v3.26.1
Derivative Instruments
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments (5) Derivative Instruments
Our business activities routinely deal with fluctuations in interest rates, equity prices, currency exchange rates and other asset and liability prices. We use derivative instruments to mitigate or reduce some of these risks. We have established policies for managing each of these risks, including prohibitions on derivatives market-making and other speculative derivatives activities. These policies require the use of derivative instruments in concert with other techniques to reduce or mitigate these risks. While we use derivatives to mitigate or reduce risks, certain derivatives do not meet the accounting requirements to be designated as hedging instruments and are denoted as “derivatives not designated as hedges” in the following disclosures. For derivatives that meet the accounting requirements to be designated as hedges, the following disclosures for these derivatives are denoted as “derivatives designated as hedges,” which include cash flow hedges.
The following table sets forth our positions in derivative instruments as of the dates indicated:
Derivative assetsDerivative liabilities
Fair valueFair value
(Amounts in millions)Balance
sheet classification		March 31,
2026		December 31,
2025		Balance
sheet classification		March 31,
2026		December 31,
2025
Derivatives designated as hedges
Cash flow hedges:
Interest rate swapsOther invested assets$8 $11 Other liabilities$797 $849 
Foreign currency swapsOther invested assets8 4 Other liabilities3 4 
Forward bond purchase commitmentsOther invested assets4 6 Other liabilities79 71 
Total cash flow hedges20 21 879 924 
Total derivatives designated as hedges20 21 879 924 
Derivatives not designated as hedges
Equity index optionsOther invested assets12 18 Other liabilities— — 
Financial futures (1)
Other invested assets— — Other liabilities— — 
Forward bond purchase commitmentsOther invested assets— — Other liabilities37 36 
Foreign currency forward contractsOther invested assets— — Other liabilities6 17 
Fixed indexed annuity embedded derivativesOther assets— — 
Policyholder account balances (2)
130 138 
Indexed universal life embedded derivativesReinsurance recoverable— — 
Policyholder account balances (3)
13 14 
Total derivatives not designated as hedges12 18 186 205 
Total derivatives$32 $39 $1,065 $1,129 
______________
(1)The period end valuations of financial futures were zero as a result of settling the margins on these contracts on a daily basis.
(2)Represents the embedded derivatives associated with our fixed indexed annuity liabilities.
(3)Represents the embedded derivatives associated with our indexed universal life liabilities.
The fair value of derivative positions presented above was not offset by the respective collateral amounts received or provided under these agreements.
The activity associated with derivative instruments can generally be measured by the change in notional value over the periods presented. However, for fixed indexed annuity embedded derivatives and indexed universal life embedded derivatives, the change between periods is best illustrated by the number of policies. The following tables represent activity associated with derivative instruments as of and for the periods indicated:
(Notional in millions)MeasurementDecember 31,
2025		AdditionsMaturities/
terminations		March 31,
2026
Derivatives designated as hedges
Cash flow hedges:
Interest rate swapsNotional$8,058 $— $(324)$7,734 
Foreign currency swapsNotional156 — — 156 
Forward bond purchase commitmentsNotional2,964 106 — 3,070 
Total cash flow hedges11,178 106 (324)10,960 
Total derivatives designated as hedges11,178 106 (324)10,960 
Derivatives not designated as hedges
Equity index optionsNotional503 110 (145)468 
Financial futuresNotional989 1,236 (1,339)886 
Forward bond purchase commitmentsNotional500 — — 500 
Foreign currency forward contractsNotional521 519 (521)519 
Total derivatives not designated as hedges2,513 1,865 (2,005)2,373 
Total derivatives$13,691 $1,971 $(2,329)$13,333 
(Number of policies)MeasurementDecember 31,
2025		AdditionsMaturities/
terminations		March 31,
2026
Derivatives not designated as hedges
Fixed indexed annuity embedded derivativesPolicies4,171—(169)4,002
Indexed universal life embedded derivativesPolicies688——688
Cash Flow Hedges
Certain derivative instruments are designated as cash flow hedges. The changes in fair value of these instruments are recorded as a component of other comprehensive income (loss) (“OCI”). We designate and account for the following as cash flow hedges when they have met the effectiveness requirements: (i) various types of interest rate swaps to convert floating rate liabilities into fixed rate liabilities; (ii) receive U.S. dollar fixed on foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments; (iii) forward starting interest rate swaps to hedge against changes in interest rates associated with future fixed rate bond purchases and/or interest income; (iv) forward bond purchase commitments to hedge against the variability in the anticipated cash flows required to purchase future fixed rate bonds; and (v) other instruments to hedge the cash flows of various forecasted transactions.
The following table provides information about the pre-tax income (loss) effects of cash flow hedges for the three months ended March 31, 2026:
(Amounts in millions)Gain (loss)
recognized in OCI		Gain (loss)
reclassified into
net income (loss)
from OCI		Classification of
gain (loss)
reclassified into
net income (loss)		Gain (loss)
recognized in
net income (loss)		Classification of
gain (loss)
recognized in
net income (loss)
Interest rate swaps hedging assets$35 $44 Net investment income$— Net investment gains (losses)
Interest rate swaps hedging assets— 3 Net investment gains (losses)— Net investment gains (losses)
Interest rate swaps hedging liabilities(1)(1)Interest expense— Net investment gains (losses)
Foreign currency swaps5 — Net investment income— Net investment gains (losses)
Forward bond purchase commitments(10)— Net investment gains (losses)— Net investment gains (losses)
Total$29 $46 $— 
The following table provides information about the pre-tax income (loss) effects of cash flow hedges for the three months ended March 31, 2025:
(Amounts in millions)Gain (loss)
recognized in OCI		Gain (loss)
reclassified into
net income (loss)
from OCI		Classification of
gain (loss)
reclassified into
net income (loss)		Gain (loss)
recognized in
net income (loss)		Classification of
gain (loss)
recognized in
net income (loss)
Interest rate swaps hedging assets$62 $48 Net investment income$— Net investment gains (losses)
Interest rate swaps hedging assets— 1 Net investment gains (losses)— Net investment gains (losses)
Interest rate swaps hedging liabilities(2)— Interest expense— Net investment gains (losses)
Foreign currency swaps(1)— Net investment income— Net investment gains (losses)
Forward bond purchase commitments36 — Net investment gains (losses)— Net investment gains (losses)
Total$95 $49 $— 
The change for these designated derivatives reported in accumulated other comprehensive income (loss) was as follows as of and for the periods indicated:
Three months ended
March 31,
(Amounts in millions)20262025
Beginning balance$187 $492 
Current period increases (decreases) in fair value (1)
23 74 
Reclassification to net (income) loss (2)
(30)(31)
Ending balance$180 $535 
______________
(1)Net of deferred taxes of $(6) million and $(21) million for the three months ended March 31, 2026 and 2025, respectively.
(2)Net of deferred taxes of $16 million and $18 million for the three months ended March 31, 2026 and 2025, respectively.
The total balance in accumulated other comprehensive income (loss) from derivatives designated as cash flow hedges of $180 million, net of taxes, recorded in stockholders’ equity as of March 31, 2026 is expected to be reclassified to net income (loss) in the future, concurrently with and primarily offsetting changes in interest expense and interest income on floating rate instruments and interest income on future fixed rate bond purchases. Of this amount, $110 million, net of taxes, is expected to be reclassified to net income (loss) in the next 12 months. Actual amounts may vary from this amount as a result of market conditions. All forecasted transactions associated with qualifying cash flow hedges are expected to occur by 2057. During the three months ended March 31, 2026 and 2025, we reclassified $2 million and $1 million, respectively, to net income (loss) in connection with forecasted transactions that were no longer considered reasonably possible of occurring.
Derivatives Not Designated As Hedges
We enter into certain non-qualifying derivative instruments such as equity index options and financial futures to mitigate the risks associated with liabilities that have guaranteed minimum benefits, fixed indexed annuities and indexed universal life. Our fixed indexed annuity and indexed universal life insurance products with certain features are required to be bifurcated as embedded derivatives. Additionally, we have forward bond purchase commitments to hedge against the variability in the anticipated cash flows required to purchase future fixed rate bonds, as well as foreign currency forward contracts to mitigate currency risk associated with anticipated future foreign currency denominated cash flows.
The following table provides the pre-tax gain (loss) recognized in net income (loss) for the effects of derivatives not designated as hedges for the periods indicated:
Three months ended
March 31,		Classification of gain (loss) recognized in net income (loss)
(Amounts in millions)20262025
Equity index options$(3)$(4)Net investment gains (losses)
Financial futures6 33 Changes in fair value of market risk benefits and associated hedges
Forward bond purchase commitments(1)4 Net investment gains (losses)
Foreign currency forward contracts10 — Net investment gains (losses)
Fixed indexed annuity embedded derivatives2 4 Net investment gains (losses)
Indexed universal life embedded derivatives— 1 Net investment gains (losses)
Total derivatives not designated as hedges$14 $38 
Derivative Counterparty Credit Risk
Most of our derivative arrangements with counterparties require the posting of collateral upon meeting certain net exposure thresholds. The following table presents additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated:
March 31, 2026December 31, 2025
(Amounts in millions)
Derivative
assets (1)
Derivative
liabilities (1)
Net
derivatives
Derivative
assets (1)
Derivative
liabilities (1)
Net
derivatives
Amounts presented in the balance sheet:
Gross amounts recognized$32 $922 $(890)$39 $977 $(938)
Gross amounts offset in the balance sheet— — — — — — 
Net amounts presented in the balance sheet32 922 (890)39 977 (938)
Gross amounts not offset in the balance sheet:
Financial instruments (2)
(23)(23)— (21)(21)— 
Collateral received(3)— (3)(17)— (17)
Collateral pledged— (1,288)1,288 — (1,717)1,717 
Over collateralization— 395 (395)4 778 (774)
Net amount$6 $6 $— $5 $17 $(12)
______________
(1)Does not include amounts related to embedded derivatives as of March 31, 2026 and December 31, 2025.
(2)Amounts represent derivative assets and/or liabilities that are presented gross within the balance sheet but are held with the same counterparty where we have a master netting arrangement. This adjustment results in presenting the net asset and net liability position for each counterparty.