurance agreements to Fortitude Re. Accordingly, the net investment income on Fortitude Re funds withheld assets and the net realized gains (losses) on Fortitude Re funds withheld assets are excluded from APTOI. Similarly, changes in the Fortitude Re funds withheld embedded derivative are also excluded from APTOI.
Previous wording
In addition, changes in interest rates may create opportunistic scenarios to buy or sell invested assets. Our derivative results, including those used to economically hedge insurance liabilities or are recognized as embedded derivatives at fair value are also included in Net realized gains (losses) and are similarly excluded from APTOI except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedges or for asset replication. Earned income on such economic hedges is reclassified from Net realized gains and losses to specific APTOI line items based on the economic risk being hedged (e.g., Net investment income and Interest credited to policyholder account balances).
Current wording
APTOI excludes “Net realized gains (losses)”, except for gains (losses) related to the disposition of real estate investments. Net realized gains (losses), except for gains (losses) related to the disposition of real estate investments, are excluded as the timing of sales on invested assets or changes in allowances depend largely on market credit cycles and can vary considerably across periods. In addition, changes in interest rates may create opportunistic scenarios to buy or sell invested assets. Our derivative results, including those used to economically hedge insurance liabilities, or those recognized as embedded derivatives at fair value, are also included in Net realized gains (losses) and are similarly excluded from APTOI except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedges or for asset replication. Earned income on such economic hedges is reclassified from Net realized gains and losses to specific APTOI line items based on the economic risk being hedged (e.g., Net investment income and Interest credited to policyholder account balances).
Previous wording
(b)Other principally consists of ceded premiums, in order to reflect gross premiums and deposits.
Current wording
(a)Other principally consists of ceded premiums, in order to reflect gross premiums and deposits.
Previous wording
(c) Excludes client deposits into advisory and brokerage accounts of $2.4 billion, $2.1 billion and $2.5 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
(b)Excludes client deposits into advisory and brokerage accounts of $3.1 billion, $2.4 billion and $2.1 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
Previous wording
(b) Includes inflows related to in-plan mutual funds of $3.2 billion, $3.5 billion and $3.1 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
(c)Includes inflows related to in-plan mutual funds of $3.1 billion, $3.2 billion and $3.5 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
Previous wording
Net investment income (APTOI basis) is the sum of base portfolio income and variable investment income.
Current wording
Net investment income (APTOI basis) is the sum of base portfolio income and variable investment income. We believe that presenting net investment income on an APTOI basis is useful for gaining an understanding of the main drivers of investment income.
Previous wording
Includes net investment income from Corporate and Other of $92 million, $473 million and $443 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
Includes net investment income from Corporate and Other of $33 million, $92 million and $473 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Previous wording
The December 31, 2023 AUMA excludes$181 million of assets that were reclassified to Assets held-for-sale in the Consolidated Balance Sheets. See Note 4 of Notes to the Consolidated Financial Statements for additional information.
Current wording
*The December 31, 2023 AUMA excludes $181 million of assets that were reclassified to Assets held-for-sale in the Consolidated Balance Sheets.
Previous wording
Variable investment income includes call and tender income, commercial mortgage loan prepayments, changes in market value of investments accounted for under the fair value option, interest received on defaulted investments (other than foreclosed real estate), income from alternative investments, affordable housing investments and other miscellaneous investment income, including income of certain partnership entities that are required to be consolidated. Alternative investments include private equity funds which are generally reported on a one-quarter lag.
Current wording
Variable investment income includes call and tender income, commercial mortgage loan prepayments, changes in market value of investments accounted for under the fair value option, interest received on defaulted investments (other than foreclosed real estate), income from alternative investments and other miscellaneous investment income, including income of certain partnership entities that are required to be consolidated. Alternative investments include private equity funds which are generally reported on a one-quarter lag.
Previous wording
For a comparative discussion regarding Corebridge’s results of operations for the year ended December 31, 2022 and the year ended December 31, 2021 recast to reflect the adoption of LTDI, see Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on June 5, 2023.
Current wording
For a comparative discussion regarding Corebridge’s results of operations for the year ended December 31, 2023 and the year ended December 31, 2022 see the Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”).
Previous wording
We recorded pre-tax income of $940 million in the year ended December 31, 2023 compared to pre-tax income of $10.5 billion in the year ended December 31, 2022. The change in pre-tax income was primarily due to:
Current wording
We recorded pre-tax income of $2.8 billion in the year ended December 31, 2024 compared to pre-tax income of $940 million in the year ended December 31, 2023.The change in pre-tax income was primarily due to:
Previous wording
•lower favorable change in the fair value of market risk benefits, net of $952 million primarily driven by the impacts of changes in equity markets and interest rate volatility; and
Current wording
•higher favorable change in the fair value of market risk benefits, net of $221 million primarily driven by the impacts of higher equity market performance compared to the comparable period in the prior year.
Previous wording
•higher interest credited to policyholder account balances of $695 million primarily due to higher interest rates in fixed and fixed index annuities and increased interest rates on the growing GIC business.
Current wording
•higher interest credited to policyholder account balances of $813 million primarily due to growth in fixed annuities, fixed index annuities and GICs; and
Previous wording
•higher gain on divestitures of $677 million primarily resulting from the sale of Laya in 2023.
Current wording
•lower net gain on divestitures of $431 million primarily from the gains on the sale of Laya in 2023 and AIG Life U.K. in 2024.
Previous wording
For the year ended December 31, 2023, there was an income tax benefit of $96 million on income from operations, resulting in an effective tax rate on income from operations of (10.2)%.
Current wording
For the year ended December 31, 2024, there was an income tax expense of $600 million on income from operations, resulting in an effective tax rate on income from operations of 21.4%.
Previous wording
•higher interest credited to policyholder account balances of $666 million primarily due to higher sales activity in fixed and fixed index annuities and increased interest rates on the growing GIC business;
Current wording
•higher interest credited to policyholder account balances of $811 million primarily due to growth in fixed annuities, fixed index annuities and GICs.
Previous wording
•Group Retirement – consists of record-keeping, plan administrative and compliance services, financial planning and advisory solutions offered in-plan, along with proprietary and limited non-proprietary annuities, advisory and brokerage products offered out-of-plan.
Current wording
•Group Retirement – consists of recordkeeping, plan administrative and compliance services, financial planning and advisory solutions offered in-plan, along with proprietary and limited non-proprietary annuities, advisory and brokerage products offered out-of-plan.
Showing the first 40 of 175 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
In 2021, we entered into a long-term asset management relationship with Blackstone IM. As of December 31, 2024, Blackstone managed approximately $68.8 billion in book value of assets in our investment portfolio.
Current report — wording carried from elsewhere
Since April 2022, we entered into investment management agreements with BlackRock and its investment advisory affiliates. As of December 31, 2024, BlackRock managed approximately $86.8 billion in book value of assets in our investment portfolio, consisting of liquid fixed income and certain private placement assets.
Rearranged previous paragraphs (23)
Previous report — wording carried elsewhere
•the economic hedge target excludes our own credit risk changes (non-performance risk adjustments (“NPA”)) used in the GAAP valuation, which are recognized in OCI. The GAAP valuation has different sensitivities to movements in interest rates and other market factors, and to changes from actuarial assumption updates, than the economic hedge target.
Previous report — wording carried elsewhere
For more information on our valuation methodology for MRBs, see Note 5 to the Consolidated Financial Statements.
Previous report — wording carried elsewhere
On an economic basis, the changes in the fair value of the hedge portfolio were partially offset by the changes in the economic hedge target. In the year ended December 31, 2023, we had a net mark-to-market loss of approximately $512 million from our hedging activities related to our economic hedge target primarily driven by aging of the business and tightening credit spreads.
Previous report — wording carried elsewhere
For additional information on our investment and asset-liability management strategies, see Note 6 to the Consolidated Financial Statements.
Previous report — wording carried elsewhere
APTOI excludes “Net realized gains (losses)”, except for gains (losses) related to the disposition of real estate investments. Net realized gains (losses), except for gains (losses) related to the disposition of real estate investments, are excluded as the timing of sales on invested assets or changes in allowances depend largely on market credit cycles and can vary considerably across periods.
Previous report — wording carried elsewhere
Income (loss) before income tax expense (benefit)
Previous report — wording carried elsewhere
(d)Interest expense - Asset management relates to consolidated investment entities, the VIEs, for which we are the primary beneficiary; however, creditors or beneficial interest holders of VIEs generally only have recourse to the assets and cash flows of the VIEs and do not have recourse to us except in limited circumstances when we have provided a guarantee to the VIE’s interest holders. As of December 31, 2021, the VIEs for which Corebridge previously provided guarantees have been terminated. Interest expense on consolidated investment entities was $216 million for the year ended December 31, 2021.
Previous report — wording carried elsewhere
For additional discussion on credit losses, see Note 6 to the Consolidated Financial Statements.
Previous report — wording carried elsewhere
Future Policy Benefits, Policyholder Contract Deposits and Market Risk Benefits
Previous report — wording carried elsewhere
Differences in Valuation of MRBs and Economic Hedge Target
Previous report — wording carried elsewhere
Our variable annuity hedging program utilizes an economic hedge target, which represents an estimate of the underlying economic risks in our GMWB riders. The economic hedge target differs from the GAAP valuation of the MRBs, creating volatility in our net income (loss) primarily due to the following:
Previous report — wording carried elsewhere
•the MRBs include both the GMWB riders and the GMDB riders while the hedge program is targeting the economic risks of just the GMWB rider;
Previous report — wording carried elsewhere
•the hedge program is designed to offset moves in the GMWB economic liability and therefore has a lower sensitivity to equity market changes than the MRBs;
Previous report — wording carried elsewhere
•the economic hedge target includes 100% of the GMWB rider fees in present value calculations;
Previous report — wording carried elsewhere
•the GAAP valuation reflects those fees attributed to the MRBs such that the initial value at contract issue equals zero. Since the MRB includes GMWBs and GMDBs these attributed fees are typically larger than just the GMWB rider fees;
Previous report — wording carried elsewhere
•the economic hedge target uses best estimate actuarial assumptions and excludes explicit risk margins used for GAAP valuation, such as margins for policyholder behavior, mortality and volatility; and
Previous report — wording carried elsewhere
The market value of the hedge portfolio compared to the economic hedge target at any point in time may be different and is not expected to be fully offsetting. In addition to the derivatives held in conjunction with the variable annuity hedging program, we generally have cash and invested assets available to cover future claims payable under these guarantees. The primary sources of difference between the change in the fair value of the hedging portfolio and the economic hedge target include:
Previous report — wording carried elsewhere
•basis risk due to the variance between expected and actual fund returns, which may be either positive or negative;
Previous report — wording carried elsewhere
•actual versus expected changes in the hedge target driven by assumptions not subject to hedging, particularly policyholder behavior; and
Previous report — wording carried elsewhere
•risk exposures that we have elected not to explicitly or fully hedge.
Previous report — wording carried elsewhere
*Liabilities ceded to Fortitude Re are reported in Corporate and Other. There is no impact to adjusted pre-tax operating income due to the annual update of actuarial assumptions as these liabilities are 100% ceded.
Previous report — wording carried elsewhere
VALUATION OF EMBEDDED DERIVATIVES FOR FIXED INDEX ANNUITY AND INDEX UNIVERSAL LIFE PRODUCTS
Previous report — wording carried elsewhere
In February 2018, AGL, VALIC and USL entered into modco reinsurance agreements with Fortitude Re a registered Class 4 and Class E reinsurer in Bermuda.