FUTURE POLICY BENEFITS

6 Months Ended

Jun. 30, 2026

The reconciliation of the balances described in the table below to the “Future policy benefits” in the statements of financial position is as follows.


AS OF US$ MILLIONS	June 30, 2026		December 31, 2025
Future policy benefits:
Annuities	$	48,519	$	12,277
Life Insurance	1,934		1,917
Deferred profit liability:
Annuities	585		226
Life Insurance	101		99
Other contracts and VOBA liability(1)	1,881		1,730
Total future policy benefits	$	53,020	$	16,249

__________________________

(1)Balance as of June 30, 2026 includes VOBA liability of $139 million from our acquisition of Just.

The balances and changes in the liability for future policy benefits are as follows:


AS OF AND FOR THE SIX MONTHS ENDED JUN. 30, 2026 US$ MILLIONS	Annuities		Life Insurance		Total
Present value of expected net premiums:
Balance, beginning of period	$	—	$	2,183	$	2,183
Beginning balance at original discount rate	—		2,302		2,302
Effect of changes in cash flow assumptions	—		(17)		(17)
Effect of actual variances from expected experience	2		(7)		(5)
Adjusted beginning of period balance	2		2,278		2,280

Issuances	1,179		12		1,191
Interest accrual	4		46		50
Net premiums collected	(1,188)		(158)		(1,346)
Derecognitions (lapses and withdrawals)	3		—		3

Ending balance at original discount rate	—		2,178		2,178
Effect of changes in discount rate assumptions	—		(107)		(107)
Balance, end of period	$	—	$	2,071	$	2,071

Present value of expected future policy benefits
Balance, beginning of period	$	12,277	$	4,100	$	16,377
Beginning balance at original discount rate	12,425		4,459		16,884
Effect of changes in cash flow assumptions(1)	(143)		(53)		(196)
Effect of actual variances from expected experience	(120)		11		(109)
Adjusted beginning of period balance	12,162		4,417		16,579
Acquisition from business combination, net(2)	35,374		—		35,374
Issuances	1,226		12		1,238
Interest accrual	793		90		883
Benefit payments	(1,332)		(177)		(1,509)
Derecognitions (lapses and withdrawals)	9		—		9
Foreign currency translation	(118)		—		(118)
Ending balance at original discount rate	48,114		4,342		52,456
Effect of changes in discount rate assumptions	381		(337)		44
Effect of foreign currency translation on the effect of changes in discount rate assumptions	24		—		24
Balance, end of period	$	48,519	$	4,005	$	52,524

Net liability for future policy benefits	48,519		1,934		50,453
Less: Reinsurance recoverables	82		(1,266)		(1,184)
Net liability for future policy benefits, after reinsurance recoverables	$	48,601	$	668	$	49,269


Weighted average liability duration of future policy benefits (years)	9		13
Weighted average interest accretion rate	6	%	5	%
Weighted average current discount rate	6	%	6	%

__________________________

(1)For the three and six months ended June 30, 2026, the Company recognized liability remeasurement losses of $35 million and $60 million, respectively, from the net effect of the changes in cash flow assumptions, which were included in “Policyholder benefits and claims incurred” in the statements of operations.

(2)Net of $1.2 billion derecognition as a result of the effective settlement of a reinsurance arrangement in relation to our acquisition of Just. See Note 16 for further details.


AS OF AND FOR THE SIX MONTHS ENDED JUN. 30, 2025 US$ MILLIONS	Annuities		Life Insurance		Total
Present value of expected net premiums
Balance, beginning of period	$	—	$	2,353	$	2,353
Beginning balance at original discount rate	—		2,507		2,507
Effect of changes in cash flow assumptions	—		65		65
Effect of actual variances from expected experience	(1)		(55)		(56)
Adjusted beginning of period balance	(1)		2,517		2,516

Issuances	742		5		747
Interest accrual	5		48		53
Net premiums collected	(749)		(148)		(897)
Derecognitions (lapses and withdrawals)	3		—		3

Ending balance at original discount rate	—		2,422		2,422
Effect of changes in discount rate assumptions	—		(114)		(114)
Balance, end of period	$	—	$	2,308	$	2,308

Present value of expected future policy benefits
Balance, beginning of period	$	10,287	$	4,169	$	14,456
Beginning balance at original discount rate	10,518		4,601		15,119
Effect of changes in cash flow assumptions(1)	15		77		92
Effect of actual variances from expected experience	(43)		(56)		(99)
Adjusted beginning of period balance	10,490		4,622		15,112

Issuances	745		5		750
Interest accrual	238		89		327
Benefit payments	(436)		(153)		(589)
Derecognitions (lapses and withdrawals)	28		—		28
Foreign currency translation	384		—		384
Ending balance at original discount rate	11,449		4,563		16,012
Effect of changes in discount rate assumptions	(162)		(360)		(522)

Balance, end of period	$	11,287	$	4,203	$	15,490

Net liability for future policy benefits	11,287		1,895		13,182
Less: Reinsurance recoverables	(12)		(1,311)		(1,323)
Net liability for future policy benefits, after reinsurance recoverables	$	11,275	$	584	$	11,859


Weighted average liability duration of future policy benefits (years)	7		14
Weighted average interest accretion rate	5	%	5	%
Weighted average current discount rate	5	%	6	%

__________________________

(1)For the three and six months ended June 30, 2025, the Company recognized liability remeasurement losses of $11 million and $31 million, respectively, from the net effect of the changes in cash flow assumptions, which were included in “Policyholder benefits and claims incurred” in the statements of operations.

The amounts of undiscounted and discounted expected gross premiums and future benefit payments follow:


AS OF JUN. 30 US$ MILLIONS	2026				2025
	Undiscounted		Discounted		Undiscounted		Discounted
Annuities:
Expected future benefit payments	$	95,082	$	48,519	$	18,614	$	11,262
Expected future gross premiums	—		—		—		—

Life Insurance:
Expected future benefit payments	$	8,161	$	4,005	$	8,675	$	4,203
Expected future gross premiums	4,978		2,938		5,482		3,259

Total:
Expected future benefit payments	$	103,243	$	52,524	$	27,289	$	15,465
Expected future gross premiums	4,978		2,938		5,482		3,259

The amount of revenue and interest recognized in the statements of operations follows:


FOR THE PERIODS ENDED JUN. 30 US$ MILLIONS	Three Months Ended								Six Months Ended
	Gross Premiums or Assessments				Interest Expense				Gross Premiums or Assessments				Interest Expense
	2026		2025		2026		2025		2026		2025		2026		2025
Annuities	$	1,206	$	338	$	660	$	105	$	1,333	$	761	$	791	$	221
Life Insurance	93		101		23		21		185		206		44		41

LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES

The liability for unpaid claims and claim adjustment expenses (“unpaid claims”) for property and casualty insurance is included in “Policy and contract claims” in the statements of financial position and is the amount estimated for incurred but not reported claims (“IBNR”) and claims that have been reported but not settled (“case reserves”), as well as associated claim adjustment expenses.

Information regarding the liability for unpaid claims is shown below:


AS OF AND FOR THE SIX MONTHS ENDED JUN. 30 US$ MILLIONS	2026		2025
Policy and contract claims, beginning	$	7,277	$	7,659
Less: Unpaid claims balance, beginning – long-duration	300		219
Gross unpaid claims balance, beginning – short-duration	6,977		7,440
Less: Reinsurance recoverables, beginning	2,742		3,083
Less: Foreign currency translation	2		1
Net balance, beginning – short-duration	4,233		4,356

Add: incurred related to
Current accident year	701		896
Prior accident years	3		20
Total incurred claims	704		916
Less: paid claims related to
Current accident year	170		296
Prior accident years	639		655
Total paid claims	809		951

Net unpaid claims balance, ending – short-duration	4,128		4,321
Add: Foreign currency translation	2		1
Add: Reinsurance recoverables, ending	2,557		2,945
Gross unpaid claims balance, ending – short-duration	6,687		7,267
Add: Unpaid claims balance, ending – long-duration	200		253
Policy and contract claims, ending	$	6,887	$	7,520

The estimates for ultimate incurred claims attributable to insured events of prior years increased by $3 million and by $20 million, respectively, for the six months ended June 30, 2026 and 2025. The unfavorable development in 2026 and 2025 was primarily related to higher-than-anticipated losses within certain casualty lines, which were partially offset by favorable development in our specialty lines.

For short-duration health insurance claims, the total of IBNR plus expected development on reported claims as of June 30, 2026 and December 31, 2025 was $5 million and $6 million, respectively.