Long-Duration Targeted Improvements and Resegmentation Impact Summary
Long-Duration Targeted Improvements
GAAP Equity Impact
($ billions)
$16
Pre-LDTI GAAP Equity
12/31/22
$14
H
Change Due to LDTI
$30
Post-LDTI GAAP Equity
12/31/22
●
●
●
●
Key Takeaways
No direct economic effect
LDTI does not impact statutory results or cash flows
GAAP Equity (¹) increased by $14 billion as of 12/31/22:
AOCI increased by $16 billion, primarily driven by the
remeasurement of certain Japan business liabilities using
higher discount rates
Retained Earnings decreased by $2 billion, reflecting the
reclassification of non-performance risk gains from Retained
Earnings to AOCI and other changes in reserves
GAAP Equity and Adjusted Book Value(2), which excludes AOCI,
continue to exclude unrealized insurance margins of $52 billion (3)
as of 12/31/22, primarily in our Japan business
These margins are an important factor in determining
financial strength
Adjusted Book Value remains a relevant measure as AOCI continues
to lack symmetry in the valuation of assets and insurance liabilities
No significant impact on underlying earnings power(4)
Note: U.S. GAAP LDTI is effective on January 1, 2023 with a transition date of January 1, 2021.
(1) GAAP Equity excludes the impact of noncontrolling interests.
(2) Adjusted Book Value represents GAAP Equity excluding Accumulated Other Comprehensive Income (AOCI) and the cumulative effect of foreign exchange rate remeasurement. See Non-GAAP Measures on slide 7.
(3) After-tax unrealized insurance margins represent the present value of gross premiums minus the present value of net premiums at current single-A rates plus deferred profit liabilities for product liabilities subject to remeasurement under LDTI.
(4) See definition of underlying earnings power in non-GAAP measures on slide 8.
Expanding access to investing, insurance, and retirement security
3View entire presentation