Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019 | |
Document and Entity Information [Abstract] | |
Document Type | POS AM |
Amendment Flag | false |
Entity Registrant Name | GREAT AMERICAN LIFE INSURANCE CO. |
Entity Central Index Key | 0000723258 |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash and cash equivalents | $ 734 | $ 329 |
Investments: | ||
Fixed maturities, available for sale at fair value (amortized cost — $36,144 and $34,024) | 37,899 | 34,132 |
Fixed maturities, trading at fair value | 54 | 55 |
Equity securities, at fair value | 809 | 743 |
Investments accounted for using the equity method | 985 | 817 |
Mortgage loans | 1,072 | 783 |
Policy loans | 164 | 174 |
Real estate and other investments | 311 | 323 |
Total cash and investments | 42,028 | 37,356 |
Recoverables from reinsurers | 282 | 298 |
Deferred policy acquisition costs (including the impact of unrealized gains on securities of $681 and $42) | 713 | 1,381 |
Accrued investment income | 335 | 326 |
Equity index call options | 924 | 184 |
Variable annuity assets (separate accounts) | 628 | 557 |
Funds held as collateral | 577 | 103 |
Net deferred tax assets | 44 | 168 |
Other assets | 362 | 428 |
Total assets | 45,893 | 40,801 |
Liabilities and Equity: | ||
Annuity benefits accumulated (including the impact of unrealized gains on securities of $220 and $14) | 40,406 | 36,616 |
Life, accident and health reserves | 612 | 635 |
Variable annuity liabilities (separate accounts) | 628 | 557 |
Liability for funds held as collateral | 577 | 103 |
Other liabilities | 189 | 351 |
Total liabilities | 42,412 | 38,262 |
Shareholder’s equity: | ||
Common Stock, par value — $12.50 per share: — 1,200,000 shares authorized — 201,000 shares issued and outstanding | 3 | 3 |
Capital surplus | 989 | 970 |
Retained earnings | 1,741 | 1,488 |
Accumulated other comprehensive income, net of tax | 700 | 31 |
Total shareholder’s equity | 3,433 | 2,492 |
Noncontrolling interests | 48 | 47 |
Total equity | 3,481 | 2,539 |
Total liabilities and equity | $ 45,893 | $ 40,801 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fixed maturities, available for sale at amortized cost | $ 36,144 | $ 34,024 |
Unrealized gains (losses) included in Balance Sheet line items related to the impact of unrealized gains on securities | $ 865 | $ 53 |
Common Stock, par value (USD per share) | $ 12.50 | $ 12.50 |
Common Stock, shares authorized | 1,200,000 | 1,200,000 |
Common Stock, shares issued | 201,000 | 201,000 |
Common Stock, shares outstanding | 201,000 | 201,000 |
Deferred policy acquisition costs | ||
Unrealized gains (losses) included in Balance Sheet line items related to the impact of unrealized gains on securities | $ (681) | $ (42) |
Annuity benefits accumulated | ||
Unrealized gains (losses) included in Balance Sheet line items related to the impact of unrealized gains on securities | $ (220) | $ (14) |
Consolidated Statement of Earni
Consolidated Statement of Earnings - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Net investment income | $ 1,813 | $ 1,657 | $ 1,478 |
Realized gains (losses) on securities | 132 | (105) | (13) |
Life, accident and health net earned premiums | 22 | 24 | 22 |
Policy charges and other income | 114 | 115 | 111 |
Total revenues | 2,081 | 1,691 | 1,598 |
Costs and Expenses: | |||
Annuity benefits | 1,151 | 998 | 892 |
Life, accident and health benefits | 36 | 37 | 23 |
Insurance acquisition expenses, net | 253 | 260 | 172 |
Other expenses | 144 | 140 | 130 |
Total costs and expenses | 1,584 | 1,435 | 1,217 |
Earnings before income taxes | 497 | 256 | 381 |
Provision for income taxes | 102 | 47 | 105 |
Net earnings, including noncontrolling interests | 395 | 209 | 276 |
Less: Net earnings attributable to noncontrolling interests | 2 | 2 | 6 |
Net Earnings Attributable to Shareholder | 393 | 207 | 270 |
Supplemental disclosure of Realized gains on securities: | |||
Realized gains (losses) before impairments | 142 | (91) | 16 |
Losses on securities with impairment | (10) | (14) | (30) |
Non-credit portion recognized in other comprehensive income (loss) | 0 | 0 | 1 |
Impairment charges recognized in earnings | (10) | (14) | (29) |
Total realized gains (losses) on securities | $ 132 | $ (105) | $ (13) |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings, including noncontrolling interests | $ 395 | $ 209 | $ 276 |
Net unrealized gains (losses) on securities: | |||
Unrealized holding gains (losses) on securities arising during the period | 654 | (443) | 194 |
Reclassification adjustment for realized (gains) losses included in net earnings | (13) | 5 | 2 |
Total net unrealized gains (losses) on securities | 641 | (438) | 196 |
Net unrealized gains (losses) on cash flow hedges | 28 | 2 | (4) |
Other comprehensive income (loss), net of tax | 669 | (436) | 192 |
Total comprehensive income (loss), net of tax | 1,064 | (227) | 468 |
Less: Comprehensive income attributable to noncontrolling interests | 2 | 2 | 6 |
Comprehensive income (loss) attributable to shareholder | $ 1,062 | $ (229) | $ 462 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Total | Common Shares | Common Stock and Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Inc. (Loss) | Noncontrolling Interests | ||
Beginning Balance, shares at Dec. 31, 2016 | 201,000 | ||||||||
Beginning Balance at Dec. 31, 2016 | $ 2,567 | $ 2,509 | $ 941 | $ 1,302 | $ 266 | $ 58 | |||
Increase (Decrease) in Stockholder's Equity [Roll Forward] | |||||||||
Net earnings | 276 | 270 | 270 | 6 | |||||
Other comprehensive income (loss) | 192 | 192 | 192 | 0 | |||||
Impact of the U.S. corporate tax rate change on AOCI | 0 | 0 | (99) | 99 | [1] | 0 | |||
Capital contributions from parent | 14 | 14 | 14 | ||||||
Dividends | (225) | (225) | (225) | ||||||
Other | (16) | 1 | 1 | 0 | 0 | (17) | |||
Ending Balance, shares at Dec. 31, 2017 | 201,000 | ||||||||
Ending Balance at Dec. 31, 2017 | 2,808 | 2,761 | 956 | 1,248 | 557 | 47 | |||
Increase (Decrease) in Stockholder's Equity [Roll Forward] | |||||||||
Cumulative effect of accounting change | 3 | 3 | 93 | (90) | |||||
Net earnings | 209 | 207 | 207 | 2 | |||||
Other comprehensive income (loss) | (436) | (436) | (436) | 0 | |||||
Impact of the U.S. corporate tax rate change on AOCI | [1] | (90) | |||||||
Capital contributions from parent | 17 | 17 | 17 | ||||||
Dividends | (60) | (60) | (60) | ||||||
Other | $ (2) | (2) | |||||||
Ending Balance, shares at Dec. 31, 2018 | 201,000 | 201,000 | |||||||
Ending Balance at Dec. 31, 2018 | $ 2,539 | 2,492 | 973 | 1,488 | 31 | 47 | |||
Increase (Decrease) in Stockholder's Equity [Roll Forward] | |||||||||
Net earnings | 395 | 393 | 393 | 2 | |||||
Other comprehensive income (loss) | 669 | 669 | 669 | 0 | |||||
Capital contributions from parent | 19 | 19 | 19 | ||||||
Dividends | (140) | (140) | (140) | ||||||
Other | $ (1) | (1) | |||||||
Ending Balance, shares at Dec. 31, 2019 | 201,000 | 201,000 | |||||||
Ending Balance at Dec. 31, 2019 | $ 3,481 | $ 3,433 | $ 992 | $ 1,741 | $ 700 | $ 48 | |||
[1] | On January 1, 2018, GALIC adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $90 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $99 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “Accounting Policies — Income Taxes”). |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities: | |||
Net earnings, including noncontrolling interests | $ 395 | $ 209 | $ 276 |
Adjustments: | |||
Depreciation and amortization | (59) | (67) | (80) |
Annuity benefits | 1,151 | 998 | 892 |
Realized (gains) losses on investing activities | (132) | 105 | 13 |
Net sales of trading securities | 3 | 59 | 3 |
Deferred annuity and life policy acquisition costs | (206) | (263) | (225) |
Amortization of insurance acquisition costs | 202 | 215 | 133 |
Change in: | |||
Recoverables from reinsurers | 16 | 14 | 16 |
Accrued investment income | (9) | (35) | (29) |
Funds held as collateral | (474) | 286 | (9) |
Other assets | 112 | (71) | (25) |
Life, accident and health reserves | (23) | (23) | (33) |
Liability for funds held as collateral | 474 | (286) | 9 |
Other liabilities | (42) | 11 | (106) |
Other operating activities, net | (74) | (84) | (39) |
Net cash provided by operating activities | 1,334 | 1,068 | 796 |
Investing Activities: | |||
Purchases of fixed maturities | (6,177) | (7,898) | (7,062) |
Purchases of equity securities | (126) | (326) | (128) |
Purchases of mortgage loans | (407) | (142) | (130) |
Purchases of equity options — indexed annuities | (600) | (567) | (432) |
Purchases of other investments | (220) | (296) | (409) |
Purchases of real estate, property and equipment | (8) | (15) | (10) |
Proceeds from maturities and redemptions of fixed maturities | 3,215 | 3,551 | 4,247 |
Proceeds from repayments of mortgage loans | 118 | 155 | 156 |
Proceeds from sales of fixed maturities | 801 | 447 | 315 |
Proceeds from sales of equity securities | 214 | 121 | 82 |
Proceeds from settlement of equity options — fixed indexed annuities | 666 | 786 | 717 |
Proceeds from sales of other investments | 65 | 122 | 186 |
Proceeds from sales of real estate, property and equipment | 0 | 0 | 27 |
Other investing activities, net | 10 | 10 | 8 |
Net cash used in investing activities | (2,449) | (4,052) | (2,433) |
Financing Activities: | |||
Annuity receipts | 4,960 | 5,407 | 4,341 |
Annuity surrenders, benefits and withdrawals | (3,358) | (2,916) | (2,341) |
Net transfers from variable annuity assets | 60 | 47 | 54 |
Advances from Federal Home Loan Bank | 0 | 225 | 0 |
Repayments to Federal Home Loan Bank | 0 | 0 | (64) |
Cash dividends paid | (140) | (60) | (225) |
Other financing activities, net | (2) | (1) | (16) |
Net cash provided by (used in) financing activities | 1,520 | 2,702 | 1,749 |
Net Change in Cash and Cash Equivalents | 405 | (282) | 112 |
Cash and cash equivalents at beginning of period | 329 | 611 | 499 |
Cash and cash equivalents at end of period | $ 734 | $ 329 | $ 611 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Great American Life Insurance Company and its subsidiaries (“GALIC” or the “Company”). GALIC is a direct wholly-owned subsidiary of Great American Financial Resources, Inc. (“GAFRI”), a financial services holding company wholly-owned by American Financial Group, Inc. (“AFG”). Certain reclassifications have been made to prior years to conform to the current year’s presentation. All significant intercompany balances and transactions have been eliminated. The results of operations of companies since their formation or acquisition are included in the consolidated financial statements. The financial statements also include costs paid on behalf of GALIC by GAFRI. These costs are recorded as expense in the period incurred and shown as an increase in capital surplus. Events or transactions occurring subsequent to the audited consolidated financial statements as of and for the year ended December 31, 2019 , and prior to April 17, 2020 , have been evaluated for potential recognition or disclosure herein. The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates. On January 1, 2018, GALIC adopted Accounting Standards Update (“ASU”) 2014-09, which provides guidance on recognizing revenue when (or as) performance obligations under the contract are satisfied. The guidance also updates the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires certain new disclosures. Because revenue recognition for insurance contracts and financial instruments (GALIC’s primary sources of revenue) were excluded from the scope of the new guidance, the adoption of ASU 2014-09 did not have a material impact on GALIC’s results of operations or financial position. Fair Value Measurements Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The standards establish a hierarchy of valuation techniques based on whether the assumptions that market participants would use in pricing the asset or liability (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect GALIC’s assumptions about the assumptions market participants would use in pricing the asset or liability. GALIC did not have any material nonrecurring fair value measurements in 2019 or 2018 . Investments On January 1, 2018, GALIC adopted ASU 2016-01, which requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At December 31, 2017, GALIC had $593 million in equity securities classified as “available for sale” under the prior guidance with holding gains and losses included in accumulated other comprehensive income (“AOCI”) instead of net earnings. At the date of adoption, the $90 million net unrealized gain on equity securities included in AOCI was reclassified to retained earnings as the cumulative effect of an accounting change. The cumulative effect of the accounting change also includes the net unrealized gain on GALIC’s small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under the new guidance ( $3 million net of tax at the date of adoption). Following the adoption of ASU 2016-01, holding gains and losses on equity securities carried at fair value are generally recorded in realized gains (losses) on securities. However, GALIC records holding gains and losses on securities classified as “trading” under previous guidance, its small portfolio of limited partnerships and similar investments carried at fair value and certain other securities classified at purchase as “fair value through net investment income” in net investment income. Under the new guidance, GALIC recorded holding gains of $140 million on equity securities in net earnings during 2019 on securities that were still held December 31, 2019 and holding losses of $97 million on equity securities in net earnings during 2018 on securities that were still owned at December 31, 2018 . Under the prior guidance, these holding losses would have been recorded in AOCI until the securities were disposed (with the exception of any impairment charge that may have been recorded). Because almost all of the equity securities impacted by the new guidance were carried at fair value through AOCI under the prior guidance, the adoption of the new guidance did not have a material impact on GALIC’s financial position. Fixed maturity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in AOCI in GALIC’s Balance Sheet. Fixed maturity securities classified as “trading” are reported at fair value with changes in unrealized holding gains or losses during the period included in net investment income. Mortgage and policy loans are carried primarily at the aggregate unpaid balance. Premiums and discounts on fixed maturity securities are amortized using the effective interest method. Mortgage-backed securities (“MBS”) are amortized over a period based on estimated future principal payments, including prepayments. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations. Limited partnerships and similar investments are generally accounted for using the equity method of accounting. Under the equity method, GALIC records its share of the earnings or losses of the investee based on when they are reported by the investee in its financial statements rather than in the period in which the investee declares a dividend. GALIC’s share of the earnings or losses from equity method investments is generally recorded on a quarter lag due to the timing of the receipt of the investee’s financial statements. GALIC’s equity in the earnings (losses) of limited partnerships and similar investments is included in net investment income. Gains or losses on fixed maturity securities classified as “available for sale” are determined on the specific identification basis. When a decline in the value of a specific investment is considered to be other-than-temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses) on securities) and the cost basis of that investment is reduced. If management can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: (i) the amount related to credit losses (recorded in earnings) and (ii) the amount related to all other factors (recorded in other comprehensive income). The credit-related portion of an other-than-temporary impairment is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. Both components are shown in the statement of earnings. If management intends to sell an impaired security, or it is more likely than not that it will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value. Derivatives Derivatives included in GALIC’s Balance Sheet are recorded at fair value. Changes in fair value of derivatives are included in earnings, unless the derivatives are designated and qualify as highly effective cash flow hedges. Derivatives that do not qualify for hedge accounting under GAAP consist primarily of (i) components of certain fixed maturity securities (primarily interest-only and principal-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related equity index options designed to be consistent with the characteristics of the liabilities and used to mitigate the risk embedded in those annuity products. To qualify for hedge accounting, at the inception of a derivative contract, GALIC formally documents the relationship between the terms of the hedge and the hedged items and its risk management objective. This documentation includes defining how hedge effectiveness and ineffectiveness will be measured on a retrospective and prospective basis. Changes in the fair value of derivatives that are designated and qualify as highly effective cash flow hedges are recorded in AOCI and are reclassified into earnings when the variability of the cash flows from the hedged items impacts earnings. When the change in the fair value of a qualifying cash flow hedge is included in earnings, it is included in the same line item in the statement of earnings as the cash flows from the hedged item. GALIC uses interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in GALIC’s portfolio of fixed maturity securities. Funds Held as Collateral GALIC receives collateral from certain counterparties to support its purchased equity index call option assets (net of collateral required under put option contracts with the same counterparties). The fair value of this collateral is recorded as an asset and the offsetting obligation to return the collateral is recorded as a liability. Reinsurance Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policies. A GALIC subsidiary cedes life insurance policies to a third party on a funds withheld basis whereby the subsidiary retains the assets (securities) associated with the reinsurance contract. Interest is credited to the reinsurer based on the actual investment performance of the retained assets. This reinsurance contract is considered to contain an embedded derivative (that must be adjusted to fair value) because the yield on the payable is based on a specific block of the ceding company’s assets, rather than the overall creditworthiness of the ceding company. GALIC determined that changes in the fair value of the underlying portfolio of fixed maturity securities is an appropriate measure of the value of the embedded derivative. The securities related to this contract are classified as “trading.” The adjustment to fair value on the embedded derivative offsets the investment income recorded on the adjustment to fair value of the related trading portfolio. Deferred Policy Acquisition Costs (“DPAC”) Policy acquisition costs (principally commissions, premium taxes and certain underwriting and policy issuance costs) directly related to the successful acquisition or renewal of an insurance contract are deferred. DPAC also includes capitalized costs associated with sales inducements offered to fixed annuity policyholders such as enhanced interest rates and premium and persistency bonuses. DPAC related to annuities is deferred to the extent deemed recoverable and amortized, with interest, in relation to the present value of actual and expected gross profits on the policies. Expected gross profits consist principally of estimated future investment margin (estimated future net investment income less interest credited on policyholder funds) and surrender, mortality, and other life and annuity policy charges, less death, annuitization and guaranteed withdrawal benefits in excess of account balances and estimated future policy administration expenses. To the extent that realized gains and losses result in adjustments to the amortization of DPAC related to annuities, such adjustments are reflected as components of realized gains (losses) on securities. DPAC related to traditional life and health insurance is amortized over the expected premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues. See “ Life, Accident and Health Reserves ” below for details on the impact of loss recognition on the accounting for traditional life and health insurance contracts. DPAC includes the present value of future profits on business in force of annuity and life, accident and health insurance companies acquired (“PVFP”). PVFP represents the portion of the costs to acquire companies that is allocated to the value of the right to receive future cash flows from insurance contracts existing at the date of acquisition. PVFP is amortized with interest in relation to expected gross profits of the acquired policies for annuities and universal life products and in relation to the premium paying period for traditional life and health insurance products. DPAC and certain other balance sheet amounts related to annuity and life businesses are also adjusted, net of tax, for the change in expense that would have been recorded if the unrealized gains (losses) from securities had actually been realized. These adjustments are included in unrealized gains (losses) on marketable securities, a component of AOCI in GALIC’s Balance Sheet. Annuity Benefits Accumulated Annuity receipts and benefit payments are recorded as increases or decreases in annuity benefits accumulated rather than as revenue and expense. Increases in this liability for interest credited are charged to annuity benefits expense and decreases for annuity policy charges are recorded as policy charges revenue. For traditional fixed annuities, the liability for annuity benefits accumulated represents the account value that had accrued to the benefit of the policyholder as of the balance sheet date. For fixed-indexed annuities (“FIAs”), the liability for annuity benefits accumulated includes an embedded derivative that represents the estimated fair value of the index participation with the remaining component representing the discounted value of the guaranteed minimum contract benefits. For certain products, annuity benefits accumulated also includes reserves for accrued persistency and premium bonuses, guaranteed withdrawals and excess benefits expected to be paid on future deaths and annuitizations (“EDAR”). The liabilities for EDAR and guaranteed withdrawals are accrued for and modified using assumptions consistent with those used in determining DPAC and DPAC amortization, except that amounts are determined in relation to the present value of total expected assessments. Total expected assessments consist principally of estimated future investment margin, surrender, mortality, and other life and annuity policy charges, and unearned revenues once they are recognized as income. Annuity benefits accumulated also includes amounts advanced from the Federal Home Loan Bank of Cincinnati. Unearned Revenue Certain upfront policy charges on annuities are deferred as unearned revenue (included in other liabilities) and recognized in net earnings (included in policy charges and other income) using the same assumptions and estimated gross profits used to amortize DPAC. Life, Accident and Health Reserves Liabilities for future policy benefits under traditional life, accident and health policies are computed using the net level premium method. Computations are based on the original projections of investment yields, mortality, morbidity and surrenders and include provisions for unfavorable deviations unless a loss recognition event (premium deficiency) occurs. Claim reserves and liabilities established for accident and health claims are modified as necessary to reflect actual experience and developing trends. For long-duration contracts (such as traditional life policies), loss recognition occurs when, based on current expectations as of the measurement date, existing contract liabilities plus the present value of future premiums (including reasonably expected rate increases) are not expected to cover the present value of future claims payments and related settlement and maintenance costs (excluding overhead) as well as unamortized acquisition costs. If a block of business is determined to be in loss recognition, a charge is recorded in earnings in an amount equal to the excess of the present value of expected future claims costs and unamortized acquisition costs over existing reserves plus the present value of expected future premiums (with no provision for adverse deviation). The charge is recorded first to reduce unamortized acquisition costs and then as an additional reserve (if unamortized acquisition costs have been reduced to zero). In addition, reserves for traditional life policies are subject to adjustment for loss recognition charges that would have been recorded if the unrealized gains (losses) from securities had actually been realized. This adjustment is included in unrealized gains (losses) on marketable securities, a component of AOCI in GALIC’s Balance Sheet. Variable Annuity Assets and Liabilities Separate accounts related to variable annuities represent the fair value of deposits invested in underlying investment funds on which GALIC earns a fee. Investment funds are selected and may be changed only by the policyholder, who retains all investment risk. GALIC’s variable annuity contracts contain a guaranteed minimum death benefit (“GMDB”) to be paid if the policyholder dies before the annuity payout period commences. In periods of declining equity markets, the GMDB may exceed the value of the policyholder’s account. A GMDB liability is established for future excess death benefits using assumptions together with a range of reasonably possible scenarios for investment fund performance that are consistent with DPAC capitalization and amortization assumptions. Leases On January 1, 2019, GALIC adopted ASU 2016-02, which requires entities that lease assets for terms longer than one year to recognize assets and liabilities for the rights and obligations created by those leases on the balance sheet based on the present value of contractual cash flows. As permitted under the ASU, GALIC adopted the guidance on a modified retrospective basis (comparative periods were not adjusted) and elected the following accounting policies and practical expedients: • exclude leases with a term of 12 months or less from the calculation of lease assets and liabilities, • not separate lease and non-lease components except for buildings (office space and storage facilities), • for contracts existing at the date of adoption — not reassess whether a contract is a lease or contains a lease, how initial direct costs were accounted for or whether the lease is an operating or finance lease, and • use hindsight to determine the lease term for leases existing at the date of adoption. GALIC did not have any material leases at December 31, 2019 or January 1, 2019. Noncontrolling Interests For balance sheet purposes, noncontrolling interests represent the interests of shareholders other than GALIC in consolidated entities. In the statement of earnings, net earnings and losses attributable to noncontrolling interests represents such shareholders’ interest in the earnings and losses of those entities. Premium Recognition For traditional life, accident and health products, premiums are recognized as revenue when legally collectible from policyholders. For interest-sensitive life and universal life products, premiums are recorded in a policyholder account, which is reflected as a liability. Revenue is recognized as amounts are assessed against the policyholder account for mortality coverage and contract expenses. Income Taxes GALIC and its subsidiaries have an intercompany tax allocation agreement with AFG. Pursuant to the agreement, each company’s tax expense is determined based upon its inclusion in the consolidated tax return of AFG and its includable subsidiaries. Estimated payments are made quarterly during the year. Following year-end, additional settlements are made on the original due date of the return and, when extended, at the time the return is filed. The method of allocation among the companies under the agreement is based upon separate return calculations with current credit for losses to the extent the losses provide a benefit in the consolidated return. Deferred income taxes are calculated using the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases and are measured using enacted tax rates. A valuation allowance is established to reduce total deferred tax assets to an amount that will more likely than not be realized. GALIC recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. Interest and penalties on GALIC’s reserve for uncertain tax positions are recognized as a component of tax expense. The effect of a change in tax rates on deferred tax assets and liabilities is recorded in net earnings in the period that includes the enactment date. This includes the impact on deferred tax assets or liabilities established through AOCI, which results in an amount equal to the difference between the deferred tax at the historical corporate rate and the newly enacted rate stranded in AOCI. As permitted under guidance adopted effective December 31, 2017 (ASU 2018-02), GALIC reclassified the $99 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings at December 31, 2017. See Note I — “ Income Taxes ” for further information. Benefit Plans GALIC provides retirement benefits to qualified employees of participating companies through the AFG 401(k) Retirement and Savings Plan, a defined contribution plan. AFG and its subsidiaries make all contributions to the retirement fund portion of the plan and match a percentage of employee contributions to the savings fund. Company contributions are expensed in the year for which they are declared. Statement of Cash Flows For cash flow purposes, “investing activities” are defined as making and collecting loans and acquiring and disposing of debt or equity instruments and property and equipment. “Financing activities” include obtaining resources from owners and providing them with a return on their investments, borrowing money and repaying amounts borrowed. Annuity receipts, surrenders, benefits and withdrawals are also reflected as financing activities. All other activities are considered “operating.” Short-term investments having original maturities of three months or less when purchased are considered to be cash equivalents for purposes of the financial statements. Credit Impairment Guidance Effective in 2020 In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which provides a new loss model for determining credit-related impairments for financial instruments measured at amortized cost (mortgage loans, premiums receivable and reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses considers historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. Expected credit losses, and subsequent increases or decreases in such expected losses, will be recorded immediately through net earnings as an allowance that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the balance sheet at the amount expected to be collected. The updated guidance also amends the current other-than-temporary impairment model for available for sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. Subsequent increases or decreases in expected credit losses will be recorded immediately in net earnings through realized gains (losses). GALIC will adopt this guidance effective January 1, 2020. The new guidance did not have a material impact on GALIC’s results of operations or financial position. |
Segments of Operations
Segments of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segments of Operations | Segments of Operations GALIC manages its business as two segments: (i) Annuity and (ii) Run-off life. GALIC’s annuity business sells traditional fixed and indexed annuities in the retail, financial institutions, broker-dealer and registered investment advisor markets. GALIC’s reportable segments and their components were determined based primarily upon similar economic characteristics, products and services. The following tables (in millions) show GALIC’s assets, revenues and earnings before income taxes by segment. 2019 2018 2017 Assets Annuity $ 45,217 $ 40,115 $ 37,392 Run-off life 676 686 728 Total assets $ 45,893 $ 40,801 $ 38,120 Revenues Annuity: Net investment income $ 1,792 $ 1,638 $ 1,458 Other income 108 108 106 Total annuity 1,900 1,746 1,564 Run-off life 49 50 47 Total revenues before realized gains (losses) 1,949 1,796 1,611 Realized gains (losses) on securities 132 (105 ) (13 ) Total revenues $ 2,081 $ 1,691 $ 1,598 Earnings Before Income Taxes Annuity $ 363 $ 363 $ 385 Run-off life 2 (2 ) 9 Total earnings before realized gains (losses) and income taxes 365 361 394 Realized gains (losses) on securities 132 (105 ) (13 ) Total earnings before income taxes $ 497 $ 256 $ 381 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Accounting standards for measuring fair value are based on inputs used in estimating fair value. The three levels of the hierarchy are as follows: Level 1 — Quoted prices for identical assets or liabilities in active markets (markets in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis). GALIC’s Level 1 financial instruments consist primarily of publicly traded equity securities and highly liquid government bonds for which quoted market prices in active markets are available. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar assets or liabilities in inactive markets (markets in which there are few transactions, the prices are not current, price quotations vary substantially over time or among market makers, or in which little information is released publicly); and valuations based on other significant inputs that are observable in active markets. GALIC’s Level 2 financial instruments include separate account assets, corporate and municipal fixed maturity securities, asset-backed securities (“ABS”), mortgage-backed securities (“MBS”), certain non-affiliated common stocks and equity index options priced using observable inputs. Level 2 inputs include benchmark yields, reported trades, corroborated broker/dealer quotes, issuer spreads and benchmark securities. When non-binding broker quotes can be corroborated by comparison to similar securities priced using observable inputs, they are classified as Level 2. Level 3 — Valuations derived from market valuation techniques generally consistent with those used to estimate the fair values of Level 2 financial instruments in which one or more significant inputs are unobservable or when the market for a security exhibits significantly less liquidity relative to markets supporting Level 2 fair value measurements. The unobservable inputs may include management’s own assumptions about the assumptions market participants would use based on the best information available at the valuation date. Financial instruments whose fair value is estimated based on non-binding broker quotes or internally developed using significant inputs not based on, or corroborated by, observable market information are classified as Level 3. AFG’s management is responsible for the valuation process and uses data from outside sources (including nationally recognized pricing services and broker/dealers) in establishing fair value. The Company's internal investment professionals are a group of approximately 20 analysts whose primary responsibility is to manage AFG’s investment portfolio. These professionals monitor individual investments as well as overall industries and are active in the financial markets on a daily basis. The group is led by AFG’s chief investment officer, who reports directly to one of AFG’s Co-CEOs. Valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by AFG’s internal investment professionals who are familiar with the securities being priced and the markets in which they trade to ensure the fair value determination is representative of an exit price. To validate the appropriateness of the prices obtained, these investment managers consider widely published indices (as benchmarks), recent trades, changes in interest rates, general economic conditions and the credit quality of the specific issuers. In addition, the Company communicates directly with the pricing services regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the service to value specific securities. Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions): Level 1 Level 2 Level 3 Total December 31, 2019 Assets: Available for sale (“AFS”) fixed maturities: U.S. Government and government agencies $ 6 $ 24 $ 15 $ 45 States, municipalities and political subdivisions — 4,284 65 4,349 Foreign government — 34 — 34 Residential MBS — 1,971 128 2,099 Commercial MBS — 806 29 835 Collateralized loan obligations — 3,365 14 3,379 Other asset-backed securities — 4,357 1,030 5,387 Corporate and other 16 20,220 1,535 21,771 Total AFS fixed maturities 22 35,061 2,816 37,899 Trading fixed maturities — 54 — 54 Equity securities 492 41 276 809 Equity index call options — 924 — 924 Variable annuity assets (separate accounts) (*) — 628 — 628 Other assets — derivatives — 50 — 50 Total assets accounted for at fair value $ 514 $ 36,758 $ 3,092 $ 40,364 Liabilities: Derivatives in annuity benefits accumulated $ — $ — $ 3,730 $ 3,730 Other liabilities — derivatives — 10 — 10 Total liabilities accounted for at fair value $ — $ 10 $ 3,730 $ 3,740 December 31, 2018 Assets: Available for sale fixed maturities: U.S. Government and government agencies $ 6 $ 25 $ 8 $ 39 States, municipalities and political subdivisions — 4,238 59 4,297 Foreign government — 13 — 13 Residential MBS — 1,787 161 1,948 Commercial MBS — 788 48 836 Collateralized loan obligations — 3,298 85 3,383 Other asset-backed securities — 3,627 543 4,170 Corporate and other 14 17,713 1,719 19,446 Total AFS fixed maturities 20 31,489 2,623 34,132 Trading fixed maturities — 55 — 55 Equity securities 493 38 212 743 Equity index call options — 184 — 184 Variable annuity assets (separate accounts) (*) — 557 — 557 Other assets — derivatives — 16 — 16 Total assets accounted for at fair value $ 513 $ 32,339 $ 2,835 $ 35,687 Liabilities: Derivatives in annuity benefits accumulated $ — $ — $ 2,720 $ 2,720 Other liabilities — derivatives — 49 — 49 Total liabilities accounted for at fair value $ — $ 49 $ 2,720 $ 2,769 (*) Variable annuity liabilities equal the fair value of variable annuity assets. The transfers between Level 1 and Level 2 for the years ended December 31, 2019 , 2018 and 2017 are reflected in the table below at fair value as of the end of the reporting period (dollars in millions): Level 2 To Level 1 Transfers Level 1 To Level 2 Transfers # of Transfers Fair Value # of Transfers Fair Value 2019 2018 2017 2019 2018 2017 2019 2018 2017 2019 2018 2017 Perpetual preferred stocks — — 1 $ — $ — $ 1 — — 1 $ — $ — $ 1 Common stocks 2 — — — — — — — — — — — Transfers between Level 1 and Level 2 for all periods presented were a result of increases or decreases in observable trade activity. Approximately 8% of the total assets carried at fair value on December 31, 2019 were Level 3 assets. Approximately 61% ( $1.87 billion ) of the Level 3 assets were priced using non-binding broker quotes, for which there is a lack of transparency as to the inputs used to determine fair value. Details as to the quantitative inputs are neither provided by the brokers nor otherwise reasonably obtainable by GALIC. Internally developed Level 3 asset fair values represent approximately $996 million at December 31, 2019 . Of this amount, approximately $565 million relates to fixed maturity securities that were priced using management’s best estimate of an appropriate credit spread over the treasury yield (of a similar duration) to discount future expected cash flows using a third-party model. The credit spread applied by management is the significant unobservable input. For this group of approximately 34 securities, the average spread used was 400 basis points over the reference treasury yield and the spreads ranged from 100 basis points to 1,253 basis points (approximately 70% of the spreads were between 200 and 700 basis points). Had management used higher spreads, the fair value of this group of securities would have been lower. Conversely, if the spreads used were lower, the fair values would have been higher. For the remainder of the internally developed prices, any justifiable changes in unobservable inputs used to determine fair value would not have resulted in a material change in GALIC’s financial position. The derivatives embedded in GALIC’s fixed-indexed and registered index-linked annuity liabilities are measured using a discounted cash flow approach and had a fair value of $3.73 billion at December 31, 2019 . The following table presents information about the unobservable inputs used by management in determining fair value of these Level 3 liabilities. See Note F — “ Derivatives .” Unobservable Input Range Adjustment for credit risk 0.2% – 2.4% over the risk-free rate Risk margin for uncertainty in cash flows 0.80% reduction in the discount rate Surrenders 3% – 22% of indexed account value Partial surrenders 2% – 9% of indexed account value Annuitizations 0.1% – 1% of indexed account value Deaths 1.5% – 10.6% of indexed account value Budgeted option costs 2.5% – 3.3% of indexed account value The range of adjustments for credit risk is based on the Moody’s corporate A2 bond index and reflects credit spread variations across the yield curve. The range of projected surrender rates reflects the specific surrender charges and other features of GALIC’s individual fixed-indexed and registered index-linked annuity products with an expected range of 7% to 10% in the majority of future calendar years ( 3% to 22% over all periods). Increasing the budgeted option cost or risk margin for uncertainty in cash flow assumptions in the table above would increase the fair value of the fixed-indexed and registered index-linked annuity embedded derivatives, while increasing any of the other unobservable inputs in the table above would decrease the fair value of the embedded derivatives. Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2019 , 2018 and 2017 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs and $20 million of equity securities transferred into Level 3 in the first quarter of 2018 related to a small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under new guidance adopted on January 1, 2018, as discussed in Note A — “ Accounting Policies — Investments .” All transfers are reflected in the table at fair value as of the end of the reporting period. Total realized/unrealized gains (losses) included in Balance at December 31, 2018 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2019 AFS fixed maturities: U.S. government agency $ 8 $ — $ 7 $ — $ — $ — $ — $ 15 State and municipal 59 — 6 — (3 ) 10 (7 ) 65 Residential MBS 161 3 (3 ) — (18 ) 36 (51 ) 128 Commercial MBS 48 2 — — (13 ) 3 (11 ) 29 Collateralized loan obligations 85 (4 ) 4 — — 14 (85 ) 14 Other asset-backed securities 543 — 5 727 (162 ) 23 (106 ) 1,030 Corporate and other 1,719 (1 ) 53 378 (250 ) 28 (392 ) 1,535 Total AFS fixed maturities 2,623 — 72 1,105 (446 ) 114 (652 ) 2,816 Equity securities 212 8 — 36 (2 ) 22 — 276 Total Level 3 assets $ 2,835 $ 8 $ 72 $ 1,141 $ (448 ) $ 136 $ (652 ) $ 3,092 Embedded derivatives (*) $ (2,720 ) $ (919 ) $ — $ (333 ) $ 242 $ — $ — $ (3,730 ) Total Level 3 liabilities $ (2,720 ) $ (919 ) $ — $ (333 ) $ 242 $ — $ — $ (3,730 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes a favorable adjustment related to the unlocking of actuarial assumptions of $181 million in 2019 . Total realized/unrealized gains (losses) included in Balance at December 31, 2017 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2018 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 72 — (3 ) — (2 ) — (8 ) 59 Residential MBS 99 (5 ) (4 ) — (18 ) 106 (17 ) 161 Commercial MBS 34 — — 14 — — — 48 Collateralized loan obligations 142 (2 ) (9 ) 24 (11 ) 2 (61 ) 85 Other asset-backed securities 398 — (1 ) 292 (171 ) 69 (44 ) 543 Corporate and other 941 (9 ) (18 ) 986 (148 ) 26 (59 ) 1,719 Total AFS fixed maturities 1,694 (16 ) (35 ) 1,316 (350 ) 203 (189 ) 2,623 Equity securities 105 (4 ) — 106 (4 ) 20 (11 ) 212 Total Level 3 assets $ 1,799 $ (20 ) $ (35 ) $ 1,422 $ (354 ) $ 223 $ (200 ) $ 2,835 Embedded derivatives (*) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) Total Level 3 liabilities $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $44 million in 2018 . Total realized/unrealized gains (losses) included in Balance at December 31, 2016 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2017 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 75 — 1 — (2 ) — (2 ) 72 Residential MBS 148 (3 ) 1 1 (26 ) 32 (54 ) 99 Commercial MBS 25 2 — 13 (10 ) 4 — 34 Collateralized loan obligations 113 — — 41 (12 ) — — 142 Other asset-backed securities 246 — 1 254 (83 ) 154 (174 ) 398 Corporate and other 652 (5 ) 3 440 (120 ) 29 (58 ) 941 Total AFS fixed maturities 1,267 (6 ) 6 749 (253 ) 219 (288 ) 1,694 Equity securities 110 (14 ) 7 25 (10 ) — (13 ) 105 Total Level 3 assets $ 1,377 $ (20 ) $ 13 $ 774 $ (263 ) $ 219 $ (301 ) $ 1,799 Embedded derivatives (*) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) Total Level 3 liabilities $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $25 million in 2017 . Fair Value of Financial Instruments The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions): Carrying Fair Value Value Total Level 1 Level 2 Level 3 December 31, 2019 Financial assets: Cash and cash equivalents $ 734 $ 734 $ 734 $ — $ — Mortgage loans 1,072 1,081 — — 1,081 Policy loans 164 164 — — 164 Total financial assets not accounted for at fair value $ 1,970 $ 1,979 $ 734 $ — $ 1,245 Financial liabilities: Annuity benefits accumulated (*) $ 40,159 $ 40,182 $ — $ — $ 40,182 Total financial liabilities not accounted for at fair value $ 40,159 $ 40,182 $ — $ — $ 40,182 December 31, 2018 Financial assets: Cash and cash equivalents $ 329 $ 329 $ 329 $ — $ — Mortgage loans 783 772 — — 772 Policy loans 174 174 — — 174 Total financial assets not accounted for at fair value $ 1,286 $ 1,275 $ 329 $ — $ 946 Financial liabilities: Annuity benefits accumulated (*) $ 36,384 $ 34,765 $ — $ — $ 34,765 Total financial liabilities not accounted for at fair value $ 36,384 $ 34,765 $ — $ — $ 34,765 (*) Excludes $247 million and $232 million of life contingent annuities in the payout phase at December 31, 2019 and 2018 , respectively. |
Balance Sheet Impact of Net Unr
Balance Sheet Impact of Net Unrealized Gains on Securities | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Balance Sheet Impact of Net Unrealized Gains on Securities | Balance Sheet Impact of Net Unrealized Gains on Securities In addition to adjusting fixed maturity securities classified as “available for sale” to fair value, GAAP requires that deferred policy acquisition costs and certain other balance sheet amounts related to annuity and life businesses be adjusted to the extent that unrealized gains and losses from securities would result in adjustments to those balances had the unrealized gains or losses actually been realized. The following table shows (in millions) the components of the net unrealized gains on securities that is included in AOCI in GALIC’s Balance Sheet. Asset (Liability) before Net Unrealized Impact of Net Unrealized Gains on Securities Carrying Value of Asset (Liability) December 31, 2019 Fixed maturities $ 36,144 $ 1,755 $ 37,899 Deferred policy acquisition costs 1,394 (681 ) 713 Annuity benefits accumulated (40,186 ) (220 ) (40,406 ) Unearned revenue (included in other liabilities) (23 ) 11 (12 ) Net unrealized gain, pretax 865 Deferred tax on unrealized gain (182 ) Net unrealized gain, after tax (included in AOCI) $ 683 December 31, 2018 Fixed maturities $ 34,024 $ 108 $ 34,132 Deferred policy acquisition costs 1,423 (42 ) 1,381 Annuity benefits accumulated (36,602 ) (14 ) (36,616 ) Unearned revenue (included in other liabilities) (29 ) 1 (28 ) Net unrealized gain, pretax 53 Deferred tax on unrealized gain (11 ) Net unrealized gain, after tax (included in AOCI) $ 42 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available for sale fixed maturities at December 31 consisted of the following (in millions): 2019 2018 Amortized Cost Gross Unrealized Net Unrealized Fair Amortized Cost Gross Unrealized Net Unrealized Fair Gains Losses Gains Losses Fixed maturities: U.S. Government and government agencies $ 38 $ 7 $ — $ 7 $ 45 $ 41 $ 1 $ (3 ) $ (2 ) $ 39 States, municipalities and political subdivisions 4,080 270 (1 ) 269 4,349 4,195 130 (28 ) 102 4,297 Foreign government 31 3 — 3 34 11 2 — 2 13 Residential MBS 1,909 193 (3 ) 190 2,099 1,749 203 (4 ) 199 1,948 Commercial MBS 807 28 — 28 835 822 16 (2 ) 14 836 Collateralized loan obligations 3,401 8 (30 ) (22 ) 3,379 3,440 — (57 ) (57 ) 3,383 Other asset-backed securities 5,265 138 (16 ) 122 5,387 4,067 122 (19 ) 103 4,170 Corporate and other 20,613 1,176 (18 ) 1,158 21,771 19,699 158 (411 ) (253 ) 19,446 Total fixed maturities $ 36,144 $ 1,823 $ (68 ) $ 1,755 $ 37,899 $ 34,024 $ 632 $ (524 ) $ 108 $ 34,132 The non-credit related portion of other-than-temporary impairment charges is included in other comprehensive income. Cumulative non-credit charges taken for securities still owned at December 31, 2019 and December 31, 2018 were $94 million and $112 million , respectively. Gross unrealized gains on such securities at December 31, 2019 and December 31, 2018 were $87 million and $89 million , respectively. Gross unrealized losses on such securities at December 31, 2019 and December 31, 2018 were $1 million and $5 million , respectively. These amounts represent the non-credit other-than-temporary impairment charges recorded in AOCI adjusted for subsequent changes in fair values and relate primarily to residential MBS. Equity securities, which are reported at fair value with holding gains and losses recognized in net earnings, consisted of the following at December 31 (in millions): 2019 2018 Fair Value Fair Value over (under) over (under) Actual Cost Fair Value Cost Actual Cost Fair Value Cost Common stocks $ 497 $ 552 $ 55 $ 562 $ 518 $ (44 ) Perpetual preferred stocks 249 257 8 236 225 (11 ) Total equity securities carried at fair value $ 746 $ 809 $ 63 $ 798 $ 743 $ (55 ) The following tables show gross unrealized losses (dollars in millions) on available for sale fixed maturities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates. Less Than Twelve Months Twelve Months or More Unrealized Loss Fair Value Fair Value as % of Cost Unrealized Loss Fair Value Fair Value as % of Cost December 31, 2019 Fixed maturities: U.S. Government and government agencies $ — $ — — % $ — $ — — % States, municipalities and political subdivisions (1 ) 105 99 % — 5 100 % Residential MBS (2 ) 315 99 % (1 ) 15 94 % Commercial MBS — 11 100 % — — — % Collateralized loan obligations (9 ) 995 99 % (21 ) 1,363 98 % Other asset-backed securities (11 ) 838 99 % (5 ) 91 95 % Corporate and other (11 ) 937 99 % (7 ) 202 97 % Total fixed maturities $ (34 ) $ 3,201 99 % $ (34 ) $ 1,676 98 % December 31, 2018 Fixed maturities: U.S. Government and government agencies $ — $ 1 100 % $ (3 ) $ 11 79 % States, municipalities and political subdivisions (12 ) 773 98 % (16 ) 471 97 % Residential MBS (3 ) 203 99 % (1 ) 32 97 % Commercial MBS (1 ) 117 99 % (1 ) 30 97 % Collateralized loan obligations (48 ) 2,807 98 % (9 ) 147 94 % Other asset-backed securities (12 ) 1,231 99 % (7 ) 293 98 % Corporate and other (294 ) 9,616 97 % (117 ) 1,761 94 % Total fixed maturities $ (370 ) $ 14,748 98 % $ (154 ) $ 2,745 95 % At December 31, 2019 , the gross unrealized losses on fixed maturities of $68 million relate to 509 securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately 75% of the gross unrealized loss and 93% of the fair value. The determination of whether unrealized losses are other-than-temporary requires judgment based on subjective as well as objective factors. Factors considered and resources used by management include: a) whether the unrealized loss is credit-driven or a result of changes in market interest rates, b) the extent to which fair value is less than cost basis, c) cash flow projections received from independent sources, d) historical operating, balance sheet and cash flow data contained in issuer SEC filings and news releases, e) near-term prospects for improvement in the issuer and/or its industry, f) third-party research and communications with industry specialists, g) financial models and forecasts, h) the continuity of interest payments, maintenance of investment grade ratings and hybrid nature of certain investments, i) discussions with issuer management, and j) ability and intent to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value. GALIC analyzes its MBS securities for other-than-temporary impairment each quarter based upon expected future cash flows. Management estimates expected future cash flows based upon its knowledge of the MBS market, cash flow projections (which reflect loan to collateral values, subordination, vintage and geographic concentration) received from independent sources, implied cash flows inherent in security ratings and analysis of historical payment data. During 2019 , 2018 and 2017 , GALIC recorded other-than-temporary impairment charges related to its residential MBS of $1 million , $5 million and $1 million , respectively. In 2019 , GALIC recorded other-than-temporary impairment charges of $12 million on third-party collateralized loan obligations and $8 million on corporate bonds. Other-than-temporary impairment charges on fixed maturities other than residential MBS were $16 million in 2018 and $13 million in 2017 . In addition, GALIC recorded $2 million in other-than-temporary impairment charges in 2017 on investments that are included in other investments on the balance sheet. Management believes GALIC will recover its cost basis in the securities with unrealized losses and that GALIC has the ability to hold the securities until they recover in value and had no intent to sell them at December 31, 2019 . As discussed in Note A — “ Accounting Policies — Investments ,” effective January 1, 2018, all equity securities previously classified as “available for sale” are required to be carried at fair value through net earnings instead of accumulated other comprehensive income and therefore are no longer evaluated for other-than-temporary impairment. In 2017, GALIC recorded other-than-temporary impairment charges on equity securities classified as available for sale of $27 million . A progression of the credit portion of other-than-temporary impairments on fixed maturity securities for which the non-credit portion of an impairment has been recognized in other comprehensive income is shown below (in millions): 2019 2018 2017 Balance at January 1 $ 97 $ 99 $ 104 Additional credit impairments on: Previously impaired securities 1 — 1 Securities without prior impairments — 1 2 Reductions due to sales or redemptions (6 ) (3 ) (8 ) Balance at December 31 $ 92 $ 97 $ 99 The table below sets forth the scheduled maturities of available for sale fixed maturities as of December 31, 2019 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers. Amortized Fair Value Cost Amount % Maturity One year or less $ 1,334 $ 1,356 4 % After one year through five years 8,151 8,510 22 % After five years through ten years 12,092 12,940 34 % After ten years 3,185 3,393 9 % 24,762 26,199 69 % Collateralized loan obligations and other ABS (average life of approximately 4-1/2 years) 8,666 8,766 23 % MBS (average life of approximately 4-1/2 years) 2,716 2,934 8 % Total $ 36,144 $ 37,899 100 % Certain risks are inherent in fixed maturity securities, including loss upon default, price volatility in reaction to changes in interest rates, and general market factors and risks associated with reinvestment of proceeds due to prepayments or redemptions in a period of declining interest rates. There were no investments in individual issuers that exceeded 10% of shareholder’s equity at December 31, 2019 or 2018 . Net Investment Income The following table shows (in millions) investment income earned and investment expenses incurred. 2019 2018 2017 Investment income: Fixed maturities $ 1,600 $ 1,450 $ 1,342 Equity securities: Dividends 34 30 21 Change in fair value (*) 17 13 — Equity in earnings of partnerships and similar investments 90 96 37 Mortgage loans 43 45 46 Policy loans 9 10 11 Real estate and other 36 26 31 Gross investment income 1,829 1,670 1,488 Investment expenses (16 ) (13 ) (10 ) Net investment income $ 1,813 $ 1,657 $ 1,478 (*) Although the change in the fair value of the majority of GALIC’s equity securities is recorded in realized gains (losses) on securities, GALIC records holding gains and losses in net investment income on equity securities classified as “trading” under previous guidance and on a small portfolio of limited partnership and similar investments that do not qualify for the equity method of accounting. GALIC’s investment portfolio is managed by a subsidiary of AFG. Investment expenses, which included investment management fees charged by this subsidiary, for 2019 , 2018 and 2017 were $11 million , $7 million and $5 million , respectively. Realized gains (losses) and changes in unrealized appreciation (depreciation) included in AOCI related to fixed maturity and equity security investments are summarized as follows (in millions): 2019 2018 Realized gains (losses) Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 19 $ (21 ) $ (2 ) $ 1,647 $ 5 $ (21 ) $ (16 ) $ (1,057 ) Equity securities 122 — 122 — (107 ) — (107 ) — Mortgage loans and other investments 2 — 2 — — — — — Other (*) (1 ) 11 10 (835 ) 11 7 18 502 Total pretax 142 (10 ) 132 812 (91 ) (14 ) (105 ) (555 ) Tax effects (30 ) 2 (28 ) (171 ) 19 3 22 117 Net of tax $ 112 $ (8 ) $ 104 $ 641 $ (72 ) $ (11 ) $ (83 ) $ (438 ) 2017 Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 15 $ (14 ) $ 1 $ 455 Equity securities 12 (27 ) (15 ) 66 Mortgage loans and other investments (8 ) (2 ) (10 ) — Other (*) (3 ) 14 11 (219 ) Total pretax 16 (29 ) (13 ) 302 Tax effects: Reclassify impact of U.S. corporate tax rate change — — — 101 Other (6 ) 10 4 (106 ) Total tax effects (6 ) 10 4 (5 ) Net of tax $ 10 $ (19 ) $ (9 ) $ 297 (*) Primarily adjustments to deferred policy acquisition costs and reserves related to the annuity business. As discussed in Note A — “ Accounting Policies — Investments ,” effective January 1, 2018, all equity securities other than those accounted for under the equity method are carried at fair value through net earnings. GALIC recorded net holding gains (losses) on equity securities during 2019 and 2018 on securities that were still owned at December 31 as follows (in millions): 2019 2018 Included in realized gains (losses) $ 123 $ (110 ) Included in net investment income 17 13 $ 140 $ (97 ) Gross realized gains and losses (excluding impairment write-downs and mark-to-market of derivatives) on available for sale fixed maturity investment transactions consisted of the following (in millions): 2019 2018 2017 Gross gains $ 30 $ 17 $ 37 Gross losses (16 ) (12 ) (19 ) During 2017, GALIC recorded gross gains of $23 million and gross losses of $11 million on available for sale equity securities. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives As discussed under “ Derivatives ” in Note A — “ Accounting Policies ,” GALIC uses derivatives in certain areas of its operations. Derivatives That Do Not Qualify for Hedge Accounting The following derivatives that do not qualify for hedge accounting under GAAP are included in GALIC’s Balance Sheet at fair value (in millions): December 31, 2019 December 31, 2018 Derivative Balance Sheet Line Asset Liability Asset Liability MBS with embedded derivatives Fixed maturities $ 74 $ — $ 84 $ — Public company warrants Equity securities — — — — Fixed-indexed and registered index-linked annuities (embedded derivative) Annuity benefits accumulated — 3,730 — 2,720 Equity index call options Equity index call options 924 — 184 — Equity index put options Other liabilities — 1 — 1 Reinsurance contract (embedded derivative) Other liabilities — 4 — 2 $ 998 $ 3,735 $ 268 $ 2,723 The MBS with embedded derivatives consist of primarily interest-only and principal-only MBS. GALIC records the entire change in the fair value of these securities in earnings. These investments are part of GALIC’s overall investment strategy and represent a small component of GALIC’s overall investment portfolio. Warrants to purchase shares of publicly traded companies, which represent a small component of GALIC’s overall investment portfolio, are considered to be derivatives that are required to be carried at fair value through earnings. GALIC’s fixed-indexed and registered index-linked annuities provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market or other financial index. GALIC attempts to mitigate the risk in the index-based component of these products through the purchase and sale of call and put options on the appropriate index. GALIC receives collateral from certain counterparties to support its purchased call option assets (net of collateral required under put option contracts with the same counterparties). This collateral ( $577 million at December 31, 2019 and $103 million at December 31, 2018 ) is shown as funds held as collateral in GALIC’s Balance Sheet with an offsetting liability to return the collateral, which is included in liability for funds held as collateral. GALIC’s strategy is designed so that the net change in the fair value of the call and put options will generally offset the economic change in the net liability from the index participation. Both the index-based component of the annuities (an embedded derivative) and the related call and put options are considered derivatives that must be adjusted for changes in fair value through earnings each period. The fair values of these derivatives are impacted by actual and expected stock market performance and interest rates as well as other factors. Fluctuations in certain of these factors, such as changes in interest rates and the performance of the stock market, are not economic in nature for current reporting period but rather impact the timing of reported results. As discussed under “ Reinsurance ” in Note A , GALIC has a reinsurance contract that is considered to contain an embedded derivative. The following table summarizes the gains (losses) included in GALIC’s Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting for 2019 , 2018 , and 2017 (in millions): Derivative Statement of Earnings Line 2019 2018 2017 MBS with embedded derivatives Realized gains (losses) on securities $ 5 $ (4 ) $ (3 ) Public company warrants Realized gains (losses) on securities — (3 ) — Fixed-indexed and registered index-linked annuities (embedded derivative) (*) Annuity benefits (919 ) 204 (589 ) Equity index call options Annuity benefits 804 (298 ) 494 Equity index put options Annuity benefits 2 (1 ) — Reinsurance contract (embedded derivative) Net investment income (2 ) 2 (2 ) $ (110 ) $ (100 ) $ (100 ) (*) The change in fair value of the embedded derivative includes a favorable adjustment related to unlocking of actuarial assumptions of $181 million in 2019 and losses of $44 million in 2018 and $25 million in 2017 . Derivatives Designated and Qualifying as Cash Flow Hedges As of December 31, 2019 , GALIC has thirteen active interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in GALIC’s portfolio of fixed maturity securities. The purpose of each of these swaps is to effectively convert a portion of GALIC’s floating-rate fixed maturity securities to fixed rates by offsetting the variability in cash flows attributable to changes in short-term LIBOR. Under the terms of the swaps, GALIC receives fixed-rate interest payments in exchange for variable interest payments based on short-term LIBOR. The notional amounts of the interest rate swaps generally decline over each swap’s respective life (the swaps expire between April 2020 and June 2030) in anticipation of the expected decline in GALIC’s portfolio of fixed maturity securities with floating interest rates based on short-term LIBOR. The total outstanding notional amount of GALIC’s interest rate swaps was $1.98 billion at December 31, 2019 compared to $2.35 billion at December 31, 2018 , reflecting the scheduled amortization discussed above, the termination of two swaps with notional amounts of $138 million and $100 million (on the settlement dates) in the second quarter and fourth quarter of 2019, respectively, and the expiration of a swap with a notional amount of $78 million (on the expiration date) in the third quarter of 2019. The fair value of the interest rate swaps in an asset position and included in other assets was $50 million at December 31, 2019 and $16 million at December 31, 2018 . The fair value of the interest rate swaps in a liability position and included in other liabilities was $5 million at December 31, 2019 and $46 million at December 31, 2018 . The net unrealized gain or loss on cash flow hedges is included in AOCI, net of DPAC and deferred taxes. Amounts reclassified from AOCI (before DPAC and taxes) to net investment income were income of $3 million in 2019 , losses of $3 million in 2018 and income of $6 million in 2017 . A collateral receivable supporting these swaps of $20 million at December 31, 2019 and $135 million at December 31, 2018 is included in other assets in GALIC’s Balance Sheet. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs A progression of deferred policy acquisition costs is presented below (in millions): Deferred Costs Sales Inducements PVFP Subtotal Unrealized (*) Total Balance at December 31, 2016 $ 1,106 $ 110 $ 46 $ 1,262 $ (265 ) $ 997 Additions 225 4 — 229 — 229 Amortization: Periodic amortization (160 ) (19 ) (8 ) (187 ) — (187 ) Annuity unlocking 34 6 1 41 — 41 Included in realized gains 9 1 — 10 — 10 Other — — 10 10 — 10 Change in unrealized — — — — (157 ) (157 ) Balance at December 31, 2017 1,214 102 49 1,365 (422 ) 943 Additions 263 2 — 265 — 265 Amortization: Periodic amortization (237 ) (19 ) (7 ) (263 ) — (263 ) Annuity unlocking 29 — — 29 — 29 Included in realized gains 14 1 — 15 — 15 Change in unrealized — — — — 392 392 Balance at December 31, 2018 1,283 86 42 1,411 (30 ) 1,381 Additions 206 2 — 208 — 208 Amortization: Periodic amortization (120 ) (13 ) (6 ) (139 ) — (139 ) Annuity unlocking (76 ) (1 ) — (77 ) — (77 ) Included in realized gains 8 1 — 9 — 9 Change in unrealized — — — — (669 ) (669 ) Balance at December 31, 2019 $ 1,301 $ 75 $ 36 $ 1,412 $ (699 ) $ 713 (*) Adjustments to DPAC related to net unrealized gains/losses on securities and cash flow hedges. The present value of future profits (“PVFP”) amounts in the table above are net of $154 million and $148 million of accumulated amortization at December 31, 2019 and 2018 , respectively. During each of the next five years, the PVFP is expected to decrease at a rate of approximately one-eighth of the balance at the beginning of each respective year. |
Shareholder's Equity
Shareholder's Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholder's Equity | Shareholder’s Equity Capital Contributions from Parent GALIC received non-cash capital contributions from GAFRI totaling $19 million in 2019 , $17 million in 2018 and $14 million in 2017 . The non-cash capital contributions were investments and other similar assets, as well as GAFRI’s payment of certain overhead expenses on behalf of GALIC. Accumulated Other Comprehensive Income, Net of Tax (“AOCI”) Comprehensive income is defined as all changes in shareholder’s equity except those arising from transactions with shareholders. Comprehensive income includes net earnings and other comprehensive income, which consists primarily of changes in net unrealized gains or losses on available for sale securities. The progression of the components of accumulated other comprehensive income follows (in millions): Other Comprehensive Income (Loss) AOCI Beginning Balance Pretax Tax Net of tax Other (c) AOCI Ending Balance Year ended December 31, 2019 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 828 $ (174 ) $ 654 Reclassification adjustment for realized (gains) losses included in net earnings (a) (16 ) 3 (13 ) Total net unrealized gains on securities (b) $ 42 812 (171 ) 641 $ — $ 683 Net unrealized gains (losses) on cash flow hedges (11 ) 36 (8 ) 28 — 17 Total $ 31 $ 848 $ (179 ) $ 669 $ — $ 700 Year ended December 31, 2018 Net unrealized gains (losses) on securities: Unrealized holding losses on securities arising during the period $ (561 ) $ 118 $ (443 ) Reclassification adjustment for realized (gains) losses included in net earnings (a) 6 (1 ) 5 Total net unrealized gains (losses) on securities (b) $ 570 (555 ) 117 (438 ) $ (90 ) $ 42 Net unrealized gains (losses) on cash flow hedges (13 ) 2 — 2 — (11 ) Total $ 557 $ (553 ) $ 117 $ (436 ) $ (90 ) $ 31 Year ended December 31, 2017 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 299 $ (105 ) $ 194 Reclassification adjustment for realized (gains) losses included in net earnings (a) 3 (1 ) 2 Total net unrealized gains on securities (b) $ 273 302 (106 ) 196 $ 101 $ 570 Net unrealized losses on cash flow hedges (7 ) (6 ) 2 (4 ) (2 ) (13 ) Total $ 266 $ 296 $ (104 ) $ 192 $ 99 $ 557 (a) The reclassification adjustment out of net unrealized gains on securities affected the following lines in GALIC’s Statement of Earnings: OCI component Affected line in the statement of earnings Pretax Realized gains (losses) on securities Tax Provision for income taxes (b) Includes net unrealized gains of $34 million at December 31, 2019 compared to $33 million and $42 million at December 31, 2018 and 2017 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. (c) On January 1, 2018, GALIC adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $90 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $99 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “ Accounting Policies — Income Taxes ”). |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following is a reconciliation of income taxes at the statutory rate ( 21% in 2019 and 2018 and 35% in 2017 ) to the provision for income taxes as shown in GALIC’s Statement of Earnings (dollars in millions): 2019 2018 2017 Amount % of EBT Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 497 $ 256 $ 381 Income taxes at statutory rate $ 104 21 % $ 54 21 % $ 133 35 % Effect of permanent items (2 ) — % (7 ) (3 %) (4 ) (1 %) Effect of change in U.S. corporate tax rate — — % — — % (24 ) (6 %) Provision for income taxes as shown in the statement of earnings $ 102 21 % $ 47 18 % $ 105 28 % The Tax Cuts and Jobs Act of 2017 (“TCJA”), which was enacted on December 22, 2017, lowered the U.S corporate tax rate to 21% and made other widespread changes to the U.S. tax code effective in 2018. Because the TCJA was enacted in December 2017, GALIC recorded the $24 million decrease in its net deferred tax liability resulting from the changes in the tax code (primarily the lower corporate tax rate applicable to 2018 and future years) in the fourth quarter of 2017. At the time it was enacted, the TCJA was subject to further clarification and interpretation by the U.S. Treasury Department and the Internal Revenue Service. GALIC’s deferred tax assets and liabilities were recorded at December 31, 2017 using reasonable estimates based on available information and were considered provisional in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 118 (“SAB 118”). In accordance with SAB 118, changes in deferred taxes resulting from clarification and interpretation of the TCJA were recorded in 2018 in the period in which the guidance was published and did not have a material impact on GALIC’s effective tax rate. As a result, GALIC’s implementation of the TCJA was complete as of December 31, 2018. GALIC’s 2013 — 2019 tax years remain subject to examination by the IRS. GALIC did not have any earnings or losses subject to tax in foreign jurisdictions for the years ended December 31, 2019 , 2018 and 2017 . The total income tax provision (credit) consists of (in millions): 2019 2018 2017 Current taxes: Federal $ 152 $ 130 $ 183 State 4 3 3 Deferred taxes: Federal (54 ) (86 ) (57 ) Impact of change in U.S. corporate tax rate — — (24 ) Provision for income taxes $ 102 $ 47 $ 105 Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in GALIC’s Balance Sheet at December 31 were as follows (in millions): 2019 2018 Excluding Unrealized Gains Impact of Unrealized Gains Total Excluding Unrealized Gains Impact of Unrealized Gains Total Deferred tax assets: Insurance claims and reserves $ 601 $ 46 $ 647 $ 521 $ 3 $ 524 Other, net 7 (2 ) 5 8 — 8 Total deferred tax assets 608 44 652 529 3 532 Deferred tax liabilities: Investment securities (78 ) (369 ) (447 ) (23 ) (22 ) (45 ) Deferred policy acquisition costs (236 ) 143 (93 ) (248 ) 8 (240 ) Insurance claims and reserves transition liability (68 ) — (68 ) (79 ) — (79 ) Total deferred tax liabilities (382 ) (226 ) (608 ) (350 ) (14 ) (364 ) Net deferred tax asset (liability) $ 226 $ (182 ) $ 44 $ 179 $ (11 ) $ 168 The likelihood of realizing deferred tax assets is reviewed periodically. There was no valuation allowance against deferred tax assets as of December 31, 2019 and 2018 . GALIC did not have a liability for uncertain tax positions during 2019 , 2018 or 2017 . Cash payments for income taxes, net of refunds, were $163 million , $106 million and $217 million for 2019 , 2018 and 2017 , respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies GALIC and its subsidiaries are involved in litigation from time to time, generally arising in the ordinary course of business. This litigation may include, but is not limited to, general commercial disputes, lawsuits brought by policyholders, employment matters, reinsurance collection matters and actions challenging certain business practices. None of these matters are expected to have a material adverse impact on GALIC’s results of operations or financial condition. |
Insurance
Insurance | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Insurance | Insurance Securities owned by GALIC, having a carrying value of approximately $28 million at December 31, 2019 , were on deposit as required by regulatory authorities. FHLB Funding Agreements GALIC is a member of the Federal Home Loan Bank of Cincinnati (“FHLB”). The FHLB makes advances and provides other banking services to member institutions. Members are required to purchase stock in the FHLB in addition to maintaining collateral deposits that back any funds advanced. GALIC’s $52 million investment in FHLB capital stock at December 31, 2019 is included in other investments at cost. Membership in the FHLB provides the annuity operations with an additional source of liquidity. These advances further the FHLB’s mission of improving access to housing by increasing liquidity in the residential mortgage-backed securities market. In 2019, GALIC refinanced the terms on advances totaling $610 million . In the fourth quarter of 2018, GALIC refinanced the terms on a $40 million advance and the FHLB advanced GALIC $225 million . At both December 31, 2019 and December 31, 2018 , GALIC had $1.10 billion in outstanding advances from the FHLB (included in annuity benefits accumulated), bearing interest at rates ranging from 0.13% to 0.21% over LIBOR (average rate of 1.95% at December 31, 2019 ). While these advances must be repaid between 2020 and 2021 ( $310 million in 2020 and $786 million in 2021), GALIC has the option to prepay all or a portion of the advances. GALIC has invested the proceeds from the advances in fixed maturity securities with similar expected lives as the advances for the purpose of earning a spread over the interest payments due to the FHLB. The advances on these agreements are collateralized by fixed maturity investments, which have a total fair value of $1.27 billion (included in available for sale fixed maturity securities) at December 31, 2019 . Interest credited on the funding agreements, which is included in annuity benefits, was $27 million in 2019 , $20 million in 2018 and $14 million in 2017 . Statutory Information GALIC and its insurance subsidiaries are required to file financial statements with state insurance regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Net earnings and capital and surplus on a statutory basis for GALIC and its insurance subsidiaries were as follows (in millions): Net Earnings Capital and Surplus 2019 2018 2017 2019 2018 GALIC consolidated life insurance companies $ 34 $ 802 $ 286 $ 2,868 $ 2,701 In the fourth quarter of 2018, GALIC entered into a reinsurance treaty with Hannover Life Reassurance Company of America that transfers the risk of certain surrender activity in GALIC’s fixed-indexed annuity business. This treaty meets the statutory risk transfer rules and resulted in a $510 million increase in statutory surplus (through an after-tax reserve credit), which is reflected in the life insurance companies capital and surplus in the table above. Under GAAP, this transaction does not meet the GAAP insurance risk transfer criteria and did not have a material impact on GALIC’s financial statements. The National Association of Insurance Commissioners’ (“NAIC”) model law for risk based capital (“RBC”) applies to life insurance companies. RBC formulas determine the amount of capital that an insurance company needs so that it has an acceptable expectation of not becoming financially impaired. Companies below specific trigger points or ratios are subject to regulatory action. At December 31, 2019 and 2018 , the capital ratios of GALIC and its life insurance companies substantially exceeded the RBC requirements. GALIC did not use any prescribed or permitted statutory accounting practices that differed from the NAIC statutory accounting practices at December 31, 2019 or 2018 . GALIC paid dividends to GAFRI totaling $140 million , $60 million and $225 million in 2019 , 2018 and 2017 , respectively. The maximum amount of dividends that can be paid to shareholders in 2020 by life insurance companies domiciled in the State of Ohio without prior approval of the Insurance Commissioner is the greater of 10% of statutory surplus as regards to policyholders or statutory net earnings as of the preceding December 31, but only to the extent of statutory earned surplus as of the preceding December 31. The maximum amount of dividends payable in 2020 by GALIC without prior approval is $287 million , based on 10% of statutory surplus. The maximum amount of dividends receivable from GALIC’s subsidiaries in 2020 without prior approval is $35 million . Reinsurance GALIC has reinsured approximately $6.23 billion of its $9.53 billion in face amount of life insurance at December 31, 2019 compared to $7.69 billion of its $10.82 billion in face amount of life insurance at December 31, 2018 . Life written premiums ceded were $20 million , $22 million and $28 million for 2019 , 2018 and 2017 , respectively. Reinsurance recoveries on ceded life policies were $32 million , $41 million and $38 million for 2019 , 2018 and 2017 , respectively. GALIC would remain liable to its insureds regardless of whether a reinsurer is able to meet its obligations. Fixed Annuities For certain products, the liability for “annuity benefits accumulated” includes reserves for excess benefits expected to be paid on future deaths and annuitizations, guaranteed withdrawal benefits and accrued persistency and premium bonuses. The liabilities included in GALIC’s Balance Sheet for these benefits, excluding the impact of unrealized gains on securities, were as follows at December 31 (in millions): 2019 2018 Expected death and annuitization $ 232 $ 229 Guaranteed withdrawal benefits 625 472 Accrued persistency and premium bonuses 1 1 Variable Annuities At December 31, 2019 , the aggregate guaranteed minimum death benefit value (assuming every variable annuity policyholder died on that date) on GALIC’s variable annuity policies exceeded the fair value of the underlying variable annuities by $13 million , compared to $35 million at December 31, 2018 . Death benefits paid in excess of the variable annuity account balances were less than $1 million in each of the last three years ended December 31, 2019 , 2018 and 2017 . |
Additional Information
Additional Information | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Information | Additional Information See Note A — “ Accounting Policies — Credit Impairment Guidance Effective in 2020 ” for a discussion of accounting guidance adopted on January 1, 2020, which provides a new credit loss model for determining credit-related impairments for reinsurance recoverables and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The new guidance did not have a material impact on GALIC’s results of operations or financial position. Related Parties Certain administrative, management, accounting, actuarial, data processing, collection and investment services are provided under agreements between GALIC and its parent, GAFRI, based on actual costs incurred. In 2019 , 2018 and 2017 , GALIC paid GAFRI $44 million , $43 million and $40 million , respectively, for such services. Financial Instruments — Unfunded Commitments On occasion, GALIC has entered into financial instrument transactions that may present off-balance-sheet risks of both a credit and market risk nature. These transactions include commitments to fund loans, loan guarantees and commitments to purchase and sell securities or loans. At December 31, 2019 , GALIC had commitments to fund credit facilities and contribute capital to limited partnerships and limited liability corporations of approximately $491 million . Benefit Plans GALIC expensed approximately $1 million in 2019 and $2 million in both 2018 and 2017 related to the retirement and employee savings plans. |
Supplementary Insurance Informa
Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES SUPPLEMENTARY INSURANCE INFORMATION THREE YEARS ENDED DECEMBER 31, 2019 (IN MILLIONS) Segment Deferred policy acquisition costs Reserves for future policy benefits and claims Net earned premiums Net investment income Benefits, claims, losses and settlement expenses Amortization of deferred policy acquisition costs Other operating expenses 2019 Annuity $ 694 $ 40,406 $ — $ 1,792 $ 1,151 $ 198 $ 188 Run-off life 19 612 22 21 36 4 7 Total $ 713 $ 41,018 $ 22 $ 1,813 $ 1,187 $ 202 $ 195 2018 Annuity $ 1,358 $ 36,616 $ — $ 1,638 $ 998 $ 211 $ 174 Run-off life 23 635 24 19 37 4 11 Total $ 1,381 $ 37,251 $ 24 $ 1,657 $ 1,035 $ 215 $ 185 2017 Annuity $ 917 $ 33,316 $ — $ 1,458 $ 892 $ 129 $ 158 Run-off life 26 658 22 20 23 4 11 Total $ 943 $ 33,974 $ 22 $ 1,478 $ 915 $ 133 $ 169 |
Subsequent Event Subsequent Eve
Subsequent Event Subsequent Event | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event Management of GALIC has evaluated all other events occurring after December 31, 2019 through April 17, 2020 , the date the financial statements were available to be issued, to determine whether any event required either recognition or disclosure in the financial statements. Subsequent to December 31, 2019 , the spread of the COVID-19 virus has affected the international and national economy and credit markets and has interrupted normal business activities due to quarantines and other travel or health-related restrictions. As of the date of issuance of these financial statements, the full impact to GALIC is unknown, but management expects continued interruptions to day-to-day business activities, impacts to claim and premium activity and decreases in the fair value of certain investments. As of the date of issuance, the outbreak is still evolving and thus there is significant uncertainty as to its ultimate impacts on GALIC. No other material subsequent events were noted other than those already disclosed. It was determined there were no events that require recognition or disclosure in the financial statements through the report date. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Great American Life Insurance Company and its subsidiaries (“GALIC” or the “Company”). GALIC is a direct wholly-owned subsidiary of Great American Financial Resources, Inc. (“GAFRI”), a financial services holding company wholly-owned by American Financial Group, Inc. (“AFG”). Certain reclassifications have been made to prior years to conform to the current year’s presentation. All significant intercompany balances and transactions have been eliminated. The results of operations of companies since their formation or acquisition are included in the consolidated financial statements. The financial statements also include costs paid on behalf of GALIC by GAFRI. These costs are recorded as expense in the period incurred and shown as an increase in capital surplus. Events or transactions occurring subsequent to the audited consolidated financial statements as of and for the year ended December 31, 2019 , and prior to April 17, 2020 , have been evaluated for potential recognition or disclosure herein. The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates. On January 1, 2018, GALIC adopted Accounting Standards Update (“ASU”) 2014-09, which provides guidance on recognizing revenue when (or as) performance obligations under the contract are satisfied. The guidance also updates the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires certain new disclosures. Because revenue recognition for insurance contracts and financial instruments (GALIC’s primary sources of revenue) were excluded from the scope of the new guidance, the adoption of ASU 2014-09 did not have a material impact on GALIC’s results of operations or financial position. |
Fair Value Measurements | Fair Value Measurements Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The standards establish a hierarchy of valuation techniques based on whether the assumptions that market participants would use in pricing the asset or liability (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect GALIC’s assumptions about the assumptions market participants would use in pricing the asset or liability. GALIC did not have any material nonrecurring fair value measurements in 2019 or 2018 . |
Investments | Investments On January 1, 2018, GALIC adopted ASU 2016-01, which requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At December 31, 2017, GALIC had $593 million in equity securities classified as “available for sale” under the prior guidance with holding gains and losses included in accumulated other comprehensive income (“AOCI”) instead of net earnings. At the date of adoption, the $90 million net unrealized gain on equity securities included in AOCI was reclassified to retained earnings as the cumulative effect of an accounting change. The cumulative effect of the accounting change also includes the net unrealized gain on GALIC’s small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under the new guidance ( $3 million net of tax at the date of adoption). Following the adoption of ASU 2016-01, holding gains and losses on equity securities carried at fair value are generally recorded in realized gains (losses) on securities. However, GALIC records holding gains and losses on securities classified as “trading” under previous guidance, its small portfolio of limited partnerships and similar investments carried at fair value and certain other securities classified at purchase as “fair value through net investment income” in net investment income. Under the new guidance, GALIC recorded holding gains of $140 million on equity securities in net earnings during 2019 on securities that were still held December 31, 2019 and holding losses of $97 million on equity securities in net earnings during 2018 on securities that were still owned at December 31, 2018 . Under the prior guidance, these holding losses would have been recorded in AOCI until the securities were disposed (with the exception of any impairment charge that may have been recorded). Because almost all of the equity securities impacted by the new guidance were carried at fair value through AOCI under the prior guidance, the adoption of the new guidance did not have a material impact on GALIC’s financial position. Fixed maturity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in AOCI in GALIC’s Balance Sheet. Fixed maturity securities classified as “trading” are reported at fair value with changes in unrealized holding gains or losses during the period included in net investment income. Mortgage and policy loans are carried primarily at the aggregate unpaid balance. Premiums and discounts on fixed maturity securities are amortized using the effective interest method. Mortgage-backed securities (“MBS”) are amortized over a period based on estimated future principal payments, including prepayments. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations. Limited partnerships and similar investments are generally accounted for using the equity method of accounting. Under the equity method, GALIC records its share of the earnings or losses of the investee based on when they are reported by the investee in its financial statements rather than in the period in which the investee declares a dividend. GALIC’s share of the earnings or losses from equity method investments is generally recorded on a quarter lag due to the timing of the receipt of the investee’s financial statements. GALIC’s equity in the earnings (losses) of limited partnerships and similar investments is included in net investment income. Gains or losses on fixed maturity securities classified as “available for sale” are determined on the specific identification basis. When a decline in the value of a specific investment is considered to be other-than-temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses) on securities) and the cost basis of that investment is reduced. If management can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: (i) the amount related to credit losses (recorded in earnings) and (ii) the amount related to all other factors (recorded in other comprehensive income). The credit-related portion of an other-than-temporary impairment is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. Both components are shown in the statement of earnings. If management intends to sell an impaired security, or it is more likely than not that it will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value. |
Derivatives | Derivatives Derivatives included in GALIC’s Balance Sheet are recorded at fair value. Changes in fair value of derivatives are included in earnings, unless the derivatives are designated and qualify as highly effective cash flow hedges. Derivatives that do not qualify for hedge accounting under GAAP consist primarily of (i) components of certain fixed maturity securities (primarily interest-only and principal-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related equity index options designed to be consistent with the characteristics of the liabilities and used to mitigate the risk embedded in those annuity products. To qualify for hedge accounting, at the inception of a derivative contract, GALIC formally documents the relationship between the terms of the hedge and the hedged items and its risk management objective. This documentation includes defining how hedge effectiveness and ineffectiveness will be measured on a retrospective and prospective basis. Changes in the fair value of derivatives that are designated and qualify as highly effective cash flow hedges are recorded in AOCI and are reclassified into earnings when the variability of the cash flows from the hedged items impacts earnings. When the change in the fair value of a qualifying cash flow hedge is included in earnings, it is included in the same line item in the statement of earnings as the cash flows from the hedged item. GALIC uses interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in GALIC’s portfolio of fixed maturity securities. |
Funds Held as Collateral | Funds Held as Collateral GALIC receives collateral from certain counterparties to support its purchased equity index call option assets (net of collateral required under put option contracts with the same counterparties). The fair value of this collateral is recorded as an asset and the offsetting obligation to return the collateral is recorded as a liability. |
Reinsurance | Reinsurance Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policies. A GALIC subsidiary cedes life insurance policies to a third party on a funds withheld basis whereby the subsidiary retains the assets (securities) associated with the reinsurance contract. Interest is credited to the reinsurer based on the actual investment performance of the retained assets. This reinsurance contract is considered to contain an embedded derivative (that must be adjusted to fair value) because the yield on the payable is based on a specific block of the ceding company’s assets, rather than the overall creditworthiness of the ceding company. GALIC determined that changes in the fair value of the underlying portfolio of fixed maturity securities is an appropriate measure of the value of the embedded derivative. The securities related to this contract are classified as “trading.” The adjustment to fair value on the embedded derivative offsets the investment income recorded on the adjustment to fair value of the related trading portfolio. |
Deferred Policy Acquisition Costs (''DPAC'') | Deferred Policy Acquisition Costs (“DPAC”) Policy acquisition costs (principally commissions, premium taxes and certain underwriting and policy issuance costs) directly related to the successful acquisition or renewal of an insurance contract are deferred. DPAC also includes capitalized costs associated with sales inducements offered to fixed annuity policyholders such as enhanced interest rates and premium and persistency bonuses. DPAC related to annuities is deferred to the extent deemed recoverable and amortized, with interest, in relation to the present value of actual and expected gross profits on the policies. Expected gross profits consist principally of estimated future investment margin (estimated future net investment income less interest credited on policyholder funds) and surrender, mortality, and other life and annuity policy charges, less death, annuitization and guaranteed withdrawal benefits in excess of account balances and estimated future policy administration expenses. To the extent that realized gains and losses result in adjustments to the amortization of DPAC related to annuities, such adjustments are reflected as components of realized gains (losses) on securities. DPAC related to traditional life and health insurance is amortized over the expected premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues. See “ Life, Accident and Health Reserves ” below for details on the impact of loss recognition on the accounting for traditional life and health insurance contracts. DPAC includes the present value of future profits on business in force of annuity and life, accident and health insurance companies acquired (“PVFP”). PVFP represents the portion of the costs to acquire companies that is allocated to the value of the right to receive future cash flows from insurance contracts existing at the date of acquisition. PVFP is amortized with interest in relation to expected gross profits of the acquired policies for annuities and universal life products and in relation to the premium paying period for traditional life and health insurance products. DPAC and certain other balance sheet amounts related to annuity and life businesses are also adjusted, net of tax, for the change in expense that would have been recorded if the unrealized gains (losses) from securities had actually been realized. These adjustments are included in unrealized gains (losses) on marketable securities, a component of AOCI in GALIC’s Balance Sheet. |
Annuity Benefits Accumulated | Annuity Benefits Accumulated Annuity receipts and benefit payments are recorded as increases or decreases in annuity benefits accumulated rather than as revenue and expense. Increases in this liability for interest credited are charged to annuity benefits expense and decreases for annuity policy charges are recorded as policy charges revenue. For traditional fixed annuities, the liability for annuity benefits accumulated represents the account value that had accrued to the benefit of the policyholder as of the balance sheet date. For fixed-indexed annuities (“FIAs”), the liability for annuity benefits accumulated includes an embedded derivative that represents the estimated fair value of the index participation with the remaining component representing the discounted value of the guaranteed minimum contract benefits. For certain products, annuity benefits accumulated also includes reserves for accrued persistency and premium bonuses, guaranteed withdrawals and excess benefits expected to be paid on future deaths and annuitizations (“EDAR”). The liabilities for EDAR and guaranteed withdrawals are accrued for and modified using assumptions consistent with those used in determining DPAC and DPAC amortization, except that amounts are determined in relation to the present value of total expected assessments. Total expected assessments consist principally of estimated future investment margin, surrender, mortality, and other life and annuity policy charges, and unearned revenues once they are recognized as income. Annuity benefits accumulated also includes amounts advanced from the Federal Home Loan Bank of Cincinnati. |
Unearned Revenue | Unearned Revenue Certain upfront policy charges on annuities are deferred as unearned revenue (included in other liabilities) and recognized in net earnings (included in policy charges and other income) using the same assumptions and estimated gross profits used to amortize DPAC. |
Life, Accident and Health Reserves | Life, Accident and Health Reserves Liabilities for future policy benefits under traditional life, accident and health policies are computed using the net level premium method. Computations are based on the original projections of investment yields, mortality, morbidity and surrenders and include provisions for unfavorable deviations unless a loss recognition event (premium deficiency) occurs. Claim reserves and liabilities established for accident and health claims are modified as necessary to reflect actual experience and developing trends. For long-duration contracts (such as traditional life policies), loss recognition occurs when, based on current expectations as of the measurement date, existing contract liabilities plus the present value of future premiums (including reasonably expected rate increases) are not expected to cover the present value of future claims payments and related settlement and maintenance costs (excluding overhead) as well as unamortized acquisition costs. If a block of business is determined to be in loss recognition, a charge is recorded in earnings in an amount equal to the excess of the present value of expected future claims costs and unamortized acquisition costs over existing reserves plus the present value of expected future premiums (with no provision for adverse deviation). The charge is recorded first to reduce unamortized acquisition costs and then as an additional reserve (if unamortized acquisition costs have been reduced to zero). In addition, reserves for traditional life policies are subject to adjustment for loss recognition charges that would have been recorded if the unrealized gains (losses) from securities had actually been realized. This adjustment is included in unrealized gains (losses) on marketable securities, a component of AOCI in GALIC’s Balance Sheet. |
Variable Annuity Assets and Liabilities | Variable Annuity Assets and Liabilities Separate accounts related to variable annuities represent the fair value of deposits invested in underlying investment funds on which GALIC earns a fee. Investment funds are selected and may be changed only by the policyholder, who retains all investment risk. GALIC’s variable annuity contracts contain a guaranteed minimum death benefit (“GMDB”) to be paid if the policyholder dies before the annuity payout period commences. In periods of declining equity markets, the GMDB may exceed the value of the policyholder’s account. A GMDB liability is established for future excess death benefits using assumptions together with a range of reasonably possible scenarios for investment fund performance that are consistent with DPAC capitalization and amortization assumptions. |
Leases | Leases On January 1, 2019, GALIC adopted ASU 2016-02, which requires entities that lease assets for terms longer than one year to recognize assets and liabilities for the rights and obligations created by those leases on the balance sheet based on the present value of contractual cash flows. As permitted under the ASU, GALIC adopted the guidance on a modified retrospective basis (comparative periods were not adjusted) and elected the following accounting policies and practical expedients: • exclude leases with a term of 12 months or less from the calculation of lease assets and liabilities, • not separate lease and non-lease components except for buildings (office space and storage facilities), • for contracts existing at the date of adoption — not reassess whether a contract is a lease or contains a lease, how initial direct costs were accounted for or whether the lease is an operating or finance lease, and • use hindsight to determine the lease term for leases existing at the date of adoption. GALIC did not have any material leases at December 31, 2019 or January 1, 2019. |
Noncontrolling Interests | Noncontrolling Interests For balance sheet purposes, noncontrolling interests represent the interests of shareholders other than GALIC in consolidated entities. In the statement of earnings, net earnings and losses attributable to noncontrolling interests represents such shareholders’ interest in the earnings and losses of those entities. |
Premium Recognition | Premium Recognition For traditional life, accident and health products, premiums are recognized as revenue when legally collectible from policyholders. For interest-sensitive life and universal life products, premiums are recorded in a policyholder account, which is reflected as a liability. Revenue is recognized as amounts are assessed against the policyholder account for mortality coverage and contract expenses. |
Income Taxes | Income Taxes GALIC and its subsidiaries have an intercompany tax allocation agreement with AFG. Pursuant to the agreement, each company’s tax expense is determined based upon its inclusion in the consolidated tax return of AFG and its includable subsidiaries. Estimated payments are made quarterly during the year. Following year-end, additional settlements are made on the original due date of the return and, when extended, at the time the return is filed. The method of allocation among the companies under the agreement is based upon separate return calculations with current credit for losses to the extent the losses provide a benefit in the consolidated return. Deferred income taxes are calculated using the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases and are measured using enacted tax rates. A valuation allowance is established to reduce total deferred tax assets to an amount that will more likely than not be realized. GALIC recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. Interest and penalties on GALIC’s reserve for uncertain tax positions are recognized as a component of tax expense. The effect of a change in tax rates on deferred tax assets and liabilities is recorded in net earnings in the period that includes the enactment date. This includes the impact on deferred tax assets or liabilities established through AOCI, which results in an amount equal to the difference between the deferred tax at the historical corporate rate and the newly enacted rate stranded in AOCI. As permitted under guidance adopted effective December 31, 2017 (ASU 2018-02), GALIC reclassified the $99 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings at December 31, 2017. See Note I — “ Income Taxes ” for further information. |
Benefit Plans | Benefit Plans GALIC provides retirement benefits to qualified employees of participating companies through the AFG 401(k) Retirement and Savings Plan, a defined contribution plan. AFG and its subsidiaries make all contributions to the retirement fund portion of the plan and match a percentage of employee contributions to the savings fund. Company contributions are expensed in the year for which they are declared. |
Statement of Cash Flows | Statement of Cash Flows For cash flow purposes, “investing activities” are defined as making and collecting loans and acquiring and disposing of debt or equity instruments and property and equipment. “Financing activities” include obtaining resources from owners and providing them with a return on their investments, borrowing money and repaying amounts borrowed. Annuity receipts, surrenders, benefits and withdrawals are also reflected as financing activities. All other activities are considered “operating.” Short-term investments having original maturities of three months or less when purchased are considered to be cash equivalents for purposes of the financial statements. |
Credit Impairment Guidance Effective in 2020 | Credit Impairment Guidance Effective in 2020 In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which provides a new loss model for determining credit-related impairments for financial instruments measured at amortized cost (mortgage loans, premiums receivable and reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses considers historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. Expected credit losses, and subsequent increases or decreases in such expected losses, will be recorded immediately through net earnings as an allowance that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the balance sheet at the amount expected to be collected. The updated guidance also amends the current other-than-temporary impairment model for available for sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. Subsequent increases or decreases in expected credit losses will be recorded immediately in net earnings through realized gains (losses). GALIC will adopt this guidance effective January 1, 2020. The new guidance did not have a material impact on GALIC’s results of operations or financial position. |
Segments of Operations (Tables)
Segments of Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment reporting information, by segment | The following tables (in millions) show GALIC’s assets, revenues and earnings before income taxes by segment. 2019 2018 2017 Assets Annuity $ 45,217 $ 40,115 $ 37,392 Run-off life 676 686 728 Total assets $ 45,893 $ 40,801 $ 38,120 Revenues Annuity: Net investment income $ 1,792 $ 1,638 $ 1,458 Other income 108 108 106 Total annuity 1,900 1,746 1,564 Run-off life 49 50 47 Total revenues before realized gains (losses) 1,949 1,796 1,611 Realized gains (losses) on securities 132 (105 ) (13 ) Total revenues $ 2,081 $ 1,691 $ 1,598 Earnings Before Income Taxes Annuity $ 363 $ 363 $ 385 Run-off life 2 (2 ) 9 Total earnings before realized gains (losses) and income taxes 365 361 394 Realized gains (losses) on securities 132 (105 ) (13 ) Total earnings before income taxes $ 497 $ 256 $ 381 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value | Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions): Level 1 Level 2 Level 3 Total December 31, 2019 Assets: Available for sale (“AFS”) fixed maturities: U.S. Government and government agencies $ 6 $ 24 $ 15 $ 45 States, municipalities and political subdivisions — 4,284 65 4,349 Foreign government — 34 — 34 Residential MBS — 1,971 128 2,099 Commercial MBS — 806 29 835 Collateralized loan obligations — 3,365 14 3,379 Other asset-backed securities — 4,357 1,030 5,387 Corporate and other 16 20,220 1,535 21,771 Total AFS fixed maturities 22 35,061 2,816 37,899 Trading fixed maturities — 54 — 54 Equity securities 492 41 276 809 Equity index call options — 924 — 924 Variable annuity assets (separate accounts) (*) — 628 — 628 Other assets — derivatives — 50 — 50 Total assets accounted for at fair value $ 514 $ 36,758 $ 3,092 $ 40,364 Liabilities: Derivatives in annuity benefits accumulated $ — $ — $ 3,730 $ 3,730 Other liabilities — derivatives — 10 — 10 Total liabilities accounted for at fair value $ — $ 10 $ 3,730 $ 3,740 December 31, 2018 Assets: Available for sale fixed maturities: U.S. Government and government agencies $ 6 $ 25 $ 8 $ 39 States, municipalities and political subdivisions — 4,238 59 4,297 Foreign government — 13 — 13 Residential MBS — 1,787 161 1,948 Commercial MBS — 788 48 836 Collateralized loan obligations — 3,298 85 3,383 Other asset-backed securities — 3,627 543 4,170 Corporate and other 14 17,713 1,719 19,446 Total AFS fixed maturities 20 31,489 2,623 34,132 Trading fixed maturities — 55 — 55 Equity securities 493 38 212 743 Equity index call options — 184 — 184 Variable annuity assets (separate accounts) (*) — 557 — 557 Other assets — derivatives — 16 — 16 Total assets accounted for at fair value $ 513 $ 32,339 $ 2,835 $ 35,687 Liabilities: Derivatives in annuity benefits accumulated $ — $ — $ 2,720 $ 2,720 Other liabilities — derivatives — 49 — 49 Total liabilities accounted for at fair value $ — $ 49 $ 2,720 $ 2,769 (*) Variable annuity liabilities equal the fair value of variable annuity assets. |
Fair value measurements, Levels 1 and 2 transfers | The transfers between Level 1 and Level 2 for the years ended December 31, 2019 , 2018 and 2017 are reflected in the table below at fair value as of the end of the reporting period (dollars in millions): Level 2 To Level 1 Transfers Level 1 To Level 2 Transfers # of Transfers Fair Value # of Transfers Fair Value 2019 2018 2017 2019 2018 2017 2019 2018 2017 2019 2018 2017 Perpetual preferred stocks — — 1 $ — $ — $ 1 — — 1 $ — $ — $ 1 Common stocks 2 — — — — — — — — — — — |
Unobservable inputs used by management in determining fair value of embedded derivatives | The following table presents information about the unobservable inputs used by management in determining fair value of these Level 3 liabilities. See Note F — “ Derivatives .” Unobservable Input Range Adjustment for credit risk 0.2% – 2.4% over the risk-free rate Risk margin for uncertainty in cash flows 0.80% reduction in the discount rate Surrenders 3% – 22% of indexed account value Partial surrenders 2% – 9% of indexed account value Annuitizations 0.1% – 1% of indexed account value Deaths 1.5% – 10.6% of indexed account value Budgeted option costs 2.5% – 3.3% of indexed account value |
Changes in balances of Level 3 financial assets | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2019 , 2018 and 2017 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs and $20 million of equity securities transferred into Level 3 in the first quarter of 2018 related to a small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under new guidance adopted on January 1, 2018, as discussed in Note A — “ Accounting Policies — Investments .” All transfers are reflected in the table at fair value as of the end of the reporting period. Total realized/unrealized gains (losses) included in Balance at December 31, 2018 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2019 AFS fixed maturities: U.S. government agency $ 8 $ — $ 7 $ — $ — $ — $ — $ 15 State and municipal 59 — 6 — (3 ) 10 (7 ) 65 Residential MBS 161 3 (3 ) — (18 ) 36 (51 ) 128 Commercial MBS 48 2 — — (13 ) 3 (11 ) 29 Collateralized loan obligations 85 (4 ) 4 — — 14 (85 ) 14 Other asset-backed securities 543 — 5 727 (162 ) 23 (106 ) 1,030 Corporate and other 1,719 (1 ) 53 378 (250 ) 28 (392 ) 1,535 Total AFS fixed maturities 2,623 — 72 1,105 (446 ) 114 (652 ) 2,816 Equity securities 212 8 — 36 (2 ) 22 — 276 Total Level 3 assets $ 2,835 $ 8 $ 72 $ 1,141 $ (448 ) $ 136 $ (652 ) $ 3,092 Embedded derivatives (*) $ (2,720 ) $ (919 ) $ — $ (333 ) $ 242 $ — $ — $ (3,730 ) Total Level 3 liabilities $ (2,720 ) $ (919 ) $ — $ (333 ) $ 242 $ — $ — $ (3,730 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes a favorable adjustment related to the unlocking of actuarial assumptions of $181 million in 2019 . Total realized/unrealized gains (losses) included in Balance at December 31, 2017 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2018 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 72 — (3 ) — (2 ) — (8 ) 59 Residential MBS 99 (5 ) (4 ) — (18 ) 106 (17 ) 161 Commercial MBS 34 — — 14 — — — 48 Collateralized loan obligations 142 (2 ) (9 ) 24 (11 ) 2 (61 ) 85 Other asset-backed securities 398 — (1 ) 292 (171 ) 69 (44 ) 543 Corporate and other 941 (9 ) (18 ) 986 (148 ) 26 (59 ) 1,719 Total AFS fixed maturities 1,694 (16 ) (35 ) 1,316 (350 ) 203 (189 ) 2,623 Equity securities 105 (4 ) — 106 (4 ) 20 (11 ) 212 Total Level 3 assets $ 1,799 $ (20 ) $ (35 ) $ 1,422 $ (354 ) $ 223 $ (200 ) $ 2,835 Embedded derivatives (*) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) Total Level 3 liabilities $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $44 million in 2018 . Total realized/unrealized gains (losses) included in Balance at December 31, 2016 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2017 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 75 — 1 — (2 ) — (2 ) 72 Residential MBS 148 (3 ) 1 1 (26 ) 32 (54 ) 99 Commercial MBS 25 2 — 13 (10 ) 4 — 34 Collateralized loan obligations 113 — — 41 (12 ) — — 142 Other asset-backed securities 246 — 1 254 (83 ) 154 (174 ) 398 Corporate and other 652 (5 ) 3 440 (120 ) 29 (58 ) 941 Total AFS fixed maturities 1,267 (6 ) 6 749 (253 ) 219 (288 ) 1,694 Equity securities 110 (14 ) 7 25 (10 ) — (13 ) 105 Total Level 3 assets $ 1,377 $ (20 ) $ 13 $ 774 $ (263 ) $ 219 $ (301 ) $ 1,799 Embedded derivatives (*) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) Total Level 3 liabilities $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $25 million in 2017 . |
Changes in balances of Level 3 financial liabilities | Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2019 , 2018 and 2017 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs and $20 million of equity securities transferred into Level 3 in the first quarter of 2018 related to a small number of limited partnerships and similar investments carried at cost under the prior guidance that are carried at fair value through net earnings under new guidance adopted on January 1, 2018, as discussed in Note A — “ Accounting Policies — Investments .” All transfers are reflected in the table at fair value as of the end of the reporting period. Total realized/unrealized gains (losses) included in Balance at December 31, 2018 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2019 AFS fixed maturities: U.S. government agency $ 8 $ — $ 7 $ — $ — $ — $ — $ 15 State and municipal 59 — 6 — (3 ) 10 (7 ) 65 Residential MBS 161 3 (3 ) — (18 ) 36 (51 ) 128 Commercial MBS 48 2 — — (13 ) 3 (11 ) 29 Collateralized loan obligations 85 (4 ) 4 — — 14 (85 ) 14 Other asset-backed securities 543 — 5 727 (162 ) 23 (106 ) 1,030 Corporate and other 1,719 (1 ) 53 378 (250 ) 28 (392 ) 1,535 Total AFS fixed maturities 2,623 — 72 1,105 (446 ) 114 (652 ) 2,816 Equity securities 212 8 — 36 (2 ) 22 — 276 Total Level 3 assets $ 2,835 $ 8 $ 72 $ 1,141 $ (448 ) $ 136 $ (652 ) $ 3,092 Embedded derivatives (*) $ (2,720 ) $ (919 ) $ — $ (333 ) $ 242 $ — $ — $ (3,730 ) Total Level 3 liabilities $ (2,720 ) $ (919 ) $ — $ (333 ) $ 242 $ — $ — $ (3,730 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes a favorable adjustment related to the unlocking of actuarial assumptions of $181 million in 2019 . Total realized/unrealized gains (losses) included in Balance at December 31, 2017 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2018 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 72 — (3 ) — (2 ) — (8 ) 59 Residential MBS 99 (5 ) (4 ) — (18 ) 106 (17 ) 161 Commercial MBS 34 — — 14 — — — 48 Collateralized loan obligations 142 (2 ) (9 ) 24 (11 ) 2 (61 ) 85 Other asset-backed securities 398 — (1 ) 292 (171 ) 69 (44 ) 543 Corporate and other 941 (9 ) (18 ) 986 (148 ) 26 (59 ) 1,719 Total AFS fixed maturities 1,694 (16 ) (35 ) 1,316 (350 ) 203 (189 ) 2,623 Equity securities 105 (4 ) — 106 (4 ) 20 (11 ) 212 Total Level 3 assets $ 1,799 $ (20 ) $ (35 ) $ 1,422 $ (354 ) $ 223 $ (200 ) $ 2,835 Embedded derivatives (*) $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) Total Level 3 liabilities $ (2,542 ) $ 204 $ — $ (545 ) $ 163 $ — $ — $ (2,720 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $44 million in 2018 . Total realized/unrealized gains (losses) included in Balance at December 31, 2016 Net earnings Other comprehensive income (loss) Purchases and issuances Sales and settlements Transfer into Level 3 Transfer out of Level 3 Balance at December 31, 2017 AFS fixed maturities: U.S. government agency $ 8 $ — $ — $ — $ — $ — $ — $ 8 State and municipal 75 — 1 — (2 ) — (2 ) 72 Residential MBS 148 (3 ) 1 1 (26 ) 32 (54 ) 99 Commercial MBS 25 2 — 13 (10 ) 4 — 34 Collateralized loan obligations 113 — — 41 (12 ) — — 142 Other asset-backed securities 246 — 1 254 (83 ) 154 (174 ) 398 Corporate and other 652 (5 ) 3 440 (120 ) 29 (58 ) 941 Total AFS fixed maturities 1,267 (6 ) 6 749 (253 ) 219 (288 ) 1,694 Equity securities 110 (14 ) 7 25 (10 ) — (13 ) 105 Total Level 3 assets $ 1,377 $ (20 ) $ 13 $ 774 $ (263 ) $ 219 $ (301 ) $ 1,799 Embedded derivatives (*) $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) Total Level 3 liabilities $ (1,759 ) $ (589 ) $ — $ (300 ) $ 106 $ — $ — $ (2,542 ) (*) Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $25 million in 2017 . |
Fair value of financial instruments | The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions): Carrying Fair Value Value Total Level 1 Level 2 Level 3 December 31, 2019 Financial assets: Cash and cash equivalents $ 734 $ 734 $ 734 $ — $ — Mortgage loans 1,072 1,081 — — 1,081 Policy loans 164 164 — — 164 Total financial assets not accounted for at fair value $ 1,970 $ 1,979 $ 734 $ — $ 1,245 Financial liabilities: Annuity benefits accumulated (*) $ 40,159 $ 40,182 $ — $ — $ 40,182 Total financial liabilities not accounted for at fair value $ 40,159 $ 40,182 $ — $ — $ 40,182 December 31, 2018 Financial assets: Cash and cash equivalents $ 329 $ 329 $ 329 $ — $ — Mortgage loans 783 772 — — 772 Policy loans 174 174 — — 174 Total financial assets not accounted for at fair value $ 1,286 $ 1,275 $ 329 $ — $ 946 Financial liabilities: Annuity benefits accumulated (*) $ 36,384 $ 34,765 $ — $ — $ 34,765 Total financial liabilities not accounted for at fair value $ 36,384 $ 34,765 $ — $ — $ 34,765 (*) Excludes $247 million and $232 million of life contingent annuities in the payout phase at December 31, 2019 and 2018 , respectively. |
Balance Sheet Impact of Net U_2
Balance Sheet Impact of Net Unrealized Gains on Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income | The following table shows (in millions) the components of the net unrealized gains on securities that is included in AOCI in GALIC’s Balance Sheet. Asset (Liability) before Net Unrealized Impact of Net Unrealized Gains on Securities Carrying Value of Asset (Liability) December 31, 2019 Fixed maturities $ 36,144 $ 1,755 $ 37,899 Deferred policy acquisition costs 1,394 (681 ) 713 Annuity benefits accumulated (40,186 ) (220 ) (40,406 ) Unearned revenue (included in other liabilities) (23 ) 11 (12 ) Net unrealized gain, pretax 865 Deferred tax on unrealized gain (182 ) Net unrealized gain, after tax (included in AOCI) $ 683 December 31, 2018 Fixed maturities $ 34,024 $ 108 $ 34,132 Deferred policy acquisition costs 1,423 (42 ) 1,381 Annuity benefits accumulated (36,602 ) (14 ) (36,616 ) Unearned revenue (included in other liabilities) (29 ) 1 (28 ) Net unrealized gain, pretax 53 Deferred tax on unrealized gain (11 ) Net unrealized gain, after tax (included in AOCI) $ 42 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for sale fixed maturities and equity securities | Available for sale fixed maturities at December 31 consisted of the following (in millions): 2019 2018 Amortized Cost Gross Unrealized Net Unrealized Fair Amortized Cost Gross Unrealized Net Unrealized Fair Gains Losses Gains Losses Fixed maturities: U.S. Government and government agencies $ 38 $ 7 $ — $ 7 $ 45 $ 41 $ 1 $ (3 ) $ (2 ) $ 39 States, municipalities and political subdivisions 4,080 270 (1 ) 269 4,349 4,195 130 (28 ) 102 4,297 Foreign government 31 3 — 3 34 11 2 — 2 13 Residential MBS 1,909 193 (3 ) 190 2,099 1,749 203 (4 ) 199 1,948 Commercial MBS 807 28 — 28 835 822 16 (2 ) 14 836 Collateralized loan obligations 3,401 8 (30 ) (22 ) 3,379 3,440 — (57 ) (57 ) 3,383 Other asset-backed securities 5,265 138 (16 ) 122 5,387 4,067 122 (19 ) 103 4,170 Corporate and other 20,613 1,176 (18 ) 1,158 21,771 19,699 158 (411 ) (253 ) 19,446 Total fixed maturities $ 36,144 $ 1,823 $ (68 ) $ 1,755 $ 37,899 $ 34,024 $ 632 $ (524 ) $ 108 $ 34,132 |
Equity securities reported at fair value | Equity securities, which are reported at fair value with holding gains and losses recognized in net earnings, consisted of the following at December 31 (in millions): 2019 2018 Fair Value Fair Value over (under) over (under) Actual Cost Fair Value Cost Actual Cost Fair Value Cost Common stocks $ 497 $ 552 $ 55 $ 562 $ 518 $ (44 ) Perpetual preferred stocks 249 257 8 236 225 (11 ) Total equity securities carried at fair value $ 746 $ 809 $ 63 $ 798 $ 743 $ (55 ) |
Available for sale securities in a continuous unrealized loss position | The following tables show gross unrealized losses (dollars in millions) on available for sale fixed maturities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates. Less Than Twelve Months Twelve Months or More Unrealized Loss Fair Value Fair Value as % of Cost Unrealized Loss Fair Value Fair Value as % of Cost December 31, 2019 Fixed maturities: U.S. Government and government agencies $ — $ — — % $ — $ — — % States, municipalities and political subdivisions (1 ) 105 99 % — 5 100 % Residential MBS (2 ) 315 99 % (1 ) 15 94 % Commercial MBS — 11 100 % — — — % Collateralized loan obligations (9 ) 995 99 % (21 ) 1,363 98 % Other asset-backed securities (11 ) 838 99 % (5 ) 91 95 % Corporate and other (11 ) 937 99 % (7 ) 202 97 % Total fixed maturities $ (34 ) $ 3,201 99 % $ (34 ) $ 1,676 98 % December 31, 2018 Fixed maturities: U.S. Government and government agencies $ — $ 1 100 % $ (3 ) $ 11 79 % States, municipalities and political subdivisions (12 ) 773 98 % (16 ) 471 97 % Residential MBS (3 ) 203 99 % (1 ) 32 97 % Commercial MBS (1 ) 117 99 % (1 ) 30 97 % Collateralized loan obligations (48 ) 2,807 98 % (9 ) 147 94 % Other asset-backed securities (12 ) 1,231 99 % (7 ) 293 98 % Corporate and other (294 ) 9,616 97 % (117 ) 1,761 94 % Total fixed maturities $ (370 ) $ 14,748 98 % $ (154 ) $ 2,745 95 % |
Roll forward of cumulative credit portion of other-than-temporary impairments on fixed maturity securities | A progression of the credit portion of other-than-temporary impairments on fixed maturity securities for which the non-credit portion of an impairment has been recognized in other comprehensive income is shown below (in millions): 2019 2018 2017 Balance at January 1 $ 97 $ 99 $ 104 Additional credit impairments on: Previously impaired securities 1 — 1 Securities without prior impairments — 1 2 Reductions due to sales or redemptions (6 ) (3 ) (8 ) Balance at December 31 $ 92 $ 97 $ 99 |
Available for sale fixed maturity securities by contractual maturity date | The table below sets forth the scheduled maturities of available for sale fixed maturities as of December 31, 2019 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers. Amortized Fair Value Cost Amount % Maturity One year or less $ 1,334 $ 1,356 4 % After one year through five years 8,151 8,510 22 % After five years through ten years 12,092 12,940 34 % After ten years 3,185 3,393 9 % 24,762 26,199 69 % Collateralized loan obligations and other ABS (average life of approximately 4-1/2 years) 8,666 8,766 23 % MBS (average life of approximately 4-1/2 years) 2,716 2,934 8 % Total $ 36,144 $ 37,899 100 % |
Net investment income earned and investment expenses incurred | The following table shows (in millions) investment income earned and investment expenses incurred. 2019 2018 2017 Investment income: Fixed maturities $ 1,600 $ 1,450 $ 1,342 Equity securities: Dividends 34 30 21 Change in fair value (*) 17 13 — Equity in earnings of partnerships and similar investments 90 96 37 Mortgage loans 43 45 46 Policy loans 9 10 11 Real estate and other 36 26 31 Gross investment income 1,829 1,670 1,488 Investment expenses (16 ) (13 ) (10 ) Net investment income $ 1,813 $ 1,657 $ 1,478 (*) Although the change in the fair value of the majority of GALIC’s equity securities is recorded in realized gains (losses) on securities, GALIC records holding gains and losses in net investment income on equity securities classified as “trading” under previous guidance and on a small portfolio of limited partnership and similar investments that do not qualify for the equity method of accounting. |
Real estate and other investments included on the Balance Sheet | Realized gains (losses) and changes in unrealized appreciation (depreciation) included in AOCI related to fixed maturity and equity security investments are summarized as follows (in millions): 2019 2018 Realized gains (losses) Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 19 $ (21 ) $ (2 ) $ 1,647 $ 5 $ (21 ) $ (16 ) $ (1,057 ) Equity securities 122 — 122 — (107 ) — (107 ) — Mortgage loans and other investments 2 — 2 — — — — — Other (*) (1 ) 11 10 (835 ) 11 7 18 502 Total pretax 142 (10 ) 132 812 (91 ) (14 ) (105 ) (555 ) Tax effects (30 ) 2 (28 ) (171 ) 19 3 22 117 Net of tax $ 112 $ (8 ) $ 104 $ 641 $ (72 ) $ (11 ) $ (83 ) $ (438 ) 2017 Realized gains (losses) Before Impairments Impairments Total Change in Unrealized Fixed maturities $ 15 $ (14 ) $ 1 $ 455 Equity securities 12 (27 ) (15 ) 66 Mortgage loans and other investments (8 ) (2 ) (10 ) — Other (*) (3 ) 14 11 (219 ) Total pretax 16 (29 ) (13 ) 302 Tax effects: Reclassify impact of U.S. corporate tax rate change — — — 101 Other (6 ) 10 4 (106 ) Total tax effects (6 ) 10 4 (5 ) Net of tax $ 10 $ (19 ) $ (9 ) $ 297 (*) Primarily adjustments to deferred policy acquisition costs and reserves related to the annuity business. |
Holding gains (losses) on equity securities still held | GALIC recorded net holding gains (losses) on equity securities during 2019 and 2018 on securities that were still owned at December 31 as follows (in millions): 2019 2018 Included in realized gains (losses) $ 123 $ (110 ) Included in net investment income 17 13 $ 140 $ (97 ) |
Gross realized gains and losses on available for sale fixed maturity and equity security investments | Gross realized gains and losses (excluding impairment write-downs and mark-to-market of derivatives) on available for sale fixed maturity investment transactions consisted of the following (in millions): 2019 2018 2017 Gross gains $ 30 $ 17 $ 37 Gross losses (16 ) (12 ) (19 ) During 2017, GALIC recorded gross gains of $23 million and gross losses of $11 million on available for sale equity securities. |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives included in Balance Sheet at fair value | The following derivatives that do not qualify for hedge accounting under GAAP are included in GALIC’s Balance Sheet at fair value (in millions): December 31, 2019 December 31, 2018 Derivative Balance Sheet Line Asset Liability Asset Liability MBS with embedded derivatives Fixed maturities $ 74 $ — $ 84 $ — Public company warrants Equity securities — — — — Fixed-indexed and registered index-linked annuities (embedded derivative) Annuity benefits accumulated — 3,730 — 2,720 Equity index call options Equity index call options 924 — 184 — Equity index put options Other liabilities — 1 — 1 Reinsurance contract (embedded derivative) Other liabilities — 4 — 2 $ 998 $ 3,735 $ 268 $ 2,723 |
Summary of gain (loss) included in the Statement of Earnings for changes in the fair value of derivatives | The following table summarizes the gains (losses) included in GALIC’s Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting for 2019 , 2018 , and 2017 (in millions): Derivative Statement of Earnings Line 2019 2018 2017 MBS with embedded derivatives Realized gains (losses) on securities $ 5 $ (4 ) $ (3 ) Public company warrants Realized gains (losses) on securities — (3 ) — Fixed-indexed and registered index-linked annuities (embedded derivative) (*) Annuity benefits (919 ) 204 (589 ) Equity index call options Annuity benefits 804 (298 ) 494 Equity index put options Annuity benefits 2 (1 ) — Reinsurance contract (embedded derivative) Net investment income (2 ) 2 (2 ) $ (110 ) $ (100 ) $ (100 ) (*) The change in fair value of the embedded derivative includes a favorable adjustment related to unlocking of actuarial assumptions of $181 million in 2019 and losses of $44 million in 2018 and $25 million in 2017 . |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred policy acquisition costs details | A progression of deferred policy acquisition costs is presented below (in millions): Deferred Costs Sales Inducements PVFP Subtotal Unrealized (*) Total Balance at December 31, 2016 $ 1,106 $ 110 $ 46 $ 1,262 $ (265 ) $ 997 Additions 225 4 — 229 — 229 Amortization: Periodic amortization (160 ) (19 ) (8 ) (187 ) — (187 ) Annuity unlocking 34 6 1 41 — 41 Included in realized gains 9 1 — 10 — 10 Other — — 10 10 — 10 Change in unrealized — — — — (157 ) (157 ) Balance at December 31, 2017 1,214 102 49 1,365 (422 ) 943 Additions 263 2 — 265 — 265 Amortization: Periodic amortization (237 ) (19 ) (7 ) (263 ) — (263 ) Annuity unlocking 29 — — 29 — 29 Included in realized gains 14 1 — 15 — 15 Change in unrealized — — — — 392 392 Balance at December 31, 2018 1,283 86 42 1,411 (30 ) 1,381 Additions 206 2 — 208 — 208 Amortization: Periodic amortization (120 ) (13 ) (6 ) (139 ) — (139 ) Annuity unlocking (76 ) (1 ) — (77 ) — (77 ) Included in realized gains 8 1 — 9 — 9 Change in unrealized — — — — (669 ) (669 ) Balance at December 31, 2019 $ 1,301 $ 75 $ 36 $ 1,412 $ (699 ) $ 713 (*) Adjustments to DPAC related to net unrealized gains/losses on securities and cash flow hedges. |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Components of accumulated other comprehensive income (loss) | The progression of the components of accumulated other comprehensive income follows (in millions): Other Comprehensive Income (Loss) AOCI Beginning Balance Pretax Tax Net of tax Other (c) AOCI Ending Balance Year ended December 31, 2019 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 828 $ (174 ) $ 654 Reclassification adjustment for realized (gains) losses included in net earnings (a) (16 ) 3 (13 ) Total net unrealized gains on securities (b) $ 42 812 (171 ) 641 $ — $ 683 Net unrealized gains (losses) on cash flow hedges (11 ) 36 (8 ) 28 — 17 Total $ 31 $ 848 $ (179 ) $ 669 $ — $ 700 Year ended December 31, 2018 Net unrealized gains (losses) on securities: Unrealized holding losses on securities arising during the period $ (561 ) $ 118 $ (443 ) Reclassification adjustment for realized (gains) losses included in net earnings (a) 6 (1 ) 5 Total net unrealized gains (losses) on securities (b) $ 570 (555 ) 117 (438 ) $ (90 ) $ 42 Net unrealized gains (losses) on cash flow hedges (13 ) 2 — 2 — (11 ) Total $ 557 $ (553 ) $ 117 $ (436 ) $ (90 ) $ 31 Year ended December 31, 2017 Net unrealized gains on securities: Unrealized holding gains on securities arising during the period $ 299 $ (105 ) $ 194 Reclassification adjustment for realized (gains) losses included in net earnings (a) 3 (1 ) 2 Total net unrealized gains on securities (b) $ 273 302 (106 ) 196 $ 101 $ 570 Net unrealized losses on cash flow hedges (7 ) (6 ) 2 (4 ) (2 ) (13 ) Total $ 266 $ 296 $ (104 ) $ 192 $ 99 $ 557 (a) The reclassification adjustment out of net unrealized gains on securities affected the following lines in GALIC’s Statement of Earnings: OCI component Affected line in the statement of earnings Pretax Realized gains (losses) on securities Tax Provision for income taxes (b) Includes net unrealized gains of $34 million at December 31, 2019 compared to $33 million and $42 million at December 31, 2018 and 2017 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. (c) On January 1, 2018, GALIC adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $90 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $99 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “ Accounting Policies — Income Taxes ”). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of income taxes at the statutory rate and income taxes shown in the Statement of Earnings | The following is a reconciliation of income taxes at the statutory rate ( 21% in 2019 and 2018 and 35% in 2017 ) to the provision for income taxes as shown in GALIC’s Statement of Earnings (dollars in millions): 2019 2018 2017 Amount % of EBT Amount % of EBT Amount % of EBT Earnings before income taxes (“EBT”) $ 497 $ 256 $ 381 Income taxes at statutory rate $ 104 21 % $ 54 21 % $ 133 35 % Effect of permanent items (2 ) — % (7 ) (3 %) (4 ) (1 %) Effect of change in U.S. corporate tax rate — — % — — % (24 ) (6 %) Provision for income taxes as shown in the statement of earnings $ 102 21 % $ 47 18 % $ 105 28 % |
Components of income tax provision (credit) | The total income tax provision (credit) consists of (in millions): 2019 2018 2017 Current taxes: Federal $ 152 $ 130 $ 183 State 4 3 3 Deferred taxes: Federal (54 ) (86 ) (57 ) Impact of change in U.S. corporate tax rate — — (24 ) Provision for income taxes $ 102 $ 47 $ 105 |
Components of deferred tax assets and liabilities | Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in GALIC’s Balance Sheet at December 31 were as follows (in millions): 2019 2018 Excluding Unrealized Gains Impact of Unrealized Gains Total Excluding Unrealized Gains Impact of Unrealized Gains Total Deferred tax assets: Insurance claims and reserves $ 601 $ 46 $ 647 $ 521 $ 3 $ 524 Other, net 7 (2 ) 5 8 — 8 Total deferred tax assets 608 44 652 529 3 532 Deferred tax liabilities: Investment securities (78 ) (369 ) (447 ) (23 ) (22 ) (45 ) Deferred policy acquisition costs (236 ) 143 (93 ) (248 ) 8 (240 ) Insurance claims and reserves transition liability (68 ) — (68 ) (79 ) — (79 ) Total deferred tax liabilities (382 ) (226 ) (608 ) (350 ) (14 ) (364 ) Net deferred tax asset (liability) $ 226 $ (182 ) $ 44 $ 179 $ (11 ) $ 168 |
Insurance (Tables)
Insurance (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Statutory information | Net earnings and capital and surplus on a statutory basis for GALIC and its insurance subsidiaries were as follows (in millions): Net Earnings Capital and Surplus 2019 2018 2017 2019 2018 GALIC consolidated life insurance companies $ 34 $ 802 $ 286 $ 2,868 $ 2,701 |
Schedule of reserve liabilities for annuity benefits accumulated | The liabilities included in GALIC’s Balance Sheet for these benefits, excluding the impact of unrealized gains on securities, were as follows at December 31 (in millions): 2019 2018 Expected death and annuitization $ 232 $ 229 Guaranteed withdrawal benefits 625 472 Accrued persistency and premium bonuses 1 1 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 |
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of accounting change | $ 3 | $ 3 | |||
Tax Cuts and Jobs Act, reclassification from AOCI to retained earnings, tax effect | 0 | ||||
Maturities of short term investments | 3 months | ||||
Equity securities | |||||
Significant Accounting Policies [Line Items] | |||||
Available-for-sale securities, equity securities | 593 | $ 593 | |||
Accounting Standards Update 2016-01 | Equity securities | |||||
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of accounting change | $ (90) | ||||
Tax Cuts and Jobs Act of 2017 | Accounting Standards Update 2018-02 | |||||
Significant Accounting Policies [Line Items] | |||||
Tax Cuts and Jobs Act, reclassification from AOCI to retained earnings, tax effect | $ 99 | ||||
Limited partnerships and similar investments | Accounting Standards Update 2016-01 | |||||
Significant Accounting Policies [Line Items] | |||||
Cumulative effect of accounting change | $ (3) | ||||
Equity securities still owned | Accounting Standards Update 2016-01 | Equity securities | |||||
Significant Accounting Policies [Line Items] | |||||
Net holding gains (losses) on equity securities | $ 140 | $ (97) |
Segments of Operations - Narrat
Segments of Operations - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of segments | 2 |
Segments of Operations - Assets
Segments of Operations - Assets by segment (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | |||
Total assets | $ 45,893 | $ 40,801 | $ 38,120 |
Annuity | |||
Segment Reporting Information [Line Items] | |||
Total assets | 45,217 | 40,115 | 37,392 |
Run-off Life | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 676 | $ 686 | $ 728 |
Segments of Operations - Revenu
Segments of Operations - Revenues by segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Net investment income | $ 1,813 | $ 1,657 | $ 1,478 |
Other income | 114 | 115 | 111 |
Revenues before realized gains | 1,949 | 1,796 | 1,611 |
Realized gains (losses) on securities | 132 | (105) | (13) |
Total revenues | 2,081 | 1,691 | 1,598 |
Annuity | |||
Segment Reporting Information [Line Items] | |||
Net investment income | 1,792 | 1,638 | 1,458 |
Other income | 108 | 108 | 106 |
Revenues before realized gains | 1,900 | 1,746 | 1,564 |
Run-off Life | |||
Segment Reporting Information [Line Items] | |||
Revenues before realized gains | $ 49 | $ 50 | $ 47 |
Segments of Operations - Earnin
Segments of Operations - Earnings before income taxes by segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Earnings before realized gains and income taxes | $ 365 | $ 361 | $ 394 |
Realized gains (losses) on securities | 132 | (105) | (13) |
Earnings before income taxes | 497 | 256 | 381 |
Annuity | |||
Segment Reporting Information [Line Items] | |||
Earnings before realized gains and income taxes | 363 | 363 | 385 |
Run-off Life | |||
Segment Reporting Information [Line Items] | |||
Earnings before realized gains and income taxes | $ 2 | $ (2) | $ 9 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)basispointsecurityprofessional | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
AFG's internal investment professionals | professional | 20 | |||
Level 3 assets as a percentage of total assets measured at fair value | 8.00% | |||
Percentage of level 3 assets that were priced using non-binding broker quotes | 61.00% | |||
Level 3 assets that were priced using non-binding broker quotes | $ 1,870 | |||
Percent of spreads between 200 and 700 basis points | 70.00% | |||
Fair value of equity securities transferred into level 3 | $ 136 | $ 223 | $ 219 | |
Life contingent annuities | $ 247 | 232 | ||
Fixed-indexed annuities (embedded derivative), majority of future years | Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Unobservable input surrenders used in Level 3 fair value determination | 7.00% | |||
Fixed-indexed annuities (embedded derivative), majority of future years | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Unobservable input surrenders used in Level 3 fair value determination | 10.00% | |||
Fixed-indexed and variable-indexed annuities (embedded derivative) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of derivatives in annuity benefits accumulated measured using a discounted cash flow approach | $ 3,730 | |||
Fixed-indexed and variable-indexed annuities (embedded derivative) | Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Unobservable input surrenders used in Level 3 fair value determination | 3.00% | |||
Fixed-indexed and variable-indexed annuities (embedded derivative) | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Unobservable input surrenders used in Level 3 fair value determination | 22.00% | |||
Not designated as hedging instrument | Annuity benefits | Fixed-indexed and variable-indexed annuities (embedded derivative) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total realized/unrealized gains (losses) included in net income for the embedded derivatives related to the unlocking of actuarial assumptions | $ 181 | (44) | (25) | |
Fixed maturities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of equity securities transferred into level 3 | 114 | 203 | 219 | |
Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of equity securities transferred into level 3 | $ 20 | 22 | $ 20 | $ 0 |
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Internally developed Level 3 assets | 996 | |||
Third party pricing model | Level 3 | Fixed maturities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Internally developed Level 3 assets | $ 565 | |||
Securities priced using third-party model | security | 34 | |||
Basis points credit spread applied by management using third party model | basispoint | 400 | |||
Third party pricing model | Level 3 | Fixed maturities | Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Basis points credit spread applied by management using third party model | basispoint | 100 | |||
Third party pricing model | Level 3 | Fixed maturities | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Basis points credit spread applied by management using third party model | basispoint | 1,253 | |||
Minimum | Third party pricing model | Level 3 | Fixed maturities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Basis points credit spread applied by management using third party model | basispoint | 200 | |||
Maximum | Third party pricing model | Level 3 | Fixed maturities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Basis points credit spread applied by management using third party model | basispoint | 700 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and liabilities measured and carried at fair value in the financial statements (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets: | |||
Fixed maturities, Available for sale, Fair Value | $ 37,899 | $ 34,132 | |
Fixed maturities, Trading, Fair Value | 54 | 55 | |
Equity securities, at fair value | 809 | 743 | |
Other assets — derivatives | 924 | 184 | |
Variable annuity assets (separate accounts) | [1] | 628 | 557 |
Total assets accounted for at fair value | 40,364 | 35,687 | |
Liabilities: | |||
Total liabilities accounted for at fair value | 3,740 | 2,769 | |
Annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 3,730 | 2,720 | |
Other liabilities | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 10 | 49 | |
Fixed maturities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 37,899 | 34,132 | |
Fixed maturities, Trading, Fair Value | 54 | 55 | |
U.S. Government and government agencies | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 45 | 39 | |
States, municipalities and political subdivisions | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 4,349 | 4,297 | |
Foreign government | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 34 | 13 | |
Residential MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 2,099 | 1,948 | |
Commercial MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 835 | 836 | |
Collateralized loan obligations | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 3,379 | 3,383 | |
Other asset-backed securities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 5,387 | 4,170 | |
Corporate and other | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 21,771 | 19,446 | |
Equity securities | |||
Assets: | |||
Equity securities, at fair value | 809 | 743 | |
Other assets — derivatives | |||
Assets: | |||
Other assets — derivatives | 50 | 16 | |
Level 1 | |||
Assets: | |||
Variable annuity assets (separate accounts) | [1] | 0 | 0 |
Total assets accounted for at fair value | 514 | 513 | |
Liabilities: | |||
Total liabilities accounted for at fair value | 0 | 0 | |
Level 1 | Annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 0 | 0 | |
Level 1 | Other liabilities | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 0 | 0 | |
Level 1 | Fixed maturities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 22 | 20 | |
Fixed maturities, Trading, Fair Value | 0 | 0 | |
Level 1 | U.S. Government and government agencies | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 6 | 6 | |
Level 1 | States, municipalities and political subdivisions | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 0 | 0 | |
Level 1 | Foreign government | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 0 | 0 | |
Level 1 | Residential MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 0 | 0 | |
Level 1 | Commercial MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 0 | 0 | |
Level 1 | Collateralized loan obligations | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 0 | 0 | |
Level 1 | Other asset-backed securities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 0 | 0 | |
Level 1 | Corporate and other | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 16 | 14 | |
Level 1 | Equity securities | |||
Assets: | |||
Equity securities, at fair value | 492 | 493 | |
Level 1 | Other assets — derivatives | |||
Assets: | |||
Other assets — derivatives | 0 | 0 | |
Level 2 | |||
Assets: | |||
Variable annuity assets (separate accounts) | [1] | 628 | 557 |
Total assets accounted for at fair value | 36,758 | 32,339 | |
Liabilities: | |||
Total liabilities accounted for at fair value | 10 | 49 | |
Level 2 | Annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 0 | 0 | |
Level 2 | Other liabilities | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 10 | 49 | |
Level 2 | Fixed maturities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 35,061 | 31,489 | |
Fixed maturities, Trading, Fair Value | 54 | 55 | |
Level 2 | U.S. Government and government agencies | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 24 | 25 | |
Level 2 | States, municipalities and political subdivisions | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 4,284 | 4,238 | |
Level 2 | Foreign government | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 34 | 13 | |
Level 2 | Residential MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 1,971 | 1,787 | |
Level 2 | Commercial MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 806 | 788 | |
Level 2 | Collateralized loan obligations | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 3,365 | 3,298 | |
Level 2 | Other asset-backed securities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 4,357 | 3,627 | |
Level 2 | Corporate and other | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 20,220 | 17,713 | |
Level 2 | Equity securities | |||
Assets: | |||
Equity securities, at fair value | 41 | 38 | |
Level 2 | Other assets — derivatives | |||
Assets: | |||
Other assets — derivatives | 50 | 16 | |
Level 3 | |||
Assets: | |||
Variable annuity assets (separate accounts) | [1] | 0 | 0 |
Total assets accounted for at fair value | 3,092 | 2,835 | |
Liabilities: | |||
Total liabilities accounted for at fair value | 3,730 | 2,720 | |
Level 3 | Annuity benefits accumulated | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 3,730 | 2,720 | |
Level 3 | Other liabilities | |||
Liabilities: | |||
Derivatives included in annuity benefits accumulated and other liabilities | 0 | 0 | |
Level 3 | Fixed maturities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 2,816 | 2,623 | |
Fixed maturities, Trading, Fair Value | 0 | 0 | |
Level 3 | U.S. Government and government agencies | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 15 | 8 | |
Level 3 | States, municipalities and political subdivisions | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 65 | 59 | |
Level 3 | Foreign government | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 0 | 0 | |
Level 3 | Residential MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 128 | 161 | |
Level 3 | Commercial MBS | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 29 | 48 | |
Level 3 | Collateralized loan obligations | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 14 | 85 | |
Level 3 | Other asset-backed securities | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 1,030 | 543 | |
Level 3 | Corporate and other | |||
Assets: | |||
Fixed maturities, Available for sale, Fair Value | 1,535 | 1,719 | |
Level 3 | Equity securities | |||
Assets: | |||
Equity securities, at fair value | 276 | 212 | |
Level 3 | Other assets — derivatives | |||
Assets: | |||
Other assets — derivatives | 0 | 0 | |
Equity index call options | Other investments | |||
Assets: | |||
Other assets — derivatives | 924 | 184 | |
Equity index call options | Level 1 | Other investments | |||
Assets: | |||
Other assets — derivatives | 0 | 0 | |
Equity index call options | Level 2 | Other investments | |||
Assets: | |||
Other assets — derivatives | 924 | 184 | |
Equity index call options | Level 3 | Other investments | |||
Assets: | |||
Other assets — derivatives | $ 0 | $ 0 | |
[1] | Variable annuity liabilities equal the fair value of variable annuity assets. |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers between Level 1 and Level 2 (Details) $ in Millions | Dec. 31, 2019USD ($)stock | Dec. 31, 2018USD ($)stock | Dec. 31, 2017USD ($)stock |
Perpetual preferred stocks | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of stocks transferred from Level 2 to Level 1 | stock | 0 | 0 | 1 |
Fair value of assets transferred from Level 2 to Level 1 | $ | $ 0 | $ 0 | $ 1 |
Number of stocks transferred from Level 1 to Level 2 | stock | 0 | 0 | 1 |
Fair value of assets transferred from Level 1 to Level 2 | $ | $ 0 | $ 0 | $ 1 |
Common stocks | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of stocks transferred from Level 2 to Level 1 | stock | 2 | 0 | 0 |
Fair value of assets transferred from Level 2 to Level 1 | $ | $ 0 | $ 0 | $ 0 |
Number of stocks transferred from Level 1 to Level 2 | stock | 0 | 0 | 0 |
Fair value of assets transferred from Level 1 to Level 2 | $ | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable inputs used in determining fair value of embedded derivatives (Details) - Embedded derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Risk margin for uncertainty in cash flows | 0.80% |
Minimum | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Adjustment for insurance subsidiary’s credit risk | 0.20% |
Surrenders | 3.00% |
Partial surrenders | 2.00% |
Annuitizations | 0.10% |
Deaths | 1.50% |
Budgeted option costs | 2.50% |
Maximum | |
Unobservable inputs used by management in determining fair value of embedded derivatives | |
Adjustment for insurance subsidiary’s credit risk | 2.40% |
Surrenders | 22.00% |
Partial surrenders | 9.00% |
Annuitizations | 1.00% |
Deaths | 10.60% |
Budgeted option costs | 3.30% |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in balances of Level 3 financial assets carried at fair value (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | $ 1,799 | $ 2,835 | $ 1,799 | $ 1,377 |
Total realized/unrealized gains (losses) included in Net income | 8 | (20) | (20) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 72 | (35) | 13 | |
Purchases and issuances | 1,141 | 1,422 | 774 | |
Sales and settlements | (448) | (354) | (263) | |
Transfer into Level 3 | 136 | 223 | 219 | |
Transfer out of Level 3 | (652) | (200) | (301) | |
Financial assets, Ending Balance | 3,092 | 2,835 | 1,799 | |
Total fixed maturities | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 1,694 | 2,623 | 1,694 | 1,267 |
Total realized/unrealized gains (losses) included in Net income | 0 | (16) | (6) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 72 | (35) | 6 | |
Purchases and issuances | 1,105 | 1,316 | 749 | |
Sales and settlements | (446) | (350) | (253) | |
Transfer into Level 3 | 114 | 203 | 219 | |
Transfer out of Level 3 | (652) | (189) | (288) | |
Financial assets, Ending Balance | 2,816 | 2,623 | 1,694 | |
U.S. government agency | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 8 | 8 | 8 | 8 |
Total realized/unrealized gains (losses) included in Net income | 0 | 0 | 0 | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 7 | 0 | 0 | |
Purchases and issuances | 0 | 0 | 0 | |
Sales and settlements | 0 | 0 | 0 | |
Transfer into Level 3 | 0 | 0 | 0 | |
Transfer out of Level 3 | 0 | 0 | 0 | |
Financial assets, Ending Balance | 15 | 8 | 8 | |
States, municipalities and political subdivisions | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 72 | 59 | 72 | 75 |
Total realized/unrealized gains (losses) included in Net income | 0 | 0 | 0 | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 6 | (3) | 1 | |
Purchases and issuances | 0 | 0 | 0 | |
Sales and settlements | (3) | (2) | (2) | |
Transfer into Level 3 | 10 | 0 | 0 | |
Transfer out of Level 3 | (7) | (8) | (2) | |
Financial assets, Ending Balance | 65 | 59 | 72 | |
Residential MBS | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 99 | 161 | 99 | 148 |
Total realized/unrealized gains (losses) included in Net income | 3 | (5) | (3) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | (3) | (4) | 1 | |
Purchases and issuances | 0 | 0 | 1 | |
Sales and settlements | (18) | (18) | (26) | |
Transfer into Level 3 | 36 | 106 | 32 | |
Transfer out of Level 3 | (51) | (17) | (54) | |
Financial assets, Ending Balance | 128 | 161 | 99 | |
Commercial MBS | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 34 | 48 | 34 | 25 |
Total realized/unrealized gains (losses) included in Net income | 2 | 0 | 2 | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | |
Purchases and issuances | 0 | 14 | 13 | |
Sales and settlements | (13) | 0 | (10) | |
Transfer into Level 3 | 3 | 0 | 4 | |
Transfer out of Level 3 | (11) | 0 | 0 | |
Financial assets, Ending Balance | 29 | 48 | 34 | |
Collateralized loan obligations | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 142 | 85 | 142 | 113 |
Total realized/unrealized gains (losses) included in Net income | (4) | (2) | 0 | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 4 | (9) | 0 | |
Purchases and issuances | 0 | 24 | 41 | |
Sales and settlements | 0 | (11) | (12) | |
Transfer into Level 3 | 14 | 2 | 0 | |
Transfer out of Level 3 | (85) | (61) | 0 | |
Financial assets, Ending Balance | 14 | 85 | 142 | |
Other asset-backed securities | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 398 | 543 | 398 | 246 |
Total realized/unrealized gains (losses) included in Net income | 0 | 0 | 0 | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 5 | (1) | 1 | |
Purchases and issuances | 727 | 292 | 254 | |
Sales and settlements | (162) | (171) | (83) | |
Transfer into Level 3 | 23 | 69 | 154 | |
Transfer out of Level 3 | (106) | (44) | (174) | |
Financial assets, Ending Balance | 1,030 | 543 | 398 | |
Corporate and other | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 941 | 1,719 | 941 | 652 |
Total realized/unrealized gains (losses) included in Net income | (1) | (9) | (5) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 53 | (18) | 3 | |
Purchases and issuances | 378 | 986 | 440 | |
Sales and settlements | (250) | (148) | (120) | |
Transfer into Level 3 | 28 | 26 | 29 | |
Transfer out of Level 3 | (392) | (59) | (58) | |
Financial assets, Ending Balance | 1,535 | 1,719 | 941 | |
Equity securities | ||||
Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Financial assets, Beginning Balance | 105 | 212 | 105 | 110 |
Total realized/unrealized gains (losses) included in Net income | 8 | (4) | (14) | |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 7 | |
Purchases and issuances | 36 | 106 | 25 | |
Sales and settlements | (2) | (4) | (10) | |
Transfer into Level 3 | $ 20 | 22 | 20 | 0 |
Transfer out of Level 3 | 0 | (11) | (13) | |
Financial assets, Ending Balance | $ 276 | $ 212 | $ 105 |
Fair Value Measurements - Cha_2
Fair Value Measurements - Changes in balances of Level 3 financial liabilities carried at fair value (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Financial liabilities, Beginning Balance | $ (2,720) | $ (2,542) | $ (1,759) | |||
Total realized/unrealized gains (losses) included in Net income | (919) | 204 | (589) | |||
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | |||
Purchases and issuances | (333) | (545) | (300) | |||
Sales and settlements | 242 | 163 | 106 | |||
Transfers into Level 3 | 0 | 0 | 0 | |||
Transfers out of Level 3 | 0 | 0 | 0 | |||
Financial liabilities, Ending Balance | (3,730) | (2,720) | (2,542) | |||
Embedded derivatives | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Financial liabilities, Beginning Balance | (2,720) | (2,542) | (1,759) | |||
Total realized/unrealized gains (losses) included in Net income | (919) | [1] | 204 | [2] | (589) | [3] |
Total realized/unrealized gains (losses) included in other comprehensive income (loss) | 0 | 0 | 0 | |||
Purchases and issuances | (333) | (545) | (300) | |||
Sales and settlements | 242 | 163 | 106 | |||
Transfers into Level 3 | 0 | 0 | 0 | |||
Transfers out of Level 3 | 0 | 0 | 0 | |||
Financial liabilities, Ending Balance | $ (3,730) | $ (2,720) | $ (2,542) | |||
[1] | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes a favorable adjustment related to the unlocking of actuarial assumptions of $181 million in 2019. | |||||
[2] | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $44 million in 2018. | |||||
[3] | Total realized/unrealized gains (losses) included in net earnings for the embedded derivatives includes losses related to the unlocking of actuarial assumptions of $25 million in 2017. |
Fair Value Measurements - The c
Fair Value Measurements - The carrying value and fair value of financial instruments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Financial assets: | |||
Mortgage loans | $ 1,072 | $ 783 | |
Policy loans | 164 | 174 | |
Level 1 | |||
Financial assets: | |||
Cash and cash equivalents | 734 | 329 | |
Mortgage loans | 0 | 0 | |
Policy loans | 0 | 0 | |
Total financial assets not accounted for at fair value | 734 | 329 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 0 | 0 |
Total financial liabilities not accounted for at fair value | 0 | 0 | |
Level 2 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | |
Mortgage loans | 0 | 0 | |
Policy loans | 0 | 0 | |
Total financial assets not accounted for at fair value | 0 | 0 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 0 | 0 |
Total financial liabilities not accounted for at fair value | 0 | 0 | |
Level 3 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | |
Mortgage loans | 1,081 | 772 | |
Policy loans | 164 | 174 | |
Total financial assets not accounted for at fair value | 1,245 | 946 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 40,182 | 34,765 |
Total financial liabilities not accounted for at fair value | 40,182 | 34,765 | |
Carrying Value | |||
Financial assets: | |||
Cash and cash equivalents | 734 | 329 | |
Mortgage loans | 1,072 | 783 | |
Policy loans | 164 | 174 | |
Total financial assets not accounted for at fair value | 1,970 | 1,286 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 40,159 | 36,384 |
Total financial liabilities not accounted for at fair value | 40,159 | 36,384 | |
Fair Value | |||
Financial assets: | |||
Cash and cash equivalents | 734 | 329 | |
Mortgage loans | 1,081 | 772 | |
Policy loans | 164 | 174 | |
Total financial assets not accounted for at fair value | 1,979 | 1,275 | |
Financial liabilities: | |||
Annuity benefits accumulated | [1] | 40,182 | 34,765 |
Total financial liabilities not accounted for at fair value | $ 40,182 | $ 34,765 | |
[1] | Excludes $247 million and $232 million of life contingent annuities in the payout phase at December 31, 2019 and 2018, respectively. |
Balance Sheet Impact of Net U_3
Balance Sheet Impact of Net Unrealized Gains on Securities - Components of the net unrealized gain on securities included in AOCI (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Securities, Available-for-sale [Abstract] | ||||
Fixed maturities, Available for sale, Amortized Cost | $ 36,144 | $ 34,024 | ||
Fixed maturities, Available for sale, Fair Value | 37,899 | 34,132 | ||
Deferred policy acquisition costs | 713 | 1,381 | $ 943 | $ 997 |
Annuity benefits accumulated | (40,406) | (36,616) | ||
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income | ||||
Net unrealized gain, pretax | 865 | 53 | ||
Deferred tax on unrealized gain | (182) | (11) | ||
Net unrealized gain, after tax (included in AOCI) | 683 | 42 | ||
Fixed maturities | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Fixed maturities, Available for sale, Amortized Cost | 36,144 | 34,024 | ||
Fixed maturities, Available for sale, Fair Value | 37,899 | 34,132 | ||
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income | ||||
Net unrealized gain, pretax | 1,755 | 108 | ||
Equity securities | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Available-for-sale securities, equity securities | 593 | |||
Deferred policy acquisition costs | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Deferred policy acquisition costs | 713 | 1,381 | ||
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income | ||||
Net unrealized gain, pretax | (681) | (42) | ||
Annuity benefits accumulated | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Annuity benefits accumulated | (40,406) | (36,616) | ||
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income | ||||
Net unrealized gain, pretax | (220) | (14) | ||
Unearned revenue (included in other liabilities) | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Unearned revenue (included in other liabilities) | (12) | (28) | ||
Components of the net unrealized gain on securities, included in Accumulated Other Comprehensive Income | ||||
Net unrealized gain, pretax | 11 | 1 | ||
Excluding Unrealized Gains | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Deferred policy acquisition costs | 1,412 | 1,411 | $ 1,365 | $ 1,262 |
Excluding Unrealized Gains | Fixed maturities | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Fixed maturities, Available for sale, Amortized Cost | 36,144 | 34,024 | ||
Excluding Unrealized Gains | Deferred policy acquisition costs | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Deferred policy acquisition costs | 1,394 | 1,423 | ||
Excluding Unrealized Gains | Annuity benefits accumulated | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Annuity benefits accumulated | (40,186) | (36,602) | ||
Excluding Unrealized Gains | Unearned revenue (included in other liabilities) | ||||
Debt Securities, Available-for-sale [Abstract] | ||||
Unearned revenue (included in other liabilities) | $ (23) | $ (29) |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Schedule of Investments [Line Items] | |||
Percentage (based on amount of unrealized loss) of available for sale fixed maturities that are in an unrealized loss position and rated investment grade | 75.00% | ||
Percentage (based on fair value) of available for sale fixed maturities that are in an unrealized loss position and rated investment grade | 93.00% | ||
Other than temporary impairment charges | $ 10 | $ 14 | $ 29 |
Average life of ABS | 4 years 6 months | ||
Average life of MBS | 4 years 6 months | ||
Investment management charges | $ 11 | 7 | 5 |
Residential MBS | |||
Schedule of Investments [Line Items] | |||
Non-credit related portion of other-than-temporary impairment charges taken for securities still owned | 94 | 112 | |
Fixed maturities, Gross Unrealized, Losses | (3) | (4) | |
Other than temporary impairment charges | 1 | 5 | 1 |
Collateralized loan obligations | |||
Schedule of Investments [Line Items] | |||
Fixed maturities, Gross Unrealized, Losses | (30) | (57) | |
Other than temporary impairment charges | 12 | ||
Corporate bonds | |||
Schedule of Investments [Line Items] | |||
Other than temporary impairment charges | 8 | ||
Fixed maturities excluding residential mortgage backed securities | |||
Schedule of Investments [Line Items] | |||
Other than temporary impairment charges | 16 | 13 | |
Other investments | |||
Schedule of Investments [Line Items] | |||
Other than temporary impairment charges | 2 | ||
Securities with non-credit other-than-temporary impairment charges | |||
Schedule of Investments [Line Items] | |||
Gross Unrealized, Gains | 87 | 89 | |
Gross Unrealized, Losses | (1) | (5) | |
Fixed maturities | |||
Schedule of Investments [Line Items] | |||
Fixed maturities, Gross Unrealized, Losses | $ (68) | (524) | |
Number of available for sale securities in an unrealized loss position | security | 509 | ||
Other than temporary impairment charges | $ 21 | 21 | 14 |
Available-for-sale Securities, Gross Realized Gains | 30 | 17 | 37 |
Available-for-sale Securities, Gross Realized Losses | 16 | 12 | 19 |
Equity securities | |||
Schedule of Investments [Line Items] | |||
Other than temporary impairment charges | $ 0 | $ 0 | 27 |
Available-for-sale Securities, Gross Realized Gains | 23 | ||
Available-for-sale Securities, Gross Realized Losses | 11 | ||
Available-for-sale securities | Equity securities | |||
Schedule of Investments [Line Items] | |||
Other than temporary impairment charges | $ 27 |
Investments - Available for sal
Investments - Available for sale fixed maturities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | $ 36,144 | $ 34,024 |
Fixed maturities, Available for sale, Fair Value | 37,899 | 34,132 |
Total fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 36,144 | 34,024 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 1,823 | 632 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (68) | (524) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 1,755 | 108 |
Fixed maturities, Available for sale, Fair Value | 37,899 | 34,132 |
U.S. Government and government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 38 | 41 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 7 | 1 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | 0 | (3) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 7 | (2) |
Fixed maturities, Available for sale, Fair Value | 45 | 39 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 4,080 | 4,195 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 270 | 130 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (1) | (28) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 269 | 102 |
Fixed maturities, Available for sale, Fair Value | 4,349 | 4,297 |
Foreign government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 31 | 11 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 3 | 2 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | 0 | 0 |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 3 | 2 |
Fixed maturities, Available for sale, Fair Value | 34 | 13 |
Residential MBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 1,909 | 1,749 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 193 | 203 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (3) | (4) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 190 | 199 |
Fixed maturities, Available for sale, Fair Value | 2,099 | 1,948 |
Commercial MBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 807 | 822 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 28 | 16 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | 0 | (2) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 28 | 14 |
Fixed maturities, Available for sale, Fair Value | 835 | 836 |
Collateralized loan obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 3,401 | 3,440 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 8 | 0 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (30) | (57) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | (22) | (57) |
Fixed maturities, Available for sale, Fair Value | 3,379 | 3,383 |
Other asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 5,265 | 4,067 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 138 | 122 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (16) | (19) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 122 | 103 |
Fixed maturities, Available for sale, Fair Value | 5,387 | 4,170 |
Corporate and other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fixed maturities, Available for sale, Amortized Cost | 20,613 | 19,699 |
Fixed maturities, Available for sale, Gross Unrealized, Gains | 1,176 | 158 |
Fixed maturities, Available for sale, Gross Unrealized, Losses | (18) | (411) |
Fixed maturities, Available for sale, Net Unrealized, Gains (Losses) | 1,158 | (253) |
Fixed maturities, Available for sale, Fair Value | $ 21,771 | $ 19,446 |
Investments - Equity securities
Investments - Equity securities reported at fair value (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at fair value | $ 809 | $ 743 |
Equity securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at cost | 746 | 798 |
Equity securities, at fair value | 809 | 743 |
Equity securities, fair value in excess of cost | 63 | (55) |
Common stocks | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at cost | 497 | 562 |
Equity securities, at fair value | 552 | 518 |
Equity securities, fair value in excess of cost | 55 | (44) |
Perpetual preferred stocks | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at cost | 249 | 236 |
Equity securities, at fair value | 257 | 225 |
Equity securities, fair value in excess of cost | $ 8 | $ (11) |
Investments - Gross unrealized
Investments - Gross unrealized losses on securities by investment category and length of time that have been in a continuous unrealized loss position (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Total fixed maturities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (34) | $ (370) |
Fair Value - Less than twelve months | $ 3,201 | $ 14,748 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 98.00% |
Unrealized Loss - Twelve months or more | $ (34) | $ (154) |
Fair Value - Twelve months or more | $ 1,676 | $ 2,745 |
Fair Value as % of Cost - Twelve months or more | 98.00% | 95.00% |
U.S. Government and government agencies | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ 0 | $ 0 |
Fair Value - Less than twelve months | $ 0 | $ 1 |
Fair Value as % of Cost - Less than twelve months | 0.00% | 100.00% |
Unrealized Loss - Twelve months or more | $ 0 | $ (3) |
Fair Value - Twelve months or more | $ 0 | $ 11 |
Fair Value as % of Cost - Twelve months or more | 0.00% | 79.00% |
States, municipalities and political subdivisions | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (1) | $ (12) |
Fair Value - Less than twelve months | $ 105 | $ 773 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 98.00% |
Unrealized Loss - Twelve months or more | $ 0 | $ (16) |
Fair Value - Twelve months or more | $ 5 | $ 471 |
Fair Value as % of Cost - Twelve months or more | 100.00% | 97.00% |
Residential MBS | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (2) | $ (3) |
Fair Value - Less than twelve months | $ 315 | $ 203 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (1) | $ (1) |
Fair Value - Twelve months or more | $ 15 | $ 32 |
Fair Value as % of Cost - Twelve months or more | 94.00% | 97.00% |
Commercial MBS | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ 0 | $ (1) |
Fair Value - Less than twelve months | $ 11 | $ 117 |
Fair Value as % of Cost - Less than twelve months | 100.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ 0 | $ (1) |
Fair Value - Twelve months or more | $ 0 | $ 30 |
Fair Value as % of Cost - Twelve months or more | 0.00% | 97.00% |
Collateralized loan obligations | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (9) | $ (48) |
Fair Value - Less than twelve months | $ 995 | $ 2,807 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 98.00% |
Unrealized Loss - Twelve months or more | $ (21) | $ (9) |
Fair Value - Twelve months or more | $ 1,363 | $ 147 |
Fair Value as % of Cost - Twelve months or more | 98.00% | 94.00% |
Other asset-backed securities | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (11) | $ (12) |
Fair Value - Less than twelve months | $ 838 | $ 1,231 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 99.00% |
Unrealized Loss - Twelve months or more | $ (5) | $ (7) |
Fair Value - Twelve months or more | $ 91 | $ 293 |
Fair Value as % of Cost - Twelve months or more | 95.00% | 98.00% |
Corporate and other | ||
Available-for-sale securities in a continuous unrealized loss position | ||
Unrealized Loss - Less than twelve months | $ (11) | $ (294) |
Fair Value - Less than twelve months | $ 937 | $ 9,616 |
Fair Value as % of Cost - Less than twelve months | 99.00% | 97.00% |
Unrealized Loss - Twelve months or more | $ (7) | $ (117) |
Fair Value - Twelve months or more | $ 202 | $ 1,761 |
Fair Value as % of Cost - Twelve months or more | 97.00% | 94.00% |
Investments - Credit portion of
Investments - Credit portion of other-than-temporary impairments on fixed maturities for which the non-credit portion of an impairment has been recognized in OCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||
Balance at January 1 | $ 97 | $ 99 | $ 104 |
Additional credit impairments on: | |||
Previously impaired securities | 1 | 0 | 1 |
Securities without prior impairments | 0 | 1 | 2 |
Reductions due to sales or redemptions | (6) | (3) | (8) |
Balance at December 31 | $ 92 | $ 97 | $ 99 |
Investments - Scheduled maturit
Investments - Scheduled maturities of available for sale fixed maturities (Details) - Fixed maturities $ in Millions | Dec. 31, 2019USD ($) |
Amortized Cost Basis, Fiscal Year Maturity [Abstract] | |
One year or less | $ 1,334 |
After one year through five years | 8,151 |
After five years through ten years | 12,092 |
After ten years | 3,185 |
Fixed maturities amortized cost, Subtotal | 24,762 |
Collateralized loan obligations and other ABS (average life of approximately 4-1/2 years) | 8,666 |
MBS (average life of approximately 4-1/2 years) | 2,716 |
Amortized Cost | 36,144 |
Fair Value, Fiscal Year Maturity [Abstract] | |
One year or less | 1,356 |
After one year through five years | 8,510 |
After five years through ten years | 12,940 |
After ten years | 3,393 |
Fixed maturities fair value, Subtotal | 26,199 |
Collateralized loan obligations and other ABS (average life of approximately 4-1/2 years) | 8,766 |
MBS (average life of approximately 4-1/2 years) | 2,934 |
Fair Value | $ 37,899 |
Fair Value Percent, Fiscal Year Maturity [Abstract] | |
One year or less | 4.00% |
After one year through five years | 22.00% |
After five years through ten years | 34.00% |
After ten years | 9.00% |
Fixed maturities fair value, Subtotal, Percent | 69.00% |
Collateralized loan obligations and other ABS (average life of approximately 4-1/2 years) | 23.00% |
MBS (average life of approximately 4-1/2 years) | 8.00% |
Fair value, Total, Percent | 100.00% |
Investments - Investment income
Investments - Investment income earned and investment expenses incurred (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 1,829 | $ 1,670 | $ 1,488 | |
Investment expenses | (16) | (13) | (10) | |
Net investment income | 1,813 | 1,657 | 1,478 | |
Fixed maturities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 1,600 | 1,450 | 1,342 | |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 34 | 30 | 21 | |
Equity in earnings of partnerships and similar investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 90 | 96 | 37 | |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 43 | 45 | 46 | |
Policy loans | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 9 | 10 | 11 | |
Real estate and other | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 36 | 26 | 31 | |
Accounting Standards Update 2016-01 | Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | [1] | $ 17 | $ 13 | $ 0 |
[1] | Although the change in the fair value of the majority of GALIC’s equity securities is recorded in realized gains (losses) on securities, GALIC records holding gains and losses in net investment income on equity securities classified as “trading” under previous guidance and on a small portfolio of limited partnership and similar investments that do not qualify for the equity method of accounting. |
Investments - Realized gains (l
Investments - Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | $ 142 | $ (91) | $ 16 | |
Realized - impairments | (10) | (14) | (29) | |
Realized gains (losses) on securities | 132 | (105) | (13) | |
Net of tax | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 112 | (72) | 10 | |
Realized - impairments | (8) | (11) | (19) | |
Realized gains (losses) on securities | 104 | (83) | (9) | |
Change in Unrealized | 641 | (438) | 297 | |
Total pretax | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 142 | (91) | 16 | |
Realized - impairments | (10) | (14) | (29) | |
Realized gains (losses) on securities | 132 | (105) | (13) | |
Change in Unrealized | 812 | (555) | 302 | |
Fixed maturities | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 19 | 5 | 15 | |
Realized - impairments | (21) | (21) | (14) | |
Realized gains (losses) on securities | (2) | (16) | 1 | |
Change in Unrealized | 1,647 | (1,057) | 455 | |
Equity securities | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 122 | (107) | 12 | |
Realized - impairments | 0 | 0 | (27) | |
Realized gains (losses) on securities | 122 | (107) | (15) | |
Change in Unrealized | 0 | 0 | 66 | |
Mortgage loans and other investments | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 2 | 0 | (8) | |
Realized - impairments | 0 | 0 | (2) | |
Realized gains (losses) on securities | 2 | 0 | (10) | |
Change in Unrealized | 0 | 0 | 0 | |
Other, Including DPAC and reserves on annuity and long-term care | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | [1] | (1) | 11 | (3) |
Realized - impairments | [1] | 11 | 7 | 14 |
Realized gains (losses) on securities | [1] | 10 | 18 | 11 |
Change in Unrealized | [1] | (835) | 502 | (219) |
Effects of tax cuts and jobs act Of 2017 | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | 0 | |||
Realized - impairments | 0 | |||
Realized gains (losses) on securities | 0 | |||
Change in Unrealized | 101 | |||
Other tax effects | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | (6) | |||
Realized - impairments | 10 | |||
Realized gains (losses) on securities | 4 | |||
Change in Unrealized | (106) | |||
Total tax effects | ||||
Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments | ||||
Realized before impairments | (30) | 19 | (6) | |
Realized - impairments | 2 | 3 | 10 | |
Realized gains (losses) on securities | (28) | 22 | 4 | |
Change in Unrealized | $ (171) | $ 117 | $ (5) | |
[1] | Primarily adjustments to deferred policy acquisition costs and reserves related to the annuity business. |
Investments - Holding gains (lo
Investments - Holding gains (losses) on equity securities still held (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | |||
Realized gains (losses) on securities still owned | $ 132 | $ (105) | $ (13) |
Included in net investment income | 1,829 | 1,670 | 1,488 |
Equity securities | |||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | |||
Realized gains (losses) on securities still owned | 122 | (107) | $ (15) |
Accounting Standards Update 2016-01 | Equity securities | Equity securities still owned | |||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | |||
Net holding gains (losses) on equity securities | 140 | (97) | |
Accounting Standards Update 2016-01 | Realized gains (losses) on securities | Equity securities | Equity securities still owned | |||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | |||
Realized gains (losses) on securities still owned | 123 | (110) | |
Accounting Standards Update 2016-01 | Investment income | Equity securities | Equity securities still owned | |||
Holding Gains (Losses) on Equity Securities Still Held [Line Items] | |||
Included in net investment income | $ 17 | $ 13 |
Investments - Gross realized ga
Investments - Gross realized gains and losses on available for sale fixed maturity investment transactions (Details) - Fixed maturities - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Gross realized gains and losses on the sale of available for sale fixed maturity and equity security investments | |||
Gross gains | $ 30 | $ 17 | $ 37 |
Gross losses | $ (16) | $ (12) | $ (19) |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019USD ($)swap | Dec. 31, 2019USD ($)swap | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2019USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Carrying value of collateral received to support purchased call options | $ 577,000,000 | $ 103,000,000 | |||
Annuity benefits | Not designated as hedging instrument | Fixed-indexed and variable-indexed annuities (embedded derivative) | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
The portion of the change in fair value of the embedded derivative related to the unlocking of actuarial assumptions | $ 181,000,000 | (44,000,000) | $ (25,000,000) | ||
Cash Flow Hedges | Designated as Hedging Instrument | Interest rate swaps | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Number of interest rate swaps designated and qualifying as a cash flow hedges | swap | 13 | ||||
Derivative, notional amount | $ 1,980,000,000 | 2,350,000,000 | |||
Gain (loss) reclassified from AOCI into net investment income | 3,000,000 | (3,000,000) | $ 6,000,000 | ||
Collateral receivable supporting interest rate swaps | 20,000,000 | 135,000,000 | |||
Other assets — derivatives | Cash Flow Hedges | Designated as Hedging Instrument | Interest rate swaps | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net derivatives, at fair value | 50,000,000 | 16,000,000 | |||
Other liabilities | Cash Flow Hedges | Designated as Hedging Instrument | Interest rate swaps | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Net derivatives, at fair value | (5,000,000) | $ (46,000,000) | |||
Contract termination | Cash Flow Hedges | Interest rate swaps | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative, notional amount | $ 78,000,000 | $ 100,000,000 | $ 138,000,000 | ||
Number of interest rate swaps terminated | swap | 2 | ||||
Number of interest rate swaps expired during the period | swap | 1 |
Derivatives - Derivatives that
Derivatives - Derivatives that do not qualify for hedge accounting under GAAP included in the Balance Sheet at fair value (Details) - Not designated as hedging instrument - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | $ 998 | $ 268 |
Derivative liability, at fair value | 3,735 | 2,723 |
MBS with embedded derivatives | Fixed maturities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 74 | 84 |
Public company warrants | Equity securities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 0 | 0 |
Fixed-indexed and variable-indexed annuities (embedded derivative) | Annuity benefits accumulated | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | 3,730 | 2,720 |
Equity index call options | Equity index call options | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative asset, at fair value | 924 | 184 |
Equity index put options | Other liabilities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | 1 | 1 |
Reinsurance contract (embedded derivative) | Other liabilities | ||
Derivatives included in AFG' s Balance Sheet at fair value | ||
Derivative liability, at fair value | $ 4 | $ 2 |
Derivatives - Gain (loss) inclu
Derivatives - Gain (loss) included in the Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting (Details) - Not designated as hedging instrument - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (110) | $ (100) | $ (100) | |
MBS with embedded derivatives | Realized gains (losses) on securities | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 5 | (4) | (3) | |
Public company warrants | Realized gains (losses) on securities | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | (3) | 0 | |
Fixed-indexed and variable-indexed annuities (embedded derivative) | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | [1] | (919) | 204 | (589) |
Equity index call options | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 804 | (298) | 494 | |
Equity index put options | Annuity benefits | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 2 | (1) | 0 | |
Reinsurance contract (embedded derivative) | Net investment income | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ (2) | $ 2 | $ (2) | |
[1] | The change in fair value of the embedded derivative includes a favorable adjustment related to unlocking of actuarial assumptions of $181 million in 2019 and losses of $44 million in 2018 and $25 million in 2017. |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | ||
Accumulated amortization of present value of future profits | $ 154 | $ 148 |
Approximate annual rate of decrease in present value of future profits during next five years | 12.50% |
Deferred Policy Acquisition C_4
Deferred Policy Acquisition Costs - Progression of deferred policy acquisition costs (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||||
Deferred policy acquisition costs, beginning balance | $ 1,283 | $ 1,214 | $ 1,106 | |
Deferred policy acquisition costs, additions | 206 | 263 | 225 | |
Deferred policy acquisition costs, periodic amortization | (120) | (237) | (160) | |
Deferred policy acquisition costs, annuity unlocking | (76) | 29 | 34 | |
Deferred policy acquisition costs, change included in realized gains | 8 | 14 | 9 | |
Deferred policy acquisition costs, ending balance | 1,301 | 1,283 | 1,214 | |
Movement in Deferred Sales Inducements [Roll Forward] | ||||
Deferred sales inducements, beginning balance | 86 | 102 | 110 | |
Deferred sales inducements, additions | 2 | 2 | 4 | |
Deferred sales inducements, periodic amortization | (13) | (19) | (19) | |
Deferred sales inducements, annuity unlocking | (1) | 0 | 6 | |
Deferred sales inducements, change included in realized gains | 1 | 1 | 1 | |
Deferred sales inducements, ending balance | 75 | 86 | 102 | |
Movement in Present Value of Future Insurance Profits [Roll Forward] | ||||
Present value of future profits, beginning balance | 42 | 49 | 46 | |
Present value of future profits, periodic amortization | (6) | (7) | (8) | |
Present value of future profits, annuity unlocking | 0 | 0 | 1 | |
Present value of future profits, other | 10 | |||
Present value of future profits, ending balance | 36 | 42 | 49 | |
Movement in Unrealized Gains (Losses) Related to Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | ||||
Unrealized investment gains (losses), beginning balance | [1] | (30) | (422) | (265) |
Unrealized investment gains (losses), change in unrealized | [1] | (669) | 392 | (157) |
Unrealized investment gains (losses), ending balance | [1] | (699) | (30) | (422) |
Movement Analysis of Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | ||||
Deferred policy acquisition costs and present value of future profits, beginning balance | 1,381 | 943 | 997 | |
Deferred policy acquisition costs and present value of future profits, additions | 208 | 265 | 229 | |
Deferred policy acquisition costs and present value of future profits, periodic amortization | (139) | (263) | (187) | |
Deferred policy acquisition costs and present value of future profits, annuity unlocking | (77) | 29 | 41 | |
Deferred policy acquisition costs and present value of future profits, change included in realized gains | 9 | 15 | 10 | |
Deferred policy acquisition costs and present value of future profits, other | 10 | |||
Deferred policy acquisition costs and present value of future profits, change in unrealized | (669) | 392 | (157) | |
Deferred policy acquisition costs and present value of future profits, ending balance | 713 | 1,381 | 943 | |
Excluding Unrealized Gains | ||||
Movement Analysis of Deferred Policy Acquisition Costs and Present Value of Future Profits [Roll Forward] | ||||
Deferred policy acquisition costs and present value of future profits, beginning balance | 1,411 | 1,365 | 1,262 | |
Deferred policy acquisition costs and present value of future profits, ending balance | $ 1,412 | $ 1,411 | $ 1,365 | |
[1] | Adjustments to DPAC related to net unrealized gains/losses on securities and cash flow hedges. |
Shareholder's Equity - Narrativ
Shareholder's Equity - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Impact of the U.S. corporate tax rate change on AOCI | $ 0 | ||||
Components of accumulated other comprehensive income | |||||
Non-cash capital contributions from parent | $ 19 | $ 17 | 14 | ||
Net of tax unrealized gains (losses) related to credit-only impaired securities | $ 42 | $ 34 | $ 33 | 42 | |
Cumulative effect of accounting change | 3 | $ 3 | |||
Accounting Standards Update 2018-02 | Tax Cuts and Jobs Act of 2017 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Impact of the U.S. corporate tax rate change on AOCI | $ 99 | ||||
Equity securities | Accounting Standards Update 2016-01 | |||||
Components of accumulated other comprehensive income | |||||
Cumulative effect of accounting change | $ (90) |
Shareholder's Equity - Progress
Shareholder's Equity - Progression of the components of accumulated other comprehensive income (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | $ 31 | |||||
Other comprehensive income (loss), net of tax | 669 | $ (436) | $ 192 | |||
Cumulative effect of accounting change | 3 | |||||
Impact of the U.S. corporate tax rate change on AOCI | 0 | |||||
AOCI ending balance | 700 | 31 | ||||
Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, Pretax | 828 | (561) | 299 | |||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, tax | (174) | 118 | (105) | |||
Other comprehensive income (loss), unrealized holding gains on securities arising during the period, net of tax | 654 | (443) | 194 | |||
Reclassification from accumulated other comprehensive income, pretax | [1] | (16) | 6 | 3 | ||
Reclassification from accumulated other comprehensive income, tax | [1] | 3 | (1) | (1) | ||
Reclassification from accumulated other comprehensive income, net of tax | (13) | 5 | 2 | |||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | 812 | (555) | 302 | |||
Other comprehensive income (loss), tax | (171) | 117 | (106) | |||
Other comprehensive income (loss), net of tax | 641 | (438) | 196 | |||
Accumulated Net Investment Gain (Loss) Attributable to Parent | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | [2] | 42 | 570 | 273 | ||
Cumulative effect of accounting change | [3] | $ 0 | ||||
Impact of the U.S. corporate tax rate change on AOCI | [3] | (90) | 101 | |||
AOCI ending balance | [2] | 683 | 42 | 570 | ||
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | 36 | 2 | (6) | |||
Other comprehensive income (loss), tax | (8) | 0 | 2 | |||
Other comprehensive income (loss), net of tax | 28 | 2 | (4) | |||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | (11) | (13) | (7) | |||
Cumulative effect of accounting change | [3] | 0 | ||||
Impact of the U.S. corporate tax rate change on AOCI | [3] | 0 | (2) | |||
AOCI ending balance | 17 | (11) | (13) | |||
AOCI Including Portion Attributable to Noncontrolling Interest | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), pretax | 848 | (553) | 296 | |||
Other comprehensive income (loss), tax | (179) | 117 | (104) | |||
Other comprehensive income (loss), net of tax | 669 | (436) | 192 | |||
AOCI Attributable to Parent | ||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||
AOCI beginning balance | 31 | 557 | 266 | |||
Other comprehensive income (loss), net of tax | 669 | (436) | 192 | |||
Cumulative effect of accounting change | (90) | $ 0 | [3] | |||
Impact of the U.S. corporate tax rate change on AOCI | [3] | (90) | 99 | |||
AOCI ending balance | $ 700 | $ 31 | $ 557 | |||
[1] | The reclassification adjustment out of net unrealized gains on securities affected the following lines in GALIC’s Statement of Earnings: OCI component Affected line in the statement of earnings Pretax Realized gains (losses) on securities Tax Provision for income taxes | |||||
[2] | Includes net unrealized gains of $34 million at December 31, 2019 compared to $33 million and $42 million at December 31, 2018 and 2017 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings. | |||||
[3] | On January 1, 2018, GALIC adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $90 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $99 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “Accounting Policies — Income Taxes”). |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Reconciliation [Line Items] | |||||
Statutory rate of income taxes | 21.00% | 21.00% | 35.00% | ||
Decrease in net deferred tax liability resulting from the changes in the Tax Cuts and Jobs Act of 2017 | $ 0 | $ 0 | $ 24,000,000 | ||
Cash payments for income taxes | 163,000,000 | $ 106,000,000 | $ 217,000,000 | ||
Tax Cuts and Jobs Act implementation complete | true | ||||
Charge for valuation allowance | |||||
Income Tax Reconciliation [Line Items] | |||||
Charge for valuation allowance against deferred tax assets | $ 0 | $ 0 | |||
Tax Cuts and Jobs Act of 2017 | |||||
Income Tax Reconciliation [Line Items] | |||||
Decrease in net deferred tax liability resulting from the changes in the Tax Cuts and Jobs Act of 2017 | $ 24,000,000 | ||||
Tax Cuts and Jobs Act of 2017 | Subsequent Event | |||||
Income Tax Reconciliation [Line Items] | |||||
Statutory rate of income taxes | 21.00% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income taxes at the statutory rate to the provision for income taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Earnings before income taxes (“EBT”) | $ 497 | $ 256 | $ 381 |
Income taxes at statutory rate | 104 | 54 | 133 |
Effect of permanent items | (2) | (7) | (4) |
Effect of change in U.S. corporate tax rate | 0 | 0 | (24) |
Provision for income taxes as shown in the statement of earnings | $ 102 | $ 47 | $ 105 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Income taxes at statutory rate as a percentage of EBT | 21.00% | 21.00% | 35.00% |
Effect of permanent items as a percentage of EBT | 0.00% | (3.00%) | (1.00%) |
Effect of change in U.S. corporate tax rate as a percentage of EBT | 0 | 0 | (0.06) |
Provision for income taxes as shown in the Statement of Earnings as a percentage of EBT | 21.00% | 18.00% | 28.00% |
Income Taxes - Total income tax
Income Taxes - Total income tax provision (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current taxes: | |||
Federal | $ 152 | $ 130 | $ 183 |
State | 4 | 3 | 3 |
Deferred taxes: | |||
Federal | (54) | (86) | (57) |
Impact of change in U.S. corporate tax rate | 0 | 0 | (24) |
Provision for income taxes as shown in the statement of earnings | $ 102 | $ 47 | $ 105 |
Income Taxes - Significant comp
Income Taxes - Significant components of deferred tax assets and liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Insurance claims and reserves | $ 647 | $ 524 |
Other, net | 5 | 8 |
Total deferred tax assets | 652 | 532 |
Deferred tax liabilities: | ||
Investment securities | (447) | (45) |
Deferred policy acquisition costs | (93) | (240) |
Insurance claims and reserves transition liability | (68) | (79) |
Total deferred tax liabilities | (608) | (364) |
Net deferred tax asset (liability) | 44 | |
Net deferred tax asset (liability) | 168 | |
Excluding Unrealized Gains | ||
Deferred tax assets: | ||
Insurance claims and reserves | 601 | 521 |
Other, net | 7 | 8 |
Total deferred tax assets | 608 | 529 |
Deferred tax liabilities: | ||
Investment securities | (78) | (23) |
Deferred policy acquisition costs | (236) | (248) |
Insurance claims and reserves transition liability | (68) | (79) |
Total deferred tax liabilities | (382) | (350) |
Net deferred tax asset (liability) | 226 | 179 |
Impact of Unrealized Gains | ||
Deferred tax assets: | ||
Insurance claims and reserves | 46 | 3 |
Other, net | (2) | 0 |
Total deferred tax assets | 44 | 3 |
Deferred tax liabilities: | ||
Investment securities | (369) | (22) |
Deferred policy acquisition costs | 143 | 8 |
Insurance claims and reserves transition liability | 0 | 0 |
Total deferred tax liabilities | (226) | (14) |
Net deferred tax asset (liability) | $ (182) | $ (11) |
Insurance - Narrative (Details)
Insurance - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance [Line Items] | ||||
Carrying value of securities owned by U.S.-based insurance subsidiaries on deposit | $ 28 | |||
Investment in Federal Home Loan Bank capital stock | 52 | |||
Advances from Federal Home Loan Bank | $ 1,100 | 1,100 | $ 1,100 | |
Advances from Federal Home Loan Bank | 225 | $ 0 | 225 | $ 0 |
Description of variable rate basis | LIBOR | |||
Repayments of advances from Federal Home Loan Bank due in next twelve months | $ 310 | |||
Repayments of advances from Federal Home Loan Bank due in year two | 786 | |||
Fair value of mortgage-backed securities held as collateral by the Federal Home Loan Bank | 1,270 | |||
Interest on advances from Federal Home Loan Bank | 27 | 20 | 14 | |
Dividends | $ (140) | (60) | (225) | |
Percentage threshold of dividends paid in previous twelve months to earned statutory surplus of prior year end, requiring approval of payment of dividends if exceeded | 10.00% | |||
Maximum amount of dividends available to be paid by insurance subsidiaries to parent without prior approval of regulatory authorities | $ 287 | |||
Maximum amount of dividends available to be received by parent from insurance subsidiaries without prior approval of regulatory authorities | 35 | |||
Aggregate guaranteed minimum death benefit value on variable annuity polices in force | 35 | $ 13 | 35 | |
Statutory Dividend Payment Restrictions Disclosure | The maximum amount of dividends that can be paid to shareholders in 2019 by life insurance companies domiciled in the State of Ohio without prior approval of the Insurance Commissioner is the greater of 10% of statutory surplus as regards to policyholders or statutory net earnings as of the preceding December 31, but only to the extent of statutory earned surplus as of the preceding December 31. | |||
Minimum | LIBOR | ||||
Insurance [Line Items] | ||||
FHLB advances, basis spread on variable rate | 0.13% | |||
Maximum | LIBOR | ||||
Insurance [Line Items] | ||||
FHLB advances, basis spread on variable rate | 0.21% | |||
Average | LIBOR | ||||
Insurance [Line Items] | ||||
FHLB advances, basis spread on variable rate | 1.95% | |||
Life insurance | ||||
Insurance [Line Items] | ||||
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 2,701 | $ 2,868 | 2,701 | |
Life insurance in force, ceded premiums | 7,690 | 6,230 | 7,690 | |
Life insurance in force, direct premiums | 10,820 | 9,530 | 10,820 | |
Life written premiums ceded | 20 | 22 | 28 | |
Reinsurance recoveries | 32 | 41 | 38 | |
Variable annuities | Maximum | ||||
Insurance [Line Items] | ||||
Death benefits paid in excess of the variable annuity account balances | 1 | 1 | 1 | |
Retained Earnings | ||||
Insurance [Line Items] | ||||
Dividends | (140) | (60) | $ (225) | |
Great American Life Insurance Company | Life insurance | ||||
Insurance [Line Items] | ||||
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 510 | 510 | ||
Federal Home Loan Banks, advances, refinanced terms | ||||
Insurance [Line Items] | ||||
Advances from Federal Home Loan Bank | $ 40 | $ 610 | $ 40 |
Insurance - Net earnings and ca
Insurance - Net earnings and capital and surplus on a statutory basis for the insurance subsidiaries (Details) - GALIC consolidated life insurance companies - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statutory information | |||
Net Earnings | $ 34 | $ 802 | $ 286 |
Capital and Surplus | $ 2,868 | $ 2,701 |
Insurance - Liabilities for exc
Insurance - Liabilities for excess benefits expected to be paid on future deaths and annuitizations, guaranteed withdrawal benefits and accrued persistency and premium bonuses (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Insurance [Abstract] | ||
Expected death and annuitization | $ 232 | $ 229 |
Guaranteed withdrawal benefits | 625 | 472 |
Accrued persistency and premium bonuses | $ 1 | $ 1 |
Additional Information - Narrat
Additional Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Additional Information [Abstract] | |||
General and administrative costs paid to parent | $ 44 | $ 43 | $ 40 |
Commitments to fund limited partnerships | 491 | ||
Retirement and employee savings plan expense | $ 1 | $ 2 | $ 2 |
Supplementary Insurance Infor_2
Supplementary Insurance Information - Table (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | $ 713 | $ 1,381 | $ 943 |
Reserves for future policy benefits and claims | 41,018 | 37,251 | 33,974 |
Net earned premiums | 22 | 24 | 22 |
Net investment income | 1,813 | 1,657 | 1,478 |
Benefits, claims, losses and settlement expenses | 1,187 | 1,035 | 915 |
Amortization of deferred policy acquisition costs | 202 | 215 | 133 |
Other operating expenses | 195 | 185 | 169 |
Annuity | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 694 | 1,358 | 917 |
Reserves for future policy benefits and claims | 40,406 | 36,616 | 33,316 |
Net investment income | 1,792 | 1,638 | 1,458 |
Benefits, claims, losses and settlement expenses | 1,151 | 998 | 892 |
Amortization of deferred policy acquisition costs | 198 | 211 | 129 |
Other operating expenses | 188 | 174 | 158 |
Run-off Life | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred policy acquisition costs | 19 | 23 | 26 |
Reserves for future policy benefits and claims | 612 | 635 | 658 |
Net earned premiums | 22 | 24 | 22 |
Net investment income | 21 | 19 | 20 |
Benefits, claims, losses and settlement expenses | 36 | 37 | 23 |
Amortization of deferred policy acquisition costs | 4 | 4 | 4 |
Other operating expenses | $ 7 | $ 11 | $ 11 |