✦ Getting the Insurance Book Off the Balance SheetThin moat

GE Aerospace (GE) — the future bets

Removing $36.9 billion of long-term-care liabilities would be the largest re-rating event available to a jet engine company.

The most valuable thing GE Aerospace could do for its own valuation has nothing to do with jet engines.

The run-off book against the company that owns it, in $m36,209Insurance liabilities 202436,894Insurance liabilities 202518,677Shareholders’ equity 202523,837LTC reserves atlocked-in rateThe book is not shrinking materially. A transfer would need a large payment to whoever took it.
Removing this would be the largest single re-rating event available to a jet engine company.

The company retains run-off insurance operations — Employers Reassurance Corporation, which stopped accepting new policies after 2008, and Union Fidelity Life Insurance Company, closed to new business since 20041. Between them they hold 201,700 long-term-care policies covering 253,000 lives at an average attained age of eighty, with 19,300 policies already on claim2. Insurance liabilities and annuity benefits on the balance sheet were $36,894 million at the end of 2025, against total shareholders' equity of $18,677 million3.

The company's own position is carefully hedged: though it may consider strategic options to accelerate the further reduction in the size of these remaining financial services operations, such options may not be viable or attractive because of the associated cash payments, financial charges or other adverse effects4.

That sentence is the whole bet. A reinsurance transaction that transferred the block would remove $36.9 billion of liabilities, an annual insurance result, a statutory capital obligation and a permanent question mark from the equity story. It would almost certainly require a large payment to whoever took it, because a long-term-care book with sixty-three per cent of policies carrying a lifetime benefit period and seventy-seven per cent carrying inflation protection5 is not an asset anyone wants cheaply.

There is a parallel item in the same category: the Bank BPH mortgage portfolio in Poland, where litigation over residential mortgages denominated in or indexed to foreign currencies continues and may require further loss recognition and capital contributions6 — the same Swiss-franc mortgage question that sits on Polish banks' own accounts.

Watch the insurance liability balance itself: $36,894 million7. A material fall that is not explained by ordinary run-off would be the single largest re-rating event available to this company.

Moat trajectory: Holding steady

Insurance liabilities were $36,894 million at the end of 2025 against $36,209 million a year earlier — the book is not shrinking materially. The company says it may consider strategic options while noting they may not be viable or attractive, which is where this has been for years.

The number that tests this moat
Reported
Insurance liabilities and annuity benefits
$36,894M, against $36,209M a year earlier

The book is not shrinking materially. A transaction transferring it would remove the liabilities, the annual insurance result and a permanent question mark, and would almost certainly require a large payment. A material fall not explained by ordinary run-off is the largest single re-rating event available to this company.

Source: GE Aerospace Form 10-K, fiscal year 2025 ↗
References
  1. ReportedThe company retains run-off insurance operations — Employers Reassurance Corporation, which stopped accepting new policies after 2008, and Union Fidelity Life Insurance Company, closed to new business since 2004.
    GE Aerospace Form 10-K, FY2025 - Other Items - Insurance — the run-off insurance operations comprising Employers Reassurance Corporation and Union Fidelity Life Insurance Company, and the long-term care portfolio table giving reserve balances, policies and covered lives in force, average policyholder attained age, the proportions with lifetime benefit periods, inflation protection options and joint lives, policies on claim, and the structured settlement annuity disclosure. — FY2025 · publ. January 2026 · source ↗
  2. ReportedBetween them they hold 201,700 long-term-care policies covering 253,000 lives at an average attained age of eighty, with 19,300 policies already on claim.
    GE Aerospace Form 10-K, FY2025 - Other Items - Insurance — the run-off insurance operations comprising Employers Reassurance Corporation and Union Fidelity Life Insurance Company, and the long-term care portfolio table giving reserve balances, policies and covered lives in force, average policyholder attained age, the proportions with lifetime benefit periods, inflation protection options and joint lives, policies on claim, and the structured settlement annuity disclosure. — FY2025 · publ. January 2026 · source ↗
  3. ReportedInsurance liabilities and annuity benefits on the balance sheet were $36,894 million at the end of 2025, against total shareholders' equity of $18,677 million.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  4. ReportedThe company's own position is carefully hedged: though it may consider strategic options to accelerate the further reduction in the size of these remaining financial services operations, such options may not be viable or attractive because of the associated cash payments, financial charges or other adverse effects.
    GE Aerospace Form 10-K, FY2025 - Item 1A Risk Factors — supply chain and supplier capacity, product safety and quality, run-off insurance and the Bank BPH mortgage portfolio in Poland including the Genworth trust counterparty exposure, borrowings and liquidity, and regulatory and legal risks. — FY2025 · publ. January 2026 · source ↗
  5. ReportedIt would almost certainly require a large payment to whoever took it, because a long-term-care book with sixty-three per cent of policies carrying a lifetime benefit period and seventy-seven per cent carrying inflation protection is not an asset anyone wants cheaply.
    GE Aerospace Form 10-K, FY2025 - Other Items - Insurance — the run-off insurance operations comprising Employers Reassurance Corporation and Union Fidelity Life Insurance Company, and the long-term care portfolio table giving reserve balances, policies and covered lives in force, average policyholder attained age, the proportions with lifetime benefit periods, inflation protection options and joint lives, policies on claim, and the structured settlement annuity disclosure. — FY2025 · publ. January 2026 · source ↗
  6. ReportedThere is a parallel item in the same category: the Bank BPH mortgage portfolio in Poland, where litigation over residential mortgages denominated in or indexed to foreign currencies continues and may require further loss recognition and capital contributions — the same Swiss-franc mortgage question that sits on Polish banks' own accounts.
    GE Aerospace Form 10-K, FY2025 - Item 1A Risk Factors — supply chain and supplier capacity, product safety and quality, run-off insurance and the Bank BPH mortgage portfolio in Poland including the Genworth trust counterparty exposure, borrowings and liquidity, and regulatory and legal risks. — FY2025 · publ. January 2026 · source ↗
  7. ReportedWatch the insurance liability balance itself: $36,894 million.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
Sources
Generated September 23, 2026