Life Insurance - Chasing The Rainbow

Please see page 33 for rating definitions, important disclosures
and required analyst certifications
All estimates/forecasts are as of 10/15/15 unless otherwise stated.
Wells Fargo Securities, LLC does and seeks to do business with companies
covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of the
report and investors should consider this report as only a single factor in
making their investment decision.
INSUR100615-114208
October 15, 2015
Equity Research
Life Insurance: Chasing The Rainbow
A Deep Dive Into Alternative Investments And Schedule BA
Source: © iStockphoto.com
Insurance
John Hall, Senior Analyst
(212) 214-8032
john.a.hall@wellsfargo.com
Elyse Greenspan, CFA, Senior Analyst
(212) 214-8031
elyse.greenspan@wellsfargo.com
Kenneth Hung, CFA, ASA, Associate Analyst
(212) 214-8023
kenneth.hung@wellsfargo.com
Rashmi H. Patel, CFA, Associate Analyst
(212) 214-8034
rashmi.patel@wellsfargo.com

WELLSFARGOSECURITIES,LLC
InsuranceEQUITYRESEARCHDEPARTMENT
2
($ in millions, exc ept per share) 10/14/15 Market
Rating Cap 14 15E 16E Current 15E 16E 14 15E 16E Current 15E 16E 14 15E 16E 14A 15 YTD
Life Insuranc e
Aflac AFL 2 $59.74 $25,729.7 $6.16 $6.05 $6.30 $31.66 $32.27 $33.08 9.7 9.9 9.5 1.89 1.85 1.81 19.8% 19.1% 19.2% (8.5%) (2.2%)
Ameriprise Financial AMP 1 $107.57 $19,171.2 $8.52 $9.48 $11.05 $39.09 $39.21 $39.68 12.6 11.3 9.7 2.75 2.74 2.71 22.6% 24.3% 28.1% 15.0% (18.7%)
Genworth Financial GNW 2 $5.19 $2,581.6 ($0.80) $1.02 $1.15 $20.55 $21.03 $22.19 NM 5.1 4.5 0.25 0.25 0.23 (3.5%) 4.9% 5.4% (45.3%) (38.9%)
Lincoln National LNC 1 $48.49 $12,168.7 $6.03 $5.99 $6.70 $50.84 $53.20 $58.11 8.0 8.1 7.2 0.95 0.91 0.83 12.8% 11.8% 12.1% 11.7% (15.9%)
MetLife MET 1 $47.20 $52,716.8 $5.74 $5.24 $6.20 $50.73 $52.19 $56.36 8.2 9.0 7.6 0.93 0.90 0.84 11.8% 10.3% 11.4% 0.3% (12.7%)
Principal Financial PFG 2 $47.77 $14,080.0 $4.41 $4.42 $4.75 $34.00 $35.46 $38.52 10.8 10.8 10.1 1.40 1.35 1.24 14.0% 13.0% 12.9% 5.3% (8.0%)
Prudential Financial PRU 1 $76.50 $34,501.5 $9.21 $10.70 $10.70 $71.09 $74.44 $81.66 8.3 7.1 7.1 1.08 1.03 0.94 14.6% 15.2% 13.7% (1.9%) (15.4%)
Torchmark TMK 2 $56.69 $7,092.8 $4.03 $4.22 $4.60 $29.56 $30.77 $33.54 14.1 13.4 12.3 1.92 1.84 1.69 14.7% 14.2% 14.3% 4.0% 4.7%
Voya Financial VOYA 1 $38.82 $8,785.9 $3.14 $3.34 $3.80 $56.33 $57.72 $62.49 12.4 11.6 10.2 0.69 0.67 0.62 6.7% 6.0% 6.3% 20.6% (8.4%)
Average 10.5 9.6 8.7 1.32 1.28 1.21 12.6% 13.2% 13.7% 0.1% (12.9%)
Multi- Lines
American International Group AIG 2 $58.03 $75,084.4 $4.58 $5.06 $5.70 $73.91 $76.73 $82.48 12.7 11.5 10.2 0.79 0.76 0.70 6.8% 6.9% 7.2% 9.7% 3.6%
Assurant AIZ 2 $79.67 $5,323.4 $6.87 $7.06 $6.75 $65.29 $67.29 $71.45 11.6 11.3 11.8 1.22 1.18 1.12 11.0% 10.7% 9.7% 3.1% 16.4%
The Hartford HIG 1 $45.88 $19,033.1 $3.36 $3.97 $4.20 $42.41 $43.81 $46.69 13.6 11.5 10.9 1.08 1.05 0.98 8.5% 9.4% 9.3% 15.1% 10.1%
Average 12.6 11.4 11.0 1.03 1.00 0.93 8.8% 9.0% 8.7% 9.3% 10.0%
Life Insuranc e Sec tor Mean 11.1 10.1 9.3 1.25 1.21 1.14 11.7% 12.1% 12.5% 2.4% (7.1%)
Life Insuranc e Sec tor Median 11.6 11.1 9.9 1.08 1.04 0.96 12.3% 11.2% 11.8% 4.7% (8.2%)
Non- Life Insuranc e
Reinsurers
Everest Re RE 2 $176.99 $7,820.9 $24.71 $20.70 $19.10 $174.84 $180.97 $195.58 7.2 8.6 9.3 1.01 0.98 0.90 15.9% 12.1% 10.1% 9.3% 3.9%
PartnerRe Ltd. PRE 2 $138.60 $6,639.2 $14.76 $10.18 $9.10 $127.24 $129.97 $135.61 9.4 13.6 15.2 1.09 1.07 1.02 12.5% 8.0% 6.9% 8.3% 21.4%
RenaissanceRe RNR 2 $108.27 $4,974.3 $11.56 $9.20 $10.00 $96.43 $99.27 $107.60 9.4 11.8 10.8 1.12 1.09 1.01 13.6% 9.7% 9.7% (0.1%) 11.4%
Average 8.6 11.3 11.8 1.07 1.05 0.98 14.0% 9.9% 8.9% 5.8% 12.2%
Diversified
ACELimited ACE 2 $105.55 $34,177.6 $9.79 $9.05 $8.95 $91.27 $94.38 $100.70 10.8 11.7 11.8 1.16 1.12 1.05 11.2% 9.8% 9.2% 11.0% (8.1%)
Arch Capital ACGL 2 $75.61 $9,257.8 $4.58 $4.10 $4.15 $47.49 $48.46 $50.97 16.5 18.4 18.2 1.59 1.56 1.48 10.7% 8.7% 8.3% (1.0%) 27.9%
Axis Capital AXS 2 $53.30 $5,364.0 $5.32 $4.20 $4.85 $51.81 $52.18 $55.39 10.0 12.7 11.0 1.03 1.02 0.96 11.0% 8.2% 9.0% 7.4% 4.3%
Chubb CB 2 $124.70 $28,304.0 $7.63 $7.45 $7.30 $70.12 $72.85 $77.77 16.3 16.7 17.1 1.78 1.71 1.60 11.5% 10.5% 9.9% 7.1% 20.5%
Travelers Corporation TRV 2 $102.77 $31,982.6 $10.55 $9.45 $9.20 $77.51 $79.67 $84.46 9.7 10.9 11.2 1.33 1.29 1.22 14.3% 12.1% 11.2% 16.9% (2.9%)
Average 12.7 14.1 13.9 1.38 1.34 1.26 11.8% 9.9% 9.5% 8.3% 8.3%
Personal Lines
Allstate Corporation ALL 1 $59.86 $23,967.3 $5.40 $4.80 $6.00 $47.96 $49.55 $53.33 11.1 12.5 10.0 1.25 1.21 1.12 10.8% 9.0% 10.8% 28.8% (14.8%)
Progressive Corporation PGR 2 $31.56 $18,492.0 $1.92 $1.95 $1.80 $12.56 $12.57 $13.57 16.4 16.2 17.5 2.51 2.51 2.32 17.4% 16.1% 13.9% (1.0%) 16.9%
United Insurance Holdings Corp. UIHC 1 $14.57 $313.7 $2.05 $1.05 $1.95 $10.19 $10.88 $12.59 7.1 13.9 7.5 1.43 1.34 1.16 25.6% 10.4% 17.1% 55.9% (33.6%)
Average 11.5 14.2 11.6 1.73 1.69 1.53 17.9% 11.9% 13.9% 27.9% (10.5%)
Insuranc e Brokers
Aon Corporation AON 2 $90.05 $25,217.9 $4.76 $5.13 $5.75 N/A N/A N/A 18.9 17.6 15.7 N/A N/A N/A N/A N/A N/A 13.0% (5.0%)
Arthur J. Gallagher AJG 1 $42.45 $7,407.5 $2.39 $2.57 $2.95 N/A N/A N/A 17.8 16.5 14.4 N/A N/A N/A N/A N/A N/A 0.3% (9.8%)
Brown & Brown BRO 2 $30.91 $4,354.4 $1.62 $1.67 $1.88 N/A N/A N/A 19.1 18.6 16.5 N/A N/A N/A N/A N/A N/A 4.8% (6.1%)
Marsh & McLennan MMC 1 $52.77 $27,967.7 $2.82 $3.01 $3.42 N/A N/A N/A 18.7 17.5 15.4 N/A N/A N/A N/A N/A N/A 18.4% (7.8%)
Willis Group Holdings WSH 3 $41.58 $7,470.4 $2.33 $2.57 $2.85 N/A N/A N/A 17.8 16.2 14.6 N/A N/A N/A N/A N/A N/A 0.0% (7.2%)
Average 18.5 17.3 15.3 7.3% (7.2%)
Non- Life Insuranc e Sec tor Mean 13.5 14.6 13.5 1.39 1.35 1.26 14.0% 10.4% 10.6% 11.2% 0.7%
Non- Life Insuranc e Sec tor Median 13.7 15.1 14.5 1.25 1.21 1.12 12.5% 9.8% 9.9% 7.8% - 4.0%
S&P 500 SPX 1,994.24 117.92 129.43 144.72 16.9 15.4 13.8 11.4% (3.1%)
Pric e / Earnings Pric e/Book Value Operating ROE Pric e Performanc eEarnings Per Share Book Value Per Share
Notes: Our EPS for AON in the above table includes intangible amortization. Excluding intangibles, cash EPS for 2014 was $5.71 and we are projecting cash EPS of $6.03 in 2015, and $6.55 in 2016. BRO 2014 EPS backs
out the $0.21 charge associated with the Axiom Re sale. For AFL, AMP, GNW, LNC, PFG, TMK, VOYA, AIG, AIZ and HIG, book value per share is ex-AOCI. For MET, book value per share is ex-AOCI other than FCTA.
For PRU, book value per share is ex-AOCI and adjusted to remove amount included for foreign currency exchange rate remeasurement.
Ratings: 1 - Outperform; 2 - Market Perform; 3 - Underperform
Source: FactSet and Wells Fargo Securities, LLC estimates

WELLS FARGO SECURITIES, LLC
Life Insurance: Chasing The Rainbow EQUITY RESEARCH DEPARTMENT
3
TABLE OF CONTENTS
Executive Summary .....................................................................................................................................................................................5
Analyzing The U.S. Life Industry’s “Other Long-term Invested Assets” ....................................................................................................7
Analyzing The Schedule BA’s Of Select Life And Non-life Insurance Companies ....................................................................................11
American International Group (NYSE: AIG)....................................................................................................................................12
The Hartford (NYSE: HIG) ...............................................................................................................................................................15
Lincoln National (NYSE: LNC) .........................................................................................................................................................18
MetLife (NYSE: MET) .......................................................................................................................................................................21
Principal Financial Group (NYSE: PFG) ..........................................................................................................................................24
Prudential Financial (NYSE: PRU)...................................................................................................................................................27
Voya Financial (NYSE: VOYA) .........................................................................................................................................................30

Insurance EQUITY RESEARCH DEPARTMENT
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5
Executive Summary
Summary: The sustained low interest rate environment has pressured net investment income and investment
spreads for life insurers. Despite risk-based capital and other constraints, life insurers still have a few tools
available in order to combat the effect of sustained low interest rates. On the margin, asset allocation is one of
those available tools. With a higher return profile as compared to investment grade bonds, alternative
investments have been a source of incremental yield for life insurers in the current rate environment.
Chasing the pot of gold at the end of the rainbow. While most of our covered life insurers reference
having alternative investment portfolios, the disclosure offered in their respective statistical supplements is
uneven and generally not comparable from one company to the next. And the discussion of the alternative
investment contribution to net investment income varies significantly from company to company on quarterly
conference calls. But to frame the potential impact – MetLife is budgeting to earn $1.3-1.7 billion of alternative
investment income in 2015 (or as they call it, variable investment income), which compares to our projection
of total operating income of roughly $5.9 billion for the largest U.S. life insurer. To us, that’s kind of important.
So we decided to dig a little deeper on the subject.
Blue Books. Our journey took us to the statutory filings for life insurers or “Blue Books,” a term lost to the
digital age. Life insurers are required to file financial statements with various states of domicile that are
prepared in accordance with statutory accounting principles. Statutory statements vary in many ways with
GAAP statements; but for investments, we think they offer a more complete view of a life insurer’s investment
portfolio. Using a contract database that includes more data than an actual Blue Book, we took a look at the
consolidated alternative investment portfolios for some of our covered life insurers (LNC, MET, PFG, PRU,
and VOYA), as well as the portfolios of a couple of covered non-life insurers with substantial life operations
(AIG and HIG). For all the companies that we reviewed, our work touches upon only their domestic life
insurance operations – a limitation of statutory accounting. Further for AIG and The Hartford, our review also
does not consider the investment portfolios supporting their respective non-life insurance companies.
Reams of data. A tremendous amount of information is collected in a life insurer’s statutory filings related to
invested assets. Life insurers are required to report each individual investment bought, held, and sold during
the course of a year. To appreciate the sheer scale of the data reported, find the Blue Book for Metropolitan Life
Insurance and just thumb through the hundreds of pages of disclosure with bond after bond listed by CUSIP
number. Investments are reported by asset class with each major asset class reported on a specific schedule.
For instance, Schedule A is for real estate, Schedule B is for mortgage loans, Schedule D is for bonds and
stocks, Schedule DB is for derivatives, Schedule DL is for securities lending collateral, and Schedule E is for
cash. Anything that does not fit these investment categories is placed on Schedule BA – the statutory home for
reporting alternative assets.
So what is Schedule BA? According to the National Association of Insurance Commissioners (NAIC), the
Schedule BA for other long-term invested assets is a catch-all schedule that includes only those classes of
invested assets, which are not clearly or normally included on any other invested asset schedule. In addition,
the Schedule BA should include any assets previously written off for book purposes, but that still have a market
or investment value. As the phrase “other” implies, Schedule BA encompasses an assortment of long-term
investments including private equity and hedge funds, common stock, real estate, housing tax credits, fixed
income instruments, surplus debentures, collateral loans, mortgage loans, and transportation equipment, as
well as oil and gas production and mineral rights.
An increasing level of granularity. In the past, Schedule BA assets lacked much, if any classification or
definition beyond their inclusion on the schedule. At present, Schedule BA listed assets are subdivided into 22
different categories, which allows us to determine the rough allocation of asset types held on the schedule. For
almost all of these categories, there is also a sub-classification for affiliated investments, which swells the total
to 43 different categories in total. In particular for private equity and hedge fund investments, there are also
data available on the allocations to and returns generated from various investment strategies.

6
Short takes – What did we find?
 In general, the allocation of investment assets to Schedule BA classifications is on the rise.
What was once 2.4% of life insurance industry invested assets in 2005 has steadily moved up to
4.5% in 2015.
 The alternative investment portfolios tend to be larger, in both absolute and percentage terms,
at bigger life insurance companies. Mutual insurance companies also seem to have a greater
appetite for alternative investments.
 While private equity and hedge fund investments tend to account for less than 33% of total
Schedule BA assets, they are the predominant contributors to alternative asset returns (in
excess of 50% for full-year 2014).
 In the aggregate, industry return expectations for Schedule BA assets tend to be in a range of 6-
9%. In 2014, the life insurance industry return on Schedule BA assets was within the expected
range at 6.3%. In particular for private equity and hedge fund investments, returns were above
the expected range at 10.1%.
 Private equity performance has been strong and has added to net investment income yields,
while hedge fund performance has been less favorable.
 Several of our covered life insurers appear to have capacity to boost their exposure to the
alternative investments that populate Schedule BA. The companies on this list would include
Aflac, Allstate, Ameriprise, Lincoln National, Principal, and Voya. To the best of our
knowledge, Aflac, Allstate, and Lincoln National have all signaled an interest in raising their
respective exposures to alternative investments.
 AIG, MetLife, and Prudential all have above industry average exposure to alternative assets
reported on Schedule BA. We think there is only a limited capacity for any of these three
companies to boost exposure to this asset class.
 We think life insurers with mature portfolios of Schedule BA assets that include private equity
are not being paid full value for them. Private equity, in particular, is an investment with a
longer gestation period. To build a substantial private equity portfolio, a life insurer must be
willing to forego current income today in the hope of stronger returns in the future. The seeds
of the private equity investments generating net investment income now were planted five or
ten years ago. And to maintain those returns, new private equity investments must continue to
be made to replenish the natural portfolio run-off.
Exhibit 1. Categories Of Schedule BA Investments
Category Line Number Category Description
1 199999/299999 oil and gas production
2 399999/399999 transportation equipment
3 599999/699999 mineral rights
4 799999/899999 bonds
5 999999/1099999 fix/var mortgage loans
6 1199999/1299999 other fixed income instruments
7 1399999/1499999 fixed income
8 1599999/1699999 common stock
9 1799999/1899999 real estate
10 1999999/2099999 JV, LLC mortgage loans
11 2199999/2299999 other
12 2399999/2499999 surplus debentures, etc.
13 2599999/2699999 collateral loans
14 2799999/2899999 non-collateral loans
15 2999999/3099999 capital notes
16 3199999/3299999 guaranteed Federal low income housing tax credit
17 3399999/3499999 non-guaranteed Federal low income housing tax credit
18 3599999/3699999 guaranteed State low income housing tax credit
19 3799999/3899999 non-guaranteed State low income housing tax credit
20 3999999/4099999 all other low income housing tax credit
21 4199999 working capital finance
22 4299999/4399999 any other class of assets
Source: Company statutory filings, NAIC annual statement instructions, and Wells Fargo Securities, LLC

7
Analyzing The U.S. Life Industry’s “Other Long-term Invested Assets”
Notable industry observations. Based on our industry Schedule BA analysis, we think there are several
notable observations for the U.S. life insurance industry:
 In general, the allocation of investment assets to Schedule BA classifications is on the rise.
What was once 2.4% of life insurance industry invested assets in 2005 has steadily moved up to
4.5% in 2015.
 The alternative investment portfolios tend to be larger, in both absolute and percentage terms,
at bigger life insurance companies. Mutual insurance companies also seem to have a greater
appetite for alternative investments.
 While private equity and hedge fund investments tend to account for less than 33% of total
Schedule BA assets, they are the predominant contributors to alternative asset returns (in
excess of 50% for full-year 2014).
 In the aggregate, industry return expectations for Schedule BA assets tend to be in a range of 6-
9%. In 2014, the life insurance industry return on Schedule BA assets was within the expected
range at 6.3%. In particular for private equity and hedge fund investments, returns were above
the expected range at 10.1%.
 Private equity performance has been strong and has added to net investment income yields,
while hedge fund performance has been less favorable.
A growing allocation to Schedule BA assets; size of general account matters. Historically, asset
allocations to other long-term invested assets in the life insurance industry were below 30% of total adjusted
capital, including asset valuation reserves. In 2007, allocation to Schedule BA assets in the life insurance
industry increased substantially, to 33.7% of total adjusted capital (from 27.5% in 2006), including asset
valuation reserves. This rising trend continued and at year-end 2014, allocation to Schedule BA assets further
increased to 40.6% of total capital, including asset valuation reserves. (See Exhibit 2.)
Exhibit 2. A Growing Allocation To Schedule BA Assets In The U.S. Life Insurance Industry
($ in billions)
$281
$295
$312
$273
$311
$336
$348
$370 $378
$405
24.3%
27.5%
33.7%
38.7%
34.7% 34.2%
36.4% 37.6% 39.1% 40.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BA Assets As A % of Total Adjusted Capital Total Adjusted Capital
2.4%
2.8%
3.6% 3.5% 3.5% 3.6%
3.8%
4.1%
4.3%
4.5%
$2,800 $2,873 $2,952 $3,020 $3,072
$3,191
$3,364 $3,406 $3,481
$3,630
0%
1%
2%
3%
4%
5%
6%
7%
8%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BA Assets As A % of Total Gross Investments Total Gross Investments
Notes:
1. Value of Schedule BA assets based on book or adjusted carrying value less encumbrances
2. Total adjusted capital includes asset valuation reserves
Source for both charts: Company statutory filings, SNL Financial, and Wells Fargo Securities, LLC estimates
SNL DISCLAIMER: SNL FINANCIAL LC. CONTAINS COPYRIGHTED AND TRADE SECRET MATERIAL
DISTRIBUTED UNDER LICENSE FROM SNL. FOR RECIPIENT’S INTERNAL USE ONLY

8
In addition, life insurers with larger general accounts tend to have higher allocations to Schedule BA assets. In
2014, the top 10 life insurers (by general account assets) accounted for roughly 49% of total general account
assets and almost 70% of total Schedule BA assets. (See Exhibit 3.)
Exhibit 3. Select Life Insurers In The United States, 2014
Rank Entity Name
General
Account
Assets
($B)
% of Total
General
Account
Assets
Schedule
BA Assets
($B)
% of
Total
Schedule
BA Assets
1 MetLife Inc. $348.7 9.1% $22.0 13.4%
2 TIAA-CREF $240.7 6.3% $26.2 15.9%
3 New York Life Insurance Group $219.1 5.7% $17.3 10.5%
4 Prudential Financial Inc. $210.6 5.5% $8.9 5.4%
5 Northwestern Mutl Life Ins Co. $203.0 5.3% $12.5 7.6%
6 American International Group $190.5 5.0% $11.5 7.0%
7 Massachusetts Mutl Life Ins Co $142.6 3.7% $7.2 4.4%
8 Manulife Financial Corp. $117.6 3.1% $6.5 4.0%
9 Aflac Inc. $101.8 2.7% $0.4 0.2%
10 Lincoln National Corp. $98.7 2.6% $1.9 1.2%
Total Of Top 10 Life Insurers $1,873.2 48.8% $114.3 69.5%
13 Voya Financial Inc. $86.6 2.3% $1.5 0.9%
14 State Farm Mutl Automobile Ins $64.4 1.7% $1.2 0.7%
16 Genworth Financial Inc. $61.7 1.6% $0.6 0.4%
18 Principal Financial Group Inc. $59.1 1.5% $3.2 1.9%
25 Unum Group $38.8 1.0% $0.6 0.4%
27 Hartford Financial Services $37.2 1.0% $1.7 1.0%
28 Allstate Corp. $37.2 1.0% $3.2 1.9%
29 American Equity Investment $36.5 1.0% $0.5 0.3%
32 Ameriprise Financial Inc. $31.7 0.8% $0.0 0.0%
35 Reinsurance Group America Inc. $27.8 0.7% $0.5 0.3%
37 Symetra Financial Corp. $24.8 0.6% $0.3 0.2%
39 CNO Financial Group Inc. $22.4 0.6% $0.2 0.1%
44 Sun Life Financial Inc. $19.7 0.5% $0.1 0.1%
46 Fidelity & Guaranty Life Group $18.9 0.5% $0.4 0.3%
50 Torchmark Corp. $16.6 0.4% $0.5 0.3%
Life Industry $3,836.0 100% $164.5 100%
Notes: SNL Life Groups; value of Schedule BA assets based on book or adjusted carrying value less encumbrances; bold
denotes covered company within Wells Fargo Securities, LLC Insurance Universe
Strong growth in LBO private equity and long/short equity and multi-strategy hedge funds. The
U.S. life industry’s investments in private equity and hedge funds grew at compound annual growth rates
(CAGR) of 33% and 36%, respectively, from 2005 to 2014. (See Exhibit 4.) These investments remained more
heavily weighted to leveraged buyout private equity assets, as well as long/short equity and multi-strategy
hedge funds. Given the strong growth in private equity and hedge fund investments, they accounted for
roughly 33% of total Schedule BA assets in 2014, up from roughly 5% in 2005. (See Exhibit 5.)

9
Exhibit 4. Hedge Funds And Private Equity In Schedule BA Assets
($ in billions)
$0.9 $1.5
$2.5 $1.8 $1.6
$2.6 $3.2
$5.5
$8.8
$12.3
$2.5
$5.7
$9.3
$12.1
$16.2
$20.4
$25.4
$32.4
$37.7
$41.4
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Hedge Funds Private Equity
From 2005-2014:
Hedge funds assets grew at a CAGR of 33%;
Private equity assets grew at a CAGR of 36%
Note: Value of Schedule BA assets based on book or adjusted carrying value less encumbrances
Source: Company statutory filings, SNL Financial, and Wells Fargo Securities, LLC estimates
Exhibit 5. Life Insurers’ Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Convertible arbitrage 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%
Distressed securities 0.0% 0.0% 0.1% 0.1% 0.1% 0.3% 0.3% 0.7% 1.1% 1.1%
Emerging markets 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0% 0.2% 0.3%
Fixed income arbitrage 0.0% 0.1% 0.2% 0.1% 0.2% 0.4% 0.3% 0.3% 0.3% 0.3%
Futures/Options/FX arbitrage 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Global macro 0.0% 0.0% 0.0% 0.0% 0.1% 0.2% 0.2% 0.2% 0.3% 0.3%
Long/short equity 0.1% 0.2% 0.6% 0.3% 0.2% 0.2% 0.5% 1.2% 1.7% 2.6%
Merger arbitrage 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1%
Multi-strategy 1.2% 1.5% 1.3% 1.1% 0.8% 1.0% 1.0% 1.4% 2.0% 2.2%
Sector investing 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.1% 0.1% 0.3% 0.6%
Hedge Funds Total 1.3% 1.8% 2.4% 1.7% 1.5% 2.3% 2.5% 4.0% 5.9% 7.5%
Leveraged buyout 1.8% 4.6% 4.5% 4.9% 8.2% 10.0% 12.2% 13.8% 16.0% 16.1%
Mezzanine financing 0.8% 1.2% 2.0% 3.5% 4.4% 3.9% 3.5% 4.4% 4.9% 4.2%
Venture capital 1.1% 1.1% 2.4% 3.1% 2.4% 3.8% 4.4% 5.1% 4.6% 4.9%
Private Equity Total 3.6% 7.0% 8.9% 11.5% 15.1% 17.7% 20.1% 23.3% 25.5% 25.2%
Total HF and PE assets 4.9% 8.8% 11.2% 13.2% 16.6% 20.0% 22.6% 27.3% 31.4% 32.7%
Total Schedule BA assets ($B) $68 $81 $105 $105 $108 $115 $127 $139 $148 $165
Note: BACV - Sum of carrying value in Schedule BA assets
Earnings volatility stemming from alternative investments. While private equity and hedge fund
investments tend to account for less than 33% of total Schedule BA assets, they are the predominant
contributors to alternative asset returns (in excess of 50% for full-year 2014). Historically, returns from
alternative investments tend to fluctuate significantly for the life insurance industry, with a range of 1.4% (in
2005 and 2009) to 6.3% (in 2014). Life insurance companies currently have a long-term expected return
assumption in the range of 6-9% for alternative investments, including hedge funds and private equity.

10
Exhibit 6. Schedule BA Asset Returns; Estimated Actual Versus Expected
9.0%
10.3%
11.4%
4.1%
2.0%
5.9%
7.5%
7.9%
7.7%
10.1%
1.4%
1.9%
2.9%
2.1%
1.4%
3.0%
3.6%
4.6%
5.4%
6.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Total HF and PE Returns Total Schedule BA Asset Returns
Expected returns of 6-9%
Note: Returns estimated using investment income/carrying value
Source: Company data and Wells Fargo Securities, LLC estimates
In particular, leveraged buyout private equity investments generated the highest returns (19.5% in 2007 and
13.0% in 2014). Hedge funds returns in general were only slightly profitable (low- to mid-single digit) in the
past ten years. In 2009, long/short equity hedge funds generated double-digit returns of 11.8%. Merger
arbitrage hedge funds also generated strong returns of 15.3% in 2014.
Exhibit 7. Returns From Hedge Funds And Private Equity Investments
Estimated Returns by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Convertible arbitrage - - 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Distressed securities 21.5% -1.0% 0.0% 0.4% 9.8% 0.0% 0.6% 1.9% 1.4% 2.4%
Emerging markets - 0.0% 0.0% 0.0% 1.0% 6.0% 6.7% 14.0% 1.5% 1.7%
Fixed income arbitrage 0.0% 0.0% 0.0% 4.6% -17.0% 1.3% 1.3% 3.7% 2.2% 3.3%
Futures/Options/FX arbitrage 5.7% 18.1% - - - - - - 0.0% 0.0%
Global macro - - 6.6% 6.7% 1.0% 1.0% 0.3% 0.3% 0.0% 0.5%
Merger arbitrage 0.0% - - - - - - - 0.0% 15.3%
Multi-strategy 5.2% 5.8% 5.1% 1.5% 0.4% 3.9% 1.4% 0.9% 0.8% 1.1%
Sector investing 0.0% 8.2% 0.0% 11.0% 0.0% 0.0% 0.0% 34.2% -0.1% 1.6%
Venture capital 2.5% 2.6% 7.7% 4.9% 1.4% 4.5% 7.3% 8.3% 6.5% 13.5%
Total HF and PE Returns 9.0% 10.3% 11.4% 4.1% 2.0% 5.9% 7.5% 7.9% 7.7% 10.1%
Total Schedule BA Asset Returns 1.4% 1.9% 2.9% 2.1% 1.4% 3.0% 3.6% 4.6% 5.4% 6.3%
Contribution from HF and PE 31.4% 47.7% 43.8% 26.6% 23.6% 40.2% 46.6% 47.4% 45.1% 52.4%
Note: Contribution from HF and PE is calculated using absolute return in dollars from hedge funds and private equity
divided by total absolute return in dollars from Schedule BA assets

11
Analyzing The Schedule BA’s Of Select Life And Non-Life Insurance Companies
Notable individual company observations. Based on our individual Schedule BA analysis, we think there
are several notable observations for some of our coverage companies:
 There has been a stable to growing allocation to Schedule BA assets in the past ten years, in
particular for bigger life insurers and non-life insurers with substantial life operations. As a
result, AIG, MetLife, and Prudential all have above industry average exposure to alternative
assets reported on Schedule BA. We think there is only a limited capacity for any of these three
companies to boost exposure to this asset class.
 In particular for MetLife, the company has increased its exposure to private equity and hedge
funds in recent years, due to the continued low interest rate environment. However, MET does
not expect this portfolio to continue to grow as it has already reached the company’s target in
regulatory capital commitment (from 3.5% of capital during crisis to roughly 5% of capital at
the moment). In addition, private equity returns could decline modestly given significant cash
distribution.
 In 2012, Prudential saw its investments in private equity increase significantly, driven by
jumbo-sized pension risk transfer (PRT) deals. As the company maintains its dominating
position in the jumbo PRT market, we expect there should still be some increase in the
company’s exposure to alternative assets (private equity in particular) on an absolute basis.
 As for The Hartford, there has been a continued increase in the allocation to private equity and
hedge fund investments within its life subsidiaries. Still, we think HIG should see these
Schedule BA assets decline over time as it continues to wind down its life business.
 Several of our covered life insurers appear to have capacity to boost their exposure to the
alternative investments that populate Schedule BA. The companies on this list include Aflac,
Allstate, Ameriprise, Lincoln National, Principal, and Voya. To the best of our knowledge,
Aflac, Allstate, and Lincoln National have all signaled an interest in raising their respective
exposures to alternative investments.
 In particular for Lincoln National, the company has $1.2 billion in alternative investments
(majority in private equity and hedge funds), which are around 1.2-1.3% of the overall
portfolio, and underweight versus peers’. Over time, the company thinks it could move to
roughly 1.5% of overall portfolio. In the past couple of years, they have been growing at around
$100 million per year.
 Historically returns from alternative investments tend to fluctuate significantly from low-
single-digit to high-double-digit. Leveraged buyout private equity investments, on average,
generated the highest returns, while hedge fund investments, on average, were modestly
profitable, generating low- to mid-single-digit returns.
 There has been strong growth in leveraged buyout private equity and multi-strategy and
long/short equity hedge funds in the past ten years. We think life insurers with mature
portfolios of Schedule BA assets that include private equity are not being paid full value for
them. Private equity, in particular, is an investment with a longer gestation period. To build a
substantial private equity portfolio, a life insurer must be willing to forego current income
today in the hope of stronger returns in the future. The seeds of the private equity investments
generating net investment income now were planted five or ten years ago. And to maintain
those returns, new private equity investments must continue to be made to replenish the
natural portfolio run-off.

12
American International Group (NYSE: AIG); Rating: Market Perform
Key takeaways from our analysis:
 On a consolidated basis, AIG’s U.S. life companies had general account assets of $190.5 billion at year-end
2014, ranked No. 6 in U.S. life insurers, and accounted for roughly 5.0% of total general account assets in
the life industry. Further, the U.S. life companies had $11.5 billion of other long-term invested assets,
which were filed on Schedule BA and represented around 7.0% of the U.S. life industry’s total Schedule BA
assets.
 At year-end 2007, the company’s asset allocation to other long-term invested assets rose to 74.9% of total
adjusted capital including asset valuation reserves (from 39.2% at year-end 2006). Historically,
fluctuations of this ratio are as much a function of capital movements. AIG’s Schedule BA assets further
increased to 84.8% of total adjusted capital including asset valuation reserves at year-end 2008, followed
by a decrease to a recent low in 2011 (51.8%) and an increase to a recent high in 2014 (88.4%). Perhaps a
better metric to look at, in our view, would be the ratio of Schedule BA assets to total gross investments,
which has stayed relative stable within a band of roughly 5-6% since 2007.
 AIG’s investments in hedge fund and private equity grew at CAGRs of 51% and 30%, respectively, from
2005 to 2014. The company’s alternative investments remained more heavily weighted to long/short
equity, distressed securities, and multi-strategy hedge funds, as well as leveraged buyout private equity
assets.
 Historically, returns from alternative investments tend to fluctuate significantly for AIG, with a range of -
0.2% (in 2005) to 7.2% (in 2014). In general, leveraged buyout private equity investments generated the
highest returns (23.0% in 2014 and 13.0% in 2013). Hedge funds returns in general were only slightly
profitable (low-single-digit) in 2011 to 2014. In 2009, AIG’s investments in long/short equity hedge funds
generated a strong, double-digit return of 17.6%. The company currently has a long-term expected return
assumption of 8% for alternative investments, including hedge funds and private equity.
A stable allocation to Schedule BA assets. At year-end 2007, AIG’s asset allocation to other long-term
invested assets rose to 74.9% of total adjusted capital, including asset valuation reserves (from 39.2% at year-
end 2006). Historically, fluctuations of this ratio are as much a function of capital movements. The company’s
Schedule BA assets further increased to 84.8% of total adjusted capital, including asset valuation reserves at
year-end 2008, followed by a decrease to a recent low in 2011 (51.8%) and an increase to a recent high in 2014
(88.4%). Perhaps a better metric to look at, in our view, would be the ratio of Schedule BA assets to total gross
investments, which has stayed relative stable within a band of roughly 5-6% since 2007.
Exhibit 8. AIG’s Stable Allocation To Schedule BA Assets
($ in billions)
107.6%
39.2%
74.9%
84.8%
61.8%
55.3% 51.8% 56.3% 60.3%
88.4%
$16.0 $16.1 $16.4
$12.2
$13.8
$15.9
$16.9
$18.2 $18.4
$13.0
0%
20%
40%
60%
80%
100%
120%
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
8.1%
3.2%
6.5%
6.1%
5.1% 5.1% 4.9%
5.6% 5.9% 6.3%
$213.1
$196.9
$189.2
$170.8 $166.0
$171.1
$177.2
$184.0 $187.2 $183.2
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
$0
$50
$100
$150
$200
$250
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes:

13
Growth in long/short equity, distressed securities, and multi-strategy hedge funds, as well as
LBO private equity. AIG’s investments in hedge fund and private equity grew at compound annual growth
rates (CAGR) of 51% and 30%, respectively, from 2005 to 2014. The company’s alternative investments
remained more heavily weighted to long/short equity, distressed securities, and multi-strategy hedge funds, as
well as leveraged buyout private equity assets.
Exhibit 9. Hedge Funds And Private Equity In AIG’s Schedule BA Assets
($ in billions)
$0.13
$0.44
$1.45
$0.96 $0.90
$1.16
$1.55
$2.38
$3.78
$5.09
$0.21 $0.38
$0.63 $0.71
$1.02
$1.56
$2.00
$2.57
$2.35
$2.24
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2005-2014:
Exhibit 10. AIG’s Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global macro 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Multi-strategy 0.0% 0.0% 0.0% 0.0% 0.0% 0.3% 0.8% 1.9% 4.5% 5.2%
Venture capital 0.1% 0.3% 0.3% 0.3% 0.7% 0.8% 1.0% 2.3% 1.9% 1.7%
Total Schedule BA assets ($B) $17.3 $6.3 $12.3 $10.4 $8.5 $8.8 $8.7 $10.2 $11.1 $11.5

14
Earnings volatility stemming from alternative investments. Historically returns from alternative
investments tend to fluctuate significantly for AIG, with a range of 0.2% (in 2005) to 7.2% (in 2014). In
general, leveraged buyout private equity investments generated the highest returns (23.0% in 2014 and 13.0%
in 2013). Hedge funds returns in general were only slightly profitable (low-single-digit) in 2011 to 2014. In
2009, AIG’s investments in long/short equity hedge funds generated a strong, double-digit return of 17.6%.
The company currently has a long-term expected return assumption of 8% for alternative investments,
including hedge funds and private equity.
Exhibit 11. AIG’s Alternative Investment Returns, 2005-2014
4.2%
2.8%
2.5%
-0.6%
4.8%
4.8%
6.4%
7.5%
6.8%
7.7%
0.2%
0.5%
0.9%
0.4%
1.6%
2.1%
3.7%
4.4%
5.2%
7.2%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Total HF and PE Returns Expected return of 8%
Total Schedule BA Asset Returns
Exhibit 12. AIG’s Returns From Hedge Funds And Private Equity Investments
Convertible arbitrage - - - - - - - - - -
Distressed securities 3.3% -0.1% 0.0% -0.4% 1.0% 0.9% 0.2% 1.8% 1.5% 1.8%
Emerging markets -2.6% -0.5% 0.0% 0.0% 0.0% 133.2% 0.0% 0.0% 0.1% 0.0%
Fixed income arbitrage 0.0% 0.0% - - - - - - - -
Futures/Options/FX arbitrage 5.7% 18.1% - - - - - - - -
Global macro - - - - - - - - - 17.5%
Long/short equity - 0.0% 0.0% -1.1% 17.6% 2.2% 3.1% 0.4% 4.0% 0.9%
Merger arbitrage - - - - - - - - - -
Multi-strategy - - - - - 0.0% 0.0% 0.0% 1.3% 1.4%
Sector investing - - - - - - - - - -
Hedge Funds Total 2.0% 0.2% 0.0% -0.8% 9.0% 2.0% 1.6% 0.9% 2.6% 1.2%
Leveraged buyout 6.0% 6.6% 8.5% -0.3% 1.2% 7.2% 10.5% 12.7% 13.0% 23.0%
Mezzanine financing - 65.5% 18.7% 0.0% 7182.1% - - - - -
Venture capital -2.4% -3.8% 5.7% -2.1% -2.1% 1.4% 2.5% 23.0% 17.9% 19.0%
Private Equity Total 5.6% 6.0% 8.3% -0.3% 1.1% 7.0% 10.1% 13.6% 13.5% 22.7%
Total HF and PE Returns 4.2% 2.8% 2.5% -0.6% 4.8% 4.8% 6.4% 7.5% 6.8% 7.7%
Contribution from HF and PE 49.6% 81.1% 47.0% -23.3% 65.0% 71.4% 70.3% 82.9% 71.7% 68.6%

15
The Hartford (NYSE: HIG); Rating: Outperform
 On a consolidated basis, HIG’s life companies had general account assets of $37.2 billion at year-end 2014,
ranked No. 27 in U.S. life insurers, and accounted for roughly 1.0% of total general account assets in the
life industry. Further, the life companies had $1.7 billion of other long-term invested assets, which were
filed on Schedule BA and represented around 1.0% of the U.S. life industry’s total Schedule BA assets.
 At year-end 2006, the company’s asset allocation to other long-term invested assets increased
substantially, to 22.3% of total adjusted capital including asset valuation reserves (from 12.6% at year-end
2005). This increase in asset allocation continued and HIG’s Schedule BA assets further increased to
28.2% of total adjusted capital including asset valuation reserves at year-end 2012. However, since 2013,
the company's asset allocation to other long-term invested assets has decreased substantially (to roughly
23% total adjusted capital including asset valuation reserves at year-end 2014).
 A rising trend can also be observed in Schedule BA assets as a percent of total gross investments, which
increased from 1.3% at year-end 2005 to 4.9% at year-end 2014. In addition, we think the surge in 2013
and 2014 was largely driven by HIG’s ongoing business restructuring, which lowered total gross
investments.
 HIG’s investments in hedge fund and private equity grew at CAGRs of 15% and 19%, respectively, from
2006 to 2014. The company’s alternative investments remained more heavily weighted to private equity
assets (leveraged buyout in particular) and multi-strategy hedge funds.
 Historically returns from alternative investments tend to fluctuate significantly for HIG, with a range of
0.6% (in 2005) to 5.3% (in 2012). In general, mezzanine financing private equity investments generated
the highest returns (16.1% in 2010 and 12.6% in 2014). Multi-strategy hedge funds also generated a strong
return of 26.7% in 2013. The company currently has a long-term expected return assumption of 6% for
alternative investments, including hedge funds and private equity.
A growing allocation to Schedule BA assets. Historically, HIG’s asset allocation to other long-term
invested assets was below 20% of total adjusted capital including asset valuation reserves. In 2006, the
company’s allocation to Schedule BA assets increased substantially to 22.3% of total adjusted capital (from
12.6% in 2005), including asset valuation reserves. This increase in asset allocation continued and HIG’s
Schedule BA assets further increased to 28.2% of total adjusted capital including asset valuation reserves at
year-end 2012. However, since 2013, the company's asset allocation to other long-term invested assets has
decreased substantially (to roughly 23% total adjusted capital including asset valuation reserves at year-end
2014). A rising trend can also be observed in Schedule BA assets as a percentage of total gross investments,
which increased from 1.3% at year-end 2005 to 4.9% at year-end 2014.
Exhibit 13. HIG’s Growing Allocation To Schedule BA Assets
($ in billions)
12.6%
22.3%
26.2%
23.4%
18.8%
17.2%
21.8%
28.2% 27.4%
22.7%
$4.7
$5.3
$6.3
$6.1 $6.0
$6.7
$7.0
$6.2 $6.1
$7.5
0%
5%
10%
15%
20%
25%
30%
$0
$1
$2
$3
$4
$5
$6
$7
$8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
1.3%
2.5%
3.1%
2.3% 2.1% 2.2%
2.6%
3.0%
4.5%
4.9%
$43.4
$47.5
$52.9
$61.6
$52.9 $52.6
$58.8 $57.9
$37.3
$34.8
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
$0
$10
$20
$30
$40
$50
$60
$70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes:

16
Growth in LBO private equity and multi-strategy hedge funds. HIG’s investments in hedge funds and
private equity assets grew significantly from 2006 to 2014, with annual asset growth rates compounding at 15%
and 19%, respectively. In addition, the company’s alternative investments remained more heavily weighted to
private equity assets (leveraged buyout in particular) and multi-strategy hedge funds. During 2014, hedge fund
investments increased sharply in both absolute and relative terms compared to 2013.
Exhibit 14. Hedge Funds And Private Equity In HIG’s Schedule BA Assets
($ in billions)
$0.17
$0.32
$0.16
$0.09
$0.05 $0.04
$0.03 $0.03
$0.52
$0.12 $0.13
$0.22
$0.33 $0.33
$0.37
$0.50
$0.53
$0.51 $0.52
$0.0
$0.1
$0.2
$0.3
$0.4
$0.5
$0.6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2006-2014:
Exhibit 15. HIG’s Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global macro 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Multi-strategy 0.0% 14.7% 19.4% 11.0% 7.9% 4.5% 2.8% 1.8% 1.5% 30.5%
Venture capital 3.8% 2.4% 1.9% 1.9% 2.1% 1.6% 2.9% 2.2% 2.3% 2.5%

17
investments tend to fluctuate significantly for HIG, with a range of 0.6% (in 2005) to 5.3% (in 2012). In
general, mezzanine financing private equity investments generated the highest returns (16.1% in 2010 and
12.6% in 2014). Multi-strategy hedge funds also generated a strong return of 26.7% in 2013. The company
currently has a long-term expected return assumption of 6% for alternative investments, including hedge funds
and private equity.
Exhibit 16. HIG’s Alternative Investment Returns, 2005-2014
0.8%
2.5%
5.9%
5.0%
1.4%
9.1%
8.0%
12.6%
9.9%
4.3%
0.6%
1.1%
2.9%
2.4%
1.2%
4.1% 3.9%
5.3%
4.2%
4.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exhibit 17. HIG’s Returns From Hedge Funds And Private Equity Investments
Distressed securities - - - - - - - - - -
Emerging markets - - - - - - - - - -
Fixed income arbitrage - - - - - - - - - -
Futures/Options/FX arbitrage - - - - - - - - - -
Global macro - - - - - - - - - -
Long/short equity - - - - - - - - - -
Multi-strategy - 0.0% 1.2% 1.2% 0.6% 6.6% 14.1% 16.1% 26.7% 0.8%
Hedge Funds Total - 0.0% 1.2% 1.2% 0.6% 6.6% 14.1% 16.1% 26.7% 0.8%
Venture capital 0.0% 3.4% 22.8% 17.7% 0.7% 0.5% 4.0% 26.3% 2.6% 2.8%

18
Lincoln National (NYSE: LNC); Rating: Outperform
 On a consolidated basis, Lincoln’s life companies had general account assets of $98.7 billion at year-end
2014, ranked No. 10 in U.S. life insurers and accounted for roughly 2.6% of total general account assets in
the life industry. Further, the company had $1.9 billion of other long-term invested assets, which were
substantially to 14.1% of total adjusted capital including asset valuation reserves (from 9.5% at year-end
2005). This increase in asset allocation continued and LNC’s Schedule BA assets further increased to
26.7% of total adjusted capital including asset valuation reserves at year-end 2012.
 A similar rising trend can also be observed in Schedule BA assets as a percent of total gross investments,
which increased from 0.8% at year-end 2005 to 2.3% at year-end 2012. However, since 2013, the
company’s asset allocation to other long-term invested assets has decreased and stabilized (to roughly
22% total adjusted capital, including asset valuation reserves and 2.0% of total gross investments).
 Based on the Schedule BA filing for 2014, the company's alternative investments were more heavily
weighted to private equity assets (leveraged buyout and mezzanine financing in particular). Due to limited
information provided in Schedule BA filings prior to 2014, we were not able to pinpoint Lincoln’s
investments in hedge funds between years 2005 and 2013. Still, based on the breakdown of hedge fund
investments for 2014 and the historical industry trend, we think there could be an increasing shift toward
long/short equity and multi-strategy hedge funds.
 Given the lack of details on investments in the company’s Schedule BA filings prior to 2014, we were not
able to estimate LNC’s returns on hedge funds and private equity assets between years 2005 and 2013. In
2014, total Schedule BA asset returns were 9.9%, aided by strong returns from investments in private
equity (11.3%) and hedge funds (13.6%).
A stabilizing allocation to Schedule BA assets. Historically, LNC’s asset allocation to other long-term
9.5% in 2005), including asset valuation reserves. This increase in asset allocation continued and LNC’s
year-end 2012. A similar rising trend can also be observed in Schedule BA assets as a percentage of total gross
investments, which increased from 0.8% at year-end 2005 to 2.3% at year-end 2012. However, since 2013, the
company’s asset allocation to other long-term invested assets has decreased and stabilized (to roughly 22%
total adjusted capital including asset valuation reserves and 2.0% of total gross investments).
Exhibit 18. LNC’s Stabilizing Allocation To Schedule BA Assets
($ in billions)
9.5%
14.1%
17.9%
20.8%
22.1% 22.6%
24.9%
26.7%
22.3% 21.6%
$5.8 $5.7
$6.0
$5.1
$6.7
$7.1
$7.6 $7.6
$8.0
$8.8
0%
5%
10%
15%
20%
25%
30%
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
0.8% 1.2%
1.6% 1.6%
2.0% 2.0% 2.2% 2.3% 2.0% 2.0%
$70.0 $68.4 $68.2 $68.6
$74.8
$79.1
$87.0
$90.2 $89.6
$94.6
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes:

19
Alternative investments more heavily weighted to private equity. Based on the Schedule BA filing for
2014, the company's alternative investments were more heavily weighted to private equity assets (leveraged
buyout and mezzanine financing in particular). Due to limited information provided in Schedule BA filings
prior to 2014, we were not able to pinpoint Lincoln’s investments in hedge funds between years 2005 and
2013. Still, based on the breakdown of hedge fund investments for 2014 and the historical industry trend, we
think there could be an increasing shift toward long/short equity and multi-strategy hedge funds.
Exhibit 19. Hedge Funds And Private Equity In LNC’s Schedule BA Assets
($ in billions)
$0.27
$0.44
$0.0
$0.1
$0.1
$0.2
$0.2
$0.3
$0.3
$0.4
$0.4
$0.5
$0.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2005-2014:
Not enough information to determine the CAGRs
of hedge funds and private equity assets.
Exhibit 20. LNC’s Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global macro 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.4%
Multi-strategy 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3.2%
Venture capital 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.0%

20
Double-digit returns from private equity and hedge funds in 2014. Given the lack of details on
investments in the company’s Schedule BA filings prior to 2014, we were not able to estimate LNC’s returns on
hedge funds and private equity assets between years 2005 and 2013. In 2014, total Schedule BA asset returns
were 9.9%, aided by strong returns from investments in private equity (11.3%) and hedge funds (13.6%).
Exhibit 21. LNC’s Alternative Investment Returns, 2005-2014
12.1%
0.0% 0.2% 0.1% 0.4% 0.5%
2.8%
1.5% 1.5%
1.9%
9.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2005-2014:
Not enough information to estimate the returns on
hedge funds and private equity assets.
Exhibit 22. LNC’s Returns From Hedge Funds And Private Equity Investments
Distressed securities - - - - - - - - - 0.0%
Emerging markets - - - - - - - - - 0.0%
Fixed income arbitrage - - - - - - - - - 151.3%
Global macro - - - - - - - - - 0.0%
Long/short equity - - - - - - - - - 2.5%
Merger arbitrage - - - - - - - - - 33.9%
Multi-strategy - - - - - - - - - 12.0%
Hedge Funds Total - - - - - - - - - 13.6%
Leveraged buyout - - - - - - - - - 11.8%
Mezzanine financing - - - - - - - - - 11.0%
Venture capital - - - - - - - - - 4.2%
Private Equity Total - - - - - - - - - 11.3%
Total HF and PE Returns - - - - - - - - - 12.1%
Contribution from HF and PE - - - - - - - - - 47.2%

21
MetLife (NYSE: MET); Rating: Outperform
 On a consolidated basis, MetLife’s life companies had general account assets of $349 billion at year-end
2014, the largest in U.S. life insurers and accounted for roughly 9.1% of total general account assets in the
life industry. Further, the life companies had $22 billion of other long-term invested assets, which were
2005). This increase in asset allocation continued and MetLife’s Schedule BA assets further increased to
86.7% of total adjusted capital including asset valuation reserves at year-end 2014.
 A similar rising trend can also be observed in Schedule BA assets as a percentage of total gross
investments, which increased from 3.1% at year-end 2005 to 6.6% at year-end 2014.
 MetLife’s investments in hedge fund and private equity grew at compound annual growth rates (CAGR) of
27% and 14%, respectively, from 2006 to 2014. The company’s alternative investments remained more
heavily weighted to private equity assets (leveraged buyout in particular), but there was also an increasing
shift toward multi-strategy and long/short equity hedge funds.
 Historically returns from alternative investments tend to fluctuate significantly for MetLife, with a range
of 0.5% (in 2005) to 4.9% (in 2007). In general, leveraged buyout private equity investments generated
the highest returns (41.5% in 2007 and 17.2% in 2014).
 Multi-strategy hedge funds returns were more favorable in 2009 and 2010 (4.3% and 7.9%, respectively),
but only slightly profitable in 2012-14. In addition, MetLife’s investments in long/short equity hedge funds
generated a strong return of 9.7% in 2014, up significantly versus returns of 1.0% in 2012 and 2.0% in
2013.
A growing allocation to Schedule BA assets. Historically, MetLife’s asset allocation to other long-term
48.6% in 2005), including asset valuation reserves. This increase in asset allocation continued and MetLife’s
year-end 2014. A similar rising trend can also be observed in Schedule BA assets as a percent of total gross
Exhibit 23. MetLife’s Growing Allocation To Schedule BA Assets
($ in billions)
48.6%
61.6%
67.3%
79.4% 76.1% 74.1% 74.9% 75.1%
86.6% 86.7%
$19.1
$20.4
$24.3
$23.7
$22.1
$23.9
$26.0
$27.2
$24.2
$25.4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$0
$5
$10
$15
$20
$25
$30
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
3.1%
3.8%
4.7%
5.4%
4.8% 4.9% 5.1%
6.4% 6.7% 6.6%
$299.7
$327.7
$346.4 $351.1 $347.8
$363.5
$383.1
$318.6 $314.9
$333.3
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes:

22
Growth in LBO private equity and multi-strategy and long/short equity hedge funds. MetLife’s
investments in hedge funds and private equity assets grew significantly from 2006 to 2014, with annual asset
growth rates compounding at 27% and 14%, respectively. In addition, the company’s alternative investments
remained more heavily weighted to private equity assets (leveraged buyout in particular), but there was also an
increasing shift toward multi-strategy and long/short equity hedge funds.
Exhibit 24. Hedge Funds And Private Equity In MetLife’s Schedule BA Assets
($ in billions)
$0.31 $0.36 $0.36
$0.49
$0.60
$0.79
$0.98
$1.60
$2.06
$1.42
$1.71 $1.76
$2.77
$2.92
$3.45
$3.56
$4.03
$4.14
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2006-2014:
Exhibit 25. MetLife’s Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global macro 0.0% 0.0% 0.0% 0.0% 1.0% 1.2% 1.2% 1.3% 1.8% 1.4%
Multi-strategy 0.0% 2.2% 2.0% 1.5% 0.1% 0.7% 0.9% 1.1% 1.9% 3.8%
Venture capital 0.0% 0.2% 0.1% 0.1% 0.4% 0.6% 1.1% 1.3% 1.8% 2.2%

23
investments tend to fluctuate significantly for MetLife, with a range of 0.5% (in 2005) to 4.9% (in 2007). In
in 2014). Multi-strategy hedge funds returns were more favorable in 2009 and 2010 (4.3% and 7.9%,
respectively), but only slightly profitable in 2012 to 2014. In addition, MetLife’s investments in long/short
equity hedge funds generated a strong return of 9.7% in 2014, up significantly versus returns of 1.0% in 2012
and 2.0% in 2013.
Exhibit 26. MetLife’s Alternative Investment Returns, 2005-2014
22.8%
31.4%
5.3%
1.9%
7.7% 8.2%
9.8% 9.6%
11.2%
0.5%
4.0%
4.9%
1.7%
0.7%
4.3%
2.9%
4.7%
4.0% 4.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exhibit 27. MetLife’s Returns From Hedge Funds And Private Equity Investments
Convertible arbitrage - - - - 0.0% 0.0% 0.0% 0.0% - -
Emerging markets - 0.0% 0.0% 0.0% 0.0% 0.0% - 109.5% 0.2% 0.1%
Fixed income arbitrage - - - 0.0% -26.9% 2.9% 0.0% 0.0% 0.0% 0.0%
Global macro - - - - 1.0% 1.0% 0.3% 0.4% 0.0% 0.2%
Long/short equity - - - - 0.0% 0.0% 0.0% 1.1% 2.0% 9.7%
Multi-strategy - 0.0% 0.0% 0.0% 4.3% 7.9% 2.1% 0.5% 0.5% 0.3%
Sector investing - - - - - - 0.0% - 0.0% 0.0%
Hedge Funds Total - 0.0% 0.0% 0.0% -7.7% 2.6% 0.7% 1.1% 0.7% 3.0%
Leveraged buyout - 29.6% 41.5% 6.0% 3.1% 9.1% 11.2% 13.2% 14.4% 17.2%
Mezzanine financing - 14.3% 8.0% 9.1% 6.4% 8.4% 7.6% 9.7% 9.8% 6.8%
Venture capital - 4.6% 10.3% 5.1% 4.0% 2.7% 2.3% 6.4% 6.4% 11.1%
Private Equity Total - 27.8% 38.0% 6.4% 3.6% 8.8% 10.2% 12.2% 13.0% 15.2%
Total HF and PE Returns - 22.8% 31.4% 5.3% 1.9% 7.7% 8.2% 9.8% 9.6% 11.2%
Contribution from HF and PE - 77.7% 80.4% 34.4% 52.5% 35.4% 62.6% 46.6% 64.2% 73.6%

24
Principal Financial Group (NYSE: PFG); Rating: Market Perform
 On a consolidated basis, PFG’s life insurance companies had general account assets of $59.1 billion at
year-end 2014, ranked No. 18 in U.S. life insurers and accounted for roughly 1.5% of total general account
assets in the life industry. Further, the life companies had $3.2 billion of other long-term invested assets,
assets.
2005). This increase in asset allocation continued through 2012 and PFG’s Schedule BA assets further
increased to 76.3% of total adjusted capital including asset valuation reserves at year-end 2012.
which increased from 3.4% at year-end 2005 to 6.1% at year-end 2012. However, since 2013, the
company’s asset allocation to other long-term invested assets has decreased substantially and stabilized
(to roughly 64% total adjusted capital including asset valuation reserves and 5.6% of total gross
investments).
 Due to limited information provided in Schedule BA filings prior to 2014, we were not able to pinpoint
PFG’s investments or returns associated with hedge funds between years 2005 and 2013. Still, based on
the breakdown of hedge fund investments for 2014 and the historical industry trend, we think there could
be an increasing shift toward multi-strategy hedge funds.
 Alternative asset returns tend to fluctuate year to year significantly for Principal, with a range of 0.2% (in
2005) to 9.7% (in 2013). In 2014, total Schedule BA asset returns were 7.6%. Due to limited information
available on PFG’s Schedule BA filings, we were not able to estimate the historical returns of the company’s
investments in private equity and hedge funds. In addition, the company’s private equity and hedge fund
investments grew from roughly 0% in 2005 to 9.8% of total other long-term invested assets in 2014.
A stabilizing allocation to Schedule BA assets. Historically, Principal’s asset allocation to other long-
term invested assets was below 50% of total adjusted capital including asset valuation reserves. In 2006, the
40.0% in 2005), including asset valuation reserves. This increase in asset allocation continued and PFG’s
year-end 2012. A similar rising trend can also be observed in Schedule BA assets as a percentage of total gross
investments, which increased from 3.4% at year-end 2005 to 6.1% at year-end 2012. However, since 2013, the
company’s asset allocation to other long-term invested assets has decreased substantially and stabilized (to
roughly 64% total adjusted capital including asset valuation reserves and 5.6% of total gross investments).
Exhibit 28. PFG’s Stabilizing Allocation To Schedule BA Assets
($ in billions)
40.0%
62.2%
65.8% 64.3%
71.5% 71.5% 72.3%
76.3%
63.4% 63.8%
$4.5
$4.5
$4.6
$5.1
$4.9
$4.7
$4.8
$4.6
$4.8
$5.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
$4
$4
$4
$5
$5
$5
$5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
3.4%
5.1% 5.2% 5.3%
6.0% 6.0% 6.0% 6.1%
5.3% 5.6%
$52.4
$55.2
$58.4
$61.8
$58.7
$56.7
$57.2
$58.2
$57.4 $57.4
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
$46
$48
$50
$52
$54
$56
$58
$60
$62
$64
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes:

25
Not enough information; but potentially a shift to multi-strategy hedge funds. Due to limited
information provided in Schedule BA filings prior to 2014, we were not able to pinpoint PFG’s investments
associated with hedge funds between years 2005 and 2013. Still, based on the breakdown of hedge fund
investments for 2014 and the historical industry trend, we think there could be an increasing shift toward
multi-strategy hedge funds. In addition, the company’s private equity and hedge fund investments grew from
roughly 0% in 2005 to 9.8% of total other long-term invested assets in 2014.
Exhibit 29. Hedge Funds And Private Equity In PFG’s Schedule BA Assets
($ in billions)
$0.00 $0.00 $0.00 $0.00 $0.00 $0.00
$0.30
$0.01
$0.0
$0.1
$0.1
$0.2
$0.2
$0.3
$0.3
$0.4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2005-2014:
Not enough information to determine the CAGRs
of hedge funds and private equity assets.
Exhibit 30. PFG’s Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global macro 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2%
Multi-strategy 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 8.5%
Venture capital 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

26
Fluctuating alternative investment returns. Alternative asset returns tend to fluctuate year to year
significantly for Principal, with a range of 0.2% (in 2005) to 9.7% (in 2013). Due to limited information
available on PFG’s Schedule BA filings, we were not able to estimate the historical returns of the company’s
investments in private equity and hedge funds. In 2014, total Schedule BA asset returns were 7.6%.
Exhibit 31. PFG’s Alternative Investment Returns, 2005-2014
0.0% 0.0% 0.0% 0.0% 0.0%
9.7%
0.0%0.2%
2.4%
8.7%
7.6%
4.4%
4.9%
7.4%
9.1%
9.3% 7.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2005-2014:
Not enough information to estimate the returns on
hedge funds and private equity assets.
Exhibit 32. PFG’s Returns From Hedge Funds And Private Equity Investments
Global macro - - - - - - - - - -
Multi-strategy - - - - - - - - - 0.0%
Hedge Funds Total - - - - - - - - - 0.0%
Leveraged buyout - - - - - - - - - 0.0%
Mezzanine financing - - - - - - - - - -
Venture capital - - - 0.0% 0.0% 0.0% 0.0% 0.0% 9.7% 0.0%
Private Equity Total - - - 0.0% 0.0% 0.0% 0.0% 0.0% 9.7% 0.0%
Total HF and PE Returns - - - 0.0% 0.0% 0.0% 0.0% 0.0% 9.7% 0.0%
Contribution from HF and PE - - - 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

27
Prudential Financial (NYSE: PRU); Rating: Outperform
 On a consolidated basis, Prudential’s life companies had general account assets of $211 billion at year-end
2014, ranked No. 4 in U.S. life insurers and accounted for roughly 5.5% of total general account assets in
the life industry. Further, the life companies had $8.9 billion of other long-term invested assets, which
were filed on Schedule BA and represented around 5.4% of the U.S. life industry’s total Schedule BA
assets.
2005). This increase in asset allocation continued and Prudential’s Schedule BA assets further increased
to 56.8% of total adjusted capital including asset valuation reserves at year-end 2014.
 A similar rising trend can also be observed in Schedule BA assets as a percentage of total gross
 Prudential’s investments in hedge fund and private equity grew at compound annual growth rates (CAGR)
of 43% and 38%, respectively, from 2005 to 2014. We think the significant increase in private equity assets
in 2012 was largely driven by the jumbo-sized pension risk transfer deals with GM and Verizon, which
included some alternative investments in the transferred asset portfolio. The company’s alternative
investments remained more heavily weighted to private equity assets (leveraged buyout in particular), in
addition to a fluctuating allocation to multi-strategy hedge funds.
 Historically returns from alternative investments tend to fluctuate significantly for Prudential, with a
range of 0.5% (in 2010) to 8.1% (in 2014). In general, leveraged buyout private equity investments
generated the highest returns (18.4% in 2014 and 17.6% in 2005).
 Multi-strategy hedge funds returns were only modestly profitable in recent years (0.2% in 2014, 0.1% in
2013, and 0.2% in 2012).
A growing allocation to Schedule BA assets. Historically, Prudential’s asset allocation to other long-term
15.1% in 2005), including asset valuation reserves. This increase in asset allocation continued and Prudential’s
Exhibit 33. Prudential’s Growing Allocation To Schedule BA Assets
($ in billions)
15.1%
27.3%
31.5% 32.6% 33.4% 34.9%
41.8%
59.6% 61.9%
56.8%
$11.0
$10.0
$11.4
$9.7
$13.9
$12.9 $12.6
$13.2
$14.3
$15.6
0%
10%
20%
30%
40%
50%
60%
70%
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
1.0%
1.6%
2.1% 1.8%
2.7% 2.6%
3.0%
4.3% 4.6% 4.5%
$162.6
$172.2 $172.9 $174.2 $171.9 $171.6 $175.3
$182.7
$192.4
$198.2
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
$0
$50
$100
$150
$200
$250
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes:

28
Growth in LBO private equity and a fluctuating allocation to multi-strategy hedge funds.
Prudential’s investments in hedge funds and private equity assets grew significantly from 2005 to 2014, with
annual asset growth rates compounding at 43% and 38%, respectively. We think the significant increase in
private equity assets in 2012 was largely driven by the jumbo-sized pension risk transfer deals with GM and
Verizon. The company’s alternative investments remained more heavily weighted to private equity assets
(leveraged buyout in particular), in addition to a fluctuating allocation to multi-strategy hedge funds.
Exhibit 34. Hedge Funds And Private Equity In Prudential’s Schedule BA Assets
($ in billions)
$0.01 $0.02 $0.03 $0.02 $0.02
$0.29
$0.57
$0.84
$1.10
$0.27
$0.13 $0.13
$0.33
$0.47 $0.46
$0.71
$0.77
$2.30 $2.33
$2.51
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2005-2014:
Exhibit 35. Prudential’s Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global macro 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Multi-strategy 0.6% 0.8% 0.7% 0.6% 0.5% 6.4% 10.7% 10.7% 12.4% 3.1%
Venture capital 0.3% 0.6% 1.6% 2.8% 1.5% 1.8% 1.7% 4.1% 2.8% 3.8%

29
investments tend to fluctuate significantly for Prudential, with a range of 0.5% (in 2010) to 8.1% (in 2014). In
in 2005). Multi-strategy hedge funds returns were only modestly profitable in recent years (0.2% in 2014, 0.1%
in 2013, and 0.2% in 2012).
Exhibit 36. Prudential’s Alternative Investment Returns, 2005-2014
12.5%
11.0%
6.1%
2.6%
3.3%
-0.2%
4.3%
2.1%
7.4%
14.8%
2.2%
1.3% 1.0%
1.9%
1.0%
0.5%
1.8%
1.8%
5.1%
8.1%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exhibit 37. Prudential’s Returns From Hedge Funds And Private Equity Investments
Global macro - - - - - - - - - -
Multi-strategy 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.4% 0.2% 0.1% 0.2%
Sector investing - - - - - - 0.0% -16.3% 0.0% -
Hedge Funds Total 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.4% 0.2% 0.1% 0.2%
Leveraged buyout 17.6% 11.9% 6.6% 3.1% -1.9% -0.4% 8.8% 2.0% 10.6% 18.4%
Mezzanine financing 12.1% 15.5% 8.0% 3.4% 8.1% -0.4% 8.9% 7.9% 12.6% 15.0%
Venture capital 19.7% 2.7% 2.2% 0.3% -0.6% 0.0% 0.4% 0.2% 10.0% 8.7%
Private Equity Total 13.5% 12.9% 6.5% 2.7% 3.5% -0.3% 7.9% 2.8% 10.9% 16.4%
Total HF and PE Returns 12.5% 11.0% 6.1% 2.6% 3.3% -0.2% 4.3% 2.1% 7.4% 14.8%
Contribution from HF and PE 50.5% 49.5% 57.7% 21.6% 36.1% -11.9% 62.5% 48.7% 56.2% 57.4%

30
Voya Financial (NYSE: VOYA); Rating: Outperform
 On a consolidated basis, VOYA’s life insurance companies had general account assets of $86.6 billion at
year-end 2014, ranked No. 13 in U.S. life insurers and accounted for roughly 2.3% of total general account
assets in the life industry. Further, the life companies had $1.5 billion of other long-term invested assets,
assets.
2005). This increase in asset allocation continued through 2009 and VOYA’s Schedule BA assets further
increased to 67.6% of total adjusted capital, including asset valuation reserves at year-end 2009.
which increased from 1.0% at year-end 2005 to 5.8% at year-end 2009. However, since 2010, the company’s
asset allocation to other long-term invested assets has decreased substantially and stabilized after 2012 (to
roughly 20% total adjusted capital including asset valuation reserves and 1.8% of total gross investments). It
appears as if VOYA divested Schedule BA investments as the company prepared to go public.
 Due to limited information provided in Schedule BA filings prior to 2014, we were not able to pinpoint
VOYA’s investments in hedge funds between years 2005 and 2013. Still, based on the breakdown of hedge
fund investments for 2014 and the historical industry trend, we think there could be an increasing shift
toward long/short equity and multi-strategy hedge funds.
 The company’s investments in private equity grew at a compound annual growth rate (CAGR) of 38% from
2005 to 2014. In addition, there was a growing allocation to leveraged buyout private equity investments.
Historically returns from private equity investments tend to fluctuate significantly for VOYA, with a range
of 1.6% (in 2009) to 37.3% (in 2006). Since 2010, returns from private equity investments have been
largely meeting or exceeding VOYA’s expectation (9%), which the company does not expect to recur.
A stabilizing allocation to Schedule BA assets. Historically, VOYA’s asset allocation to other long-term
invested assets was below 20% of total adjusted capital, including asset valuation reserves. In 2006, the
11.7% in 2005), including asset valuation reserves. This increase in asset allocation continued and VOYA’s
investments, which increased from 1.0% at year-end 2005 to 5.8% at year-end 2009. However, since 2010,
VOYA’s asset allocation to other long-term invested assets has decreased substantially and stabilized after 2012
(to roughly 20% total adjusted capital including asset valuation reserves and 1.8% of total gross investments).
Exhibit 38. VOYA’s Stabilizing Allocation To Schedule BA Assets
($ in billions)
11.7%
22.6%
34.0% 31.4%
67.6%
63.5%
49.2%
19.6% 19.5% 20.2%
$7.5
$7.3
$7.9
$6.8
$6.9
$7.0
$8.0
$7.9
$7.1
$7.3
0%
10%
20%
30%
40%
50%
60%
70%
80%
$6
$6
$7
$7
$7
$7
$7
$8
$8
$8
$8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
1.0%
2.1%
3.2%
2.5%
5.8%
5.4%
4.6%
1.8% 1.7% 1.8%
$89.1
$78.2
$83.2
$85.3
$80.5
$81.8
$85.7
$84.3
$82.5
$83.3
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
$72
$74
$76
$78
$80
$82
$84
$86
$88
$90
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Notes:

31
Growth in LBO private equity. The company’s investments in private equity grew at a CAGR of 38% from
2005 to 2014. In addition, there was a growing allocation to leveraged buyout private equity investments. Due
to limited information provided in Schedule BA filings prior to 2014, we were not able to pinpoint VOYA’s
investments in hedge funds between years 2005 and 2013. Still, based on the breakdown of hedge fund
investments for 2014 and the historical industry trend, we think there could also be an increasing shift toward
long/short equity and multi-strategy hedge funds.
Exhibit 39. Hedge Funds And Private Equity In VOYA’s Schedule BA Assets
($ in billions)
$0.16
$0.03
$0.01
$0.06
$0.13
$0.13 $0.12 $0.12
$0.09
$0.07
$0.16
$0.0
$0.0
$0.0
$0.1
$0.1
$0.1
$0.1
$0.1
$0.2
$0.2
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
From 2005-2014:
Exhibit 40. VOYA’s Various Private Equity And Hedge Fund Investments
BACV by Strategy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global macro 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.8%
Multi-strategy 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2.6%
Venture capital 0.3% 0.2% 0.1% 0.1% 0.0% 0.1% 0.0% 0.0% 0.0% 0.3%

32
Earnings volatility stemming from alternative investments. Historically returns from private equity
investments tend to fluctuate significantly for VOYA, with a range of 1.6% (in 2009) to 37.3% (in 2006). The
company currently has a long-term expected return assumption of 9% for alternative investments, including
hedge funds and private equity. Since 2010, returns from private equity investments have been largely meeting
or exceeding VOYA’s expectation, which the company does not expect to recur.
Exhibit 41. VOYA’s Alternative Investment Returns, 2005-2014
8.0%
37.3%
10.4%
1.7% 1.6%
14.2%
8.5%
31.4%
10.3%
7.2%
0.3% 0.4% 0.3%0.6% 0.1%
2.1%
3.0%
11.5%
7.8%
13.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exhibit 42. VOYA’s Returns From Hedge Funds And Private Equity Investments
Distressed securities - - - - - - - 0.0% 0.0% 6.2%
Emerging markets - - - - - - - - - 0.0%
Fixed income arbitrage - - - - - - - - - 0.0%
Global macro - - - - - - - - - 0.1%
Long/short equity - - - - - - - - - 12.4%
Multi-strategy - - - - - - - - - 0.7%
Sector investing - - - - - - - - - 0.0%
Hedge Funds Total 0.0% - - - - - - 0.0% 0.0% 4.5%
Mezzanine financing 6.4% - 6.3% 3.3% 2.9% 17.9% 9.5% 11.1% 7.6% 15.0%
Venture capital 0.0% 8.2% 0.0% 0.0% 0.0% 0.0% 195.2% 0.0% 0.0% 19.6%

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