Document and Entity Information
Document and Entity Information - $ / shares | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 15, 2016 | Dec. 31, 2015 | |
Document Document And Entity Information [Abstract] | |||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2016 | ||
Entity Registrant Name | CIGNA Corporation | ||
Entity Central Index Key | 701,221 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Trading Symbol | CI | ||
Entity Common Stock Shares Outstanding | 256,738,638 | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Entity Well Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | Q3 | ||
Common stock, par value per share | $ 0.25 | $ 0.25 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | ||||
Premiums | $ 7,605 | $ 7,347 | $ 23,005 | $ 22,181 |
Fees and other revenues | 1,156 | 1,104 | 3,554 | 3,359 |
Net investment income | 282 | 285 | 848 | 858 |
Mail order pharmacy revenues | 762 | 643 | 2,207 | 1,846 |
Realized investment gains (losses): | ||||
Other-than-temporary impairments on debt securities | (1) | (58) | (31) | (73) |
Other realized investment gains (losses), net | 76 | 68 | 141 | 177 |
Net realized investment gains (losses) | 75 | 10 | 110 | 104 |
Total revenues | 9,880 | 9,389 | 29,724 | 28,348 |
Benefits and Expenses | ||||
Global Health Care medical costs | 4,692 | 4,539 | 14,230 | 13,720 |
Other benefit expenses | 1,343 | 1,230 | 4,125 | 3,698 |
Mail order pharmacy costs | 638 | 532 | 1,842 | 1,553 |
Other operating expenses | 2,428 | 2,171 | 7,038 | 6,587 |
Amortization of other acquired intangible assets, net | 37 | 39 | 115 | 122 |
Total benefits and expenses | 9,138 | 8,511 | 27,350 | 25,680 |
Income before Income Taxes | 742 | 878 | 2,374 | 2,668 |
Income taxes (benefits): | ||||
Current | 210 | 282 | 842 | 965 |
Deferred | 80 | 52 | 63 | 44 |
Total income taxes | 290 | 334 | 905 | 1,009 |
Net Income | 452 | 544 | 1,469 | 1,659 |
Less: Net Income (Loss) Attributable to Noncontrolling Interests | (4) | (3) | (16) | (9) |
Shareholders' Net Income | $ 456 | $ 547 | $ 1,485 | $ 1,668 |
Shareholders' Net Income Per Share: | ||||
Basic | $ 1.78 | $ 2.14 | $ 5.82 | $ 6.51 |
Diluted | 1.76 | 2.10 | 5.72 | 6.40 |
Dividends Declared Per Share | $ 0 | $ 0 | $ 0.04 | $ 0.04 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Comprehensive Income [Abstract] | ||||
Shareholders' Net Income | $ 456 | $ 547 | $ 1,485 | $ 1,668 |
Shareholders' other comprehensive income (loss): | ||||
Net unrealized appreciation (depreciation) on securities | 66 | 8 | 416 | (138) |
Net unrealized appreciation (depreciation), derivatives | (1) | 3 | (5) | 15 |
Net translation of foreign currencies | 55 | (112) | 96 | (198) |
Postretirement benefits liability adjustment | 9 | 11 | 28 | 42 |
Shareholders' other comprehensive income (loss) | 129 | (90) | 535 | (279) |
Shareholders' comprehensive income (loss) | $ 585 | $ 457 | $ 2,020 | $ 1,389 |
Consolidated Statements of Tota
Consolidated Statements of Total Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Comprehensive Income [Abstract] | ||||
Shareholders' comprehensive income (loss) | $ 585 | $ 457 | $ 2,020 | $ 1,389 |
Net income (loss) attributable to redeemable noncontrolling interests | (1) | (1) | (4) | (2) |
Net income (loss) attributable to other noncontrolling interests | (3) | (2) | (12) | (7) |
Other comprehensive income (loss) attributable to redeemable noncontrolling interests | (3) | (9) | (1) | (21) |
Other comprehensive income (loss) attributable to other noncontrolling interests | 0 | (1) | 0 | (1) |
Total comprehensive (loss) attributable to noncontrolling interests | (7) | (13) | (17) | (31) |
Total comprehensive income | $ 578 | $ 444 | $ 2,003 | $ 1,358 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Investments [Abstract] | ||
Fixed maturities, at fair value (amortized cost, $19,392; $18,456) | $ 21,244 | $ 19,455 |
Equity securities, at fair value (cost, $185; $190) | 188 | 190 |
Commercial Mortgage Loans | 1,822 | 1,864 |
Policy loans | 1,442 | 1,419 |
Other long-term investments | 1,408 | 1,404 |
Short-term investments | 997 | 381 |
Total investments | 27,101 | 24,713 |
Cash and cash equivalents | 3,224 | 1,968 |
Premiums, accounts and notes receivable, net | 3,577 | 3,694 |
Reinsurance recoverables | 6,539 | 6,813 |
Deferred policy acquisition costs | 1,876 | 1,659 |
Property and equipment | 1,561 | 1,534 |
Deferred tax assets, net | 110 | 379 |
Goodwill | 6,007 | 6,019 |
Other assets, including other intangibles | 2,611 | 2,476 |
Separate account assets | 8,156 | 7,833 |
Total assets | 60,762 | 57,088 |
Liabilities: | ||
Contractholder deposit funds | 8,470 | 8,443 |
Future policy benefits | 10,043 | 9,479 |
Unpaid claims and claim expenses | 4,889 | 4,574 |
Global Health Care medical costs payable | 2,550 | 2,355 |
Unearned premiums | 1,179 | 629 |
Total insurance and contractholder liabilities | 27,131 | 25,480 |
Accounts payable, accrued expenses and other liabilities | 6,374 | 6,493 |
Short-term debt | 271 | 149 |
Long-term debt | 4,780 | 5,020 |
Separate account liabilities | 8,156 | 7,833 |
Total liabilities | 46,712 | 44,975 |
Contingencies - Note 16 | ||
Redeemable noncontrolling interests | 68 | 69 |
Shareholders' Equity | ||
Common stock (par value per share, $0.25; shares issued, 296; authorized, 600) | 74 | 74 |
Additional paid-in capital | 2,884 | 2,859 |
Accumulated other comprehensive loss | (715) | (1,250) |
Retained earnings | 13,487 | 12,121 |
Less treasury stock, at cost | (1,756) | (1,769) |
Total shareholders' equity | 13,974 | 12,035 |
Noncontrolling interests | 8 | 9 |
Total equity | 13,982 | 12,044 |
Total liabilities and equity | $ 60,762 | $ 57,088 |
Shareholders' Equity Per Share | $ 54.43 | $ 46.91 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Fixed maturities, at amortized cost | $ 19,392 | $ 18,456 |
Equity securities, at cost | $ 185 | $ 190 |
Common stock, par value per share | $ 0.25 | $ 0.25 |
Common stock shares issued | 296 | 296 |
Common stock shares authorized | 600 | 600 |
Statement of Changes in Total E
Statement of Changes in Total Equity - USD ($) $ in Millions | Total | Shareholders' Equity [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] |
Total Equity, beginning of period at Dec. 31, 2014 | $ 10,789 | $ 10,774 | $ 74 | $ 2,769 | $ (936) | $ 10,289 | $ (1,422) | $ 15 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 143 | 143 | 80 | (241) | 304 | |||
Other comprehensive income (loss) | (280) | (279) | (279) | (1) | ||||
Net income (loss) | 1,661 | 1,668 | 1,668 | (7) | ||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | |||||
Repurchase of common stock | (518) | (518) | (518) | |||||
Other transactions impacting noncontrolling interest | 2 | (4) | (4) | 6 | ||||
Total Equity, end of period at Sep. 30, 2015 | 11,787 | 11,774 | 74 | 2,845 | (1,215) | 11,706 | (1,636) | 13 |
Beginning Balance at Dec. 31, 2014 | 90 | |||||||
Redeemable Noncontrolling Interest [Roll Forward] | ||||||||
Other comprehensive income (loss) | (21) | |||||||
Net income (loss) | (2) | |||||||
Other transactions impacting noncontrolling interest | ||||||||
Ending Balance at Sep. 30, 2015 | 67 | |||||||
Total Equity, beginning of period at Jun. 30, 2015 | 11,303 | 11,290 | 74 | 2,835 | (1,125) | 11,178 | (1,672) | 13 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 28 | 28 | 11 | (19) | 36 | |||
Other comprehensive income (loss) | (91) | (90) | (90) | (1) | ||||
Net income (loss) | 545 | 547 | 547 | (2) | ||||
Other transactions impacting noncontrolling interest | 2 | (1) | (1) | 3 | ||||
Total Equity, end of period at Sep. 30, 2015 | 11,787 | 11,774 | 74 | 2,845 | (1,215) | 11,706 | (1,636) | 13 |
Beginning Balance at Jun. 30, 2015 | 76 | |||||||
Redeemable Noncontrolling Interest [Roll Forward] | ||||||||
Other comprehensive income (loss) | (9) | |||||||
Net income (loss) | (1) | |||||||
Other transactions impacting noncontrolling interest | 1 | |||||||
Ending Balance at Sep. 30, 2015 | 67 | |||||||
Total Equity, beginning of period at Dec. 31, 2015 | 12,044 | 12,035 | 74 | 2,859 | (1,250) | 12,121 | (1,769) | 9 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 52 | 52 | 38 | (109) | 123 | |||
Other comprehensive income (loss) | 535 | 535 | 535 | |||||
Net income (loss) | 1,473 | 1,485 | 1,485 | (12) | ||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | |||||
Repurchase of common stock | (110) | (110) | (110) | |||||
Other transactions impacting noncontrolling interest | (2) | (13) | (13) | 11 | ||||
Total Equity, end of period at Sep. 30, 2016 | 13,982 | 13,974 | 74 | 2,884 | (715) | 13,487 | (1,756) | 8 |
Beginning Balance at Dec. 31, 2015 | 69 | |||||||
Redeemable Noncontrolling Interest [Roll Forward] | ||||||||
Other comprehensive income (loss) | (1) | |||||||
Net income (loss) | (4) | |||||||
Other transactions impacting noncontrolling interest | 4 | |||||||
Ending Balance at Sep. 30, 2016 | 68 | |||||||
Total Equity, beginning of period at Jun. 30, 2016 | 13,364 | 13,356 | 74 | 2,879 | (844) | 13,046 | (1,799) | 8 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 35 | 35 | 7 | (15) | 43 | |||
Other comprehensive income (loss) | 129 | 129 | 129 | |||||
Net income (loss) | 453 | 456 | 456 | (3) | ||||
Other transactions impacting noncontrolling interest | 1 | (2) | (2) | 3 | ||||
Total Equity, end of period at Sep. 30, 2016 | 13,982 | $ 13,974 | $ 74 | $ 2,884 | $ (715) | $ 13,487 | $ (1,756) | $ 8 |
Beginning Balance at Jun. 30, 2016 | 71 | |||||||
Redeemable Noncontrolling Interest [Roll Forward] | ||||||||
Other comprehensive income (loss) | (3) | |||||||
Net income (loss) | (1) | |||||||
Other transactions impacting noncontrolling interest | 1 | |||||||
Ending Balance at Sep. 30, 2016 | $ 68 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Cash Flows from Operating Activities | |||
Net Income | $ 1,469 | $ 1,659 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 460 | 451 | |
Realized investment (gains) losses | (110) | (104) | |
Deferred income taxes | 63 | 44 | |
Net changes in assets and liabilities, net of non-operating effects: | |||
Premiums, accounts and notes receivable | 184 | (1,051) | |
Reinsurance recoverables | 132 | 61 | |
Deferred policy acquisition costs | (167) | (145) | |
Other assets | (32) | (89) | |
Insurance liabilities | 1,098 | 620 | |
Accounts payable, accrued expenses and other liabilities | 9 | 219 | |
Current income taxes | (57) | 36 | |
Loss on extinguishment of debt | 0 | 100 | |
Other, net | [1] | 25 | (4) |
Net cash provided by (used in) operating activities | [1] | 3,074 | 1,797 |
Proceeds from investments sold: | |||
Fixed maturities and equity securities | 1,012 | 1,452 | |
Investment maturities and repayments: | |||
Fixed maturities and equity securities | 1,178 | 1,018 | |
Commercial mortgage loans | 117 | 458 | |
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 904 | 1,006 | |
Investments purchased or originated: | |||
Fixed maturities and equity securities | (2,894) | (2,686) | |
Commercial mortgage loans | (121) | (389) | |
Other (primarily short-term and other long-term investments) | (1,317) | (689) | |
Property and equipment purchases | (362) | (357) | |
Acquisitions, net of cash acquired | (5) | (110) | |
Other, net | (101) | 0 | |
Net cash provided by (used in) investing activities | (1,589) | (297) | |
Cash Flows from Financing Activities | |||
Deposits and interest credited to contractholder deposit funds | 1,133 | 1,092 | |
Withdrawals and benefit payments from contractholder deposit funds | (1,042) | (1,053) | |
Net change in short-term debt | (143) | (15) | |
Net proceeds on issuance of long-term debt | 0 | 894 | |
Repayment of long-term debt | 0 | (938) | |
Repurchase of common stock | (139) | (536) | |
Issuance of common stock | 23 | 136 | |
Other, net | [1] | (87) | (83) |
Net cash provided by (used in) financing activities | [1] | (255) | (503) |
Effect of foreign currency rate changes on cash and cash equivalents | 26 | (36) | |
Net increase (decrease) in cash and cash equivalents | 1,256 | 961 | |
Cash and cash equivalents, January 1 | 1,968 | 1,420 | |
Cash and cash equivalents, September 30 | 3,224 | 2,381 | |
Supplemental Disclosure of Cash Information: | |||
Income taxes paid, net of refunds | 904 | 881 | |
Interest paid | $ 192 | $ 192 | |
[1] | As required by the adoption of ASU 2016-09, the Company retrospectively reclassified $78 million of cash payments from operating to financing activities for the nine months ended September 30, 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amount reported in financing activities for the nine months ended September 30, 2016 was $69 million. See Note 2 for further discussion. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of presentation | Note 1 – Basis of Presentation Basis of Presentation Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as “Cigna,” the “Company,” “we,” “our” or “us”) is a global health services organization dedicated to a mission of helping individuals improve their health, well-being and sense of security. To execute on our mission, Cigna's strategy is to “Go Deep”, “Go Global” and “Go Individual” with a differentiated set of medical, dental, disability, life and accident insurance and related products and services offered by our insurance and other subsidiaries. The majority of these products are offered through employers and other groups (e.g. governmental and non-governmental organizations, unions and associations). Cigna also offers commercial health and dental insurance, Medicare and Medicaid products and health, life and acciden t insurance coverages to individuals in the U.S. and selected international markets. In addition to its ongoing operations described above, Cigna also has certain run-off operations. The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. Certain reclassifications have been made to prior year amounts to conform to the current presentation. See Note 2 for further discussion. The se interim C onsolidated F inancial S tatements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim C onsolidated F inancial S tatements and N otes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company's 2015 Annual Report on Form 10-K (“Form 10-K”) . The preparation of interim C onsolidated F inancial S tatements necessarily relies heavily on estimates. This and certain other factors, including the seasonal nature of portions of the health care and related benefits business as well as competitive and other market conditions, call for caution in estimating full year results based on interim results of operations. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Changes | Note 2 – Recent Accounting Pronouncement s The Company's 2015 Form 10-K includes discussion of significant recent accounting pronouncement s that either have impacted or may impact our financial statements in the future. The following issuances of, and changes in, accounting pronouncements that apply to the Company have occurred since the Company filed its 201 5 Form 10-K . Recently Adopted Accounting Guidance Improvements to Employee Share-Based Payment Accounting ( Accounting Standards Update (“ASU”) 2016-09). In March 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits or deficiencies to be recorded in the income statement when the awards vest or are settled, requires cash flows related to the excess tax benefits to be classified as an operating activity in the statement of cash flows, permits repurchasing more than was previously allowed of an employee's shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee's behalf for withheld shares are to be presented as a financing activity in the statement of cash flows and provides an accounting policy election to account for forfeitures as they occur . In addition, the new guidance changes the calculation of common stock equivalents for earnings per share purposes. The new standard is required to be adopted as of January 1, 2017. As permitted, the Company elected to early adopt the new guidance effective January 1, 2016 , which resulted in $ 25 million of tax benefits recorded in net income (in Corporate) during the nine months ended September 30, 2016 that previously would have been reported in additional paid-in capital. The change in the calculation of common stock equivalents added approximately one million weighted average shares for the diluted earnings per share calculations for the nine months ended September 30, 2016 . The Company applied these provisions prospectively. The Company retrospectively applied the provisions related to the presentation of employee taxes paid for withheld shares and reclassified $ 78 million of tax withholding from operating to financing activities in its Consolidated Statement of Cash Flows for the nine months ended September 30, 2015 . For the nine months ended September 30, 2016 , the Company reflected $ 69 million of tax withholding in financing activities. The ability under the new guidance to repurchase more employee shares for tax withholding purposes had no impact on the Co mpany's financial statements because no changes have been made to the Company's withholding practices . The Company elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. Amendments to the Consolidation Analysis (ASU 2015-02). The Company adopted this new consolidation guidance effective January 1, 2016 with no material effect on its financial statements. Among other provisions, the guidance defines limited partnerships as variable interest entities unless substantive kick-out rights or participating rights exist. See Note 10 for additional disclosures about various real estate and security limited partnerships that are newly identified as variable interest entities for which the Company is not the primary beneficiary. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (ASU 2015-07) . This amendment removed the requirement to categorize all investments within the fair value hierarchy for which fair value is measured using the practical expedient of net asset value (“NAV”) per share . The Company adopted this new guidance effective January 1, 2016. Upon adoption, the Company began to separately disclose certain s eparate a ccount investments and provided comparable prior period disclosure. See Note 7 for this separate disclosure information. Recently Issued Accounting Guidance Not Yet Adopted Except as noted below, t here were no other new accounting pronouncements that were issued or became effective since the issuance of the Company's 2015 Annual Report on Form 10-K that had, or are expected to have, a material impact on the Company's consolidated financial position, results of operations or cash flows. Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory (ASU 2016-16). In October 2016, the FASB issued this new standard that requires entities to recognize the tax impacts of all intra-entity sales of assets other than inventory even though the pre-tax effects of those transactions are eliminated in consolidation. The new standard is required to be adopted as of January 1, 2018, with early adoption permitted as of January 1, 2017. The new standard is required to be adopted in a modified retrospective approach, with a cumulative-effect adjustment recorded in retained earnings to write off any unamortized tax expense previously deferred and record any previously unrecognized net deferred tax assets. The Company is evaluating the impact of this new standard on its financial statements and disclosures. Statement of Cash Flows (ASU 2016-15). In August 2016, the FASB issued this new standard that is a consensus of the FASB's Emerging Issues Task Force. The standard provides new guidance on how certain transactions should be classified in the statement of cash flows. The new standard is required to be adopted as of January 1, 2018, with early adoption permitted as of January 1, 2017. Upon adoption, the effects of the new guidance must be applied retrospectively to all prior periods presented. The Company is evaluating its implementation timing options as well as the impact of this new standard on its financial statements and disclosures. Financial Instruments – Credit Losses (ASU 2016- 1 3). In June 2016, t he FASB issued this new standard that introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The ASU will be effective January 1, 2020, and e arly adoption is permitted on January 1, 2019 . The Company is evaluating the impact of this new standard on its financial statements and disclosures. Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). As previously disclosed in the Company's 2015 Form 10-K , in January 2016 the FASB issued guidance that will require entities to measure equity investments at fair value in net income if they are not consolidated or accounted for under the equity method. The new standard will be effective January 1, 2018 and its effect will be recognized as a cumulative effect adjustment to the beginning balance of retained earnings. The Company has identified certain limited partnership interests carried at cost that are subject to the requirements of this new standard. If adopted as of September 30, 2016 , the impact of this new guidance would have resulted in a cumulative effect increase to retained earnings of approximately $ 60 million after-tax . The actual cumulative effect adjustment will depend on the portfolio and market conditions as of the date of implementation. Revenue from Contracts with Customers (ASU 2014-09). T he FASB issued three new ASUs in 2016 further clarifying the broader revenue guidance: “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (ASU 2016-08) that clarifies the definition o f principals and agents . “ Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing” (ASU 2016-10) that clarifies guidance and add s examples to help companies properly identify performance obligations. This ASU also illustrates when a license provides a customer with a right to use (point in time) versus a right to access (over time) benefit . “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients ” (ASU 2016-12) that clarifies ce rtain aspects of the previously- issued guidance, including the objective of the collectability criterion in the new revenue model. These clarifications, together with the broader revenue recognition guidance within ASU 2014-09, are required to be adopted beginning January 1, 2018 , with early adoption permitted as of January 1, 2017 . The Company does not plan to early adopt this new guidance but continues to monitor developing implementation guidance and evaluate these new requirements for its non-insurance customer contracts to determine its method of implementation and any resulting estimated effects on its financial statements. |
Mergers and Acquisitions
Mergers and Acquisitions | 9 Months Ended |
Sep. 30, 2016 | |
Acquisitions and Dispositions [Abstract] | |
Acquisitions and Dispositions | Note 3 – Mergers and Acquisitions Proposed Merger On July 23, 2015, the Company entered into a merger agreement with Anthem, Inc. (“Anthem”) and Anthem Merger Sub Corp. (“Merger Sub”), a direct wholly-owned subsidiary of Anthem. The merger agreement provides (a) for the merger of the Company and Merger Sub, with the Company continuing as the surviving corporation and (b) if certain tax opinions are delivered, immediately following the completion of the initial merger, for the surviving corporation to be merged with and into Anthem, with Anthem continuing as the surviving corporation (collectively, the “merger”). Subject to certain terms, conditions, and customary operating covenants, each share of Cigna common stock issued and outstanding immediately prior to the effective time of the merger would be converted into the right to receive (a) $103.40 in cash, without interest, and (b) 0.5152 of a share of Anthem common stock. The closing price of Anthem common stock on November 2 , 2016 was $122.99 . At special shareholders' meetings held in December 2015, Cigna shareholders approved the merger and Anthem shareholders approved the issuance of shares of Anthem common stock in connection with the merger. Completing the merger remains subject to certain customary conditions, including the receipt of certain necessary governmental and regulatory approvals and the absence of a legal restraint prohibiting the merger. Completing the merger is not subject to a financing condition. On July 21, 2016, the U.S. Department of Justice (“DOJ”) and certain state attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia seeking to block the merger. Trial is scheduled to begin on November 21, 2 016. The Company will continue to defend itself in this matter. In light of the DOJ litigation, Cigna does not believe the transaction will close in 2016 and the earliest it could close is 2017, if at all. If the merger agreement is terminated under certain circumstances, Anthem will be required to pay Cigna a termination fee of $1.85 billion. Anthem's obligation to pay the termination fee arises if the merger agreement is terminated because: (1) a governmental entity, such as the Department of Justice or a state Department of Insurance, has prevented the merger for regulatory reasons and that decision is final and non-appealable; or (2) the merger has not closed by January 31, 2017 (subject to extension to April 30, 2017 under certain circumstances) only because all necessary regulatory approvals have not been received. The merger agreement contains customary covenants, including covenants that Cigna conduct its business in the ordinary course during the period between entering into the merger agreement and closing. In addition, Cigna's ability to take certain actions prior to closing without Anthem's consent is subject to certain limitations. These limitations relate to, among other matters, the payment of dividends, capital expenditures, the payment or retirement of indebtedness or the incurrence of new indebtedness, settlement of material claims or proceedings, mergers or acquisitions, and certain employment-related matters. The Company incurred $ 49 million pre-tax ($ 46 million after-tax) for the three months and $ 123 million pre-tax ($ 108 million after-tax) for the nine months ended September 30, 2016 in costs directly related to the proposed merger. Comparable merger-related costs for the three months and nine months ended September 30, 2015 were $ 35 million pre-tax ($ 29 million after-tax). These costs primarily consisted of fees for legal, advisory and other professional services. If the merger is consummated, most of the merger-related costs are not deductible for federal income tax purposes. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 4 – E arnings P er S hare (“EPS”) Basic and diluted earnings per share were computed as follows: Effect of (Shares in thousands, dollars in millions, except per share amounts) Basic Dilution Diluted Three Months Ended September 30, 2016 Shareholders' net income $ 456 $ 456 Shares : Weighted average 255,519 255,519 Common stock equivalents 4,235 4,235 Total shares 255,519 4,235 259,754 EPS $ 1.78 $ (0.02) $ 1.76 2015 Shareholders' net income $ 547 $ 547 Shares : Weighted average 256,070 256,070 Common stock equivalents 4,449 4,449 Total shares 256,070 4,449 260,519 EPS $ 2.14 $ (0.04) $ 2.10 Effect of (Shares in thousands, dollars in millions, except per share amounts) Basic Dilution Diluted Nine Months Ended September 30, 2016 Shareholders' net income $ 1,485 $ 1,485 Shares : Weighted average 255,242 255,242 Common stock equivalents 4,326 4,326 Total shares 255,242 4,326 259,568 EPS $ 5.82 $ (0.10) $ 5.72 2015 Shareholders' net income $ 1,668 $ 1,668 Shares : Weighted average 256,166 256,166 Common stock equivalents 4,451 4,451 Total shares 256,166 4,451 260,617 EPS $ 6.51 $ (0.11) $ 6.40 The following outstand ing employee stock options were not included in the computation of diluted earnings per share for the three months and nine months ended September 30, 2016 and 2015 because their effect was anti-dilutive . Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Anti-dilutive options 2.6 - 2.2 0.5 The Company held 39,425,208 shares of common stock in Treasury as of September 30, 2016 , and 38,553,358 shares as of September 30, 2015 . |
Global Health Care Medical Cost
Global Health Care Medical Costs Payable | 9 Months Ended |
Sep. 30, 2016 | |
Global Health Benefits Segment [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Global Health Care Medical Costs Payable | N ote 5 — Global H ealth C are M edical Costs P ayable Medical costs payable for the Global Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not yet reported, those that have been reported but not yet paid (reported claims in process) , and other medical care expense s and services payable that are primarily comprised of accruals for incentives and oth er amounts payable to health care professionals and facilities , as follows: September 30, December 31, (In millions) 2016 2015 Incurred but not yet reported $ 1,947 $ 1,757 Reported claims in process 475 470 Physician incentives and other medical care expenses and services payable 128 128 Global Health Care medical costs payable $ 2,550 $ 2,355 Activity in medical costs payable was as follows: For the period ended September 30, December 31, (In millions) 2016 2015 Balance at January 1, $ 2,355 $ 2,180 Less: Reinsurance and other amounts recoverable 243 252 Balance at January 1, net 2,112 1,928 Incurred costs related to: Current year 14,318 18,564 Prior years (88) (210) Total incurred 14,230 18,354 Paid costs related to: Current year 12,285 16,588 Prior years 1,783 1,582 Total paid 14,068 18,170 Ending Balance, net 2,274 2,112 Add: Reinsurance and other amounts recoverable 276 243 Ending Balance $ 2,550 $ 2,355 Reinsurance and other amounts recoverable includes amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business where the Company administers the plan benefits but the right of offset does not exist. See Note 6 for additional information on reinsurance. For the nine months ended September 30, 2016 , actual experience differed from the Company's key assumptions resulting in favorable incurred costs related to prior years' medical costs payable of $ 88 million, or 0.5% of the current year incurred costs as reporte d for the year ended December 31, 2015. O f the favorability , a ctual completion factors accounted for 0.3 % , and actual medical cost trend resulted in 0.2 % . For the year ended December 31, 2015, actual experience differed from the Company ' s key assumptions, resulting in favorable incurred costs related to prior years' medical costs payable of $210 million, or 1 . 3 % of the current year incurred costs as reported for the year ended December 31, 2014. Actual completion factors accounted for 0 . 4 % of favorability , while a ctual medical cost trend resulted in 0 .7 %. The remaining 0.2% was related to an increase in the 2014 reinsurance reimbursement rate from the Centers for Medicare and Medicaid Services (“ CMS ”) under The Patient Protection and Affordable Care Act (“Health Care Reform”) . The impact o f prior year development o n shareholders' net income for the nine months ended September 30, 2016 was not significant compare d with $ 57 million for the nine months ended September 30, 2015 . The favorable effect of prior year development in a given period primarily reflects low er than expected utilization of medical services . Incurred costs related to prior years in the table above do not directly correspond to an increase or decrease to shareholders' net income . The primary reason for the difference is that decreases to prior year incurred costs reflecting a release of the liability for moderately adverse conditions are not considered as impacting shareholders' net income if they are offset by increases in the current year provision for moderately adverse conditions. The determination of liabilities for Global Health Care medical costs payable requires the Company to make critical accounting estimates. See Note 2(N) to the Consolidated Financial Statements in the Company's 2015 Form 10-K for further information about the assumptions and estimates used to establish this liability. |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2016 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | N ote 6 ― R einsurance The Company's insurance subsidiaries enter into agreements with other insurance companies to assume and cede reinsurance. Reinsurance is ceded primarily to limit losses from large exposures and to permit recovery of a portion of direct or assumed losses. Reinsurance is also used in acquisition an d disposition transactions when the underwriting company is not being acquired. Reinsurance does not relieve the originating insurer of liability. The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk. Effective Exit of GMDB and GMIB Business In 2013, the Company entered into an agreement with Berkshire Hathaway Life Insurance Company of Nebraska ( “ Berkshire ” ) to effectively exit the guaranteed minimum death benefit (“ GMDB ”) and guaranteed minimum income benefit (“ GMIB ”) business via a reinsurance transaction. Berkshire reinsured 100 % of the Company's future claim payments in th is business , net of other reinsurance arrangements existing at that time . The Berkshire reinsurance agreement is subject to an overall limit with approximately $ 3.5 billion remaining . Because this effective exit was accomplished via a reinsurance contract , the amounts related to the reinsured GMDB and GMIB contracts cannot be netted, so the gross assets and liabilities must continu e to be measured and reported . The following disclosures provide further context for the methods and assumptions used to determine GMDB assets and liabilities. GMDB The Co mpany estimates this liability with an internal model based on its experience and future expectations over an extended period, consistent with the long-term nature of this product. Because the product is premium deficient, the Company records increases to the reserve if it is inadequate based on the model. As a result of the reinsurance transaction, reserve increases have a corresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit (including the GMIB asset s ). Activity in the future policy benefit reserve for the GMDB business was as follows: For the period ended September 30, December 31, (In millions) 2016 2015 Balance at January 1 $ 1,252 $ 1,270 Add: Unpaid claims 18 16 Less: Reinsurance and other amounts recoverable 1,164 1,186 Balance at January 1, net 106 100 Add: Incurred benefits 4 3 Less: Paid benefits (1) (3) Ending balance, net 111 106 Less: Unpaid claims 18 18 Add: Reinsurance and other amounts recoverable 1,132 1,164 Ending balance $ 1,225 $ 1,252 Benefits paid and in curred are net of ceded amounts. The ending net retained reserve cover s ongoing administrative expenses, as well as the minor claims exposure retained by the Company. The table below presents the account value, net amount at risk and number of underlying contractholders for guarantees assumed by the Company in the event of contractholder death s . The net amount at risk is the amount that the Company would have to pay if all contractholders died as of the specified date. Unless the Berkshire limit is exceeded, the Company should be reimbursed in full for these payments. (Dollars in millions, excludes impact of reinsurance ceded) September 30, 2016 December 31, 2015 Account value $ 10,752 $ 11,355 Net amount at risk $ 2,530 $ 2,870 Number of contractholders 292,000 324,000 Effects of R einsurance In the Company's C onsolidated Statements of Income, premiums were reported net of amounts ceded to reinsurers and Global Health Care medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts : Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Ceded premiums Individual life insurance and annuity business sold $ 37 $ 38 $ 118 $ 121 Other 94 130 262 323 Total $ 131 $ 168 $ 380 $ 444 Reinsurance recoveries Individual life insurance and annuity business sold $ 77 $ 83 $ 211 $ 230 Other 8 113 209 313 Total $ 85 $ 196 $ 420 $ 543 Reinsurance Recoverables Components of the Company's reinsurance recoverables are presented below: (In millions) September 30, December 31, Collateral and Other Terms Line of Business Reinsurer(s) 2016 2015 at September 30, 2016 GMDB Berkshire $ 1,089 $ 1,123 100% secured by assets in a trust. Other 43 41 99% secured by assets in a trust or letter of credit. Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,612 3,705 Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 944 995 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 301 315 100% secured by assets in a trust. Global Health Care, Global Supplemental Benefits, Group Disability and Life Various 475 553 Recoverables arising in the ordinary course of business from approximately 80 reinsurers including the U.S. Government. Excluding the recoverable from the U.S. Government of approximately $58 million, current balances range from less than $1 million up to $96 million, with 19% secured by assets in trusts or letters of credit. Other run-off reinsurance Various 75 81 99% secured by assets in trusts. Total reinsurance recoverables $ 6,539 $ 6,813 Over 90 % of the Company's reinsurance recoverables were from companies that were rated A or higher by Standard & Poor's at September 30, 2016 . The Company reviews its reinsurance arrangements and establishes reserves against the recoverables if recovery is not considered probable. As of September 30, 2016 , the Company's recoverables were net of a reserve of approximately $ 4 million. The Company bears the risk of loss if its reinsurers and retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Compan y. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | N ote 7 ― Fair Value Measurements The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when impaired. Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor. The Company's financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset's or a liability's classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument's fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value. The internal pricing methods are performed by the Company's investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining fair value, as well as designating the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs of a sample of securities held across various asset types to validate the documented pricing process. Financial Assets and Financial Liabilities Carried at Fair Value The following tables provide information as of September 30, 2016 and December 31, 2015 about the Company's financial assets and liabilities carried at fair value. Separate account assets that are also recorded at fair value on the Company's Consolidated Balance Sheets are reported separately under the heading “ s eparate account assets” as gains and losses related to these assets generally accrue directly to policyholders. Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In millions) (Level 1) (Level 2) (Level 3) Total September 30, 2016 Financial assets at fair value: Fixed maturities: Federal government and agency $ 180 $ 570 $ - $ 750 State and local government - 1,508 - 1,508 Foreign government - 2,278 44 2,322 Corporate - 15,714 451 16,165 Mortgage-backed - 36 - 36 Other asset-backed - 299 164 463 Total fixed maturities (1) 180 20,405 659 21,244 Equity securities 4 110 74 188 Subtotal 184 20,515 733 21,432 Short-term investments - 997 - 997 GMIB assets (2) - - 931 931 Other derivative assets - 7 - 7 Total financial assets at fair value, excluding separate accounts $ 184 $ 21,519 $ 1,664 $ 23,367 Financial liabilities at fair value: GMIB liabilities $ - $ - $ 908 $ 908 Other derivative liabilities - 4 - 4 Total financial liabilities at fair value $ - $ 4 $ 908 $ 912 December 31, 2015 Financial assets at fair value: Fixed maturities: Federal government and agency $ 251 $ 528 $ - $ 779 State and local government - 1,641 - 1,641 Foreign government - 2,010 4 2,014 Corporate - 14,122 326 14,448 Mortgage-backed - 48 1 49 Other asset-backed - 198 326 524 Total fixed maturities (1) 251 18,547 657 19,455 Equity securities 32 89 69 190 Subtotal 283 18,636 726 19,645 Short-term investments - 381 - 381 GMIB assets (2) - - 907 907 Other derivative assets - 16 - 16 Total financial assets at fair value, excluding separate accounts $ 283 $ 19,033 $ 1,633 $ 20,949 Financial liabilities at fair value: GMIB liabilities $ - $ - $ 885 $ 885 Total financial liabilities at fair value $ - $ - $ 885 $ 885 (1) Fixed maturities include d $ 750 million as of September 30, 2016 and $483 million as of December 31, 2015 of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $ 19 million as of September 30, 2016 and $30 million as of December 31, 2015 of appreciation for sec urities classified in Level 3. See Note 8 for additional information. (2) The GMIB assets represent retrocessional contracts in place fr om three external reinsurers that cover the exposures on these contracts. Level 1 Financial Assets Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Assets in Level 1 include actively-traded U.S. government bond s and e xchange-listed equity securities . Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment returns, a relatively small portion of the Company's investment assets are classified in this category. Level 2 Financial Assets and Financial Liabilities Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant. Fixed maturities and equity securities. Approximately 96% of the Company's investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks. Because many fixed maturities do not trade daily, third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pricing models. Less than 1% of the fair value of investments classified in Level 2 represent s foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes , consistent with local market practice . Short-term investments are carried at fair value which approximates cost. On a regular basis , the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. Other derivatives classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts. Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of September 30, 2016 or December 31, 2015. Level 2 also inc ludes exchange-traded interest rate swap contracts. Credit risk related to the clearinghouse counterparty and the Company is considered minimal when estimating the fair values of these derivatives because of upfront margin deposits and daily settlement requirements. The nature and use of these other derivatives are described in Note 9 . Level 3 Financial Assets and Financial Liabilities Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The Company classifies certain newly issued, privately- placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3. A pproximately 3% of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category . Fair values of other asset and mortgage-backed securities, corporate and government fixed maturities are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics. For other asset and mortgage-backed securities, inputs and assumptions for pricing may also include collateral attributes and prepayment speeds. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation , as well as th e issuer's financial statements . Quantitative Information about Unobservable Inputs The following tables summarize the fair value and significant unobservable inputs used in pricing the following securities that were developed directly by the Company as of September 30, 2016 and December 31, 2015. The range and weighted average basis point amounts ( “ bps ” ) for fixed maturity spreads (adjustme nt to discount rates) and price-to- earnings multiples for equity investments reflect the Company's best estimates of the unobservable adjustments a market participant would make to calculate the se fair values. Other asset and mortgage-backed securities . The significant unobservable inputs used to value the following other asset and mortgage-backed securities are liquidity and weighting of credit spreads. When there is limited trading activity for the security, a n adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure. An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral's characteristics and their proportional cash flows supporting the bond obligations. The resulting wide range of unobservable adjustments in the table below is due to the varying liquidity and quality of the underlying collateral, ranging from high credit quality to below investment grade. Corporate and government fixed maturitie s. The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is limited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances. Equity securities . The significant unobservable input used to value the following equity securities is a multiple of earnings before interest, taxes, depreciation and amortization ( “ EBITDA ” ). These securities are comprised of private equity investments with limited trading activity and therefore a ratio of EBITDA is used to estimate value based on company circumstances and relative risk characteristics. Unobservable Input Unobservable Adjustment Range (Weighted Average) (Fair value in millions) Fair Value As of September 30, 2016 Fixed maturities: Other asset and mortgage-backed securities $ 164 Liquidity 60 - 330 (90) bps Weighting of credit spreads 200 - 610 (280) bps Corporate and government fixed maturities 457 Liquidity 80 - 1,310 (370) bps Total fixed maturities 621 Equity securities 74 Price-to-earnings multiples 4.2 - 11.6 (8.2) Subtotal 695 Securities not priced by the Company (1) 38 Total Level 3 securities $ 733 As of December 31, 2015 Fixed maturities: Other asset and mortgage-backed securities $ 327 Liquidity 60 - 440 (200) bps Weighting of credit spreads 170 - 630 (220) bps Corporate and government fixed maturities 285 Liquidity 70 - 930 (280) bps Total fixed maturities 612 Equity securities 69 Price-to-earnings multiples 4.2 - 11.6 (8.3) Subtotal 681 Securities not priced by the Company (1) 45 Total Level 3 securities $ 726 (1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. Significant increases in fixed maturity spreads would result in a lower fair value measurement while decreases in these inputs would result in a higher fair value measurement. Significant decreases in equity price - to - earnings multiples would result in a lower fair value measurement while increases in these inputs would result in a higher fair value measurement. Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input. G MIB c ontracts. As discussed in Note 6 , the Company effectively exited the GMIB business in 2013. Although t hese GMIB assets and liabilities must continue to be reported as derivatives at fair value, the only assumption that is expected to impact future shareholders' net income is the risk of non-performance. This assumption reflects a market participant's view of (a) the risk of a subsidiary of the Company not fulfilling its GMIB obligations (GMIB liabilities ) and (b) the credit risk that the reinsurers do not pay their obligations (GMIB asset s ). As of September 30, 2016 , there were three reinsurers for G MIB, with collateral securing 6 9 % of the balance. The Company reports GMIB liabilities and assets as derivatives at fair value because the cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments. Under the terms of these written and purchased contracts, the Company periodically receives and pays fees based on either contractholders ' account values or deposits increased at a contractual rate. The Company will also pay and receive cash depending on account values and interest rates when contractholder s elect to begin to receive minimum income payments. The Company estimates the fair value of the assets and liabilities for GMIB contracts by calculating the results for many scenarios run through a model utilizing various assumptions that include non-performance risk, among other things. The non-performance risk adjustment is incorporated by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilit ies to reflect a market participant's view of the risk of a subsidiary of the Company not fulfilling its GMIB obligations, and (b) the GMIB asset s to reflect a market participant's view of the credit risk of the reinsurers, after considering collateral. Other assumptions that affect GMIB assets and liabilities include capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and future annuitant behavior (including mortality, lapse and annuity election rates). As certain assumptions used to estimate fair values for these contracts are largely unobservable (primarily related to future annuitant behavior), the Company classifies GMIB assets and liabilities in Level 3. The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk, or increases in assumed annuity election rates , would result in higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. GMIB liabilities are reported in the Company's Consolidated Balance Sheets in a ccounts payable, accrued expenses and other liabilities. GMIB assets associated with these contracts represent net receivables in connection with reinsurance that the Company has purchased from three external reinsurers and are reported in the Company's Consolidated Balance Sheets in o ther assets, including other intangibles. Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value T he following table s summarize the changes in financial assets and financial liabilities classified in Level 3 for the three months and nine months ended September 30, 2016 and 2015 . Separate account asset changes are reported separately under the heading “ s eparate account assets” as the changes in fair values of these assets accrue directly to the policyholder s . Gains and losses reported in th ese table s may include net changes in fair value that are attributable to both observable and unobservable inputs. For the Three Months Ended September 30, 2016 Changes in Level 3 financial assets and financial liabilities (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net Balance at July 1, 2016 $ 743 $ 975 $ (947) $ 28 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - (22) 22 - Other - 1 (6) (5) Total gains (losses) included in shareholders' net income - (21) 16 (5) Gains included in other comprehensive income 12 - - - Gains required to adjust future policy benefits for settlement annuities (1) - - - - Purchases, sales and settlements: Purchases 20 - - - Sales (1) - - - Settlements (55) (23) 23 - Total purchases, sales and settlements (36) (23) 23 - Transfers into/(out of) Level 3: Transfers into Level 3 44 - - - Transfers out of Level 3 (30) - - - Total transfers into/(out of) Level 3 14 - - - Balance at September 30, 2016 $ 733 $ 931 $ (908) $ 23 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ - $ (21) $ 16 $ (5) For the Three Months Ended September 30, 2015 (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net Balance at July 1, 2015 $ 666 $ 867 $ (841) $ 26 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - 104 (104) - Other 1 - - - Total gains (losses) included in shareholders' net income 1 104 (104) - Losses included in other comprehensive income (1) - - - Gains required to adjust future policy benefits for settlement annuities (1) 4 - - - Purchases, sales and settlements: Purchases 25 - - - Sales (1) - - - Settlements (13) (10) 10 - Total purchases, sales and settlements 11 (10) 10 - Transfers into/(out of) Level 3: Transfers into Level 3 48 - - - Transfers out of Level 3 (8) - - - Total transfers into/(out of) Level 3 40 - - - Balance at September 30, 2015 $ 721 $ 961 $ (935) $ 26 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (1) $ 104 $ (104) $ - (1) Amounts do not accrue to shareholders. For the Nine Months Ended September 30, 2016 Changes in Level 3 financial assets and financial liabilities Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net (In millions) Balance at January 1, 2016 $ 726 $ 907 $ (885) $ 22 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - 71 (71) - Other (16) - 1 1 Total gains (losses) included in shareholders' net income (16) 71 (70) 1 Gains included in other comprehensive income 11 - - - Gains required to adjust future policy benefits for settlement annuities (1) 35 - - - Purchases, sales and settlements: Purchases 67 - - - Sales (126) - - - Settlements (71) (47) 47 - Total purchases, sales and settlements (130) (47) 47 - Transfers into/(out of) Level 3: Transfers into Level 3 235 - - - Transfers out of Level 3 (128) - - - Total transfers into/(out of) Level 3 107 - - - Balance at September 30, 2016 $ 733 $ 931 $ (908) $ 23 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (11) $ 71 $ (70) $ 1 For the Nine Months Ended September 30, 2015 Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net (In millions) Balance at January 1, 2015 $ 857 $ 953 $ (929) $ 24 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - 37 (37) - Other 29 - 2 2 Total gains (losses) included in shareholders' net income 29 37 (35) 2 Losses included in other comprehensive income (18) - - - Gains required to adjust future policy benefits for settlement annuities (1) 6 - - - Purchases, sales and settlements: Purchases 136 - - - Sales (229) - - - Settlements (20) (29) 29 - Total purchases, sales and settlements (113) (29) 29 - Transfers into/(out of) Level 3: Transfers into Level 3 49 - - - Transfers out of Level 3 (89) - - - Total transfers into/(out of) Level 3 (40) - - - Balance at September 30, 2015 $ 721 $ 961 $ (935) $ 26 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (1) $ 37 $ (35) $ 2 (1) Amounts do not accrue to shareholders. As noted in the tables above, total gains and losses included in shareholders' net income are reflected in the following captions in the Consolidated Statements of Income: Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities and realized investment gains (losses) for the impact of changes in non-performance risk related to GMIB assets and liabilities, similar to hedge ineffectiveness; and Other operating expenses for amounts related to GMIB assets and liabilities (GMIB fair value gain/loss), except for the impact of changes in non-performance risk. In the tables above, gains and losses included in other comprehensive income are reflected in net unrealized appreciation (depreciation) on securities in the Consolidated Statements of Comprehensive Income. Reclassifications impacting Level 3 financial instruments are reported as transfers into or out of the Level 3 category as of the beginning of the quarter in which the transfer occurs. Therefore gains and losses in income only reflect activity for the period the instrument was classified in Level 3. Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company's best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. For the three months ended September 30, 2016 , transfers between Level 2 and Level 3 primarily reflect change s in the significance of unobservable inputs used to value several securities across the foreign government and consumer sector s . Additionally, for the nine months ended September 30, 2016 , transfers between Level 2 and Level 3 primarily reflect changes in liquidity and credit risk estimates for certain private placement issuers in the metals, mining , energy and consumer sectors. For the three months and nine months ended September 30, 2015 , transfers out of Level 3 primarily reflect a change in the signific ance of the unobservable inputs related to liquidity and credit estimates used to value several private corporate bonds . Separate account assets Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company's revenues and expenses. Beginning in 2016, investments that are measured using the practical expedient of NAV (see Note 2 for additional information) are excluded from the fair value hierarchy. Prior periods have been reclassified to conform to the current presentation . As of September 30, 2016 and December 31, 2015 , separate account assets were as follows: (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total September 30, 2016 Guaranteed separate accounts (See Note 16) $ 246 $ 271 $ - $ 517 Non-guaranteed separate accounts (1) 1,407 4,947 346 6,700 Subtotal $ 1,653 $ 5,218 $ 346 7,217 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 939 Total separate account assets $ 8,156 December 31, 2015 Guaranteed separate accounts (See Note 16) $ 235 $ 274 $ - $ 509 Non-guaranteed separate accounts (1) 1,401 4,698 297 6,396 Subtotal $ 1,636 $ 4,972 $ 297 6,905 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 928 Total separate account assets $ 7,833 (1) N on-guaranteed separate accounts include d $3.7 billion as of September 30, 2016 and $3.6 billion as of December 31, 2015 in assets supporting the Comp any's pension pla ns, including $ 0.3 b illion classified in Level 3 and $0.9 billion priced at NAV as a practical expedient for both periods . Separate account assets in Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include: corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value that is the exit price. Separate account assets classified in Level 3 include certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above , as well as commercial mortgage loans that are valued according to the methodologies discussed below . The following tables summarize the changes in separate account assets reported in Level 3 for the three months and nine months ended September 30, 2016 a nd 2015 . Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Balance, beginning of period $ 333 $ 273 $ 297 $ 255 Policyholder gains (losses) 2 (1) 3 (3) Purchases, sales and settlements: Purchases 7 4 12 33 Sales - - (1) - Settlements (3) (3) (5) (8) Total purchases, sales and settlements 4 1 6 25 Transfers into/(out of) Level 3: Transfers into Level 3 7 16 46 16 Transfers out of Level 3 - (3) (6) (7) Total transfers into/(out of) Level 3 7 13 40 9 Balance, end of period $ 346 $ 286 $ 346 $ 286 Separate account i nvestments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account's ownership share of the equity of the investee ( NAV as a practical expedient), including changes in the fair values of its underlying investments. The table below provides additional information on these investments. Fair Value as of (In millions) September 30, 2016 December 31, 2015 Unfunded Commitments Redemption Frequency (if currently eligible)* Redemption Notice Period* Security Partnerships $ 460 $ 406 $ 279 Not applicable Not applicable Real Estate Funds 281 261 - Quarterly 45-90 days Hedge Funds 198 261 - Up to Annually, varying by fund 30-90 days Total $ 939 $ 928 $ 279 * The attributes noted are effectiv e as of September 30, 2016 and December 31, 2015 . Assets and Liabilities M easured at F air V alue under Certain Conditions Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate , partnership entities and commercial mortgage loans when they become impaired. Impaired values for these asset types classified as Level 3 representing less than 1% of total investments , were written down to their fair values , resulting in realized investment losses of $3 million after- tax for the nine months ended September 30, 2016 and $7 million a fter- tax for the nine months ended September 30, 2015 . Fair Value Disclosures for Financial Instruments Not Carried at Fair Value The following table includes the Company's financial instruments not recorded at fair value that are subject to fai r value disclosure requirements at September 30, 2016 and December 31, 2015. In addition to universal life products and capital leases, f inancial instruments that are carried in the Company's Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table. September 30, 2016 December 31, 2015 (In millions) Classification in the Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,887 $ 1,822 $ 1,911 $ 1,864 Contractholder deposit funds, excluding universal life products Level 3 $ 1,229 $ 1,218 $ 1,151 $ 1,148 Long-term debt, including current maturities, excluding capital leases Level 2 $ 5,802 $ 5,012 $ 5,515 $ 5,020 The fair values for all financial instruments presented in the table above have been estimated using market information when available. The following valuation methodologies and inputs are used by the Company to determine fair value. Commercial mortgage loans . The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows using estimated market interest rates that reflect the Company's assessment of the credit quality of the loans. Market interest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates, based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan, co nsidering debt service coverage, the loan -to- value ratio and other factors . Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model. The fair value |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstract] | |
Investments | Note 8 — Investments Total Realized Investment Gains and Losses The following realized gains and ( losses ) on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business : Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Fixed maturities $ 7 $ (57) $ (5) $ (38) Equity securities (1) 28 - 42 Commercial mortgage loans - - 4 2 Other investments, including derivatives 69 39 111 98 Realized investment gains before income taxes 75 10 110 104 Less income taxes 27 3 39 36 Net realized investment gains $ 48 $ 7 $ 71 $ 68 Included in these realized investment gains (losses) were pre-tax asset write-downs as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Other-than-temporary impairments on debt securities: Credit-related $ - $ (3) $ (19) $ (4) Non credit-related (1) (1) (55) (12) (69) Total other-than-temporary impairments on debt securities (1) (58) (31) (73) Other asset write-downs (2) - (1) (13) (12) Total $ (1) $ (59) $ (44) $ (85) (1) These write-downs pertain to other-than-temporary declines in fair values due to increases in market yields (widening of credit spreads), particularly within the energy sector, for certain below investment grade fixed maturities with an increased probability of sales activity prior to recovery of their amortized cost basis. (2) Other asset write-downs include other-than-temporary declines in fair values of equity securities, increases in valuation reserves on commercial mortgage loans and asset write-downs related to real estate investments and security partnerships. Sales information for available-for-sale fixed maturities and equity securities was as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Proceeds from sales $ 300 $ 275 $ 1,012 $ 1,452 Gross gains on sales $ 9 $ 31 $ 43 $ 82 Gross losses on sales $ - $ 3 $ 6 $ 7 Fixed Maturities and Equity Securities The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at September 30, 2016: Amortized Fair (In millions) Cost Value Due in one year or less $ 1,550 $ 1,557 Due after one year through five years 6,581 6,928 Due after five years through ten years 7,353 7,881 Due after ten years 3,447 4,379 Mortgage and other asset-backed securities 461 499 Total $ 19,392 $ 21,244 Actual maturities of these securities could differ from their contractual maturities used in the table above. This could occur because issuers may have the right to call or prepay obligations, with or without penalties . Gross unrealized appre ciation (depreciation) on fixed maturities by type of issuer is shown below. Gross Gross Unrealized Unrealized Amortized Appre- Depre- Fair Cost ciation ciation Value (In millions) September 30, 2016 Federal government and agency $ 452 $ 298 $ - $ 750 State and local government 1,360 148 - 1,508 Foreign government 2,104 221 (3) 2,322 Corporate 15,015 1,192 (42) 16,165 Mortgage-backed 35 2 (1) 36 Other asset-backed 426 40 (3) 463 Total $ 19,392 $ 1,901 $ (49) $ 21,244 (In millions) December 31, 2015 Federal government and agency $ 528 $ 251 $ - $ 779 State and local government 1,496 147 (2) 1,641 Foreign government 1,870 147 (3) 2,014 Corporate 14,022 632 (206) 14,448 Mortgage-backed 48 2 (1) 49 Other asset-backed 492 39 (7) 524 Total $ 18,456 $ 1,218 $ (219) $ 19,455 The above table includes investments with a fair value of $2.9 billion at September 30, 2016 and $2.7 billion at December 31, 2015 s upporting liabilities of the Company's run-off settlement annuity business . These investments had gross unrealized a ppreciation of $ 752 million and gross unrealized depreciation of $2 million at September 30, 2016 , compared with gross unrealized appreciation of $521 million and gross unrealized depreciation of $38 million at December 31, 2015. Such unrealized amounts are reported in future policy benefit liabilities rather tha n accumulated other comprehensive income. Review of declines in fair value . Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include: length of time and severity of decline; financial health and specific near term prospects of the issuer; changes in the regulatory, economic or general market environment of the issuer's industry or geographic region; and the Company's intent to sell or the likelihood of a required sale prior to expected recovery. The table below summarizes fixed maturities in an unrealized loss position at September 30, 2016 by the length of time these securities have been in an unrealized loss position . These fixed maturities were primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase. September 30, 2016 Fair Amortized Unrealized Number (Dollars in millions) Value Cost Depreciation of Issues One year or less: Investment grade $ 784 $ 797 $ (13) 329 Below investment grade $ 277 $ 283 $ (6) 122 More than one year: Investment grade $ 331 $ 345 $ (14) 58 Below investment grade $ 181 $ 197 $ (16) 32 There were no available for sale equity securities with a significant unrealized loss reflected in accumulated other comprehensive income at September 30, 2016 . Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. As of September 30, 2016 , fair val ues of these securities were $36 million and amortized cos t was $51 million. As of December 31, 2015 , fair val ues of these securities were $52 mi llion and amortized cost was $66 million. Commercial Mortgage Loans Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower. Loans are generally issued at a fixed rate of interest and are secured by high quality, primarily completed and substantially leased operating p roperties. Credit quality . The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the i nvestment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Quality ratings are based on our evaluation of a number of key inputs related to the loan including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on the debt , with a ratio below 1.0 indicat ing that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collaterali zing the loan. The following table s summarize the credit risk profile of the Company's commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios, as of September 30, 2016 and December 31, 2015: Debt Service Coverage Ratio 1.30x or 1.20x to 1.10x to 1.00x to Less than Loan-to-Value Ratios Greater 1.29x 1.19x 1.09x 1.00x Total (In millions) September 30, 2016 Below 50% $ 465 $ 15 $ - $ - $ - $ 480 50% to 59% 518 24 19 30 - 591 60% to 69% 651 14 - - - 665 70% to 79% - - 30 - 35 65 80% to 89% - - - - - - 90% to 100% - - - - 21 21 Total $ 1,634 $ 53 $ 49 $ 30 $ 56 $ 1,822 Debt Service Coverage Ratio 1.30x or 1.20x to 1.10x to 1.00x to Less than Loan-to-Value Ratios Greater 1.29x 1.19x 1.09x 1.00x Total (In millions) December 31, 2015 Below 50% $ 261 $ 2 $ - $ 67 $ - $ 330 50% to 59% 683 - - 24 - 707 60% to 69% 590 14 - 19 - 623 70% to 79% - - - 30 36 66 80% to 89% 40 - - - - 40 90% to 100% - - - - 98 98 Total $ 1,574 $ 16 $ - $ 140 $ 134 $ 1,864 The Company's annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company's investment professionals in the second quarter of 201 6 and included an analysis of each underlying property's most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value and categorizes the investments as loans in good standing, potential problem loans or problem loans. The results of the 2016 review showed improvement from the prior review in each of the key metrics and confirmed the overall strength of the portfolio. Based on property values and cash flows estimated as part of this review, and considering updates for loans where material changes were subsequently identified, the portfolio's avera ge loan-to-value ratio improved to 56 % at September 30, 2016 compared with 58 % at December 31, 2015 and the portfolio's average debt service cove rage ratio improved to 1.93 at September 30, 2016 compared with 1.78 at December 31, 2015 . The se improvement s are primarily attributable to improvements in property operations and the relative stability of the se metrics is primarily due to low portfolio turnover. The Company will reevaluate a loan's credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower's request for restructure causes management to believe that the Company's estimate of financial performance, fair value or the risk profile of the underlying property has been impacted . Potential problem mortgage loans are considered current (no payment is more than 59 days past due), but they exhibit certain characteristics that increase the likelihood of future default . The characteristics management considers include , but are not limited to, the deterioration of debt service coverage below 1.0, estimated loan-to-value ratios increasing to 100% or more, downgrade in quality rating and request s from the borrower for restructuring. In addition, loans are considered potential problems if principal or interest payments are past due by more than 30 but less than 60 days. Problem mortgage loans are either in default by 60 days or more or have been restructured as to terms that could include concessions on interest rate, principal payment or maturity date. The Company monitors each problem and potential problem mortgage loan on an ongoing basis, and updates the loan categorization and quality rating when warranted. Problem and potential problem mortgage loans, net of valuation reserves, totaled $21 million at September 30, 2016 and $139 million at December 31, 2015. Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due according to the terms of the original loan agreement. These loans are included in either problem or potential problem loans. The Company monitors credit risk and assesses the impairment of loans individually and on a consistent basis for all loans in the portfolio. Impaired loans are carried at the lower of unpaid principal balance or the fair value of the underlying real estate. Certain commercial mortgage loans without valuation reserves are considered impaired because the Company will not collect all interest due according to the terms of the original agreements; however, the Company expects to recover the unpaid principal becau se it is less than the fair value of the underlying real estate. The carrying value of the Company's impaired commercial mortgage loans and related valuation reserves were as follows: (In millions) September 30, 2016 December 31, 2015 Gross Reserves Net Gross Reserves Net Impaired commercial mortgage loans with valuation reserves $ 26 $ (5) $ 21 $ 113 $ (15) $ 98 Impaired commercial mortgage loans without valuation reserves - - - - - - Total $ 26 $ (5) $ 21 $ 113 $ (15) $ 98 The average recorded investment in impaired loans decreased to $ 83 million during the nine months ended September 30, 2016 versus $ 129 million during the nine months ended September 30, 2015 , partially due to foreclos ing o n one impaired loan . Because of the risk profile of the underlying investment, t he Company recognizes interest income on impaired mortgage loans only when payment is actually received. Changes in valuation reserves for commercial mortgage loans were not material for the nine months ended September 30, 2016 and 2015. Short-term investments and cash equivalents Short-term investments and cash equivalents include d corporate securities of $2.3 b illion , federal government securities of $567 million and money market funds of $40 million as of September 30, 2016 . The Company's short-term inve stments and cash equivalents as of December 31, 2015 inclu ded corporate securities of $925 m illion, federal government se curities of $220 millio n and money market funds of $55 million. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 9 — Derivative Financial Instruments The Company uses derivative financial instruments to manage the characteristics of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities (such as paying claims, investment returns and withdrawals) and to hedge interest rate risk of its long- term debt . The Company has written and purchased G MIB reinsurance contracts in its r un-off r einsurance business that are accounted for as free standing derivatives. For further information on the Company's accounting policy for derivative financial instruments , s ee Note 2 (C) to the Consolidated Financial Statements contained in the Company's 2015 Form 10-K. Derivatives in the Company's separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders. Collateral and termination feature s. T he Company routinely monitors exposure to credit risk associated with derivatives and diversifies the portfolio among approved dealers of high credit quality to minimize this risk. As of September 30, 2016 , the Company had $14 million in cash on deposit representing the upfront margin requi red for the Company's centrally- cleared derivative instruments. Certain of the Company's over-the-counter derivative instruments contain provisions requiring either the Company or the counterparty to post collateral or demand immediate payment depending on the amount of the net liability position and predefined financial strength or credit rating thresholds. Collateral posting requirements vary by counterparty. The net asset or liability positions of these derivatives were not material as of September 30, 2016 or December 31, 2015 . Investment Cash Flow and Fair Value Hedges Using cash flow hedge accounting, the Company entered into interest rate, foreign currency, and combination (interest rate and foreign currency) swap contracts to hedge the interest and foreign currency cash flows of its fixed maturity bonds to match associated insurance liabilities. F air values are reported in other long-term inves tments or acc ounts payable, accrued expenses and other liabilities. Changes in fair value are reported in accumulated other comprehensive income and amortized into net investment income or reported in other realized investment gains and losses as interest or principal payments are received. Beginning in the second quarter of 2016, the Company entered into a foreign currency swap contract to hedge the foreign exchange- related changes in fair value of a fixed maturity bond . Using fair value hedge accounting, the swap contract f air value is reported in other long-term investments or accounts payable, accrued expenses and other liabilities. Changes in the fair value of the swap contract , as well as changes in the fair value of the hedged bond attributable to the hedged risk are reported in other realized investment gains and losses. Under the terms of these various contracts, the Company periodically exchanges cash flows between variable and fixed interest rates or between two currencies for both principal and interest. Foreign currency and combination swaps are primarily Euros, Canadian dollars and Japanese yen and have terms for pe riods of up to seven years. Net interest cash flows are reported in operating activities. T he notional value s of cash f low hedge swaps were $65 million as of September 30, 2016 and $131 million as of December 31, 2015 . The notional value of the fair value hedge swap entered into beginning in the second quarter of 2016 was $23 million as of September 30, 2016 . T he effects of these derivative instruments on the Consolidated Financial Statements were not material as of September 30, 2016 and December 31, 2015, and for the three months and nine months ended September 30, 2016 and 2015. No material amounts were excluded from the assessment of hedge effectiveness and no significant gains or losses were recognized due to hedge ineffectiveness. Investment Economic Hedges During the third quarter of 2016, the Company entered into a foreign currency forward contract to hedge the foreign exchange related changes in fair value of U . S . dollar -denominated fixed maturity bonds back to the local currency for one of its forei gn subsidiaries . This arrangement was not designated as an accounting hedge, and therefore the forward contract fair value is reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair value are reported in other realized investment gains and losses. Under the terms of this contract , the Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contract's trade date. Cash flows on foreign currency forward contracts are reported in operating activities. The notional value of the forward contract entered into during the third quarter of 2016 was $ 50 million as of September 30, 2016 . T he effects of these derivative instruments on the Consolidated Financial Statements were not material as of and for the three months ended September 30, 2016 . F air V alue H edge of Long-Term Corporate Debt T he Company entered into interest rate swap contracts to convert a portion of the interest rat e exposure on its long-term debt from fixed to variable rates to more closely align interest expense with interest income received on its cash equiv alent and short-term investment balances. The variable rates are benchmarked to LIBOR. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets , including other intangibles , or acc ounts payable, accrued expenses and other liabilities. As the critical terms of these swaps match those of the long-term debt being hedged, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR . The effects of those adjustment s on other operating expense s are offset by the effects of corresponding changes in the swaps' fair value , including i nterest expense for the difference between the variable and fixed interest rates. Under the terms of these cont racts, the Company provides upfront margin and settles fair value changes and net interest between variable and fix ed interest rates daily with a central clearinghouse. Net interest cash flows are reported in operating activities. The notional values of these derivative instruments were $750 million as of September 30, 2016 and December 31, 2015. T he effects of these derivative instruments on the Consolidated Financial Statements were not material as of September 30, 2016 and December 31, 2015, and for the three and nine months ended September 30, 2016 and 2015. GMIB The Company 's run-off reinsurance business has written reinsurance contracts with issue rs of variable annuities that provide annuitants with certain guarantees of minimum income benefits resulting from the level of variable annuity account values compared with a contractually guaranteed amount (“GMIB liabilities”). According to the contractual terms of the written reinsurance contracts, payment by the Company depends on the actual account value in the underlying mutual funds and the level of interest rates when the contractholders elect to receive minimum income payments. The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts, including the agreement with Berkshire in 2013, effectively exiting this business. See Note 6 for further details. The fair value effects of GMIB contracts on the financial statements are included in Note 7 and their volume of activity is included in Note 16 . Cash flows on these contracts are reported in operating activities. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2016 | |
Variable Interest Entities [Abstract] | |
Variable interest entities | Note 10 – Variable Interest Entities When the Company becomes involved with a variable interest entity, as well as when the re is a change in the Company's involvement with an entity, the Company evaluates the following to determine if it is the primary beneficiary and must consolidate the entity : the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company's ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers. The Company owns interests in security and real estate limited partnerships that are now defined as variable interest entities under ASU 2015-02 (see Note 2). These partnerships invest in the equity or mezzanine debt of privately held companies and real estate properties. General partners unaffiliated with the Company control decisions that most significantly impact the partnership's operations and the limited partners do not have substantive kick-out or participating rights. The Company's maximum exposure to these entities of $1.9 billion across approximately 100 li mited partnerships as of September 30, 2016 includes $1.0 b illion reported in other long-term investments and commitments to contribute an additional $0.9 b illion. The Company's non-controlling interest in each of these limited partnerships is generally less than 10 % of the partnership ownership interests . In the normal course of its investing activities, the Company also makes passive investments in certain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company . Th e Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to the carrying amount of $0.6 b illion as of September 30, 2016 , that is reported in fixed maturities. The Company's combined ownership interests are insignificant relative to the total principal amount s issued by these entities. To provide certain services to its Medicare Advantage customers, the Company contracts with independent physician associations (“IPAs”) that are variable interest entities. Physicians provide health care services to Medicare Advantage customers and the Company provides medical management and administrative services to the IPAs. The Company's maximum exposure to loss related to the IPA arrangements is limited to their liability for incurred but not reported medical costs for the Company's Medicare Advantage customers. These liabilities are not material and are generally secured by deposits maintained by the IPAs. The Company is not the primary beneficiary of any of the variable interest entities described above and does not consolidate these entities because either: it ha s no power to direct the activities that most significantly impact the entities' economic performance; or it ha s neither the right to receive benefits nor the obligation to absorb losses that could be significant to these variable interest entities. The Company has not provided, and does not intend to provide, financial support to these entities that it is not contractually required to provide. The Company performs ongoing qualitative analyses of its involvement with these variable interest entities to determine if consolidation is required. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2016 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefit Plans | Note 11 — Pension and Other Postretirement Benefit Plans The Company and certain of its subsidiaries provide pension, health care and life insurance defined benefits to eligible retired employees, spouses and other eligible dependents through various domestic and foreign plans. The effect of its foreign pension and other postretirement benefit plans is immaterial to the Company's results of operations, liquidity and financial position. The Company froze its defined benefit postretirement medical plan in 2013 and its primary domestic pension plans in 2009. As further discussed in Note 16 , the Company and the Cigna Pension Plan are defendants in a class action lawsuit that has yet to be resolved. When the parties agree on a final plan amendment, the pension benefit obligation will be updated to reflect additional benefits resulting from this litigation. For the nine months ended September 30, 2016, the Company's unrecognized actuarial losses and prior service costs (reported in accumulated other comprehensive income) decreased by $41 million pre-tax in the aggregate ($28 million after-tax) resulting in an increase in shareholders' equity. This change was primarily the result of amortization . Pension and Other Postretirement B enefits . Components of net pension and net other postretirement benefit costs were as follows: Pension Benefits Other Postretirement Benefits Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (In millions) 2016 2015 2016 2015 2016 2015 2016 2015 Service cost $ - $ 1 $ 1 $ 2 $ - $ - $ - $ - Interest cost 50 49 149 146 3 3 8 8 Expected long-term return on plan assets (62) (66) (186) (199) - - - - Amortization of: Net loss from past experience 17 17 50 52 - - - - Prior service cost - - - - (1) (1) (2) (2) Net cost $ 5 $ 1 $ 14 $ 1 $ 2 $ 2 $ 6 $ 6 The Company funds its domestic qualified pension plans at least at the minimum amount required by the Pension Protection Act of 2006. T he Company did not make any pension contributions to these plans during the nine months ended September 30, 2016 , and does not expect to make any such contributions for the remainder of 2016 . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Note 12 ― Deb t Short-term and long-term debt were as follo ws: September 30, December 31, (In millions) 2016 2015 Short-term: Commercial paper $ - $ 100 Current maturities of long-term debt 250 - Other, including capital leases 21 49 Total short-term debt $ 271 $ 149 Long-term: $250 million, 5.375% Notes due 2017 $ - $ 249 $131 million, 6.35% Notes due 2018 131 131 $250 million, 4.375% Notes due 2020 (1) 260 254 $300 million, 5.125% Notes due 2020 (1) 307 303 $78 million, 6.37% Notes due 2021 78 78 $300 million, 4.5% Notes due 2021 (1) 311 304 $750 million, 4% Notes due 2022 743 743 $100 million, 7.65% Notes due 2023 100 100 $17 million, 8.3% Notes due 2023 17 17 $900 million, 3.25% Notes due 2025 893 892 $300 million, 7.875% Debentures due 2027 299 299 $83 million, 8.3% Step Down Notes due 2033 82 82 $500 million, 6.15% Notes due 2036 498 498 $300 million, 5.875% Notes due 2041 296 295 $750 million, 5.375% Notes due 2042 743 743 Other, including capital leases 22 32 Total long-term debt $ 4,780 $ 5,020 ( 1) T he Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 9 for further information about the Company's interest rate risk management and these derivative instruments. T he Company has a five -year revolving credit and letter of credit agreement for $ 1.5 billion that permits up to $ 500 million to be used for letters of credit. This agreement extends through December 12, 2019 and is diversified among 16 banks, with three banks each having 12% of the commitment and the remainder spread among 13 banks. The credit agreement includes options subject to consent by the administrative agent and the committing banks to increase the commitment amount to $ 2 billion and to extend t he term past December 12, 2019 . The credit agreement is available for general corporate purposes, including for the issuance of letters of credit. The credit a greement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitali zation (each as defined in the credit a greement) – to be greater than 0.50 . The leverage ratio calculation excludes the following items that are included in accu mulated other comprehensive loss on the Company's consolidated balance sheets: net unrealized appreciation on fixed maturities and the portion of the post-retirement benefits liability adjustment attributable to pension. In addition to the $ 5.1 billion of debt outstanding as of September 30, 2016 , the Company had $ 9.5 billion of borrowing capacity within the maximum debt coverage covenant in the credit agreement. This additional borrowing capacity includes the $ 1.5 billion available under the credit agreement . L etters of credit outstanding as of September 30, 2016 totaled $ 14 million . The Company was in compliance with its debt covenants as of September 30, 2016 . In April 2015, the Company redeemed two of its outstanding notes early. The Company paid a total of $ 955 million including accrued interest and expenses that resulted in a total pre-tax loss on early debt extinguishment of $ 100 million ($ 65 million after - tax). See Note 15 of the Company's 2015 Form 10-K for further details. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 13 — Accumulated Other Comprehensive Income ( Loss ) Accumulated other comprehensive income ( loss ) excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate owned life insurance business . Changes in the components of accumulated other comprehensive income ( loss ) were as follows: Tax (Expense) After- (In millions) Pre-Tax Benefit Tax Three Months Ended September 30, 2016 Net unrealized appreciation, securities, July 1, $ 1,135 $ (367) $ 768 Unrealized appreciation on securities arising during the period 94 (24) 70 Reclassification adjustment for (gains) included in shareholders' net income (realized investment gains) (6) 2 (4) Net unrealized appreciation, securities arising during the period 88 (22) 66 Net unrealized appreciation, securities, September 30, $ 1,223 $ (389) $ 834 Net unrealized appreciation, derivatives, July 1, $ 5 $ (2) $ 3 Unrealized appreciation on derivatives arising during the period 2 - 2 Reclassification adjustment for (gains) included in shareholders' net income (other operating expenses) (4) 1 (3) Net unrealized (depreciation) on derivatives arising during the period (2) 1 (1) Net unrealized appreciation, derivatives, September 30, $ 3 $ (1) $ 2 Net translation of foreign currencies, July 1, $ (251) $ 18 $ (233) Net translation of foreign currencies arising during the period 55 - 55 Net translation of foreign currencies, September 30, $ (196) $ 18 $ (178) Postretirement benefits liability adjustment, July 1, $ (2,127) $ 745 $ (1,382) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 16 (4) 12 Net change due to valuation update (3) - (3) Net postretirement benefits liability adjustment arising during the period 13 (4) 9 Postretirement benefits liability adjustment, September 30, $ (2,114) $ 741 $ (1,373) 2015 Net unrealized appreciation, securities, July 1, $ 733 $ (259) $ 474 Unrealized (depreciation) on securities arising during the period (37) 26 (11) Reclassification adjustment for losses included in shareholders' net income (realized investment gains) 29 (10) 19 Net unrealized (depreciation), securities arising during the period (8) 16 8 Net unrealized appreciation, securities, September 30, $ 725 $ (243) $ 482 Net unrealized appreciation, derivatives, July 1, $ 7 $ (3) $ 4 Unrealized appreciation on derivatives arising during the period 4 (1) 3 Net unrealized appreciation, derivatives, September 30, $ 11 $ (4) $ 7 Net translation of foreign currencies, July 1, $ (165) $ 17 $ (148) Net translation of foreign currencies arising during the period (113) 1 (112) Net translation of foreign currencies, September 30, $ (278) $ 18 $ (260) Postretirement benefits liability adjustment, July 1, $ (2,240) $ 785 $ (1,455) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 16 (5) 11 Postretirement benefits liability adjustment, September 30, $ (2,224) $ 780 $ (1,444) Tax (Expense) After- (In millions) Pre-Tax Benefit Tax Nine Months Ended September 30, 2016 Net unrealized appreciation, securities, January 1, $ 612 $ (194) $ 418 Unrealized appreciation on securities arising during the period 606 (193) 413 Reclassification adjustment for losses included in shareholders' net income (realized investment gains) 5 (2) 3 Net unrealized appreciation, securities arising during the period 611 (195) 416 Net unrealized appreciation, securities, September 30, $ 1,223 $ (389) $ 834 Net unrealized appreciation, derivatives, January 1, $ 10 $ (3) $ 7 Unrealized (depreciation), derivatives arising during the period (3) 1 (2) Reclassification adjustment for (gains) included in shareholders' net income (other operating expenses) (4) 1 (3) Net unrealized (depreciation), derivatives arising during the period (7) 2 (5) Net unrealized appreciation, derivatives, September 30, $ 3 $ (1) $ 2 Net translation of foreign currencies, January 1, $ (295) $ 21 $ (274) Net translation of foreign currencies arising during the period 99 (3) 96 Net translation of foreign currencies, September 30, $ (196) $ 18 $ (178) Postretirement benefits liability adjustment, January 1, $ (2,155) $ 754 $ (1,401) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 48 (15) 33 Net change due to valuation update (7) 2 (5) Net postretirement benefits liability adjustment arising during the period 41 (13) 28 Postretirement benefits liability adjustment, September 30, $ (2,114) $ 741 $ (1,373) 2015 Net unrealized appreciation, securities, January 1, $ 955 $ (335) $ 620 Unrealized (depreciation) on securities arising during the period (226) 90 (136) Reclassification adjustment for (gains) included in shareholders' net income (realized investment gains) (4) 2 (2) Net unrealized (depreciation), securities arising during the period (230) 92 (138) Net unrealized appreciation, securities, September 30, $ 725 $ (243) $ 482 Net unrealized (depreciation), derivatives, January 1, $ (12) $ 4 $ (8) Unrealized appreciation, derivatives arising during the period 11 (4) 7 Reclassification adjustment for losses included in shareholders' net income (other operating expenses) 12 (4) 8 Net unrealized appreciation, derivatives arising during the period 23 (8) 15 Net unrealized appreciation, derivatives, September 30, $ 11 $ (4) $ 7 Net translation of foreign currencies, January 1, $ (71) $ 9 $ (62) Net translation of foreign currencies arising during the period (207) 9 (198) Net translation of foreign currencies, September 30, $ (278) $ 18 $ (260) Postretirement benefits liability adjustment, January 1, $ (2,286) $ 800 $ (1,486) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 50 (17) 33 Net change due to valuation update 12 (3) 9 Net postretirement benefits liability adjustment arising during the period 62 (20) 42 Postretirement benefits liability adjustment, September 30, $ (2,224) $ 780 $ (1,444) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | Note 14 ― Income Taxes A. Income Tax Expense The consolidated effective tax rate s of 38.1 % for the nine months ended September 30, 2016 and 37.8 % for the nine months ended 2015 reflect the health insurance industry tax that is not deductible fo r federal income tax purposes. The effective tax rate for 2016 also reflects tax benefits associated with adopting ASU 2016-09 effective January 1, 2016 as described in Note 2 , partially offset by the impact of certain costs related to the pending Anthem transaction that are not tax deductible. As part of its global capital management strategy , the Company's foreign operations retain a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the U.S. in support of the liquidity and capital needs of our foreign operations. The Company does not intend to repatriate these earnings to the U.S. and as a result, income taxes are provided using the respective foreign jurisdictions' tax rate. The Company has accumulated undistributed foreign earnings of $ 2.8 billion as of September 30, 2016 . If the Company had intended to repatriate these foreign earnings to the U.S., the Company's consolidated balance sheet would have included an additional $ 405 million of deferred tax liabilities as of September 30, 2016 . B. Unrecognized Tax Benefits Changes in unrecognized tax benefits were immaterial for the nine months ended September 30, 2016 . C. Other Tax Matters The Internal Revenue Service (“IRS”) is expected to complete their examination of the Company's 2011 and 2012 consolidated federal income tax returns during the fourth quarter of 2016, the result of which are expected to have minimal effect on consolidated shareholders net income . |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information [Abstract] | |
Segment Information [Text Block] | Note 15 ― Segment Information T he financial results of the Company's businesses are reported in the following segments: Global Health Care aggregates the Commercial and Government operating segments due to their similar economic characteristics, products and services and regulatory environment: The Commercial operating segment encompasses both the U.S. commercial and certain international health care businesses serving employers and their employees, other groups and individuals. Products and services include medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services to insured and self-insured customers. The Government operating segment offers Medicare Advantage and Medicare Part D plans to seniors . This segment also offers Medicaid plans in selected markets . Global Supplemental Benefits includes supplemental health, life and accident insurance products offered in selected international markets and in the U.S. Group Disability and Life provides group long-term and short-term disability, group life, accident and specialty insurance products and related services. Other Operations consist of: corporate-owned life insurance (“COLI”); run-off reinsurance business that is predominantly comprised of GMDB and GMIB business effectively exited through reinsurance with Berkshire in 2013; deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business; and run-off settlement annuity business. Corporate reflects amounts not allocated to operating segments, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, certain litigation matters, intersegment eliminations, compensation cost for stock options, expense associate d with frozen pension plans and certain costs for corporate project s, including overhead . In the Company's segment disclosures, w e present “operating revenues,” defined as total revenues excluding realized investment results. The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. As a result, gains or losses created in this process may not be indicative of the past or future underlying performance of the business. The Company uses “ adjusted income (loss) from operations ” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders' net income (loss) excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items. Income or expense amounts are excluded from adjusted income from operations for the following reasons: Realized investment results are excluded because, as noted above, the Company's portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. Net amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company's business operations. Special items, if any, are excluded because management believes they are not representative of the un derlying results of operations. For the three months and nine months ended September 30, 2016 , the Company reported special item charge s consisting of $ 49 million and $ 123 million of pre-tax costs ($ 46 million and $ 108 million after-tax) related to the proposed merger with Anthem. Management excludes these costs from adjusted income from operations because the size and nature of the Anthem merger is not comparable with the Company's previous acquisition activity. See Note 3 for additional details. For the three months and nine months ended September 30, 2016 , the Company also reported special item charge s consisting of $ 40 million of pre-tax costs ($ 25 million after-tax) related to litigation matters further described in Note 16 . These charges are excluded from adjusted income from operations because Management believes that the nature and size of these matters are not representative of the underlying results of the Company's operations . For the nine months ended September 30, 2015 , the Company reported special item charge s consisting of a $ 100 million pre-tax loss ($ 65 million after-tax) on the early extinguishment of debt described in more detail in Note 15 of the Company's 2015 Form 10-K. For the three months and nine months ended September 30, 2015 , the Company reported special item charge s consisting of $ 35 million of pre-tax costs ($ 29 million after-tax) related to the proposed merger with Anthem as previously described. In connection with adopting ASU 2016-09 effective January 1, 2016 , the Company recognized $ 25 million in adjusted income from operations for Corporate for the nine months ended September 30, 2016 for certain income tax effects of stock-based compensation. See Note 2 for further discussion. Summarized s egment financial information was as follows: (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total Three Months Ended September 30, 2016 Premiums, fees and other revenues and mail order pharmacy revenues $ 7,636 $ 837 $ 1,026 $ 28 $ (4) $ 9,523 Net investment income 77 29 85 87 4 282 Operating revenues $ 7,713 $ 866 $ 1,111 $ 115 $ - $ 9,805 Total revenues $ 7,775 $ 868 $ 1,128 $ 109 $ - $ 9,880 Shareholders' net income (loss) $ 413 $ 77 $ 65 $ 9 $ (108) $ 456 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (42) - (12) 5 1 (48) Amortization of other acquired intangible assets, net 20 4 - - - 24 Special Item: Charges associated with litigation matters 25 - - - - 25 Merger-related transaction costs - - - - 46 46 Total special items 25 - - - 46 71 Adjusted income (loss) from operations $ 416 $ 81 $ 53 $ 14 $ (61) $ 503 Three Months Ended September 30, 2015 Premiums, fees and other revenues and mail order pharmacy revenues $ 7,323 $ 767 $ 980 $ 28 $ (4) $ 9,094 Net investment income 85 26 84 90 - 285 Operating revenues $ 7,408 $ 793 $ 1,064 $ 118 $ (4) $ 9,379 Total revenues $ 7,427 $ 792 $ 1,055 $ 119 $ (4) $ 9,389 Shareholders' net income (loss) $ 475 $ 58 $ 78 $ 17 $ (81) $ 547 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (14) 1 6 - - (7) Amortization of other acquired intangible assets, net 21 3 - - - 24 Special Item: Merger-related transaction costs - - - - 29 29 Adjusted income (loss) from operations $ 482 $ 62 $ 84 $ 17 $ (52) $ 593 Nine Months Ended September 30, 2016 Premiums, fees and other revenues and mail order pharmacy revenues $ 23,207 $ 2,425 $ 3,065 $ 83 $ (14) $ 28,766 Net investment income 230 82 253 270 13 848 Operating revenues $ 23,437 $ 2,507 $ 3,318 $ 353 $ (1) $ 29,614 Total revenues $ 23,510 $ 2,507 $ 3,356 $ 352 $ (1) $ 29,724 Shareholders' net income (loss) $ 1,414 $ 214 $ 81 $ 53 $ (277) $ 1,485 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (49) 1 (25) 1 1 (71) Amortization of other acquired intangible assets, net 56 16 - - - 72 Special Item: Charges associated with litigation matters 25 - - - - 25 Merger-related transaction costs - - - - 108 108 Total special items 25 - - - 108 133 Adjusted income (loss) from operations $ 1,446 $ 231 $ 56 $ 54 $ (168) $ 1,619 (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total Nine Months Ended September 30, 2015 Premiums, fees and other revenues and mail order pharmacy revenues $ 22,110 $ 2,266 $ 2,934 $ 90 $ (14) $ 27,386 Net investment income 251 78 252 276 1 858 Operating revenues $ 22,361 $ 2,344 $ 3,186 $ 366 $ (13) $ 28,244 Total revenues $ 22,437 $ 2,344 $ 3,207 $ 373 $ (13) $ 28,348 Shareholders' net income (loss) $ 1,440 $ 195 $ 254 $ 61 $ (282) $ 1,668 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (50) 1 (13) (6) - (68) Amortization of other acquired intangible assets, net 64 12 - - - 76 Special Items: Debt extinguishment costs - - - - 65 65 Merger-related transaction costs - - - - 29 29 Total special items - - - - 94 94 Adjusted income (loss) from operations $ 1,454 $ 208 $ 241 $ 55 $ (188) $ 1,770 The Company had receivables , net of allowances, from CMS of $ 1.2 billion as of September 30, 2016 and $ 1.5 billion as of December 31, 2015 . These amounts were included in the Consolidated Balance Sheet in premiums, accounts and notes receivable and reinsurance recoverables. Premiums from CMS were 20 % of consolidated revenues for the nine months ended September 30, 2016 and 21 % for the nine months ended September 30, 2015 . |
Contingencies and Other Matters
Contingencies and Other Matters | 9 Months Ended |
Sep. 30, 2016 | |
Contingencies And Other Matters [Abstract] | |
Contingencies and Other Matters | Note 16 ― Contingencies and Other Matters The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business. A. Financial Guarantees: Retiree and Life Insurance Benefits Separate account assets are contractholder funds maintained in accounts with specific investment objectives. The Company records separate account liabilities equal to separate account assets. In certain cases, the Company guarantees a minimum level of benefits for retirement and insurance contracts written in separate accounts. The Company establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees. The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits. The sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations. This percentage varies depending on the asset class within a sponsoring employer's portfolio (for example, a bond fund would require a lower percentage than a riskier equity fund) and thus will vary as the composition of the portfolio changes. If employers do not maintain the required levels of separate account assets, the Company or an affiliate of the buyer of the retirement benefits business ( Prudential Retirement Insurance and Annuity Company ) has the right to redirect the management of the related assets to provide for benefit payments. As of September 30, 2016 , employers maintained assets that exceeded the benefit obligations. Benefit obligations under these arrangements were $ 493 million as of September 30, 2016 and approximately 13 % of these are reinsured by an affiliate of the buyer of the retirement benefits business. The remaining guarantees are provided by the Company with minimal reinsurance from third parties. There were no additional liabilities required for these guarantees as of September 30, 2016 . Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy. See Note 7 for further information on the fair value hierarchy. The Company does not expect that these financial guarantees will have a material effect on the Company's consolidated results of operations, liquidity or financial condition. B. G MIB Contracts Under these guarantees, the future payment amounts are dependent on annuitants' underlying mutual fund investment values and interest rate levels prior to and at the date of annuitization election that must occur within 30 days of a policy anniversary after the appropriate waiting period. Therefore, the future payments are not fixed and determinable under the terms of these contracts. Accordingly, the Company calculated an exposure, without considering any re insurance coverage, using the following hypothetical assumptions: no annuitants surrendered their accounts; all annuitants lived to elect their benefit; all annuitants elected to receive their benefit on the next available date ( 2016 through 2022 ); and all underlying mutual fund investment values remained at the September 30, 2016 value of $892 m illion with no future returns. The Company has reinsurance coverage in place that covers the exposures on these contracts. Using these hypothetical assumptions, this GMIB exposure is $762 million , which is lower than the recorded liability for GMIB calculated using fair value assumptions. See Notes 6 , 7 and 9 for further information on GMIB contracts. C. Certain Other Guarantees The Company had indemnification obligations to lenders of up to $ 1 66 million as of September 30 , 2016, related to borrowings by certain real estate joint ventures that the Company either records as an investment or consolidates. These borrowings, that are nonrecourse to the Company, are secured by the joint ventures' real estate properties with fair values in excess of the loan amounts and mature at various dates beginning in 201 8 through 2021. The Company's indemnification obligations would require payment to lenders for any actual damages resulting from certain acts such as unauthorized ownership transfers, misappropriation of rental payments by others or environmental damages. Based on initial and ongoing reviews of property management and operations, the Company does not expect that payments will be required under these indemnification obligations. Any payments that might be required could be recovered through a refinancing or sale of the assets. In some cases, the Company also has recourse to partners for their proportionate share of amounts paid. There were no liabilities required for these indemnification obligations as of September 30, 2016 . As of September 30, 2016 , the Company guaranteed that it would compensate the lessors for a shortfall of up to $41 million in the market value of certain leased equipment at the end of its lease s . Guarantees of $16 million expire in the fourth quarter of 2016 and $25 million expire in 202 2 . The Company had liabilities for these guarantees of $19 million as of September 30, 2016 . The Company does not expect that these guarantees will have a material adverse effect on the Company's consolidated results of operations, financial condition or liquidity. The Company had indemnification obligations as of September 30, 2016 in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, the filing of tax returns, compliance with law or the identification of outstanding litigation. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable. The Company does not believe that it is possible to determine the maximum potential amount due under these obligations, because not all amounts due under these indemnification obligations are subject to limitation. There were no liabilities required for these indemnification obligations as of September 30, 2016 . D. Guaranty Fund Assessments The Company operates in a regulatory environment that may require its participation in assessments under state insurance guaranty association laws. The Company's exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions. For the nine months ended September 30, 2016 and 2015, charges related to guaranty fund assessments were immaterial to the Company's results of operations. The Company is aware that Penn Treaty Network America Insurance Company, together with its subsidiary American Network Insurance Company (collectively “Penn Treaty”) is in rehabilitation. In 2012, the state court denied the regulator's amended petitions for liquidation and set forth specific requirements and a deadline for the regulator to develop a plan of rehabilitation without liquidating Penn Treaty . The regulator has appealed the court's decision. More recently, the state court has been holding settlement conferences to attempt to resolve outstanding issues with the rehabilitation plan. In July 2016, the regulator , who is the rehabilitator, filed another amended petition for liquidation with the court. Based on the developments in this matter, it is reasonably likely that a guaranty fund assessment related to Penn Treaty will be finalized either in the fourth quarter of 2016 or in 2017. Due to the uncertainties surrounding this matter, the Company's share of this guaranty fund assessment related to Penn Treaty is uncertain, but based on current information it is estimated at approximately $80 million after-tax . The Company continues to monitor this situation. E. Legal and Regulatory Matters The Company is routinely involved in numerous claims, lawsuits, regulatory audits, investigations and other legal matters arising, for the most part, in the ordinary course of mana ging a global health services business . These actions may include benefit disputes , breach of contract claims, tort claims, provider disputes, disputes regarding reinsurance arrangements, employment and employment discrimination-related suits, employee benefit claims, wage and hour claims, privacy, intellectual property claims and real estate- related disputes. T here are currently, and may be in the future, attempts to bring class action lawsuits against the industry. The Company also is regularly engaged in IRS audits and may be subject to examinations by various state and foreign taxing authorities. Disputed income tax matters arising from these examinations, including those resulting in litigation, are accounted for under the FASB's guidance for uncertain tax positions . Further information on income tax matters can be found in Note 14 . The business of administering and insuring health services programs, particularly health care and group insurance programs, is heavily regulated by federal and state laws and administrative agencies, such as state departments of insurance and the U.S. Departments of Health and Human Services (“HHS”) , Treasury, Labor and Justice, as well as the courts. Health care regulation and legislation in its various forms, including the implementation of Health Care Reform , other regulatory reform initiatives, such as those relating to Medicare programs, or additional changes in existing laws or regulations or their interpretations, could have a material adverse effect on the Company's business, results of operations and financial condition. In addition, there is heightened review by federal and state regulators of the health care, disability and life insurance industry business and related reporting practices. Cigna is frequently the subject of regulatory market conduct reviews and other examinations of its business and reporting practices, audits and investigations by state insurance and health and welfare departments, state attorneys general, CMS and the Office of Inspector General (“OIG”). With respect to Cigna's Medicare Advantage business, CMS and OIG perform audits to determine a health plan's compliance with federal regulations and contractual obligations, including compliance with proper coding practices (sometimes referred to as R isk Adjustment Data Validation a udits or RADV audits), that may result in retrospective adjustments to payments made to health plans. Regulatory actions can result in assessments, civil or criminal fines or penalties or other sanctions, including loss of licensing or exclusion from participating in government programs. As a global company, Cigna is also subject to the laws, regulations and rules of the foreign jurisdictions in which it conducts business. Foreign laws and rules, and regulatory audit and investigation practices, may differ from or be more stringent than, similar requirements in the U.S. Regulation, legislation and judicial decisions have resulted in changes to industry and the Company's business practices, financial liability or other sanctions and will continue to do so in the future. When the Company (in the course of its regular review of pending litigation and legal or regulatory matters) has determined that a material loss is reasonably possible, the matter is disclosed. Such matters are described below. In accordance with GAAP, when litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to net income. The amount accrued represents the Company's best estimate of the probable loss at the time. If only a range of estimated losses can be determined, the Company accrues an amount within the range that, in the Company's judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the Company accrues the minimum amount of the range. In cases when the Company has accrued an estimated loss, the accrued amount may differ materially from the ultimate amount of the loss. In many proceedings, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any loss. The Company provides disclosure in the aggregate for material pending litigation and legal or regulatory matters, including accruals, range of loss, or a statement that such information cannot be estimated. As a litigation or regulatory matter develops, the Company monitors the matter for further developments that could affect the amount previously accrued, if any, and updates such amount accrued or disclosures previously provided as appropriate. The outcome of litigation and other legal or regulatory matters is always uncertain, and unfavorable outcomes that are not justified by the evidence or existing law can occur. The Company believes that it has valid defenses to the matters pending against it and is defending itself vigorously. Except as otherwise noted, the Company believes that the legal actions, regulatory matters, proceedings and investigations currently pending against it should not have a material adverse effect on the Company's results of operation s , financial condition or liquidity based upon our current knowledge and taking into consideration current accruals. T he Company had pre-tax reserves as of September 30, 2016 of approximately $ 230 million ($ 150 million after-tax ) for the matters described below under “Litigation Matters” as well as litigation related to the Company's claim processing practices for a commercial client. Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time. In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company. An adverse outcome in one or more of these matters could be material to the Company's results of operations, financial condition or liquidity for any particular period. Litigation Matters Amara cash balance pension plan litigation. In December, 2001, Janice Amara filed a class action lawsuit in the U.S. District Court for the District of Connecticut against Cigna Corporation and the Cigna Pension Plan (the “Plan”) on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a cash balance formula. The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), including that the Plan's cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions. In 2008, the District Court (1) affirmed the Company's right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Company to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula. The Second Circuit upheld this decision. From 2008 through the present, this case has undergone a series of court proceedings that resulted in the original District Court order being largely upheld. In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015. In January 2016, the District Court ordered the method of calculating the additional pension benefits due to class members. The court order left several aspects of the calculation of additional plan benefits open to interpretation. The parties continue to work towards obtaining agreement aroun d differences in interpretation . The timing of the resol ution of these differences remains uncertain. Once resolved, the Plan will be amended to comply with the agreed-upon interpretation of the District Court's order and the benefits will begin to be paid . The Company's reserve for this litigation remains reasonable at September 30, 2016 based on a calculation consistent with the Company's interpretation of the court order. Ingenix. In April 2004, the Company was sued in a number of putative nationwide class actions alleging that the Company improperly underpaid claims for out-of-network providers through the use of data provided by Ingenix, Inc., a subsidiary of one of the Company's competitors. These actions were consolidated into Franco v. Connecticut General Life Insurance Company, et al. , pending in the U.S. District Court for the District of New Jersey. The consolidated amended complaint, filed in 2009 on behalf of subscribers, health care providers and various medical associations, asserted claims related to benefits and disclosure under ERISA, the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, the Sherman Antitrust Act and New Jersey state law and seeks recovery for alleged underpayments from 1998 through the present. Other major health insurers have been the subject of, or have settled, similar litigation. In September 2011, the District Court (1) dismissed all claims by the health care provider and medical association plaintiffs for lack of standing; and (2) dismissed the antitrust claims, the New Jersey state law claims and the ERISA disclosure claim. In January 2013 and again in April 2014, the District Court denied separate motions by the plaintiffs to certify a nationwide class of subscriber plaintiffs. T he Third Circuit denied plaintiff's request for an immediate appeal of the January 2013 ruling. As a result, the case is proceeding on behalf of the named plaintiffs only. In June 2014, the District Court granted the Company's motion for summary judgment to terminate all claims, and denied the plaintiffs' partial motion for summary judgment. In July 2014, the plaintiffs appealed all of the District Court's decisions in favor of the Company, including the class certification decision, to the Third Circuit . On May 2, 2016, the Third Circuit affirmed the District Court's decisions denying class certification for the claims asserted by members, the granting of summary judgment on the individual plaintiffs' claims, as well as the dismissal of the antitrust claims. However, the Third Circuit also reversed the earlier dismissal of the providers' ERISA claims. The Company will continue to vigorously defend its position. Regulatory Matters CMS actions. In January 2016, CMS issued a Notice of Imposition of Immediate Intermediate Sanctions (“the Notice”) to the Company. The Notice require d us to suspend certain enrollment and marketing activities for Medicare Advantage-Prescription Drug and Medicare Part D Plans. The sanctions do not impact the right of current enrollees to remain covered by our Medicare Advantage-Prescription Drug or Medicare Part D Plans. We continue to devote significant resources to our remediation efforts. For the nine months ended September 30, 2016, costs related to our CMS audit response were approxi mately $ 80 million after-tax. CMS imposed sanctions based on its findings of deficiencies with the Company's operations of its Parts C and D appeals and grievances, Part D formulary and benefit administration and compliance program. While we are working with CMS to address the audit findings and have the sanctions lifted as quickly as possible, these matters will not be resolved in time to participate in the 2017 Medicare Advantage and Part D annual enrollment period that began in October 2016 and ends on December 7, 2016. The impact of disenrollment is not material to 2016 consolidated revenues and earnings. In 2017, Medicare enrollment and consolidated revenues will be materially impacted due to our inability to participate in annual enrollment. However, management does not anticipate that 2017 shareholders' net income will be materially affected because we expect to offset the margin impact of the revenue loss with several factors including significantly lower costs to remediate the sanctions and other operational efficiencies. On October 12, 2016, CMS announced Medicare Star Quality Ratings (“Star Ratings ”) for 2017 (see page 22 of our 2015 Form 10-K for further description of Star Ratings ) . While Star R atings are based on a number of plan performance measures that are evaluated each year, the projected Star R atings for our plans included certain reductions which are primarily attributable to our CMS audit discussed above. Under these revised Star R atings, approximately 20% of our Medicare Advantage customers would be in a 4 Stars or greater plan. We do not believe that these Star R atings reflect the quality offerings Cigna HealthSpring provides to beneficiaries. We will work fully with CMS through their process as well as consider additional alternatives to ensure that final Star R atings more accurately reflect our performance. We remain committed to our partnership with CMS and to delivering quality products and services to seniors, while working to mitigate the impact these Star R atings could have on our offerings in 2018. There is no financial impact in 2016 or 2017 because these ratings apply to plans for the 2018 payment year. Disability claims regulatory matter. During the second quarter of 2013, the Company finalized an agreement with the Departments of Insurance for Maine, Massachusetts, Pennsylvania, Connecticut and California (together, the “monitoring states”) related to the Company's long-term disability claims handling practices. The agreement requires primarily : (1) enhanced procedures related to documentation and disposition and (2) a two-year monitoring perio d followed by a re-examination that began in the second quarter of 2016. Management believes the Company has address ed th e requirements of the agreement. If the monitoring states find material non-compliance with the agreement upon re-examination, the Company may be subject to additional costs and penalties or requests to change its business practices that could negatively impact future earnings for this business . Other Legal Matters On July 21, 2016, the DOJ and certain state attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia seeking to block the merger with Anthem. Trial is scheduled to begin on November 21, 2016. The Company will continue to defend itself in this matter. Following announcement of the Company's m erger agreement with Anthem as discussed in Note 3 , putative class action complaints (collectively the “complaints” or “Cigna Merger Litigation”) were filed by purported Cigna shareholders on behalf of a purported class of Cigna shareholders. Additional lawsuits arising out of or relating to the merger agreement or the merger may be filed in the future. Cigna, members of the Cigna board of directors, Anthem and Anthem Merger Sub Corp (“Merger Sub”) have been named as defendants. The plaintiffs generally assert that the members of the Cigna board of directors breached their fiduciary duties to the Cigna shareholders during merger negotiations and by entering into the merger agreement and approving the merger, and that Cigna, Anthem and Merger Sub aided and abetted such breaches of fiduciary duties. The allegations include, among other things, that (1) the merger consideration undervalues Cigna, (2) the sales process leading up to the merger was flawed due to purported conflicts of interest of members of the Cigna board of directors and (3) certain provisions of the merger agreement inappropriately favor Anthem and inhibit competing bids. Plaintiffs seek, among other things, injunctive relief enjoining the merger, rescission of the merger agreement to the extent already implemented, and costs and damages. Effective November 24, 2015, solely to avoid the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the Company, the Company's directors, Anthem and Merger Sub entered into a Memorandum of Understanding (“MOU”) to settle the Cigna Merger Litigation. Subject to approval by the Connecticut Superior Court, Judicial District of Hartford and further definitive documentation in a settlement agreement that will be subject to customary conditions, the MOU resolved the Cigna Merger Litigation and provided that the Company would make certain additional disclosures related to the merger. If the Court approves the settlement, the Cigna Merger Litigation will be dismissed with prejudice and all claims that were or could have been brought in any actions challenging any aspect of the merger, the merger agreement and any related disclosures will be released. In connection with the settlement, subject to the ultimate determination of the Court, plaintiffs' counsel may receive an award of reasonable fees. There can be no assurance that the parties will ultimately enter into a settlement agreement, or that the Court will approve the settlement even if the parties were to enter into such agreement. The MOU may terminate, if, among other reasons, the Court does not approve the settlement or the merger is not consummated for any reason . |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation Basis of Presentation Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as “Cigna,” the “Company,” “we,” “our” or “us”) is a global health services organization dedicated to a mission of helping individuals improve their health, well-being and sense of security. To execute on our mission, Cigna's strategy is to “Go Deep”, “Go Global” and “Go Individual” with a differentiated set of medical, dental, disability, life and accident insurance and related products and services offered by our insurance and other subsidiaries. The majority of these products are offered through employers and other groups (e.g. governmental and non-governmental organizations, unions and associations). Cigna also offers commercial health and dental insurance, Medicare and Medicaid products and health, life and acciden t insurance coverages to individuals in the U.S. and selected international markets. In addition to its ongoing operations described above, Cigna also has certain run-off operations. The Consolidated Financial Statements include the accounts of Cigna Corporation and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. Certain reclassifications have been made to prior year amounts to conform to the current presentation. See Note 2 for further discussion. The se interim C onsolidated F inancial S tatements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim C onsolidated F inancial S tatements and N otes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company's 2015 Annual Report on Form 10-K (“Form 10-K”) . The preparation of interim C onsolidated F inancial S tatements necessarily relies heavily on estimates. This and certain other factors, including the seasonal nature of portions of the health care and related benefits business as well as competitive and other market conditions, call for caution in estimating full year results based on interim results of operations. |
Changes in Accounting Pronouncements | Note 2 – Recent Accounting Pronouncement s The Company's 2015 Form 10-K includes discussion of significant recent accounting pronouncement s that either have impacted or may impact our financial statements in the future. The following issuances of, and changes in, accounting pronouncements that apply to the Company have occurred since the Company filed its 201 5 Form 10-K . Recently Adopted Accounting Guidance Improvements to Employee Share-Based Payment Accounting ( Accounting Standards Update (“ASU”) 2016-09). In March 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits or deficiencies to be recorded in the income statement when the awards vest or are settled, requires cash flows related to the excess tax benefits to be classified as an operating activity in the statement of cash flows, permits repurchasing more than was previously allowed of an employee's shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee's behalf for withheld shares are to be presented as a financing activity in the statement of cash flows and provides an accounting policy election to account for forfeitures as they occur . In addition, the new guidance changes the calculation of common stock equivalents for earnings per share purposes. The new standard is required to be adopted as of January 1, 2017. As permitted, the Company elected to early adopt the new guidance effective January 1, 2016 , which resulted in $ 25 million of tax benefits recorded in net income (in Corporate) during the nine months ended September 30, 2016 that previously would have been reported in additional paid-in capital. The change in the calculation of common stock equivalents added approximately one million weighted average shares for the diluted earnings per share calculations for the nine months ended September 30, 2016 . The Company applied these provisions prospectively. The Company retrospectively applied the provisions related to the presentation of employee taxes paid for withheld shares and reclassified $ 78 million of tax withholding from operating to financing activities in its Consolidated Statement of Cash Flows for the nine months ended September 30, 2015 . For the nine months ended September 30, 2016 , the Company reflected $ 69 million of tax withholding in financing activities. The ability under the new guidance to repurchase more employee shares for tax withholding purposes had no impact on the Co mpany's financial statements because no changes have been made to the Company's withholding practices . The Company elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. Amendments to the Consolidation Analysis (ASU 2015-02). The Company adopted this new consolidation guidance effective January 1, 2016 with no material effect on its financial statements. Among other provisions, the guidance defines limited partnerships as variable interest entities unless substantive kick-out rights or participating rights exist. See Note 10 for additional disclosures about various real estate and security limited partnerships that are newly identified as variable interest entities for which the Company is not the primary beneficiary. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (ASU 2015-07) . This amendment removed the requirement to categorize all investments within the fair value hierarchy for which fair value is measured using the practical expedient of net asset value (“NAV”) per share . The Company adopted this new guidance effective January 1, 2016. Upon adoption, the Company began to separately disclose certain s eparate a ccount investments and provided comparable prior period disclosure. See Note 7 for this separate disclosure information. Recently Issued Accounting Guidance Not Yet Adopted Except as noted below, t here were no other new accounting pronouncements that were issued or became effective since the issuance of the Company's 2015 Annual Report on Form 10-K that had, or are expected to have, a material impact on the Company's consolidated financial position, results of operations or cash flows. Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory (ASU 2016-16). In October 2016, the FASB issued this new standard that requires entities to recognize the tax impacts of all intra-entity sales of assets other than inventory even though the pre-tax effects of those transactions are eliminated in consolidation. The new standard is required to be adopted as of January 1, 2018, with early adoption permitted as of January 1, 2017. The new standard is required to be adopted in a modified retrospective approach, with a cumulative-effect adjustment recorded in retained earnings to write off any unamortized tax expense previously deferred and record any previously unrecognized net deferred tax assets. The Company is evaluating the impact of this new standard on its financial statements and disclosures. Statement of Cash Flows (ASU 2016-15). In August 2016, the FASB issued this new standard that is a consensus of the FASB's Emerging Issues Task Force. The standard provides new guidance on how certain transactions should be classified in the statement of cash flows. The new standard is required to be adopted as of January 1, 2018, with early adoption permitted as of January 1, 2017. Upon adoption, the effects of the new guidance must be applied retrospectively to all prior periods presented. The Company is evaluating its implementation timing options as well as the impact of this new standard on its financial statements and disclosures. Financial Instruments – Credit Losses (ASU 2016- 1 3). In June 2016, t he FASB issued this new standard that introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The ASU will be effective January 1, 2020, and e arly adoption is permitted on January 1, 2019 . The Company is evaluating the impact of this new standard on its financial statements and disclosures. Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). As previously disclosed in the Company's 2015 Form 10-K , in January 2016 the FASB issued guidance that will require entities to measure equity investments at fair value in net income if they are not consolidated or accounted for under the equity method. The new standard will be effective January 1, 2018 and its effect will be recognized as a cumulative effect adjustment to the beginning balance of retained earnings. The Company has identified certain limited partnership interests carried at cost that are subject to the requirements of this new standard. If adopted as of September 30, 2016 , the impact of this new guidance would have resulted in a cumulative effect increase to retained earnings of approximately $ 60 million after-tax . The actual cumulative effect adjustment will depend on the portfolio and market conditions as of the date of implementation. Revenue from Contracts with Customers (ASU 2014-09). T he FASB issued three new ASUs in 2016 further clarifying the broader revenue guidance: “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (ASU 2016-08) that clarifies the definition o f principals and agents . “ Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing” (ASU 2016-10) that clarifies guidance and add s examples to help companies properly identify performance obligations. This ASU also illustrates when a license provides a customer with a right to use (point in time) versus a right to access (over time) benefit . “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients ” (ASU 2016-12) that clarifies ce rtain aspects of the previously- issued guidance, including the objective of the collectability criterion in the new revenue model. These clarifications, together with the broader revenue recognition guidance within ASU 2014-09, are required to be adopted beginning January 1, 2018 , with early adoption permitted as of January 1, 2017 . The Company does not plan to early adopt this new guidance but continues to monitor developing implementation guidance and evaluate these new requirements for its non-insurance customer contracts to determine its method of implementation and any resulting estimated effects on its financial statements. |
Investments | Review of declines in fair value . Management reviews fixed maturities with a decline in fair value from cost for impairment based on criteria that include: length of time and severity of decline; financial health and specific near term prospects of the issuer; changes in the regulatory, economic or general market environment of the issuer's industry or geographic region; and the Company's intent to sell or the likelihood of a required sale prior to expected recovery. Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. Credit quality . The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the i nvestment holding period. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Quality ratings are based on our evaluation of a number of key inputs related to the loan including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on the debt , with a ratio below 1.0 indicat ing that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collaterali zing the loan. The Company's annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company's investment professionals in the second quarter of 201 6 and included an analysis of each underlying property's most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimates the current year and future stabilized property income and fair value and categorizes the investments as loans in good standing, potential problem loans or problem loans. The Company will reevaluate a loan's credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower's request for restructure causes management to believe that the Company's estimate of financial performance, fair value or the risk profile of the underlying property has been impacted . Potential problem mortgage loans are considered current (no payment is more than 59 days past due), but they exhibit certain characteristics that increase the likelihood of future default . The characteristics management considers include , but are not limited to, the deterioration of debt service coverage below 1.0, estimated loan-to-value ratios increasing to 100% or more, downgrade in quality rating and request s from the borrower for restructuring. In addition, loans are considered potential problems if principal or interest payments are past due by more than 30 but less than 60 days. Problem mortgage loans are either in default by 60 days or more or have been restructured as to terms that could include concessions on interest rate, principal payment or maturity date. The Company monitors each problem and potential problem mortgage loan on an ongoing basis, and updates the loan categorization and quality rating when warranted. Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due according to the terms of the original loan agreement. These loans are included in either problem or potential problem loans. The Company monitors credit risk and assesses the impairment of loans individually and on a consistent basis for all loans in the portfolio. Impaired loans are carried at the lower of unpaid principal balance or the fair value of the underlying real estate. Certain commercial mortgage loans without valuation reserves are considered impaired because the Company will not collect all interest due according to the terms of the original agreements; however, the Company expects to recover the unpaid principal becau se it is less than the fair value of the underlying real estate. Because of the risk profile of the underlying investment, t he Company recognizes interest income on impaired mortgage loans only when payment is actually received. |
Future Policy Benefits | The Co mpany estimates this liability with an internal model based on its experience and future expectations over an extended period, consistent with the long-term nature of this product. Because the product is premium deficient, the Company records increases to the reserve if it is inadequate based on the model. As a result of the reinsurance transaction, reserve increases have a corresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit (including the GMIB asset s ). |
Fair Value Measurements | N ote 7 ― Fair Value Measurements The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when impaired. Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor. The Company's financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset's or a liability's classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument's fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair value. The internal pricing methods are performed by the Company's investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining fair value, as well as designating the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. Annually, we conduct an on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs of a sample of securities held across various asset types to validate the documented pricing process. Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Assets in Level 1 include actively-traded U.S. government bond s and e xchange-listed equity securities . Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment returns, a relatively small portion of the Company's investment assets are classified in this category. Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant. Fixed maturities and equity securities. Approximately 96% of the Company's investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks. Because many fixed maturities do not trade daily, third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pricing models. Less than 1% of the fair value of investments classified in Level 2 represent s foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes , consistent with local market practice . Short-term investments are carried at fair value which approximates cost. On a regular basis , the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. Other derivatives classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts. Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of September 30, 2016 or December 31, 2015. Level 2 also inc ludes exchange-traded interest rate swap contracts. Credit risk related to the clearinghouse counterparty and the Company is considered minimal when estimating the fair values of these derivatives because of upfront margin deposits and daily settlement requirements. The nature and use of these other derivatives are described in Note 9 . Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The Company classifies certain newly issued, privately- placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB, in Level 3. Fair values of other asset and mortgage-backed securities, corporate and government fixed maturities are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics. For other asset and mortgage-backed securities, inputs and assumptions for pricing may also include collateral attributes and prepayment speeds. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation , as well as th e issuer's financial statements . The significant unobservable inputs used to value the following other asset and mortgage-backed securities are liquidity and weighting of credit spreads. When there is limited trading activity for the security, a n adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure. An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral's characteristics and their proportional cash flows supporting the bond obligations. The resulting wide range of unobservable adjustments in the table below is due to the varying liquidity and quality of the underlying collateral, ranging from high credit quality to below investment grade. The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is limited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances. The significant unobservable input used to value the following equity securities is a multiple of earnings before interest, taxes, depreciation and amortization ( “ EBITDA ” ). These securities are comprised of private equity investments with limited trading activity and therefore a ratio of EBITDA is used to estimate value based on company circumstances and relative risk characteristics. Significant increases in fixed maturity spreads would result in a lower fair value measurement while decreases in these inputs would result in a higher fair value measurement. Significant decreases in equity price - to - earnings multiples would result in a lower fair value measurement while increases in these inputs would result in a higher fair value measurement. Generally, the unobservable inputs are not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input. Although t hese GMIB assets and liabilities must continue to be reported as derivatives at fair value, the only assumption that is expected to impact future shareholders' net income is the risk of non-performance. This assumption reflects a market participant's view of (a) the risk of a subsidiary of the Company not fulfilling its GMIB obligations (GMIB liabilities ) and (b) the credit risk that the reinsurers do not pay their obligations (GMIB asset s ). The Company reports GMIB liabilities and assets as derivatives at fair value because the cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments. Under the terms of these written and purchased contracts, the Company periodically receives and pays fees based on either contractholders ' account values or deposits increased at a contractual rate. The Company will also pay and receive cash depending on account values and interest rates when contractholder s elect to begin to receive minimum income payments. The Company estimates the fair value of the assets and liabilities for GMIB contracts by calculating the results for many scenarios run through a model utilizing various assumptions that include non-performance risk, among other things. The non-performance risk adjustment is incorporated by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilit ies to reflect a market participant's view of the risk of a subsidiary of the Company not fulfilling its GMIB obligations, and (b) the GMIB asset s to reflect a market participant's view of the credit risk of the reinsurers, after considering collateral. Other assumptions that affect GMIB assets and liabilities include capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and future annuitant behavior (including mortality, lapse and annuity election rates). As certain assumptions used to estimate fair values for these contracts are largely unobservable (primarily related to future annuitant behavior), the Company classifies GMIB assets and liabilities in Level 3. The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk, or increases in assumed annuity election rates , would result in higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. GMIB liabilities are reported in the Company's Consolidated Balance Sheets in a ccounts payable, accrued expenses and other liabilities. GMIB assets associated with these contracts represent net receivables in connection with reinsurance that the Company has purchased from three external reinsurers and are reported in the Company's Consolidated Balance Sheets in o ther assets, including other intangibles. As noted in the tables above, total gains and losses included in shareholders' net income are reflected in the following captions in the Consolidated Statements of Income: Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities and realized investment gains (losses) for the impact of changes in non-performance risk related to GMIB assets and liabilities, similar to hedge ineffectiveness; and Other operating expenses for amounts related to GMIB assets and liabilities (GMIB fair value gain/loss), except for the impact of changes in non-performance risk. In the tables above, gains and losses included in other comprehensive income are reflected in net unrealized appreciation (depreciation) on securities in the Consolidated Statements of Comprehensive Income. Reclassifications impacting Level 3 financial instruments are reported as transfers into or out of the Level 3 category as of the beginning of the quarter in which the transfer occurs. Therefore gains and losses in income only reflect activity for the period the instrument was classified in Level 3. Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company's best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Separate account assets Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company's revenues and expenses. Beginning in 2016, investments that are measured using the practical expedient of NAV (see Note 2 for additional information) are excluded from the fair value hierarchy. Prior periods have been reclassified to conform to the current presentation . Separate account assets in Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include: corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value that is the exit price. Separate account assets classified in Level 3 include certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above , as well as commercial mortgage loans that are valued according to the methodologies discussed below . Separate account i nvestments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account's ownership share of the equity of the investee ( NAV as a practical expedient), including changes in the fair values of its underlying investments. Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate , partnership entities and commercial mortgage loans when they become impaired. Commercial mortgage loans . The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows using estimated market interest rates that reflect the Company's assessment of the credit quality of the loans. Market interest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates, based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan, co nsidering debt service coverage, the loan -to- value ratio and other factors . Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model. The fair value measurements were classified in Level 3 because the cash flow models incorporate significant unobservable inputs. Contractholder deposit funds, excluding universal life products . G enerally, these funds do not have stated maturities. Approximately 70 % of these balances can be withdrawn by the customer at any time without prior notice or penalty. The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Most of the remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses. The fair value for these contracts is determined using the fair value of these buyers' assets supporting these reinsured contracts. The Company had reinsurance recoverable s equal to the carrying value of these reinsured contracts . These instruments were classified in Level 3 because certain inputs are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Long-term debt , including current maturities , excluding capital leases . The fair value of long-term debt is based on quoted market prices for recent trades . W hen quoted market prices are not available, fair value is estimated using a discounted cash flow analysis and the Company's estimated current borrowing rate for debt of similar terms and remaining maturities. These measurements were classified in Level 2 because the fair values are based on quoted market prices or other inputs that are market observable or can be corroborated by market data . |
Derivative Financial Instruments | Using cash flow hedge accounting, the Company entered into interest rate, foreign currency, and combination (interest rate and foreign currency) swap contracts to hedge the interest and foreign currency cash flows of its fixed maturity bonds to match associated insurance liabilities. F air values are reported in other long-term inves tments or acc ounts payable, accrued expenses and other liabilities. Changes in fair value are reported in accumulated other comprehensive income and amortized into net investment income or reported in other realized investment gains and losses as interest or principal payments are received. Beginning in the second quarter of 2016, the Company entered into a foreign currency swap contract to hedge the foreign exchange- related changes in fair value of a fixed maturity bond . Using fair value hedge accounting, the swap contract f air value is reported in other long-term investments or accounts payable, accrued expenses and other liabilities. Changes in the fair value of the swap contract , as well as changes in the fair value of the hedged bond attributable to the hedged risk are reported in other realized investment gains and losses. Under the terms of these various contracts, the Company periodically exchanges cash flows between variable and fixed interest rates or between two currencies for both principal and interest. Foreign currency and combination swaps are primarily Euros, Canadian dollars and Japanese yen and have terms for pe riods of up to seven years. Net interest cash flows are reported in operating activities. During the third quarter of 2016, the Company entered into a foreign currency forward contract to hedge the foreign exchange related changes in fair value of U . S . dollar -denominated fixed maturity bonds back to the local currency for one of its forei gn subsidiaries . This arrangement was not designated as an accounting hedge, and therefore the forward contract fair value is reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair value are reported in other realized investment gains and losses. Under the terms of this contract , the Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contract's trade date. Cash flows on foreign currency forward contracts are reported in operating activities. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets , including other intangibles , or acc ounts payable, accrued expenses and other liabilities. As the critical terms of these swaps match those of the long-term debt being hedged, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by LIBOR . The effects of those adjustment s on other operating expense s are offset by the effects of corresponding changes in the swaps' fair value , including i nterest expense for the difference between the variable and fixed interest rates. Under the terms of these cont racts, the Company provides upfront margin and settles fair value changes and net interest between variable and fix ed interest rates daily with a central clearinghouse. Net interest cash flows are reported in operating activities. |
Variable Interest Entities | Note 10 – Variable Interest Entities When the Company becomes involved with a variable interest entity, as well as when the re is a change in the Company's involvement with an entity, the Company evaluates the following to determine if it is the primary beneficiary and must consolidate the entity : the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company's ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers. The Company owns interests in security and real estate limited partnerships that are now defined as variable interest entities under ASU 2015-02 (see Note 2). These partnerships invest in the equity or mezzanine debt of privately held companies and real estate properties. General partners unaffiliated with the Company control decisions that most significantly impact the partnership's operations and the limited partners do not have substantive kick-out or participating rights. The Company's maximum exposure to these entities of $1.9 billion across approximately 100 li mited partnerships as of September 30, 2016 includes $1.0 b illion reported in other long-term investments and commitments to contribute an additional $0.9 b illion. The Company's non-controlling interest in each of these limited partnerships is generally less than 10 % of the partnership ownership interests . In the normal course of its investing activities, the Company also makes passive investments in certain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company . Th e Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to the carrying amount of $0.6 b illion as of September 30, 2016 , that is reported in fixed maturities. The Company's combined ownership interests are insignificant relative to the total principal amount s issued by these entities. To provide certain services to its Medicare Advantage customers, the Company contracts with independent physician associations (“IPAs”) that are variable interest entities. Physicians provide health care services to Medicare Advantage customers and the Company provides medical management and administrative services to the IPAs. The Company's maximum exposure to loss related to the IPA arrangements is limited to their liability for incurred but not reported medical costs for the Company's Medicare Advantage customers. These liabilities are not material and are generally secured by deposits maintained by the IPAs. The Company is not the primary beneficiary of any of the variable interest entities described above and does not consolidate these entities because either: it ha s no power to direct the activities that most significantly impact the entities' economic performance; or it ha s neither the right to receive benefits nor the obligation to absorb losses that could be significant to these variable interest entities. The Company has not provided, and does not intend to provide, financial support to these entities that it is not contractually required to provide. The Company performs ongoing qualitative analyses of its involvement with these variable interest entities to determine if consolidation is required. |
Accumulated Other Comprehensive Income | Accumulated other comprehensive income ( loss ) excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate owned life insurance business . |
Income taxes on undistributed earnings of certain foreign operations | As part of its global capital management strategy , the Company's foreign operations retain a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the U.S. in support of the liquidity and capital needs of our foreign operations. The Company does not intend to repatriate these earnings to the U.S. and as a result, income taxes are provided using the respective foreign jurisdictions' tax rate. |
Segment Information | In the Company's segment disclosures, w e present “operating revenues,” defined as total revenues excluding realized investment results. The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. As a result, gains or losses created in this process may not be indicative of the past or future underlying performance of the business. The Company uses “ adjusted income (loss) from operations ” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders' net income (loss) excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items. Income or expense amounts are excluded from adjusted income from operations for the following reasons: Realized investment results are excluded because, as noted above, the Company's portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. Net amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company's business operations. Special items, if any, are excluded because management believes they are not representative of the un derlying results of operations. |
Commitments and Contingencies | When the Company (in the course of its regular review of pending litigation and legal or regulatory matters) has determined that a material loss is reasonably possible, the matter is disclosed. Such matters are described below. In accordance with GAAP, when litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to net income. The amount accrued represents the Company's best estimate of the probable loss at the time. If only a range of estimated losses can be determined, the Company accrues an amount within the range that, in the Company's judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the Company accrues the minimum amount of the range. In cases when the Company has accrued an estimated loss, the accrued amount may differ materially from the ultimate amount of the loss. In many proceedings, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any loss. The Company provides disclosure in the aggregate for material pending litigation and legal or regulatory matters, including accruals, range of loss, or a statement that such information cannot be estimated. As a litigation or regulatory matter develops, the Company monitors the matter for further developments that could affect the amount previously accrued, if any, and updates such amount accrued or disclosures previously provided as appropriate. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Effect of (Shares in thousands, dollars in millions, except per share amounts) Basic Dilution Diluted Three Months Ended September 30, 2016 Shareholders' net income $ 456 $ 456 Shares : Weighted average 255,519 255,519 Common stock equivalents 4,235 4,235 Total shares 255,519 4,235 259,754 EPS $ 1.78 $ (0.02) $ 1.76 2015 Shareholders' net income $ 547 $ 547 Shares : Weighted average 256,070 256,070 Common stock equivalents 4,449 4,449 Total shares 256,070 4,449 260,519 EPS $ 2.14 $ (0.04) $ 2.10 Effect of (Shares in thousands, dollars in millions, except per share amounts) Basic Dilution Diluted Nine Months Ended September 30, 2016 Shareholders' net income $ 1,485 $ 1,485 Shares : Weighted average 255,242 255,242 Common stock equivalents 4,326 4,326 Total shares 255,242 4,326 259,568 EPS $ 5.82 $ (0.10) $ 5.72 2015 Shareholders' net income $ 1,668 $ 1,668 Shares : Weighted average 256,166 256,166 Common stock equivalents 4,451 4,451 Total shares 256,166 4,451 260,617 EPS $ 6.51 $ (0.11) $ 6.40 |
Antidilutive Options Table | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Anti-dilutive options 2.6 - 2.2 0.5 |
Global Health Care Medical Co27
Global Health Care Medical Costs Payable (Tables) - Global Health Benefits Segment [Member] | 9 Months Ended |
Sep. 30, 2016 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Schedule of medical costs payable balance | September 30, December 31, (In millions) 2016 2015 Incurred but not yet reported $ 1,947 $ 1,757 Reported claims in process 475 470 Physician incentives and other medical care expenses and services payable 128 128 Global Health Care medical costs payable $ 2,550 $ 2,355 |
Schedule of medical costs payable activity | For the period ended September 30, December 31, (In millions) 2016 2015 Balance at January 1, $ 2,355 $ 2,180 Less: Reinsurance and other amounts recoverable 243 252 Balance at January 1, net 2,112 1,928 Incurred costs related to: Current year 14,318 18,564 Prior years (88) (210) Total incurred 14,230 18,354 Paid costs related to: Current year 12,285 16,588 Prior years 1,783 1,582 Total paid 14,068 18,170 Ending Balance, net 2,274 2,112 Add: Reinsurance and other amounts recoverable 276 243 Ending Balance $ 2,550 $ 2,355 |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Effects Of Reinsurance [Line Items] | |
Effects of Reinsurance | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Ceded premiums Individual life insurance and annuity business sold $ 37 $ 38 $ 118 $ 121 Other 94 130 262 323 Total $ 131 $ 168 $ 380 $ 444 Reinsurance recoveries Individual life insurance and annuity business sold $ 77 $ 83 $ 211 $ 230 Other 8 113 209 313 Total $ 85 $ 196 $ 420 $ 543 |
Reinsurance Recoverables | (In millions) September 30, December 31, Collateral and Other Terms Line of Business Reinsurer(s) 2016 2015 at September 30, 2016 GMDB Berkshire $ 1,089 $ 1,123 100% secured by assets in a trust. Other 43 41 99% secured by assets in a trust or letter of credit. Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,612 3,705 Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 944 995 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 301 315 100% secured by assets in a trust. Global Health Care, Global Supplemental Benefits, Group Disability and Life Various 475 553 Recoverables arising in the ordinary course of business from approximately 80 reinsurers including the U.S. Government. Excluding the recoverable from the U.S. Government of approximately $58 million, current balances range from less than $1 million up to $96 million, with 19% secured by assets in trusts or letters of credit. Other run-off reinsurance Various 75 81 99% secured by assets in trusts. Total reinsurance recoverables $ 6,539 $ 6,813 |
Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Future policy benefits for GMDB business | For the period ended September 30, December 31, (In millions) 2016 2015 Balance at January 1 $ 1,252 $ 1,270 Add: Unpaid claims 18 16 Less: Reinsurance and other amounts recoverable 1,164 1,186 Balance at January 1, net 106 100 Add: Incurred benefits 4 3 Less: Paid benefits (1) (3) Ending balance, net 111 106 Less: Unpaid claims 18 18 Add: Reinsurance and other amounts recoverable 1,132 1,164 Ending balance $ 1,225 $ 1,252 |
Account value, net amount at risk, contractholder average age | (Dollars in millions, excludes impact of reinsurance ceded) September 30, 2016 December 31, 2015 Account value $ 10,752 $ 11,355 Net amount at risk $ 2,530 $ 2,870 Number of contractholders 292,000 324,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities carried at fair value | Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In millions) (Level 1) (Level 2) (Level 3) Total September 30, 2016 Financial assets at fair value: Fixed maturities: Federal government and agency $ 180 $ 570 $ - $ 750 State and local government - 1,508 - 1,508 Foreign government - 2,278 44 2,322 Corporate - 15,714 451 16,165 Mortgage-backed - 36 - 36 Other asset-backed - 299 164 463 Total fixed maturities (1) 180 20,405 659 21,244 Equity securities 4 110 74 188 Subtotal 184 20,515 733 21,432 Short-term investments - 997 - 997 GMIB assets (2) - - 931 931 Other derivative assets - 7 - 7 Total financial assets at fair value, excluding separate accounts $ 184 $ 21,519 $ 1,664 $ 23,367 Financial liabilities at fair value: GMIB liabilities $ - $ - $ 908 $ 908 Other derivative liabilities - 4 - 4 Total financial liabilities at fair value $ - $ 4 $ 908 $ 912 December 31, 2015 Financial assets at fair value: Fixed maturities: Federal government and agency $ 251 $ 528 $ - $ 779 State and local government - 1,641 - 1,641 Foreign government - 2,010 4 2,014 Corporate - 14,122 326 14,448 Mortgage-backed - 48 1 49 Other asset-backed - 198 326 524 Total fixed maturities (1) 251 18,547 657 19,455 Equity securities 32 89 69 190 Subtotal 283 18,636 726 19,645 Short-term investments - 381 - 381 GMIB assets (2) - - 907 907 Other derivative assets - 16 - 16 Total financial assets at fair value, excluding separate accounts $ 283 $ 19,033 $ 1,633 $ 20,949 Financial liabilities at fair value: GMIB liabilities $ - $ - $ 885 $ 885 Total financial liabilities at fair value $ - $ - $ 885 $ 885 (1) Fixed maturities include d $ 750 million as of September 30, 2016 and $483 million as of December 31, 2015 of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $ 19 million as of September 30, 2016 and $30 million as of December 31, 2015 of appreciation for sec urities classified in Level 3. See Note 8 for additional information. (2) The GMIB assets represent retrocessional contracts in place fr om three external reinsurers that cover the exposures on these contracts. |
Level 3 fixed maturities and equity securities priced using significant unobservable inputs | Unobservable Input Unobservable Adjustment Range (Weighted Average) (Fair value in millions) Fair Value As of September 30, 2016 Fixed maturities: Other asset and mortgage-backed securities $ 164 Liquidity 60 - 330 (90) bps Weighting of credit spreads 200 - 610 (280) bps Corporate and government fixed maturities 457 Liquidity 80 - 1,310 (370) bps Total fixed maturities 621 Equity securities 74 Price-to-earnings multiples 4.2 - 11.6 (8.2) Subtotal 695 Securities not priced by the Company (1) 38 Total Level 3 securities $ 733 As of December 31, 2015 Fixed maturities: Other asset and mortgage-backed securities $ 327 Liquidity 60 - 440 (200) bps Weighting of credit spreads 170 - 630 (220) bps Corporate and government fixed maturities 285 Liquidity 70 - 930 (280) bps Total fixed maturities 612 Equity securities 69 Price-to-earnings multiples 4.2 - 11.6 (8.3) Subtotal 681 Securities not priced by the Company (1) 45 Total Level 3 securities $ 726 (1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. |
Changes in level 3 financial assets and liabilities carried at fair value | For the Three Months Ended September 30, 2016 Changes in Level 3 financial assets and financial liabilities (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net Balance at July 1, 2016 $ 743 $ 975 $ (947) $ 28 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - (22) 22 - Other - 1 (6) (5) Total gains (losses) included in shareholders' net income - (21) 16 (5) Gains included in other comprehensive income 12 - - - Gains required to adjust future policy benefits for settlement annuities (1) - - - - Purchases, sales and settlements: Purchases 20 - - - Sales (1) - - - Settlements (55) (23) 23 - Total purchases, sales and settlements (36) (23) 23 - Transfers into/(out of) Level 3: Transfers into Level 3 44 - - - Transfers out of Level 3 (30) - - - Total transfers into/(out of) Level 3 14 - - - Balance at September 30, 2016 $ 733 $ 931 $ (908) $ 23 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ - $ (21) $ 16 $ (5) For the Three Months Ended September 30, 2015 (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net Balance at July 1, 2015 $ 666 $ 867 $ (841) $ 26 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - 104 (104) - Other 1 - - - Total gains (losses) included in shareholders' net income 1 104 (104) - Losses included in other comprehensive income (1) - - - Gains required to adjust future policy benefits for settlement annuities (1) 4 - - - Purchases, sales and settlements: Purchases 25 - - - Sales (1) - - - Settlements (13) (10) 10 - Total purchases, sales and settlements 11 (10) 10 - Transfers into/(out of) Level 3: Transfers into Level 3 48 - - - Transfers out of Level 3 (8) - - - Total transfers into/(out of) Level 3 40 - - - Balance at September 30, 2015 $ 721 $ 961 $ (935) $ 26 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (1) $ 104 $ (104) $ - (1) Amounts do not accrue to shareholders. For the Nine Months Ended September 30, 2016 Changes in Level 3 financial assets and financial liabilities Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net (In millions) Balance at January 1, 2016 $ 726 $ 907 $ (885) $ 22 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - 71 (71) - Other (16) - 1 1 Total gains (losses) included in shareholders' net income (16) 71 (70) 1 Gains included in other comprehensive income 11 - - - Gains required to adjust future policy benefits for settlement annuities (1) 35 - - - Purchases, sales and settlements: Purchases 67 - - - Sales (126) - - - Settlements (71) (47) 47 - Total purchases, sales and settlements (130) (47) 47 - Transfers into/(out of) Level 3: Transfers into Level 3 235 - - - Transfers out of Level 3 (128) - - - Total transfers into/(out of) Level 3 107 - - - Balance at September 30, 2016 $ 733 $ 931 $ (908) $ 23 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (11) $ 71 $ (70) $ 1 For the Nine Months Ended September 30, 2015 Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities GMIB Net (In millions) Balance at January 1, 2015 $ 857 $ 953 $ (929) $ 24 Gains (losses) included in shareholders' net income: GMIB fair value gain/(loss) - 37 (37) - Other 29 - 2 2 Total gains (losses) included in shareholders' net income 29 37 (35) 2 Losses included in other comprehensive income (18) - - - Gains required to adjust future policy benefits for settlement annuities (1) 6 - - - Purchases, sales and settlements: Purchases 136 - - - Sales (229) - - - Settlements (20) (29) 29 - Total purchases, sales and settlements (113) (29) 29 - Transfers into/(out of) Level 3: Transfers into Level 3 49 - - - Transfers out of Level 3 (89) - - - Total transfers into/(out of) Level 3 (40) - - - Balance at September 30, 2015 $ 721 $ 961 $ (935) $ 26 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (1) $ 37 $ (35) $ 2 (1) Amounts do not accrue to shareholders. |
Separate account assets schedule | (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total September 30, 2016 Guaranteed separate accounts (See Note 16) $ 246 $ 271 $ - $ 517 Non-guaranteed separate accounts (1) 1,407 4,947 346 6,700 Subtotal $ 1,653 $ 5,218 $ 346 7,217 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 939 Total separate account assets $ 8,156 December 31, 2015 Guaranteed separate accounts (See Note 16) $ 235 $ 274 $ - $ 509 Non-guaranteed separate accounts (1) 1,401 4,698 297 6,396 Subtotal $ 1,636 $ 4,972 $ 297 6,905 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 928 Total separate account assets $ 7,833 (1) N on-guaranteed separate accounts include d $3.7 billion as of September 30, 2016 and $3.6 billion as of December 31, 2015 in assets supporting the Comp any's pension pla ns, including $ 0.3 b illion classified in Level 3 and $0.9 billion priced at NAV as a practical expedient for both periods . |
Changes in level 3 separate account assets | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Balance, beginning of period $ 333 $ 273 $ 297 $ 255 Policyholder gains (losses) 2 (1) 3 (3) Purchases, sales and settlements: Purchases 7 4 12 33 Sales - - (1) - Settlements (3) (3) (5) (8) Total purchases, sales and settlements 4 1 6 25 Transfers into/(out of) Level 3: Transfers into Level 3 7 16 46 16 Transfers out of Level 3 - (3) (6) (7) Total transfers into/(out of) Level 3 7 13 40 9 Balance, end of period $ 346 $ 286 $ 346 $ 286 |
Separate account assets priced at net asset value | Fair Value as of (In millions) September 30, 2016 December 31, 2015 Unfunded Commitments Redemption Frequency (if currently eligible)* Redemption Notice Period* Security Partnerships $ 460 $ 406 $ 279 Not applicable Not applicable Real Estate Funds 281 261 - Quarterly 45-90 days Hedge Funds 198 261 - Up to Annually, varying by fund 30-90 days Total $ 939 $ 928 $ 279 * The attributes noted are effectiv e as of September 30, 2016 and December 31, 2015 . |
Financial instruments not carried at fair value | September 30, 2016 December 31, 2015 (In millions) Classification in the Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,887 $ 1,822 $ 1,911 $ 1,864 Contractholder deposit funds, excluding universal life products Level 3 $ 1,229 $ 1,218 $ 1,151 $ 1,148 Long-term debt, including current maturities, excluding capital leases Level 2 $ 5,802 $ 5,012 $ 5,515 $ 5,020 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investment [Line Items] | |
Realized Investment Gains and Losses | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Fixed maturities $ 7 $ (57) $ (5) $ (38) Equity securities (1) 28 - 42 Commercial mortgage loans - - 4 2 Other investments, including derivatives 69 39 111 98 Realized investment gains before income taxes 75 10 110 104 Less income taxes 27 3 39 36 Net realized investment gains $ 48 $ 7 $ 71 $ 68 |
Asset write-downs and changes in valuation reserves | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Other-than-temporary impairments on debt securities: Credit-related $ - $ (3) $ (19) $ (4) Non credit-related (1) (1) (55) (12) (69) Total other-than-temporary impairments on debt securities (1) (58) (31) (73) Other asset write-downs (2) - (1) (13) (12) Total $ (1) $ (59) $ (44) $ (85) (1) These write-downs pertain to other-than-temporary declines in fair values due to increases in market yields (widening of credit spreads), particularly within the energy sector, for certain below investment grade fixed maturities with an increased probability of sales activity prior to recovery of their amortized cost basis. (2) Other asset write-downs include other-than-temporary declines in fair values of equity securities, increases in valuation reserves on commercial mortgage loans and asset write-downs related to real estate investments and security partnerships. |
Sales of available-for-sale fixed maturities and equity securities | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2016 2015 2016 2015 Proceeds from sales $ 300 $ 275 $ 1,012 $ 1,452 Gross gains on sales $ 9 $ 31 $ 43 $ 82 Gross losses on sales $ - $ 3 $ 6 $ 7 |
Amortized cost and fair value by maturity period for fixed maturities | Amortized Fair (In millions) Cost Value Due in one year or less $ 1,550 $ 1,557 Due after one year through five years 6,581 6,928 Due after five years through ten years 7,353 7,881 Due after ten years 3,447 4,379 Mortgage and other asset-backed securities 461 499 Total $ 19,392 $ 21,244 |
Gross unrealized appreciation (depreciation) fixed maturities by type of issuer | Gross Gross Unrealized Unrealized Amortized Appre- Depre- Fair Cost ciation ciation Value (In millions) September 30, 2016 Federal government and agency $ 452 $ 298 $ - $ 750 State and local government 1,360 148 - 1,508 Foreign government 2,104 221 (3) 2,322 Corporate 15,015 1,192 (42) 16,165 Mortgage-backed 35 2 (1) 36 Other asset-backed 426 40 (3) 463 Total $ 19,392 $ 1,901 $ (49) $ 21,244 (In millions) December 31, 2015 Federal government and agency $ 528 $ 251 $ - $ 779 State and local government 1,496 147 (2) 1,641 Foreign government 1,870 147 (3) 2,014 Corporate 14,022 632 (206) 14,448 Mortgage-backed 48 2 (1) 49 Other asset-backed 492 39 (7) 524 Total $ 18,456 $ 1,218 $ (219) $ 19,455 |
Fixed maturities in an unrealized loss position | September 30, 2016 Fair Amortized Unrealized Number (Dollars in millions) Value Cost Depreciation of Issues One year or less: Investment grade $ 784 $ 797 $ (13) 329 Below investment grade $ 277 $ 283 $ (6) 122 More than one year: Investment grade $ 331 $ 345 $ (14) 58 Below investment grade $ 181 $ 197 $ (16) 32 |
Credit risk profile of commercial mortgage loans | Debt Service Coverage Ratio 1.30x or 1.20x to 1.10x to 1.00x to Less than Loan-to-Value Ratios Greater 1.29x 1.19x 1.09x 1.00x Total (In millions) September 30, 2016 Below 50% $ 465 $ 15 $ - $ - $ - $ 480 50% to 59% 518 24 19 30 - 591 60% to 69% 651 14 - - - 665 70% to 79% - - 30 - 35 65 80% to 89% - - - - - - 90% to 100% - - - - 21 21 Total $ 1,634 $ 53 $ 49 $ 30 $ 56 $ 1,822 Debt Service Coverage Ratio 1.30x or 1.20x to 1.10x to 1.00x to Less than Loan-to-Value Ratios Greater 1.29x 1.19x 1.09x 1.00x Total (In millions) December 31, 2015 Below 50% $ 261 $ 2 $ - $ 67 $ - $ 330 50% to 59% 683 - - 24 - 707 60% to 69% 590 14 - 19 - 623 70% to 79% - - - 30 36 66 80% to 89% 40 - - - - 40 90% to 100% - - - - 98 98 Total $ 1,574 $ 16 $ - $ 140 $ 134 $ 1,864 |
Impaired commercial mortgage loans and related valuation reserves | (In millions) September 30, 2016 December 31, 2015 Gross Reserves Net Gross Reserves Net Impaired commercial mortgage loans with valuation reserves $ 26 $ (5) $ 21 $ 113 $ (15) $ 98 Impaired commercial mortgage loans without valuation reserves - - - - - - Total $ 26 $ (5) $ 21 $ 113 $ (15) $ 98 |
Pension and Other Postretirem31
Pension and Other Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Components of net defined benefit plan costs | Pension Benefits Other Postretirement Benefits Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (In millions) 2016 2015 2016 2015 2016 2015 2016 2015 Service cost $ - $ 1 $ 1 $ 2 $ - $ - $ - $ - Interest cost 50 49 149 146 3 3 8 8 Expected long-term return on plan assets (62) (66) (186) (199) - - - - Amortization of: Net loss from past experience 17 17 50 52 - - - - Prior service cost - - - - (1) (1) (2) (2) Net cost $ 5 $ 1 $ 14 $ 1 $ 2 $ 2 $ 6 $ 6 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Table] [Abstract] | |
Short-term and Long-term Debt | September 30, December 31, (In millions) 2016 2015 Short-term: Commercial paper $ - $ 100 Current maturities of long-term debt 250 - Other, including capital leases 21 49 Total short-term debt $ 271 $ 149 Long-term: $250 million, 5.375% Notes due 2017 $ - $ 249 $131 million, 6.35% Notes due 2018 131 131 $250 million, 4.375% Notes due 2020 (1) 260 254 $300 million, 5.125% Notes due 2020 (1) 307 303 $78 million, 6.37% Notes due 2021 78 78 $300 million, 4.5% Notes due 2021 (1) 311 304 $750 million, 4% Notes due 2022 743 743 $100 million, 7.65% Notes due 2023 100 100 $17 million, 8.3% Notes due 2023 17 17 $900 million, 3.25% Notes due 2025 893 892 $300 million, 7.875% Debentures due 2027 299 299 $83 million, 8.3% Step Down Notes due 2033 82 82 $500 million, 6.15% Notes due 2036 498 498 $300 million, 5.875% Notes due 2041 296 295 $750 million, 5.375% Notes due 2042 743 743 Other, including capital leases 22 32 Total long-term debt $ 4,780 $ 5,020 |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Changes in accumulated other comprehensive income (loss) | Tax (Expense) After- (In millions) Pre-Tax Benefit Tax Three Months Ended September 30, 2016 Net unrealized appreciation, securities, July 1, $ 1,135 $ (367) $ 768 Unrealized appreciation on securities arising during the period 94 (24) 70 Reclassification adjustment for (gains) included in shareholders' net income (realized investment gains) (6) 2 (4) Net unrealized appreciation, securities arising during the period 88 (22) 66 Net unrealized appreciation, securities, September 30, $ 1,223 $ (389) $ 834 Net unrealized appreciation, derivatives, July 1, $ 5 $ (2) $ 3 Unrealized appreciation on derivatives arising during the period 2 - 2 Reclassification adjustment for (gains) included in shareholders' net income (other operating expenses) (4) 1 (3) Net unrealized (depreciation) on derivatives arising during the period (2) 1 (1) Net unrealized appreciation, derivatives, September 30, $ 3 $ (1) $ 2 Net translation of foreign currencies, July 1, $ (251) $ 18 $ (233) Net translation of foreign currencies arising during the period 55 - 55 Net translation of foreign currencies, September 30, $ (196) $ 18 $ (178) Postretirement benefits liability adjustment, July 1, $ (2,127) $ 745 $ (1,382) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 16 (4) 12 Net change due to valuation update (3) - (3) Net postretirement benefits liability adjustment arising during the period 13 (4) 9 Postretirement benefits liability adjustment, September 30, $ (2,114) $ 741 $ (1,373) 2015 Net unrealized appreciation, securities, July 1, $ 733 $ (259) $ 474 Unrealized (depreciation) on securities arising during the period (37) 26 (11) Reclassification adjustment for losses included in shareholders' net income (realized investment gains) 29 (10) 19 Net unrealized (depreciation), securities arising during the period (8) 16 8 Net unrealized appreciation, securities, September 30, $ 725 $ (243) $ 482 Net unrealized appreciation, derivatives, July 1, $ 7 $ (3) $ 4 Unrealized appreciation on derivatives arising during the period 4 (1) 3 Net unrealized appreciation, derivatives, September 30, $ 11 $ (4) $ 7 Net translation of foreign currencies, July 1, $ (165) $ 17 $ (148) Net translation of foreign currencies arising during the period (113) 1 (112) Net translation of foreign currencies, September 30, $ (278) $ 18 $ (260) Postretirement benefits liability adjustment, July 1, $ (2,240) $ 785 $ (1,455) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 16 (5) 11 Postretirement benefits liability adjustment, September 30, $ (2,224) $ 780 $ (1,444) Tax (Expense) After- (In millions) Pre-Tax Benefit Tax Nine Months Ended September 30, 2016 Net unrealized appreciation, securities, January 1, $ 612 $ (194) $ 418 Unrealized appreciation on securities arising during the period 606 (193) 413 Reclassification adjustment for losses included in shareholders' net income (realized investment gains) 5 (2) 3 Net unrealized appreciation, securities arising during the period 611 (195) 416 Net unrealized appreciation, securities, September 30, $ 1,223 $ (389) $ 834 Net unrealized appreciation, derivatives, January 1, $ 10 $ (3) $ 7 Unrealized (depreciation), derivatives arising during the period (3) 1 (2) Reclassification adjustment for (gains) included in shareholders' net income (other operating expenses) (4) 1 (3) Net unrealized (depreciation), derivatives arising during the period (7) 2 (5) Net unrealized appreciation, derivatives, September 30, $ 3 $ (1) $ 2 Net translation of foreign currencies, January 1, $ (295) $ 21 $ (274) Net translation of foreign currencies arising during the period 99 (3) 96 Net translation of foreign currencies, September 30, $ (196) $ 18 $ (178) Postretirement benefits liability adjustment, January 1, $ (2,155) $ 754 $ (1,401) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 48 (15) 33 Net change due to valuation update (7) 2 (5) Net postretirement benefits liability adjustment arising during the period 41 (13) 28 Postretirement benefits liability adjustment, September 30, $ (2,114) $ 741 $ (1,373) 2015 Net unrealized appreciation, securities, January 1, $ 955 $ (335) $ 620 Unrealized (depreciation) on securities arising during the period (226) 90 (136) Reclassification adjustment for (gains) included in shareholders' net income (realized investment gains) (4) 2 (2) Net unrealized (depreciation), securities arising during the period (230) 92 (138) Net unrealized appreciation, securities, September 30, $ 725 $ (243) $ 482 Net unrealized (depreciation), derivatives, January 1, $ (12) $ 4 $ (8) Unrealized appreciation, derivatives arising during the period 11 (4) 7 Reclassification adjustment for losses included in shareholders' net income (other operating expenses) 12 (4) 8 Net unrealized appreciation, derivatives arising during the period 23 (8) 15 Net unrealized appreciation, derivatives, September 30, $ 11 $ (4) $ 7 Net translation of foreign currencies, January 1, $ (71) $ 9 $ (62) Net translation of foreign currencies arising during the period (207) 9 (198) Net translation of foreign currencies, September 30, $ (278) $ 18 $ (260) Postretirement benefits liability adjustment, January 1, $ (2,286) $ 800 $ (1,486) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 50 (17) 33 Net change due to valuation update 12 (3) 9 Net postretirement benefits liability adjustment arising during the period 62 (20) 42 Postretirement benefits liability adjustment, September 30, $ (2,224) $ 780 $ (1,444) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information [Abstract] | |
Summarized segment financial information | (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total Three Months Ended September 30, 2016 Premiums, fees and other revenues and mail order pharmacy revenues $ 7,636 $ 837 $ 1,026 $ 28 $ (4) $ 9,523 Net investment income 77 29 85 87 4 282 Operating revenues $ 7,713 $ 866 $ 1,111 $ 115 $ - $ 9,805 Total revenues $ 7,775 $ 868 $ 1,128 $ 109 $ - $ 9,880 Shareholders' net income (loss) $ 413 $ 77 $ 65 $ 9 $ (108) $ 456 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (42) - (12) 5 1 (48) Amortization of other acquired intangible assets, net 20 4 - - - 24 Special Item: Charges associated with litigation matters 25 - - - - 25 Merger-related transaction costs - - - - 46 46 Total special items 25 - - - 46 71 Adjusted income (loss) from operations $ 416 $ 81 $ 53 $ 14 $ (61) $ 503 Three Months Ended September 30, 2015 Premiums, fees and other revenues and mail order pharmacy revenues $ 7,323 $ 767 $ 980 $ 28 $ (4) $ 9,094 Net investment income 85 26 84 90 - 285 Operating revenues $ 7,408 $ 793 $ 1,064 $ 118 $ (4) $ 9,379 Total revenues $ 7,427 $ 792 $ 1,055 $ 119 $ (4) $ 9,389 Shareholders' net income (loss) $ 475 $ 58 $ 78 $ 17 $ (81) $ 547 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (14) 1 6 - - (7) Amortization of other acquired intangible assets, net 21 3 - - - 24 Special Item: Merger-related transaction costs - - - - 29 29 Adjusted income (loss) from operations $ 482 $ 62 $ 84 $ 17 $ (52) $ 593 Nine Months Ended September 30, 2016 Premiums, fees and other revenues and mail order pharmacy revenues $ 23,207 $ 2,425 $ 3,065 $ 83 $ (14) $ 28,766 Net investment income 230 82 253 270 13 848 Operating revenues $ 23,437 $ 2,507 $ 3,318 $ 353 $ (1) $ 29,614 Total revenues $ 23,510 $ 2,507 $ 3,356 $ 352 $ (1) $ 29,724 Shareholders' net income (loss) $ 1,414 $ 214 $ 81 $ 53 $ (277) $ 1,485 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (49) 1 (25) 1 1 (71) Amortization of other acquired intangible assets, net 56 16 - - - 72 Special Item: Charges associated with litigation matters 25 - - - - 25 Merger-related transaction costs - - - - 108 108 Total special items 25 - - - 108 133 Adjusted income (loss) from operations $ 1,446 $ 231 $ 56 $ 54 $ (168) $ 1,619 (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total Nine Months Ended September 30, 2015 Premiums, fees and other revenues and mail order pharmacy revenues $ 22,110 $ 2,266 $ 2,934 $ 90 $ (14) $ 27,386 Net investment income 251 78 252 276 1 858 Operating revenues $ 22,361 $ 2,344 $ 3,186 $ 366 $ (13) $ 28,244 Total revenues $ 22,437 $ 2,344 $ 3,207 $ 373 $ (13) $ 28,348 Shareholders' net income (loss) $ 1,440 $ 195 $ 254 $ 61 $ (282) $ 1,668 After-tax adjustments to reconcile to adjusted income from operations: Net realized investment (gains) losses (50) 1 (13) (6) - (68) Amortization of other acquired intangible assets, net 64 12 - - - 76 Special Items: Debt extinguishment costs - - - - 65 65 Merger-related transaction costs - - - - 29 29 Total special items - - - - 94 94 Adjusted income (loss) from operations $ 1,454 $ 208 $ 241 $ 55 $ (188) $ 1,770 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Goodwill | $ 6,007 | $ 6,019 |
Recent Accounting Pronounceme36
Recent Accounting Pronouncements (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Income tax expense (benefit) | $ 290 | $ 334 | $ 905 | $ 1,009 | |
Common stock equivalents | 4,235 | 4,449 | 4,326 | 4,451 | |
Other, net (operating) | [1] | $ 25 | $ (4) | ||
Net cash provided by operating activities | [1] | 3,074 | 1,797 | ||
Other, net (financing) | [1] | (87) | (83) | ||
Net cash provided by financing activities | [1] | (255) | (503) | ||
Accounting Standards Update 2016-09 [Member] | Restatement Adjustment [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Income tax expense (benefit) | $ (25) | ||||
Common stock equivalents | 1,000 | ||||
Other, net (operating) | $ 69 | 78 | |||
Net cash provided by operating activities | 69 | 78 | |||
Other, net (financing) | (69) | (78) | |||
Net cash provided by financing activities | $ (69) | $ (78) | |||
[1] | As required by the adoption of ASU 2016-09, the Company retrospectively reclassified $78 million of cash payments from operating to financing activities for the nine months ended September 30, 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amount reported in financing activities for the nine months ended September 30, 2016 was $69 million. See Note 2 for further discussion. |
Recent Accounting Pronounceme37
Recent Accounting Pronouncements - Guidance Not Yet Adopted (Details) $ in Millions | Sep. 30, 2016USD ($) |
Restatement Adjustment [Member] | Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Impact of new guidance on equity if adopted | $ 60 |
Mergers and Acquistions (Detail
Mergers and Acquistions (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2015USD ($) | Nov. 02, 2016$ / shares | |
Acquisitions and Dispositions [Abstract] | |||||
Cash consideration for each share of Company stock | $ / shares | $ 103.40 | $ 103.40 | |||
Shares of acquirer common stock for each share of Company stock | 0.5152 | 0.5152 | |||
Closing price of Anthem common stock | $ / shares | $ 122.99 | ||||
Termination fee payable to Company | $ 1,850 | $ 1,850 | |||
Merger-related costs, before tax | 49 | $ 35 | 123 | $ 35 | |
Merger-related costs, after-tax | $ 46 | $ 29 | $ 108 | $ 29 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Shareholders' net income | $ 456 | $ 547 | $ 1,485 | $ 1,668 |
Shares: | ||||
Weighted average | 255,519,000 | 256,070,000 | 255,242,000 | 256,166,000 |
Common stock equivalents | 4,235,000 | 4,449,000 | 4,326,000 | 4,451,000 |
Total shares | 259,754,000 | 260,519,000 | 259,568,000 | 260,617,000 |
EPS, basic | $ 1.78 | $ 2.14 | $ 5.82 | $ 6.51 |
EPS, effect of dilution | (0.02) | (0.04) | (0.10) | (0.11) |
EPS, diluted | $ 1.76 | $ 2.10 | $ 5.72 | $ 6.40 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Common shares held in Treasury | 39,425,208 | 38,553,358 | 39,425,208 | 38,553,358 |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive options | 2,600,000 | 0 | 2,200,000 | 500,000 |
Global Health Care Medical Co40
Global Health Care Medical Costs Payable (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |||
Incurred but not yet reported | $ 1,947 | $ 1,757 | |
Reported claims in process | 475 | 470 | |
Phyician incentives and other medical expense payable | 128 | 128 | |
Medical costs payable | $ 2,550 | $ 2,355 | $ 2,180 |
Global Health Care Medical Co41
Global Health Care Medical Costs Payable - Activity (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Medical Claims Payable Activity [Abstract] | ||
Costs payable, beginning balance, gross | $ 2,355 | $ 2,180 |
Less: Reinsurance and other amounts recoverable | 243 | 252 |
Balance at January 1, net | 2,112 | 1,928 |
Incurred claims related to: | ||
Current year | 14,318 | 18,564 |
Prior years | (88) | (210) |
Total incurred | 14,230 | 18,354 |
Paid claims related to: | ||
Current year | 12,285 | 16,588 |
Prior years | 1,783 | 1,582 |
Total paid | 14,068 | 18,170 |
Ending balance, net | 2,274 | 2,112 |
Add: Reinsurance and other amounts recoverable | 276 | 243 |
Costs payable, ending balance, gross | $ 2,550 | $ 2,355 |
Global Health Care Medical Co42
Global Health Care Medical Costs Payable - Prior Year Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
(Favorable) Unfavorable incurred costs related to prior years' claims payable | $ (88) | $ (210) | |
Incurred costs related to prior years' claims payable percentage | 0.50% | 1.30% | |
Favorable (unfavorable) impact of prior development on shareholders' net income | $ 57 | ||
Completion Factors [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Incurred costs related to prior years' claims payable percentage | 0.30% | 0.40% | |
Medical Cost Trend [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Incurred costs related to prior years' claims payable percentage | 0.20% | 0.70% | |
Reinsurance Reimbursements Under Health Care Reform [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Incurred costs related to prior years' claims payable percentage | 0.20% |
Reinsurance - Effective Exit of
Reinsurance - Effective Exit of GMDB and GMIB Business (Details) - Berkshire Hathway Life Insurance Company Of Nebraska [Member] - Variable Annuity [Member] - USD ($) $ in Billions | Sep. 30, 2016 | Dec. 31, 2013 |
Ceded Credit Risk [Line Items] | ||
Percent of future claim payments reinsured | 100.00% | |
Maximum [Member] | Guaranteed Minimum Death Benefit [Member] | ||
Ceded Credit Risk [Line Items] | ||
Ceded Reinsurance Agreement, Coverage Limit, Amount Remaining | $ 3.5 |
Reinsurance - Guaranteed Minimu
Reinsurance - Guaranteed Minimum Death Benefit Contracts, Future Policy Benefits (Details) - Variable Annuity [Member] - Guaranteed Minimum Death Benefit [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Activity in future policy benefits reserves for GMDB business [Line Items] | ||
Future Policy Benefit Reserve, beginning balance, gross | $ 1,252 | $ 1,270 |
Costs payable, beginning balance, gross | 18 | 16 |
Less: Reinsurance and other amounts recoverable | 1,164 | 1,186 |
Balance at January 1, net | 106 | 100 |
Add: Incurred benefits | 4 | 3 |
Less: Paid benefits | (1) | (3) |
Ending balance, net | 111 | 106 |
Costs payable, ending balance, gross | 18 | 18 |
Add: Reinsurance and other amounts recoverable | 1,132 | 1,164 |
Future Policy Benefit Reserve, ending balance, gross | $ 1,225 | $ 1,252 |
Reinsurance - Guaranteed Mini45
Reinsurance - Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk and Contractholders (Details) - Variable Annuity [Member] - Guaranteed Minimum Death Benefit [Member] Contractholders in Millions, $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016USD ($)Contractholders | Dec. 31, 2015USD ($)Contractholders | |
Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk And Average Age Table [Line Items] | ||
Account value | $ 10,752 | $ 11,355 |
Net amount at risk | $ 2,530 | $ 2,870 |
Number of contractholders | Contractholders | 292,000 | 324,000 |
Reinsurance - Effects of Reinsu
Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Premiums Earned, Net [Abstract] | ||||
Ceded | $ 131 | $ 168 | $ 380 | $ 444 |
Premiums Earned Net | 7,605 | 7,347 | 23,005 | 22,181 |
Reinsurance Recoveries [Abstract] | ||||
Reinsurance recoveries | 85 | 196 | 420 | 543 |
Individual Life Insurance And Annuity Business Sold [Member] | ||||
Premiums Earned, Net [Abstract] | ||||
Ceded | 37 | 38 | 118 | 121 |
Reinsurance Recoveries [Abstract] | ||||
Reinsurance recoveries | 77 | 83 | 211 | 230 |
Other Subsegments [Member] | ||||
Premiums Earned, Net [Abstract] | ||||
Ceded | 94 | 130 | 262 | 323 |
Reinsurance Recoveries [Abstract] | ||||
Reinsurance recoveries | $ 8 | $ 113 | $ 209 | $ 313 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverables (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($)Reinsurers | Dec. 31, 2015USD ($)Reinsurers | |
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 6,539 | $ 6,813 |
Reserve netted against reinsurance recoverables | $ 4 | |
Minimum [Member] | Standard Poors A Rating Or Better [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 90.00% | |
Guaranteed Minimum Income Benefit [Member] | ||
Ceded Credit Risk [Line Items] | ||
Number of external reinsurers | Reinsurers | 3 | 3 |
Berkshire Hathway Life Insurance Company Of Nebraska [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 1,089 | $ 1,123 |
Berkshire Hathway Life Insurance Company Of Nebraska [Member] | Guaranteed Minimum Death Benefits [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
The Lincoln National Life Insurance Company And Lincoln Life And Annuity Of New York [Member] | Individual Life Insurance And Annuity (sold in 1998) [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 3,612 | 3,705 |
Prudential Retirement Insurance And Annuity Company [Member] | Retirement Benefits Business (sold in 2004) [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 944 | 995 |
Prudential Retirement Insurance And Annuity Company [Member] | Retirement Benefits Business (sold in 2004) [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Great American Life Insurance Company [Member] | Supplemental Benefits Business (2012 acquistion) [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 301 | 315 |
Great American Life Insurance Company [Member] | Supplemental Benefits Business (2012 acquistion) [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Other retrocessionaires, including U.S. Government [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 475 | 553 |
Number of external reinsurers | Reinsurers | 80 | |
U.S. Government [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 58 | |
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 43 | 41 |
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 99.00% | |
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | ||
Ceded Credit Risk [Line Items] | ||
Maximum reinsurance recoverable from a single reinsurer | $ 96 | |
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Maximum [Member] | ||
Ceded Credit Risk [Line Items] | ||
Minimum reinsurance recoverable balance from a single reinsurer | $ 1 | |
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 19.00% | |
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 75 | $ 81 |
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 99.00% |
Goodwill, Other Intangibles, an
Goodwill, Other Intangibles, and Property and Equipment - Goodwill (Details) $ in Millions | Sep. 30, 2016USD ($) |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 6,019 |
Goodwill, Ending Balance | $ 6,007 |
Goodwill, Other Intangibles, 49
Goodwill, Other Intangibles, and Property and Equipment - Property and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Line Items] | ||
Net carrying value | $ 1,561 | $ 1,534 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Financial Liabilities Carried at Fair Value (Details) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($)Reinsurers | Dec. 31, 2015USD ($)Reinsurers | ||
Financial assets at fair value: | |||
Fixed maturities | $ 21,244 | $ 19,455 | |
Equity securities | 188 | 190 | |
Short-term investments | 997 | 381 | |
Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | [1] | 21,244 | 19,455 |
Equity securities | 188 | 190 | |
Subtotal | 21,432 | 19,645 | |
Short-term investments | 997 | 381 | |
Total financial assets at fair value, excluding separate accounts | 23,367 | 20,949 | |
Financial liabilities at fair value: | |||
Total financial liabilities at fair value | 912 | 885 | |
Run-off Settlement Annuity Business [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial liabilities at fair value: | |||
Net appreciation required to adjust future policy benefits for run-off settlement annuity business included in fixed maturities | 750 | 483 | |
Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | 7 | $ 16 | |
Financial liabilities at fair value: | |||
Derivative liabilities | $ 4 | ||
Guaranteed Minimum Income Benefit [Member] | |||
Financial liabilities at fair value: | |||
Number of external reinsurers | Reinsurers | 3 | 3 | |
Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | [2] | $ 931 | $ 907 |
Financial liabilities at fair value: | |||
Derivative liabilities | 908 | 885 | |
Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 750 | 779 | |
State and local government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 1,508 | 1,641 | |
Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 2,322 | 2,014 | |
Corporate [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 16,165 | 14,448 | |
Mortgage-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 36 | 49 | |
Other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 463 | 524 | |
Fair Value Inputs Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | [1] | 180 | 251 |
Equity securities | 4 | 32 | |
Subtotal | 184 | 283 | |
Short-term investments | 0 | 0 | |
Total financial assets at fair value, excluding separate accounts | 184 | 283 | |
Financial liabilities at fair value: | |||
Total financial liabilities at fair value | 0 | 0 | |
Fair Value Inputs Level 1 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | 0 | 0 | |
Financial liabilities at fair value: | |||
Derivative liabilities | 0 | ||
Fair Value Inputs Level 1 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | [2] | 0 | 0 |
Financial liabilities at fair value: | |||
Derivative liabilities | 0 | 0 | |
Fair Value Inputs Level 1 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 180 | 251 | |
Fair Value Inputs Level 1 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 0 | |
Fair Value Inputs Level 1 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 0 | |
Fair Value Inputs Level 1 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 0 | |
Fair Value Inputs Level 1 [Member] | Mortgage-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 0 | |
Fair Value Inputs Level 1 [Member] | Other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 0 | |
Fair Value Inputs Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | [1] | 20,405 | 18,547 |
Equity securities | 110 | 89 | |
Subtotal | 20,515 | 18,636 | |
Short-term investments | 997 | 381 | |
Total financial assets at fair value, excluding separate accounts | 21,519 | 19,033 | |
Financial liabilities at fair value: | |||
Total financial liabilities at fair value | 4 | 0 | |
Fair Value Inputs Level 2 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | 7 | 16 | |
Financial liabilities at fair value: | |||
Derivative liabilities | 4 | ||
Fair Value Inputs Level 2 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | [2] | 0 | 0 |
Financial liabilities at fair value: | |||
Derivative liabilities | 0 | 0 | |
Fair Value Inputs Level 2 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 570 | 528 | |
Fair Value Inputs Level 2 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 1,508 | 1,641 | |
Fair Value Inputs Level 2 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 2,278 | 2,010 | |
Fair Value Inputs Level 2 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 15,714 | 14,122 | |
Fair Value Inputs Level 2 [Member] | Mortgage-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 36 | 48 | |
Fair Value Inputs Level 2 [Member] | Other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 299 | 198 | |
Fair Value Inputs Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | [1] | 659 | 657 |
Equity securities | 74 | 69 | |
Subtotal | 733 | 726 | |
Short-term investments | 0 | 0 | |
Total financial assets at fair value, excluding separate accounts | 1,664 | 1,633 | |
Financial liabilities at fair value: | |||
Total financial liabilities at fair value | 908 | 885 | |
Fair Value Inputs Level 3 [Member] | Run-off Settlement Annuity Business [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial liabilities at fair value: | |||
Net appreciation required to adjust future policy benefits for run-off settlement annuity business included in fixed maturities | 19 | 30 | |
Fair Value Inputs Level 3 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | 0 | 0 | |
Financial liabilities at fair value: | |||
Derivative liabilities | 0 | ||
Fair Value Inputs Level 3 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Derivative assets | [2] | 931 | 907 |
Financial liabilities at fair value: | |||
Derivative liabilities | 908 | 885 | |
Fair Value Inputs Level 3 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 0 | |
Fair Value Inputs Level 3 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 0 | |
Fair Value Inputs Level 3 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 44 | 4 | |
Fair Value Inputs Level 3 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 451 | 326 | |
Fair Value Inputs Level 3 [Member] | Mortgage-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | 0 | 1 | |
Fair Value Inputs Level 3 [Member] | Other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | |||
Financial assets at fair value: | |||
Fixed maturities | $ 164 | $ 326 | |
[1] | Fixed maturities included $750 million as of September 30, 2016 and $483 million as of December 31, 2015 of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $19 million as of September 30, 2016 and $30 million as of December 31, 2015 of appreciation for securities classified in Level 3. See Note 8 for additional information. | ||
[2] | The GMIB assets represent retrocessional contracts in place from three external reinsurers that cover the exposures on these contracts. |
Fair Value Measurements - Level
Fair Value Measurements - Level 2 Financial Assets and Financial Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Percentage of investments in fixed maturities and equity securities classified as Level 2 | 96.00% | |
Maximum percentage of investments classified in Level 2 representing foreign bonds priced using unadjusted broker quotes | 1.00% | |
Other derivatives [Member] | ||
Derivative [Line Items] | ||
Adjustment for credit risk on derivatives assets | $ 0 | $ 0 |
Adjustment for credit risk on derivatives liabilities | 0 | 0 |
Other derivatives [Member] | Fair Value Inputs Level 2 [Member] | ||
Derivative [Line Items] | ||
Adjustment for credit risk on derivatives assets | 0 | 0 |
Adjustment for credit risk on derivatives liabilities | $ 0 | $ 0 |
Fair Value Measurements - Lev52
Fair Value Measurements - Level 3 Financial Assets and Liabilities (Details) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Fair Value Disclosures [Abstract] | |||
Percentage of investments in fixed maturities and equity securities classified in Level 3 | 3.00% | ||
Fair Value, Measurements, Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | $ 21,432 | $ 19,645 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | 733 | 726 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | 695 | 681 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Securities not priced by the Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | [1] | 38 | 45 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | $ 74 | $ 69 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities. | 11.6 | 11.6 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities. | 4.2 | 4.2 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Equity securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) used to value equity securities. | 8.2 | 8.3 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Fixed Maturities [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | $ 621 | $ 612 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government debt securities [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | $ 457 | $ 285 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government debt securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 13.10% | 9.30% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government debt securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 0.80% | 0.70% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government debt securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 3.70% | 2.80% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Other asset and mortgage-backed securities [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Fixed Maturities And Equity Securities | $ 164 | $ 327 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Other asset and mortgage-backed securities [Member] | Maximum [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 3.30% | 4.40% | |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 6.10% | 6.30% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Other asset and mortgage-backed securities [Member] | Minimum [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 0.60% | 0.60% | |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 2.00% | 1.70% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Other asset and mortgage-backed securities [Member] | Weighted Average [Member] | Unobservable Inputs Developed By Company [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | |||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 0.90% | 2.00% | |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 2.80% | 2.20% | |
[1] | The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. |
Fair Value Measurements - Guara
Fair Value Measurements - Guaranteed Minimum Income Benefit Contracts (Details) | Sep. 30, 2016 |
Guaranteed Minimum Income Benefit [Member] | Ceded Credit Risk Secured [Member] | |
Ceded Credit Risk [Line Items] | |
GMIB assets percent secured | 69.00% |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Financial Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Fixed Maturities And Equity Securities [Member] | |||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | $ 743 | $ 666 | $ 726 | $ 857 | |
Gains (losses) included in shareholders' net income: | |||||
GMIB fair value gain/(loss) | 0 | 0 | 0 | 0 | |
Other | 0 | 1 | (16) | 29 | |
Total gains (losses) included in shareholders' net income | 0 | 1 | (16) | 29 | |
Gains (losses) included in other comprehensive income | 12 | (1) | 11 | (18) | |
Gains (losses) required to adjust future policy benefits for settlement annuities | [1] | 0 | 4 | 35 | 6 |
Purchases, sales, and settlements: | |||||
Purchases | 20 | 25 | 67 | 136 | |
Sales | (1) | (1) | (126) | (229) | |
Settlements | (55) | (13) | (71) | (20) | |
Total purchases, sales, settlements | (36) | 11 | (130) | (113) | |
Transfers into/(out of) Level 3: | |||||
Transfers into Level 3 | 44 | 48 | 235 | 49 | |
Transfers out of Level 3 | (30) | (8) | (128) | (89) | |
Total transfers into/(out of) Level 3 | 14 | 40 | 107 | (40) | |
Ending Balance | 733 | 721 | 733 | 721 | |
Total gains (losses) included in income attributable to instruments held at the reporting date | 0 | (1) | (11) | (1) | |
Derivative Financial Instruments, Assets [Member] | Guaranteed Minimum Income Benefit [Member] | |||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 975 | 867 | 907 | 953 | |
Gains (losses) included in shareholders' net income: | |||||
GMIB fair value gain/(loss) | (22) | 104 | 71 | 37 | |
Other | 1 | 0 | 0 | 0 | |
Total gains (losses) included in shareholders' net income | (21) | 104 | 71 | 37 | |
Gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 | |
Gains (losses) required to adjust future policy benefits for settlement annuities | [1] | 0 | 0 | 0 | 0 |
Purchases, sales, and settlements: | |||||
Purchases | 0 | 0 | 0 | 0 | |
Sales | 0 | 0 | 0 | 0 | |
Settlements | (23) | (10) | (47) | (29) | |
Total purchases, sales, settlements | (23) | (10) | (47) | (29) | |
Transfers into/(out of) Level 3: | |||||
Transfers into Level 3 | 0 | 0 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | 0 | 0 | |
Total transfers into/(out of) Level 3 | 0 | 0 | 0 | 0 | |
Ending Balance | 931 | 961 | 931 | 961 | |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ (21) | $ 104 | $ 71 | $ 37 | |
[1] | Amounts do not accrue to shareholders. |
Fair Value Measurements - Cha55
Fair Value Measurements - Changes in Level 3 Financial Liabilities (Details) - Derivative Financial Instruments, Liabilities [Member] - Guaranteed Minimum Income Benefit [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ (947) | $ (841) | $ (885) | $ (929) | |
Gains (losses) included in shareholders' net income: | |||||
GMIB fair value gain/(loss) | 22 | (104) | (71) | (37) | |
Other | (6) | 0 | 1 | 2 | |
Total gains (losses) included in shareholders' net income | 16 | (104) | (70) | (35) | |
Gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 | |
Gains (losses) required to adjust future policy benefits for settlement annuities | [1] | 0 | 0 | 0 | 0 |
Purchases, sales, settlements: | |||||
Purchases | 0 | 0 | 0 | 0 | |
Sales | 0 | 0 | 0 | 0 | |
Settlements | 23 | 10 | 47 | 29 | |
Total purchases, sales, and settlements | 23 | 10 | 47 | 29 | |
Transfers into/(out of) Level 3: | |||||
Transfers into Level 3 | 0 | 0 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | 0 | 0 | |
Transfers into/(out of) Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | (908) | (935) | (908) | (935) | |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ 16 | $ (104) | $ (70) | $ (35) | |
[1] | Amounts do not accrue to shareholders. |
Fair Value Measurements - Cha56
Fair Value Measurements - Changes in Level 3 Net Derivative Assets (Liabilities) (Details) - Guaranteed Minimum Income Benefit [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Fair Value, Net Derivative Asset (Liability), Measured On Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||||
Beginning balance | $ 28 | $ 26 | $ 22 | $ 24 | |
Gains (losses) included in shareholders' net income: | |||||
GMIB fair value gain/(loss) | 0 | 0 | 0 | 0 | |
Other | (5) | 0 | 1 | 2 | |
Total gains (losses) included in shareholders' net income | (5) | 0 | 1 | 2 | |
Gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 | |
Gains (losses) required to adjust future policy benefits for settlement annuities | [1] | 0 | 0 | 0 | 0 |
Purchases, sales, settlements: | |||||
Purchases | 0 | 0 | 0 | 0 | |
Sales | 0 | 0 | 0 | 0 | |
Settlements | 0 | 0 | 0 | 0 | |
Total purchases, sales, settlements | 0 | 0 | 0 | 0 | |
Transfers into/(out of) Level 3: | |||||
Transfers into Level 3 | 0 | 0 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | 0 | 0 | |
Transfers into/out of Level 3 | 0 | 0 | 0 | 0 | |
Ending balance | 23 | 26 | 23 | 26 | |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ (5) | $ 0 | $ 1 | $ 2 | |
[1] | Amounts do not accrue to shareholders. |
Fair Value Measurements - Separ
Fair Value Measurements - Separate Account Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||||||
Guaranteed separate accounts | $ 517 | $ 517 | $ 509 | |||
Non-guaranteed separate accounts | [1] | 6,700 | 6,700 | 6,396 | ||
Subtotal | 7,217 | 7,217 | 6,905 | |||
Non-guaranteed separate accounts priced at NAV as a practical expedient | [1] | 939 | 939 | 928 | ||
Total separate account assets | 8,156 | 8,156 | 7,833 | |||
Pension Benefits [Member] | ||||||
Financial assets and financial liabilities carried at fair value [Line Items] | ||||||
Non-guaranteed separate accounts priced at NAV as a practical expedient | 900 | 900 | 900 | |||
Non-guaranteed separate accounts | 3,700 | 3,700 | 3,600 | |||
Fair Value Inputs Level 1 [Member] | ||||||
Financial assets and financial liabilities carried at fair value [Line Items] | ||||||
Guaranteed separate accounts | 246 | 246 | 235 | |||
Non-guaranteed separate accounts | 1,407 | 1,407 | 1,401 | |||
Subtotal | 1,653 | 1,653 | 1,636 | |||
Fair Value Inputs Level 2 [Member] | ||||||
Financial assets and financial liabilities carried at fair value [Line Items] | ||||||
Guaranteed separate accounts | 271 | 271 | 274 | |||
Non-guaranteed separate accounts | 4,947 | 4,947 | 4,698 | |||
Subtotal | 5,218 | 5,218 | 4,972 | |||
Fair Value Inputs Level 3 [Member] | ||||||
Financial assets and financial liabilities carried at fair value [Line Items] | ||||||
Guaranteed separate accounts | 0 | 0 | 0 | |||
Non-guaranteed separate accounts | 346 | 346 | 297 | |||
Subtotal | 346 | 346 | 297 | |||
Fair Value Inputs Level 3 [Member] | Pension Benefits [Member] | ||||||
Financial assets and financial liabilities carried at fair value [Line Items] | ||||||
Non-guaranteed separate accounts | 300 | 300 | $ 300 | |||
Separate Account Assets [Member] | ||||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||||
Beginning Balance | 333 | $ 273 | 297 | $ 255 | ||
Policyholder gains (losses) | 2 | (1) | 3 | (3) | ||
Purchases, sales, and settlements: | ||||||
Purchases | 7 | 4 | 12 | 33 | ||
Sales | 0 | 0 | (1) | 0 | ||
Settlements | (3) | (3) | (5) | (8) | ||
Total purchases, sales, and settlements | 4 | 1 | 6 | 25 | ||
Transfers into/(out of) Level 3: | ||||||
Transfers into Level 3 | 7 | 16 | 46 | 16 | ||
Transfers out of Level 3 | 0 | (3) | (6) | (7) | ||
Total transfers into/(out of) Level 3 | 7 | 13 | 40 | 9 | ||
Ending Balance | $ 346 | $ 286 | $ 346 | $ 286 | ||
[1] | Non-guaranteed separate accounts included $3.7 billion as of September 30, 2016 and $3.6 billion as of December 31, 2015 in assets supporting the Company's pension plans, including $0.3 billion classified in Level 3 and $0.9 billion priced at NAV as a practical expedient for both periods. |
Fair Value Measurements - Sep58
Fair Value Measurements - Separate Account Assets Priced at NAV (Details) - Separate Account Assets [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Unfunded Commitments | $ 279 | ||
Fair Value, Measurements, Recurring [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Fair Value | 939 | $ 928 | |
Security Partnerships [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Unfunded Commitments | $ 279 | ||
Redemption Frequency | [1] | Not applicable | |
Security Partnerships [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Fair Value | $ 460 | $ 406 | |
Real Estate Funds [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Unfunded Commitments | $ 0 | ||
Redemption Frequency | [1] | Quarterly | |
Real Estate Funds [Member] | Minimum [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Redemption Notice Period | 45 days | 45 days | |
Real Estate Funds [Member] | Maximum [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Redemption Notice Period | 90 days | 90 days | |
Real Estate Funds [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Fair Value | $ 281 | $ 261 | |
Hedge Funds [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Unfunded Commitments | $ 0 | ||
Redemption Frequency | [1] | Up to Annually, varying by fund | |
Hedge Funds [Member] | Minimum [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Redemption Notice Period | 30 days | 30 days | |
Hedge Funds [Member] | Maximum [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Redemption Notice Period | 90 days | 90 days | |
Hedge Funds [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | |||
Fair Value | $ 198 | $ 261 | |
[1] | The attributes noted are effective as of September 30, 2016 and December 31, 2015. |
Fair Value Measurements - Measu
Fair Value Measurements - Measured Under Certain Conditions (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Financing Receivable, Impaired [Line Items] | ||
Realized investment losses on impaired commercial mortgage loans and real estate entities | $ 3 | $ 7 |
Maximum [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired commercial mortgage loans and real estate entities as a percent of total investments | 1.00% | 1.00% |
Fair Value Measurements - Not C
Fair Value Measurements - Not Carried at Fair Value (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial Mortgage Loans | $ 1,822 | $ 1,864 |
Percentage of contractholder deposit funds that can be withdrawn at any time | 70.00% | |
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, including current maturities, excluding capital leases | $ 5,802 | 5,515 |
Estimate Of Fair Value Fair Value Disclosure [Member] | Fair Value Inputs Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial Mortgage Loans | 1,887 | 1,911 |
Contractholder deposit funds, excluding universal life products | 1,229 | 1,151 |
Carrying Reported Amount Fair Value Disclosure [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial Mortgage Loans | 1,822 | 1,864 |
Contractholder deposit funds, excluding universal life products | 1,218 | 1,148 |
Long-term debt, including current maturities, excluding capital leases | $ 5,012 | $ 5,020 |
Fair Value Measurements - Off-B
Fair Value Measurements - Off-Balance Sheet Financial Instruments (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Fair value of off-balance-sheet financial assets | ||
Fair value of off-balance-sheet financial liabilities |
Investments - Realized Investme
Investments - Realized Investment Gains and Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | $ 75 | $ 10 | $ 110 | $ 104 |
Less income taxes (benefits) | 27 | 3 | 39 | 36 |
Net realized investment gains (losses) | 48 | 7 | 71 | 68 |
Fixed Maturities [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | 7 | (57) | (5) | (38) |
Equity securities [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | (1) | 28 | 0 | 42 |
Commercial Mortgage Loans [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | 0 | 0 | 4 | 2 |
Other Investments Including Derivatives [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | $ 69 | $ 39 | $ 111 | $ 98 |
Investments - Write Downs and S
Investments - Write Downs and Sales (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Realized Gains (Losses) on Investments [Line Items] | |||||
Total | $ (1) | $ (59) | $ (44) | $ (85) | |
Sales Information For Available For Sale Fixed Maturities Equity Securities [Abstract] | |||||
Proceeds from sales | 300 | 275 | 1,012 | 1,452 | |
Gross gains on sales | 9 | 31 | 43 | 82 | |
Gross losses on sales | 0 | 3 | 6 | 7 | |
Debt Securities [Member] | |||||
Realized Gains (Losses) on Investments [Line Items] | |||||
Credit-related | 0 | (3) | (19) | (4) | |
Non-credit related | [1] | (1) | (55) | (12) | (69) |
Total | (1) | (58) | (31) | (73) | |
Other [Member] | |||||
Realized Gains (Losses) on Investments [Line Items] | |||||
Total | [2] | $ 0 | $ (1) | $ (13) | $ (12) |
[1] | These write-downs pertain to other-than-temporary declines in fair values due to increases in market yields (widening of credit spreads), particularly within the energy sector, for certain below investment grade fixed maturities with an increased probability of sales activity prior to recovery of their amortized cost basis. | ||||
[2] | Other asset write-downs include other-than-temporary declines in fair values of equity securities, increases in valuation reserves on commercial mortgage loans and asset write-downs related to real estate investments and security partnerships. |
Investments - Fixed Maturities
Investments - Fixed Maturities by Maturity Periods (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Amortized Cost: | ||
Due in one year or less | $ 1,550 | |
Due after one year through five years | 6,581 | |
Due after five years through ten years | 7,353 | |
Due after ten years | 3,447 | |
Mortgage and other asset-backed securities | 461 | |
Amortized Cost | 19,392 | $ 18,456 |
Fair Value: | ||
Due in one year or less | 1,557 | |
Due after one year through five years | 6,928 | |
Due after five years through ten years | 7,881 | |
Due after ten years | 4,379 | |
Mortgage and other asset-backed securities | 499 | |
Total fair value | $ 21,244 |
Investments - Appreciation (Dep
Investments - Appreciation (Depreciation) on Fixed Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 19,392 | $ 18,456 |
Unrealized Appreciation | 1,901 | 1,218 |
Unrealized (Depreciation) | (49) | (219) |
Total Fair Value | 21,244 | 19,455 |
Run-off Settlement Annuity Business [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized Appreciation | 752 | 521 |
Unrealized (Depreciation) | (2) | (38) |
Total Fair Value | 2,900 | 2,700 |
Federal government and agency [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 452 | 528 |
Unrealized Appreciation | 298 | 251 |
Unrealized (Depreciation) | 0 | 0 |
Total Fair Value | 750 | 779 |
State and local government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,360 | 1,496 |
Unrealized Appreciation | 148 | 147 |
Unrealized (Depreciation) | 0 | (2) |
Total Fair Value | 1,508 | 1,641 |
Foreign government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,104 | 1,870 |
Unrealized Appreciation | 221 | 147 |
Unrealized (Depreciation) | (3) | (3) |
Total Fair Value | 2,322 | 2,014 |
Corporate [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 15,015 | 14,022 |
Unrealized Appreciation | 1,192 | 632 |
Unrealized (Depreciation) | (42) | (206) |
Total Fair Value | 16,165 | 14,448 |
Mortgage-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 35 | 48 |
Unrealized Appreciation | 2 | 2 |
Unrealized (Depreciation) | (1) | (1) |
Total Fair Value | 36 | 49 |
Other asset-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 426 | 492 |
Unrealized Appreciation | 40 | 39 |
Unrealized (Depreciation) | (3) | (7) |
Total Fair Value | $ 463 | $ 524 |
Investments - Declines in Fair
Investments - Declines in Fair Value, Fixed Maturities (Details) $ in Millions | Sep. 30, 2016USD ($) |
Debt Securities [Member] | Investment Grade [Member] | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Fair Value | $ 784 |
Available For Sale Securities, Continuous Unrealized Loss Position, Twelve Months Or Longer, Fair Value | 331 |
Available For Sale Securities, Continuous Unrealized Loss Position, One Year or Less, Amortized Cost | 797 |
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Amortized Cost | 345 |
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Accumulated Losses | (13) |
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Accumulated Losses | $ (14) |
Debt Securities [Member] | Investment Grade [Member] | One Year Or Less [Member] | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | 329 |
Debt Securities [Member] | Investment Grade [Member] | More Than One Year [Member] | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | 58 |
Debt Securities [Member] | Below Investment Grade [Member] | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Fair Value | $ 277 |
Available For Sale Securities, Continuous Unrealized Loss Position, Twelve Months Or Longer, Fair Value | 181 |
Available For Sale Securities, Continuous Unrealized Loss Position, One Year or Less, Amortized Cost | 283 |
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Amortized Cost | 197 |
Available-for-sale Securities, Continuous Unrealized Loss Position, One Year or Less, Accumulated Losses | (6) |
Available-for-sale Securities, Continuous Unrealized Loss Position, More Than One Year, Accumulated Losses | $ (16) |
Debt Securities [Member] | Below Investment Grade [Member] | One Year Or Less [Member] | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | 122 |
Debt Securities [Member] | Below Investment Grade [Member] | More Than One Year [Member] | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | 32 |
Equity securities [Member] | |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | |
Securities with a significant unrealized loss reflected in accumulated other comprehensive income | $ 0 |
Investments - Hybrid Securities
Investments - Hybrid Securities (Details) - Equity securities [Member] - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Investment [Line Items] | ||
Hybrid securities | $ 36 | $ 52 |
Hybrid instruments, cost | $ 51 | $ 66 |
Investments - Commerical Mortga
Investments - Commerical Mortgage Loans by Property Type and Geographic Region (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Mortgage Loans on Real Estate [Line Items] | ||
Commercial Mortgage Loans | $ 1,822 | $ 1,864 |
Investments - Credit Risk Profi
Investments - Credit Risk Profile, Commercial Mortgage Loans (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | $ 1,822 | $ 1,864 |
Weighted Average [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Debt service coverage ratio, commercial mortgage loans | 1.93 | 1.78 |
Loan-to-value ratio, commercial mortgage loans | 56.00% | 58.00% |
Loan To Value Ratio Below 50 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | $ 480 | $ 330 |
Loan To Value Ratio 50 Percent To 59 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 591 | 707 |
Loan To Value Ratio 60 Percent To 69 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 665 | 623 |
Loan To Value Ratio 70 Percent To 79 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 65 | 66 |
Loan To Value Ratio 80 Percent To 89 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 40 |
Loan To Value Ratio 90 Percent To 100 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 21 | 98 |
Debt Service Coverage Ratio 1.30x Or Greater [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 1,634 | 1,574 |
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio Below 50 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 465 | 261 |
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 518 | 683 |
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 651 | 590 |
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 40 |
Debt Service Coverage Ratio 1.30x Or Greater [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 53 | 16 |
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio Below 50 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 15 | 2 |
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 24 | 0 |
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 14 | 14 |
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.20x To 1.29x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 49 | 0 |
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio Below 50 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 19 | 0 |
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 30 | 0 |
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.10x To 1.19x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 30 | 140 |
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio Below 50 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 67 |
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 30 | 24 |
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 19 |
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 30 |
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio 1.00x To 1.09x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio Less Than 1.00x [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 56 | 134 |
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio Below 50 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 50 Percent To 59 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 60 Percent To 69 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 70 Percent To 79 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 35 | 36 |
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 80 Percent To 89 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | 0 | 0 |
Debt Service Coverage Ratio Less Than 1.00x [Member] | Loan To Value Ratio 90 Percent To 100 Percent [Member] | ||
Schedule Of Financing Receivable Recorded Investment Credit Quality Indicator [Line Items] | ||
Commercial mortgage loan | $ 21 | $ 98 |
Investments - Problem and Poten
Investments - Problem and Potential Problem Commercial Mortgage Loans (Details) - Mortgage Loans on Real Estate [Member] $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Financing Receivable, Modifications [Line Items] | ||
Maximum past due days that the mortgage loans are considered current | 59 days | |
Debt service coverage ratio threshold, below which mortgage loans are considered potential problems | 1 | |
Loan-to-value ratio threshold, above which mortgage loans are considered potential problems | 100.00% | |
Minimum past due days that mortgage loans are considered potential problems | 30 days | |
Maximum past due days that mortgage loans are considered potential problems | 60 days | |
Problem and potential problem mortgage loans | $ 21 | $ 139 |
Investments - Impaired Commerci
Investments - Impaired Commercial Mortgage Loans (Details) - Mortgage Loans on Real Estate [Member] - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Financing Receivable, Impaired [Line Items] | |||
Impaired commercial mortgage loans with related allowance, gross | $ 26 | $ 113 | |
Impaired commercial mortgage loans with no related allowance, gross | 0 | 0 | |
Impaired commercial mortgage loans, gross | 26 | 113 | |
Impaired commercial mortgage loans, reserves | (5) | (15) | |
Impaired commercial mortgage loans with related allowance, net | 21 | 98 | |
Impaired commercial mortgage loans, net | 21 | $ 98 | |
Average recorded investment in impaired mortgage loans | $ 83 | $ 129 |
Investments - Valuation Reserve
Investments - Valuation Reserves for Commercial Mortgage Loans (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Mortgage Loans on Real Estate [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Financing Receivable, Allowance For Credit Losses, Period Increase (Decrease) |
Investments - Real Estate and O
Investments - Real Estate and Other Long-Term Investments (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Other Long Term Investments [Line Items] | ||
Other long-term investments | $ 1,408 | $ 1,404 |
Investments - Short-Term Invest
Investments - Short-Term Investments and Cash Equivalents (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Corporate Securities [Member] | ||
Short Term Investments And Cash Equivalents [Line Items] | ||
Short-term investments and cash equivalents | $ 2,300 | $ 925 |
Federal goverment securities | ||
Short Term Investments And Cash Equivalents [Line Items] | ||
Short-term investments and cash equivalents | 567 | 220 |
Money Market Funds [Member] | ||
Short Term Investments And Cash Equivalents [Line Items] | ||
Short-term investments and cash equivalents | $ 40 | $ 55 |
Derivative Financial Instrume75
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |||||
Maximum term length, investment cash flow hedges | 7 years | ||||
Amounts excluded from assessment of hedge effectiveness | |||||
Gains (losses) recognized due to hedge ineffectiveness | |||||
Cash on deposit representing upfront margin required by clearinghouse | 14 | 14 | |||
Net liability position of derivatives that contain certain credit risk-related contingent features | |||||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Amount | 65 | 65 | 131 | ||
Fair Value | |||||
Gain (Loss) Recognized in Other Comprehensive Income | |||||
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Amount | 750 | 750 | 750 | ||
Fair Value | |||||
Gain (Loss) Recognized in Income Statement | |||||
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Amount | 23 | 23 | |||
Fair Value | |||||
Gain (Loss) Recognized in Income Statement | |||||
Non designated [Member] | Forward Contracts [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Amount | 50 | 50 | |||
Fair Value | |||||
Gain (Loss) Recognized in Income Statement |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Billions | 9 Months Ended |
Sep. 30, 2016USD ($)LimitedPartnerships | |
Variable Interest Entity [Line Items] | |
Methodology for determining whether the Company is primary beneficiary | When the Company becomes involved with a variable interest entity, as well as when there is a change in the Company’s involvement with an entity, the Company evaluates the following to determine if it is the primary beneficiary and must consolidate the entity: the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers. |
Investment Entities [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | $ 0.6 |
Non-controlling interest percentage | |
Security And Real Estate Limited Partnerships [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | $ 1.9 |
Number of limited partnerships defined as variable interest entities | LimitedPartnerships | 100 |
Commitments to contribute additional cash, amount | $ 0.9 |
Security And Real Estate Limited Partnerships [Member] | Maximum [Member] | |
Variable Interest Entity [Line Items] | |
Non-controlling interest percentage | 10.00% |
Security And Real Estate Limited Partnerships [Member] | Other Long Term Investments [Member] | |
Variable Interest Entity [Line Items] | |
Carrying amount of assets | $ 1 |
Independent Physician Associations [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity |
Investment Income and Gains and
Investment Income and Gains and Losses - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule Of Investment Income Reported Amounts By Category [Line Items] | ||||
Net investment income | $ 282 | $ 285 | $ 848 | $ 858 |
Pension and Other Postretirem78
Pension and Other Postretirement Benefits - Effect of Foreign Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan cost | $ 5 | $ 1 | $ 14 | $ 1 |
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan cost | $ 2 | $ 2 | $ 6 | $ 6 |
Pension and Other Postretirem79
Pension and Other Postretirement Benefits - Pension and Other Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension And Other Postretirement Footnote Text Details [Abstract] | ||||
Postretirement benefits liability adjustment, (increase) decrease to equity, pre-tax | $ (41) | |||
Postretirement benefits liability adjustment, (increase) decrease to equity, after-tax | $ (9) | $ (11) | (28) | $ (42) |
Pension Benefits [Member] | ||||
Change in benefit obligation [Abstract] | ||||
Service cost | 0 | 1 | 1 | 2 |
Interest cost | 50 | 49 | 149 | 146 |
Change in plan assets [Roll Forward] | ||||
Contributions | 0 | |||
Components of net pension cost and other postretirement benefits cost tables detail [Abstract] | ||||
Service cost | 0 | 1 | 1 | 2 |
Interest cost | 50 | 49 | 149 | 146 |
Expected long-term return on plan assets | (62) | (66) | (186) | (199) |
Amortization of net loss from past experience | 17 | 17 | 50 | 52 |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Defined benefit plan cost | 5 | 1 | 14 | 1 |
Pension And Other Postretirement Footnote Text Details [Abstract] | ||||
Expected pension contributions for the remainder of the year | 0 | 0 | ||
Other Postretirement Benefits [Member] | ||||
Change in benefit obligation [Abstract] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 3 | 3 | 8 | 8 |
Components of net pension cost and other postretirement benefits cost tables detail [Abstract] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 3 | 3 | 8 | 8 |
Expected long-term return on plan assets | 0 | 0 | 0 | 0 |
Amortization of net loss from past experience | 0 | 0 | 0 | 0 |
Amortization of prior service cost | (1) | (1) | (2) | (2) |
Defined benefit plan cost | $ 2 | $ 2 | $ 6 | $ 6 |
Debt - Short-term and Long-term
Debt - Short-term and Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Total short-term debt | $ 271 | $ 149 | |
Long-term debt, carrying value | 4,780 | 5,020 | |
Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Commercial paper | 0 | 100 | |
Current maturities of long-term debt | 250 | 0 | |
Other, including capital leases | 21 | 49 | |
Total short-term debt | 271 | 149 | |
Long-term debt, carrying value | 4,780 | 5,020 | |
$250 million, 5.375% Notes due 2017 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 250 | $ 250 | |
Long-term debt, stated interest rate | 5.375% | 5.375% | |
Long-term debt, carrying value | $ 0 | $ 249 | |
$131 million, 6.35% Notes due 2018 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 131 | $ 131 | |
Long-term debt, stated interest rate | 6.35% | 6.35% | |
Long-term debt, carrying value | $ 131 | $ 131 | |
$250 million, 4.375% Notes due 2020 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | [1] | $ 250 | $ 250 |
Long-term debt, stated interest rate | [1] | 4.375% | 4.375% |
Long-term debt, carrying value | [1] | $ 260 | $ 254 |
$300 million, 5.125% Notes due 2020 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | [1] | $ 300 | $ 300 |
Long-term debt, stated interest rate | [1] | 5.125% | 5.125% |
Long-term debt, carrying value | [1] | $ 307 | $ 303 |
$78 million, 6.37% Notes due 2021 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 78 | $ 78 | |
Long-term debt, stated interest rate | 6.37% | 6.37% | |
Long-term debt, carrying value | $ 78 | $ 78 | |
$300 million, 4.5% Notes due 2021 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | [1] | $ 300 | $ 300 |
Long-term debt, stated interest rate | [1] | 4.50% | 4.50% |
Long-term debt, carrying value | [1] | $ 311 | $ 304 |
$750 million, 4% Notes due 2022 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 750 | $ 750 | |
Long-term debt, stated interest rate | 4.00% | 4.00% | |
Long-term debt, carrying value | $ 743 | $ 743 | |
$100 million, 7.65% Notes due 2023 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 100 | $ 100 | |
Long-term debt, stated interest rate | 7.65% | 7.65% | |
Long-term debt, carrying value | $ 100 | $ 100 | |
$17 million, 8.3% Notes due 2023 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 17 | $ 17 | |
Long-term debt, stated interest rate | 8.30% | 8.30% | |
Long-term debt, carrying value | $ 17 | $ 17 | |
$900 million, 3.25% Notes Due 2025 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 900 | $ 900 | |
Long-term debt, stated interest rate | 3.25% | 3.25% | |
Long-term debt, carrying value | $ 893 | $ 892 | |
$300 million, 7.875% Debentures due 2027 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 300 | $ 300 | |
Long-term debt, stated interest rate | 7.875% | 7.875% | |
Long-term debt, carrying value | $ 299 | $ 299 | |
$83 million, 8.3% Step Down Notes due 2033 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 83 | $ 83 | |
Long-term debt, stated interest rate | 8.30% | 8.30% | |
Long-term debt, carrying value | $ 82 | $ 82 | |
$500 million, 6.15% Notes due 2036 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 500 | $ 500 | |
Long-term debt, stated interest rate | 6.15% | 6.15% | |
Long-term debt, carrying value | $ 498 | $ 498 | |
$300 million, 5.875% Notes due 2041 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 300 | $ 300 | |
Long-term debt, stated interest rate | 5.875% | 5.875% | |
Long-term debt, carrying value | $ 296 | $ 295 | |
$750 million, 5.375% Notes due 2042 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 750 | $ 750 | |
Long-term debt, stated interest rate | 5.375% | 5.375% | |
Long-term debt, carrying value | $ 743 | $ 743 | |
Other, including capital leases [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | $ 22 | $ 32 | |
[1] | The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 9 for further information about the Company’s interest rate risk management and these derivative instruments. |
Debt - Extinguishment (Details)
Debt - Extinguishment (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Extinguishment of Debt [Line Items] | |||
Loss on extinguishment of debt | $ 0 | $ 100 | |
Loss on extinguishment of debt, after-tax | $ 65 | ||
Uncollateralized Debt [Member] | |||
Extinguishment of Debt [Line Items] | |||
Extinguishment of Debt, Amount | $ 955 | ||
Loss on extinguishment of debt | 100 | ||
Loss on extinguishment of debt, after-tax | $ 65 |
Debt - Revolving Credit and Let
Debt - Revolving Credit and Letter of Credit (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)Banks | |
Line of Credit Facility [Line Items] | |
Debt outstanding | $ 5,100 |
Revolving Credit And Letter Of Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Credit agreement term | 5 years |
Maximum borrowing capacity under credit facility | $ 1,500 |
Number of participating banks | Banks | 16 |
Total commitment amount under option to increase borrowing capacity | $ 2,000 |
Expiration date | Dec. 12, 2019 |
Covenant terms | The credit agreement includes options subject to consent by the administrative agent and the committing banks to increase the commitment amount to $2 billion and to extend the term past December 12, 2019. The credit agreement is available for general corporate purposes, including for the issuance of letters of credit. The credit agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 0.50. The leverage ratio calculation excludes the following items that are included in accumulated other comprehensive loss on the Company’s consolidated balance sheets: net unrealized appreciation on fixed maturities and the portion of the post-retirement benefits liability adjustment attributable to pension. |
Leverage ratio covenant | 50.00% |
Additional borrowing capacity under maximum debt coverage covenant | $ 9,500 |
Line of Credit Facility, Covenant Compliance | The Company was in compliance with its debt covenants as of September 30, 2016. |
Letter of Credit [Member] | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity under credit facility | $ 500 |
Letters of credit outstanding | $ 14 |
Primary Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Number of participating banks | Banks | 3 |
Percent held by each primary commitment holder | 12.00% |
Minor Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Number of participating banks | Banks | 13 |
Collective percentage held by secondary commitment holders | 64.00% |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Common: Par value $.25, 600,000,000 shares authorized | |||
Treasury stock | 39,425,208 | 38,553,358 | |
Issued - December 31 | 296,000,000 | ||
Common Stock, par value and shares authorized | |||
Common stock, par value per share | $ 0.25 | $ 0.25 | |
Common stock shares authorized | 600,000,000 | 600,000,000 | |
Payments For Repurchase Of Common Stock | $ 139 | $ 536 |
Accumulated Other Comprehensi84
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | $ (1,250) | |||
Shareholders' other comprehensive income (loss) | $ 129 | $ (90) | 535 | $ (279) |
Accumulated other comprehensive income (loss), ending | (715) | (715) | ||
Realized investment (gains) losses | (75) | (10) | (110) | (104) |
Other operating expenses | 2,428 | 2,171 | 7,038 | 6,587 |
Net unrealized appreciation on securities [ Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), before tax, beginning | 1,135 | 733 | 612 | 955 |
Other comprehensive income (loss) before reclassifications, pre-tax | 94 | (37) | 606 | (226) |
Reclassification adjustment, pre-tax | (6) | 29 | 5 | (4) |
Other comprehensive income (loss), pre-tax | 88 | (8) | 611 | (230) |
Accumulated other comprehensive income (loss), before tax, ending | 1,223 | 725 | 1,223 | 725 |
Accumulated other comprehensive income/loss tax (expense) benefit, beginning | (367) | (259) | (194) | (335) |
Other comprehensive income (loss), securities, before reclassifications, tax (expense) benefit | (24) | 26 | (193) | 90 |
Reclassification adjustment, securities, tax (expense) benefit | 2 | (10) | (2) | 2 |
Other comprehensive income (loss), tax (expense) benefit | (22) | 16 | (195) | 92 |
Accumulated other comprehensive income/loss tax (expense) benefit, ending | (389) | (243) | (389) | (243) |
Accumulated other comprehensive income (loss), beginning | 768 | 474 | 418 | 620 |
Other comprehensive income (loss) before reclassifications, after-tax | 70 | (11) | 413 | (136) |
Reclassification adjustment, after-tax | (4) | 19 | 3 | (2) |
Shareholders' other comprehensive income (loss) | 66 | 8 | 416 | (138) |
Accumulated other comprehensive income (loss), ending | 834 | 482 | 834 | 482 |
Net unrealized appreciation on securities [ Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Realized investment (gains) losses | (6) | 29 | 5 | (4) |
Net unrealized appreciation on derivatives [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), before tax, beginning | 5 | 7 | 10 | (12) |
Other comprehensive income (loss) before reclassifications, pre-tax | 2 | 4 | (3) | 11 |
Reclassification adjustment, pre-tax | (4) | (4) | 12 | |
Other comprehensive income (loss), pre-tax | (2) | (7) | 23 | |
Accumulated other comprehensive income (loss), before tax, ending | 3 | 11 | 3 | 11 |
Accumulated other comprehensive income/loss tax (expense) benefit, beginning | (2) | (3) | (3) | 4 |
Other comprehensive income (loss), derivatives, before reclassifications, tax (expense) benefit | 0 | (1) | 1 | (4) |
Reclassification adjustment, derivatives, tax (expense) benefit | 1 | 1 | (4) | |
Other comprehensive income (loss), tax (expense) benefit | 1 | 2 | (8) | |
Accumulated other comprehensive income/loss tax (expense) benefit, ending | (1) | (4) | (1) | (4) |
Accumulated other comprehensive income (loss), beginning | 3 | 4 | 7 | (8) |
Other comprehensive income (loss) before reclassifications, after-tax | 2 | 3 | (2) | 7 |
Reclassification adjustment, after-tax | (3) | (3) | 8 | |
Shareholders' other comprehensive income (loss) | (1) | (5) | 15 | |
Accumulated other comprehensive income (loss), ending | 2 | 7 | 2 | 7 |
Net unrealized appreciation on derivatives [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other operating expenses | (4) | (4) | 12 | |
Net translation of foreign currencies [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), before tax, beginning | (251) | (165) | (295) | (71) |
Other comprehensive income (loss), pre-tax | 55 | (113) | 99 | (207) |
Accumulated other comprehensive income (loss), before tax, ending | (196) | (278) | (196) | (278) |
Accumulated other comprehensive income/loss tax (expense) benefit, beginning | 18 | 17 | 21 | 9 |
Other comprehensive income (loss), tax (expense) benefit | 0 | 1 | (3) | 9 |
Accumulated other comprehensive income/loss tax (expense) benefit, ending | 18 | 18 | 18 | 18 |
Accumulated other comprehensive income (loss), beginning | (233) | (148) | (274) | (62) |
Shareholders' other comprehensive income (loss) | 55 | (112) | 96 | (198) |
Accumulated other comprehensive income (loss), ending | (178) | (260) | (178) | (260) |
Postretirement benefits liability adjustment [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), before tax, beginning | (2,127) | (2,240) | (2,155) | (2,286) |
Other comprehensive income (loss) before reclassifications, pre-tax | (3) | (7) | 12 | |
Reclassification adjustment, pre-tax | 16 | 16 | 48 | 50 |
Other comprehensive income (loss), pre-tax | 13 | 41 | 62 | |
Accumulated other comprehensive income (loss), before tax, ending | (2,114) | (2,224) | (2,114) | (2,224) |
Accumulated other comprehensive income/loss tax (expense) benefit, beginning | 745 | 785 | 754 | 800 |
Other comprehensive income (loss), postretirement benefits, before reclassifications, tax (expense) benefit | 0 | 2 | (3) | |
Reclassification adjustment, postretirement benefits, tax (expense) benefit | (4) | (5) | (15) | (17) |
Other comprehensive income (loss), tax (expense) benefit | (4) | (13) | (20) | |
Accumulated other comprehensive income/loss tax (expense) benefit, ending | 741 | 780 | 741 | 780 |
Accumulated other comprehensive income (loss), beginning | (1,382) | (1,455) | (1,401) | (1,486) |
Other comprehensive income (loss) before reclassifications, after-tax | (3) | (5) | 9 | |
Reclassification adjustment, after-tax | 12 | 11 | 33 | 33 |
Shareholders' other comprehensive income (loss) | 9 | 28 | 42 | |
Accumulated other comprehensive income (loss), ending | (1,373) | (1,444) | (1,373) | (1,444) |
Postretirement benefits liability adjustment [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other operating expenses | 16 | 16 | 48 | 50 |
Reclassification adjustment for amortization of net losses from past experience and prior service costs [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Reclassification adjustment, pre-tax | 16 | 16 | 48 | 50 |
Reclassification adjustment, postretirement benefits, tax (expense) benefit | (4) | (5) | (15) | (17) |
Reclassification adjustment, after-tax | 12 | 11 | 33 | 33 |
Reclassification adjustment for amortization of net losses from past experience and prior service costs [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Other operating expenses | $ 16 | $ 16 | $ 48 | $ 50 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Current taxes | ||||
Total taxes, current | $ 210 | $ 282 | $ 842 | $ 965 |
Deferred taxes (benefits) | ||||
Total taxes, deferred | 80 | 52 | 63 | 44 |
Total taxes | $ 290 | $ 334 | $ 905 | $ 1,009 |
Income Taxes - Reconciliation t
Income Taxes - Reconciliation to Nominal Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of total taxes to nominal federal rate details [Abstract] | ||||
Total income taxes | $ 290 | $ 334 | $ 905 | $ 1,009 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Taxes [Abstract] | ||
Consolidated effective tax rate | 38.10% | 37.80% |
Accumulated undistributed foreign earnings | $ 2,800 | |
Cumulative unrecognized deferred tax liabilities | $ 405 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Deferred tax liabilities [Abstract] | ||
Net deferred income tax assets | $ 110 | $ 379 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Reconciliation of unrecognized tax benefits details [Abstract] | |
Unrecognized tax benefits increase (decrease) |
Segment Information - Special I
Segment Information - Special Item Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
After-tax Impact [Abstract] | ||||
Merger-related transaction costs | $ 46 | $ 29 | $ 108 | $ 29 |
Charges associated with litigation matters | 25 | 25 | ||
Debt extinguishment costs | 65 | |||
Total Before-tax Impact [Abstract] | ||||
Merger-related costs, before tax | 49 | $ 35 | 123 | 35 |
Charges associated with litigation matters, before tax | 40 | 40 | ||
Debt extinguishment costs, before tax | 0 | 100 | ||
Total special items | $ 71 | $ 133 | $ 94 |
Segment Information - Segment F
Segment Information - Segment Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | $ 9,523 | $ 9,094 | $ 28,766 | $ 27,386 |
Net investment income | 282 | 285 | 848 | 858 |
Total operating revenues | 9,805 | 9,379 | 29,614 | 28,244 |
Total revenues | 9,880 | 9,389 | 29,724 | 28,348 |
Operating Segments [Member] | Global Health Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 7,636 | 7,323 | 23,207 | 22,110 |
Net investment income | 77 | 85 | 230 | 251 |
Total operating revenues | 7,713 | 7,408 | 23,437 | 22,361 |
Total revenues | 7,775 | 7,427 | 23,510 | 22,437 |
Operating Segments [Member] | Global Supplemental Benefits [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 837 | 767 | 2,425 | 2,266 |
Net investment income | 29 | 26 | 82 | 78 |
Total operating revenues | 866 | 793 | 2,507 | 2,344 |
Total revenues | 868 | 792 | 2,507 | 2,344 |
Operating Segments [Member] | Group Disability And Life [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 1,026 | 980 | 3,065 | 2,934 |
Net investment income | 85 | 84 | 253 | 252 |
Total operating revenues | 1,111 | 1,064 | 3,318 | 3,186 |
Total revenues | 1,128 | 1,055 | 3,356 | 3,207 |
Operating Segments [Member] | Other Operations Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 28 | 28 | 83 | 90 |
Net investment income | 87 | 90 | 270 | 276 |
Total operating revenues | 115 | 118 | 353 | 366 |
Total revenues | 109 | 119 | 352 | 373 |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | (4) | (4) | (14) | (14) |
Net investment income | 4 | 0 | 13 | 1 |
Total operating revenues | 0 | (4) | (1) | (13) |
Total revenues | $ 0 | $ (4) | $ (1) | $ (13) |
Segment Information - Reconcili
Segment Information - Reconciliation to Adjusted Income From Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Shareholders' Net Income | $ 456 | $ 547 | $ 1,485 | $ 1,668 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Realized investment (gains) losses | (48) | (7) | (71) | (68) |
Amortization of other acquired intangible assets | 24 | 24 | 72 | 76 |
Special items: | ||||
Charges associated with litigation matters | 25 | 25 | ||
Debt extinguishment costs | 65 | |||
Merger-related transaction costs | 46 | 29 | 108 | 29 |
Total special items | 71 | 133 | 94 | |
Adjusted income from operations | 503 | 593 | 1,619 | 1,770 |
Accounting Standards Update 201609 [Member] | Restatement Adjustment [Member] | ||||
Special items: | ||||
Adjusted income from operations | 25 | |||
Operating Segments [Member] | Global Health Benefits Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Shareholders' Net Income | 413 | 475 | 1,414 | 1,440 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Realized investment (gains) losses | (42) | (14) | (49) | (50) |
Amortization of other acquired intangible assets | 20 | 21 | 56 | 64 |
Special items: | ||||
Charges associated with litigation matters | 25 | 25 | ||
Debt extinguishment costs | 0 | |||
Merger-related transaction costs | 0 | 0 | 0 | 0 |
Total special items | 25 | 25 | 0 | |
Adjusted income from operations | 416 | 482 | 1,446 | 1,454 |
Operating Segments [Member] | Global Supplemental Benefits Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Shareholders' Net Income | 77 | 58 | 214 | 195 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Realized investment (gains) losses | 0 | 1 | 1 | 1 |
Amortization of other acquired intangible assets | 4 | 3 | 16 | 12 |
Special items: | ||||
Charges associated with litigation matters | 0 | 0 | ||
Debt extinguishment costs | 0 | |||
Merger-related transaction costs | 0 | 0 | 0 | 0 |
Total special items | 0 | 0 | 0 | |
Adjusted income from operations | 81 | 62 | 231 | 208 |
Operating Segments [Member] | Group Disability And Life Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Shareholders' Net Income | 65 | 78 | 81 | 254 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Realized investment (gains) losses | (12) | 6 | (25) | (13) |
Amortization of other acquired intangible assets | 0 | 0 | 0 | 0 |
Special items: | ||||
Charges associated with litigation matters | 0 | 0 | ||
Debt extinguishment costs | 0 | |||
Merger-related transaction costs | 0 | 0 | 0 | 0 |
Total special items | 0 | 0 | 0 | |
Adjusted income from operations | 53 | 84 | 56 | 241 |
Operating Segments [Member] | Other Operations Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Shareholders' Net Income | 9 | 17 | 53 | 61 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Realized investment (gains) losses | 5 | 0 | 1 | (6) |
Amortization of other acquired intangible assets | 0 | 0 | 0 | 0 |
Special items: | ||||
Charges associated with litigation matters | 0 | 0 | ||
Debt extinguishment costs | 0 | |||
Merger-related transaction costs | 0 | 0 | 0 | 0 |
Total special items | 0 | 0 | 0 | |
Adjusted income from operations | 14 | 17 | 54 | 55 |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Shareholders' Net Income | (108) | (81) | (277) | (282) |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Realized investment (gains) losses | 1 | 0 | 1 | 0 |
Amortization of other acquired intangible assets | 0 | 0 | 0 | 0 |
Special items: | ||||
Charges associated with litigation matters | 0 | 0 | ||
Debt extinguishment costs | 65 | |||
Merger-related transaction costs | 46 | 29 | 108 | 29 |
Total special items | 46 | 108 | 94 | |
Adjusted income from operations | $ (61) | $ (52) | $ (168) | $ (188) |
Segment Information - Revenues
Segment Information - Revenues by Product Type (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue from External Customer [Line Items] | ||||
Premiums | $ 7,605 | $ 7,347 | $ 23,005 | $ 22,181 |
Mail order pharmacy revenues | 762 | 643 | 2,207 | 1,846 |
Revenues from external customers | $ 9,523 | $ 9,094 | $ 28,766 | $ 27,386 |
Segment Information - Foreign a
Segment Information - Foreign and U.S. Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues from external customers | $ 9,523 | $ 9,094 | $ 28,766 | $ 27,386 |
Segment Information - Concentra
Segment Information - Concentration Risk (Details) - CMS [Member] - USD ($) $ in Billions | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Net receivables from CMS | $ 1.2 | $ 1.5 | |
Revenue Consolidated [Member] | Government Contracts Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 20.00% | 21.00% |
Contingencies and Other Matte96
Contingencies and Other Matters - Guarantees (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Financial Guarantee [Member] | Retirement And Life Insurance Contracts [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Maximum Exposure, Undiscounted | $ 493 |
Guarantee Obligations, Current Carrying Value | $ 0 |
Percentage of benefit obligations reinsured | 13.00% |
Financial Guarantee [Member] | Retirement And Life Insurance Contracts [Member] | Minimum [Member] | |
Guarantee Obligations [Line Items] | |
Assets maintained by employers to cover benefit obligations | $ 493 |
Guarantee Type, Other [Member] | Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Maximum Exposure, Undiscounted | $ 762 |
Annuitization election period | 30 days |
Underlying mutual fund investment values | $ 892 |
Guarantee Type, Other [Member] | Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member] | Minimum [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Current Carrying Value | 762 |
Indemnification obligations to lenders [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Current Carrying Value | 0 |
Indemnification obligations to lenders [Member] | Maximum [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Maximum Exposure, Undiscounted | $ 166 |
Indemnification obligations in connection with acquistion, disposition and reinsurance transactions [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Maximum Exposure Inestimable | The Company does not believe that it is possible to determine the maximum potential amount due under these obligations, because not all amounts due under these indemnification obligations are subject to limitation. |
Guarantee Obligations, Current Carrying Value | $ 0 |
Market Value Guarantee [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Maximum Exposure, Undiscounted | 41 |
Guarantee Obligations, Current Carrying Value | 19 |
Expiring In 2016 [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Maximum Exposure, Undiscounted | 16 |
Expiring In 2022 [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee Obligations, Maximum Exposure, Undiscounted | $ 25 |
Contingencies and Other Matte97
Contingencies and Other Matters - Legal and Regulatory Matters (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||||
Total revenues | $ 9,880 | $ 9,389 | $ 29,724 | $ 28,348 | |
Shareholders' net income | 456 | $ 547 | 1,485 | 1,668 | |
CMS Actions [Member] | |||||
Loss Contingencies [Line Items] | |||||
Costs related to CMS audit response, after-tax | $ 80 | ||||
CMS Actions [Member] | Scenario, Forecast [Member] | |||||
Loss Contingencies [Line Items] | |||||
Total revenues | |||||
Shareholders' net income | |||||
Disability Claims Regulatory Matter [Member] | |||||
Loss Contingencies [Line Items] | |||||
Monitoring period | 2 years | ||||
Guaranty Fund Assessments [Member] | |||||
Loss Contingencies [Line Items] | |||||
Charges related to guaranty fund assessments | |||||
Estimate of possible loss | 80 | 80 | |||
Pending Litigation [Member] | |||||
Loss Contingencies [Line Items] | |||||
Reserves for litigation matters, pre-tax | 230 | 230 | |||
Reserves for litigation matters, after-tax | $ 150 | $ 150 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Quarterly Results [Abstract] | ||||
Total revenues | $ 9,880 | $ 9,389 | $ 29,724 | $ 28,348 |
Income before income taxes | 742 | 878 | 2,374 | 2,668 |
Shareholders' net income | $ 456 | $ 547 | $ 1,485 | $ 1,668 |
Shareholders' Net Income Per Share: | ||||
EPS, basic | $ 1.78 | $ 2.14 | $ 5.82 | $ 6.51 |
EPS, diluted | 1.76 | 2.10 | 5.72 | 6.40 |
Stock And Dividend Data [Abstract] | ||||
Dividends Declared Per Share | $ 0 | $ 0 | $ 0.04 | $ 0.04 |
Quarterly Financial Data Text Details [Abstract] | ||||
Debt extinguishment costs | $ 65 | |||
Merger-related transaction costs | $ 46 | $ 29 | $ 108 | $ 29 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information, Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating expenses: | ||||
Loss on extinguishment of debt | $ 0 | $ 100 | ||
Total operating expenses | $ 2,428 | $ 2,171 | 7,038 | 6,587 |
Income before Income Taxes | 742 | 878 | 2,374 | 2,668 |
Income tax expense (benefit) | 290 | 334 | 905 | 1,009 |
Shareholders' Net Income | 456 | 547 | 1,485 | 1,668 |
Shareholders' other comprehensive income (loss): | ||||
Net unrealized appreciation (depreciation) on securities | 66 | 8 | 416 | (138) |
Net unrealized appreciation (depreciation), derivatives | (1) | 3 | (5) | 15 |
Net translation of foreign currencies | 55 | (112) | 96 | (198) |
Postretirement benefits liability adjustment | 9 | 11 | 28 | 42 |
Shareholders' other comprehensive income (loss) | 129 | (90) | 535 | (279) |
Shareholders' comprehensive income (loss) | $ 585 | $ 457 | $ 2,020 | $ 1,389 |
Schedule II - Condensed Fina100
Schedule II - Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||||
Cash and cash equivalents | $ 3,224 | $ 1,968 | $ 2,381 | $ 1,420 |
Short-term investments | 997 | 381 | ||
Other assets | 2,611 | 2,476 | ||
Total assets | 60,762 | 57,088 | ||
Liabilities: | ||||
Short-term debt | 271 | 149 | ||
Long-term debt, carrying value | 4,780 | 5,020 | ||
Total liabilities | 46,712 | 44,975 | ||
Shareholders Equity: | ||||
Common stock (shares issued, 296; authorized, 600) | 74 | 74 | ||
Additional paid-in capital | 2,884 | 2,859 | ||
Accumulated other comprehensive loss | (715) | (1,250) | ||
Retained earnings | 13,487 | 12,121 | ||
Less treasury stock, at cost | (1,756) | (1,769) | ||
Total shareholders' equity | 13,974 | 12,035 | ||
Total liabilities and equity | $ 60,762 | $ 57,088 |
Schedule II - Condensed Fina101
Schedule II - Condensed Financial Information, Balance Sheets - Parentheticals (Details) - shares shares in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Common stock shares issued | 296 | 296 |
Common stock shares authorized | 600 | 600 |
Schedule II - Condensed Fina102
Schedule II - Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Cash Flows from Operating Activities | |||||
Shareholders' net income | $ 456 | $ 547 | $ 1,485 | $ 1,668 | |
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||
Loss on extinguishment of debt | 0 | 100 | |||
Other liabilities | 9 | 219 | |||
Other, net | [1] | 25 | (4) | ||
Net cash provided by (used in) operating activities | [1] | 3,074 | 1,797 | ||
Cash Flows from Investing Activities | |||||
Short term investments purchased | (1,317) | (689) | |||
Other, net | (101) | 0 | |||
Net cash provided by (used in) investing activities | (1,589) | (297) | |||
Cash Flows from Financing Activities | |||||
Net change in short-term debt | (143) | (15) | |||
Net proceeds on issuance of long-term debt | 0 | 894 | |||
Repayment of long-term debt | 0 | (938) | |||
Issuance of common stock | 23 | 136 | |||
Repurchase of common stock | (139) | (536) | |||
Net cash provided by (used in) financing activities | [1] | (255) | (503) | ||
Net increase (decrease) in cash and cash equivalents | 1,256 | 961 | |||
Cash and cash equivalents, January 1 | 1,968 | 1,420 | |||
Cash and cash equivalents, September 30 | $ 3,224 | $ 2,381 | $ 3,224 | $ 2,381 | |
[1] | As required by the adoption of ASU 2016-09, the Company retrospectively reclassified $78 million of cash payments from operating to financing activities for the nine months ended September 30, 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amount reported in financing activities for the nine months ended September 30, 2016 was $69 million. See Note 2 for further discussion. |
Schedule II - Condensed Fina103
Schedule II - Condensed Financial Information, Short-term and Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Total short-term debt | $ 271 | $ 149 | |
Long-term debt, carrying value | 4,780 | 5,020 | |
Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Commercial paper | 0 | 100 | |
Total short-term debt | 271 | 149 | |
Long-term debt, carrying value | 4,780 | 5,020 | |
$250 million, 5.375% Notes due 2017 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 250 | $ 250 | |
Long-term debt, stated interest rate | 5.375% | 5.375% | |
Long-term debt, carrying value | $ 0 | $ 249 | |
$131 million, 6.35% Notes due 2018 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 131 | $ 131 | |
Long-term debt, stated interest rate | 6.35% | 6.35% | |
Long-term debt, carrying value | $ 131 | $ 131 | |
$250 million, 4.375% Notes due 2020 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | [1] | $ 250 | $ 250 |
Long-term debt, stated interest rate | [1] | 4.375% | 4.375% |
Long-term debt, carrying value | [1] | $ 260 | $ 254 |
$300 million, 5.125% Notes due 2020 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | [1] | $ 300 | $ 300 |
Long-term debt, stated interest rate | [1] | 5.125% | 5.125% |
Long-term debt, carrying value | [1] | $ 307 | $ 303 |
$300 million, 4.5% Notes due 2021 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | [1] | $ 300 | $ 300 |
Long-term debt, stated interest rate | [1] | 4.50% | 4.50% |
Long-term debt, carrying value | [1] | $ 311 | $ 304 |
$750 million, 4% Notes due 2022 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 750 | $ 750 | |
Long-term debt, stated interest rate | 4.00% | 4.00% | |
Long-term debt, carrying value | $ 743 | $ 743 | |
$100 million, 7.65% Notes due 2023 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 100 | $ 100 | |
Long-term debt, stated interest rate | 7.65% | 7.65% | |
Long-term debt, carrying value | $ 100 | $ 100 | |
$17 million, 8.3% Notes due 2023 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 17 | $ 17 | |
Long-term debt, stated interest rate | 8.30% | 8.30% | |
Long-term debt, carrying value | $ 17 | $ 17 | |
$900 million, 3.25% Notes Due 2025 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 900 | $ 900 | |
Long-term debt, stated interest rate | 3.25% | 3.25% | |
Long-term debt, carrying value | $ 893 | $ 892 | |
$300 million, 7.875% Debentures due 2027 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 300 | $ 300 | |
Long-term debt, stated interest rate | 7.875% | 7.875% | |
Long-term debt, carrying value | $ 299 | $ 299 | |
$83 million, 8.3% Step Down Notes due 2033 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 83 | $ 83 | |
Long-term debt, stated interest rate | 8.30% | 8.30% | |
Long-term debt, carrying value | $ 82 | $ 82 | |
$500 million, 6.15% Notes due 2036 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 500 | $ 500 | |
Long-term debt, stated interest rate | 6.15% | 6.15% | |
Long-term debt, carrying value | $ 498 | $ 498 | |
$300 million, 5.875% Notes due 2041 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 300 | $ 300 | |
Long-term debt, stated interest rate | 5.875% | 5.875% | |
Long-term debt, carrying value | $ 296 | $ 295 | |
$750 million, 5.375% Notes due 2042 [Member] | Uncollateralized Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 750 | $ 750 | |
Long-term debt, stated interest rate | 5.375% | 5.375% | |
Long-term debt, carrying value | $ 743 | $ 743 | |
[1] | The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 9 for further information about the Company’s interest rate risk management and these derivative instruments. |
Schedule II - Condensed Fina104
Schedule II - Condensed Financial Information, Extinguishment of Debt (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Extinguishment of Debt [Line Items] | |||
Loss on extinguishment of debt | $ 0 | $ 100 | |
Loss on extinguishment of debt, after-tax | $ 65 | ||
Uncollateralized Debt [Member] | |||
Extinguishment of Debt [Line Items] | |||
Extinguishment of Debt, Amount | $ 955 | ||
Loss on extinguishment of debt | 100 | ||
Loss on extinguishment of debt, after-tax | $ 65 |
Schedule II - Condensed Fina105
Schedule II - Condensed Financial Information, Credit Facility (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)Banks | |
Line of Credit Facility [Line Items] | |
Debt outstanding | $ 5,100 |
Revolving Credit And Letter Of Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Credit agreement term | 5 years |
Maximum borrowing capacity under credit facility | $ 1,500 |
Number of participating banks | Banks | 16 |
Total commitment amount under option to increase borrowing capacity | $ 2,000 |
Expiration date | Dec. 12, 2019 |
Covenant terms | The credit agreement includes options subject to consent by the administrative agent and the committing banks to increase the commitment amount to $2 billion and to extend the term past December 12, 2019. The credit agreement is available for general corporate purposes, including for the issuance of letters of credit. The credit agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitalization (each as defined in the credit agreement) – to be greater than 0.50. The leverage ratio calculation excludes the following items that are included in accumulated other comprehensive loss on the Company’s consolidated balance sheets: net unrealized appreciation on fixed maturities and the portion of the post-retirement benefits liability adjustment attributable to pension. |
Leverage ratio covenant | 50.00% |
Additional borrowing capacity under maximum debt coverage covenant | $ 9,500 |
Line of Credit Facility, Covenant Compliance | The Company was in compliance with its debt covenants as of September 30, 2016. |
Letter of Credit [Member] | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity under credit facility | $ 500 |
Letters of credit outstanding | $ 14 |
Primary Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Number of participating banks | Banks | 3 |
Percent held by each primary commitment holder | 12.00% |
Minor Commitment Holders [Member] | Revolving Credit And Letter Of Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Number of participating banks | Banks | 13 |
Collective percentage held by secondary commitment holders | 64.00% |
Schedule II - Condensed Fina106
Schedule II - Condensed Financial Information, Notes (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Maturities Of Debt Excluding Capital Leases [Abstract] | ||
Interest paid on long-term and short-term debt | $ 192 | $ 192 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Premiums: | ||||
Ceded to other companies, premiums | $ 131 | $ 168 | $ 380 | $ 444 |
Net amount | $ 7,605 | $ 7,347 | $ 23,005 | $ 22,181 |