6 unchanged sentences
We regularly assess these market risks and have established policies and business practices designed to protect against the adverse effects of these exposures.
−Removed: At December 31, 2023, we had $3,887 million in long-term debt, none of which bears interest at a floating rate, other than the F&G Credit Facility.
+Added: At December 31, 2024, we had $4,321 million in long-term debt, none of which bears interest at a floating rate.
Accordingly, fluctuations in market interest rates will not have a material impact on our resulting interest expense.
6 unchanged sentences
In the past, our exposure to changes in equity prices primarily resulted from our holdings of equity securities.
−Removed: At December 31, 2023, we held $766 million in marketable equity securities (not including our investments in preferred securities of $621 million and our investments in unconsolidated affiliates of $3,334 million).
+Added: As of December 31, 2024, we held $642 million in marketable equity securities (not including our investments in preferred securities of $443 million and our investments in unconsolidated affiliates of $3,731 million).
The carrying values of investments subject to equity price risks are based on quoted market prices as of the balance sheet date.
Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value.
−Removed: Fluctuation in
−Removed: the market price of a security may result from perceived changes in the underlying economic characteristics of the investee, the relative price of alternative investments and general market conditions.
+Added: Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the investee, the
+Added: relative price of alternative investments and general market conditions.
Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.
19 unchanged sentences
Interest Rate Risk
−Removed: At December 31, 2023, an increase (decrease) in the levels of interest rates of 100 basis points, with all other variables held constant, would result in a (decrease) increase in the fair value of our fixed maturity securities and certain of our investments in preferred securities, which are tied to interest rates of $2.5 billion as compared with a (decrease) increase of $2.0 billion at December 31, 2022.
+Added: As of December 31, 2024, an increase (decrease) in the levels of interest rates of 100 basis points, with all other variables held constant, would result in a (decrease) increase in the fair value of our fixed maturity securities and certain of our investments in preferred securities, which are tied to interest rates of $2.7 billion as compared with a (decrease) increase of $2.5 billion at December 31, 2023.
The actuarial models used to estimate the impact of a one percentage point change in market interest rates incorporate numerous assumptions, require significant estimates and assume an immediate and parallel change in interest rates without any management of the investment portfolio in reaction to such change.
4 unchanged sentences
Equity Price Risk
−Removed: At December 31, 2023, a 10% increase (decrease) in market prices, with all other variables held constant, would result in an increase (decrease) in the fair value of our equity securities portfolio of $77 million, as compared with an increase (decrease) o f $68 million at December 31, 2022.
+Added: As of December 31, 2024, a 10% increase (decrease) in market prices, with all other variables held constant, would result in an increase (decrease) in the fair value of our equity securities portfolio of $64 million, as compared with an increase (decrease) o f $77 million at December 31, 2023.
Interest Rate Risk Related to our F&G Segment
1 unchanged sentence
An increase in the levels of interest rates of 100 basis points, with all other variables held constant, would result in a decrease in the fair value of our fixed maturity securities and certain investments in preferred securities of approximately $2.6 billion, a net decrease in the fair value of interest rate swaps of approximately $0.1 billion and a net decrease in the combined fair value of embedded derivatives and MRBs of approximately $0.6 bil lion at December 31, 2024 .
−Removed: For comparison, a similar increase in the levels of interest rates of 100 basis points, with all other variables held constant, would have resulted in a decrease in the fair value of our fixed maturity securities and certain investments in preferred securities of approximately $1.9 billion and a net decrease in the combined fair value of embedded derivatives and MRBs of approximately $0.4 billion at December 31, 2022.
−Removed: A 100 basis point shift in interest rates for our floating rate debt and funding agreements will increase or decrease floating expense by approximatel y $14 million and $11 million per year as of December 31, 2023 and December 31, 2022, respectively .
+Added: For comparison, a similar increase in the levels of interest rates of 100 basis points, with all other variables held constant, would have resulted in a decrease in the fair value of our fixed maturity securities and certain investments in preferred securities of approximately $2.4 billion, a net decrease in the fair value of interest rate swaps of approximately $0.1 billion and a net decrease in the combined fair value of embedded derivatives and MRBs of approximately $0.5 billion at December 31, 2023.
+Added: A 100 basis point shift in interest rates for our floating rate debt and funding agreements will increase or decrease floating expense by approximatel y $17 million and $14 million per year as of December 31, 2024 and 2023, respectively .
As noted above, the impact to net earnings related to the interest rate swaps and floating rate notes payable and funding agreements will be significantly offset by corresponding changes in investment income associated with our floating rate investments.
11 unchanged sentences
When the durations of assets and liabilities are similar, exposure to interest rate risk is minimized because a change in the value of assets could be expected to be largely offset by a change in the value of liabilities.
−Removed: The duration of the investment portfolio, excluding cash and cash equivalents, derivatives, policy loans, and common stocks as of December 31, 2023, and December 31, 2022, is summarized as follows:
+Added: The duration of the investment portfolio, excluding cash and cash equivalents, derivatives, policy loans, and common stocks as of December 31, 2024, and 2023, is summarized as follows:
December 31, 2024
21 unchanged sentences
We are also exposed to equity price risk through certain insurance products.
−Removed: We offer a variety of FIA/ IUL contracts with crediting strategies linked to the performance of indices such as the S&P 500 Index, Dow Jones Industrials or the NASDAQ 100 Index, and target volatility indices.
−Removed: Additionally, the estimated cost of providing GMWB on FIA products incorporates various assumptions about the overall performance of equity markets over certain time periods.
+Added: We offer a variety of indexed annuities/IUL contracts with crediting strategies linked to the performance of indices such as the S&P 500 Index, Dow Jones Industrials or the NASDAQ 100 Index, and target volatility indices.
+Added: Additionally, the estimated cost of providing GMWB on indexed annuities products incorporates various assumptions about the overall performance of equity markets over certain time periods.
Periods of significant and sustained downturns in equity markets or increased equity volatility could result in an increase in the valuation of the MRB liabilities and decrease in the valuation of contractholder funds liabilities associated with such products.
−Removed: To economically hedge the equity returns on these products, we purchase derivatives to hedge the FIA and IUL equity exposures.
−Removed: The primary way we hedge FIA/ IUL equity exposure is to purchase over the counter equity index call options from broker-dealer derivative counterparties approved by F&G.
−Removed: The second way to hedge FIA/ IUL equity exposure is by purchasing exchange traded equity index futures contracts.
−Removed: This hedging strategy enables us to reduce the overall hedging costs and achieve a high correlation of returns on the call options purchased relative to the index credits earned by the FIA/ IUL contractholders.
−Removed: The majority of the call options are one-year options purchased to match the funding requirements underlying the FIA/ IUL contracts.
−Removed: These hedge programs are limited to the current policy term of the FIA/ IUL contracts.
−Removed: Future returns, which may be reflected in FIA/ IUL contracts’ credited rates beyond the current policy term, are not hedged.
−Removed: We attempt to manage the costs of these purchases through the terms of the FIA/ IUL contracts, which permit us to change cap, spread or participation rates, subject to certain guaranteed minimums that must be maintained.
−Removed: The derivatives are used to fund the FIA/ IUL contract index credits and the cost of the call options purchased is treated as a component of spread earnings.
−Removed: While the FIA/ IUL hedging program does not explicitly hedge GAAP income volatility, the FIA/ IUL hedging program tends to mitigate a significant portion of the GAAP reserve changes associated with movements in the equity market.
+Added: To economically hedge the equity returns on these products, we purchase derivatives to hedge the indexed annuities and IUL equity exposures.
+Added: The primary way we hedge indexed annuities/IUL equity exposure is to purchase over the counter equity index equity options from broker-dealer derivative counterparties approved by F&G.
+Added: The second way to hedge indexed annuities/ IUL equity exposure is by purchasing exchange traded equity index futures contracts.
+Added: This hedging strategy enables us to reduce the overall hedging costs and achieve a high correlation of returns on the equity options purchased relative to the index credits earned by the indexed annuities/IUL contractholders.
+Added: The majority of the equity options are one-year options purchased to match the funding requirements underlying the indexed annuities/IUL contracts.
+Added: These hedge programs are limited to the current policy term of the indexed annuities/IUL contracts.
+Added: Future returns, which may be reflected in indexed annuities IUL contracts’ credited rates beyond the current policy term, are not hedged.
+Added: We attempt to manage the costs of these purchases through the terms of the indexed annuities/IUL contracts, which permit us to change cap, spread or participation rates, subject to certain guaranteed minimums that must be maintained.
+Added: The derivatives are used to fund the indexed annuities/IUL contract index credits and the cost of the equity options purchased is treated as a component of spread earnings.
+Added: While the indexed annuities/IUL hedging program does not explicitly hedge GAAP income volatility, the indexed annuities/IUL hedging program tends to mitigate a significant portion of the GAAP reserve changes associated with movements in the equity market.
This is due to the fact that a key component in the calculation of GAAP reserves is the market valuation of the current term embedded derivative.
4 unchanged sentences
Fair value changes associated with these investments are intended to, but do not always, substantially offset the increase or decrease in the amounts added to contractholder funds for indexed products.
−Removed: When index credits to policyholders exceed option proceeds received at expiration related to such credits, any shortfall is funded by our excess of net investment income earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed product policies and futures income.
−Removed: For the years ended December 31, 2023 , December 31, 2022, and December 31, 2021, the annual index credits to
−Removed: policyholders on their anniversaries were $203 million, $155 million and $628 million, respectively.
+Added: When index credits to policyholders exceed option proceeds received at expiration related to such credits, any shortfall is funded by our excess of net investment income earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed product policies and futures
+Added: For the years ended December 31, 2024 , 2023 and 2022, the annual index credits to policyholders on their anniversaries were $725 million, $203 million and $155 million, respectively.
Proceeds received at expiration of options related to such credits were $849 million, $212 million and $158 million, respectively.
Other market exposures are hedged periodically depending on market conditions and our risk tolerance.
−Removed: The FIA/ IUL hedging strategy economically hedges the equity returns and exposes us to the risk that unhedged market exposures result in divergence between changes in the fair value of the liabilities and the hedging assets.
+Added: The indexed annuities/IUL hedging strategy economically hedges the equity returns and exposes us to the risk that unhedged market exposures result in divergence between changes in the fair value of the liabilities and the hedging assets.
We use a variety of techniques, including direct estimation of market sensitivities, to monitor this risk daily.
25 unchanged sentences
In the normal course of business, certain reinsurance recoverables are subject to reviews by the reinsurers.
−Removed: We are not aware of any material disputes arising from these reviews or other communications with the counterparties as of December 31, 2023, and December 31, 2022, that would require an increase to the allowance for credit losses.
+Added: We are not aware of any material disputes arising from these reviews or other communications with the counterparties as of December 31, 2024, and 2023, that would require an increase to the allowance for credit losses.
For information on concentrations of reinsurance risk, refer to Note O F&G Reinsurance in the Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K.
4 unchanged sentences
Concentrations of Financial Instruments Related to our F&G Segment
−Removed: Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations - Investment Portfolio - Investment Industry Concentrations included in Part II - Item 7 of this Annual Report on Form 10-K regarding the top ten investment concentrations 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 December 31, 2022.
−Removed: Refer to Note D - Investments in the Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K for our underlying investment concentrations that exceed 10% of shareholders equity as of December 31, 2023, and December 31, 2022.
+Added: Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations - Investment Portfolio - Investment Industry Concentrations included in Part II - Item 7 of this Annual Report on Form 10-K regarding the top ten investment concentrations 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, 2024, and 2023.
Concentrations of Financial and Capital Markets Risk Related to our F&G Segment
7 unchanged sentences
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.