v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements
4. Fair Value Measurements
The Company carries certain financial assets and liabilities at estimated fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. Our fair value framework includes a hierarchy that gives the highest priority to the use of quoted prices in active markets, followed by the use of market observable inputs, followed by the use of unobservable inputs.
The fair value hierarchy levels are as follows:
Level 1    Fair values based on unadjusted quoted prices for identical assets or liabilities, in active markets that the Company has the ability to access at the measurement date.
Level 2    Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities.
Level 3    Fair values derived when one or more of the significant inputs are unobservable (including assumptions about risk). With little or no observable market, the determination of fair values uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. Also included are securities that are traded within illiquid markets and/or priced by independent brokers.
The Company will classify the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. In most cases, both observable inputs (e.g., changes in interest rates) and unobservable inputs (e.g., changes in risk assumptions) are used to determine fair values that the Company has classified within Level 3.
Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of June 30, 2026
TotalQuoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
Asset-backed securities ("ABS")
$4,783 $— $4,608 $175 
Collateralized loan obligations ("CLOs")
3,360 — 3,160 200 
Commercial mortgage-backed securities ("CMBS")
1,822 — 1,725 97 
Corporate23,868 — 20,952 2,916 
Foreign government/government agencies454 — 454 — 
Municipal4,105 — 4,105 — 
Residential mortgage-backed securities ("RMBS")
5,787 — 5,772 15 
U.S. Treasuries1,645 489 1,156 — 
Total fixed maturities, AFS45,824 489 41,932 3,403 
FVO securities125 — — 125 
Equity securities, at fair value [1]560 430 6 124 
Derivative assets
Credit derivatives(14)— (14)— 
Foreign exchange derivatives11 — 11 — 
Total derivative assets [2](3)— (3)— 
Short-term investments3,866 245 2,912 709 
Total assets accounted for at fair value on a recurring basis [3]$50,372 $1,164 $44,847 $4,361 
Liabilities accounted for at fair value on a recurring basis
Derivative liabilities
Credit derivatives$14 $— $14 $— 
Foreign exchange derivatives6 — 6 — 
Interest rate derivatives(10)— (10)— 
Total derivative liabilities [4]10 — 10 — 
Total liabilities accounted for at fair value on a recurring basis$10 $— $10 $— 
Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of December 31, 2025
TotalQuoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS$4,663 $— $4,496 $167 
CLOs3,316 — 3,099 217 
CMBS2,328 — 2,213 115 
Corporate23,076 — 20,210 2,866 
Foreign government/government agencies447 — 447 — 
Municipal4,652 — 4,652 — 
RMBS6,178 — 6,171 7 
U.S. Treasuries1,381 164 1,217 — 
Total fixed maturities, AFS46,041 164 42,505 3,372 
FVO securities168 — — 168 
Equity securities, at fair value [1]422 311 5 106 
Derivative assets
Foreign exchange derivatives20 — 20 — 
Total derivative assets [2]20 — 20 — 
Short-term investments4,004 491 3,131 382 
Total assets accounted for at fair value on a recurring basis [3]$50,655 $966 $45,661 $4,028 
Liabilities accounted for at fair value on a recurring basis
Derivative liabilities
Foreign exchange derivatives$(17)$— $(17)$— 
Interest rate derivatives(3)— (3)— 
Total derivative liabilities [4](20)— (20)— 
Total liabilities accounted for at fair value on a recurring basis$(20)$— $(20)$— 
[1]Level 3 includes investments that have contractual sales restrictions that require consent to sell and are in place for the duration that the securities are held by the Company.
[2]Includes derivative instruments in a net positive fair value position after consideration of the accrued interest and impact of collateral posting requirements which may be imposed by agreements and applicable law. See footnote [3] to this table for derivative liabilities.
[3]Excludes Level 1 assets of $168 and $179 and Level 2 assets of $256 and $240, respectively, that were reclassified to assets held-for-sale as of June 30, 2026 and December 31, 2025.
[4]Includes derivative instruments in a net negative fair value position (derivative liability) after consideration of the accrued interest and impact of collateral posting requirements which may be imposed by agreements and applicable law.
The Company has overseas deposits included in other investments of $84 and $87 as of June 30, 2026 and December 31, 2025, respectively, which are measured at fair value using the net asset value as a practical expedient.
Fixed Maturities, Equity Securities, Short-term Investments, and Derivatives
Valuation Techniques
The Company generally determines fair values using valuation techniques that use prices, rates, and other relevant information evident from market transactions involving identical or similar
instruments. Valuation techniques also include, where appropriate, estimates of future cash flows that are converted into a single discounted amount using current market expectations. The Company uses a "waterfall" approach comprised of the following pricing sources and techniques, which are listed in priority order:
•Quoted prices, unadjusted, for identical assets or liabilities in active markets, which are classified as Level 1.
•Prices from third-party pricing services, which primarily utilize a combination of techniques. These services utilize recently reported trades of identical, similar, or benchmark securities making adjustments for market observable inputs available through the reporting date. If there are no recently reported trades, they may use a discounted cash flow technique to develop a price using expected cash flows
based upon the anticipated future performance of the underlying collateral discounted at an estimated market rate. Both techniques develop prices that consider the time value of future cash flows and provide a margin for risk, including liquidity and credit risk. Most prices provided by third-party pricing services are classified as Level 2 because the inputs used in pricing the securities are observable. However, some securities that are less liquid or trade less actively are classified as Level 3. Additionally, certain long-dated securities include benchmark interest rate or credit spread assumptions that are not observable in the marketplace and are thus classified as Level 3.
•Internal matrix pricing is a valuation process internally developed for private placement securities for which the Company is unable to obtain a price from a third-party pricing service. Internal pricing matrices determine credit spreads that, when combined with risk-free rates, are applied to contractual cash flows to develop a price. The Company develops credit spreads using market based data for public securities adjusted for credit spread differentials between public and private securities, which are obtained from a survey of multiple private placement brokers. The market-based reference credit spread considers the issuer’s sector, financial strength, and term to maturity, using an independent public security index, while the credit spread differential considers the non-public nature of the security. Securities priced using internal matrix pricing are classified as Level 2 because the significant inputs are observable or can be corroborated with observable data.
•Independent broker quotes, which are typically non-binding, use inputs that can be difficult to corroborate with observable market-based data. Brokers may use present value techniques using assumptions specific to the security types, or they may use recent transactions of similar securities. Due to the lack of transparency in the process that brokers use to develop prices, valuations that are based on independent broker quotes are classified as Level 3. As of June 30, 2026 and December 31, 2025, no significant adjustments were made by the Company to broker prices received.
•Internal valuation models are used when third-party pricing or independent broker quotes are not available. These internally developed models incorporate market-based credit spreads from independent public security indexes reflective of comparable quality, maturity, and sector, adjusted for the non-public nature of the security. These securities are classified as Level 3 since they are not observable in the marketplace.
The fair value of derivative instruments is determined primarily using a discounted cash flow model or option model technique and incorporates counterparty credit risk. In some cases, quoted market prices for exchange-traded and over-the-counter ("OTC") cleared derivatives may be used and in other cases independent broker quotes may be used. The pricing valuation models primarily use inputs that are observable in the market or can be corroborated by observable market data. The valuation of certain derivatives may include significant inputs that are unobservable, such as volatility levels, and reflect the Company’s view of what other market participants would use when pricing such instruments.
Valuation Controls
The process for determining the fair value of investments is monitored by the Valuation Committee, which is a cross-functional group of senior management within the Company. The purpose of the Valuation Committee is to provide oversight of the pricing policy, procedures, and controls, including approval of valuation methodologies and pricing sources. The Valuation Committee reviews market data trends, pricing statistics and trading statistics to ensure that prices are reasonable and consistent with our fair value framework. Controls and procedures used to assess third-party pricing services are reviewed by the Valuation Committee, including the results of annual due-diligence reviews. Controls include, but are not limited to, reviewing daily and monthly price changes, stale prices, and missing prices and comparing new trade prices to third-party pricing services, weekly price changes to published bond index prices, and daily OTC derivative market valuations to counterparty valuations. The Company has a dedicated pricing group that works with trading and investment professionals to challenge prices received by a third-party pricing source if the Company believes that the valuation received does not accurately reflect the fair value. New valuation models and changes to current models require approval by the Valuation Committee. In addition, the Company’s enterprise-wide Operational Risk Management function provides an independent review of the suitability and reliability of model inputs, as well as an analysis of significant changes to current models.
Valuation Inputs
Quoted prices for identical assets in active markets are considered Level 1 and consist of on-the-run U.S. Treasuries, money market funds, exchange-traded equity securities, open-ended mutual funds, certain short-term investments, and exchange traded derivative instruments.
Valuation Inputs Used in Levels 2 and 3 Measurements for Securities and Derivatives
Level 2
Primary Observable Inputs		Level 3
Primary Unobservable Inputs
Fixed Maturity Investments
Structured securities (includes ABS, CLOs, CMBS and RMBS)
• Benchmark yields and spreads
• Monthly payment information
• Collateral performance, which varies by vintage year and includes delinquency rates, loss severity rates and refinancing assumptions
• Credit default swap indices

Other inputs for ABS, CLOs, and RMBS:
• Estimate of future principal prepayments, derived from the characteristics of the underlying structure
• Prepayment speeds previously experienced at the interest rate levels projected for the collateral		• Independent broker quotes
• Credit spreads beyond observable curve
• Interest rates beyond observable curve
• For privately traded investments, credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature

Other inputs for less liquid securities or those that trade less actively:
• Estimated cash flows
• Credit spreads, which include illiquidity premium
• Constant prepayment and default rates, and loss severity
Corporates
• Benchmark yields and spreads
• Reported trades, bids, offers of the same or similar securities
• Issuer spreads and credit default swap curves

Other inputs for investment grade privately placed securities that utilize internal matrix pricing:
• Credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature		• Independent broker quotes
• Credit spreads beyond observable curve
• Interest rates beyond observable curve

Other inputs for privately traded investments and below investment grade privately placed securities:
• Credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature
U.S. Treasuries, Municipals, and Foreign government/government agencies
• Benchmark yields and spreads
• Issuer credit default swap curves
• Political events in emerging market economies
• Municipal Securities Rulemaking Board reported trades and material event notices
• Issuer financial statements 		• Credit spreads beyond observable curve
• Interest rates beyond observable curve
Equity Securities
• Quoted prices in markets that are not active• For privately traded equity securities, internal discounted cash flow models utilizing earnings multiples or other cash flow assumptions that are not observable
• Private company financials
Short-term Investments
• Benchmark yields and spreads
• Reported trades, bids, offers
• Issuer spreads and credit default swap curves
• Material event notices and new issue money market rates 		• Independent broker quotes
• For privately traded investments, credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature
Derivatives
Credit derivatives
• Swap yield curve
• Credit default swap curves 		• Not applicable
Foreign exchange derivatives
• Swap yield curve
• Currency spot and forward rates
• Cross currency basis curves		• Not applicable
Interest rate derivatives
• Swap yield curve• Not applicable
Equity derivatives
• Equity index levels• Not applicable
Significant Unobservable Inputs for Level 3 - Securities
Assets accounted for at fair value on a recurring basisFair
Value		Predominant
Valuation
Technique		Significant Unobservable InputMinimumMaximumWeighted Average [1]Impact of
Increase in
Input on Fair Value [2]
As of June 30, 2026
ABS$175 Discounted cash flowsSpread488 bps902 bps590 bpsDecrease
CLOs$200 Discounted cash flowsSpread279 bps1,007 bps551 bpsDecrease
CMBS [3]$96 Discounted cash flowsSpread (encompasses prepayment, default risk and loss severity)270 bps1,270 bps435 bpsDecrease
Corporate [4]$2,796 Discounted cash flowsSpread97 bps1,041 bps283 bpsDecrease
RMBS$15 Discounted cash flowsSpread [6]88 bps184 bps101 bpsDecrease
Constant prepayment rate [6]2%5%4%Decrease [5]
Constant default rate [6]1%5%2%Decrease
Loss severity [6]35%55%48%Decrease
Equity Securities$82 Adjusted CostPrivate company financialsN/AN/AN/AIncrease
16 Discounted cash flowsSpread1,381 bps1,381 bps1,381 bpsDecrease
Short-term investments$709 Discounted cash flowsSpread164 bps238 bps174 bpsDecrease
As of December 31, 2025
ABS$167 Discounted cash flowsSpread434 bps843 bps530 bpsDecrease
CLOs$217 Discounted cash flowsSpread270 bps1,021 bps544 bpsDecrease
CMBS [3]$115 Discounted cash flowsSpread (encompasses prepayment, default risk and loss severity)245 bps1,000 bps397 bpsDecrease
Corporate [4]$2,765 Discounted cash flowsSpread88 bps811 bps289 bpsDecrease
RMBS$7 Discounted cash flowsSpread [6]88 bps551 bps172 bpsDecrease
Constant prepayment rate [6]2%5%4%Decrease [5]
Constant default rate [6]1%5%2%Decrease
Loss severity [6]37%80%50%Decrease
Equity Securities$56 Adjusted CostPrivate company financialsN/AN/AN/AIncrease
$14 Discounted cash flowsSpread1,370  bps1,370  bps1,370  bpsDecrease
Short-term investments$382 Discounted cash flowsSpread164 bps186 bps177 bpsDecrease
[1]The weighted average is determined based on the fair value of the securities.
[2]Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table.
[3]Excludes securities for which the Company bases fair value on broker quotations.
[4]Excludes securities for which the Company bases fair value on broker quotations; however, included are broker priced lower-rated private placement securities for which the Company receives spread and yield information to corroborate the fair value.
[5]Decrease for above market rate coupons and increase for below market rate coupons.
[6]Generally, a change in the assumption used for the constant default rate would have been accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for constant prepayment rate and would have resulted in wider spreads.
The table above excludes certain securities for which fair values are predominately based on independent broker quotes. As of June 30, 2026 and December 31, 2025, the fair values of the Company's level 3 derivatives were less than $1 for both periods.
Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs
The Company uses derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instrument may not be classified within the same fair value hierarchy level as the associated asset or liability.
Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the
Three Months Ended June 30, 2026
Total realized/unrealized gains (losses)
Fair value as of March 31, 2026Included in net income [1]Included in OCI [2]Purchases SettlementsSalesTransfers into Level 3 [3]Transfers out of Level 3 [3]Fair value as of June 30, 2026
Assets
Fixed maturities, AFS
ABS$163 $— $(1)$18 $(5)$— $— $— $175 
CLOs233 — — 75 — — — (108)200 
CMBS116 (7)5 — (12)(7)2 — 97 
Corporate2,694 — 2 372 (124)(5)— (23)2,916 
RMBS5 — — 11 (1)— — — 15 
Total fixed maturities, AFS3,211 (7)6 476 (142)(12)2 (131)3,403 
FVO securities130 (3)— — (2)— — — 125 
Equity securities, at fair value123 (1)— 12 — — — (10)124 
Short-term investments688 — — 626 (518)(87)— — 709 
Total Assets$4,152 $(11)$6 $1,114 $(662)$(99)$2 $(141)$4,361 
Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the
 Six Months Ended June 30, 2026
Total realized/unrealized gains (losses)
Fair value as of January 1, 2026Included in net income [1]Included in OCI [2]Purchases SettlementsSalesTransfers into Level 3 [3]Transfers out of Level 3 [3]Fair value as of June 30, 2026
Assets
Fixed maturities, AFS
ABS$167 $— $(3)$30 $(8)$— $— $(11)$175 
CLOs217 — (1)182 — — — (198)200 
CMBS115 (7)4 — (12)(7)4 — 97 
Corporate2,866 — (33)469 (355)(8)— (23)2,916 
RMBS7 — — 11 (3)— — — 15 
Total fixed maturities, AFS3,372 (7)(33)692 (378)(15)4 (232)3,403 
FVO securities168 (37)— 1 (7)— — — 125 
Equity securities, at fair value106 (2)— 30 — — — (10)124 
Short-term investments382 — (1)1,061 (559)(174)— — 709 
Total Assets$4,028 $(46)$(34)$1,784 $(944)$(189)$4 $(242)$4,361 
Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the
 Three Months Ended June 30, 2025
Total realized/unrealized gains (losses)
Fair value as of March 31, 2025Included in net income [1]Included in OCI [2]Purchases SettlementsSalesTransfers into Level 3 [3]Transfers out of Level 3 [3]Fair value as of June 30, 2025
Assets
Fixed maturities, AFS
ABS$56 $— $— $39 $(3)$— $— $— $92 
CLOs233 — — 20 (18)— — (165)70 
CMBS150 (1)1 — (13)(8)8 — 137 
Corporate2,401 2 47 460 (109)(67)— — 2,734 
RMBS39 — — — (3)— — (24)12 
Total fixed maturities, AFS2,879 1 48 519 (146)(75)8 (189)3,045 
FVO securities195 (13)— 2 (3)— — — 181 
Equity securities, at fair value91 — — 2 — — — — 93 
Short-term investments59 — — 57 — — — — 116 
Total Assets$3,224 $(12)$48 $580 $(149)$(75)$8 $(189)$3,435 
Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the
 Six Months Ended June 30, 2025
Total realized/unrealized gains (losses)
Fair value as of January 1, 2025Included in net income [1]Included in OCI [2]PurchasesSettlementsSalesTransfers into Level 3 [3]Transfers out of Level 3 [3]Fair value as of June 30, 2025
Assets
Fixed maturities, AFS
ABS$22 $— $1 $73 $(4)$— $— $— $92 
CLOs116 — — 228 (19)— — (255)70 
CMBS167 (1)4 — (13)(10)43 (53)137 
Corporate2,281 3 62 624 (198)(76)38 — 2,734 
RMBS24 — — 24 (7)— — (29)12 
Total fixed maturities, AFS2,610 2 67 949 (241)(86)81 (337)3,045 
FVO securities197 (17)— 8 (7)— — — 181 
Equity securities, at fair value87 (1)— 10 (3)— — — 93 
Short-term investments98 — — 67 (49)— — — 116 
Total Assets$2,992 $(16)$67 $1,034 $(300)$(86)$81 $(337)$3,435 
[1]Amounts in these columns are generally reported in net realized gains (losses). All amounts are before income taxes.
[2]All amounts are before income taxes.
[3]Transfers into and/or (out of) Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.
Changes in Unrealized Gains (Losses) for Financial Instruments Classified as
Level 3 Still Held at End of Period
Three Months Ended June 30,Six Months Ended June 30,
20262025202620252026202520262025
Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]Changes in Unrealized Gain/(Loss) included in OCI [3]                Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]Changes in Unrealized Gain/(Loss) included in OCI [3]
Assets
Fixed maturities, AFS
ABS$— $— $(1)$— $— $— $(3)$1 
CLOs— — — — $— $— $(1)$— 
CMBS— — 1 1 — — — 3 
Corporate— — 2 45 — 3 (33)58 
Total fixed maturities, AFS— — 2 46 — 3 (37)62 
FVO securities(3)(13)— — (37)(17)— — 
Equity securities, at fair value(1)— — — (2)— — — 
Total Assets$(4)$(13)$2 $46 $(39)$(14)$(37)$62 
[1]All amounts in these rows are reported in net realized gains (losses). All amounts are before income taxes.
[2]Amounts presented are for Level 3 only and therefore may not agree to other disclosures included herein.
[3]Changes in unrealized gains (losses) on fixed maturities, AFS are reported in changes in net unrealized gain (loss) on fixed maturities in the Condensed Consolidated Statements of Comprehensive Income (Loss).
Fair Value Option
The Company has elected the fair value option for certain investments in residual interests of securitizations in order to reflect changes in fair value in earnings. These instruments are included within FVO securities on the Condensed Consolidated Balance Sheets and changes in the fair value of these investments are reported in net realized gains and losses.
As of June 30, 2026 and December 31, 2025, the fair value of assets using the fair value option was $125 and $168, respectively. For the three and six months ended June 30, 2026, net realized losses related to the change in fair value of assets using the fair value option were $3 and $37, respectively. For the three and six months ended June 30, 2025, net realized losses related to the change in fair value of assets using the fair value option were $13 and $17, respectively.
Financial Instruments Not Carried at Fair Value
Financial Assets and Liabilities Not Carried at Fair Value
June 30, 2026December 31, 2025
Fair Value Hierarchy LevelCarrying Amount [1]Fair ValueFair Value Hierarchy LevelCarrying Amount [1]Fair Value
Assets
Mortgage loansLevel 3$7,262 $6,993 Level 3$6,837 $6,607 
Liabilities
Other policyholder funds and benefits payableLevel 3$606 $606 Level 3$612 $613 
Senior notes [2]Level 2$3,875 $3,468 Level 2$3,872 $3,528 
Junior subordinated debentures [2]Level 2$499 $491 Level 2$499 $473 
[1]As of both June 30, 2026 and December 31, 2025, the carrying amount of mortgage loans is net of ACL of $49.
[2]Included in long-term debt in the Condensed Consolidated Balance Sheets, except for any current maturities, which are included in short-term debt when applicable.