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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-02-29 · 275 added, 275 removed, 866 unchanged (39% of the section changed)

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• the strength of the United States economy, including employment levels.

The most recent forecast of the MBA, as of February 20, 2024, estimated (actual for fiscal year 2022) the size of the U.S.

The most recent forecast of the MBA, as of February 19, 2025, estimated (actual for fiscal years 2023 and 2024) the size of the U.S.

residential mortgage originations market as shown in the following table for 2023 - 2027 in its "Mortgage Finance Forecast" (in trillions):

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mortgage originations forecast $ 2.5 $ 2.4 $ 2.1 $ 1.8 $ 1.5

As of February 20, 2024, the MBA expected residential purchase transactions and residential refinance transactions to decrease in 2023 followed by increases in 2024 through 2026.

As of February 19, 2025, the MBA expected residential purchase transactions and residential refinance transactions to increase in 2025 through 2027.

Following the Federal Reserve's reduction of its benchmark rate to nearly zero in response to COVID-19, residential purchase and refinance activity were on strong footing resulting in record revenues in 2021.

However, residential refinance transactions began to slow in 2021 as the population of eligible refinance candidates declined.

The Federal Reserve raised the benchmark interest rate from near zero as of March 2022 to a range between 5.25% and 5.50% as of December 2023 in an effort to combat inflation.

Interest rates on a 30-year, fixed rate mortgage averaged 6.8%, up from 5.2% and 3.2% in 2022 and 2021, respectively.

A shortage in the supply of homes for sale, increasing home prices, rising mortgage interest rates, inflation and disrupted labor markets created some volatility in the residential real estate market in 2021 and 2022.

Additionally, geopolitical uncertainties associated with the wars in Ukraine and Gaza have created additional volatility in the global economy in 2022 and 2023.

The Federal Reserve raised the benchmark interest rate from near zero as of March 2022 to a range between 5.25% and 5.50% in July 2023 in an effort to combat inflation.

Following a decline in inflation in 2024, the Federal Reserve reduced the benchmark rate to a range of 4.25% and 4.50% as of December 31, 2024.

Interest rates on a 30-year, fixed rate mortgage averaged 6.7% in 2024, 6.8% and 5.2% in 2023 and 2022, respectively.

A shortage in the supply of homes for sale, increasing home prices, varying mortgage interest rates, inflation, disrupted labor markets and geopolitical uncertainties created some volatility in the residential real estate market in 2022, 2023 and 2024.

Existing-home sales decreased 9% in December 2024 as compared to the corresponding month in 2023 while median existing-home sales prices rose to $404,400 in December 2024, a 6% increase over the corresponding month in 2023.

According to the U.S.

Department of Labor's Bureau of Labor, the unemployment rate was 6.7% in December 2020.

In 2021, the unemployment rate fell dramatically and remained near record lows throughout 2022 and 2023.

Department of Labor's Bureau of Labor, the unemployment rate was near record lows throughout 2022 and 2023.

The unemployment rate was 4.1% and 3.7% in December of 2024 and 2023, respectively.

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Commercial volumes and

commercial fee-per-file recovered in the second half of 2020 and remained stable throughout 2021 and the first three quarters of 2022.

Commercial volumes and commercial fee-per-file declined in the fourth quarter of 2022 and remained depressed throughout 2023 when compared to recent years.

commercial fee-per-file were stable in the first three quarters of 2022.

Commercial volumes and commercial fee-per-file declined in the fourth quarter of 2022 and remained depressed throughout 2023 and 2024 when compared to recent years.

We continually monitor mortgage origination trends and believe that, based on our ability to produce industry leading operating margins through all economic cycles, we are well positioned to adjust our operations for adverse changes in real estate activity and to take advantage of increased volume when demand increases.

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The fourth quarter is typically strong due to the desire of commercial entities to complete transactions by year-end.

Seasonality in 2021, 2022 and 2023 deviated from historical patterns due to COVID-19 and the subsequent rapid increase in interest rates.

We have noted short-term fluctuations through recent years in resale and refinance transactions as a result of changes in interest rates.

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Some of our F&G products include guaranteed minimum crediting rates, most notably our fixed rate annuities.

As of December 31, 2023, our reserves, net of reinsurance, and average crediting rate on our fixed rate annuities were $6.0 billion and 4%, respectively.

As of December 31, 2024 and December 31, 2023, our reserves, net of reinsurance, and average crediting rate on our fixed rate annuities were $6 billion and 5%, respectively, and $6 billion and 4%, respectively.

We are required to pay the guaranteed minimum crediting rates even if earnings on our investment portfolio decline, which would negatively impact earnings.

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Conversely, a rise in average yield on our investment portfolio would increase earnings if the average interest rate we pay on our products does not rise correspondingly.

Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as

interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows.

Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows.

See “Item 7A.

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We believe that the aging of the U.S.

population will increase the demand for our FIA and IUL products.

population will increase the demand for our indexed annuity and indexed universal life (“IUL”) products.

As the “baby boomer” generation prepares for retirement, we believe that demand for retirement savings, growth, and income products will grow.

Over 10,000 people will turn 65 each day in the United States over the next 15 years, and according to the U.S.

Census Bureau, the proportion of the U.S.

population over the age of 65 is expected to grow from 18% in 2023 to 21% in 2035.

We serve a growing retirement population, with more than 10,000 Americans turning 65 every day and a projected 23% increase in people age 65 and older over the next 25 years.

The impact of this growth may be offset to some extent by asset outflows as an increasing percentage of the population begins withdrawing assets to convert their savings into income.

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As a tool for addressing the unmet need for retirement planning, we believe that many middle-income Americans have grown to appreciate the financial certainty that we believe annuities such as our FIA products afford.

For example, the FIA market grew from nearly $12 billion of sales in 2002 to $79 billion of sales in 2022.

Additionally, this market demand has positively impacted the IUL market as it has expanded from $100 million of annual premiums in 2002 to $3 billion of annual premiums in 2022.

For example, the fixed index annuity market grew from nearly $12 billion of sales in 2002 to $97 billion of sales in 2023 and the registered index-linked annuities (“RILA”) market grew from $11 billion of sales in 2018 to $44 billion of sales in 2023.

Additionally, this market demand has positively impacted the IUL market as it has expanded from $100 million of annual sales in 2002 to $3 billion of annual sales in 2023.

Critical Accounting Policies and Estimates

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Additionally, we continued to see stable development relating to the 2012 through 2022 policy years, which we believe is indicative of more stringent underwriting standards by us and the lending industry.

Our ending open claim inventory increased from approximately 9,100 claims at December 31, 2022, to approximately 9,200 claims at December 31, 2023.

Our ending open claim inventory decreased from approximately 9,200 claims as of December 31, 2023, to approximately 8,300 claims as of December 31, 2024.

If actual claims loss development varies from what is currently expected and is not offset by other factors, it is possible that our recorded reserves may fall outside a reasonable range of our actuaries' central estimate, which may require additional reserve adjustments in future periods.

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A 10% increase (decrease) in our reserve for title claim losses, as of December 31, 2024, would result in an increase (decrease) in our provision for title claim losses of approximately $171 million.

Reserves for Future Policy Benefits and Product Guarantees

Reserves for Future Policy Benefits and Certain Information on Contractholder Funds

The determination of FPB reserves is dependent on actuarial assumptions.

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On our deferred annuities and life insurance products, these provisions may allow for lump sum payments, payments over a period of time, or spousal continuation of the contract.

On our life-contingent immediate annuities (which includes life-contingent pension risk transfer (“PRT”) annuities), the death of a named annuitant or certificate holder may trigger the cessation or reduction of future life-contingent payments due, depending on the presence of a joint annuitant/certificate holder and any remaining guaranteed non-life contingent payment periods.

On our life-contingent immediate annuities (which includes life-contingent PRT annuities), the death of a named annuitant or certificate holder may trigger the cessation or reduction of future life-contingent payments due, depending on the presence of a joint annuitant/certificate holder and any remaining guaranteed non-life contingent payment periods.

We utilize a combination of internal and industry experience when setting our mortality assumptions.

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For liability for FPB reserves, the discount rate used is based on the yield curve for A-rated corporate bonds as of the valuation date.

Changes in the discount rates from the at-issue or at-purchase discount rates flow through other comprehensive income (“OCI”).

Our aggregate reserves for contractholder funds, FPBs and MRBs on a direct and net basis as of December 31, 2023, and December 31, 2022, are summarized as follows:

Changes in the discount rates from the at-issue or at-purchase discount rates flow through OCI.

Our aggregate reserves for contractholder funds, FPBs and MRBs on a direct and net basis as of December 31, 2024 and 2023, are summarized as follows:

As of December 31, 2024

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(In millions)

Fixed indexed annuities ("FIA") $ 27,809 $ (17) $ 27,792

Indexed annuities $ 31,002 $ (861) $ 30,141

Fixed rate annuities 17,443 (11,009) 6,434

Single premium immediate annuities ("SPIA") and other 1,814 (115) 1,699

SPIA and other 1,673 (109) 1,564

IUL and other life 4,203 (1,390) 2,813

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(In millions)

FIA $ 24,704 $ (16) $ 24,688

Indexed annuities $ 27,809 $ (17) $ 27,792

Fixed rate annuities 13,445 (7,521) 5,924

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Total $ 56,251 $ (8,960) $ 47,291

FIA and IUL products contain an embedded derivative;

Indexed annuities and IUL products contain an embedded derivative;

a feature that permits the holder to elect an interest rate return or an equity-index linked component, where interest credited to the contract is linked to the performance of various equity indices.

The FIA/IUL embedded derivatives are valued at fair value and included in the liability for Contractholder funds in our Consolidated Balance Sheets with changes in fair value included as a component of Benefits and other changes in policy reserves in our Consolidated Statements of Earnings.

The indexed annuities/IUL embedded derivatives are valued at fair value and included in the liability for Contractholder funds in our Consolidated Balance Sheets with changes in fair value included as a component of Benefits and other changes in policy reserves in our Consolidated Statements of Earnings.

For life-contingent immediate annuity policies, gross premiums received in excess of net premiums are deferred at initial recognition as a deferred profit liability (“DPL”).

Gross premiums are measured using assumptions consistent with those used in the measurement of the related liability for FPBs.

Valuation of Fixed Maturity, Preferred and Equity Securities, and Derivatives and Reinsurance Recoverable

Valuation of Fixed Maturity, Preferred and Equity Securities and Derivatives

Our investments in fixed maturity securities have been designated as available-for-sale (“AFS”) and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within accumulated other comprehensive earnings (loss) (“AOCI”), net of deferred income taxes.

Our equity securities are carried at fair value with unrealized gains and losses included in net income (loss).

Our equity securities are carried at fair value with unrealized gains and losses included in net earnings.

Realized gains and losses on the sale of investments are determined on the basis of first-in first-out cost basis and are credited or charged to income on a trade date basis.

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We validate external valuations at least quarterly through a combination of procedures that include the evaluation of methodologies used by the pricing services, comparisons to valuations from other independent pricing services, analytical reviews and performance analysis of the prices against trends, and maintenance of a securities watch list.

See Note D - Fair Value of Financial Instruments and Note E - Investments to our Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K.

See Note D Fair Value of Financial Instruments and Note E Investments to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K.

The fair value of derivative assets and liabilities is based upon valuation pricing models or independent broker quotes and represents what we would expect to receive or pay at the balance sheet date if we canceled or exercised the derivative or entered into offsetting positions.

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However, we are largely protected by collateral arrangements with counterparties when individual counterparty exposures exceed certain thresholds.

The fair value of futures contracts (specifically for FIA contracts) at the balance sheet date represents the cumulative unsettled variation margin (open trade equity net of cash settlements).

The fair value of futures contracts (specifically for indexed annuities contracts) at the balance sheet date represents the cumulative unsettled variation margin (open trade equity net of cash settlements).

The fair value of an interest rate swap represents the change in projected interest rates between the reporting date and the date the interest rate swap was executed.

The fair values of the embedded derivatives in our FIA and IUL contracts are derived using market value of options, use of current and budgeted option cost, swap rates, mortality rates, surrender rates, partial withdrawals, and non-performance spread.

The discount rate used to determine the fair value of our FIA/IUL embedded derivative liabilities includes an adjustment to reflect the risk that these obligations will not be fulfilled (“non-performance risk”).

For the years ended December 31, 2023, and December 31, 2022, our non-performance risk adjustment was based on the expected loss due to default in debt obligations for similarly rated financial companies.

See Note D Fair Value of Financial Instruments and Note F Derivative Financial Instruments to our Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K.

The fair values of the embedded derivatives in our indexed annuities and IUL contracts are derived using market value of options, use of current and budgeted option cost, swap rates, mortality rates, surrender rates, partial withdrawals and non-performance spread.

The discount rate used to determine the fair value of our indexed annuities/IUL embedded derivative liabilities includes an adjustment to reflect the risk that these obligations will not be fulfilled (“non-performance risk”).

For the years ended December 31, 2024 and 2023, our non-performance risk adjustment was based on the expected loss due to default in debt obligations for similarly rated

financial companies.

See Note D Fair Value of Financial Instruments and Note F Derivative Financial Instruments to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K.

F&G cedes certain business on a coinsurance funds withheld basis.

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The fair value of the total return swaps is based on the change in fair value of the underlying assets held in the funds withheld account.

These embedded derivatives are reported in Prepaid expenses and other assets if in a net gain position, or Accounts payable and accrued liabilities, if in a net loss position on the Consolidated Balance Sheets.

For arrangements reinsuring indexed annuities products, the funds withheld account additionally contains an embedded derivative representing the index credit obligation due the reinsurer, resulting in a compound embedded derivative.

These compound embedded derivatives are reported in Funds withheld for reinsurance liabilities and for all other arrangements, embedded derivatives are reported in Prepaid expenses and other assets if in a net gain position, or Accounts payable and accrued liabilities, if in a net loss position on the Consolidated Balance Sheets.

The related gains or losses are reported in Recognized gains and losses, net on the Consolidated Statements of Earnings.

See Note O F&G Reinsurance to our Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K.

See Note O F&G Reinsurance to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K.

We categorize our fixed maturity securities, preferred securities, equity securities and derivatives into a three-level hierarchy based on the priority of the inputs to the valuation technique.

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Based on the results of this analysis, an annual goodwill impairment test may be completed based on an analysis of the discounted future cash flows generated by the underlying assets.

The process of determining whether or not goodwill is impaired or recoverable relies on projections of future cash flows, operating results and market conditions.

The process of determining whether or not goodwill is impaired or recoverable relies on

projections of future cash flows, operating results and market conditions.

Future cash flow estimates are based partly on projections of market conditions such as the volume and mix of refinance and purchase transactions and interest rates, which are beyond our control and are likely to fluctuate.

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MRBs are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest and foreign exchange risk) and expose the Company to other-than-nominal capital market risk.

MRBs include certain contract features primarily on FIA contracts that provide minimum guarantees to policyholders, such as GMDB and GMWB riders.

MRBs include certain contract features primarily on indexed annuities contracts that provide minimum guarantees to policyholders, such as GMDB and GMWB riders.

MRBs are measured at fair value using a risk neutral valuation method, which is based on current net amounts at risk, market data, internal and industry experience, and other factors.

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Changes in, or deviations from, the assumptions previously used can significantly affect our MRBs and related results of operations in a positive or negative direction.

See Note X Market Risk Benefits to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K.

Mortality refers to the incidence of death amongst policyholders on covered lives, which triggers contractual death benefit provisions.

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GAAP requires the evaluation of the recoverability of deferred tax assets and the establishment of a valuation allowance, if necessary, to reduce the deferred tax asset to an amount that is more likely than not to be realized.

When assessing the need for valuation allowance on the unrealized capital loss deferred tax assets, we assert a tax planning strategy to hold certain underlying securities to recovery or maturity.

When assessing the need for valuation allowance on

the unrealized capital loss deferred tax assets, we assert a tax planning strategy to hold certain underlying securities to recovery or maturity.

Our ability to assert such a tax planning strategy is dependent upon factors such as the Company’s asset/liability matching process, overall investment strategy, projected future annuity product sales, and expected liquidity needs.

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Net earnings from continuing operations $ 1,391 $ 518 $ 1,306

Total revenues increased by $187 million in 2023 compared to 2022, primarily attributable to increases in escrow title-related and other fees, increases in interest and investment income and decreases in net recognized investments losses, partially offset by decreases in both direct and agency premiums.

Total revenues decreased by $4,090 million in 2022 compared to 2021, primarily attributable to decreases in both direct and agency premiums, decreases in escrow title-related and other fees, decreases in interest and investment income and net recognized losses on our investment holdings in 2022 as compared to net recognized gains on our investment holdings in 2021.

Total revenues increased by $1,929 million in 2024 as compared to 2023.

The increase was attributable to increases in direct title insurance premiums, agency title insurance premiums, escrow, title-related and other fees, interest and investment income and net recognized gains in 2024 as compared to net recognized losses in 2023.

Total revenues increased by $187 million in 2023 as compared to 2022, primarily attributable to increases in escrow title-related and other fees, increases in interest and investment income and decreases in net recognized losses, partially offset by decreases in both direct and agency title insurance premiums.

See Note L Revenue Recognition to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for a breakout of our consolidated revenues.

Total net earnings from continuing operations decreased by $788 million in 2023 compared to 2022, and decreased by $1,503 million in 2022 compared to 2021.

Total net earnings from continuing operations increased by $873 million in 2024 as compared to 2023, and decreased by $788 million in 2023 as compared to 2022.

The change in revenue and net earnings from our reportable segments is discussed in further detail at the segment level below.

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Recognized gains and losses, net totaled $83 million, $(164) million and $(1,493) million for the years ended December 31, 2024, 2023 and 2022, respectively.

Recognized gains and losses, net for the year ended December 31, 2024 are primarily attributable to gains on sales of equity securities and other assets of $193 million and realized gains on derivatives of $50

million, partially offset by recognized losses on sales of fixed maturity securities of $38 million and non-cash valuation losses on equity and preferred security holdings of $117 million.

Recognized gains and losses, net for the year ended December 31, 2023 are primarily attributable to losses on sales of fixed maturity securities of $166 million, losses on sales of equity and preferred securities of $104 million and losses on sales of mortgages and other assets of $75 million, partially offset by non-cash valuation gains on equity and preferred security holdings and other invested assets of $181 million.

Recognized gains and losses, net for the year ended December 31, 2022 are primarily attributable to realized losses on derivatives of $515 million, losses on sales of fixed maturity securities of $282 million, losses on sales of mortgages and other assets of $80 million, losses on sales of equity and preferred securities of $31 million and non-cash valuation losses on equity and preferred security holdings of $584 million.

Recognized gains and losses, net for the year ended December 31, 2021 are primarily attributable to realized gains on derivatives of $655 million, gains on sales of fixed maturity securities of $114 million and gains on sales of mortgages and other assets of $13 million, partially offset by losses on sales of equity and preferred securities of $19 million and non-cash net valuation losses on equity and preferred securities of $429 million.

See Note E Investments to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for a breakout of our consolidated interest and investment income and realized gains and losses.

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For traditional life and immediate annuities, policy benefit claims are charged to expense in the period that the claims are incurred, net of reinsurance recoveries.

Title insurance premiums, escrow and title-related fees are generally recognized as income at the time the underlying transaction closes or other service is provided.

Title insurance premiums, escrow fees and title-related fees are generally recognized as income at the time the underlying transaction closes or other service is provided.

Direct title operations revenue often lags approximately 45-60 days behind expenses, therefore;

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Agent commissions represent the portion of premiums retained by our third-party agents pursuant to the terms of their respective agency contracts.

Benefit expenses for deferred annuity, FIA and IUL policies include index credits and interest credited to contractholder account balances and benefit claims in excess of contract account balances, net of reinsurance recoveries.

Other changes in policy reserves include the change in the fair value of the FIA embedded derivative and the change in the reserve for secondary guarantee benefit payments.

Benefit expenses for deferred annuity, indexed annuities and IUL policies include index credits and interest credited to contractholder account balances and benefit claims in excess of contract account balances, net of reinsurance recoveries.

Other changes in policy reserves include the change in the fair value of the indexed annuities embedded derivative and the change in the reserve for secondary guarantee benefit payments.

Other changes in policy reserves also include the change in reserves for life insurance products.

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Income tax expense as a percentage of earnings before income taxes was 21.1%, 27.7% and 25.4% in the years ended December 31, 2024, 2023 and 2022 respectively.

The increase in income tax expense as a percentage of earnings before taxes in 2023 as compared to 2022 is primarily attributable the non-recurring tax benefit in 2022 of realized capital losses carried back to 2017.

The increase in income tax expense as a percentage of earnings before taxes in 2022 as compared to 2021 is primarily attributable to the recording of a valuation allowance in 2022, partially offset by the non-recurring tax benefit in 2022 of realized capital losses carried back to 2017.

For the year ended December 31, 2023, changes in market conditions, including changing interest rates, resulted in deferred tax assets related to the net unrealized capital losses in the Company’s investment portfolio.

The decrease in income tax expense as a percentage of earnings before taxes in 2024 as compared to 2023 is primarily attributable to favorable movement in the valuation allowance in 2024 as compared to 2023.

The increase in income tax expense as a percentage of earnings before taxes in 2023 as compared to 2022 is primarily attributable to a non-recurring tax benefit in 2022 of realized capital losses carried back to 2017.

For the years ended December 31, 2024 and 2023, changes in market conditions, including varying interest rates, resulted in deferred tax assets related to the net unrealized capital losses in the Company’s investment portfolio.

When assessing the need for valuation allowance for the F&G segment on the unrealized capital loss deferred tax assets, F&G asserts a tax planning strategy to hold the vast majority of underlying securities to recovery or maturity.

F&G’s ability to assert such a tax planning strategy is dependent upon factors such as F&G’s asset/liability matching process, overall investment strategy, projected future annuity product sales, and expected liquidity needs.

When assessing the need for a valuation allowance for the F&G segment on the unrealized capital loss deferred tax assets, F&G asserts a tax planning strategy to hold the vast majority of underlying securities to recovery or maturity.

F&G’s ability to

assert such a tax planning strategy is dependent upon factors such as F&G’s asset/liability matching process, overall investment strategy, projected future annuity product sales, and expected liquidity needs.

In the event these estimates differ from our prior estimates due to the receipt of new information, the Company may be required to significantly change the income tax expense recorded in the Consolidated Financial Statements.

This includes a further significant decline in value of assets incorporated into our tax planning strategies, which could lead to an increase of our valuation allowance on deferred tax assets having an adverse effect on current and future results.

The Organization for Economic Cooperation and Development (OECD) has developed guidance known as the Global Anti-Base Erosion Pillar Two minimum tax rules, or Pillar Two, which generally provide for a minimum effective tax rate of 15% and are intended to apply to tax years beginning in 2024.

The Company does not expect these rules to have a material impact on our income tax provision in 2024.

For further information related to income taxes, refer to Note T Income Taxes in our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

The following table presents the results of operations of our Title segment for the years indicated:

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Fee per file by direct title operations (in dollars) $ 3,742 $ 3,617 $ 3,381

Total revenues for the Title segment decreased by $2,068 million, or 23%, in the year ended December 31, 2023, when compared to 2022.

Total revenues for the Title segment decreased by $2,391 million, or 21%, in the year ended December 31, 2022, when compared to 2021.

The decrease in the year ended December 31, 2023, as compared to 2022 is primarily attributable to decreases in both our direct and agency premiums, decreases in escrow, title-related and other fees, partially offset by an increase in interest and investment income and a decrease in non-cash valuation losses on our equity and preferred investment holdings.

The decrease in the year ended December 31, 2022, as compared to 2021 is primarily attributable to decreases in both our direct and agency premiums, decreases in escrow, title-related and other fees and an increase in non-cash valuation losses on our equity and preferred investment holdings, partially offset by an increase in interest and investment income.

Total revenues for the Title segment increased by $664 million, or 9%, in the year ended December 31, 2024, as compared to 2023.

Total revenues for the Title segment decreased by $2,068 million, or 23%, in the year ended December 31, 2023, as compared to 2022.

The increase in the year ended December 31, 2024, as compared to 2023 is primarily attributable to increases in both our direct and agency title insurance premiums, increases in escrow, title-related and other fees, increases in interest and investment income and a decrease in non-cash valuation losses on our equity and preferred investment holdings.

The decrease in the year ended December 31, 2023, as compared to 2022 is primarily attributable to decreases in both our direct and agency title insurance premiums and decreases in escrow, title-related and other fees, partially offset by an increase in interest and investment income and a decrease in non-cash valuation losses on our equity and preferred investment holdings.

The following table presents the percentages of title insurance premiums generated by our direct and agency operations:

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Total title premiums $ 5,153 100.0 % $ 4,592 100.0 % $ 6,834 100.0 %

Title premiums decreased by 33% in the year ended December 31, 2023, as compared to 2022.

The decrease is primarily attributable to a decrease in Title premiums from direct operations of $876 million, or 31%, and a decrease in Title premiums from agency operations of $1,366 million, or 34%.

Title premiums increased by 12% in the year ended December 31, 2024 as compared to 2023.

The increase is primarily attributable to an increase in Title premiums from direct operations of $218 million, or 11%, and a increase in Title premiums from agency operations of $343 million, or 13%.

Title premiums decreased by 33% in the year ended December 31, 2023, as compared to 2022.

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(1) Percentages exclude consideration of an immaterial number of non-purchase and non-refinance orders.

Title premiums from direct operations decreased in the years ended December 31, 2023, and 2022 as compared to 2022 and 2021, respectively.

The decreases are primarily attributable to decreases in total closed order volume, partially offset by increases in fee per file.

Title premiums from direct operations increased in the year ended December 31, 2024 as compared to 2023.

Title premiums from direct operations decreased in the year ended December 31, 2023 as compared to 2022.

The increase is primarily attributable to increases in total closed order volume from purchase and refinance transactions, and an increase in fee per file.

The decreases in closed our volume are primarily attributable to closed orders from refinance transactions.

Title premiums from direct operations decreased in the year ended December 31, 2023 as compared to 2022.

The decrease is attributable to a decrease in total closed order volume, partially offset by an increase in fee-per-file.

The decrease in closed order volume is primarily attributable to closed orders from refinance transactions.

The residential refinance market has considerably lower fees per closed order than commercial or residential purchase transactions.

We experienced a decrease in closed title insurance order volumes from both purchase and refinance transactions in the year ended December 31, 2023, as compared to 2022.

Total closed order volumes were 837,000 in the year ended December 31, 2023, as compared to 1,222,000 in the year ended December 31, 2022, an overall decrease of 32%.

Total closed order volumes from refinance transactions, which have a lower fee per file than purchase transactions, were 156,000 in the year ended December 31, 2023, compared to 369,000 in the year ended December 31, 2022, an overall decrease of 57%.

We experienced an increase in closed title insurance order volumes from both purchase and refinance transactions in the year ended December 31, 2024, as compared to 2023.

Total closed order volumes were 879,000 in the year ended December 31, 2024, as compared to 837,000 in the year ended December 31, 2023, an overall increase of 5%.

Total closed order volumes from refinance transactions, which have a lower fee per file than purchase transactions, were 183,000 in the year ended December 31, 2024, compared to 156,000 in the year ended December 31, 2023, an overall increase of 17%.

Total closed order volumes were 837,000 in the year ended December 31, 2023, compared to 1,222,000 in the year ended December 31, 2022, an overall decrease of 32%.

Total closed order volumes from refinance transactions, which have a lower fee per file than purchase transactions, were 369,000 in the year ended December 31, 2022, compared to 1,172,000 in the year ended December 31, 2021, an overall decrease of 69%.

The decreases in both purchase and refinance transactions in 2023 and 2022 are primarily attributable to higher average mortgage interest rates in 2023 and 2022 as compared to 2022 and 2021, respectively.

Total open ed title insurance order volume s decreased i n the years ended December 31, 2023, and 2022, as compared to 2022 and 2021, respectively.

The decreases in 2023 and 2022 were attributable to decreases in both opened title orders from purchase transactions and refinance transactions as compared to 2022 and 2021, respectively.

Total closed order volumes from refinance transactions were 156,000 in the year ended December 31, 2023, compared to 369,000 in the year ended December 31, 2022, an overall decrease of 57%.

The decreases in both purchase and refinance transactions in 2024 and 2023 are primarily attributable to higher average mortgage interest rates in 2024 and 2023 as compared to 2022.

Total open ed title insurance order volume s increased i n the year ended December 31, 2024 as compared to 2023.

The increase was attributable to increases in both opened title orders from purchase transactions and refinance transactions.

Total opened title insurance order volumes decreased in the year ended December 31, 2023 as compared to 2022.

The decrease was attributable to decreases in both opened title orders from purchase transactions and refinance transactions.

The average fee per file in our direct operations was $3,742 in the year ended December 31, 2024, compared to $3,617 in the year ended December 31, 2023.

The average fee per file in our direct operations was $3,617 in the year ended December 31, 2023, compared to $3,381 in the year ended December 31, 2022.

The increase in average fee per file in 2023 and 2022 as compared to 2022 and 2021, respectively, reflects an increased proportion of purchase transactions relative to total closed orders and a stable commercial market.

The fee per file tends to change as the mix of refinance and purchase transactions

changes, because purchase transactions involve the issuance of both a lender’s policy and an owner’s policy, resulting in higher fees, whereas refinance transactions only require a lender’s policy, resulting in lower fees.

Title premiums from agency operations decreased $1,366 million, or 34%, in the year ended December 31, 2023, as compared to 2022, and decreased $1,006 million, or 20%, in the year ended December 31, 2022 as compared to 2021.

The increase in average fee per file in 2024 and 2023 as

compared to 2022 reflects an increased proportion of purchase transactions relative to total closed orders and a stable commercial market.

The fee per file tends to change as the mix of refinance and purchase transactions changes, because purchase transactions involve the issuance of both a lender’s policy and an owner’s policy, resulting in higher fees, whereas refinance transactions only require a lender’s policy, resulting in lower fees.

Title premiums from agency operations increased $343 million, or 13%, in the year ended December 31, 2024 as compared to 2023, and decreased $1,366 million, or 34%, in the year ended December 31, 2023 as compared to 2022.

The current trends in the agency business reflect a softening residential purchase environment in many markets throughout the country and a dramatic decline in residential refinance transactions, consistent with trends in the direct business.

In addition, in 2021, lower mortgage rates during those years resulted in a surge in refinance business with agents, which was further impacted by changes in underlying real estate activity in the geographic regions in which the independent agents operate.

Escrow, title-related and other fees decreased by $385 million, or 15%, in the year ended December 31, 2023, as compared to 2022, and decreased by $726 million, or 22%, in the year ended December 31, 2022, as compared to 2021.

Escrow fees, which are more closely related to our direct operations, decreased by $214 million, or 22%, in the year ended December 31, 2023, as compared to 2022, and decreased $414 million, or 30%, in the year ended December 31, 2022, as compared to 2021.

The decreases in the years ended December 31, 2023, and 2022 as compared to 2022 and 2021, respectively, are primarily due to the decreases in closed order volume including declines in residential refinance volume, which have relatively higher escrow fees than residential purchase and commercial transactions.

Othe r fees in the Title segment, excluding escrow fees, decreased b y $172 million, or 11%, in the year ended December 31, 2023, as compared to 2022, and decreased $311 million, or 17%, in the year ended December 31, 2022, as compared to 2021.

Escrow, title-related and other fees increased by $79 million, or 4%, in the year ended December 31, 2024 as compared to 2023, and decreased by $385 million, or 15%, in the year ended December 31, 2023 as compared to 2022.

Escrow fees, which are more closely related to our direct operations, in creased by $58 million, or 8%, in the year ended December 31, 2024, as compared to 2023, and decreased $214 million, or 22%, in the year ended December 31, 2023, as compared to 2022.

The increase in the year ended December 31, 2024 as compared to 2023 were relatively consistent with the increase in direct premiums .

The decrease in the year ended December 31, 2023 as compared 2022 was primarily due to the decreases in closed order volume including declines in residential refinance volume.

Other fees in the Title segment, excluding escrow fees, increased by $21 million, or 2%, in the year ended December 31, 2024, as compared to 2023, and decreased $172 million, or 11%, in the year ended December 31, 2023, as compared to 2022.

The increase in Other fees in the year ended December 31, 2024 as compared to 2023 was attributable to various immaterial items.

The decrease in Other fees in the year ended December 31, 2023 as compared to 2022 was primarily driven by decreases in revenues related to our ServiceLink and home warranty businesses and various other immaterial items.

The decrease in Other fees in the year ended December 31, 2022, as compared to 2021 was primarily driven by a decrease in revenues related to our ServiceLink business and decreases in various other immaterial items.

T he change in both escrow fees and other fees is directionally consistent with the change in title premiums from direct operations in 2023 and 2022.

The change in both escrow fees and other fees is directionally consistent with the change in title premiums from direct operations in 2024 and 2023.

Interest and investment income levels are primarily a function of securities markets, interest rates and the amount of cash available for investment.

Interest and investment income increased $21 million, or 6%, in the year ended December 31, 2024 as compared to 2023, and increased $125 million, or 59%, in the year ended December 31, 2023 as compared to 2022.

The increases in the years ended December 31, 2023, and 2022 as compared to 2022 and 2021, respectively, was primarily attributable to increased income from our tax-deferred property exchange business and higher yields on our short-term investments.

The increase in the year ended December 31, 2024 as compared to 2023 was attributable to various immaterial items.

The increase in the year ended December 31, 2023 as compared to 2022 was primarily attributable to increased income from our tax-deferred property exchange business and higher yields on fixed maturity securities and short-term investments.

Recognized net losses were $6 million, $9 million and $443 million in the years ended December 31, 2024, 2023 and 2022, respectively.

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Personnel costs include base salaries, commissions, benefits, stock-based compensation and bonuses paid to employees, and are one of our most significant operating expenses.

Personnel costs decreased $443 million, or 15%, in the year ended December 31, 2023, as compared to 2022, and decreased $305 million, or 9% in the year ended December 31, 2022, as compared to 2021.

Personnel costs increased $151 million, or 6%, in the year ended December 31, 2024 as compared to 2023, and decreased $443 million, or 15% in the year ended December 31, 2023 as compared to 2022.

The increase in the year ended December 31, 2024 as compared to 2023 is primarily attributable to inflationary salary increases and increased variable costs from a modest increase in revenue and earnings.

The decrease in the year ended December 31, 2023 as compared to 2022 is primarily attributable to the decrease in average headcount in 2023 associated with the decline in closed order volume and decreases in bonuses and commissions associated with the declines in revenue and profitability.

The decrease in the year ended December 31, 2022, as compared to 2021 is primarily attributable to lower average head count in 2022 in response to the significant decline in refinance orders and declines in purchase and commercial orders in the second half of 2022, partially offset by an increase in the 401(k) match in 2022 .

Personnel costs as a percentage of total revenues from direct title premiums and escrow, title-related and other fees were 61%, 62% and 56% for the years ended December 31, 2024, 2023 and 2022, respectively.

Average employee count in the Title segment was 21,206, 21,398 and 25,157 in the years ended December 31, 2024, 2023 and 2022, respectively.

Other operating expenses decreased by $273 million, or 18%, in the year ended December 31, 2023, as compared to 2022, and decreased $210 million, or 12%, in the year ended December 31, 2022 compared to 2021.

Other operating expenses increased by $9 million, or 1%, in the year ended December 31, 2024 as compared to 2023, and decreased $273 million, or 18%, in the year ended December 31, 2023 as compared to 2022.

Other operating expenses as a percentage of total revenue excluding agency premiums, interest and investment income and recognized gains and losses were 28%, 30% and 28% in the years ended December 31, 2024, 2023 and 2022, respectively.

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Our customers range across a variety of age groups and are concentrated in the middle-income market.

Our FIA products provide for pre-retirement wealth accumulation and post-retirement income management.

Our indexed annuities products provide for pre-retirement wealth accumulation and post-retirement income management.

Our IUL products provide wealth protection and transfer opportunities.

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Additionally, we provide funding agreements and PRT solutions to various institutions through consultants and brokers.

In setting the features and pricing of our flagship FIA products relative to our targeted net margin, we take into account our expectations regarding (1) the difference between the net investment income we earn and the sum of the interest credited to policyholders and the cost of hedging our risk on the policies;

In setting the features and pricing of our flagship indexed annuity products relative to our targeted net margin, we take into account our expectations regarding (1) the difference between the net investment income we earn and the sum of the interest credited to policyholders and the cost of hedging our risk on the policies;

(2) fees, including surrender charges and rider fees, partly offset by vesting bonuses that we pay our policyholders;

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Key Components of Our Historical Results of Operations

Through our insurance subsidiaries, we issue a broad portfolio of deferred annuities (FIA and fixed rate annuities), IUL insurance, immediate annuities, funding agreements and PRT solutions.

Through our insurance subsidiaries, we issue a broad portfolio of deferred annuities (indexed annuities and fixed rate annuities), IUL insurance, immediate annuities, funding agreements and PRT solutions.

A deferred annuity is a type of contract that accumulates value on a tax deferred basis and typically begins making specified periodic or lump sum payments a certain number of years after the contract has been issued.

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Our PRT products are comparable to income annuities, as we generally receive a single, upfront premium in exchange for paying a guaranteed stream of future income payments which are typically fixed in nature but may vary in duration based on participant mortality experience.

Under GAAP, premium collections for deferred annuities (FIAs and fixed rate annuities), immediate annuities and PRT without life contingency, and deposits received for funding agreements are reported in the financial statements as deposit liabilities (i.e., contractholder funds) instead of as sales or revenues.

Under GAAP, premium collections for deferred annuities (indexed annuities and fixed rate annuities), immediate annuities and PRT without life contingency, and deposits received for funding agreements are reported in the financial statements as deposit liabilities (i.e., contractholder funds) instead of as sales or revenues.

Similarly, cash payments to customers are reported as decreases in the liability for contractholder funds and not as expenses.

Sources of revenues for products accounted for as deposit liabilities are net investment income, surrender charges, cost of insurance and other charges deducted from contractholder funds (i.e., amortization of the Unearned Revenue Liability ("URL")), and net realized gains (losses) on investments.

Components of expenses for products accounted for as deposit liabilities are interest-sensitive and index product

benefits (primarily interest credited to account balances or the hedging cost of providing index credits to the policyholder), amortization of VOBA, DAC and DSI, and other operating costs and expenses.

Sources of revenues for products accounted for as deposit liabilities are net investment income, surrender charges, cost of insurance and other charges deducted from contractholder funds (i.e., amortization of URL), and net realized gains (losses) on investments.

Components of expenses for products accounted for as deposit liabilities are interest-sensitive and index product benefits (primarily interest credited to account balances or the hedging cost of providing index credits to the policyholder), amortization of VOBA, DAC and DSI, and other operating costs and expenses.

F&G hedges certain portions of its exposure to product related equity market risk by entering into derivative transactions.

We purchase derivatives consisting predominantly of call options and, to a lesser degree, futures contracts (specifically for FIA contracts) on the equity indices underlying the applicable policy.

These derivatives are used to offset the reserve impact of the index credits due to policyholders under the FIA and IUL contracts.

The majority of all such call options are one-year options purchased to match the funding requirements underlying the FIA/IUL contracts.

We attempt to manage the cost of these purchases through the terms of our FIA/IUL contracts, which permit us to change caps, spread, or participation rates on each policy's annual anniversary, subject to certain guaranteed minimums that must be maintained.

The call options and futures contracts are marked to fair value with the change in fair value included as a component of net investment gains (losses).

The change in fair value of the call options and futures contracts includes the gains and losses recognized at the expiration of the instruments’ terms or upon early termination and the changes in fair value of open positions.

In addition, to reduce market risks from interest rate changes on our earnings associated with our floating rate investments, during the year ended December 31, 2023, we have executed pay-float and receive-fixed interest rate swaps.

As noted above, MRBs are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest and foreign exchange risk) and expose the Company to other-than-nominal capital market risk.

MRBs are measured at fair value using a risk neutral valuation method, which is based on current net amounts at risk, market data, internal and industry experience, and other factors.

We purchase derivatives consisting predominantly of equity options and, to a lesser degree, futures contracts (specifically for indexed annuity contracts) on the equity indices underlying the applicable policy.

These derivatives are used to offset the reserve impact of the index credits due to policyholders under the indexed annuity and IUL contracts.

The majority of all such equity options are one-year options purchased to match the funding requirements underlying the indexed annuity/IUL contracts.

We attempt to manage the cost of these purchases through the terms of our indexed annuity/IUL contracts, which permit us to change caps, spread, or participation rates on each policy's annual anniversary, subject to certain guaranteed minimums that must be maintained.

The equity options and futures contracts are marked to fair value with the change in fair value included as a component of net investment gains (losses).

The change in fair value of the equity options and futures contracts includes the gains and losses recognized at the expiration of the instruments’ terms or upon early termination and the changes in fair value of open positions.

In addition, to reduce market risks from interest rate changes on our earnings associated with our floating rate investments, during 2023 we began to execute pay-float and receive-fixed interest rate swaps.

Market risk benefits (“MRBs”) are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest and foreign exchange risk) and expose the Company to other-than-nominal capital market risk.

MRBs (inclusive of reinsured MRBs) are measured at fair value using a risk neutral valuation method, which is based on current net amounts at risk, market data, internal and industry experience, and other factors.

The change in fair value of MRBs generally reflects impacts from actual policyholder behavior (including surrenders of the benefit), changes in interest rates, and changes in equity market returns.

Generally higher interest rates and equity returns result in gains whereas lower interest rates and equity returns result in losses.

With respect to FIAs/IULs, which includes the expenses incurred to fund the index credits.

Proceeds received upon expiration or early termination of call options purchased to fund annual index credits are recorded as part of the change in fair value of derivatives and are largely offset by an expense for index credits earned on annuity contractholder fund balances.

Reinsured MRBs are valued using a methodology consistent with direct MRBs, with the exception of the non-performance spread which reflects the credit of the reinsurer.

Earnings from products accounted for as deposit liabilities are primarily generated from the excess of net investment income earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed annuity/IUL policies, which includes the expenses incurred to fund the index credit with respect to indexed annuities/IULs.

Proceeds received upon expiration or early termination of equity options purchased to fund annual index credits are recorded as part of the change in fair value of derivatives and are largely offset by an expense for index credits earned on annuity contractholder fund balances.

F&G Results of Operations

The results of operations of our F&G segment for the years ended December 31, 2024, 2023 and 2022, were as follows:

December 31, 2023 December 31, 2022 December 31, 2021

(In millions)

Year ended December 31,

2024 2023 2022

Revenues (In millions)

Life insurance premiums and other fees $ 2,860 $ 2,413 $ 1,704

Interest and investment income 2,719 2,211 1,655

Owned distribution revenues 81 — —

Recognized gains and (losses), net 84 (124) (1,010)

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Total benefits and expenses 4,966 4,535 1,556

Earnings (loss) before income taxes (35) 793 1,552

Income tax expense 23 158 320

Earnings (loss) from continuing operations $ (58) $ 635 $ 1,232

Earnings from discontinued operations, net of tax — — 8

Net earnings (loss) $ (58) $ 635 $ 1,240

Earnings (loss) before income taxes and equity in earnings of unconsolidated affiliates $ 778 $ (35) $ 793

Life insurance premiums and other fees

Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on FIA policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts (up to 10% of the prior year's value, subject to certain limitations).

The following table summarizes the Life insurance premiums and other fees, on the Consolidated Statements of Earnings for the respective periods:

December 31, 2023 December 31, 2022 December 31, 2021

Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on indexed annuity policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts (up to 10% of the prior year's value, subject to certain limitations).

The following table summarizes the Life insurance premiums and other fees, on the Consolidated Statements of Earnings for the years ended December 31, 2024, 2023 and 2022:

Year ended December 31,

2024 2023 2022

(In millions)

Life-contingent pension risk transfer premiums $ 2,217 $ 1,964 $ 1,362

Traditional life insurance premiums 19 15 18

Life-contingent immediate annuity premiums 24 18 13

Traditional life insurance and life-contingent immediate annuity premiums 35 43 33

Surrender charges 268 103 58

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Life insurance premiums and other fees $ 2,860 $ 2,413 $ 1,704

• Life-contingent pension risk transfer premiums increased for the years ended December 31, 2023 and December 31, 2022, reflecting higher PRT sales.

• Surrender charges increased for the years ended December 31, 2023, and December 31, 2022, primarily reflecting increases in withdrawals from policyholders with surrender changes and market value adjustments (MVAs), primarily on our FIA policies.

• Policyholder fees and other income increased for the years ended December 31, 2023, and December 31, 2022, primarily due to increased GMWB rider fees and cost of insurance charges, net of changes in URL on IUL policies from growth in business.

• Life-contingent pension risk transfer premiums increased for the years ended December 31, 2024 and 2023, reflecting the timing of PRT transactions.

As noted above, PRT premiums are subject to fluctuation period to period.

• Surrender charges increased for the years ended December 31, 2024 and 2023, primarily reflecting increases in withdrawals from policyholders with surrender charges and market value adjustments (“MVAs”), primarily on our indexed annuities policies.

The increase in termination activity is primarily due to the higher interest rate environment.

See “ Item 1.

Business – The Products We Offer – Withdrawal Option for Deferred Annuities,” in this Annual Report on Form 10-K for additional discussion on surrender charges and MVAs.

• Policyholder fees and other income increased for the years ended December 31, 2024 and 2023, primarily due to increased cost of insurance charges, net of changes in unearned revenue liabilities (“URL”) on IUL policies from growth in business and higher guaranteed minimum withdrawal benefit (“GMWB”) rider fees.

GMWB rider fees are based on the policyholder's benefit base and are collected at the end of the policy year.

Interest and investment income

Below is a summary of interest and investment income:

December 31, 2023 December 31, 2022 December 31, 2021

Below is a summary of interest and investment income for the years ended December 31, 2024, 2023 and 2022:

Year ended December 31,

2024 2023 2022

(In millions)

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Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements.

Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $339 million, $109 million and $53 million, for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $636 million, $339 million and $109 million, for the years ended December 31, 2024, 2023 and 2022, respectively.

Recognized gains and losses, net

Below is a summary of the major components included in recognized gains and losses, net:

December 31, 2023 December 31, 2022 December 31, 2021

Below is a summary of the major components included in recognized gains and losses, net for the years ended December 31, 2024, 2023 and 2022:

Year ended December 31,

2024 2023 2022

(In millions)

Net realized and unrealized (losses) gains on fixed maturity available-for-sale securities, equity securities and other invested assets $ (111) $ (461) $ 57

Net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets $ 76 $ (111) $ (461)

Change in allowance for expected credit losses (34) (37) (34)

Net realized and unrealized (losses) gains on certain derivatives instruments 147 (857) 615

Net realized and unrealized gains (losses) on certain derivatives instruments 70 147 (857)

Change in fair value of reinsurance related embedded derivatives (32) (128) 352

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Recognized gains and losses, net $ 84 $ (124) $ (1,010)

Recognized gains and losses are shown net of amounts attributable to certain funds withheld reinsurance agreements, which is passed along to the reinsurer in accordance with the terms of these agreements.

Recognized gains and losses attributable to these agreements, and thus excluded from the totals in the table above, was $(123) million, $381 million and $15 million for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

Recognized gains and losses, net is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements.

Recognized gains and (losses) attributable to these agreements, and thus excluded from the totals in the table above, was $(30) million, $(123) million and $381 million for the years ended December 31, 2024, 2023 and 2022, respectively.

• For the year ended December 31, 2024, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of unrealized fair value option gains on owned distribution investments and mark-to-market gains on our preferred and equity securities.

• For the year ended December 31, 2023, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized losses on fixed maturity available-for-sale securities, partially offset by mark-to-market gains on our equity securities and realized gains on other invested assets.

• For the year ended December 31, 2022, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized losses on fixed maturity available-for-sale securities and mark-to-market losses on our equity securities.

• For the year ended December 31, 2021, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized gains on fixed maturity available-for-sale securities, partially offset by mark-to-market losses on our equity securities.

• For all periods, net realized and unrealized gains (losses) on certain derivative instruments primarily relate to the net realized and unrealized gains (losses) on options and futures used to hedge FIA and IUL products, including gains on option and futures expiration and changes in the fair value of interest rate swaps.

• For all periods, net realized and unrealized gains (losses) on certain derivative instruments primarily relate to the net realized and unrealized gains (losses) on equity options and futures used to hedge indexed annuity and IUL products, including gains on option and futures expiration and changes in the fair value of interest rate swaps.

See the table below for primary drivers of gains (losses) on certain derivatives.

• The fair value of reinsurance related embedded derivative is based on the change in fair value of the underlying assets held in the funds withheld portfolio.

We utilize a combination of static (call options) and dynamic (long futures contracts) instruments in our product hedging strategy.

A substantial portion of the call options and futures contracts are based upon the S&P 500 Index with the remainder based upon other equity, bond and gold market indices.

During the year ended December 31, 2023, we began to utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments.

The components of the realized and unrealized gains (losses) on certain derivative instruments hedging our indexed annuity, universal life products and floating rate investments are summarized in the table below (dollars in millions):

December 31, 2023 December 31, 2022 December 31, 2021

(Dollars in millions)

Call options:

Realized (losses) gains $ (216) $ (170) $ 437

• The fair value of reinsurance related embedded derivative is based on the change in fair value of the underlying assets held in the funds withheld (“FWH”) portfolio.

We utilize a combination of static (equity options) and dynamic (long futures contracts) instruments in our product hedging strategy.

Equity options and futures contracts are generally based upon the performance of various equity indices, such as the S&P 500 Index, as well as other bond and gold market indices.

We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments.

The components of the realized and unrealized gains (losses) on certain derivative instruments hedging our indexed annuities, universal life products and floating rate investments are summarized in the table below for the years ended December 31, 2024, 2023 and 2022:

Year ended December 31,

2024 2023 2022

(In millions)

Equity options:

Realized gains (losses) $ 220 $ (216) $ (170)

Change in unrealized (losses) gains (75) 308 (692)

Futures contracts:

(Losses) gains on futures contracts expiration 7 (6) 9

Change in unrealized gains (losses) 2 (1) (1)

Interest rate swaps 48 — —

Foreign currency forward:

Gains on foreign currency forward (2) 11 10

Gains (losses) on futures contracts expiration 24 7 (6)

Change in unrealized (losses) gains (6) 2 (1)

Interest rate swap (losses) gains (103) 48 —

Other derivative investments

Gains (losses) on other derivative investments 10 (2) 12

Total net change in fair value $ 70 $ 147 $ (857)

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Secured Overnight Financing Rates 4.49 % 5.38 % 4.30 %

• Realized gains and losses on certain derivative instruments are directly correlated to the performance of the indices upon which the call options and futures contracts are based and the value of the derivatives at the time of expiration compared to the value at the time of purchase.

Gains (losses) on option expiration reflect the movement during each period on options settled during the respective period.

• The change in unrealized gains (losses) due to fair value of call options is primarily driven by the underlying performance of the S&P 500 Index during each respective period relative to the S&P 500 Index on the policyholder buy dates.

• The net change in fair value of the call options and futures contracts was primarily driven by movements in the S&P 500 Index relative to the policyholder buy dates.

• Realized gains and (losses) on certain derivative instruments are directly correlated to the performance of the indices upon which the equity options and futures contracts are based and the value of the derivatives at the time of expiration compared to the value at the time of purchase.

• The changes in unrealized gains (losses) due to the net changes in fair value of equity options and futures contracts are driven by the underlying performance of the indices, such as the S&P 500 Index, upon which the equity options and futures contracts are based during each respective period relative to the respective indices on the policyholder buy dates.

• The net change in fair value of the interest rate swaps was primarily driven by fluctuations in the interest rate index underlying the swap contracts.

The average index credits to policyholders are as follows:

December 31, 2023 December 31, 2022 December 31, 2021

Year ended December 31,

2024 2023 2022

Average Crediting Rate 4 % 1 % 1 %

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3 year high water mark 3 % 8 % 13 %

• Actual amounts credited to contractholder fund balances may differ from the index appreciation due to contractual features in the FIA contracts and certain IUL contracts (caps, spreads and participation rates), which allow us to manage the cost of the options purchased to fund the annual index credits.

• Actual amounts credited to contractholder fund balances may differ from the index appreciation due to contractual features in the indexed annuity contracts and certain IUL contracts (caps, spreads and participation rates), which allow us to manage the cost of the options purchased to fund the annual index credits.

• The credits for the periods presented were based on comparing the S&P 500 Index on each issue date in the period to the same issue date in the respective prior year periods.

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Below is a summary of the major components included in Benefits and other changes in policy reserves:

December 31, 2023 December 31, 2022 December 31, 2021

Year ended December 31,

2024 2023 2022

(In millions)

PRT agreements $ 2,310 $ 2,016 $ 1,399

FIA/IUL market related liability movements 588 (1,010) (377)

Index credits, interest credited & bonuses 831 593 1,019

Indexed annuities/IUL market related liability movements (221) 588 (1,010)

Index credits, interest credited and bonuses 1,696 831 593

Other changes in policy reserves 6 118 144

Total benefits and other changes in policy reserves $ 3,791 $ 3,553 $ 1,126

• PRT agreements increased for the years ended December 31, 2023, and December 31, 2022, reflecting higher pension risk transfer group annuity obligations.

• The FIA/IUL market related liability movements for all periods presented are mainly driven by changes in the equity markets, non-performance spreads, and risk-free rates during the respective periods.

The change in risk free rates and non-performance spreads (decreased) increased the FIA market related liability by $106 million, $(656) million and $(74) million during the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

The remaining change in market value of the market related liability movements was driven by equity market impacts.

• PRT agreements increased for the years ended December 31, 2024, and 2023, reflecting the timing of PRT transactions.

PRT transactions are subject to fluctuation period to period.

• The indexed annuities/IUL market related liability movements for all periods presented are mainly driven by changes in the equity markets, non-performance spreads, and risk-free rates during the respective periods.

The change in risk free rates and non-performance spreads (decreased) increased the indexed annuities market related liability by approximately $(203) million, $106 million and $(656) million during the years ended December 31, 2024, 2023 and 2022, respectively.

The remaining changes in market value of the market related liability movements for all periods were primarily driven by equity market impacts.

See “ Revenues — Recognized gains and losses, net” above for summary and discussion of net unrealized gains (losses) on certain derivative instruments.

• Annually, typically in the third quarter, we review assumptions associated with reserves for policy benefits and product guarantees.

• During the third quarter and for the year ended December 31, 2023, based on increases in interest rates and pricing changes, we updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and also aligned reserves to actual policyholder behavior.

• During the third quarter of 2024 and for the year ended December 31, 2024, based on policyholder behavior, experience and interest rate movements, we reflected updates to surrender assumptions for recent and expected near term policyholder behavior, as well as updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds.

These changes resulted in decreases in total benefits and other changes in policy reserves of approximately $89 million for the year ended December 31, 2024.

• During the third quarter and for the year ended December 31, 2023, based on increases in interest rates and pricing changes, we updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and also aligned reserves to actual policyholder behavior.

These changes, taken together, resulted in an increase in total benefits and other changes in policy reserves of approximately $73 million.

• During the fourth quarter of 2022, based on increases in interest rates and pricing changes during 2022, we updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and the fair value of market risk benefits.

• During the fourth quarter of 2022, based on increases in interest rates and pricing changes during 2022, we updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and the fair value of market risk benefits.

These changes, taken together, resulted in an increase in contractholder funds and market risk benefits of approximately $99 million.

• During the third quarter of 2021, we implemented a new actuarial valuation system, and as a result, our third quarter 2021 assumption updates include model refinements and assumption updates resulting from the implementation.

The system implementation and assumption review process included refinements in the calculation of the fair value of the embedded derivative component of our fixed indexed annuities.

These changes, taken together, resulted in a decrease in contractholder funds and future policy reserves of approximately $435 million.

• Index credits, interest credited & bonuses for the year ended December 31, 2023, were higher compared to the year ended December 31, 2022, primarily reflecting higher index credits and interest credited on FIA and other policies as a result of market movement during the respective periods and higher interest credited associated with the growth in PRT agreements.

Index credits, interest credited & bonuses for the year ended December 31, 2022, were lower compared with the year ended December 31, 2021, primarily reflecting lower index credits on FIA policies as a result of market movement during the respective periods.

Refer to average policyholder index discussion above for details on drivers.

• Index credits, interest credited and bonuses were higher for the years ended December 31, 2024 and 2023, primarily reflecting higher index credits and interest credited on indexed annuities and other policies as a result of market movement during the respective periods and higher interest credited associated with the growth in PRT agreements.

Market risk benefit (gains) losses

Below is a summary of market risk benefit (gains) losses (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

Below is a summary of market risk benefit (gains) losses

Year ended December 31,

2024 2023 2022

(In millions)

Market risk benefit (gains) losses $ (25) $ 95 $ (182)

• Market risk benefits (gains) losses is primarily driven by attributed fees collected, effects of market related movements (including changes in equity markets and risk-free rates), actual policyholder behavior as compared with expected and changes in assumptions during the periods.

• Market risk benefit (gains) losses is primarily driven by issuances, attributed fees collected, effects of market related movements (including changes in equity markets and risk-free rates), actual policyholder behavior as compared with expected, changes in assumptions during the periods.

Market risk benefit (gains) losses are reported net of reinsurance, reflecting an amended reinsurance agreement effective during the year ended December 31, 2024.

• Changes in market risk benefit (gains) losses for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily reflect more favorable market related movements and favorable actual policyholder behavior as compared to expected.

▪ Changes in market risk benefit (gains) losses for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily reflect less favorable market related movements, a favorable GMWB utilization assumption change in 2022 (that did not recur in 2023) and higher attributed fees.

These changes were partially offset by actual policyholder behavior for the year ended December 31, 2023 being more in line with expected, as compared to the year ended December 31, 2022, resulting in a favorable change to the market risk benefit (gains) losses.

▪ Market risk benefit gains increased for the year ended December 31, 2022, compared with the year ended December 31, 2021, primarily reflecting favorable market related movements, primarily higher increases in risk free rates.

In addition, the favorable impact of a GMWB utilization assumption change in 2022 was mostly offset by unfavorable impacts of actual policyholder behavior differing from expected when comparing the year ended December 31, 2022, with the year ended December 31, 2021.

Depreciation and amortization

Below is a summary of the major components included in depreciation and amortization:

December 31, 2023 December 31, 2022 December 31, 2021

Year ended December 31,

2024 2023 2022

(In millions)

Amortization of VOBA, DAC and DSI $ 382 $ 300 $ 255

Amortization of other intangible assets and other depreciation 30 24 16

Amortization of DAC, VOBA and DSI $ 495 $ 382 $ 300

Amortization of other intangible assets and fixed asset depreciation 74 30 24

Total depreciation and amortization $ 569 $ 412 $ 324

• DAC, VOBA and DSI are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization.

Depreciation and amortization increased for the years ended December 31, 2023, and December 31, 2022, primarily reflecting increased DAC and DSI associated with the growth of the business.

The increase for the year ended December 31, 2023, also reflects a slightly increased

amortization rate on some DAC and DSI balances due to updates to the surrender and mortality assumptions for the FIA and fixed-rate annuity blocks.

Amortization of DAC, VOBA and DSI increased for the years ended December 31, 2024 and 2023, primarily reflecting increased DAC and DSI associated with the growth of the business.

In addition, as a result of our annual actuarial assumption update process, amortization rates on some DAC and DSI balances increased primarily for indexed annuities.

Amortization of VOBA also increased approximately $15 million for the year ended December 31, 2024, reflecting other actuarial model updates and refinements.

• Amortization of other intangible assets and fixed asset depreciation for the year ended December 31, 2024 included amortization of other intangible assets from our majority owned interests in Roar Joint Venture, LLC ("Roar") and PALH, LLC ("PALH").

Personnel costs and other operating expenses

Below is a summary of personnel costs and other operating expenses (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

Below is a summary of personnel costs and other operating expenses:

Year ended December 31,

2024 2023 2022

(In millions)

Personnel costs $ 296 $ 232 $ 157

Other operating expenses 203 146 102

Total personnel costs and other operating costs $ 378 $ 259 $ 234

• Personnel costs and other operating expenses increased for the years ended December 31, 2023, and December 31, 2022, primarily reflecting headcount growth to support higher sales and assets volumes and strategic growth capabilities.

Interest expense

Below is a summary of interest expense (in millions):

December 31, 2023 December 31, 2022 December 31, 2021

Interest expense $ 97 $ 29 $ 29

Total interest expense 97 29 29

• Interest expense increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily reflecting a full year of interest on the F&G revolving credit facility and the issuance of the 7.40% F&G Notes in January of 2023.

Other items affecting net earnings

Income tax expense (benefit)

Below is a summary of the major components included in income tax expense (benefit):

December 31, 2023 December 31, 2022 December 31, 2021

(Dollars in millions)

Earnings (loss) before taxes $ (35) $ 793 $ 1,552

Income tax expense (benefit) before valuation allowance (12) 131 338

Change in valuation allowance 35 27 (18)

Income tax expense $ 23 $ 158 $ 320

Effective rate (66) % 20 % 21 %

• The income tax expense for the year ended December 31, 2023, was $23 million compared to income tax expense of $158 million for the year ended December 31, 2022.

The effective tax rate was (66)% and 20%, respectively, for the years ended December 31, 2023, and December 31, 2022.

The effective tax rate for the year ended December 31, 2023, differs from the statutory rate of 21% primarily due to a tax valuation allowance expense recorded on unrealized losses and capital loss carryforwards.

The effective tax rate for the year ended December 31, 2022, differs from the statutory rate of 21% primarily due to favorable permanent tax adjustments.

• The income tax expense for the year ended December 31, 2021, was $320 million.

The effective tax rate was 21% for the year ended December 31, 2021.

• See Note T Income Taxes to the Consolidated Financial Statements for further information.

Total personnel costs and other operating expenses $ 499 $ 378 $ 259

• Personnel costs and other operating expenses increased for the years ended December 31, 2024 and 2023, reflecting costs in line with the growth in sales and assets along with continued investments in our operating platform.

In addition, the year ended December 31, 2024 includes $39 million from our majority owned interests in Roar and

PALH, $26 million related to the change in fair value of contingent consideration and $19 million of guaranty fund assessments.

Investment Portfolio

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Our investment portfolio is designed to contribute stable earnings, excluding short-term mark-to-market effects, and balance risk across diverse asset classes and is primarily invested in high quality fixed income securities.

As of December 31, 2023, and December 31, 2022, the fair value of our investment portfolio was approximately $52 billion and $41 billion, respectively, and was divided among the following asset classes and sectors:

As of December 31, 2024, and 2023, the fair value of our investment portfolio was approximately $60 billion and $52 billion, respectively, and was divided among the following asset classes and sectors:

December 31, 2024 December 31, 2023

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Asset-backed securities 10,270 17 % 8,929 17 %

Collateral loan obligations ("CLO")

Collateral loan obligations

5,379 9 % 5,405 10 %

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Residential mortgage loans 2,916 5 % 2,545 5 %

Other (primarily derivatives and company owned life insurance) 1,697 3 % 809 2 %

Other (primarily derivatives, company owned life insurance and unconsolidated owned distribution investments) 1,753 3 % 1,697 3 %

Short term investments 2,410 4 % 1,452 3 %

Total investments $ 59,503 100 % $ 51,751 100 %

(a) Includes investment grade non-redeemable preferred stocks ($428 million and $672 million at December 31, 2023, and December 31, 2022, respectively).

(a) Includes investment grade non-redeemable preferred stocks ($222 million and $428 million at December 31, 2024, and 2023, respectively).

Insurance statutes regulate the type of investments that our life insurance subsidiaries are permitted to make and limit the amount of funds that may be used for any one type of investment.

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December 31, 2024 December 31, 2023

NRSRO Rating NAIC Designation Amortized Cost Fair Value Fair Value Percent Amortized Cost Fair Value Fair Value Percent

Rating NAIC Designation Amortized Cost Fair Value Fair Value Percent Amortized Cost Fair Value Fair Value Percent

AAA/AA/A 1 $ 31,258 $ 29,174 63 % $ 28,052 $ 26,170 65 %

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Investment Concentrations

The tables below present the top ten structured security and industry categories of our fixed maturity and equity securities including the fair value and percent of total fixed maturity and equity securities fair value as of December 31, 2023, and 2022 (dollars in millions).

Effective January 1, 2023, we updated our industry classifications as a result of a change in our investment accounting software and related service providers.

Our investment strategy has remained consistent and our portfolio mix has not materially changed.

The December 31, 2022, table was updated to reflect a consistent presentation with the December 31, 2023, classifications:

December 31, 2024

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Diversified financial services 4,271 9 %

Banking 2,048 5 %

Whole loan collateralized mortgage obligation 2,635 6 %

Municipal 1,600 4 %

Banking 1,988 4 %

Insurance 1,761 4 %

Municipal 1,363 3 %

Electric 1,229 3 %

Telecommunications 696 2 %

Pharmaceuticals 738 1 %

Total $ 34,765 74 %

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Banking 2,048 5 %

Insurance 1,545 5 %

Whole loan collateralized mortgage obligation 2,043 5 %

Municipal 1,600 4 %

Whole loan collateralized mortgage obligations 1,278 4 %

Insurance 1,567 4 %

Electric 1,086 3 %

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Total $ 31,056 77 %

The amortized cost and fair value of fixed maturity AFS securities by contractual maturities as of December 31, 2023, and December 31, 2022, are shown below.

The amortized cost and fair value of fixed maturity AFS securities by contractual maturities as of December 31, 2024 and 2023, are shown below.

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

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(In millions)

Corporate, Non-structured Hybrids, Municipal and U.S.

Corporate, Non-structured Hybrids, Municipal, Foreign and U.S.

Government securities:

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As of December 31, 2024, the CLO and ABS positions were trading at a net unrealized gain position of $92 million and a net unrealized loss of $207 million, respectively.

As of December 31, 2022, the CLO and ABS positions were trading at a net unrealized loss position of $236 million and $499 million, respectively.

As of December 31, 2023, the CLO and ABS positions were trading at a net unrealized gain position of $65 million and a net unrealized loss position of $344 million, respectively.

The following table summarizes the credit quality by NRSRO rating, or NAIC designation equivalent, of our AFS ABS portfolio (dollars in millions) at December 31, 2024, and 2023.

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Municipal Bond Exposure

Our municipal bond exposure is a combination of general obligation bonds (fair value of $231 million and $188 million and an amortized cost of $268 million and $231 million as of December 31, 2023, and December 31, 2022, respectively) and special revenue bonds (fair value of $1,334 million and $1,017 million and an amortized cost of $1,506 million and $1,248 million as of December 31, 2023, and December 31, 2022, respectively).

Across all municipal bonds, the largest issuer represented 5% and 6% of the category as of December 31, 2023, and December 31, 2022, respectively, with less than 1% of the entire portfolio and is rated NAIC 1.

Our focus within municipal bonds is on NAIC 1 rated instruments, with 98% and 96% of our municipal bond exposure rated NAIC 1 as of December 31, 2023, and December 31, 2022, respectively.

The following table summarizes our municipal bond exposure as of December 31, 2024 and 2023 (dollars in millions).

December 31, 2024 December 31, 2023

Amortized Cost Fair Value Amortized Cost Fair Value

General obligation bonds $ 247 $ 205 $ 269 $ 232

Special revenue bonds 1,329 1,128 1,507 1,335

Certificate participations 16 13 — —

Total $ 1,592 $ 1,346 $ 1,776 $ 1,567

Across all municipal bonds, the largest issuer represented 5% of the category and less than 1% of the total portfolio for both December 31, 2024, and 2023, and is rated NAIC 1 as of December 31, 2024.

Our focus within municipal bonds is on NAIC 1 rated instruments, with 97% and 98% of our municipal bond exposure rated NAIC 1 as of December 31, 2024, and 2023, respectively.

Mortgage Loans

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Loan-to-value ("LTV") and debt-service coverage ("DSC") ratios are utilized to assess the risk and quality of CMLs.

As of December 31, 2023, and December 31, 2022, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.3 times and 2.3 times, respectively, and a weighted average LTV ratio of 55% and 57%, respectively.

As of December 31, 2024, and 2023, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.3 times, and a weighted average LTV ratio of 57% and 55%, respectively.

We consider a CML delinquent when a loan payment is greater than 30 days past due.

For mortgage loans that are determined to require foreclosure, the carrying value is reduced to the fair value of the underlying collateral, net of estimated costs to obtain and sell at the point of foreclosure.

At December 31, 2023, and 2022, we had no CMLs that were delinquent in principal or interest payments and none in the process of foreclosure.

As of December 31, 2024, we had one CML that was delinquent in principal or interest payments compared to none as of December 31, 2023.

As of December 31, 2024 and 2023, we had no CMLs in the process of foreclosure.

See Note E Investments to the Consolidated Financial Statements included in this report for additional information on our CMLs, including our distribution by property type, geographic region, LTV and DSC ratios.

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We diversify our RML portfolio by state to attempt to reduce concentration risk.

RMLs have a primary credit quality indicator of either a performing or nonperforming loan.

We define nonperforming RMLs as those that are 90 or more days past due and/or in nonaccrual status.

Loans are placed on nonaccrual status when they are over 90 days delinquent.

RMLs have a primary credit quality indicator of either a performing or non-performing loan.

We define non-performing RMLs as those that are 90 or more days past due and/or in non-accrual status.

Loans are placed on non-accrual status when they are over 90 days delinquent.

If a loan becomes over 90 days delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current can be put in place.

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Unrealized Losses

The amortized cost and fair value of the fixed maturity securities and the equity securities that were in an unrealized loss position as of December 31, 2023, and December 31, 2022, were as follows:

The amortized cost and fair value of the fixed maturity securities and the equity securities that were in an unrealized loss position as of December 31, 2024, and 2023, were as follows:

December 31, 2024

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Total investments 3,653 $ 29,741 $ (33) $ (3,691) $ 26,017

The gross unrealized loss position on the fixed maturity available-for-sale fixed and equity portfolio was $3,691 million and $4,744 million as of December 31, 2023, and December 31, 2022, respectively.

Most components of the portfolio exhibited price depreciation caused by higher treasury rates and wider spreads.

The total amortized cost of all securities in an unrealized loss position was $29,741 million and $34,164 million as of December 31, 2023, and December 31, 2022, respectively.

The average market value/book value of the investment category with the largest unrealized loss position was 88% for finance, insurance and real estate as of December 31, 2023.

In the aggregate, finance, insurance and real estate represented 19% of the total unrealized loss position as of December 31, 2023.

The gross unrealized loss position on the fixed maturity available-for-sale fixed and equity portfolio was $3,837 million and $3,691 million as of December 31, 2024, and 2023, respectively.

Most components of the portfolio exhibited price depreciation caused by higher treasury rates as opposed to issuer specific credit concerns.

The total amortized cost of all securities in an unrealized loss position was $29,405 million and $29,741 million as of December 31, 2024, and 2023, respectively.

The average market value/book value of the investment category with the largest unrealized loss position was 81% for services, media and other as of December 31, 2024.

In the aggregate, services, media and other represented 23% of the total unrealized loss position as of December 31, 2024.

The average market value/book value of the investment category with the largest unrealized loss position was 88% for finance, insurance and real estate as of December 31, 2023.

In aggregate, finance, insurance and real estate represented 19% of the total unrealized loss position as of December 31, 2023.

The amortized cost and fair value of fixed maturity available for sale securities under watch list analysis and the number of months in a loss position with investment grade securities (NRSRO rating of BBB/Baa or higher) as of December 31, 2023, and December 31, 2022, were as follows:

December 31, 2024

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Detailed analysis is performed for each security on the watch list to further assess the presence of credit impairment loss indicators and, where present, calculate an allowance for expected credit loss or direct write-down of a security’s amortized cost.

At December 31, 2023, our watch list included 52 securities in an unrealized loss position with an amortized cost of $722 million, no allowance for expected credit losses, unrealized losses of $205 million and a fair value of $517 million.

At December 31, 2022, our watch list included 146 securities in an unrealized loss position with an amortized cost of $1,435 million, allowance for expected credit losses of $15 million, unrealized losses of $472 million and a fair value of $948 million.

As of December 31, 2024, our watch list included 120 securities in an unrealized loss position with an amortized cost of $1,579 million, no allowance for expected credit losses, unrealized losses of $517 million and a fair value of $1,062 million.

As of December 31, 2023, our watch list included 52 securities in an unrealized loss position with an amortized cost of $722 million, no allowance for expected credit losses, unrealized losses of $205 million and a fair value of $517 million.

The watch list excludes structured securities as we have separate processes to evaluate the credit quality on the structured securities.

There were 101 and 64 structured securities with a fair value of $316 million and $162 million, respectively, to which we had potential credit exposure as of December 31, 2023, and December 31, 2022, respectively.

Our analysis of these structured securities, which included cash flow testing, resulted in allowances for expected credit losses of $35 million and $16 million as of December 31, 2023, and December 31, 2022, respectively.

There were 45 and 101 structured securities with a fair value of $146 million and $316 million, respectively, to which we had potential credit exposure as of December 31, 2024, and 2023, respectively.

Our analysis of these structured securities, which included cash flow testing, resulted in allowances for expected credit losses of $62 million and $35 million as of December 31, 2024, and 2023, respectively.

Exposure to Sovereign Debt and Certain Other Exposures

Our investment portfolio had an immaterial amount of direct exposure to European sovereign debt as of December 31, 2023, and December 31, 2022, respectively.

Our investment portfolio had an immaterial amount of direct exposure to European sovereign debt as of December 31, 2024, and 2023, respectively.

We have no exposure to investments in Russia or Ukraine and de minimis investments in peripheral countries in the region.

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AFS Securities

For additional information regarding our AFS securities, including the amortized cost, gross unrealized gains (losses), and fair value as well as the amortized cost and fair value of fixed maturity AFS securities by contractual maturities, as of December 31, 2023 and December 31, 2022, refer to Note E Investments to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

For additional information regarding our AFS securities, including the amortized cost, gross unrealized gains (losses), and fair value as well as the amortized cost and fair value of fixed maturity AFS securities by contractual maturities, as of December 31, 2024 and 2023, refer to Note E Investments to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

Concentrations of Financial Instruments

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of Part II of this Annual Report.

We are exposed to credit loss in the event of nonperformance by our counterparties on derivative instruments.

We are exposed to credit loss in the event of non-performance by our counterparties on derivative instruments.

We attempt to reduce this credit risk by purchasing such derivative instruments from large, well-established financial institutions.

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This program permits collateral cash received to be invested in short term Treasury securities, bank deposits and commercial paper rated A1/P1, which are included in Cash and cash equivalents in the accompanying Consolidated Balance Sheets.

See Note F Derivative Financial Instruments to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for additional information regarding our derivatives and our exposure to credit loss on call options.

Corporate and Other

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The revenue in the Corporate and Other segment for all years represents revenue generated by our non-title real estate technology and brokerage subsidiaries as well as mark-to-market valuation changes on certain corporate deferred compensation plans.

Total revenues in the Corporate and Other segment increased $104 million, or 95% in the year ended December 31, 2023, as compared to 2022, and decreased $74 million, or 40%, in the year ended December 31, 2022, as compared to 2021.

The increase in the year ended December 31, 2023, as compared to 2022 is primarily attributable to a $71 million increase in valuations associated with our deferred compensation plan assets, which increased both revenue and personnel costs, a $35 million increase in interest and investment income related to cash and short-term investments, and a $33 million impairment of cost method investments in 2023 as compared to a $41 million impairment of cost method investments in 2022, partially offset by various other immaterial items.

The decrease in the year ended December 31, 2022, as compared to 2021 is primarily attributable to a $59 million decrease in valuations associated with our deferred compensation plan assets, which decreased both revenue and personnel costs and a $41 million impairment of cost method investments in 2022, partially offset by various other immaterial items.

Personnel costs in the Corporate and Other segment increased $84 million, or 175% in the year ended December 31, 2023, as compared to 2022, and decreased $59 million, or 55%, in the year ended December 31, 2022, as compared to 2021.

Total revenues in the Corporate and Other segment increased $64 million, or 23% in the year ended December 31, 2024, as compared to 2023, and increased $169 million, or 154%, in the year ended December 31, 2023, as compared to 2022.

The increase in the year ended December 31, 2024, as compared to 2023 is primarily attributable to a $43 million increase in dividends received from F&G and a $33 million impairment of cost method investments in 2023, partially offset by a $12 million decrease in interest and investment income related to short-term investments and various other immaterial items.

The increase in the year ended December 31, 2023, as compared to 2022 is primarily attributable to a $71 million increase in valuations associated with our deferred compensation plan assets, which increased both revenue and personnel costs, a $65 million increase in dividends received from F&G, a $35 million increase in interest and investment income related to cash and short-term investments and a $33 million impairment of cost method investments in 2023 as compared to a $41 million impairment of cost method investments in 2022, partially offset by various other immaterial items.

The dividends received from F&G are eliminated upon consolidation.

Personnel costs in the Corporate and Other segment increased $25 million, or 19% in the year ended December 31, 2024, as compared to 2023, and increased $84 million, or 175%, in the year ended December 31, 2023, as compared to 2022.

The increase in the year ended December 31, 2024, as compared to 2023 is primarily attributable to inflationary pressures on salaries expense and a $13 million increase is stock compensation expense associated with a restricted stock grant to our chairman.

The increase in the year ended December 31, 2023, as compared to 2022 is primarily attributable to the aforementioned increase in the valuation of deferred compensation plan assets in 2023.

The decrease in the year ended December 31, 2022, as compared to 2021 is primarily attributable to the aforementioned decrease in the valuation of deferred compensation plan assets in 2022.

Other operating expenses in the Corporate and Other segment increased $29 million, or 28%, in the year ended December 31, 2023, as compared to 2022, and increased $5 million, or 5% in the year ended December 31, 2022, as compared to 2021.

Other operating expenses in the Corporate and Other segment decreased $29 million, or 22%, in the year ended December 31, 2024, as compared to 2023, and increased $29 million, or 28% in the year ended December 31, 2023, as compared to 2022.

The decrease in the year ended December 31, 2024 as compared to 2023 is primarily attributable to a $10 million reduction in expenses related to the 2023 cybersecurity incident, a $9 million reduction in expenses related to the termination of our pension plan and other various immaterial items.

The increase in 2024 as compared to 2023 is attributable to various immaterial items.

Interest expense decreased $9 million, or 10%, in the year ended December 31, 2023, as compared to 2022, and increased $1 million, or 1%, in the year ended December 31, 2022, as compared to 2021.

Interest expense decreased $9 million, or 10%, in the year ended December 31, 2023, as compared to 2022.

The decrease in the year ended December 31, 2023, as compared to 2022 is primarily attributable to decreased average debt outstanding in 2023 associated with repayment of the $400 million in outstanding principal of our 5.50% Senior Notes in September of 2022.

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As of December 31, 2024, we had cash and cash equivalents of $3,479 million, short term investments of $3,050 million and available capacity under our Revolving Credit Facility of $800 million and available capacity under the Amended F&G Credit Agreement of $750 million.

Subsequent to December 31, 2023, F&G acquired a 70% majority ownership stake in the equity of Roar Joint Venture, LLC ("Roar"), on January 2, 2024.

Roar wholesales life insurance and annuity products to banks and broker dealers through a network of agents.

Total initial consideration was approximately $311 million, comprised of cash of approximately $269 million and contingent consideration with an estimated fair value of $45 million.

Under the terms of the purchase agreement, F&G has agreed to make cash payments of up to approximately $90 million over a three year period upon the achievement of certain earnings before interest, taxes, depreciation and amortization milestones of Roar.

Subsequent to December 31, 2024, on February 1, 2025, F&G redeemed the outstanding $300 million aggregate principal amount of its 5.50% senior notes due May 1, 2025.

On January 13, 2025, F&G completed its public offering of its 7.300% Junior Subordinated Notes due 2065 with an aggregate principal amount of $375 million.

On October 4, 2024, F&G completed its public offering of its 6.25% Senior Notes due 2034 with the aggregate principal amount of $500 million (the "6.25% F&G Notes").

A portion of the net proceeds were used to pay off the outstanding balance of $365 million on the Company’s revolving credit facility.

On June 4, 2024, F&G completed its public offering of $550 million aggregate principal amount of its 6.50% Senior Notes due 2029 (the "6.50% F&G Notes").

A portion of the net proceeds were used to finance a cash tender offer by its wholly owned subsidiary Fidelity & Guaranty Life Holdings, Inc.

("FGLH") for an aggregate principal amount of $250 million of FGLH’s 5.50% Senior Notes due 2025 (the "5.50% F&G Notes").

On February 16, 2024, we entered into a Sixth Amended and Restated Credit Agreement for our $800 million revolving credit facility with Bank of America, N.A., as administrative agent and other agents party thereto (the "Sixth Restated Credit Agreement").

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Among other changes, the Second Amended and Restated F&G Credit Agreement amends the Amended F&G Credit Agreement to extend the maturity date and increase the aggregate principal amount of commitments under the revolving credit facility to $750 million.

On December 6, 2023, F&G completed the public offering of $345 million aggregate principal amount of its 7.95% Senior Notes due 2053 (the "7.95% F&G Notes").

F&G used the net proceeds from the sale of the notes to repay borrowings under its revolving credit facility and for general corporate purposes, including the support of organic growth opportunities.

On January 13, 2023, F&G completed its issuance and sale of $500 million aggregate amount of its 7.40% Senior Notes due 2028 (the "7.40% F&G Notes"), pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended.

F&G intends to use the net proceeds from the offering of the 7.40% F&G Notes for general corporate purposes, including to support the growth of assets under management and for F&G's future liquidity requirements.

For further information related to the 7.95% F&G Notes and 7.40% F&G Notes, refer to Note G Notes Payable to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.

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Operating Cash Flow .

Our cash flows provided by operations for the years ended December 31, 2023, 2022, 2021 were $6,478 million, $4,355 million, and $4,090 million, respectively.

The increase in cash provided by operating activities of $2,123 million in 2023 as compared to 2022 is primarily attributable to increased cash inflows associated with the change in funds withheld from reinsurers of $1,330 million, increased cash inflows associated with the change in future policy benefits of $254 million and net cash inflows associated with the timing of receipts and payments of prepaid assets, payables, and receivables of $384 million in 2023 as compared to net cash outflows of $783 million in 2022, partially offset by decreased net cash inflows from the change in reinsurance recoverable of $198 million, decreased net cash inflows from the change in trade receivables of $141 million and net cash outflows associated with the change in income taxes of $50 million in 2023 as compared to net cash inflows of $66 million in 2022.

The increase in cash provided by operating activities of $265 million in 2022 as compared to 2021 is primarily attributable to increased cash inflows associated with the change in funds withheld from reinsurers of $1,206 million, increased cash inflows associated with the change in future policy benefits of $444 million, net cash inflows from the change in trade receivables of $178 million in 2023 as compared to net cash outflows of $120 million in 2021 and increased cash inflows associated with the change in reinsurance recoverable of $217 million, partially offset by net cash outflows associated with the change in the reserve for title claims losses of $73 million in 2022 as compared to net cash inflows of $260 million in 2021, and net cash outflows associated with the timing of receipts and payments of prepaid assets, payables and receivables of $783 million in 2022 as compared to net cash inflows of $199 million in 2021.

Our cash flows provided by operations for the years ended December 31, 2024, 2023 and 2022 were $6,815 million, $6,478 million and $4,355 million, respectively.

The increase in cash provided by operating activities of $337 million in 2024 as compared to 2023 is primarily attributable to the increase in net earnings of $873 million, increased cash inflows associated with the change in future policy benefits of $528 million, increased cash inflows associated with the change in funds withheld from reinsurers of $409 million and net cash inflows associated with the change in income taxes of $83 million in 2024 as compared to net cash outflows of $50 million in 2023, partially offset by reduced net cash inflows associated with the change in derivative collateral liabilities of $319 million and increased net cash outflows associated with the timing of receipts and payments of prepaid assets, payables, and receivables of $268 million.

The increase in cash provided by operating activities of $2,123 million in 2023 as compared to 2022 is primarily attributable to increased cash inflows associated with the change in funds withheld from reinsurers of $1,330 million, increased cash inflows associated with the change in future policy benefits of $254 million, reduced net cash outflows associated with the timing of receipts and payments of prepaid assets, payables, and receivables of $359 million and net cash inflows associated with the change in derivative collateral liabilities of $410 million in 2023 as compared to net cash outflows of $398 million in 2022, partially offset by the decrease in net earnings of $788 million, decreased net cash inflows from the change in reinsurance recoverable of $198 million, decreased net cash inflows from the change in trade receivables of $141 million and net cash outflows associated with the change in income taxes of $50 million in 2023 as compared to net cash inflows of $66 million in 2022.

Investing Cash Flows.

Our cash used in investing activities for the years ended December 31, 2024, 2023 and 2022 were $7,862 million, $9,090 million and $10,524 million, respectively.

The decrease in cash used in investing activities in 2024 as compared to 2023 of $1,228 million is primarily associated with increased cash inflows from proceeds from sales, calls and maturities of investment securities of $6,399 million, increased cash inflows from distributions received from unconsolidated affiliates of $198 million and decreased investments in unconsolidated affiliates of $165 million, partially offset by increased purchases of investment securities of $3,840 million, increased cash outflows associated with acquisitions of $287 million and net purchases of short-term investment securities of $1,416 in 2024 as compared to net proceeds from sales and maturities of short-term investment securities of $340 million in 2023.

The decrease in cash used in investing activities in 2023 as compared to 2022 of $1,434 million is primarily associated with increased cash inflows from net proceeds from sales and maturities of short-term investment securities of $340 million in 2023 as compared to net purchases of short-term investment securities of $2,571 million in 2022, partially offset by increased cash outflows for additional investments in unconsolidated affiliates of $219 million, increased cash outflows for purchases of investment securities of $837 million, decreased cash inflows from proceeds from sales, calls and maturities of investment securities of $465 million and increased cash outflows associated with acquisitions of $119 million.

The increase in cash used in investing activities in 2022 as compared to 2021 of $3,075 million is primarily associated with net purchases of short-term investment securities of $2,571 million in 2022 as compared to proceeds from sales and maturities of short-term investment securities of $266 million in 2021, partially offset by decreased cash outflows for additional investments in unconsolidated affiliates of $669 million and decreased cash outflows for purchases of investment securities of $2,866 million.

Capital Expenditures.

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Our cash flows provided by financing activities for the year ended December 31, 2024, 2023 and 2022 were $1,759 million, $3,093 million and $4,095 million, respectively.

The decrease in cash provided by financing activities of $1,334 million in 2024 as compared to 2023 is primarily associated with increased cash outflows from contractholder withdrawals of $3,385 million, cash outflows for the tender offer of $250 million of our 5.50% F&G Notes and increased cash outflows associated with repayments of principal outstanding on our F&G Credit Agreement of $180 million, partially offset by increased cash inflows from contractholder deposits of $2,360 million and increased cash inflows associated with the issuance of our 6.25% F&G Senior Notes of $500 million and the issuance of our 6.50% F&G Senior Notes of $550 million in 2024, as compared to the issuance of our 7.95% F&G Notes of $345 million and the issuance of our 7.40% F&G Notes of $500 million in 2023.

The decrease in cash provided by financing activities of $1,002 million in 2023 as compared to 2022 is primarily associated with increased cash outflows from contractholder withdrawals of $1,175 million, decreased cash inflows from contractholder deposits of $743 million and net F&G Credit Agreement repayments of $185 million, partially offset by the issuance of our 7.95% F&G Notes of $345 million in December of 2023 and the issuance of our 7.40% F&G Notes of $500 million in January of 2023 as compared to the issuance of borrowings of $550 million in 2022, decreased purchases of treasury stock of $547 million and the repayment of $400 million for our 5.50% Notes in September 2022.

The decrease in cash provided by financing activities of $905 million in 2022 as compared to 2021 is primarily associated with increased cash outflows for debt service payments, including the repayment of $400 million for our 5.50% Notes that were due in September 2022, increased cash outflows from contractholder withdrawals of $519 million, and net cash outflows associated with the change in secured trust deposits of $72 million in 2022 as compared to net cash inflows of $224 million in 2021, partially offset by increased cash inflows from contractholder deposits of $364 million and borrowings of $550 million in 2022 as compared to the issuance of our 3.45% Notes of $449 million in September of 2021.

Financing Arrangements.

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Operating lease payments 133 108 77 52 32 24 426

Pension and other benefit payments 11 8 6 6 5 29 65

Annuity and universal life products 6,801 6,340 7,338 7,284 6,881 45,376 80,020

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Interest on fixed rate notes payable 139 136 136 92 78 996 1,577

Acquisitions 269 — — — — — 269

Total $ 9,308 $ 9,226 $ 10,221 $ 10,346 $ 8,814 $ 58,556 $ 106,471

As of December 31, 2024 , we had title insurance reserves of $1,713 million.

T he amounts and timing of these obligations are estimated and are not set contractually.

While we believe that historical loss payments are a reasonable source for projecting future claim payments, there is significant inherent uncertainty in this payment pattern estimate because of the potential impact of changes in:

The amounts and timing of these obligations are estimated and are not set contractually.

While we believe that historical loss pa yments are a reasonable source for projecting future claim payments, there is significant inherent uncertainty in this payment pattern estimate because of the potential impact of changes in:

• future mortgage interest rates, which will affect the number of real estate and refinancing transactions and;

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On August 3, 2021, our Board of Directors approved the 2021 Repurchase Program under which we may purchase up to 25 million shares of our FNF common stock through July 31, 2024 .

We may make repurchases from time to time in the open market, in block purchases or in privately negotiated transactions, depending on market conditions and other factors.

We repurchased 100,0000 shares of FNF common stock during the year ended December 31, 2023, for approximately $4 million, or an average of $38.45 per share.

Since the original commencement of the 2021 Repurchase Program, we have repurchased a total of 16,449,565 FNF common shares for an aggregate amount of $701 million, or an average of $42.60 per share.

On July 31, 2024, our Board of Directors approved a new three-year stock repurchase program effective July 31, 2024 (the "2024 Repurchase Program") under which we are authorized to purchase up to 25 million shares of our FNF common stock through July 31, 2027.

We did not repurchase any FNF common stock under the 2021 Repurchase Program or the 2024 Repurchase Program during the year ended December 31, 2024.

Subsequent to December 31, 2024 and through market close on February 21, 2025, we did not repurchase any FNF common stock under the 2024 Repurchase Program.

Equity and Preferred Security Investments.

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In conducting our operations, we routinely hold customers’ assets in escrow, pending completion of real estate transactions, and are responsible for the proper disposition of these balances for our customers.

Certain of these amounts are maintained in segregated bank accounts and have not been included in the accompanying Consolidated Balance Sheets, consistent with Generally Accepted Accounting Principles and industry practice.

These balances amounted to

$13.5 billion and $18.9 billion at December 31, 2023, and 2022 , respectively.

Certain of these amounts are maintained in segregated bank accounts and have not been included in the accompanying Consolidated Balance Sheets, consistent with GAAP and industry practice.

These balances amounted to $14.4 billion and $13.5 billion at

December 31, 2024, and 2023 , respectively.

As a result of holding these customers’ assets in escrow, we have ongoing programs for realizing economic benefits during the year through favorable borrowing and vendor arrangements with various banks.

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Generally, U.S.

government agency notes and mortgage-backed securities are pledged to the FHLB as collateral.

government agency notes, mortgage-backed securities, municipal bonds, and commercial and residential whole loans are pledged to the FHLB as collateral.

Market value fluctuations resulting from changes in interest rates, spreads and other risk factors for each type of asset are monitored and additional collateral is either pledged or released as needed.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis