F&G Annuities & Life, Inc.

Previous wording

Market conditions can change rapidly with significant positive or negative impacts on our results. Volatility can pressure sales and reduce demand as consumers hesitate to make financial decisions. We anticipate various macroeconomic factors will continue to drive uncertainty and instability, which could have a significant impact on the Company during fiscal year 2025. These factors include, among others, consumer spending, business investment, government spending, the volatility and strength of the capital markets, investor and consumer confidence, foreign currency exchange rates, commodity prices, inflation levels, changes in trade policy, tariffs and trade sanctions on goods, trade wars, United States-China relations and supply chain disruptions.

Current wording

Market conditions can change rapidly with significant positive or negative impacts on our results. Volatility can pressure sales and reduce demand as consumers hesitate to make financial decisions. We anticipate various macroeconomic factors will continue to drive uncertainty and instability, which could have a significant impact on the Company during fiscal year 2025. These factors include, among others, consumer spending, business investment, government spending, government shutdown, the volatility and strength of the capital markets, investor and consumer confidence, foreign currency exchange rates, commodity prices, inflation levels, changes in trade policy, tariffs and trade sanctions on goods, trade wars, United States-China relations and supply chain disruptions.

Previous wording

As of June 30, 2025 and December 31, 2024, our reserves, net of reinsurance, and weighted average crediting rate on our fixed rate annuities were $6.7 billion and 4.57% and $6.4 billion and 4.42%, respectively. Some of our products, most notably our fixed rate annuities, include guaranteed minimum crediting rates. We are required to pay the guaranteed minimum crediting rates even if earnings on our investment portfolio decline, which would negatively impact earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates for a longer period in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio would increase earnings if the average interest rate we pay on our products does not rise correspondingly. Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows.

Current wording

As of September 30, 2025 and December 31, 2024, our reserves, net of reinsurance, and weighted average crediting rate on our fixed rate annuities were $6.6 billion and 4.71% and $6.4 billion and 4.42%, respectively. Some of our products, most notably our fixed rate annuities, include guaranteed minimum crediting rates. We are required to pay the guaranteed minimum crediting rates even if earnings on our investment portfolio decline, which would negatively impact earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates for a longer period in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio would increase earnings if the average interest rate we pay on our products does not rise correspondingly. Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows.

Previous wording

We believe that the aging of the U.S. population will increase the demand for our indexed annuity and indexed universal life (“IUL”) products. As the “baby boomer” generation prepares for retirement, we believe that demand for retirement savings, growth, and income products will grow. We serve a growing retirement population, with more than 10,000 Americans turning 65 every day and a projected 30% increase in people age 65 and older over the next 25 years. The impact of this growth may be offset to some extent by asset outflows as an increasing percentage of the population begins withdrawing assets to convert their savings into income.

Current wording

We believe that the aging of the U.S. population will continue to increase demand for retirement savings, growth, and income solutions, including demand for our indexed annuity and indexed universal life (“IUL”) products. We serve a growing retirement population, with more than 11,000 Americans turning 65 every day and a projected 30% increase in people age 65-100 over the next 25 years according to the U.S. Census Bureau. The impact of this growth may be offset to some extent by asset outflows as an increasing percentage of the population begins withdrawing assets to convert their savings into income.

Previous wording

The accounting estimates described in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024 are those we consider critical in preparing our unaudited Condensed Consolidated Financial Statements. There were no changes to the Company’s critical accounting policies or estimates during the six months ended June 30, 2025. Management is required to make estimates and assumptions that can affect the reported amounts of assets and liabilities and disclosures with respect to contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. See Note A -Basis of Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional description of certain significant accounting policies that have been followed in preparing our unaudited Condensed Consolidated Financial Statements.

Current wording

The accounting estimates described in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024 are those we consider critical in preparing our unaudited Condensed Consolidated Financial Statements. There were no changes to the Company’s critical accounting policies or estimates during the nine months ended September 30, 2025. Management is required to make estimates and assumptions that can affect the reported amounts of assets and liabilities and disclosures with respect to contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. See Note A -Basis of Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional description of certain significant accounting policies that have been followed in preparing our unaudited Condensed Consolidated Financial Statements.

Previous wording

The results of operations for the three and six months ended June 30, 2025 and June 30, 2024 were as follows (in millions):

Current wording

The results of operations for the three and nine months ended September 30, 2025 and September 30, 2024 were as follows (in millions):

Previous wording

•Total annuity sales were higher for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, reflecting strong sales; we continue to prioritize pricing discipline and capital allocation to the highest return opportunities. Total annuity sales were lower for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, reflecting in line core sales of indexed annuities, IUL, and PRT as well as lower MYGA sales and funding agreements which are subject to fluctuation period to period based on economics and market opportunity. We continue to prioritize pricing discipline and capital allocation to the highest return opportunities.

Current wording

•Gross sales were higher for the three months ended September 30, 2025, and lower for the nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, respectively. Core sales of indexed annuities, IUL, and PRT were modestly higher for the three months ended September 30, 2025 and modestly lower for the nine months ended September 30, 2025. Opportunistic sales of MYGA and funding agreements are subject to fluctuation period to period based on economics and market opportunity; we continue to prioritize pricing discipline and capital allocation to the highest return opportunities.

Previous wording

•Sales attributable to flow reinsurance to third parties were higher during the three months ended June 30, 2025, and lower during the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, primarily reflecting the levels of MYGA sales during the respective periods.

Current wording

•Sales attributable to flow reinsurance to third parties, including the new reinsurance vehicle effective August 1, 2025, were lower during the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, respectively, primarily reflecting the levels of MYGA sales during the respective periods.

Previous wording

Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on indexed annuity policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts (up to 10% of the prior year's value, subject to certain limitations). The following table summarizes the Life insurance premiums and other fees, on the unaudited Condensed Consolidated Statements of Operations, for the three and six months ended June 30, 2025 and June 30, 2024 (in millions):

Current wording

Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on indexed annuity policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts (up to 10% of the prior year's value, subject to certain limitations). The following table summarizes the Life insurance premiums and other fees, on the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and September 30, 2024 (in millions):

Previous wording

•Life-contingent pension risk transfer premiums increased for the three months ended June 30, 2025 and decreased for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, reflecting the timing of PRT transactions. As noted above, PRT premiums are subject to fluctuation period to period.

Current wording

•Life-contingent pension risk transfer premiums increased for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, respectively, reflecting the timing of PRT transactions. PRT premiums are subject to fluctuation period to period.

Previous wording

•Surrender charges were relatively unchanged for the three months ended June 30, 2025 and increased for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively. The increase for the six months ended June 30, 2025 primarily reflects increases in withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities policies. The increase in termination activity is primarily due to the higher interest rate environment.

Current wording

•Surrender charges decreased for the three months ended September 30, 2025 and were relatively unchanged for the nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, respectively. These charges primarily reflect withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities policies, and are subject to changes in the interest rate environment.

Previous wording

•Policyholder fees and other income increased for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, primarily reflecting increased cost of insurance charges, net of changes in unearned revenue liabilities (“URL”) on IUL policies from growth in business and higher guaranteed minimum withdrawal benefit (“GMWB”) rider fees. The increase for the six months ended June 30, 2025 also includes a reinsurance true-up adjustment. GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year.

Current wording

•Policyholder fees and other income increased for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, primarily reflecting increased cost of insurance charges, net of changes in unearned revenue liabilities (“URL”) on IUL policies from growth in business and higher guaranteed minimum withdrawal benefit (“GMWB”) rider fees. GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year. The increase for the nine months ended September 30, 2025 also includes a reinsurance true-up adjustment.

Previous wording

Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $189 million and $373 million for the three and six months ended June 30, 2025, respectively, and $155 million and $282 million for the three and six months ended June 30, 2024, respectively.

Current wording

Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $219 million and $592 million for the three and nine months ended September 30, 2025, respectively, and $181 million and $463 million for the three and nine months ended September 30, 2024, respectively.

Previous wording

•AAUM was higher for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, reflecting net new business asset flows, stable inforce retention and, for the six months ended June 30, 2025, net capital transaction proceeds.

Current wording

•AAUM was higher for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, reflecting net new business asset flows, stable inforce retention and, for the nine months ended September 30, 2025, net capital transaction proceeds.

Previous wording

•Interest and investment income was lower for the three months ended June 30, 2025, compared to the three and months ended June 30, 2024, primarily due to $56 million from invested asset growth and $10 million of all other rate and mix impacts, partially offset by $68 million of lower returns on alternative investments.

Current wording

•Interest and investment income was higher for the three months ended September 30, 2025, compared to the three and months ended September 30, 2024, primarily due to $42 million from invested asset growth and $12 million of all other rate and mix impacts, partially offset by $18 million of lower returns on alternative investments.

Previous wording

•Interest and investment income was higher for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to $112 million from invested asset growth and $11 million of all other rate and mix impacts, partially offset by $75 million of lower returns on alternative investments.

Current wording

•Interest and investment income was higher for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to $154 million from invested asset growth and $23 million of all other rate and mix impacts, partially offset by $93 million of lower returns on alternative investments.

Previous wording

•Owned distribution revenues represent commissions received by our majority owned distribution partners generated from third-party annuity and life insurance sales. Override and bonus commissions are recognized as revenue at the effective date of each policy sold under a contract. Owned distribution revenues were higher for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and slightly lower for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily reflecting higher and slightly lower commission revenues for the respective periods.

Current wording

•Owned distribution revenues represent commissions received by our majority owned distribution partners generated from third-party annuity and life insurance sales. Override and bonus commissions are recognized as revenue at the effective date of each policy sold under a contract. Owned distribution revenues were higher for the three months and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, primarily reflecting higher commission revenues for the respective periods.

Previous wording

Recognized gains and (losses), net is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Recognized gains and (losses) attributable to these agreements, and thus excluded from the totals in the table above, was $(57) million and $(99) million for the three and six month periods ended June 30, 2025, and $10 million and $(9) million for the three and six month periods ended June 30, 2024, respectively.

Current wording

Recognized gains and (losses), net is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Recognized gains and (losses) attributable to these agreements, and thus excluded from the totals in the table above, was $(77) million and $(176) million for the three and nine month periods ended September 30, 2025, and $(177) million and $(186) million for the three and nine month periods ended September 30, 2024, respectively.

Previous wording

•For the three and six months ended June 30, 2024, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of unrealized fair value option (“FVO”) gains on owned distribution investments and preferred securities, partially offset by realized losses on fixed maturity available-for-sale securities and mark-to-market losses on our equity securities.

Current wording

•For the nine months ended September 30, 2025, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of mark-to-market losses on our equity securities and net realized losses on fixed maturity available-for-sale securities.

Previous wording

•For the three and six months ended June 30, 2025, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of mark-to-market losses on our equity securities.

Current wording

•For the three months ended September 30, 2024, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of mark-to-market gains on our preferred and equity securities.

Previous wording

•PRT agreements, primarily representing the change in reserves associated with PRT premiums during the periods, increased for the three months ended June 30, 2025 and decreased for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, reflecting the timing of PRT transactions. PRT transactions are subject to fluctuation period to period.

Current wording

•PRT agreements, primarily representing the change in reserves associated with PRT premiums during the periods, increased for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, reflecting the timing of PRT transactions. PRT transactions are subject to fluctuation period to period.

Previous wording

•The indexed annuities/IUL market related liability movements during the three and six months ended June 30, 2025 and June 30, 2024, respectively, are mainly driven by changes in the equity markets, non-performance spreads, and risk free rates during the respective periods. The change in risk free rates and non-performance spreads increased (decreased) the direct indexed annuities market related liability by $36 million and $(85) million during the three months ended June 30, 2025 and June 30, 2024, respectively. The change in risk free rates and non-performance spreads increased (decreased) the direct indexed annuities market related liability by $83 million and $(168) million during the six months ended June 30, 2025 and June 30, 2024, respectively. The remaining changes in market value of the market related liability movements for all periods were primarily driven by equity market impacts. See “Revenues—Recognized gains and (losses), net”above for summary and discussion of net unrealized gains (losses) on certain derivative instruments.

Current wording

•The indexed annuities/IUL market related liability movements during the three and nine months ended September 30, 2025 and September 30, 2024, respectively, are mainly driven by changes in the equity markets, non-performance spreads, and risk free rates during the respective periods. The change in risk free rates and non-performance spreads increased the direct indexed annuities market related liability by $92 million and $255 million during the three months ended September 30, 2025 and September 30, 2024, respectively. The change in risk free rates and non-performance spreads increased the direct indexed annuities market related liability by $175 million and $87 million during the nine months ended September 30, 2025 and September 30, 2024, respectively. The remaining changes in market value of the market related liability movements for all periods were primarily driven by equity market impacts. See “Revenues—Recognized gains and (losses), net”above for summary and discussion of net unrealized gains (losses) on certain derivative instruments.

Previous wording

◦During the three and six months ended June 30, 2025, based on experience, we reflected updates to the option budget assumption used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in decreases in total benefits and other changes in policy reserves of approximately $5 million and $26 million for the three and six months ended June 30, 2025, respectively.

Current wording

◦During the three and nine months ended September 30, 2025 and September 30, 2024, based on policyholder behavior, experience and interest rate movements, we reflected updates to surrender assumptions for recent and expected near term policyholder behavior, as well as updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in increases (decreases) in total benefits and other changes in policy reserves of approximately $(4) million and ($136) million for the three months ended September 30, 2025 and September 30, 2024, respectively, and $(30) million and ($79) million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

Previous wording

•Index credits, interest credited and bonuses for the three and six months ended June 30, 2025, were higher compared to the three and six months ended June 30, 2024, primarily reflecting higher index credits and interest credited on indexed annuities and other policies as a result of market movement during the respective periods and higher interest credited associated with the growth in PRT agreements.

Current wording

•Index credits, interest credited and bonuses for the three and nine months ended September 30, 2025, were higher compared to the three and nine months ended September 30, 2024, primarily reflecting higher index credits and interest credited on indexed annuities and other policies as a result of market movement during the respective periods and higher interest credited associated with the growth in PRT agreements.

Previous wording

•Changes in market risk benefit (gains) losses for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily reflect favorable market related movements and lower issuances. Changes in market risk benefit (gains) losses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily reflect unfavorable market related movements and unfavorable actual policyholder behavior as compared to expected.

Current wording

•Changes in market risk benefit (gains) losses for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily reflect favorable market related movements. Changes in market risk benefit (gains) losses for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily reflect unfavorable market related movements and unfavorable actual policyholder behavior as compared to expected.

Previous wording

•DAC, VOBA and DSI are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. Amortization of DAC, VOBA and DSI increased for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, primarily reflecting increased DAC and DSI associated with the growth of the business. In addition, as a result of our annual actuarial assumption update process during the three months ended September 30, 2024, amortization rates on some DAC and DSI balances increased primarily for indexed annuities.

Current wording

•DAC, VOBA and DSI are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. Depreciation and amortization increased for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, primarily reflecting increased DAC and DSI associated with the growth of the business. In addition, as a result of our annual actuarial assumption update process, amortization rates on some DAC and DSI balances increased primarily for indexed annuities. Amortization of VOBA also increased approximately $15 million for the nine months ended September 30, 2024 reflecting other actuarial model updates and refinements.

Previous wording

•Personnel costs and other operating expenses were higher for the three months ended June 30, 2025 and lower for the six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, primarily reflecting costs in line with sales volumes and growth in assets, disciplined expense management, including one-time management actions taken in the second quarter, along with continued investments in our operating platform.

Current wording

•Personnel costs and other operating expenses were lower for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, respectively, primarily reflecting costs in line with sales volumes and growth in assets, disciplined expense management, including one-time management actions taken in the second quarter and one-time transaction costs in the third quarter, along with continued investments in our operating platform.

Previous wording

•Interest expense increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, primarily reflecting interest on the debt issuances in 2024 and January 2025, partially offset by the payoff of the 5.50% Senior Notes due May 1, 2025 (the “5.50% F&G Senior Notes”) in February 2025, and the payoff of the revolving credit facility in 2024.

Current wording

•Interest expense increased for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, primarily reflecting interest on the debt issuances in 2024 and January 2025, partially offset by the payoffs of the 5.50% Senior Notes in February 2025 and the revolving credit facility in 2024.

Previous wording

•Income tax expense for the three months ended June 30, 2025 was $15 million, compared to income tax expense of $50 million for the three months ended June 30, 2024. The effective tax rate was 26% and 20% for the three months ended June 30, 2025 and June 30, 2024, respectively. The decrease in income tax expense period over period is primarily related to the decrease in pre-tax income.

Current wording

•Income tax expense for the three months ended September 30, 2025 was $11 million, compared to income tax benefit of $25 million for the three months ended September 30, 2024. The effective tax rate was 8% and 83% for the three months ended September 30, 2025 and September 30, 2024, respectively. The increase in income tax expense period over period is primarily related to the increase in pre-tax income.

Previous wording

•Income tax expense for the six months ended June 30, 2025 was $10 million, compared to income tax expense of $76 million for the six months ended June 30, 2024. The effective tax rate was 32% and 19% for the six months ended June 30, 2025 and June 30, 2024, respectively. The decrease in income tax expense period over period is primarily related to the decrease in pre-tax income.

Current wording

•Income tax expense for the nine months ended September 30, 2025 was $21 million, compared to income tax expense of $51 million for the nine months ended September 30, 2024. The effective tax rate was 13% and 14% for the nine months ended September 30, 2025 and September 30, 2024, respectively. The decrease in income tax expense period over period is primarily related to the decrease in pre-tax income.

Previous wording

•Adjusted net earnings of $194 million for the six months ended June 30, 2025 included income from a $16 million reinsurance true-up adjustment. Investment income from alternative investments was $146 million below management’s long-term expected return of approximately 10%.

Current wording

•Adjusted net earnings of $359 million for the nine months ended September 30, 2025 included income from $16 million reinsurance true-up adjustment, $10 million tax valuation allowance benefit, and $4 million of actuarial reserve release. Investment income from alternative investments was $213 million below management’s long-term expected return of approximately 10%.

Previous wording

•Adjusted net earnings of $247 million for the six months ended June 30, 2024 included expense from $16 million of actuarial model updates and refinements; partially offset by $2 million of other income items. Investment income from alternative investments was $72 million below management’s long-term expected return of approximately 10%.

Current wording

•Adjusted net earnings of $403 million for the nine months ended September 30, 2024 included expense from $33 million of actuarial model updates and refinements; partially offset by income from a $14 million tax valuation allowance benefit and $2 million of other income items. Investment income from alternative investments was $113 million below management’s long-term expected return of approximately 10%.

Previous wording

As of June 30, 2025 and December 31, 2024, the fair value of our investment portfolio was approximately $64 billion and $60 billion, respectively, and was divided among the following asset classes and sectors (dollars in millions):

Current wording

As of September 30, 2025 and December 31, 2024, the fair value of our investment portfolio was approximately $67 billion and $60 billion, respectively, and was divided among the following asset classes and sectors (dollars in millions):

Previous wording

(b)Includes investment grade non-redeemable preferred stocks ($202 million and $222 million at June 30, 2025 and December 31, 2024, respectively).

Current wording

(b)Includes investment grade non-redeemable preferred stocks ($204 million and $222 million at September 30, 2025 and December 31, 2024, respectively).

Previous wording

The amortized cost and fair value of fixed maturity available-for-sale (“AFS”) securities by contractual maturities as of June 30, 2025 (dollars in millions), are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

Current wording

The amortized cost and fair value of fixed maturity available-for-sale (“AFS”) securities by contractual maturities as of September 30, 2025, (in millions) are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

Previous wording

The fair value of our investments in subprime securities and Alt-A RMBS securities were $5 million and $43 million as of June 30, 2025, respectively, and $29 million and $44 million as of December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, approximately 94% and 93%, respectively, of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher.

Current wording

The fair value of our investments in subprime securities and Alternative-A (“Alt-A") RMBS securities were $3 million and $42 million as of September 30, 2025, respectively, and $29 million and $44 million as of December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, approximately 96% and 93%, respectively, of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher.

Previous wording

As of June 30, 2025, the CLO and ABS positions were trading at a net unrealized gain of $91 million and a net unrealized loss of $193 million, respectively. As of December 31, 2024, the CLO and ABS positions were trading at a net unrealized gain of $92 million and a net unrealized loss of $207 million, respectively.

Current wording

As of September 30, 2025, the CLO and ABS positions were trading at a net unrealized gain of $69 million and a net unrealized loss of $130 million, respectively. As of December 31, 2024, the CLO and ABS positions were trading at a net unrealized gain of $92 million and a net unrealized loss of $207 million, respectively.

Previous wording

The following table summarizes our municipal bond exposure as of June 30, 2025 and December 31, 2024 (dollars in millions).

Current wording

The following table summarizes our municipal bond exposure as of September 30, 2025 and December 31, 2024 (in millions).

Previous wording

Across all municipal bonds, the largest issuer represented 5% of the category and less than 1% of the total portfolio for both June 30, 2025 and December 31, 2024, and is rated NAIC 1 as of June 30, 2025. Our focus within municipal bonds is on NAIC 1 rated instruments, with 97% of our municipal bond exposure rated NAIC 1 as of June 30, 2025 and December 31, 2024.

Current wording

Across all municipal bonds, the largest issuer represented 4% and 5% respectively, of the category and less than 1% of the total portfolio for both September 30, 2025 and December 31, 2024, and is rated NAIC 1 as of September 30, 2025. Our focus within municipal bonds is on NAIC 1 rated instruments, with 98% and 97% respectively, of our municipal bond exposure rated NAIC 1 as of September 30, 2025 and December 31, 2024.

Previous wording

We diversify our commercial mortgage loans (“CMLs”) portfolio by geographic region and property type to attempt to reduce concentration risk. We continuously evaluate CMLs based on relevant current information to ensure properties are performing at a level to secure the related debt. Loan-to-value (“LTV”) and debt-service coverage (“DSC”) ratios are utilized to assess the risk and quality of CMLs. As of June 30, 2025 and December 31, 2024, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.2 times and 2.3 times, respectively, and a weighted average LTV ratio of 56% and 57%, respectively.

Current wording

We diversify our commercial mortgage loans (“CMLs”) portfolio by geographic region and property type to attempt to reduce concentration risk. We continuously evaluate CMLs based on relevant current information to ensure properties are performing at a level to secure the related debt. Loan-to-value (“LTV”) and debt-service coverage (“DSC”) ratios are utilized to assess the risk and quality of CMLs. As of September 30, 2025 and December 31, 2024, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.2 times and 2.3 times, respectively, and a weighted average LTV ratio of 57% for both periods.

Previous wording

The gross unrealized loss position on the fixed maturity available-for-sale fixed and equity portfolio was $3,465 million and $3,837 million as of June 30, 2025 and December 31, 2024, respectively. Most components of the portfolio exhibited price appreciation caused primarily by lower treasury rates. The total amortized cost of all securities in an unrealized loss position was $26,479 million and $29,405 million as of June 30, 2025 and December 31, 2024, respectively. The average market value/book value of the investment category with the largest unrealized loss position was 80% and 81% for services, media and other as of June 30, 2025 and December 31, 2024, respectively. In the aggregate, services, media and other represented 24% and 23% of the total unrealized loss position for June 30, 2025 and December 31, 2024, respectively.

Current wording

The gross unrealized loss position on the fixed maturity available-for-sale fixed and equity portfolio was $3,063 million and $3,837 million as of September 30, 2025 and December 31, 2024, respectively. Most components of the portfolio exhibited price appreciation caused primarily by lower treasury rates. The total amortized cost of all securities in an unrealized loss position was $23,390 million and $29,405 million as of September 30, 2025 and December 31, 2024, respectively. The average market value/book value of the investment category with the largest unrealized loss position was 80% and 81% for services, media and other as of September 30, 2025 and December 31, 2024, respectively. In the aggregate, services, media and other represented 24% and 23% of the total unrealized loss position for September 30, 2025 and December 31, 2024, respectively.