Brighthouse Financial, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk We have exposure to market risk through our insurance operations and general account investment activities. For purposes of this discussion, “market risk” is defined as changes in estimated fair value resulting from changes in interest rates, equity market prices, credit spreads and foreign currency exchange rates. We regularly analyze our market risk exposure. As a result of that analysis, we have determined that the estimated fair values of certain assets and liabilities are significantly exposed to changes in interest rates, and to a lesser extent, to changes in equity market prices and foreign currency exchange rates. We may have additional financial impacts other than changes in estimated fair value, which are beyond the scope of this discussion. A description of our market risk exposures may be found under “Quantitative and Qualitative Disclosures About Market Risk” in our 2024 Annual Report. There have been no material changes to our market risk exposures from the market risk exposures previously disclosed in our 2024 Annual Report, with the exception of sensitivity to changes in interest rates and equity prices. The sensitivity of our financial instruments to a 100 basis point increase in interest rates increased potential losses to $4.8 billion at September 30, 2025 from $4.4 billion at December 31, 2024. The sensitivity of our financial instruments to a 10% decrease in equity prices increased potential losses to $530 million at September 30, 2025 from $322 million at December 31, 2024. The increases in potential losses on our interest rate and equity market sensitivities were driven by higher derivative balances at September 30, 2025 compared to the prior year.