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What changed in Fidelity National Financial, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Fidelity National Financial, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+649 added−591 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in Fidelity National Financial, Inc.'s 2024 10-K

649 paragraphs added · 591 removed · 542 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

216 edited+37 added−12 removed251 unchanged
Biggest changeAmong other requirements, if finalized in its proposed form, the New Fiduciary Rule provides that any person will be an investment advice fiduciary if they provide investment advice or make an investment recommendation to a retirement investor ( i.e., a plan, plan fiduciary, plan participant or beneficiary, IRA, IRA owner or beneficiary, or IRA fiduciary) for a fee or other compensation, and the person provides the advice or makes the recommendation on a regular basis as part of their business and the recommendation is provided under circumstances indicating that the recommendation is based on the particular needs or individual investor circumstances of the retirement investor.
Biggest changeAmong other requirements, the New Fiduciary Rule provides that any person will be an investment advice fiduciary if such person provides investment advice or makes an investment recommendation to a retirement investor (i.e., a plan, a discretionary plan fiduciary, a plan participant or beneficiary, an IRA, an IRA owner or beneficiary, or an IRA fiduciary) for a fee or other compensation, the person makes professional investment recommendations to investors on a regular basis as part of their business, and the recommendation is provided under circumstances that would indicate to a reasonable investor in like circumstances that the recommendation is based on a review of the particular needs or individual investor circumstances of the retirement investor, reflects the application of professional or expert judgment to the retirement investor’s particular needs or individual circumstances, and may be relied upon by the retirement investor as intended to advance the retirement investor’s best interest.
An owner’s policy is typically also issued, insuring the buyer against defects in title in an amount equal to the purchase price. In a 6 Table of Contents refinancing transaction, only a lender’s policy is generally purchased because ownership of the property has not changed.
An owner’s 6 Table of Contents policy is typically also issued, insuring the buyer against defects in title in an amount equal to the purchase price. In a refinancing transaction, only a lender’s policy is generally purchased because ownership of the property has not changed.
Prior to granting approval of an application to acquire control of a domestic insurer, the state insurance commissioner will consider such factors as the financial strength of the applicant; the integrity and management of the applicant’s Board of Directors and executive officers; the acquirer’s plans for the insurer’s Board of Directors and executive officers; the acquirer’s plans for the future operations of the domestic insurer; and any anti-competitive results that may arise from the consummation of the acquisition of control.
Prior to granting approval of an application to acquire control of a domestic insurer, the state insurance commissioner will consider factors such as the financial strength of the applicant; the integrity and management of the applicant’s Board of Directors and executive officers; the acquirer’s plans for the insurer’s Board of Directors and executive officers; the acquirer’s plans for the future operations of the domestic insurer; and any anti-competitive results that may arise from the consummation of the acquisition of control.
We purchase derivatives consisting predominantly of over-the-counter options and, to a lesser degree, futures contracts (specifically for FIA contracts) on the equity indices underlying the applicable policy such as the S&P 500. These derivatives are used to fund the index credits due to policyholders under the FIA and IUL contracts based upon policyholders’ contract elections.
We purchase derivatives consisting predominantly of over-the-counter options and, to a lesser degree, futures contracts (specifically for FIA contracts) on the equity indices underlying the applicable policy such as the S&P 500 Index. These derivatives are used to fund the index credits due to policyholders under the FIA and IUL contracts based upon policyholders’ contract elections.
We base all of our decisions on fundamental, bottom-up research, coupled with a top-down view that respects the cyclicality of certain asset classes. The types of assets in which we may invest are influenced by various state laws, which prescribe qualified investment assets applicable to insurance companies.
We base all our decisions on fundamental, bottom-up research, coupled with a top-down view that respects the cyclicality of certain asset classes. The types of assets in which we may invest are influenced by various state laws, which prescribe qualified investment assets applicable to insurance companies.
Department of Labor (DOL) issued its final version of an investment advice rule replacing the previous “Fiduciary Rule” that had been challenged by industry participants and vacated in March 2018 by the United States Fifth Circuit Court of Appeals.
Department of Labor (the "DOL") issued its final version of an investment advice rule replacing the previous “Fiduciary Rule” that had been challenged by industry participants and vacated in March 2018 by the United States Fifth Circuit Court of Appeals.
Furthermore, as a Class E insurer, F&G Life Re must not declare or pay a dividend in any financial year which would exceed 25% of its total capital and statutory surplus, as set out in its previous year’s financial statements, unless at least seven days before payment of such dividend F&G Life Re files with the BMA an affidavit signed by at least two directors of F&G Life Re and its principal representative under the Bermuda Insurance Act stating that, in the opinion of those signing, declaration of such dividend has not caused the insurer to fail to meet its relevant margins.
Furthermore, as a Class E insurer, F&G Life Re must not declare or pay a dividend in any financial year which would exceed 25% of its total capital and statutory surplus, as set out in its previous year’s Bermuda statutory financial statements, unless at least seven days before payment of such dividend F&G Life Re files with the BMA an affidavit signed by at least two directors of F&G Life Re and its principal representative under the Bermuda Insurance Act stating that, in the opinion of those signing, declaration of such dividend has not caused the insurer to fail to meet its relevant margins.
State insurance authorities have broad administrative powers over FGL Insurance and FGL NY Insurance with respect to all aspects of the insurance business including: • licensing to transact business; • licensing agents; • prescribing which assets and liabilities are to be considered in determining statutory surplus; • regulating premium rates for certain insurance products; • approving policy forms and certain related materials; • requiring insurers and agents to act in the best interests of consumers when making recommendations to purchase annuities, or to determine whether a reasonable basis exists as to the suitability of such investments for consumers; • regulating unfair trade and claims practices; • establishing reserve requirements and solvency standards; • regulating the amount of dividends that may be paid in any year; • regulating the availability of reinsurance or other substitute financing solutions, the terms thereof and the ability of an insurer to take credit on its financial statements for insurance ceded to reinsurers or other substitute financing solutions; • fixing maximum interest rates on life insurance policy loans and minimum accumulation or surrender values; and • regulating the type, amounts, and valuations of investments permitted, transactions with affiliates, and other matters.
State insurance authorities have broad administrative powers over FGL Insurance and FGL NY Insurance with respect to all aspects of the insurance business including: • licensing to transact business; • licensing agents; • prescribing which assets and liabilities are to be considered in determining statutory surplus; • regulating premium rates for certain insurance products; • approving policy forms and certain related materials; • requiring insurers and agents to act in the best interests of consumers when making recommendations to purchase annuities, or to determine whether a reasonable basis exists as to the suitability of such investments for consumers; • regulating unfair trade and claims practices; • establishing reserve requirements and solvency standards; • regulating the amount of dividends that may be paid in any year by insurance companies; • regulating the availability of reinsurance or other substitute financing solutions, the terms thereof and the ability of an insurer to take credit on its financial statements for insurance ceded to reinsurers or other substitute financing solutions; • fixing maximum interest rates on life insurance policy loans and minimum accumulation or surrender values; and • regulating the type, amounts, and valuations of investments permitted, transactions with affiliates, and other matters.
Funding Agreements. As defined by the Iowa Insurance Division (the "IID"), a funding agreement is an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies of the person to whom the funding agreement is issued.
As defined by the Iowa Insurance Division (the "IID"), a funding agreement is an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies of the person to whom the funding agreement is issued.
Standard & Poor’s Ratings Group (“S&P”) and Moody’s Investors Service (“Moody’s”) provide ratings for the entire FNF family of companies as a whole as follows: S&P Moody’s FNF family of companies A A2 The relative position of each of our ratings among the ratings scale assigned by each rating agency is as follows: • An S&P "A" rating is the third highest rating of eleven ratings for S&P.
Standard & Poor’s Ratings Group (“S&P”) and Moody’s Investors Service (“Moody’s”) provide ratings for the FNF family of companies as a whole as follows: S&P Moody’s FNF family of companies A A2 The relative position of each of our ratings among the ratings scale assigned by each rating agency is as follows: • An S&P "A" rating is the third highest rating of eleven ratings for S&P.
Negative performance of the market indices during a term can result in negative policyholder returns, with downside protection typically provided in the form of either a “buffer” or a “floor” to limit the policyholder’s exposure to market loss. A "buffer" is protection from negative exposure up to a certain percentage, typically 10 or 20 percent.
Negative performance of the market indices during a term can result in negative policyholder returns, with downside protection typically provided in the form of either a “buffer” or a “floor” to limit the policyholder’s exposure to market loss. A "buffer" is protection from negative exposure up to a certain percentage, typically 10% or 20%.
We have previously sold single premium immediate annuities (“SPIAs”), which provide a series of periodic payments for a fixed period of time or for the life of the policyholder, according to the policyholder’s choice at the time of issue. The amounts, frequency and length of time of the payments are fixed at the outset of the annuity contract.
We have previously sold single premium immediate annuities (“SPIAs”), which provide a series of periodic payments for a fixed period of time or for the life of the contract, according to the policyholder’s choice at the time of issue. The amounts, frequency and length of time of the payments are fixed at the outset of the annuity contract.
Overview We are a leading provider of (i) title insurance, escrow and other title-related services, including trust activities, trustee sales guarantees, recordings and reconveyances and home warranty products and (ii) transaction services to the real estate and mortgage industries.
Overview We are a leading provider of (i) title insurance, escrow and other title-related services, including trust activities, trustee sales guarantees, recordings and reconveyances and home warranty and (ii) transaction services to the real estate and mortgage industries.
We seek to assess risk to our business through a formalized process involving (i) identifying short-term and long-term strategic and operational objectives, (ii) development of risk appetite statements that establish what the company is willing to accept in terms of risks to achieving its goals and objectives, (iii) identifying the levers that control the risk appetite of the company, (iv) establishing the overall limits of risk 19 Table of Contents acceptable for a given risk driver, (v) establishing operational risk limits that are aligned with the tolerances, (vi) assigning risk limit quantification and mitigation responsibilities to individual team members within functional groups, (vii) analyzing the potential qualitative and quantitative impact of individual risks, including but not limited to stress and scenario testing covering over eight economic and insurance related risks, (viii) mitigating risks by appropriate actions and (ix) identifying, documenting and communicating key business risks in a timely fashion.
We seek to assess risk to our business through a formalized process involving (i) identifying short-term and long-term strategic and operational objectives, (ii) development of risk appetite statements that establish what the company is willing to accept in terms of risks to achieving its goals and objectives, (iii) identifying the levers that control the risk appetite of the company, (iv) establishing the overall limits of risk acceptable for a given risk driver, (v) establishing operational risk limits that are aligned with the tolerances, (vi) assigning risk limit quantification and mitigation responsibilities to individual team members within functional groups, (vii) analyzing the potential qualitative and quantitative impact of individual risks, including but not limited to stress and scenario testing covering over eight economic and insurance related risks, (viii) mitigating risks by appropriate actions and (ix) identifying, documenting and communicating key business risks in a timely fashion.
We maintain shorter durations on our investment portfolio to mitigate our interest rate risk. A more detailed discussion of our investment strategies is included in “Investment Policies and Investment Portfolio.” • Continue to improve our products and technology.
We maintain shorter durations on our investment portfolio to mitigate our interest rate risk. A more detailed discussion of our investment strategies is included in “ Investment Policies and Investment Portfolio .” • Continue to improve our products and technology.
The second excess of loss reinsurance contract ("Second XOL Contract") provides an additional $300 million limit of coverage from a single loss occurrence, with the Company co-participating at approximately 10%. The third excess of loss reinsurance contract ("Third XOL Contract") provides an additional $80 million limit of coverage from a single loss occurrence, with the Company co-participating at approximately 10.00%.
The second excess of loss reinsurance contract ("Second XOL Contract") provides an additional $300 million limit of coverage from a single loss occurrence, with the Company co-participating at approximately 10%. The third excess of loss reinsurance contract ("Third XOL Contract") provides an additional $80 million limit of coverage from a single loss occurrence, with the Company co-participating at approximately 10%.
Actual results could differ materially from those anticipated in these statements as a result of a number of factors, including, but not limited to the following: • adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding, increased mortgage defaults, or a weak U.S. economy; • the severity of our title insurance claims; • downgrade of our credit rating by rating agencies; • compliance with extensive government regulation of our operating subsidiaries and adverse changes in applicable laws or regulations or in their application by regulators; • potential impact of the F&G Distribution on relationships, including employees, suppliers, customers and competitors; • regulatory investigations of the title insurance industry; • loss of key personnel that could negatively affect our financial results and impair our operating abilities; • our business concentration in the States of California and Texas are the source of approximately 13.0% and 14.3%, respectively, of our title insurance premiums; • our potential inability to find suitable acquisition candidates, as well as the risks associated with acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties integrating acquisitions; • our dependence on distributions from our title insurance underwriters as our main source of cash flow; • competition from other title insurance companies; • changes in general economic, business, and political conditions, including changes in the financial markets related to inflation and geopolitical uncertainties; • impacts to our business operations caused by the occurrence of a catastrophe or global crisis; and • other risks detailed in "Risk Factors" below and elsewhere in this Annual Report and in our other filings with the SEC.
Actual results could differ materially from those anticipated in these statements as a result of a number of factors, including, but not limited to the following: • adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding, increased mortgage defaults, or a weak U.S. economy; • the severity of our title insurance claims; • downgrade of our credit rating by rating agencies; • compliance with extensive government regulation of our operating subsidiaries and adverse changes in applicable laws or regulations or in their application by regulators; • potential impact of the F&G Distribution on relationships, including employees, suppliers, customers and competitors; • regulatory investigations of the title insurance industry; • loss of key personnel that could negatively affect our financial results and impair our operating abilities; • our business concentration in the States of California and Texas are the source of approximately 12.9% and 13.8%, respectively, of our title insurance premiums; • our potential inability to find suitable acquisition candidates, as well as the risks associated with acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties integrating acquisitions; • our dependence on distributions from our title insurance underwriters as our main source of cash flow; • competition from other title insurance companies; • changes in general economic, business, and political conditions, including changes in the financial markets related to inflation and geopolitical uncertainties; • impacts to our business operations caused by the occurrence of a catastrophe or global crisis; and • other risks detailed in "Risk Factors" below and elsewhere in this Annual Report and in our other filings with the SEC.
Our national and regional brands include FNTIC, Chicago Title, Commonwealth Land Title, Lawyers Title, Ticor Title, Alamo Title, and National Title of New York. In our largest markets, we operate multiple brands.
Our national and regional brands include FNTIC, Chicago Title, Commonwealth Land Title, Lawyers Title Company, Ticor Title Company, Alamo Title, and National Title of New York. In our largest markets, we operate multiple brands.
The laws of most states in which we transact business establish supervisory agencies with broad administrative powers relating to issuing and revoking licenses to transact business; regulating trade practices; licensing agents; approving policy forms and accounting and financial practices; establishing reserves and capital and surplus in regards to policyholder requirements defining suitable investments for reserves and capital and surplus; approving rate schedules; etc.
The laws of most states in which we transact business establish supervisory agencies with broad administrative powers relating to issuing and revoking licenses to transact business, regulating trade practices, licensing agents, approving policy forms and accounting and financial practices, establishing reserves and capital and surplus in regard to policyholder requirements defining suitable investments for reserves and capital and surplus, approving rate schedules, etc.
Through F&G’s insurance subsidiaries, we issue a broad portfolio of deferred annuities (FIA and fixed rate annuities), immediate annuities, and PRT solutions. A deferred annuity is a type of contract that accumulates value on a tax deferred basis and typically begins making specified periodic or lump sum payments a certain number of years after the contract has been issued.
Through F&G’s insurance subsidiaries, we issue a broad portfolio of deferred annuities (indexed annuities and fixed rate annuities), immediate annuities, and PRT solutions. A deferred annuity is a type of contract that accumulates value on a tax deferred basis and typically begins making specified periodic or lump sum payments a certain number of years after the contract has been issued.
The escrow and other services provided by us include all of those typically required in connection with residential and commercial real estate purchases and refinance activities. Escrow, title-related and other fees included in our Title segment represented approxima tely 30.1%, 27.5%, and 28.1% of total Title segment revenues in 2023 , 2022 , and 2021 , respectively. Sales and Marketing.
The escrow and other services provided by us include all of those typically required in connection with residential and commercial real estate purchases and refinance activities. Escrow, title-related and other fees included in our Title segment represented approxima tely 28.5%, 30.1% and 27.5% of total Title segment revenues in 2024 , 2023 and 2022 , respectively. Sales and Marketing.
The first excess of loss reinsurance contract provides an $75 million limit of coverage from a single loss occurrence for losses in excess of a $25 million retention per single loss occurrence.
The first excess of loss reinsurance contract provides a $75 million limit of coverage from a single loss occurrence for losses in excess of a $25 million retention per single loss occurrence.
Effective December 1, 2023, FGL Insurance executed an additional coinsurance funds withheld agreement with Somerset to cede certain flow MYGA business written effective on or after December 1, 2023. As the policies ceded to Somerset are investment contracts, there is no significant insurance risk present and the reinsurance agreements are accounted for as separate investment contracts. Everlake Reinsurance Transaction.
Effective December 1, 2023, FGL Insurance executed an additional coinsurance funds withheld agreement with Somerset to cede certain flow MYGA business written effective on or after December 1, 2023. As the policies ceded to Somerset are investment contracts, there is no significant insurance risk present and the reinsurance agreements are accounted for as separate investment contracts.
Any person who is deemed to acquire control over F&G, FNF, FGL US Holdings, CF Bermuda, FGLH, FGL Insurance, FGL NY Insurance, Raven Re, Corbeau Re or certain of their affiliates including any person who acquires 10% or more of our or FNF’s voting securities of FGL Insurance, FGL NY Insurance or certain of their affiliates, without the prior approval of the insurance regulators of Iowa and New York, will be in violation of those states’ laws and may be subject to injunctive action requiring the disposition or seizure of those securities by the relevant insurance regulator or prohibiting the voting of those securities and to other actions determined by the relevant insurance regulator.
Any person who is deemed to acquire control over F&G, FNF, FGL US Holdings, CF Bermuda, FGLH, FGL Insurance, FGL NY Insurance, Raven Re, Corbeau Re or certain of their affiliates including any person who acquires 10% or more of our or FNF’s voting securities of FGL Insurance, FGL NY Insurance or certain of their affiliates, without the prior approval of the insurance regulators of Iowa and New York, will be in violation of those states’ laws and may be subject to injunctive action requiring the disposition or seizure of those securities by the relevant 25 Table of Contents insurance regulator or prohibiting the voting of those securities and to other actions determined by the relevant insurance regulator.
The size of the industry is closely tied to various macroeconomic factors, including, but not limited to, growth in the gross domestic product, inflation, unemployment, the availability of credit, consumer confidence, interest rates, and sales volumes and prices for new and existing homes, as well as the volume of refinancing of previously issued mortgages.
The size of the industry is closely tied to various macroeconomic factors, including, but not limited to, growth in the gross domestic product, inflation, unemployment, the availability of credit, consumer confidence, interest rates, housing inventory and sales volumes, and prices for new and existing homes, as well as the volume of refinancing of previously issued mortgages.
Subject to the Company’s retention and co-participation on the Second, Third and Fourth XOL Contracts, the maximum coverage from a single loss occurrence provided under our excess of loss reinsurance coverage is $610 million. Each XOL Contract provides for one reinstatement of its respective limit, so the aggregate limit of coverage is $1.2 billion.
Subject to the Company’s retention and co-participation on the Second, Third and Fourth XOL Contracts, the maximum coverage from a single loss occurrence provided under our excess of loss reinsurance coverage is $615 million. Each XOL Contract provides for one reinstatement of its respective limit, so the aggregate limit of coverage is $1.2 billion.
Each of our title insurers has complied with the minimum statutory requirements as of December 31, 2023 . Our underwritten title companies, primarily those domiciled in California, are also subject to certain regulation by insurance regulatory or banking authorities relating to their net worth and working capital.
Each of our title insurers has complied with the minimum statutory requirements as of December 31, 2024 . Our underwritten title companies, primarily those domiciled in California, are also subject to certain regulation by insurance regulatory or banking authorities relating to their net worth and working capital.
The contract holder account value of a FIA contract is equal to the sum of deposits paid, premium bonuses, if any, (described below), and index credits based on the change in the relevant market index (subject to a cap, spread and/or a participation rate) less any fees for riders and any withdrawals taken to-date.
The contractholder account value of a FIA contract is equal to the sum of deposits paid, premium bonuses, if any, (described below), and index credits based on the change in the relevant market index (subject to a cap, spread and/or a participation rate) less any fees for riders and any withdrawals taken to-date.
After the first year following the issuance of a deferred annuity policy, holders of deferred annuities are typically permitted penalty-free withdrawals up to a contractually specified amount. The penalty-free withdrawal amount is typically 10% of the prior year account value for FIAs, and is typically up to accumulated interest for fixed rate annuities, subject to certain restrictions.
After the first year following the issuance of a deferred annuity policy, holders of deferred annuities are typically permitted penalty-free withdrawals up to a contractually specified amount. The penalty-free withdrawal amount is typically 10% of the prior year account value for indexed annuities and is typically up to accumulated interest for fixed rate annuities, subject to certain restrictions.
The XOL matures on December 31, 2043, and provides for coverage on losses up to $1.5 billion as of December 31, 2023. With Corbeau Re, non-economic reserves were financed through the maturity date of the XOL and statutory reserves are recorded for all risks expected to be incurred after the maturity date of the XOL.
The XOL matures on December 31, 2043, and provides for coverage on losses up to $1.5 billion as of December 31, 2024. With Corbeau Re, non-economic reserves were financed through the maturity date of the XOL and statutory reserves are recorded for all risks expected to be incurred after the maturity date of the XOL.
While the degree to which ratings adjustments will affect sales and persistency is unknown, we believe if our ratings were to be negatively adjusted for any reason, we could experience a material decline in the sales of our products and the persistency of our existing business. See “Item 1A. Risk Factors”.
While the degree to which ratings adjustments will affect sales and persistency is unknown, we believe if our ratings were to be negatively adjusted for any reason, we could experience a material decline in the sales of our products and the persistency of our existing business. See “Item 1A.
FNF offers a variety of training and educational opportunities for employees including, but not limited to, training on escrow policies and procedures, advanced escrow processing and practices, title loss reduction, title underwriting, advanced title practices and procedures, fraud prevention, as well as software, soft skills, sales, and time management trainings.
FNF offers a variety of training and educational opportunities for employees including, but not limited to, training on escrow policies and procedures, advanced escrow processing and practices, title loss reduction, title underwriting, advanced title practices and procedures, fraud prevention, as well as leadership effectiveness, software, soft skills, sales, and time management trainings.
The majority of all such call options are one-year options purchased to match the funding requirements underlying the FIA/IUL contracts. On the anniversary dates of the FIA/IUL contracts, the market index used to compute the annual index credit under the contracts is reset. At such time, we purchase new call options to fund the next index credit.
The majority of all such equity options are one-year options purchased to match the funding requirements underlying the FIA/IUL contracts. On the anniversary dates of the FIA/IUL contracts, the market index used to compute the annual index credit under the contracts is reset. At such time, we purchase new equity options to fund the next index credit.
Withdrawals in excess of allowable penalty-free amounts are assessed a surrender charge if such withdrawals are made during the penalty period of the deferred annuity policy. The penalty period typically ranges from seven to fourteen years for FIAs and three to ten years for fixed rate annuities.
Withdrawals in excess of allowable penalty-free amounts are assessed a surrender charge if such withdrawals are made during the penalty period of the deferred annuity policy. The penalty period typically ranges from seven to fourteen years for indexed annuities and three to ten years for fixed rate annuities.
F&G is required to maintain minimum ratings as a matter of routine practice as part of its over-the-counter derivatives agreements on International Swaps and Derivatives Association ("ISDA") forms. Under some ISDA agreements, we have agreed to maintain certain financial strength ratings.
Risk Factors." F&G is required to maintain minimum ratings as a matter of routine practice as part of its over-the-counter derivatives agreements on International Swaps and Derivatives Association ("ISDA") forms. Under some ISDA agreements, we have agreed to maintain certain financial strength ratings.
FGL Insurance has a reinsurance agreement with Hannover Life Reassurance Company of America (Bermuda) Ltd., an unaffiliated reinsurer, to reinsure an in-force block of its FIA and fixed deferred annuity contracts with GMWB and Guaranteed Minimum Death Benefit (“GMDB”) guarantees.
FGL Insurance has a reinsurance agreement with Hannover Life Reassurance Company of America (Bermuda) Ltd., an unaffiliated reinsurer, to reinsure an in-force block of its indexed annuity and fixed deferred annuity contracts with GMWB and Guaranteed Minimum Death Benefit (“GMDB”) guarantees.
In addition, FGL Insurance and FGL NY Insurance must file, and in many jurisdictions and for some lines of business obtain regulatory approval for, rates and forms relating to the insurance written in the jurisdictions in which they operate. FGL Insurance is currently the subject of four ongoing market conduct examinations in various states.
In addition, FGL Insurance and FGL NY Insurance must file, and in many jurisdictions and for some lines of business obtain regulatory approval for, rates and forms relating to the insurance written in the jurisdictions in which they operate. FGL Insurance is currently the subject of two ongoing market conduct examinations in various states.
All of FNF’s core title insurance, real estate, technology and mortgage related businesses, assets and liabilities that are not held by F&G remain with FNF. As of December 31, 2023, we had the following reporting segments: • Title.
All of FNF’s core title insurance, real estate, technology and mortgage related businesses, assets and liabilities that are not held by F&G remain with FNF. As of December 31, 2024, we had the following reporting segments: • Title.
New Re Reinsurance Transaction. Effective December 31, 2022, FGL Insurance entered into an indemnity reinsurance agreement with New Reinsurance Company Ltd., an unaffiliated reinsurer and wholly owned subsidiary of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (d/b/a Munich Re), to cede certain FIA policies. Effective July 1, 2023, this agreement was amended to reinsure additional FIA products.
New Re Reinsurance Transaction. Effective December 31, 2022, FGL Insurance entered into an indemnity reinsurance agreement with New Reinsurance Company Ltd., an unaffiliated reinsurer and wholly owned subsidiary of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (d/b/a Munich Re), to cede certain indexed annuity policies. Effective July 1, 2023, this agreement was amended to reinsure additional indexed annuity products.
We closely manage our outsourcing partners and integrate their services into our operations. We believe that outsourcing such functions allows us to focus capital and our employees on our core business operations and perform differentiating functions, such as investment, actuarial, product development and risk management functions.
We closely manage our outsourcing partners and integrate their services into our operations. We believe that outsourcing such functions allows us to focus capital and our employees on our core business operations and perform differentiating functions, such as finance, actuarial, product development and risk management functions.
We are not under any obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise. You should carefully consider the possibility that actual results may differ materially from our forward-looking statements. Additional Information Our website address is www.fnf.com.
We are not under any obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise. You should carefully consider the possibility that actual results may differ materially from our forward-looking statements. 31 Table of Contents Additional Information Our website address is www.fnf.com.
Our FIAs allow contract owners the possibility of earning returns linked to the performance of a specified market index, predominantly the S&P 500 Index, while providing principal protection. The contract owners typically make a single deposit into our deferred annuities. The contracts include a provision for a minimum guaranteed surrender value calculated in accordance with applicable law.
Our FIAs allow contract owners the possibility of earning returns linked to the performance of a specified market index, such as the S&P 500 Index, while providing principal protection. The contract owners typically make a single deposit into our deferred annuities. The contracts include a provision for a minimum guaranteed surrender value calculated in accordance with applicable law.
Effective December 31, 2023, FGL Insurance recaptured its reinsurance arrangement with Canada Life Assurance Company (“Canada Life”) United States Branch covering FIA policies with GMWB and guaranteed withdrawal payment (“GWP”) features and entered into a reinsurance treaty with Corbeau Re, Inc. (“Corbeau Re”), its wholly owned captive reinsurance company, to cede certain FIA policies with GMWB and GWP.
Effective December 31, 2023, FGL Insurance recaptured its reinsurance arrangement with Canada Life Assurance Company (“Canada Life”) United States Branch covering indexed annuity policies with GMWB and guaranteed withdrawal payment (“GWP”) features and entered into a reinsurance treaty with Corbeau Re, Inc. (“Corbeau Re”), its wholly owned captive reinsurance company, to cede certain indexed annuity policies with GMWB and GWP.
If FIAs were to be treated as securities, federal and state securities laws would require additional registration and licensing of these products and the agents selling them, and FGL Insurance and FGL NY Insurance would be required to seek additional marketing relationships for these products, any of which could impose significant restrictions on its ability to conduct operations as currently operated.
If indexed annuities were to be treated as securities, federal and state securities laws would require additional registration and licensing of these products and the agents selling them, and FGL Insurance and FGL NY Insurance would be required to seek additional marketing relationships for these products, any of which could impose significant restrictions on its ability to conduct operations as currently operated.
These causes generally include, but are not limited to, search and exam errors, forgeries, incorrect legal descriptions, signature and notary errors, unrecorded liens, mechanics’ liens, the failure to pay off existing liens, mortgage lending fraud, mishandling or theft of settlement funds (including independent agency theft), and mistakes in the escrow process.
These causes generally include, but are not limited to, search and exam errors, forgeries, incorrect legal descriptions, signature and notary errors, unrecorded liens, mechanics’ liens, the failure to pay off existing liens, mortgage lending fraud, mishandling or theft of settlement funds (including independent agency theft), and 8 Table of Contents mistakes in the escrow process.
Within our F&G segment, we embrace a long-term conservative investment philosophy, investing nearly all the insurance premiums we receive in a wide range of high-quality debt securities. Our investment strategy is designed to (i) preserve capital, (ii) provide consistent yield and investment income, and (iii) achieve attractive absolute returns.
Within our F&G segment, we embrace a long-term conservative investment philosophy, investing nearly all the insurance premiums we receive in a wide range of high-quality debt securities. Our investment strategy is designed to preserve capital, provide consistent yield and investment income and achieve attractive absolute returns.
The agent thus retains the majority of the title premium collected, with the balance remitted to the title underwriter for bearing the risk of loss in the event that a claim is made under the title insurance policy.
The agent thus retains the majority of the title premium collected, with the balance remitted to the title underwriter as compensation for bearing the risk of loss in the event that a claim is made under the title insurance policy.
Minimum net worth and working capital requirements for each underwritten title company is less than $1 million . These companies were in compliance with their respective minimum net worth and working capital requirements at December 31, 2023.
Minimum net worth and working capital requirements for each underwritten title company is less than $1 million . These companies were in compliance with their respective minimum net worth and working capital requirements at December 31, 2024.
Utilizing a relatively flat managerial structure and providing our employees with a sense of individual ownership supports this goal. • Effectively manage costs based on economic factors. We believe that our focus on our operating margins is essential to our continued success in the title insurance business.
Utilizing a relatively flat managerial structure and providing our employees with a sense of individual ownership supports this goal. 4 Table of Contents • Effectively manage costs based on economic factors. We believe that our focus on our operating margins is essential to our continued success in the title insurance business.
We currently maintain a well-matched asset/liability profile (asset duration, including cash and cash equivalents, of 5.24 years vs. liability duration of 4.7 years). For further discussion of portfolio activity, see Item 7 of Part II of this Annual Report, under Management’s Discussion and Analysis of Financial Condition and Results of Operations-Investment Portfolio. Outsourcing.
We currently maintain a well-matched asset/liability profile (asset duration, including cash and cash equivalents, of 4.9 years vs. liability duration of 5.8 years). For further discussion of portfolio activity, see Item 7 of Part II of this Annual Report, under Management’s Discussion and Analysis of Financial Condition and Results of Operations - Investment Portfolio . Outsourcing.
As of the most recent annual statutory financial statements filed with insurance regulators, the RBC ratios for FGL Insurance and FGL NY Insurance each exceeded the minimum RBC requirements. 23 Table of Contents It is desirable to maintain an RBC ratio in excess of the minimum requirements in order to maintain or improve financial strength ratings. FGL Insurance's estimated U.S.
As of the most recent annual statutory financial statements filed with insurance regulators, the RBC ratios for FGL Insurance and FGL NY Insurance each exceeded the minimum RBC requirements. It is desirable to maintain an RBC ratio in excess of the minimum requirements in order to maintain or improve financial strength ratings. FGL Insurance’s estimated U.S.
Our strategic alignment with our distribution partners allows us to reach a diverse, growing and underserved middle market demographic in both our retail and institutional channels. Durable investment management edge. Our strategic partnership with Blackstone provides a sustained competitive advantage for our business. Our liability profile and risk appetite drives our investment strategy.
Our strategic alignment with our distribution partners allows us to reach a diverse, growing and underserved middle market demographic in both our retail and institutional channels. Durable investment management edge. Our strategic partnership with Blackstone Inc. ("Blackstone") provides a sustained competitive advantage for our business. Our liability profile and risk appetite drive our investment strategy.
F&G Life Re is not permitted to declare or pay a dividend, or make a distribution out of its contributed surplus, if it is, or would after the payment be, unable to pay its liabilities as they become due or if the realizable value of its assets would be less than its liabilities. 27 Table of Contents Reduction of Capital .
F&G Life Re is not permitted to declare or pay a dividend, or make a distribution out of its contributed surplus, if it is, or would after the payment be, unable to pay its liabilities as they become due or if the realizable value of its assets would be less than its liabilities. Reduction of Capital.
The cap, spread and participation rate can typically be reset annually and in some instances every two to five years. Certain riders provide a variety of benefits, such as the ability to increase their cap, lifetime 14 Table of Contents income or additional liquidity for a set fee.
The cap, spread and participation rate can typically be reset annually and in some instances every two to five years. Certain riders provide a variety of benefits, such as the ability to increase their cap, lifetime income or additional liquidity for a set fee.
Compared to an FIA, RILAs have the potential for higher returns but also have the potential for risk of loss to principal and related earnings. RILAs provide the ability for the policyholder to participate in the positive performance of certain market indices during a term, limited by a cap or adjusted for a participation rate.
Compared to an indexed annuity, RILAs have the potential for higher returns but also have the potential for risk of loss to principal and related earnings. RILAs provide the ability for the policyholder to participate in the positive performance of certain market indices during a term, limited by a cap or adjusted for a participation rate.
Our Commercial Sales University is a course for new commercial sales reps and our Leadership Development Program provides employees with mentorship from senior executives. Leadership Development Program: Our Leadership Development Program helps employees advance their careers through professional development.
Our Commercial Sales University is a course for new commercial sales representatives, and our Leadership Development Program provides employees with mentorship from senior executives. Leadership Development Program. Our Leadership Development Program helps employees advance their careers through professional development.
The combined statutory earnings of our title insurers were $503 million, $778 million, and $936 million for the years ended December 31, 2023 , 2022 , and 2021 , respectively. 10 Table of Contents As a condition to continued authority to underwrite policies in the states in which our insurers conduct their business, they are required to pay certain fees and file information regarding their officers, directors and financial condition.
The combined statutory earnings of our title insurers were $587 million, $503 million and $778 million for the years ended December 31, 2024 , 2023 and 2022 , respectively. 10 Table of Contents As a condition to continued authority to underwrite policies in the states in which our insurers conduct their business, they are required to pay certain fees and file information regarding their officers, directors and financial condition.
The options and futures contracts are marked to fair value with the change in fair value included as a component of “Recognized gains and losses, net” in our Consolidated Statements of Earnings.
The options and futures contracts are marked to fair value with the change in fair value included as a component of “Recognized gains and losses, net” in our Consolidated Statements of Operations.
The financial advisers at our bank and broker dealer partners are able to offer their clients guaranteed rates of return, protected growth, and income for life through our Secure series of annuity products. We employ a hybrid distribution model in this channel, whereby some financial institutions partner directly with F&G and our sales team, and others work with an intermediary.
The financial advisers at our bank and broker dealer partners can offer their clients guaranteed rates of return, protected growth, and income for life through our secure series of annuity products. We employ a hybrid distribution model in this channel, whereby some financial institutions partner directly with F&G and our sales team, and others work with an intermediary.
We believe that the investment portfolios of FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re as of December 31, 2023, complied in all material respects with such regulations.
We believe that the investment portfolios of FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re as of December 31, 2024, complied in all material respects with such regulations.
Regardless of the business cycle in which we may be operating, we seek to continue to evaluate and manage our cost structure and make appropriate adjustments where 4 Table of Contents economic conditions dictate. This continual focus on our cost structure helps us to better maintain our operating margins.
Regardless of the business cycle in which we may be operating, we seek to continue to evaluate and manage our cost structure and make appropriate adjustments where economic conditions dictate. This continual focus on our cost structure helps us to better maintain our operating margins.
During 2024, our directly owned title insurers can pay dividends or make distributions to us of approximat ely $471 million; h owever, insurance regulators have the authority to prohibit the payment of ordinary dividends or other payments by our title insurers to us (such as a payment under a tax sharing agreement or for other services) if they determine that such payment could be adverse to our policyholders.
During 2025, our directly owned title insurers can pay dividends or make distributions to us of approximat ely $498 million; h owever, insurance regulators have the authority to prohibit the payment of ordinary dividends or other payments by our title insurers to us (such as a payment under a tax sharing agreement or for other services) if they determine that such payment could be adverse to our policyholders.
These statutory principles are subject to ongoing 22 Table of Contents change and modification. Moreover, compliance with any particular regulator’s interpretation of a legal or accounting issue may not result in compliance with another regulator’s interpretation of the same issue, particularly when compliance is judged in hindsight.
These statutory principles are subject to ongoing change and modification. Moreover, compliance with any particular regulator’s interpretation of a legal or accounting issue may not result in compliance with another regulator’s interpretation of the same issue, particularly when compliance is judged in hindsight.
We offer fixed annuities and life insurance products through a network of approximately 21 leading banks and broker dealers and approximately 280 Independent Marketing Organizations (“IMOs”) that provide back-office support for thousands of independent insurance agents. Winning in high-growth markets. The U.S. retirement and middle markets are growing, and we are both well-established and well-positioned for continued growth.
We offer fixed annuities and life insurance products through a network of approximately 22 leading banks and broker dealers and approximately 300 Independent Marketing Organizations (“IMOs”) that provide back-office support for thousands of independent insurance agents. Winning in high-growth markets. The U.S. retirement and middle markets are growing, and we are both well-established and well-positioned for continued growth.
Generally, rating agencies base their financial strength ratings upon information furnished to them by the insurer and upon their own investigations, studies and assumptions. Financial strength ratings are based upon factors of concern to policyholders, agents and intermediaries and are not directed toward the protection of investors.
Generally, rating agencies base their financial strength ratings upon information furnished to them by 18 Table of Contents the insurer and upon their own investigations, studies and assumptions. Financial strength ratings are based upon factors of concern to policyholders, agents and intermediaries and are not directed toward the protection of investors.
According to Demotech Performance of Title Insurance Companies 2023 Edition, an annual compilation of financial information from the title insurance industry that is published by Demotech Inc.
According to Demotech Performance of Title Insurance Companies 2024 Edition, an annual compilation of financial information from the title insurance industry that is published by Demotech Inc.
As this fee is fixed, the contract holder may lose principal if the index credits received do not exceed the amount of such fee. Approximately 39% of the FIA sales for the year ended December 31, 2023, involved “premium bonuses” or vesting bonuses. Premium bonuses increase the initial annuity deposit by a specified rate of 2%.
As this fee is fixed, the contract holder may lose principal if the index credits received do not exceed the amount of such fee. Approximately 39% of the FIA sales for the year ended December 31, 2024, involved premium bonuses or vesting bonuses. Premium bonuses increase the initial annuity deposit by a specified rate of 2%.
The average crediting rate on all outstanding fixed rate annuities at December 31, 2023, was 5%. Deferred Annuities - Registered Index-Linked Annuities (“RILA”). – In early 2024, we entered into the RILA markets. RILAs are similar to FIAs in offering the policyholder the opportunity for tax-deferred growth based in part on the performance of a market index.
The average crediting rate on all outstanding fixed rate annuities at December 31, 2024, was 5%. Deferred Annuities - Registered Index-Linked Annuities (“RILA”). In early 2024, we entered the RILA markets. RILAs are similar to indexed annuities in offering the policyholder the opportunity for tax-deferred growth based in part on the performance of a market index.
Raven Re is a special purpose captive reinsurance company that only provides reinsurance to FGL Insurance under the CARVM Treaty. Corbeau Re, a wholly owned captive reinsurance company, reinsures certain of FGL Insurance’s FIA policies with GMWB and GWP.
Raven Re is a special purpose captive reinsurance company that only provides reinsurance to FGL Insurance under the CARVM Treaty. Corbeau Re, a wholly owned captive reinsurance company, reinsures certain of FGL Insurance’s indexed annuity policies with GMWB and GWP.
In connection with the CARVM reinsurance agreement, FGL Insurance and Raven Re entered into an agreement with Nomura Bank International plc (“NBI”) to establish a reserve financing facility in the form of a letter of credit issued by NBI. The financing facility has $200 million available to draw on as of December 31, 2023.
In connection with the CARVM reinsurance agreement, FGL Insurance and Raven Re entered into an agreement with Nomura Bank International plc (“NBI”) to establish a reserve financing facility in the form of a letter of credit issued by NBI. The financing facility has $175 million available to draw on as of December 31, 2024.
We believe this mix of “some upside but limited downside” fills the need for middle-income Americans who must save for retirement but who want to limit the risk of decline in their savings. For the year ended December 31, 2023, FIAs generated approximately 36% of our total gross sales.
We believe this mix of “some upside but limited downside” fills the need for middle-income Americans who must save for retirement but who want to limit the risk of decline in their savings. For the year ended December 31, 2024, FIAs generated approximately 44% of our total gross sales.
We believe that our future success depends in part on our ability to anticipate industry changes and offer products and services that meet evolving industry standards. In connection with our Title segment service offerings, we are continuing to deploy new information system technologies to our direct and agency operations.
We believe that our future success depends in part on our ability to anticipate industry changes and offer products and services that meet evolving industry standards. In connection with our Title segment service offerings, we are continuing to deploy new 5 Table of Contents information system technologies to our direct and agency operations.
We made compensating adjustments in the commission paid to the agent or the surrender charges on the policy to offset the premium bonus. Approximately 48% of our FIA contracts were issued with a guaranteed minimum withdrawal benefit ("GMWB") rider for the year ended December 31, 2023.
We made compensating adjustments in the commission paid to the agent or the surrender charges on the policy to offset the premium bonus. Approximately 48% of our FIA contracts were issued with a guaranteed minimum withdrawal benefit (“GMWB”) rider for the year ended December 31, 2024.
Management believes these current and emerging developments relating to market conduct standards for the financial services industry may over time materially affect the way in which our agents do business, the role of IMOs, sale of IRA products including IRA-to-IRA and employer plan rollovers, how the company supervises its distribution force, compensation practices, and liability exposure and costs.
Management believes these current and emerging developments relating to market conduct standards for the financial services industry may, over time, materially affect the way in which our agents do business, the role of IMOs, sale of IRA products including IRA-to-IRA and employer plan rollovers, how we supervise our distribution force, compensation practices and liability exposure and costs.
We continue to improve the process of ordering title and 5 Table of Contents escrow services and improve the delivery of our products to our customers. In order to meet new regulatory requirements, we also continue to expand our data collection and reporting abilities.
We continue to improve the process of ordering title and escrow services and improve the delivery of our products to our customers. In order to meet new regulatory requirements, we also continue to expand our data collection and reporting abilities.
We also conduct periodic audits of our agents and strategically manage the number of agents with which we transact business in an effort to reduce future expenses and manage risks. As of December 31, 2023, we transacted business with approxim ately 5,200 ag ents. Fees and Premiums.
We also conduct periodic audits of our agents and strategically manage the number of agents with which we transact business in an effort to reduce future expenses and manage risks. As of December 31, 2024, we transacted business with approxim ately 5,100 ag ents. Fees and Premiums.
Because of the potential for prepayment on mortgage-backed and asset-backed securities, they are not categorized by contractual maturity. As of December 31, 2023, and 2022 , we held $263 million and $187 million, respectively, in investments that are accounted for using the equity method of accounting.
Because of the potential for prepayment on mortgage-backed and asset-backed securities, they are not categorized by contractual maturity. As of December 31, 2024 and 2023 , we held $166 million and $263 million, respectively, in investments that are accounted for using the equity method of accounting.
Net investment income includes fees earned by holding customer funds in escrow (off-balance sheet) during facilitation of tax-deferred property exchanges. For the years ended December 31, 2023, 2022 and 2021, fees earned during facilitation of tax-deferred property exchanges were $202 million, $106 million and $17 million, respectively.
Net investment income includes fees earned by holding customer funds in escrow (off-balance sheet) during facilitation of tax-deferred property exchanges. For the years ended December 31, 2024 , 2023 and 2022, fees earned during facilitation of tax-deferred property exchanges were $180 million, $202 million and $106 million, respectively.
BIS, in accordance with our IMAs, has delegated certain investment services 17 Table of Contents to its affiliates, including Blackstone’s Credit, Real Estate Debt and Asset-Based Finance businesses, in each case, pursuant to separate sub-management agreements executed between BIS and each such affiliate.
BIS, in accordance with our IMAs, has delegated certain investment services to its affiliates, including Blackstone’s Credit, Real Estate Debt and Asset-Based Finance businesses, in each case, pursuant to separate sub-management agreements executed between BIS and each such affiliate.
However, to pay any dividends or distributions (including the payment of any dividends or distributions for which prior consent is not required), FGL NY Insurance must provide advance written notice to the NYDFS.
However, to pay any dividends or distributions (including the payment of any dividends or distributions for which prior consent is not required), FGL NY Insurance must provide advance written notice to the NYDFS. FGL NY Insurance has historically not paid dividends.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAmong other requirements, if finalized in its proposed form, the New Fiduciary Rule provides that any person will be an investment advice fiduciary if they provide 38 Table of Contents investment advice or make an investment recommendation to a retirement investor ( i.e., a plan, plan fiduciary, plan participant or beneficiary, IRA, IRA owner or beneficiary, or IRA fiduciary) for a fee or other compensation, and the person provides the advice or makes the recommendation on a regular basis as part of their business and the recommendation is provided under circumstances indicating that the recommendation is based on the particular needs or individual investor circumstances of the retirement investor.
Biggest changeAmong other requirements, the New Fiduciary Rule provides that any person will be an investment advice fiduciary if such person provides investment advice or makes an investment recommendation to a retirement investor (i.e., a plan, a discretionary plan fiduciary, a plan participant or beneficiary, an IRA, an IRA owner or beneficiary, or an IRA fiduciary) for a fee or other compensation, the person makes professional investment recommendations to investors on a regular basis as part of their business, and the 41 Table of Contents recommendation is provided under circumstances that would indicate to a reasonable investor in like circumstances that the recommendation is based on a review of the particular needs or individual investor circumstances of the retirement investor, reflects the application of professional or expert judgment to the retirement investor’s particular needs or individual circumstances, and may be relied upon by the retirement investor as intended to advance the retirement investor’s best interest.
Concentration in certain states for the distribution of our life insurance and annuity products in our F&G segment may subject us to losses attributable to economic downturns or catastrophes in those states. Our top five states for the distribution of our life insurance and annuity products in our F&G segment are Florida, California, Pennsylvania, Ohio and Texas.
Concentration in certain states for the distribution of our life insurance and annuity products in our F&G segment may subject us to losses attributable to economic downturns or catastrophes in those states. Our top five states for the distribution of our life insurance and annuity products in our F&G segment are Florida, California, Pennsylvania, Texas and Ohio.
We cede material amounts of insurance and transfers related assets and certain liabilities to other insurance companies through reinsurance. Accordingly, we bear credit risk with respect to our reinsurers.
We cede material amounts of insurance and transfers of related assets and certain liabilities to other insurance companies through reinsurance. Accordingly, we bear credit risk with respect to our reinsurers.
Competition could result in, among other things, lower sales or higher lapses of existing products. Our annuity products compete with fixed indexed, fixed rate and variable annuities sold by other insurance companies and also with mutual fund products, traditional bank investments and other retirement funding alternatives offered by asset managers, banks and broker-dealers.
Competition could result in, among other things, lower sales or higher lapses of existing products. Our annuity products compete with indexed annuities and fixed rate annuities sold by other insurance companies and also with mutual fund products, traditional bank investments and other retirement funding alternatives offered by asset managers, banks and broker-dealers.
Changes to statutory reserve or risk-based capital requirements may increase the amount of reserves or capital our insurance companies are required to hold and may impact our ability to pay dividends. In addition, changes in statutory reserve or risk-based capital requirements may adversely impact our financial strength ratings.
Changes to statutory reserve or RBC requirements may increase the amount of reserves or capital our insurance companies are required to hold and may impact our ability to pay dividends. In addition, changes in statutory reserve or risk-based capital requirements may adversely impact our financial strength ratings.
For the years ended December 31, 2023, 2022 and 2021, no goodwill impairment charge was recorded. However, if economic conditions deteriorate, the carrying amount of our goodwill may no longer be recoverable, and we may be required to record an impairment charge, which would have a negative impact on our results of operations and financial condition.
For the years ended December 31, 2024, 2023 and 2022, no goodwill impairment charge was recorded. However, if economic conditions deteriorate, the carrying amount of our goodwill may no longer be recoverable, and we may be required to record an impairment charge, which would have a negative impact on our results of operations and financial condition.
In addition, our reliance on third-party service providers that we do not control does not relieve us of our responsibilities and requirements. Any failure or negligence by such third-party service providers in carrying out their contractual duties may result in us becoming subjected to liability to parties who are harmed and ensuing litigation.
In addition, our reliance on third-party service providers that we do not control does not relieve us of our responsibilities and contractual, legal and other requirements. Any failure or negligence by such third-party service providers in carrying out their contractual duties may result in us becoming subjected to liability to parties who are harmed and ensuing litigation.
Although we think this situation is unlikely, if one or more such takeovers were to occur they could adversely affect our business. We cannot be assured that future legislative or regulatory changes will not adversely affect our business operations. See “Item 1. Business — Regulation” for further discussion of the current regulatory environment.
Although we think this situation is unlikely, if one or more such takeovers were to occur, they could adversely affect our business. We cannot be assured that future legislative or regulatory changes will not adversely affect our business operations. See “Item 1. Business — Regulation” of this Annual Report for further discussion of the current regulatory environment.
The MBA predicts overall mortgage originations in 2024 will increase when compared to 2023 as a result of increases in both purchase and refinance activity. Ou r revenues in future periods will continue to be subject to these and other factors that are beyond our control and, as a result, are likely to fluctuate.
The MBA predicts overall mortgage originations in 2025 will increase when compared to 2024 as a result of increases in both purchase and refinance activity. Ou r revenues in future periods will continue to be subject to these and other factors that are beyond our control and, as a result, are likely to fluctuate.
These factors, which are both qualitative and quantitative, can change from period to period and include items such as current trends in the real estate industry (which management can assess, but for which there is a time lag in the development of the data used by our actuary), any adjustments from the actuarial estimates needed for the effects of unusually large or small claims, improvements in our claims management processes, and other cost saving measures.
These factors, which are both qualitative and quantitative, can change from period to period and include items such as current trends in the real estate industry (which management can assess, but for which there is a time lag in the development of the data used by our actuary), any adjustments from the actuarial estimates needed for the effects of unusually large or small claims, 37 Table of Contents improvements in our claims management processes and other cost saving measures.
F&G, along with FGL NY Insurance, designed and launched a compliance program in January 2022 requiring all agents selling IRA products to submit an acknowledgment with each IRA application indicating the agent has satisfied PTE 84-24 requirements on a precautionary basis in case the agent acted or is found to have acted as a fiduciary.
We, along with FGL Insurance and FGL NY Insurance, designed and launched a compliance program in January 2022 requiring all agents selling IRA products to submit an acknowledgment with each IRA application indicating the agent has satisfied PTE 84-24 requirements on a precautionary basis in case the agent acted or is found to have acted as a fiduciary.
If inherent limitations cause our claim loss risk mitigation procedures to fail, we could incur substantial losses having an adverse effect on our results of operations or financial condition. 35 Table of Contents Our use of independent agents for a significant amount of our title insurance policies could adversely impact the frequency and severity of title claims.
If inherent limitations cause our claim loss risk mitigation procedures to fail, we could incur substantial losses having an adverse effect on our results of operations or financial condition. Our use of independent agents for a significant amount of our title insurance policies could adversely impact the frequency and severity of title claims.
If 34 Table of Contents we are unable to attract and retain a sufficient number of marketers and agents to sell our products, our ability to compete and our revenues would suffer. Failure of our enterprise-wide risk management processes could result in unexpected monetary losses, damage to our reputation, additional costs or impairment of our ability to conduct business effectively.
If we are unable to attract and retain a sufficient number of marketers and agents to sell our products, our ability to compete and our revenues would suffer. Failure of our enterprise-wide risk management processes could result in unexpected monetary losses, damage to our reputation, additional costs or impairment of our ability to conduct business effectively.
The possible macroeconomic effects of such events could also adversely affect our asset portfolio. General Risk Factors Failure of our information security systems or unauthorized access to such systems could result in a loss or disclosure of confidential information, damage to our reputation, monetary losses, additional costs and impairment of our ability to conduct business effectively.
The possible macroeconomic effects of such events could also adversely affect our asset portfolio. 44 Table of Contents General Risk Factors Failure of our information security systems or unauthorized access to such systems could result in a loss or disclosure of confidential information, damage to our reputation, monetary losses, additional costs and impairment of our ability to conduct business effectively.
Adverse regulatory developments in California and Texas, which could include reductions in the maximum rates permitted to be charged, inadequate rate 36 Table of Contents increases or more fundamental changes in the design or implementation of the California and Texas title insurance regulatory framework, could have a material adverse effect on our results of operations and financial condition.
Adverse regulatory developments in California and Texas, which could include reductions in the maximum rates permitted to be charged, inadequate rate increases or more fundamental changes in the design or implementation of the California and Texas title insurance regulatory framework, could have a material adverse effect on our results of operations and financial condition.
Catastrophic events could adversely affect the cost and availability of that reinsurance; • the value of our investment portfolio may decrease if the securities in which we invest are negatively impacted by climate change, pandemics, severe weather conditions and other catastrophic events. Natural catastrophes, pandemics, and malicious and terrorist acts present risks that could adversely affect our results of operations.
Catastrophic events could adversely affect the cost and availability of that reinsurance; • the value of our investment portfolio may decrease if the securities in which we invest are negatively impacted by climate change, pandemics, severe weather conditions and other catastrophic events. Natural catastrophes and pandemics present risks that could adversely affect our results of operations.
In addition, our investments could be adversely affected as a result of deteriorating financial and business conditions affecting the issuers of the securities in our investment portfolio. Our investments are subject to market and credit risks. These risks could be heightened during periods of extreme volatility or disruption in financial and credit markets.
In addition, our investments could be adversely affected as a result of deteriorating financial and business conditions affecting the issuers of the securities in our investment portfolio. 33 Table of Contents Our investments are subject to market and credit risks. These risks could be heightened during periods of extreme volatility or disruption in financial and credit markets.
The SECURE Act 2.0 contains provisions that may impact our F&G insurance subsidiaries, and these changes could affect the desirability of IRAs, necessitate changes to our administrative system to implement the Secure Act 2.0, and affect, to some extent, the length of time that IRA assets remain in our annuity products.
The SECURE Act 2.0 contains provisions that may impact our F&G insurance subsidiaries, and these changes could affect the desirability of IRAs, 42 Table of Contents necessitate changes to our administrative system to implement the Secure Act 2.0, and affect, to some extent, the length of time that IRA assets remain in our annuity products.
Interest rate risk is a significant market risk for us, as our F&G business involves issuing interest rate sensitive obligations backed primarily by investments in fixed income assets.
Interest rate risk is a significant market risk for us, as our F&G segment involves issuing interest rate sensitive obligations backed primarily by investments in fixed income assets.
The risk of non-performance is mitigated with various forms of collateral or collateral arrangements, including secured trusts, funds withheld accounts and irrevocable letters of credit. We are also exposed to credit loss in the event of non-performance by our counterparties on options.
The risk of non-performance is mitigated with various forms of collateral or collateral arrangements, including secured trusts, funds withheld accounts and irrevocable letters of credit. 43 Table of Contents We are also exposed to credit loss in the event of non-performance by our counterparties on options.
We may be required to accept lower spread income (the difference between the returns we earn on our investments and the amounts we credit to contract holders), thus reducing our profitability, as returns on our portfolio of invested assets may not increase as quickly as current interest rates.
We may be required to accept lower spread income (the difference between the returns we earn on our investments and the amounts we credit to contractholders), thus reducing our profitability, as returns on our portfolio of invested assets may not increase as quickly as current interest rates.
If we are unable to generate sufficient cash flow to service our debt or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our obligations and impair our liquidity.
If we are unable to generate sufficient cash flow to service our debt 35 Table of Contents or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our obligations and impair our liquidity.
To the extent that actual experience is less favorable than our underlying assumptions, we could be required to increase our liabilities, which may reduce our profitability and impact our financial strength. 33 Table of Contents We have been issuing GMWB products since 2008. In our reserve calculations, we make assumptions for policyholder behavior as it relates to GMWB utilization.
To the extent that actual experience is less favorable than our underlying assumptions, we could be required to increase our liabilities, which may reduce our profitability and impact our financial strength. We have been issuing GMWB products since 2008. In our reserve calculations, we make assumptions for policyholder behavior as it relates to GMWB utilization.
These provisions include, for example, raising the age for required minimum distributions from IRAs from 72 to 73 (age 74 after 2032); additional exceptions to the 10% penalty tax for distributions before age 59-1/2; reduction of the penalty for failures to take a required distribution amount; directions to the SEC for new registration forms for registered index linked annuities; and directions to the DOL to revisit fiduciary standards relating to choosing an annuity provider in pension risk transfer transactions.
These provisions include, for example, raising the age for required minimum distributions from IRAs from 72 to 73 (age 74 after 2032); additional exceptions to the 10% penalty tax for distributions before age 59-1/2; reduction of the penalty for failures to take a required distribution amount; directions to the SEC for new registration forms for RILAs; and directions to the DOL to revisit fiduciary standards relating to choosing an annuity provider in pension risk transfer transactions.
Decreases in interest rates generally would have the impact of increasing the value of these liabilities, which will result in a reduction in our net income. Liabilities for future policyholder benefits are valued using locked-in discount rates, and any changes in interest rates since the inception of those contracts are reflected in OCI.
Decreases in interest rates generally would have the impact of increasing the value of these liabilities, which will result in a reduction in our net income. Liabilities for future policyholder benefits are valued using locked-in discount rates, and any changes in interest rates since the inception of those contracts are reflected in Other comprehensive earnings (loss) ("OCI").
New artificial intelligence algorithms and predictive models may be used by insurance companies in selling 41 Table of Contents insurance products to consumers. However, the use of new artificial intelligence models may make insurance companies more susceptible to potential bias, discrimination, and data breaches.
New artificial intelligence algorithms and predictive models may be used by insurance companies in selling insurance products to consumers. However, the use of new artificial intelligence models may make insurance companies more susceptible to potential bias, discrimination and data breaches.
Management believes these current and emerging developments relating to market conduct standards for the financial services industry may over time materially affect the way in which our agents do business, the role of IMOs, sale of IRA products including IRA-to-IRA and employer plan rollovers, how the company supervises its distribution force, compensation practices, and liability exposure and costs.
Management believes these current and emerging developments relating to market conduct standards for the financial services industry may, over time, materially affect the way in which our agents do business, the role of IMOs, sale of IRA products including IRA-to-IRA and employer plan rollovers, how we supervise our distribution force, compensation practices and liability exposure and costs.
During 2024 , our title insurers may pay dividends or make distributions to us of approxim ately $471 million; however, insurance regulators have the authority to prohibit the payment of ordinary dividends or other payments by our title insurers to us if they determine that such payment could be adverse to our policyholders.
During 2025 , our title insurers may pay dividends or make distributions to us of approxim ately $498 million; however, insurance regulators have the authority to prohibit the payment of ordinary dividends or other payments by our title insurers to us if they determine that such payment could be adverse to our policyholders.
Business for further discussion of the impact of regulations on our business. State Regulation Our business is subject to government regulation in each of the states in which we conduct business and is concerned primarily with the protection of policyholders and other customers rather than shareholders.
Business — Regulation” of this Annual Report for further discussion of the impact of regulations on our business. State Regulation Our business is subject to government regulation in each of the states in which we conduct business and is concerned primarily with the protection of policyholders and other customers rather than shareholders.
In addition, because our activities are relatively concentrated in a small number of lines of business, any change in law or regulation affecting one of those lines of business could have a disproportionate impact on us as compared to other more diversified insurance companies. See section titled “ Regulation ” in Item 1.
In addition, because our activities are relatively concentrated in a small number of lines of business, any change in law or regulation affecting one of those lines of business could have a disproportionate impact on us as compared to other more diversified insurance companies. See “Item 1.
Risk Factors Relating to the Geographic Concentrations of our Business Segments Because we are dependent upon California and Texas for approximately 13.0% and 14.3% of our title insurance premiums, respectively, our Title segment may be adversely affected by regulatory conditions in California and/or Texas. Californi a and Texas are the two largest sources of revenue for our Title segment.
Risk Factors Relating to the Geographic Concentrations of our Business Segments Because we are dependent upon California and Texas for approximately 12.9% and 13.8% of our title insurance premiums, respectively, our Title segment may be adversely affected by regulatory conditions in California and/or Texas. Californi a and Texas are the two largest sources of revenue for our Title segment.
Any such claims and any resulting litigation could result in significant expense and liability for damages or we could be enjoined from providing certain products or services to our customers or utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses, or alternatively, we could be required to enter into costly licensing 42 Table of Contents arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition.
Any such claims and any resulting litigation could result in significant expense and liability for damages or we could be enjoined from providing certain products or services to our customers or utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses, or alternatively, we could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition. 46 Table of Contents We are the subject of various legal proceedings that could have a material adverse effect on our results of operations.
Any adverse economic developments or catastrophes in these states could have an adverse impact on our F&G segment. Risk Factors Relating to Government Regulation of the Insurance Industry Our subsidiaries must comply with extensive regulations.
Any adverse economic developments or catastrophes in these states could have an adverse impact on our F&G segment. Risk Factors Relating to Government Regulation of the Insurance Industry Our subsidiaries must comply with federal and state statutes and regulations.
The F&G Distribution is subject to inherent risks and uncertainties, including, but not limited to: diversion of management’s attention and the potential impact of the F&G Distribution on relationships, including with employees, suppliers, customers and competitors; our ability to successfully realize the anticipated benefits of the F&G Distribution; the terms and conditions of agreements and arrangements between FNF and F&G following the distribution, such as the Corporate Services Agreement, dated as of November 30, 2022, between FNF and F&G (the “Corporate Services Agreement”), which provides for, among other things, the provision of certain services by FNF to F&G following the F&G Distribution; and the nature and amount of indebtedness incurred by F&G.
The F&G Distribution is subject to inherent risks and uncertainties, including, but not limited to: diversion of management’s attention; our ability to successfully realize the anticipated benefits of the F&G Distribution; the terms and conditions of agreements and arrangements between FNF and F&G following the distribution, such as the Corporate Services Agreement, dated as of November 30, 2022, between FNF and F&G (the “Corporate Services Agreement”), which provides for, among other things, the provision of certain services by FNF to F&G following the F&G Distribution; and the nature and amount of indebtedness incurred by F&G.
Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations under our indebtedness. As of December 31, 2023, our outstanding debt wa s $3,887 million.
Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations under our indebtedness. As of December 31, 2024, our outstanding debt wa s $4,321 million.
These assets are maintained in segregated bank accounts and have not been included in the accompanying Consolidated Balance Sheets. We have a contingent liability relating to proper disposition of these balances for our customers, which amounted to $13.5 billion at December 31, 2023.
These assets are maintained in segregated bank accounts and have not been included in the accompanying Consolidated Balance Sheets. We have a contingent liability relating to proper disposition of these balances for our customers, which amounted to $14.4 billion at December 31, 2024.
If there is a delay in our third-party providers’ introduction of our new products or if our third-party providers are unable to service our customers appropriately, we may experience a loss of business that could have a material adverse effect on our results of operations.
If there is a delay in our third-party providers’ introduction of our new products or if our third-party providers are 36 Table of Contents unable to service our customers appropriately, we may experience a loss of business that could have a material adverse effect on our business, financial condition and results of operations.
Premium rates are likely to prove insufficient when ultimate claims and expenses exceed historically projected levels. Premium rate inadequacy may not become evident quickly and may take time to correct, and could adversely affect our business operating results and financial conditions. 37 Table of Contents Our F&G segment is highly regulated and subject to numerous legal restrictions and regulations.
Premium rates are likely to prove insufficient when ultimate claims and expenses exceed historically projected levels. Premium rate inadequacy may not become evident quickly and may take time to correct, and could adversely affect our results of operations and financial condition. Our F&G segment is highly regulated and subject to numerous legal restrictions and regulations.
In 2023, California-based premiums accounted for approximately 27.4% of premiums earned by our direct operations and 0.6% of our agency premium revenues, while Texas-based premiums accounted for 19.5% of premiums earned by our direct operations and 9.8% of o ur agency premium revenues.
In 2024, California-based premiums accounted for approximately 27.8% of premiums earned by our direct operations and 0.5% of our agency premium revenues, while Texas-based premiums accounted for 19.2% of premiums earned by our direct operations and 9.2% of o ur agency premium revenues.
Risk Factors Relating to Our Business We have recorded goodwill as a result of prior acquisitions, and an economic downturn could cause these balances to become impaired, requiring write-downs that would reduce our operating income. Goodwill aggregated approximate ly $4,830 million, or 6.0% of our total assets, as of December 31, 2023.
Risk Factors Relating to Our Business We have recorded goodwill as a result of prior acquisitions, and an economic downturn could cause these balances to become impaired, requiring write-downs that would reduce our operating income. Goodwill aggregated approximate ly $5,271 million, or 5.5% of our total assets, as of December 31, 2024.
“Fiduciary” Rule Proposals The DOL investment advice rule leaves in place PTE 84-24, which is a longstanding class exemption providing prohibited transaction relief for insurance agents selling annuity products provided certain disclosures are made to the plan fiduciary, which is the policyholder in the case of an IRA, and certain other conditions are met.
The DOL left in place PTE 84-24, which is a longstanding class exemption providing prohibited transaction relief for insurance agents selling annuity products, provided that certain disclosures are made to the plan fiduciary, which is the policyholder in the case of an IRA, and certain other conditions are met.
Business for functions we outsource to third-party service providers. If we are unable to attract and retain national marketing organizations and independent agents, sales of our products may be reduced. Within our F&G segment, we must attract and retain our network of IMOs and independent agents to sell our products. Insurance companies compete vigorously for productive agents.
If we are unable to attract and retain national marketing organizations and independent agents, sales of our products may be reduced. Within our F&G segment, we must attract and retain our network of IMOs and independent agents to sell our products. Insurance companies compete vigorously for productive agents.
In the aggregate, California and Texas accounted for approximat ely 13.0% and 14.3%, respe ctively, of our total title insurance premiums for 2023. A significant part of our revenues and profitability are therefore subject to our operations in California and Texas and to the prevailing regulatory conditions in these states.
In the aggregate, California and Texas accounted for approximat ely 12.9% and 13.8%, respe ctively, of our total title insurance premiums for 2024. A significant part of our revenues and profitability are therefore subject to our operations in California and Texas and to the prevailing regulatory conditions in these states.
Any litigation relating to such matters could be costly, expensive and time-consuming, and the outcome of any such litigation may be uncertain. Moreover, any adverse publicity arising from such litigation, even if the litigation is not successful, could adversely affect our reputation and sales of our products. See section titled "Outsourcing" in Item 1.
Any litigation relating to such matters could be costly and time-consuming, and the outcome of any such litigation may be uncertain. Moreover, any adverse publicity arising from such litigation, even if the litigation is not successful, could adversely affect our reputation and sales of our products.
The failure, insolvency, inability or unwillingness of any reinsurer to pay under the terms of reinsurance agreements with us could materially adversely affect our business, financial condition, liquidity and results of operations. We regularly monitor the credit rating and performance of our reinsurance parties. ASPIDA Life Re Ltd. (“Aspida Re”), Wilton Reassurance Company (“Wilton Re”), Somerset Reinsurance Ltd.
The failure, insolvency, inability or unwillingness of any reinsurer to pay under the terms of reinsurance agreements with us could materially adversely affect our business, financial condition, liquidity and results of operations. We regularly monitor the credit rating and performance of our reinsurance parties. Aspida Re, Wilton Re, Somerset and Everlake represent our largest third-party reinsurance counterparty exposure.
For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between FNF and F&G regarding the terms of the agreements governing F&G’s relationship with FNF, including the Corporate Services Agreement. FNF or F&G may fail to perform under various transaction agreements that were executed as part of the F&G Distribution.
For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between FNF and F&G regarding the terms of the agreements governing F&G’s relationship with FNF, including the Corporate Services Agreement.
These concerns could lead to development of new, or modifications to, laws and regulations pertaining to the use of Artificial Intelligence by insurance companies, or the broader financial services sector, which may prove to be onerous for companies to implement in a timely manner.
These concerns could lead to development of new, or modifications to, laws and regulations pertaining to the use of Artificial Intelligence by insurance companies or the broader financial services sector, which may prove to be onerous for companies to implement in a timely manner. 45 Table of Contents The use of artificial intelligence and machine learning technologies, including generative artificial intelligence, has increased rapidly with increasing complexity and changes in the nature of the technology.
Claims arising from such events could have an adverse effect on our business, operations and financial condition, 40 Table of Contents either directly or as a result of their effect on our reinsurers or other counterparties.
Claims arising from such events could have an adverse effect on our business, operations and financial condition, either directly or as a result of their effect on our reinsurers or other counterparties. Such events could also have an adverse effect on the rate and amount of lapses and surrenders of existing policies, as well as sales of new policies.
Lower interest rates may also result in decreased sales of certain insurance products, negatively impacting our profitability from new business. During periods of increasing interest rates, we may offer higher crediting rates on interest-sensitive products, such as universal life insurance and fixed rate annuities, and we may increase crediting rates on in-force products to keep these products competitive.
During periods of increasing interest rates, we may offer higher crediting rates on interest-sensitive products, such as universal life insurance and fixed rate annuities, and we may increase crediting rates on in-force products to keep these products 34 Table of Contents competitive.
The Mortgage Bankers Association's ("MBA") Mortgage Finance Forecast as of February 20, 2024, calculates an approximate $1.6 trillion mortgage origination market for 2023, which would be a decrease from 2022 resulting from decreases in both purchase and refinance activity.
The Mortgage Bankers Association's ("MBA") Mortgage Finance Forecast as of February 19, 2025, reported an approximate $1.8 trillion mortgage origination market for 2024, which would be a modest increase from 2023 resulting from an increase in refinance activity.
Finally, market volatility could cause investment income fluctuations in regard to our alternative investments that may differ significantly from period to period. 31 Table of Contents The value of our mortgage-backed securities and our commercial and residential mortgage loan investments depends in part on the financial condition of the borrowers and tenants for the properties underlying those investments, as well as general and specific economic trends affecting the overall default rate.
The value of our mortgage-backed securities and our commercial and residential mortgage loan investments depends in part on the financial condition of the borrowers and tenants for the properties underlying those investments, as well as general and specific economic trends affecting the overall default rate.
We are the subject of various legal proceedings that could have a material adverse effect on our results of operations. We are involved from time to time in various legal proceedings, including in some cases class-action lawsuits and regulatory inquiries, investigations or other proceedings.
We are involved from time to time in various legal proceedings, including in some cases class-action lawsuits and regulatory inquiries, investigations or other proceedings.
Regulators and other authorities have the power to bring administrative or judicial proceedings against us, which could result in, among other things, suspension or revocation of our licenses, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action, which could materially harm our results of operations and financial condition.
Regulators and other authorities have the power to bring administrative or judicial proceedings against us, which could result in, among other things, suspension or revocation of our licenses, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action, which could materially harm our results of operations and financial condition. 40 Table of Contents We cannot predict what form any future changes in these or other areas of regulation affecting the insurance industry might take or what effect, if any, such proposals might have on us if enacted into law.
Such events could also have an adverse effect on the rate and amount of lapses and surrenders of existing policies, as well as sales of new policies. While we believe we have taken steps to identify and mitigate these types of risks, such risks cannot be reliably predicted, nor fully protected against even if anticipated.
While we believe we have taken steps to identify and mitigate these types of risks, such risks cannot be reliably predicted, nor fully protected against even if anticipated.
Our investment policy in our title business is designed to maximize total return through investment income and capital appreciation consistent with moderate risk of principal, while 30 Table of Contents providing adequate liquidity and complying with internal and regulatory guidelines.
Our investment policy in our title business is designed to maximize total return through investment income and capital appreciation consistent with moderate risk of principal, while providing adequate liquidity and complying with internal and regulatory guidelines. To achieve this objective, our marketable debt investments are primarily investment grade, liquid, fixed-income securities and money market instruments denominated in U.S. dollars.
Economic and credit market conditions may adversely affect the ability of some issuers of investment securities to repay their obligations and affect the values of investment securities.
We make investments in certain equity securities and preferred stock in order to take advantage of perceived value and for strategic purposes. Economic and credit market conditions may adversely affect the ability of some issuers of investment securities to repay their obligations and affect the values of investment securities.
Additionally, market price valuations may not accurately reflect the underlying expected cash flows of securities within our investment portfolio.
Additionally, market price valuations may not accurately reflect the underlying expected cash flows of securities within our investment portfolio. Finally, market volatility could cause investment income fluctuations in regard to our alternative investments that may differ significantly from period to period.
Unlike the current ERISA standard, the New Fiduciary Rule would subject non-discretionary investment advice to retirement plans and accounts to the prudent-person “best interest” standard that has historically been reserved for investment advisors with discretionary authority or control over ERISA plan assets.
Unlike the current ERISA standard, the New Fiduciary Rule subjects non-discretionary investment advice to retirement plans and accounts under the care and loyalty standards that also apply to investment advisors with discretionary authority or control over such plans and accounts.
If the New Fiduciary Rule is adopted in its present form, certain of the Company’s agents would likely be considered fiduciaries for purposes of ERISA and the Internal Revenue Code—subjecting the Company, and the insurance industry on the whole, to greater regulatory risk.
The New Fiduciary Rule likely means that certain of the Company’s agents will be considered fiduciaries for purposes of ERISA and the Code, subjecting the Company, and the insurance industry on the whole, to greater regulatory risk. The DOL’s New Fiduciary Rule, which was scheduled to become effective on September 23, 2024, has been challenged.
Despite our efforts to reduce the impact of rising interest rates, we may be required to sell assets to raise the cash necessary to respond to an increase in surrenders, withdrawals and loans, thereby realizing capital losses on the assets sold. 32 Table of Contents Liabilities that are held on our balance sheet at fair value, including embedded derivatives on our FIA and IUL business and MRBs on our FIA and fixed rate annuity business, are sensitive to fluctuations in interest rates.
There can be no assurance that actual withdrawals, contract benefits and maturities will match our estimates. Despite our efforts to reduce the impact of rising interest rates, we may be required to sell assets to raise the cash necessary to respond to an increase in surrenders, withdrawals and loans, thereby realizing capital losses on the assets sold.
These regulations may increase our costs or impede or impose burdensome conditions on actions that we might seek to take to increase the revenues of those subsidiaries. Our insurance b usinesses are subject to extensive regulation by state insurance authorities in each state in which they operate.
These statutes and regulations may increase our costs, impede our provision of certain products or services, or impose burdensome conditions on actions that we might seek to take to increase the revenues of those subsidiaries, resulting in decreased demand for the Company's products and services or otherwise adversely affecting the Company.
Meanwhile the DOL has publicly announced its intention to consider future rulemaking that would revoke or modify PTE 84-24. On November 2, 2023, following previous attempts to expand fiduciary regulation for advisers, the DOL the New Fiduciary Rule to significantly broaden the definition of “fiduciary” under ERISA.
Meanwhile, the DOL has publicly announced its intention to consider future rulemaking that may revoke or modify PTE 84-24.
From time to time, we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities, which may require us to pay fines or claims or take other actions. 39 Table of Contents Risk Factors Relating to the Credit Risk of our Counterparties We are subject to the credit risk of our counterparties, including companies with whom we have reinsurance agreements or we have purchased call options.
From time to time, we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities, which may require us to pay fines or claims or take other actions. Changing rules, public disclosure regulations and stakeholder expectations on environmental, social and corporate governance (“ESG”) related matters create a variety of risks for our business.
Our ability to compete is also dependent upon, among other things, our ability to attract and retain distribution channels to market our products, the competition for which is vigorous. The loss of key personnel could negatively affect our financial results and impair our operating abilities.
Our ability to compete is also dependent upon, among other things, our ability to attract and retain distribution channels to market our products, the competition for which is vigorous. We must anticipate and respond effectively to changes in customer preferences, new industry standards, evolving distribution models, disruptive technology developments and alternate business models.
(“Somerset”) and Everlake Life Insurance Company (“Everlake”) represent our largest third-party reinsurance counterparty exposure. As of December 31, 2023, the net amount recoverable from Aspida Re, Wilton Re, Somerset and Everlake were $6,128 million, $1,092 million, $716 million, and $509 million, respectively.
As of December 31, 2024, the net amount recoverable from Aspida Re, Wilton Re, Somerset and Everlake were $7,844 million, $2,822 million, $1,168 million, and $1,066 million, respectively.
Risk Factors Related to the F&G Distribution The F&G Distribution could adversely affect our results of operations or financial condition. On December 1, 2022, we completed the F&G Distribution.
On December 1, 2022, we completed the F&G Distribution.
Removed
To achieve this objective, our marketable debt investments are primarily investment grade, liquid, fixed-income securities and money market instruments denominated in U.S. dollars. We make investments in certain equity securities and preferred stock in order to take advantage of perceived value and for strategic purposes.
Added
Lower interest rates may also result in decreased sales of certain insurance products, negatively impacting our profitability from new business.
Removed
There can be no assurance that actual withdrawals, contract benefits, and maturities will match our estimates.
Added
Liabilities that are held on our balance sheet at fair value, including embedded derivatives on our indexed annuities and IUL business and MRBs on our indexed annuity and fixed rate annuity business, are sensitive to fluctuations in interest rates.
Removed
In connection with the F&G Distribution, FNF and F&G entered into a separation and distribution agreement, the Corporate Services Agreement, and other transaction agreements. The transaction agreements determine the allocation of assets, rights and liabilities between the companies and include indemnifications related to liabilities and obligations.
Added
We have a formal vendor management program that follows a continuous lifecycle for third-party providers.
Removed
The Corporate Services Agreement provides for the performance of certain services by us for the benefit of F&G for a limited period of time after the F&G Distribution. The reverse services agreement provides for the performance of certain services by F&G for the benefit of FNF for a limited period of time after the F&G Distribution.
Added
The lifecycle includes an initial risk assessment for new relationships to determine risk tier; vendor due diligence depending on the risk tier; contract management to effectively address all terms, conditions, duties and obligations, risks/issues identified; ongoing monitoring and management to ensure compliance with contract provisions and service level agreements; and termination/offboarding to ensure appropriate communication and any other requirements such as destruction of data.
Removed
We will rely on F&G to satisfy its obligations under the transaction agreements. If F&G is unable to satisfy its obligations under the transaction agreements, including its indemnification obligations, we could incur operational difficulties or losses.
Added
If our key providers, distributors or other parties terminate important business arrangements with us, reduce their business with us or renew contracts on terms less favorable to us, which occurs from time to time, we may fail to meet our business objectives and targets, and our cash flows, results of operations and financial condition could be materially adversely affected.
Removed
We cannot predict what form any future changes in these or other areas of regulation affecting the insurance industry might take or what effect, if any, such proposals might have on us if enacted into law.
Added
Changes in the Company’s dealings with large mortgage lenders, servicers or government-sponsored enterprises could adversely affect our title insurance and mortgage servicing subsidiaries. Large mortgage lenders, servicers and government-sponsored enterprises have significant influence over the products and services provided by our title insurance and mortgage servicing subsidiaries.
Removed
The use of artificial intelligence and machine learning technologies, including generative artificial intelligence, has increased rapidly with increasing complexity and changes in the nature of the technology.
Added
Changes in our dealings with any of these lenders, servicers or the government-sponsored enterprises, the loss of all or a portion of the business derived from these parties or revisions to the government-sponsored enterprises’ selling or servicing guides related to title insurance or mortgage servicing, could have a material adverse effect on our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

12 edited+1 added−1 removed7 unchanged
Biggest changeGovernance Management's Role in Assessing and Managing Cybersecurity Risk Our Corporate Information Security Group is led by our Chief Information Security Officer (CISO) who is responsible for our information security strategy. This strategy includes policy management, security engineering, identity and access management, vulnerability management and cyber threat detection and response through our Security Operations Center.
Biggest changeThis group determines appropriate coverage levels and deductibles for each policy based on tolerance and weighs the coverage against the premium for the policy. Governance Management's Role in Assessing and Managing Cybersecurity Risk Our Corporate Information Security Group is led by our Chief Information Security Officer ("CISO") who is responsible for our information security strategy.
Risk Management and Strategy We assess, identify and manage cybersecurity risks through various processes within our Enterprise Risk Management Program and Information Security Program. We focus on all areas of cybersecurity, including threat and vulnerability management, security monitoring, identity and access management, phishing awareness, risk oversight, third-party risk management, disaster recovery and continuity management.
Risk Management and Strategy We assess, identify and manage cybersecurity risks through various processes within our Enterprise Risk Management Program and Information Security Program. We focus on all areas of cybersecurity, including threat and vulnerability management, security monitoring, identity and access management, phishing awareness, risk oversight, third-party risk 47 Table of Contents management, disaster recovery and continuity management.
The last confirmed date of unauthorized third-party activity in our network occurred on November 20, 2023. We have identified and analyzed the nature and scope of the affected systems and data.
The last confirmed date of unauthorized third-party activity in our network occurred on November 20, 2023. 48 Table of Contents We have identified and analyzed the nature and scope of the affected systems and data.
We have been named as a defendant in several lawsuits related to this incident. The Company will vigorously defend itself against any litigation filed related to this incident. At this time, we do not believe that the incident will have a material impact on the Company. 44 Table of Contents
We have been named as a defendant in several lawsuits related to this incident. The Company will vigorously defend itself against any litigation filed related to this incident. This incident did not have a material impact on the Company.
Our employees are one of our strongest assets in protecting our customers' information and mitigating cybersecurity risk. We maintain comprehensive and tailored training programs that focus on applicable privacy and cybersecurity requirements.
Our employees are one of our strongest assets in protecting our customers' information and mitigating cybersecurity risk. We maintain comprehensive and tailored training programs that focus on applicable privacy and cybersecurity requirements. Additionally, we make strategic investments in cybersecurity to protect our customers and information systems, including both capital expenditures and operating expenses for hardware, software, personnel and consulting services.
We believe cybersecurity is a shared responsibility throughout the organization and thus we also manage cybersecurity risks, through a cross-functional committee of members of senior management known as the Enterprise Risk Steering Committee, which includes the CISO. The diversity of this group allows for identification of key enterprise risks from strategic, operational, financial, legal, information technology, and compliance perspectives.
Our CISO, as well as others in our information security group, hold certifications such the Certified Information System Security Professional certification. We believe cybersecurity is a shared responsibility throughout the organization and thus we also manage cybersecurity risks, through a cross-functional committee of members of senior management known as the Enterprise Risk Steering Committee, which includes the CISO.
Our CISO reports to our Chief Security Officer who also has extensive experience in the information security space. Board Oversight of Cybersecurity Our board has a strong focus on cybersecurity. Our approaches to cybersecurity and privacy risk are overseen by the audit committee.
The CISO is also the primary point of contact for reporting information security incidents and for coordinating information security activities including incident response and digital forensics. Our CISO reports to our Chief Security Officer who also has extensive experience in the information security space. Board Oversight of Cybersecurity Our board has a strong focus on cybersecurity.
In some circumstances we use third-party service providers to provide expertise and to monitor utilization of specific cyber tools, and in certain cases, to supplement staffing services. Through our vendor risk management process, these vendors undergo various assessments such as financial, reputational, contractual and informational security.
Our processes to assess, identify and manage cybersecurity risks, including cybersecurity risks related to the use of third-party service providers, are fully integrated into our Enterprise Risk Management Program. In some circumstances we use third-party service providers to provide expertise and to monitor utilization of specific cyber tools, and in certain cases, to supplement staffing services.
The deductible limits on these policies are determined by a corporate insurance risk management group and executive management at least on an annual basis. This group determines appropriate coverage levels and deductibles for each policy based on tolerance and weighs the coverage against the premium for the policy.
To further reduce the residual risk associated with cybersecurity, we maintain Miscellaneous Professional Liability Insurance, which provides coverage for cybersecurity incidents. The deductible limits on these policies are determined by a corporate insurance risk management group and executive management at least on an annual basis.
These individuals receive reporting on our cybersecurity programs and also participate in table-top exercises relating to potential security incidents. The CISO is also the primary point of contact for reporting information security incidents and for coordinating information security activities including incident response and digital forensics.
The diversity of this group allows for identification of key enterprise risks from strategic, operational, financial, legal, information technology and compliance perspectives. These individuals receive reporting on our cybersecurity programs and also participate in table-top exercises relating to potential security incidents.
Our CISO has extensive information technology and program management experience as do many of our employees in our information security group. Our CISO, as well as others in our information security group, hold certifications such the Certified Information System Security Professional certification.
This strategy includes policy management, security engineering, identity and access management, vulnerability management and cyber threat detection and response through our Security Operations Center. Our CISO has extensive information technology and program management experience as do many of our employees in our information security group.
These assessments are performed to ascertain that these vendors meet our policy requirements relative to the services they perform on our behalf. To further reduce the residual risk associated with cybersecurity, we maintain Miscellaneous Professional Liability Insurance, which provides coverage for cybersecurity incidents.
Through our vendor risk management process, these vendors undergo various assessments such as financial, reputational, contractual and informational security. These assessments are performed to ascertain that these vendors meet our policy requirements relative to the services they perform on our behalf.
Removed
Additionally, we make strategic investments in cybersecurity to protect our customers and information systems, including both capital expenditures and operating expenses for hardware, software, personnel and consulting services. 43 Table of Contents Our processes to assess, identify and manage cybersecurity risks, including cybersecurity risks related to the use of third-party service providers, are fully integrated into our Enterprise Risk Management Program.
Added
Our approaches to cybersecurity and privacy risk are overseen by the audit committee.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−1 removed2 unchanged
Biggest changeThe stock price performance included in this graph is not necessarily indicative of future stock price performance. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Fidelity National Financial, Inc. 100.00 148.93 134.00 185.19 145.31 206.52 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 Peer Group 100.00 129.17 123.30 195.35 130.06 169.56 46 Table of Contents Dividends On February 14, 2024, our Board of Directors formally declared a $0.48 per FNF share cash dividend that is payable on March 29, 2024, to FNF shareholders of record as of March 15, 2024.
Biggest changeThe stock price performance included in this graph is not necessarily indicative of future stock price performance. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Fidelity National Financial, Inc. 100.00 89.97 124.34 97.57 138.67 158.17 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 Peer Group 100.00 95.45 151.24 100.69 131.27 136.36 50 Table of Contents Dividends On February 20, 2025, our Board of Directors formally declared a $0.50 per FNF share cash dividend that is payable on March 31, 2025, to FNF shareholders of record as of March 17, 2025.
This peer group consists of the following companies: First American Financial Corporation and Stewart Information Services Corp. The peer group comparison has been weighted based on their stock market capitalization. The graph assumes an initial investment of $100.00 on December 31, 2018, with dividends reinvested over the periods indicated.
This peer group consists of the following companies: First American Financial Corporation and Stewart Information Services Corp. The peer group comparison has been weighted based on their stock market capitalization. The graph assumes an initial investment of $100.00 on December 31, 2019, with dividends reinvested over the periods indicated.
Information concerning securities authorized for issuance under our equity compensation plans will be included in Item 12 of Part III of this Annual Report. 45 Table of Contents Performance Graph Set forth below is a graph comparing cumulative total shareholder return on our FNF common stock against the cumulative total return on the S&P 500 Index and against the cumulative total return of a peer group index consisting of certain companies in the primary industry in which we compete (SIC code 6361 — Title Insurance) for the period ending December 31, 2023.
Information concerning securities authorized for issuance under our equity compensation plans will be included in Item 12 of Part III of this Annual Report. 49 Table of Contents Performance Graph Set forth below is a graph comparing cumulative total shareholder return on our FNF common stock against the cumulative total return on the S&P 500 Index and against the cumulative total return of a peer group index consisting of certain companies in the primary industry in which we compete (SIC code 6361 — Title Insurance) for the period ending December 31, 2024.
During the years ended December 31, 2023, 2022, and 2021, we declared dividends on our common stock of $1.83, $1.77, and $1.56, respectively. Our current dividend policy anticipates the payment of quarterly dividends in the future.
During the years ended December 31, 2024, 2023, and 2022, we declared dividends on our common stock of $1.94, $1.83, and $1.77, respectively. Our current dividend policy anticipates the payment of quarterly dividends in the future.
Purchases of Equity Securities by the Issuer On August 3, 2021, our Board of Directors approved a new three-year stock repurchase program effective August 3, 2021 (the "2021 Repurchase Program") under which we may purchase up to 25 million shares of our FNF common stock through July 31, 2024.
Purchases of Equity Securities by the Issuer On August 3, 2021, our Board of Directors approved a three-year repurchase program (the "2021 Repurchase Program") under which we were authorized to purchase up to 25 million shares of our FNF common stock through July 31, 2024.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the New York Stock Exchange under the trading symbol "FNF". On January 31, 2024, the last reported sale price of our common stock on the New York Stock Exchange was $50.03.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the New York Stock Exchange under the trading symbol "FNF". On January 31, 2025, the last reported sale price of our common stock on the New York Stock Exchange was $58.17.
We had approximately 5,828 shareholders of record on January 31, 2024.
We had approximately 5,461 shareholders of record on January 31, 2025.
Since the original commencement of the 2021 Repurchase Program, we repurchased a total of 16,449,565 FNF common shares for an aggregate amount of $701 million, or an average of $42.60 per share. Item 6. Reserved. 47 Table of Contents
Since the commencement of the 2021 Repurchase Program, we repurchased a total of 16,449,565 FNF common shares for approximately $701 million, at an average price of $42.60 per share.
Removed
We may make repurchases from time to time in the open market, in block purchases or in privately negotiated transactions, depending on market conditions and other factors. During the quarter ended December 31, 2023, we did not repurchase any FNF common shares.
Added
On July 31, 2024, our Board of Directors approved a new three-year stock repurchase program effective July 31, 2024 (the "2024 Repurchase Program") under which we are authorized to purchase up to 25 million shares of our FNF common stock through July 31, 2027.
Added
We did not repurchase any FNF common stock under the 2021 Repurchase Program or the 2024 Repurchase Program during the year ended December 31, 2024. Subsequent to December 31, 2024 and through market close on February 21, 2025, we did not repurchase any FNF common stock under the 2024 Repurchase Program. Item 6. Reserved. 51 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

211 edited+26 added−27 removed124 unchanged
Biggest changeGains (losses) on option expiration reflect the movement during each period on options settled during the respective period. • The change in unrealized gains (losses) due to fair value of call options is primarily driven by the underlying performance of the S&P 500 Index during each respective period relative to the S&P 500 Index on the policyholder buy dates. • The net change in fair value of the call options and futures contracts was primarily driven by movements in the S&P 500 Index relative to the policyholder buy dates. • The net change in fair value of the interest rate swaps was primarily driven by fluctuations in the interest rate index underlying the swap contracts. 67 Table of Contents The average index credits to policyholders are as follows: Year ended December 31, 2023 December 31, 2022 December 31, 2021 Average Crediting Rate 1 % 1 % 5 % S&P 500 Index: Point-to-point strategy 2 % 1 % 4 % Monthly average strategy 1 % 2 % 3 % Monthly point-to-point strategy — % — % 7 % 3 year high water mark 8 % 13 % 16 % • Actual amounts credited to contractholder fund balances may differ from the index appreciation due to contractual features in the FIA contracts and certain IUL contracts (caps, spreads and participation rates), which allow us to manage the cost of the options purchased to fund the annual index credits. • The credits for the periods presented were based on comparing the S&P 500 Index on each issue date in the period to the same issue date in the respective prior year periods.
Biggest changeThe average index credits to policyholders are as follows: Year ended December 31, 2024 2023 2022 Average Crediting Rate 4 % 1 % 1 % S&P 500 Index: Point-to-point strategy 4 % 2 % 1 % Monthly average strategy 3 % 1 % 2 % Monthly point-to-point strategy 5 % — % — % 3 year high water mark 3 % 8 % 13 % • Actual amounts credited to contractholder fund balances may differ from the index appreciation due to contractual features in the indexed annuity contracts and certain IUL contracts (caps, spreads and participation rates), which allow us to manage the cost of the options purchased to fund the annual index credits. • The credits for the periods presented were based on comparing the S&P 500 Index on each issue date in the period to the same issue date in the respective prior year periods. 71 Table of Contents Benefits and expenses Benefits and other changes in policy reserves Below is a summary of the major components included in Benefits and other changes in policy reserves: Year ended December 31, 2024 2023 2022 (In millions) PRT agreements $ 2,310 $ 2,016 $ 1,399 Indexed annuities/IUL market related liability movements (221) 588 (1,010) Index credits, interest credited and bonuses 1,696 831 593 Other changes in policy reserves 6 118 144 Total benefits and other changes in policy reserves $ 3,791 $ 3,553 $ 1,126 • PRT agreements increased for the years ended December 31, 2024, and 2023, reflecting the timing of PRT transactions.
See Note D Fair Value of Financial Instruments and Note F Derivative Financial Instruments to our Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K. F&G cedes certain business on a coinsurance funds withheld basis.
See Note D Fair Value of Financial Instruments and Note F Derivative Financial Instruments to our Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K. F&G cedes certain business on a coinsurance funds withheld basis.
For traditional life and immediate annuities, policy benefit claims are charged to expense in the period that the claims are incurred, net of reinsurance recoveries. Title insurance premiums, escrow and title-related fees are generally recognized as income at the time the underlying transaction closes or other service is provided.
For traditional life and immediate annuities, policy benefit claims are charged to expense in the period that the claims are incurred, net of reinsurance recoveries. Title insurance premiums, escrow fees and title-related fees are generally recognized as income at the time the underlying transaction closes or other service is provided.
The increase in income tax expense as a percentage of earnings before taxes in 2023 as compared to 2022 is primarily attributable the non-recurring tax benefit in 2022 of realized capital losses carried back to 2017.
The increase in income tax expense as a percentage of earnings before taxes in 2023 as compared to 2022 is primarily attributable to a non-recurring tax benefit in 2022 of realized capital losses carried back to 2017.
This includes a further significant decline in value of assets incorporated into our tax planning strategies, which could lead to an increase of our valuation allowance on deferred tax assets having an adverse effect on current and future results.
This includes a further significant decline in value of assets incorporated into our tax planning strategies, which could lead to an increase of our valuation allowance on deferred tax assets having an adverse effect on current and future results.
This loss provision rate is set to provide for losses on current year policies, but due to development of prior years and our long claim duration, it periodically includes amounts of estimated adverse or positive development on prior years' policies.
This loss provision rate is set to provide for losses on current year policies, but due to development of prior years and our long claim duration, it periodically includes amounts of estimated adverse or positive development on prior years' policies.
The average market value/book value of the investment category with the largest unrealized loss position was 88% for finance, insurance and real estate as of December 31, 2023. In the aggregate, finance, insurance and real estate represented 19% of the total unrealized loss position as of December 31, 2023.
The average market value/book value of the investment category with the largest unrealized loss position was 88% for finance, insurance and real estate as of December 31, 2023. In aggregate, finance, insurance and real estate represented 19% of the total unrealized loss position as of December 31, 2023.
While we believe that historical loss payments are a reasonable source for projecting future claim payments, there is significant inherent uncertainty in this payment pattern estimate because of the potential impact of changes in: • future mortgage interest rates, which will affect the number of real estate and refinancing transactions and; therefore, the rate at which title insurance claims will emerge; • the legal environment whereby court decisions and reinterpretations of title insurance policy language to broaden coverage could increase total obligations and influence claim payout patterns; • events such as fraud, escrow theft, multiple property title defects, foreclosure rates and individual large loss events that can substantially and unexpectedly cause increases in both the amount and timing of estimated title insurance loss payments; and • loss cost trends whereby increases or decreases in inflationary factors (including the value of real estate) will influence the ultimate amount of title insurance loss payments.
While we believe that historical loss pa yments are a reasonable source for projecting future claim payments, there is significant inherent uncertainty in this payment pattern estimate because of the potential impact of changes in: • future mortgage interest rates, which will affect the number of real estate and refinancing transactions and; therefore, the rate at which title insurance claims will emerge; • the legal environment whereby court decisions and reinterpretations of title insurance policy language to broaden coverage could increase total obligations and influence claim payout patterns; • events such as fraud, escrow theft, multiple property title defects, foreclosure rates and individual large loss events that can substantially and unexpectedly cause increases in both the amount and timing of estimated title insurance loss payments; and • loss cost trends whereby increases or decreases in inflationary factors (including the value of real estate) will influence the ultimate amount of title insurance loss payments.
The provision rate in 2023, 2022, and 2021 is supported by stability in payments for prior policy years, and qualitative factors that would indicate consistency, including consistency in lender underwriting standards, extension of credit to quality borrowers, a high proportion of refinance activity, claims expense management, mechanic’s lien underwriting practices, and fraud awareness by lenders, title insurers and settlement agents.
The provision rate in 2024, 2023 and 2022 is supported by stability in payments for prior policy years, and qualitative factors that would indicate consistency, including consistency in lender underwriting standards, extension of credit to quality borrowers, a high proportion of refinance activity, claims expense management, mechanic’s lien underwriting practices, and fraud awareness by lenders, title insurers and settlement agents.
The outcome of these final determinations could have a material effect on our income tax provision, net income or cash flows in the period that determination is made. For the year ended December 31, 2023, changes in market conditions, including changing interest rates, resulted in deferred tax assets related to the net unrealized capital losses in the Company’s investment portfolio.
The outcome of these final determinations could have a material effect on our income tax provision, net income or cash flows in the period that determination is made. For the year ended December 31, 2024, changes in market conditions, including changing interest rates, resulted in deferred tax assets related to the net unrealized capital losses in the Company’s investment portfolio.
AFS Securities For additional information regarding our AFS securities, including the amortized cost, gross unrealized gains (losses), and fair value as well as the amortized cost and fair value of fixed maturity AFS securities by contractual maturities, as of December 31, 2023 and December 31, 2022, refer to Note E Investments to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.
AFS Securities For additional information regarding our AFS securities, including the amortized cost, gross unrealized gains (losses), and fair value as well as the amortized cost and fair value of fixed maturity AFS securities by contractual maturities, as of December 31, 2024 and 2023, refer to Note E Investments to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report.
Valuation of Fixed Maturity, Preferred and Equity Securities, and Derivatives and Reinsurance Recoverable Our investments in fixed maturity securities have been designated as available-for-sale (“AFS”) and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within accumulated other comprehensive earnings (loss) (“AOCI”), net of deferred income taxes.
Valuation of Fixed Maturity, Preferred and Equity Securities and Derivatives Our investments in fixed maturity securities have been designated as available-for-sale (“AFS”) and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within accumulated other comprehensive earnings (loss) (“AOCI”), net of deferred income taxes.
Similarly, cash payments to customers are reported as decreases in the liability for contractholder funds and not as expenses. Sources of revenues for products accounted for as deposit liabilities are net investment income, surrender charges, cost of insurance and other charges deducted from contractholder funds (i.e., amortization of the Unearned Revenue Liability ("URL")), and net realized gains (losses) on investments.
Similarly, cash payments to customers are reported as decreases in the liability for contractholder funds and not as expenses. Sources of revenues for products accounted for as deposit liabilities are net investment income, surrender charges, cost of insurance and other charges deducted from contractholder funds (i.e., amortization of URL), and net realized gains (losses) on investments.
At each quarter end, our recorded reserve for claim losses is initially the result of taking the prior recorded reserve for claim losses, adding the current provision 51 Table of Contents and subtracting actual paid claims, resulting in an amount that management then compares to the range of reasonable estimates provided by the actuarial calculation.
At each quarter end, our recorded reserve for claim losses is initially the result of taking the prior recorded reserve for claim losses, adding the current provision 55 Table of Contents and subtracting actual paid claims, resulting in an amount that management then compares to the range of reasonable estimates provided by the actuarial calculation.
In setting the features and pricing of our flagship FIA products relative to our targeted net margin, we take into account our expectations regarding (1) the difference between the net investment income we earn and the sum of the interest credited to policyholders and the cost of hedging our risk on the policies; (2) fees, including surrender charges and rider fees, partly offset by vesting bonuses that we pay our policyholders; and (3) a number of related expenses, including benefits and changes in reserves, acquisition costs, and general and administrative expenses.
In setting the features and pricing of our flagship indexed annuity products relative to our targeted net margin, we take into account our expectations regarding (1) the difference between the net investment income we earn and the sum of the interest credited to policyholders and the cost of hedging our risk on the policies; (2) fees, including surrender charges and rider fees, partly offset by vesting bonuses that we pay our policyholders; and (3) a number of related expenses, including benefits and changes in reserves, acquisition costs, and general and administrative expenses.
As of December 31, 2023, and December 31, 2022, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.3 times and 2.3 times, respectively, and a weighted average LTV ratio of 55% and 57%, respectively. We consider a CML delinquent when a loan payment is greater than 30 days past due.
As of December 31, 2024, and 2023, our mortgage loans on real estate portfolio had a weighted average DSC ratio of 2.3 times, and a weighted average LTV ratio of 57% and 55%, respectively. We consider a CML delinquent when a loan payment is greater than 30 days past due.
While we still see claims opened on these policy years, the proportion of our claims inventory represented by these policy years has continued to decrease. Additionally, we continued to see stable development relating to the 2012 through 2023 policy years, which we believe is indicative of more stringent underwriting standards by us and the lending industry.
While we still see claims opened on these policy years, the proportion of our claims inventory represented by these policy years has continued to decrease. Additionally, we continued to see stable development relating to the 2012 through 2022 policy years, which we believe is indicative of more stringent underwriting standards by us and the lending industry.
Government and government-sponsored agency securities, and Structured securities, among others. 71 Table of Contents The NAIC’s Securities Valuation Office (“SVO”) is responsible for the day-to-day credit quality assessment and valuation of securities owned by state regulated insurance companies. Insurance companies report ownership of securities to the SVO when such securities are eligible for regulatory filings.
Government and government-sponsored agency securities, and Structured securities, among others. 74 Table of Contents The NAIC’s Securities Valuation Office (“SVO”) is responsible for the day-to-day credit quality assessment and valuation of securities owned by state regulated insurance companies. Insurance companies report ownership of securities to the SVO when such securities are eligible for regulatory filings.
Under GAAP, premium collections for deferred annuities (FIAs and fixed rate annuities), immediate annuities and PRT without life contingency, and deposits received for funding agreements are reported in the financial statements as deposit liabilities (i.e., contractholder funds) instead of as sales or revenues.
Under GAAP, premium collections for deferred annuities (indexed annuities and fixed rate annuities), immediate annuities and PRT without life contingency, and deposits received for funding agreements are reported in the financial statements as deposit liabilities (i.e., contractholder funds) instead of as sales or revenues.
Exposure to Sovereign Debt and Certain Other Exposures Our investment portfolio had an immaterial amount of direct exposure to European sovereign debt as of December 31, 2023, and December 31, 2022, respectively. We have no exposure to investments in Russia or Ukraine and de minimis investments in peripheral countries in the region.
Exposure to Sovereign Debt and Certain Other Exposures Our investment portfolio had an immaterial amount of direct exposure to European sovereign debt as of December 31, 2024, and 2023, respectively. We have no exposure to investments in Russia or Ukraine and de minimis investments in peripheral countries in the region.
During 2023, 2022, and 2021, payment patterns were consistent with our actuaries' and management's expectations. Also, compared to prior years we have seen a leveling off of the ultimate loss ratios in more mature policy years, particularly 2006-2009.
During 2024, 2023 and 2022, payment patterns were consistent with our actuaries' and management's expectations. Also, compared to prior years we have seen a leveling off of the ultimate loss ratios in more mature policy years, particularly 2006-2009.
Our equity securities are carried at fair value with unrealized gains and losses included in net income (loss). Realized gains and losses on the sale of investments are determined on the basis of first-in first-out cost basis and are credited or charged to income on a trade date basis.
Our equity securities are carried at fair value with unrealized gains and losses included in net earnings. Realized gains and losses on the sale of investments are determined on the basis of first-in first-out cost basis and are credited or charged to income on a trade date basis.
We also transact title insurance business through a network of approxima tely 5,200 age nts, primarily in those areas in which agents are the more prevalent title insurance provider. Substantially all of our revenues are generated in the United States.
We also transact title insurance business through a network of approxima tely 5,100 age nts, primarily in those areas in which agents are the more prevalent title insurance provider. Substantially all of our revenues are generated in the United States.
At December 31, 2023, our watch list included 52 securities in an unrealized loss position with an amortized cost of $722 million, no allowance for expected credit losses, unrealized losses of $205 million and a fair value of $517 million.
As of December 31, 2023, our watch list included 52 securities in an unrealized loss position with an amortized cost of $722 million, no allowance for expected credit losses, unrealized losses of $205 million and a fair value of $517 million.
We have unfunded investment commitments as of December 31, 2023, based upon the timing of when investments are executed compared to when the actual investments are funded, as some investments require that funding occur over a period of months or years.
We have unfunded investment commitments as of December 31, 2024, based upon the timing of when investments are executed compared to when the actual investments are funded, as some investments require that funding occur over a period of months or years.
The decrease in cash provided by financing activities of $1,002 million in 2023 as compared to 2022 is primarily associated with increased cash outflows from contractholder withdrawals of $1,175 million, decreased cash inflows from contractholder deposits of $743 million and net F&G Credit Agreement repayments of $185 million, partially offset by the issuance of our 7.95% F&G Notes of $345 million in December of 2023 and the issuance of our 7.40% F&G Notes of $500 million in January of 2023 as compared to the issuance of borrowings of $550 million in 2022, decreased purchases of treasury stock of $547 million and the repayment of $400 million for our 5.50% Notes in September 2022.
The decrease in cash provided by financing activities of $1,002 million in 2023 as compared to 2022 is primarily associated with increased cash outflows from contractholder withdrawals of $1,175 million, decreased cash inflows from contractholder deposits of $743 million and net F&G Credit Agreement repayments of $185 million, partially offset by the issuance of our 7.95% F&G Notes of $345 million in December of 2023 and the issuance of our 7.40% F&G Notes of $500 million in January of 2023 as compared to the issuance of borrowings of $550 million in 2022, decreased purchases of treasury stock of $547 million and the repayment of $400 million for our 5.50% Notes in September 2022. 84 Table of Contents Financing Arrangements.
These changes, taken together, resulted in an increase in total benefits and other changes in policy reserves of approximately $73 million. • During the fourth quarter of 2022, based on increases in interest rates and pricing changes during 2022, we updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and the fair value of market risk benefits.
These changes, taken together, resulted in an increase in total benefits and other changes in policy reserves of approximately $73 million. • During the fourth quarter of 2022, based on increases in interest rates and pricing changes during 2022, we updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and the fair value of market risk benefits.
See the table below for primary drivers of gains (losses) on certain derivatives. • The fair value of reinsurance related embedded derivative is based on the change in fair value of the underlying assets held in the funds withheld portfolio. We utilize a combination of static (call options) and dynamic (long futures contracts) instruments in our product hedging strategy.
See the table below for primary drivers of gains (losses) on certain derivatives. • The fair value of reinsurance related embedded derivative is based on the change in fair value of the underlying assets held in the funds withheld (“FWH”) portfolio. We utilize a combination of static (equity options) and dynamic (long futures contracts) instruments in our product hedging strategy.
To enhance the attractiveness and profitability of our products and services, we continually monitor the behavior of our customers, as evidenced by annuitization rates and lapse rates, which vary in response to changes in market conditions. See Item 1A of Part I of this Annual Report for further discussion of risk factors that could affect market conditions.
To enhance the attractiveness and profitability of our products and services, we continually monitor the behavior of our customers, as evidenced by annuitization rates and lapse rates, which vary in response to changes in market conditions. See Item 1A of Part I of this Annual Report for further discussion of risk factors that could affect market conditions. Interest Rate Environment.
Other operating expenses as a percentage of total revenue excluding agency premiums, interest and investment income, and recognized gains and losses were 30%, 28% and 25% in the years ended December 31, 2023, 2022 and 2021, respectively. Agent commissions represent the portion of premiums retained by agents pursuant to the terms of their respective agency contracts.
Other operating expenses as a percentage of total revenue excluding agency premiums, interest and investment income and recognized gains and losses were 28%, 30% and 28% in the years ended December 31, 2024, 2023 and 2022, respectively. Agent commissions represent the portion of premiums retained by agents pursuant to the terms of their respective agency contracts.
Agent commissions represent the portion of premiums retained by our third-party agents pursuant to the terms of their respective agency contracts. Benefit expenses for deferred annuity, FIA and IUL policies include index credits and interest credited to contractholder account balances and benefit claims in excess of contract account balances, net of reinsurance recoveries.
Agent commissions represent the portion of premiums retained by our third-party agents pursuant to the terms of their respective agency contracts. Benefit expenses for deferred annuity, indexed annuities and IUL policies include index credits and interest credited to contractholder account balances and benefit claims in excess of contract account balances, net of reinsurance recoveries.
Our FIA products provide for pre-retirement wealth accumulation and post-retirement income management. Our IUL products provide wealth protection and transfer opportunities. Life and annuity products are primarily distributed through IMOs and independent insurance agents, and beginning in 2020, independent broker dealers and banks. Additionally, we provide funding agreements and PRT solutions to various institutions through consultants and brokers.
Our indexed annuities products provide for pre-retirement wealth accumulation and post-retirement income management. Our IUL products provide wealth protection and transfer opportunities. Life and annuity products are primarily distributed through IMOs and independent insurance agents, and beginning in 2020, independent broker dealers and banks. Additionally, we provide funding agreements and PRT solutions to various institutions through consultants and brokers.
Concentrations of Financial Instruments For detail regarding our concentration of financial instruments refer to Item 7A. of Part II of this Annual Report. Derivatives We are exposed to credit loss in the event of nonperformance by our counterparties on derivative instruments. We attempt to reduce this credit risk by purchasing such derivative instruments from large, well-established financial institutions.
Concentrations of Financial Instruments For detail regarding our concentration of financial instruments refer to Item 7A. of Part II of this Annual Report. Derivatives We are exposed to credit loss in the event of non-performance by our counterparties on derivative instruments. We attempt to reduce this credit risk by purchasing such derivative instruments from large, well-established financial institutions.
Refer to Note T Income Taxes to our Consolidated Financial Statements in Item 8 of Part II of this Annual Report for details. 57 Table of Contents Results of Operations Consolidated Results of Operations Net Earnings.
Refer to Note T Income Taxes to our Consolidated Financial Statements in Item 8 of Part II of this Annual Report for details. 61 Table of Contents Results of Operations Consolidated Results of Operations Net Earnings.
Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as 49 Table of Contents interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows. See “Item 7A.
Similarly, we expect that policyholders would be less likely to hold policies with existing guarantees as interest rates rise and the relative value of other new business offerings are increased, which would negatively impact our earnings and cash flows. See “Item 7A.
However, we are largely protected by collateral arrangements with counterparties when individual counterparty exposures exceed certain thresholds. The fair value of futures contracts (specifically for FIA contracts) at the balance sheet date represents the cumulative unsettled variation margin (open trade equity net of cash settlements).
However, we are largely protected by collateral arrangements with counterparties when individual counterparty exposures exceed certain thresholds. The fair value of futures contracts (specifically for indexed annuities contracts) at the balance sheet date represents the cumulative unsettled variation margin (open trade equity net of cash settlements).
Market Risk Benefits MRBs are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest and foreign exchange risk) and expose the Company to other-than-nominal capital market risk. MRBs include certain contract features primarily on FIA contracts that provide minimum guarantees to policyholders, such as GMDB and GMWB riders.
Market Risk Benefits MRBs are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest and foreign exchange risk) and expose the Company to other-than-nominal capital market risk. MRBs include certain contract features primarily on indexed annuities contracts that provide minimum guarantees to policyholders, such as GMDB and GMWB riders.
Key Components of Our Historical Results of Operations Through our insurance subsidiaries, we issue a broad portfolio of deferred annuities (FIA and fixed rate annuities), IUL insurance, immediate annuities, funding agreements and PRT solutions.
Key Components of Our Historical Results of Operations Through our insurance subsidiaries, we issue a broad portfolio of deferred annuities (indexed annuities and fixed rate annuities), IUL insurance, immediate annuities, funding agreements and PRT solutions.
The decrease in the year ended December 31, 2023, as compared to 2022 is primarily attributable to decreased average debt outstanding in 2023 associated with repayment of the $400 million in outstanding principal of our 5.50% Senior Notes in September of 2022. 79 Table of Contents Liquidity and Capital Resources Cash Requirements.
The decrease in the year ended December 31, 2023, as compared to 2022 is primarily attributable to decreased average debt outstanding in 2023 associated with repayment of the $400 million in outstanding principal of our 5.50% Senior Notes in September of 2022. Liquidity and Capital Resources Cash Requirements.
The change in fair value of the call options and futures contracts includes the gains and losses recognized at the expiration of the instruments’ terms or upon early termination and the changes in fair value of open positions.
The change in fair value of the equity options and futures contracts includes the gains and losses recognized at the expiration of the instruments’ terms or upon early termination and the changes in fair value of open positions.
Based on the results of this analysis, an annual goodwill impairment test may be completed based on an analysis of the discounted future cash flows generated by the underlying assets. The process of determining whether or not goodwill is impaired or recoverable relies on projections of future cash flows, operating results and market conditions.
Based on the results of this analysis, an annual goodwill impairment test may be completed based on an analysis of the discounted future cash flows generated by the underlying assets. The process of determining whether or not goodwill is impaired or recoverable relies on 59 Table of Contents projections of future cash flows, operating results and market conditions.
We recorded our loss provision rate at 4.5% for the years ended December 31, 2023, 2022 and 2021 related to policies written in those years.
We recorded our loss provision rate at 4.5% for the years ended December 31, 2024, 2023 and 2022 related to policies written in those years.
The following table presents the fair value of fixed maturity securities and equity securities by pricing source, hierarchy level and net asset value (“NAV”) as of December 31, 2023, and 2022.
The following table presents the fair value of fixed maturity securities and equity securities by pricing source, hierarchy level and net asset value (“NAV”) as of December 31, 2024 and 2023.
We attempt to manage the cost of these purchases through the terms of our FIA/IUL contracts, which permit us to change caps, spread, or participation rates on each policy's annual anniversary, subject to certain guaranteed minimums that must be maintained.
We attempt to manage the cost of these purchases through the terms of our indexed annuity/IUL contracts, which permit us to change caps, spread, or participation rates on each policy's annual anniversary, subject to certain guaranteed minimums that must be maintained.
See Note F Derivative Financial Instruments to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for additional information regarding our derivatives and our exposure to credit loss on call options. 78 Table of Contents Corporate and Other The Corporate and Other segment consists of the operations of the parent holding company, our various real estate brokerage businesses and our real estate technology subsidiaries.
See Note F Derivative Financial Instruments to the Consolidated Financial Statements included in Item 8 of Part II of this Annual Report for additional information regarding our derivatives and our exposure to credit loss on derivatives. 81 Table of Contents Corporate and Other The Corporate and Other segment consists of the operations of the parent holding company, our various real estate brokerage businesses and our real estate technology subsidiaries.
For the years ended December 31, 2023, 2022 and 2021, we determined there were no events or circumstances that indicated that the carrying value exceeded the fair value.
For the years ended December 31, 2024, 2023 and 2022, we determined there were no events or circumstances that indicated that the carrying value exceeded the fair value.
The Provision for title claim losses includes an estimate of anticipated title and title-related claims, and escrow losses. The change in expenses attributable to our reportable segments is discussed in further detail at the segment level below. Income tax expense was $192 million, $439 million, and $813 million for the years ended December 31, 2023, 2022, and 2021, respectively.
The Provision for title claim losses includes an estimate of anticipated title and title-related claims, and escrow losses. The change in expenses attributable to our reportable segments is discussed in further detail at the segment level below. Income tax expense was $367 million, $192 million and $439 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Total revenues increased by $187 million in 2023 compared to 2022, primarily attributable to increases in escrow title-related and other fees, increases in interest and investment income and decreases in net recognized investments losses, partially offset by decreases in both direct and agency premiums.
Total revenues increased by $187 million in 2023 as compared to 2022, primarily attributable to increases in escrow title-related and other fees, increases in interest and investment income and decreases in net recognized losses, partially offset by decreases in both direct and agency title insurance premiums.
The call options and futures contracts are marked to fair value with the change in fair value included as a component of net investment gains (losses).
The equity options and futures contracts are marked to fair value with the change in fair value included as a component of net investment gains (losses).
Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. December 31, 2023 December 31, 2022 Amortized Cost Fair Value Amortized Cost Fair Value (In millions) Corporate, Non-structured Hybrids, Municipal and U.S.
Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. December 31, 2024 December 31, 2023 Amortized Cost Fair Value Amortized Cost Fair Value (In millions) Corporate, Non-structured Hybrids, Municipal, Foreign and U.S.
The increase in the year ended December 31, 2023, as compared to 2022 is primarily attributable to the aforementioned increase in the valuation of deferred compensation plan assets in 2023. The decrease in the year ended December 31, 2022, as compared to 2021 is primarily attributable to the aforementioned decrease in the valuation of deferred compensation plan assets in 2022.
The increase in the year ended December 31, 2023, as compared to 2022 is primarily attributable to the aforementioned increase in the valuation of deferred compensation plan assets in 2023.
The FIA/IUL embedded derivatives are valued at fair value and included in the liability for Contractholder funds in our Consolidated Balance Sheets with changes in fair value included as a component of Benefits and other changes in policy reserves in our Consolidated Statements of Earnings.
The indexed annuities/IUL embedded derivatives are valued at fair value and included in the liability for Contractholder funds in our Consolidated Balance Sheets with changes in fair value included as a component of Benefits and other changes in policy reserves in our Consolidated Statements of Earnings.
The fee per file tends to change as the mix of refinance and purchase transactions 61 Table of Contents changes, because purchase transactions involve the issuance of both a lender’s policy and an owner’s policy, resulting in higher fees, whereas refinance transactions only require a lender’s policy, resulting in lower fees.
The fee per file tends to change as the mix of refinance and purchase transactions changes, because purchase transactions involve the issuance of both a lender’s policy and an owner’s policy, resulting in higher fees, whereas refinance transactions only require a lender’s policy, resulting in lower fees.
Financing Arrangements. For a description of our financing arrangements see Note G Notes Payable included in Item 8 of Part II of this Annual Report, which is incorporated by reference into this Item 7 of Part II. 81 Table of Contents Obligations - Contractual and Other.
For a description of our financing arrangements see Note G Notes Payable included in Item 8 of Part II of this Annual Report, which is incorporated by reference into this Item 7 of Part II. Obligations - Contractual and Other.
The fair values of the embedded derivatives in our FIA and IUL contracts are derived using market value of options, use of current and budgeted option cost, swap rates, mortality rates, surrender rates, partial withdrawals, and non-performance spread.
The fair values of the embedded derivatives in our indexed annuities and IUL contracts are derived using market value of options, use of current and budgeted option cost, swap rates, mortality rates, surrender rates, partial withdrawals and non-performance spread.
As of December 31, 2023, and 2022, approximately 95% and 91%, respectively, of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher. ABS and CLO Exposures Our ABS exposures are largely diversified by underlying collateral and issuer type. Our CLO exposures are generally senior tranches of CLOs which have leveraged loans as their underlying collateral.
As of December 31, 2024, and 2023, approximately 93% and 95%, respectively, of the subprime and Alt-A RMBS exposures were rated NAIC 2 or higher. ABS and CLO Exposures Our ABS exposures are largely diversified by underlying collateral and issuer type. Our CLO exposures are generally senior tranches of CLOs which have leveraged loans as their underlying collateral.
The decrease in Other fees in the year ended December 31, 2023, as compared to 2022 was primarily driven by decreases in revenues related to our ServiceLink and home warranty businesses and various other immaterial items.
The increase in Other fees in the year ended December 31, 2024 as compared to 2023 was attributable to various immaterial items. The decrease in Other fees in the year ended December 31, 2023 as compared to 2022 was primarily driven by decreases in revenues related to our ServiceLink and home warranty businesses and various other immaterial items.
Equity and Preferred Security Investments. Our equity and preferred security investments may be subject to significant volatility. Currently prevailing accounting standards require us to record the change in fair value of equity and preferred security investments held as of any given period end within earnings. Our results of operations in future periods are anticipated to be subject to such volatility.
Our equity and preferred security investments may be subject to significant volatility. Currently prevailing accounting standards require us to record the change in fair value of equity and preferred security investments held as of any given period end within earnings. Our results of operations in future periods are anticipated to be subject to such volatility. Off-Balance Sheet Arrangements.
The discount rate used to determine the fair value of our FIA/IUL embedded derivative liabilities includes an adjustment to reflect the risk that these obligations will not be fulfilled (“non-performance risk”).
The discount rate used to determine the fair value of our indexed annuities/IUL embedded derivative liabilities includes an adjustment to reflect the risk that these obligations will not be fulfilled (“non-performance risk”).
Each applicable state of domicile regulates the extent to which our title underwriters can pay dividends or make other distributions. As of December 31, 2023, $1,145 million of our net assets were restricted from dividend payments without prior approval from the relevant departments of insurance.
Each applicable state of domicile regulates the extent to which our title underwriters can pay dividends or make other distributions. As of December 31, 2024, $1,141 million of our net assets were restricted from dividend payments without prior approval from the relevant departments of insurance.
The increase in the year ended December 31, 2023, as compared to 2022 is primarily attributable to a $71 million increase in valuations associated with our deferred compensation plan assets, which increased both revenue and personnel costs, a $35 million increase in interest and investment income related to cash and short-term investments, and a $33 million impairment of cost method investments in 2023 as compared to a $41 million impairment of cost method investments in 2022, partially offset by various other immaterial items.
The increase in the year ended December 31, 2023, as compared to 2022 is primarily attributable to a $71 million increase in valuations associated with our deferred compensation plan assets, which increased both revenue and personnel costs, a $65 million increase in dividends received from F&G, a $35 million increase in interest and investment income related to cash and short-term investments and a $33 million impairment of cost method investments in 2023 as compared to a $41 million impairment of cost method investments in 2022, partially offset by various other immaterial items.
T he change in both escrow fees and other fees is directionally consistent with the change in title premiums from direct operations in 2023 and 2022. Interest and investment income levels are primarily a function of securities markets, interest rates and the amount of cash available for investment.
The change in both escrow fees and other fees is directionally consistent with the change in title premiums from direct operations in 2024 and 2023. Interest and investment income levels are primarily a function of securities markets, interest rates and the amount of cash available for investment.
Other changes in policy reserves include the change in the fair value of the FIA embedded derivative and the change in the reserve for secondary guarantee benefit payments. Other changes in policy reserves also include the change in reserves for life insurance products.
Other changes in policy reserves include the change in the fair value of the indexed annuities embedded derivative and the change in the reserve for secondary guarantee benefit payments. Other changes in policy reserves also include the change in reserves for life insurance products.
F&G’s ability to assert such a tax planning strategy is dependent upon factors such as F&G’s asset/liability matching process, overall investment strategy, projected future annuity product sales, and expected liquidity needs.
F&G’s ability to 63 Table of Contents assert such a tax planning strategy is dependent upon factors such as F&G’s asset/liability matching process, overall investment strategy, projected future annuity product sales, and expected liquidity needs.
As of December 31, 2023, and 2022, goodwill w as $4,830 million and $4,635 million, respectively. The majority of our goodwill as of December 31, 2023, relates to goodwill recorded in connection with the Chicago Title merger in 2000, our initial acquisition of an ownership interest in ServiceLink in 2014 and our acquisition of F&G in 2020.
As of December 31, 2024 and 2023, goodwill w as $5,271 million and $4,830 million, respectively. The majority of our goodwill as of December 31, 2024 relates to goodwill recorded in connection with the Chicago Title merger in 2000, our initial acquisition of an ownership interest in ServiceLink in 2014 and our acquisition of F&G in 2020.
On our life-contingent immediate annuities (which includes life-contingent pension risk transfer (“PRT”) annuities), the death of a named annuitant or certificate holder may trigger the cessation or reduction of future life-contingent payments due, depending on the presence of a joint annuitant/certificate holder and any remaining guaranteed non-life contingent payment periods.
On our life-contingent immediate annuities (which includes life-contingent PRT annuities), the death of a named annuitant or certificate holder may trigger the cessation or reduction of future life-contingent payments due, depending on the presence of a joint annuitant/certificate holder and any remaining guaranteed non-life contingent payment periods.
When assessing the need for valuation allowance on the unrealized capital loss deferred tax assets, we assert a tax planning strategy to hold certain underlying securities to recovery or maturity.
When assessing the need for valuation allowance on 60 Table of Contents the unrealized capital loss deferred tax assets, we assert a tax planning strategy to hold certain underlying securities to recovery or maturity.
Additionally, this market demand has positively impacted the IUL market as it has expanded from $100 million of annual premiums in 2002 to $3 billion of annual premiums in 2022. 50 Table of Contents Critical Accounting Policies and Estimates The accounting estimates described below are those we consider critical in preparing our Consolidated Financial Statements.
Additionally, this market demand has positively impacted the IUL market as it has expanded from $100 million of annual sales in 2002 to $3 billion of annual sales in 2023. 54 Table of Contents Critical Accounting Policies and Estimates The accounting estimates described below are those we consider critical in preparing our Consolidated Financial Statements.
Our analysis of these structured securities, which included cash flow testing, resulted in allowances for expected credit losses of $35 million and $16 million as of December 31, 2023, and December 31, 2022, respectively.
Our analysis of these structured securities, which included cash flow testing, resulted in allowances for expected credit losses of $62 million and $35 million as of December 31, 2024, and 2023, respectively.
The terms of the CSA call for us to pay interest on any cash received equal to the federal funds rate. As of December 31, 2023, and 2022, respectively, $381 million and $219 million of collateral was posted by our counterparties as they did not meet the net exposure thresholds.
The terms of the CSA call for us to pay interest on any cash received equal to the federal funds rate. As of December 31, 2024, and 2023, respectively, $771 million and $775 million of collateral was posted by our counterparties as they did not meet the net exposure thresholds.
Interest Rate Environment Some of our F&G products include guaranteed minimum crediting rates, most notably our fixed rate annuities. As of December 31, 2023, our reserves, net of reinsurance, and average crediting rate on our fixed rate annuities were $6.0 billion and 4%, respectively.
Some of our F&G products include guaranteed minimum crediting rates, most notably our fixed rate annuities. As of December 31, 2024 and December 31, 2023, our reserves, net of reinsurance, and average crediting rate on our fixed rate annuities were $6 billion and 5%, respectively, and $6 billion and 4%, respectively.
Our current cash requirements include personnel costs, operating expenses, claim payments, taxes, payments of interest and principal on our debt, capital expenditures, business acquisitions, stock repurchases and dividends on our common stock. We paid dividends of $1.83 per share in 2023, or approximately $500 million to our common shareholders.
Our current cash requirements include personnel costs, operating expenses, claim payments, taxes, payments of interest and principal on our debt, capital expenditures, business acquisitions, stock repurchases and dividends on our common stock. We paid dividends of $1.94 per share in 2024, or approximately $532 million to our common shareholders.
Operating Cash Flow . Our cash flows provided by operations for the years ended December 31, 2023, 2022, 2021 were $6,478 million, $4,355 million, and $4,090 million, respectively.
Operating Cash Flow . Our cash flows provided by operations for the years ended December 31, 2024, 2023 and 2022 were $6,815 million, $6,478 million and $4,355 million, respectively.
Investing Cash Flows. Our cash used in investing activities for the years ended December 31, 2023, 2022, and 2021 were $9,090 million, $10,524 million, and $7,449 million, respectively.
Investing Cash Flows. Our cash used in investing activities for the years ended December 31, 2024, 2023 and 2022 were $7,862 million, $9,090 million and $10,524 million, respectively.
The watch list excludes structured securities as we have separate processes to evaluate the credit quality on the structured securities. There were 101 and 64 structured securities with a fair value of $316 million and $162 million, respectively, to which we had potential credit exposure as of December 31, 2023, and December 31, 2022, respectively.
The watch list excludes structured securities as we have separate processes to evaluate the credit quality on the structured securities. There were 45 and 101 structured securities with a fair value of $146 million and $316 million, respectively, to which we had potential credit exposure as of December 31, 2024, and 2023, respectively.
The following table sets forth the approximate dollar and percentage volumes of our title insurance premium revenue by state: Year Ended December 31, 2023 2022 2021 Amount % Amount % Amount % (Dollars in millions) Texas $ 657 14.3 % $ 1,027 15.0 % $ 1,112 13.0 % California 597 13.0 819 12.0 1,251 14.6 Florida 490 10.7 722 10.6 799 9.3 Illinois 275 6.0 360 5.3 436 5.1 Pennsylvania 227 4.9 356 5.2 439 5.1 All others 2,351 51.1 3,550 51.9 4,516 52.9 Totals $ 4,597 100.0 % $ 6,834 100.0 % $ 8,553 100.0 % F&G The following factors represent some of the key trends and uncertainties that have influenced the development of our F&G segment and its historical financial performance, and we believe these key trends and uncertainties will continue to influence the business and financial performance of our F&G segment in the future.
The following table sets forth the approximate dollar and percentage volumes of our title insurance premium revenue by state: Year Ended December 31, 2024 2023 2022 Amount % Amount % Amount % (Dollars in millions) Texas $ 710 13.8 % $ 657 14.3 % $ 1,027 15.0 % California 668 12.9 597 13.0 819 12.0 Florida 525 10.2 490 10.7 722 10.6 Illinois 298 5.8 275 6.0 360 5.3 Pennsylvania 269 5.2 227 4.9 356 5.2 All others 2,687 52.1 2,351 51.1 3,550 51.9 Totals $ 5,157 100.0 % $ 4,597 100.0 % $ 6,834 100.0 % F&G The following factors represent some of the key trends and uncertainties that have influenced the development of our F&G segment and its historical financial performance, and we believe these key trends and uncertainties will continue to influence the business and financial performance of our F&G segment in the future.
The table below summarizes our reserves for known claims and incurred but not reported claims related to title insurance: December 31, 2023 % December 31, 2022 % (Dollars in millions) Known claims $ 217 12.3 % $ 195 10.8 % IBNR 1,553 87.7 1,615 89.2 Total Reserve for Title Claim Losses $ 1,770 100.0 % $ 1,810 100.0 % Although claims against title insurance policies can be reported relatively soon after the policy has been issued, claims may be reported many years later.
The table below summarizes our reserves for known claims and incurred but not reported claims related to title insurance: December 31, 2024 % December 31, 2023 % (Dollars in millions) Known claims $ 209 12.2 % $ 217 12.3 % IBNR 1,504 87.8 1,553 87.7 Total Reserve for Title Claim Losses $ 1,713 100.0 % $ 1,770 100.0 % Although claims against title insurance policies can be reported relatively soon after the policy has been issued, claims may be reported many years later.
Recognized gains and losses attributable to these agreements, and thus excluded from the totals in the table above, was $(123) million, $381 million and $15 million for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively. • For the year ended December 31, 2023, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized losses on fixed maturity available-for-sale securities, partially offset by mark-to-market gains on our equity securities and realized gains on other invested assets. 66 Table of Contents • For the year ended December 31, 2022, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized losses on fixed maturity available-for-sale securities and mark-to-market losses on our equity securities. • For the year ended December 31, 2021, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized gains on fixed maturity available-for-sale securities, partially offset by mark-to-market losses on our equity securities. • For all periods, net realized and unrealized gains (losses) on certain derivative instruments primarily relate to the net realized and unrealized gains (losses) on options and futures used to hedge FIA and IUL products, including gains on option and futures expiration and changes in the fair value of interest rate swaps.
Recognized gains and (losses) attributable to these agreements, and thus excluded from the totals in the table above, was $(30) million, $(123) million and $381 million for the years ended December 31, 2024, 2023 and 2022, respectively. • For the year ended December 31, 2024, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of unrealized fair value option gains on owned distribution investments and mark-to-market gains on our preferred and equity securities. • For the year ended December 31, 2023, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized losses on fixed maturity available-for-sale securities, partially offset by mark-to-market gains on our equity securities and realized gains on other invested assets. • For the year ended December 31, 2022, net realized and unrealized gains (losses) on fixed maturity available-for-sale securities, equity securities and other invested assets is primarily the result of realized losses on fixed maturity available-for-sale securities and mark-to-market losses on our equity securities. • For all periods, net realized and unrealized gains (losses) on certain derivative instruments primarily relate to the net realized and unrealized gains (losses) on equity options and futures used to hedge indexed annuity and IUL products, including gains on option and futures expiration and changes in the fair value of interest rate swaps.
Personnel costs as a percentage of total revenues from direct title premiums and escrow, title-related and other fees were 62%, 56% and 48% for the years ended December 31, 2023, 2022 and 2021, respectively. Average employee count in the Title segment was 21,398, 25,157, and 27,297 in the years ended December 31, 2023, 2022 and 2021, respectively.
Personnel costs as a percentage of total revenues from direct title premiums and escrow, title-related and other fees were 61%, 62% and 56% for the years ended December 31, 2024, 2023 and 2022, respectively. Average employee count in the Title segment was 21,206, 21,398 and 25,157 in the years ended December 31, 2024, 2023 and 2022, respectively.
Our focus within municipal bonds is on NAIC 1 rated instruments, with 98% and 96% of our municipal bond exposure rated NAIC 1 as of December 31, 2023, and December 31, 2022, respectively. 74 Table of Contents Mortgage Loans Commercial Mortgage Loans We diversify our CMLs portfolio by geographic region and property type to attempt to reduce concentration risk.
Our focus within municipal bonds is on NAIC 1 rated instruments, with 97% and 98% of our municipal bond exposure rated NAIC 1 as of December 31, 2024, and 2023, respectively. Mortgage Loans Commercial Mortgage Loans We diversify our CMLs portfolio by geographic region and property type to attempt to reduce concentration risk.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe duration of the investment portfolio, excluding cash and cash equivalents, derivatives, policy loans, and common stocks as of December 31, 2023, and December 31, 2022, is summarized as follows: December 31, 2023 Duration (years) Amortized Cost (In millions) % of Total 0-4 $ 26,146 54 % 5-9 10,455 21 % 10-14 9,943 20 % 15-19 2,650 5 % 20-30 69 — % Total $ 49,263 100 % 85 Table of Contents December 31, 2022 Duration (years) Amortized Cost (In millions) % of Total 0-4 $ 25,323 53 % 5-9 10,010 21 % 10-14 9,423 21 % 15-19 2,515 5 % 20-30 64 — % Total $ 47,335 100 % Equity Price Risk Related to our F&G Segment Our F&G segment is exposed to equity price risk through certain insurance products.
Biggest changeThe duration of the investment portfolio, excluding cash and cash equivalents, derivatives, policy loans, and common stocks as of December 31, 2024, and 2023, is summarized as follows: December 31, 2024 Duration (years) Amortized Cost (In millions) % of Total 0-4 $ 29,363 54 % 5-9 12,526 23 % 10-14 10,448 19 % 15-19 1,862 4 % 20-30 33 — % Total $ 54,232 100 % 88 Table of Contents December 31, 2023 Duration (years) Amortized Cost (In millions) % of Total 0-4 $ 26,146 54 % 5-9 10,455 21 % 10-14 9,943 20 % 15-19 2,650 5 % 20-30 69 — % Total $ 49,263 100 % Equity Price Risk Related to our F&G Segment Our F&G segment is exposed to equity price risk through certain insurance products.
The actuarial models used to estimate the impact of a one percentage point change in market interest rates incorporate numerous assumptions, require significant estimates and assume an immediate and parallel change in interest rates without any management of the investment portfolio in reaction to such change.
The actuarial models used to estimate the impact of a one percentage point change in market interest rates incorporate numerous assumptions, require significant estimates and assume an immediate and parallel change in interest rates without any management of the investment portfolio in reaction to such change.
Consequently, potential changes in value of financial instruments indicated by these simulations will likely be different from the actual changes experienced under given interest rate scenarios, and the differences may be material. Because we actively manage our investments and liabilities, the net exposure to interest rates can vary over time.
Consequently, potential changes in value of financial instruments indicated by these simulations will likely be different from the actual changes experienced under given interest rate scenarios, and the differences may be material. Because we actively manage our investments and liabilities, the net exposure to interest rates can vary over time.
However, any such decreases in the fair value of fixed maturity securities, unless related to credit concerns of the issuer requiring allowances for credit losses, would generally be realized only if we were required to sell such securities at losses prior to their maturity to meet liquidity needs.
However, any such decreases in the fair value of fixed maturity securities, unless related to credit concerns of the issuer requiring allowances for credit losses, would generally be realized only if we were required to sell such securities at losses prior to their maturity to meet liquidity needs.
Equity price risk is the risk that we will incur economic losses due to adverse changes in equity prices. In the past, our exposure to changes in equity prices primarily resulted from our holdings of equity securities.
Equity price risk is the risk that we will incur economic losses due to adverse changes in equity prices. In the past, our exposure to changes in equity prices primarily resulted from our holdings of equity securities.
Fluctuation in 83 Table of Contents the market price of a security may result from perceived changes in the underlying economic characteristics of the investee, the relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.
Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the investee, the 86 Table of Contents relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.
We are not aware of any material disputes arising from these reviews or other communications with the counterparties as of December 31, 2023, and December 31, 2022, that would require an increase to the allowance for credit losses.
We are not aware of any material disputes arising from these reviews or other communications with the counterparties as of December 31, 2024, and 2023, that would require an increase to the allowance for credit losses.
We offer a variety of FIA/ IUL contracts with crediting strategies linked to the performance of indices such as the S&P 500 Index, Dow Jones Industrials or the NASDAQ 100 Index, and target volatility indices. Additionally, the estimated cost of providing GMWB on FIA products incorporates various assumptions about the overall performance of equity markets over certain time periods.
We offer a variety of indexed annuities/IUL contracts with crediting strategies linked to the performance of indices such as the S&P 500 Index, Dow Jones Industrials or the NASDAQ 100 Index, and target volatility indices. Additionally, the estimated cost of providing GMWB on indexed annuities products incorporates various assumptions about the overall performance of equity markets over certain time periods.
Actual results could differ from those estimates and assumptions used. 87 Table of Contents Concentrations of Financial Instruments Related to our F&G Segment Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations - Investment Portfolio - Investment Industry Concentrations included in Part II - Item 7 of this Annual Report on Form 10-K regarding the top ten investment concentrations of our fixed maturity and equity securities including the fair value and percent of total fixed maturity and equity securities fair value as of December 31, 2023, and December 31, 2022.
Actual results could differ from those estimates and assumptions used. 90 Table of Contents Concentrations of Financial Instruments Related to our F&G Segment Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations - Investment Portfolio - Investment Industry Concentrations included in Part II - Item 7 of this Annual Report on Form 10-K regarding the top ten investment concentrations of our fixed maturity and equity securities including the fair value and percent of total fixed maturity and equity securities fair value as of December 31, 2024, and 2023.
When index credits to policyholders exceed option proceeds received at expiration related to such credits, any shortfall is funded by our excess of net investment income earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed product policies and futures income.
When index credits to policyholders exceed option proceeds received at expiration related to such credits, any shortfall is funded by our excess of net investment income earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed product policies and futures 89 Table of Contents income.
Periods of significant and sustained downturns in equity markets or increased equity volatility could result in an increase in the valuation of the MRB liabilities and decrease in the valuation of contractholder funds liabilities associated with such products. To economically hedge the equity returns on these products, we purchase derivatives to hedge the FIA and IUL equity exposures.
Periods of significant and sustained downturns in equity markets or increased equity volatility could result in an increase in the valuation of the MRB liabilities and decrease in the valuation of contractholder funds liabilities associated with such products. To economically hedge the equity returns on these products, we purchase derivatives to hedge the indexed annuities and IUL equity exposures.
The results of the sensitivity analysis at December 31, 2023, and 2022, are as follows: Interest Rate Risk At December 31, 2023, an increase (decrease) in the levels of interest rates of 100 basis points, with all other variables held constant, would result in a (decrease) increase in the fair value of our fixed maturity securities and certain of our investments in preferred securities, which are tied to interest rates of $2.5 billion as compared with a (decrease) increase of $2.0 billion at December 31, 2022.
The results of the sensitivity analysis at December 31, 2024 and 2023, are as follows: Interest Rate Risk As of December 31, 2024, an increase (decrease) in the levels of interest rates of 100 basis points, with all other variables held constant, would result in a (decrease) increase in the fair value of our fixed maturity securities and certain of our investments in preferred securities, which are tied to interest rates of $2.7 billion as compared with a (decrease) increase of $2.5 billion at December 31, 2023.
Other market exposures are hedged periodically depending on market conditions and our risk tolerance. The FIA/ IUL hedging strategy economically hedges the equity returns and exposes us to the risk that unhedged market exposures result in divergence between changes in the fair value of the liabilities and the hedging assets.
Other market exposures are hedged periodically depending on market conditions and our risk tolerance. The indexed annuities/IUL hedging strategy economically hedges the equity returns and exposes us to the risk that unhedged market exposures result in divergence between changes in the fair value of the liabilities and the hedging assets.
For example, our reserve for title claim losses (representing 2.4% of total liabilities at December 31, 2023) is not included in the hypothetical effects. Market Risk Factors Market risk is the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates, commodity prices and equity prices.
For example, our reserve for title claim losses (representing 2.0% of total liabilities at December 31, 2024) is not included in the hypothetical effects. Market Risk Factors Market risk is the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates, commodity prices and equity prices.
We expect to continue to face these challenges and uncertainties that could adversely affect our results of operations and financial condition. 88 Table of Contents
We expect to continue to face these challenges and uncertainties that could adversely affect our results of operations and financial condition. 91 Table of Contents
We attempt to manage the costs of these purchases through the terms of the FIA/ IUL contracts, which permit us to change cap, spread or participation rates, subject to certain guaranteed minimums that must be maintained.
We attempt to manage the costs of these purchases through the terms of the indexed annuities/IUL contracts, which permit us to change cap, spread or participation rates, subject to certain guaranteed minimums that must be maintained.
The fair value of our fixed maturity portfolio totaled $40 billion at December 31, 2023 . Our credit risk materializes primarily as impairment losses. We are exposed to occasional cyclical economic downturns, during which impairment losses may be significantly higher than the long-term historical average.
The fair value of our fixed maturity portfolio totaled $46 billion at December 31, 2024 . Our credit risk materializes primarily as impairment losses. We are exposed to occasional cyclical economic downturns, during which impairment losses may be significantly higher than the long-term historical average.
An increase in the levels of interest rates of 100 basis points, with all other variables held constant, would result in a decrease in the fair value of our fixed maturity securities and certain investments in preferred securities of approximately $2.4 billion, a net decrease in the fair value of interest rate swaps of approximately $0.1 billion and a net decrease in the combined fair value of embedded derivatives and MRBs of approximately $0.5 bil lion at December 31, 2023 .
An increase in the levels of interest rates of 100 basis points, with all other variables held constant, would result in a decrease in the fair value of our fixed maturity securities and certain investments in preferred securities of approximately $2.6 billion, a net decrease in the fair value of interest rate swaps of approximately $0.1 billion and a net decrease in the combined fair value of embedded derivatives and MRBs of approximately $0.6 bil lion at December 31, 2024 .
While the FIA/ IUL hedging program does not explicitly hedge GAAP income volatility, the FIA/ IUL hedging program tends to mitigate a significant portion of the GAAP reserve changes associated with movements in the equity market.
While the indexed annuities/IUL hedging program does not explicitly hedge GAAP income volatility, the indexed annuities/IUL hedging program tends to mitigate a significant portion of the GAAP reserve changes associated with movements in the equity market.
These hedge programs are limited to the current policy term of the FIA/ IUL contracts. Future returns, which may be reflected in FIA/ IUL contracts’ credited rates beyond the current policy term, are not hedged.
These hedge programs are limited to the current policy term of the indexed annuities/IUL contracts. Future returns, which may be reflected in indexed annuities IUL contracts’ credited rates beyond the current policy term, are not hedged.
A 100 basis point shift in interest rates for our floating rate debt and funding agreements will increase or decrease floating expense by approximatel y $14 million and $11 million per year as of December 31, 2023 and December 31, 2022, respectively .
A 100 basis point shift in interest rates for our floating rate debt and funding agreements will increase or decrease floating expense by approximatel y $17 million and $14 million per year as of December 31, 2024 and 2023, respectively .
Equity Price Risk At December 31, 2023, a 10% increase (decrease) in market prices, with all other variables held constant, would result in an increase (decrease) in the fair value of our equity securities portfolio of $77 million, as compared with an increase (decrease) o f $68 million at December 31, 2022. 84 Table of Contents Interest Rate Risk Related to our F&G Segment Interest rate risk is the F&G segment's primary market risk exposure.
Equity Price Risk As of December 31, 2024, a 10% increase (decrease) in market prices, with all other variables held constant, would result in an increase (decrease) in the fair value of our equity securities portfolio of $64 million, as compared with an increase (decrease) o f $77 million at December 31, 2023. 87 Table of Contents Interest Rate Risk Related to our F&G Segment Interest rate risk is the F&G segment's primary market risk exposure.
The primary way we hedge FIA/ IUL equity exposure is to purchase over the counter equity index call options from broker-dealer derivative counterparties approved by F&G. The second way to hedge FIA/ IUL equity exposure is by purchasing exchange traded equity index futures contracts.
The primary way we hedge indexed annuities/IUL equity exposure is to purchase over the counter equity index equity options from broker-dealer derivative counterparties approved by F&G. The second way to hedge indexed annuities/ IUL equity exposure is by purchasing exchange traded equity index futures contracts.
This hedging strategy enables us to reduce the overall hedging costs and achieve a high correlation of returns on the call options purchased relative to the index credits earned by the FIA/ IUL contractholders. The majority of the call options are one-year options purchased to match the funding requirements underlying the FIA/ IUL contracts.
This hedging strategy enables us to reduce the overall hedging costs and achieve a high correlation of returns on the equity options purchased relative to the index credits earned by the indexed annuities/IUL contractholders. The majority of the equity options are one-year options purchased to match the funding requirements underlying the indexed annuities/IUL contracts.
For comparison, a similar increase in the levels of interest rates of 100 basis points, with all other variables held constant, would have resulted in a decrease in the fair value of our fixed maturity securities and certain investments in preferred securities of approximately $1.9 billion and a net decrease in the combined fair value of embedded derivatives and MRBs of approximately $0.4 billion at December 31, 2022.
For comparison, a similar increase in the levels of interest rates of 100 basis points, with all other variables held constant, would have resulted in a decrease in the fair value of our fixed maturity securities and certain investments in preferred securities of approximately $2.4 billion, a net decrease in the fair value of interest rate swaps of approximately $0.1 billion and a net decrease in the combined fair value of embedded derivatives and MRBs of approximately $0.5 billion at December 31, 2023.
The derivatives are used to fund the FIA/ IUL contract index credits and the cost of the call options purchased is treated as a component of spread earnings.
The derivatives are used to fund the indexed annuities/IUL contract index credits and the cost of the equity options purchased is treated as a component of spread earnings.
At December 31, 2023, we held $766 million in marketable equity securities (not including our investments in preferred securities of $621 million and our investments in unconsolidated affiliates of $3,334 million). The carrying values of investments subject to equity price risks are based on quoted market prices as of the balance sheet date.
As of December 31, 2024, we held $642 million in marketable equity securities (not including our investments in preferred securities of $443 million and our investments in unconsolidated affiliates of $3,731 million). The carrying values of investments subject to equity price risks are based on quoted market prices as of the balance sheet date.
For the years ended December 31, 2023 , December 31, 2022, and December 31, 2021, the annual index credits to 86 Table of Contents policyholders on their anniversaries were $203 million, $155 million and $628 million, respectively. Proceeds received at expiration of options related to such credits were $212 million, $158 million and $702 million, respectively.
For the years ended December 31, 2024 , 2023 and 2022, the annual index credits to policyholders on their anniversaries were $725 million, $203 million and $155 million, respectively. Proceeds received at expiration of options related to such credits were $849 million, $212 million and $158 million, respectively.
At December 31, 2023, we had $3,887 million in long-term debt, none of which bears interest at a floating rate, other than the F&G Credit Facility. Accordingly, fluctuations in market interest rates will not have a material impact on our resulting interest expense.
At December 31, 2024, we had $4,321 million in long-term debt, none of which bears interest at a floating rate. Accordingly, fluctuations in market interest rates will not have a material impact on our resulting interest expense.
Removed
Refer to Note D - Investments in the Consolidated Financial Statements included in Part II - Item 8 of this Annual Report on Form 10-K for our underlying investment concentrations that exceed 10% of shareholders equity as of December 31, 2023, and December 31, 2022.

Other FNF 10-K year-over-year comparisons