In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance or reinsurance companies under excess coverage and coinsurance contracts. Retrocession reinsurance treaties do not relieve the Company from its obligations to direct writing companies. Failure of retrocessionaires to honor their obligations could result in losses to the Company. Consequently, allowances would be established for amounts deemed uncollectible. The Company regularly evaluates the financial condition of the insurance companies from which it assumes and to which it cedes reinsurance. At June 30, 2026 and December 31, 2025, no allowances were deemed necessary.

Retrocessions are arranged through the Company’s retrocession pools for amounts in excess of the Company’s retention limit. As of June 30, 2026, all rated retrocession pool participants followed by the A.M. Best Company were rated “B++ (Good)” or better. The Company verifies retrocession pool participants’ ratings on a quarterly basis. For a majority of the retrocessionaires that were not rated, security in the form of letters of credit or trust assets have been posted. In addition, the Company performs annual financial reviews of its retrocessionaires to evaluate financial stability and performance.

During the fourth quarter of 2023, Ruby Reinsurance Company (“Ruby Re”), a Missouri-domiciled life reinsurance company to reinsure U.S. asset-intensive business, was launched with the Company as a sponsor. The Company, which is not an investor in Ruby Re, does not consolidate the entity. As of June 30, 2026, the Company has a ceded reinsurance recoverable from Ruby Re of approximately $4.1 billion.

As of June 30, 2026 and December 31, 2025, $5 million and $6 million of claims recoverable were in excess of 90 days past due, respectively. Also included in reinsurance ceded receivables and other is a deposit asset on reinsurance of $2.5 billion and $2.6 billion as of June 30, 2026 and December 31, 2025, respectively.

Certain of the Company’s retrocession agreements, including those with Ruby Re, are on a modified coinsurance or funds withheld basis. While the economic benefits of the funds withheld assets are passed on to the assuming company, the Company retains legal ownership of the assets within the funds withheld account and has established a funds withheld liability. Net investment income related to the funds withheld assets are reported in other insurance expenses, and net realized gains (losses) related to the assets are reported net of the amount that is passed on to the assuming company. The following assets were held in support of the Company’s funds withheld arrangements and are reported in the line items shown in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025 (dollars in millions):


	June 30, 2026		December 31, 2025
Fixed maturity securities available-for-sale	$	3,834	$	4,033
Equity securities	3		2
Mortgage loans	802		821
Funds withheld at interest	1,322		1,360
Limited partnerships and real estate joint ventures	96		88
Short-term investments and cash and cash equivalents	73		60
Accrued investment income	48		50
Net other assets	1		1
Net assets	$	6,179	$	6,415

Certain assets are reported at amortized cost while the fair value of those assets is reflected in the funds withheld payable. The Company had a $6,394 million and $6,805 million funds withheld payable as of June 30, 2026 and December 31, 2025, respectively, net of an embedded derivative asset of $136 million and $58 million as of June 30, 2026 and December 31, 2025, respectively.