Document and Entity Information
Document and Entity Information - $ / shares | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 19, 2018 | Dec. 31, 2017 | |
Document Document And Entity Information [Abstract] | |||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2018 | ||
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 | 243,534,265 | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Document Fiscal Year Focus | 2,018 | ||
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Premiums | $ 8,994 | $ 8,075 | $ 27,005 | $ 24,283 |
Fees and other revenues | 1,361 | 1,266 | 4,087 | 3,782 |
Net investment income | 355 | 298 | 1,036 | 909 |
Mail order pharmacy revenues | 747 | 733 | 2,222 | 2,200 |
Realized investment gains (losses): | ||||
Other-than-temporary impairments on fixed maturities | (1) | (6) | (19) | (15) |
Other realized investment gains (losses), net | 1 | 123 | (17) | 229 |
Net realized investment gains (losses) | 0 | 117 | (36) | 214 |
Total revenues | 11,457 | 10,489 | 34,314 | 31,388 |
Benefits and Expenses | ||||
Global Health Care medical costs | 5,360 | 4,845 | 16,098 | 14,684 |
Other benefit expenses | 1,443 | 1,342 | 4,322 | 4,044 |
Mail order pharmacy costs | 602 | 612 | 1,776 | 1,819 |
Other operating expenses | 2,971 | 2,838 | 8,666 | 7,905 |
Amortization of other acquired intangible assets | 48 | 28 | 99 | 88 |
Total benefits and expenses | 10,424 | 9,665 | 30,961 | 28,540 |
Income before Income Taxes | 1,033 | 824 | 3,353 | 2,848 |
Income taxes (benefits): | ||||
Current | 248 | 231 | 837 | 821 |
Deferred | 11 | 31 | 17 | 62 |
Total income taxes | 259 | 262 | 854 | 883 |
Net Income | 774 | 562 | 2,499 | 1,965 |
Less: net income (loss) attributable to noncontrolling interests | 2 | 2 | 6 | (6) |
Shareholders' net income | $ 772 | $ 560 | $ 2,493 | $ 1,971 |
Shareholders' net income per share: | ||||
Basic | $ 3.18 | $ 2.25 | $ 10.28 | $ 7.79 |
Diluted | 3.14 | 2.21 | 10.14 | 7.67 |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Comprehensive Income | ||||
Shareholders' net income | $ 772 | $ 560 | $ 2,493 | $ 1,971 |
Shareholders' other comprehensive income (loss), net of tax: | ||||
Net unrealized appreciation (depreciation), securities | 0 | (22) | (420) | 52 |
Net unrealized appreciation (depreciation), derivatives | 2 | 0 | (11) | (3) |
Net translation of foreign currencies | (29) | 34 | (136) | 173 |
Postretirement benefits liability adjustment | 13 | 10 | 31 | 36 |
Shareholders' other comprehensive income (loss), net of tax | (14) | 22 | (536) | 258 |
Shareholders' comprehensive income (loss) | $ 758 | $ 582 | $ 1,957 | $ 2,229 |
Consolidated Statements of Tota
Consolidated Statements of Total Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Comprehensive Income | ||||
Shareholders' comprehensive income (loss) | $ 758 | $ 582 | $ 1,957 | $ 2,229 |
Comprehensive income (loss) attributable to noncontrolling interests: | ||||
Net income (loss) attributable to redeemable noncontrolling interests | 2 | 2 | 6 | (1) |
Net income (loss) attributable to other noncontrolling interests | 0 | 0 | 0 | (5) |
Other comprehensive income (loss) attributable to redeemable noncontrolling interests | (9) | 0 | (19) | 0 |
Total comprehensive income (loss) attributable to noncontrolling interests | (7) | 2 | (13) | (6) |
Total comprehensive income | $ 751 | $ 584 | $ 1,944 | $ 2,223 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed maturities, at fair value (amortized cost, $22,869; $21,867) | $ 23,268 | $ 23,138 |
Equity securities | 579 | 588 |
Commercial mortgage loans | 1,867 | 1,761 |
Policy loans | 1,421 | 1,415 |
Other long-term investments | 1,739 | 1,518 |
Short-term investments | 102 | 199 |
Total investments | 28,976 | 28,619 |
Cash and cash equivalents | 24,032 | 2,972 |
Premiums, accounts and notes receivable, net | 3,609 | 3,380 |
Reinsurance recoverables | 5,780 | 6,046 |
Deferred policy acquisition costs | 2,350 | 2,237 |
Property and equipment | 1,559 | 1,563 |
Deferred tax assets, net | 132 | 39 |
Goodwill | 6,129 | 6,164 |
Other assets, including other intangibles | 2,227 | 2,316 |
Separate account assets | 8,162 | 8,423 |
Total assets | 82,956 | 61,759 |
Liabilities: | ||
Contractholder deposit funds | 8,069 | 8,196 |
Future policy benefits | 9,652 | 10,040 |
Unpaid claims and claim expenses | 5,259 | 5,168 |
Global Health Care medical costs payable | 2,955 | 2,719 |
Unearned premiums | 683 | 724 |
Total insurance and contractholder liabilities | 26,618 | 26,847 |
Accounts payable, accrued expenses and other liabilities | 7,541 | 7,290 |
Short-term debt | 9 | 240 |
Long-term debt | 25,041 | 5,199 |
Separate account liabilities | 8,162 | 8,423 |
Total liabilities | 67,371 | 47,999 |
Contingencies - Note 16 | ||
Redeemable noncontrolling interests | 30 | 49 |
Shareholders' Equity | ||
Common stock (par value per share, $0.25; shares issued, 296; authorized, 600) | 74 | 74 |
Additional paid-in capital | 2,985 | 2,940 |
Accumulated other comprehensive income (loss) | (1,857) | (1,082) |
Retained earnings | 18,474 | 15,800 |
Less: treasury stock, at cost | (4,121) | (4,021) |
Total shareholders' equity | 15,555 | 13,711 |
Total liabilities and shareholders' equity | $ 82,956 | $ 61,759 |
Shareholders' Equity Per Share | $ 63.88 | $ 56.2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Fixed maturities, at amortized cost | $ 22,869 | $ 21,867 |
Common stock, par value per share | $ 0.25 | $ 0.25 |
Common stock shares issued | 296 | 296 |
Common stock shares authorized | 600 | 600 |
Consolidated Statements of Chan
Consolidated Statements 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] | Other noncontrolling interests [Member] | |
Total Equity, beginning of period (Previously Reported [Member]) at Dec. 31, 2016 | $ 13,727 | $ 13,723 | $ 74 | $ 2,892 | $ (1,382) | $ 13,855 | $ (1,716) | $ 4 | |
Total Equity, beginning of period (Restatement Adjustment [Member]) | [1] | (24) | (24) | (24) | |||||
Total Equity, beginning of period at Dec. 31, 2016 | 13,703 | 13,699 | 74 | 2,892 | (1,382) | 13,831 | (1,716) | 4 | |
Increase (Decrease) In Stockholders Equity [Roll Forward] | |||||||||
Effect of issuing stock for employee benefit plans | 194 | 194 | 40 | (226) | 380 | ||||
Other comprehensive income (loss) | 258 | 258 | 258 | ||||||
Net income (loss) | 1,966 | 1,971 | 1,971 | (5) | |||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | ||||||
Repurchase of common stock | (1,988) | (1,988) | (1,988) | ||||||
Other transactions impacting noncontrolling interest | (2) | (3) | (3) | 1 | |||||
Total Equity, end of period at Sep. 30, 2017 | 14,121 | 14,121 | 74 | 2,929 | (1,124) | 15,566 | (3,324) | 0 | |
Beginning Balance (Previously Reported [Member]) at Dec. 31, 2016 | 58 | ||||||||
Beginning Balance at Dec. 31, 2016 | 58 | ||||||||
Redeemable Noncontrolling Interests | |||||||||
Other comprehensive income (loss) | 0 | ||||||||
Net income (loss) | (1) | ||||||||
Other transactions impacting noncontrolling interest | (5) | ||||||||
Ending Balance at Sep. 30, 2017 | 52 | ||||||||
Total Equity, beginning of period (Previously Reported [Member]) at Jun. 30, 2017 | 14,547 | 14,546 | 74 | 2,922 | (1,146) | 15,102 | (2,406) | 1 | |
Total Equity, beginning of period (Restatement Adjustment [Member]) | [1] | (24) | (24) | (24) | |||||
Total Equity, beginning of period at Jun. 30, 2017 | 14,523 | 14,522 | 74 | 2,922 | (1,146) | 15,078 | (2,406) | 1 | |
Increase (Decrease) In Stockholders Equity [Roll Forward] | |||||||||
Effect of issuing stock for employee benefit plans | 63 | 63 | 7 | (72) | 128 | ||||
Other comprehensive income (loss) | 22 | 22 | 22 | ||||||
Net income (loss) | 560 | 560 | 560 | ||||||
Repurchase of common stock | (1,046) | (1,046) | (1,046) | ||||||
Other transactions impacting noncontrolling interest | (1) | 0 | (1) | ||||||
Total Equity, end of period at Sep. 30, 2017 | 14,121 | 14,121 | 74 | 2,929 | (1,124) | 15,566 | (3,324) | 0 | |
Beginning Balance (Previously Reported [Member]) at Jun. 30, 2017 | 58 | ||||||||
Beginning Balance at Jun. 30, 2017 | 58 | ||||||||
Redeemable Noncontrolling Interests | |||||||||
Net income (loss) | 2 | ||||||||
Other transactions impacting noncontrolling interest | (8) | ||||||||
Ending Balance at Sep. 30, 2017 | 52 | ||||||||
Total Equity, beginning of period at Dec. 31, 2017 | 13,711 | 13,711 | 74 | 2,940 | (1,082) | 15,800 | (4,021) | 0 | |
Increase (Decrease) In Stockholders Equity [Roll Forward] | |||||||||
Reclassification adjustment related to U.S. tax reform legislation | [1] | 0 | 0 | (229) | 229 | ||||
Effect of issuing stock for employee benefit plans | 114 | 114 | 45 | (106) | 175 | ||||
Other comprehensive income (loss) | (536) | (536) | (536) | ||||||
Net income (loss) | 2,493 | 2,493 | 2,493 | ||||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | ||||||
Repurchase of common stock | (275) | (275) | (275) | ||||||
Other transactions impacting noncontrolling interest | 0 | 0 | |||||||
Total Equity, end of period at Sep. 30, 2018 | 15,555 | 15,555 | 74 | 2,985 | (1,857) | 18,474 | (4,121) | 0 | |
Beginning Balance at Dec. 31, 2017 | 49 | ||||||||
Redeemable Noncontrolling Interests | |||||||||
Other comprehensive income (loss) | (19) | ||||||||
Net income (loss) | 6 | ||||||||
Other transactions impacting noncontrolling interest | (6) | ||||||||
Ending Balance at Sep. 30, 2018 | 30 | ||||||||
Total Equity, beginning of period at Jun. 30, 2018 | [1] | 14,743 | 14,743 | 74 | 2,974 | (1,843) | 17,722 | (4,184) | 0 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | |||||||||
Effect of issuing stock for employee benefit plans | 54 | 54 | 11 | (20) | 63 | ||||
Other comprehensive income (loss) | (14) | (14) | (14) | ||||||
Net income (loss) | 772 | 772 | 772 | ||||||
Other transactions impacting noncontrolling interest | 0 | 0 | |||||||
Total Equity, end of period at Sep. 30, 2018 | 15,555 | $ 15,555 | $ 74 | $ 2,985 | $ (1,857) | $ 18,474 | $ (4,121) | $ 0 | |
Beginning Balance at Jun. 30, 2018 | [1] | 39 | |||||||
Redeemable Noncontrolling Interests | |||||||||
Other comprehensive income (loss) | (9) | ||||||||
Net income (loss) | 2 | ||||||||
Other transactions impacting noncontrolling interest | (2) | ||||||||
Ending Balance at Sep. 30, 2018 | $ 30 | ||||||||
[1] | See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net Income | $ 2,499 | $ 1,965 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 438 | 425 |
Realized investment (gains) losses | 36 | (214) |
Deferred income taxes (benefits) | 17 | 62 |
Net changes in assets and liabilities, net of non-operating effects: | ||
Premiums, accounts and notes receivable | (243) | (190) |
Reinsurance recoverables | 100 | 144 |
Deferred policy acquisition costs | (195) | (209) |
Other assets | 339 | (156) |
Insurance liabilities | 408 | 988 |
Accounts payable, accrued expenses and other liabilities | 113 | 221 |
Current income taxes | 73 | 7 |
Debt extinguishment costs | 0 | 321 |
Distributions from partnership investments | 128 | 114 |
Other, net | (69) | 33 |
Net cash provided by (used in) operating activities | 3,644 | 3,511 |
Proceeds from investments sold: | ||
Fixed maturities and equity securities | 1,930 | 1,376 |
Investment maturities and repayments: | ||
Fixed maturities and equity securities | 1,394 | 1,444 |
Commercial mortgage loans | 181 | 253 |
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 588 | 1,486 |
Investments purchased or originated: | ||
Fixed maturities and equity securities | (4,461) | (4,292) |
Commercial mortgage loans | (288) | (272) |
Other (primarily short-term and other long-term investments) | (660) | (722) |
Property and equipment purchases | (346) | (340) |
Acquisitions, net of cash acquired | 0 | (33) |
Other, net | (12) | 0 |
Net cash provided by (used in) investing activities | (1,674) | (1,100) |
Cash Flows from Financing Activities | ||
Deposits and interest credited to contractholder deposit funds | 816 | 965 |
Withdrawals and benefit payments from contractholder deposit funds | (872) | (1,079) |
Net change in short-term debt | (109) | (16) |
Payments for debt extinguishment | 0 | (313) |
Repayment of long-term debt | (131) | (1,250) |
Net proceeds on issuance of long-term debt | 19,884 | 1,584 |
Repurchase of common stock | (310) | (1,961) |
Issuance of common stock | 41 | 111 |
Other, net | (204) | (9) |
Net cash provided by (used in) financing activities | 19,115 | (1,968) |
Effect of foreign currency rate changes on cash and cash equivalents | (25) | 28 |
Net increase / (decrease) in cash and cash equivalents | 21,060 | 471 |
Cash and cash equivalents, January 1, | 2,972 | 3,185 |
Cash and cash equivalents, September 30, | 24,032 | 3,656 |
Supplemental Disclosure of Cash Information: | ||
Income taxes paid, net of refunds | 767 | 812 |
Interest paid | $ 167 | $ 197 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2018 | |
Description Of Business [Abstract] | |
Description of Business | Note 1 – Description of Business 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 evolved strategy is to “Go Deeper”, “Go Local” and “Go Beyond” 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 such as governmental and non-governmental organizations, unions and associations. Cigna also offers commercial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverages to individuals in the United States and selected international markets. In addition to its ongoing operations described above, Cigna also has certain run-off operations. The 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 characterist ics, products and services and regulatory environment: The Commercial operating segment (“Commercial segment”) encompasses both the U.S. commercial and certain international health care businesses serving employers and their employees, other groups and in dividuals. Products and services include medical, dental, behavioral health, vision, prescription drug benefit plans, health advocacy programs and other products and services to insured and self-insured customers. The Government operating segment (“Gover nment 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 primarily in selected international markets and in the United States. Group Disability and Life provides group long-term and short-term disability and 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 guaranteed minimum death benefit (“ GMDB ”) and guaranteed minimum income benefit (“ GMIB ”) business effectively exited through reinsurance with Berkshir e Hathaway Life Insurance Company of Nebraska (“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 bu siness. 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, intersegment eliminations, compensation cost for stock options and related excess tax benefits, expense associated with frozen pension plans and certain litigation matters and costs for corporate projects, including overhead. |
Summary of Signficant Accountin
Summary of Signficant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2 – Significant Accounting Policies Basis of Presentation 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 Ame rica (“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 throughou t 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 c urrent presentation. These interim Consolidated Financial Statements 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 op erations for the periods reported. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s 2017 Annual Report on Form 10-K (“ 2017 Form 1 0-K”). The preparation of interim Consolidated Financial Statements 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 competitiv e and other market conditions, call for caution in estimating full- year results based on interim results of operations. Recent Accounting Pronouncements The Company’s 2017 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our finan cial statements in the future. The following tables provide information about recently adopted and recently issued or changed accounting guidance ( applicable to Cigna) that have occurred since the Company filed its 2017 Form 10-K. Recently Adopted Accounting Guidance Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments) Adopted as of January 1, 2018 Requires: • Revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services • Additional revenue-related disclosures Effects of adoption: • Applies to the Company’s service and mail order pharmacy contracts with customers • Adopted through full retrospective restatement • Cumulative effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2016 balance of retained earnings. Adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates. Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial. • Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation. The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer. Companies are required to identify and evaluate distinct performance obligations within their contracts. These clarifications resulted in reclassifications within the Global Health Care segment affecting premiums, fees and other revenues, Global Health Care medical costs, and other operating expenses and had no impact on recognition patterns or net income. • Prior period balances in the Company's footnote disclosures have been updated to reflect adjustments resulting from the adoption of this ASU. Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01 and related amendments) Adopted as of January 1, 2018 Requires entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method Effects of adoption: • Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018. Subsequent changes in fair value are reported in net investment income. • Changes in fair value for equity securities that have a readily determinable fair value that were previously reported in accumulated other comprehensive income are now reported in net realized investment gains. • Cumulative effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018. • See Notes 9 and 10 for updated disclosures about equity securities. Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Early adopted as of January 1, 2018 Guidance: • Relaxes requirements for financial and nonfinancial hedging strategies to be eligible for hedge accounting and changes how companies assess effectiveness • Amends presentation and disclosure requirements to improve transparency about the uses and results of hedging programs Effects of adoption: • An immaterial amount of retained earnings was reclassified to accumulated other comprehensive income, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges. • See Note 11 for the Company's disclosures about derivatives. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) Early adopted as of January 1, 2018 Guidance: • Allows companies to reclassify the tax effects stranded in accumulated other comprehensive income to retained earnings as a result of H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (referred to throughout this Form 10-Q as "U.S. tax reform" or "U.S. tax reform legislation") • Requires additional disclosures of the Company's accounting policy for releasing income tax effects from accumulated other comprehensive income • Allows companies to apply the guidance retrospectively or in the period of adoption Effects of adoption: Accumulated other comprehensive income of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 13 for additional information including accounting policy disclosures. In addition to the standards listed above, the Company adopted the following guidance in first quarter 2018 with no material impact to our financial statements: Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16) , Clarifying the Definition of a Business (ASU 2017-01) , Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) , Statement of Cash Flows: Restricted Cash (ASU 2016-18), Gains and Losses from the Derecognition of N onfinancial Assets (ASU 2017-05) and Stock Compensation Scope of Modification Accounting (ASU 2017-09) . Accounting Guidance Not Yet Adopted Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of Guidance Not Yet Adopted Leases (ASU 2016-02 and related amendments) Required as of January 1, 2019 Requires: • Balance sheet recognition of assets and liabilities arising from leases, including leases embedded in other contracts • Additional disclosures of the amount, timing and uncertainty of cash flows from leases • Modified retrospective approach for leases in effect as of and after the date of adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate the impact this standard will have on its financial statements. • While we continue to refine the estimated impact of this standard, the Company currently expects an increase to assets and liabilities of approximately $500 million. The actual increase in assets and liabilities will depend on the volume, terms and discount rates of leases in place at the time of adoption. • The Company plans to elect the optional practical expedient to retain the current classification of leases, and therefore, does not anticipate a material impact to the Consolidated Statements of Income or Cash Flows. • The Company is implementing a new lease system and also expects that adoption of the new standard will require changes to internal control over financial reporting. • The Company intends to adopt this new guidance as of the adoption date and will not present comparative periods in the financial statements, as recently allowed. Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) Required as of January 1, 2021 Requires (for insurance entities that issue long-duration contracts): • Cash flow assumptions used to measure the liability for future policy benefits for traditional and limited-pay contract to be reconsidered at least annually with any changes reflected in net income. • Discount rate assumptions to be reviewed quarterly (based on an upper-medium grade (low-credit-risk) fixed-income instrument yield that maximizes the use of observable market inputs) with any changes reflected in other comprehensive income. • Deferred policy acquisition costs to be amortized on a constant-level basis over the expected term of the related contract. • Fair value measurement of all market risk benefits. • Additional disclosures, including liability rollforwards and information about significant inputs, judgments, assumptions and methods used in measurement. • Transition methods at adoption vary. - Changes to the liability for future policy benefits will use a modified retrospective approach (applied to all contracts on the basis of their carrying amounts as of the beginning of the earliest period presented), with an option to elect a full retrospective transition under certain criteria. - Deferred policy acquisition costs are to be transitioned consistent with the method applied to the liability for future policyholder benefits. - Market risk benefits are required to transition using retrospective application. Expected effects: • The Company is evaluating the impact of this newly-issued guidance, but it is expected to have a significant impact on our processes, controls, systems and financial results. The new guidance will apply to insurance products predominantly sold in the Company's businesses other than the Global Health Care segment. Updates to Significant Accounting Policies The Company’s 2017 Form 10-K includes discussion of significant accounting policies in Note 2 or the applicable Notes to the Consolidated Financial Statements . Significant u pdates to these policies resulting from the adoption of new accounting guidance in 2018 are provided as follows: ASU 2016-01 (Recognition and Measurement of Financial Assets and Liabilities): see Notes 9 and 10 ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activ ities): see Note 11 ASU 2014-09 (Revenue from Contracts with Customers), also referred to as Financial Accounting Stand ards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and related guidance (“ASC 60 6”): see below The majority of the Company’s revenues are not subject to the guidance in ASC 606, including premiums from insurance contracts and fees for investment-related products accounted for under insurance guidance (ASC 944). ASC 606 a pplies to t he Company’s service and mail order pharmacy contracts with clients . See Note 17 for disaggregated revenue from external customers by segment and by major product or service identified with applicable accounting guidance (ASC 944 or ASC 606). Accou nting for Contracts with Customers – Service and Mail Order Pharmacy Arrangements Service Fees and Expenses The majority of the Company’s service fees are derived from administrative services only (“ASO”) arrangements that allow corporate clients to self-fund claims and assume the risk of medical or other benefit costs. Most of the Company’s ASO arrangements are for Global Health Care medical and specialty ser vices, including pharmacy benefits and, to a lesser extent, ASO services in its Group Disabi lity and Life and Global Supplemental Benefits segments. Generally, the Compa ny’s ASO arrangements are short- term. Contract modifications typically occur on renewal and are prospective in nature. In return for fees from these clients, the Company provid es or makes available various services supporting benefit management and claims administration. In addition, Global Health C are’s services include access to the Company’s participating provider networks, disease management, utilization management, and cos t containment services. In general, the Company considers these services to be a combined performance obligation to provide cost effective administration of plan benefits over the contract period. Fees are billed, due and recognized monthly at contract ed rates based on curre nt membership or utilization. This recognition pattern aligns with the benefits from services provided to clients. These revenues are reported in fees and other revenues in the Consol idated Statements of Income. For most ASO arran gements, the Company is required to perform services for a limited period after a client cancels. If these services will not be separately billed to the client as they are performed, the Company estimates and defers a portion of compensation attributable to this service obligation received in advance. Deferred revenue is recorded as a contract liability in accounts payable, accrued expenses and other liabilities and recognized when the related services are performed. The Company may also provide performa nce guarantees that result in refunds to clients only if certain service standards, clinical outcomes or financial metrics are not met. If these standards, outcomes and metrics are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accounts payable, accrued exp enses and other liabilities. The amount of revenue deferred is estimated for each type of guarantee, using either a most likely amount or expected value method depending upon the nature of the guarantee and the information available to estimate refunds. Estimates are refined each reporting period as additional infor mation on the Company’s performance becomes available, and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for performance guarantees during the reporti ng periods were not material. Service fees are recognized net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our network of retail pharmacies. Net rebates retained by the Company from pharmaceutical manufacturers resulting from ASO c lient utilization at retail pharmacies represent compensation for pharmacy services and are reflected as fee revenue. Rebates generally represent a per script amount from the manufacturer and are determined based on scripts filled during the reporting period. Expenses associated with administrative programs and services are recognized in other operating expenses as incurred. Mail Order Pharmacy Revenues and Costs Mail order pharmacy revenues are due and recognized as each prescription is shipped . Mail order pharmacy revenues are presented net of estimated pharmaceutical manufacturer rebates payable to ASO clients that use our mail order business . Rebates are generally determined based on actual prescriptions filled during the reporting period. Mail order pharmacy costs ar e recognized as each prescription is shipped and include the cost of prescriptions sold and other costs to operate this business (including supplies, shipping and handling), net of estimated pharmaceutical rebates from manufacturers for prescriptions fille d through our mail order business. Contract Balances The following table provides information about receivables and contract liabilities from service and mail order pharmacy contracts with clients. The allowance for doubtful accounts for receivables and the Company’s c ontract assets were not material as of the dates presented . (In millions) September 30, 2018 December 31, 2017 Receivables, net $ 898 $ 885 Contract liabilities $ 50 $ 54 Revenue recognized that was included in the contract liability balance at the beginning of the reporting period was not material for the three months and nine months ended September 30, 2018 and 2017 . The amount of revenue recognized from performance obligations satisfied in prior periods was not material for the three months and nine months ended September 30, 2018 and 2017 . The incremental costs of obtaining ASO and mail order pharmacy contracts (such as sales commissions) are expensed as incurred and the Company does not disclose information about remaining performance obligations for these contracts in accordance with elections made by the Company as they are generally short-term with original expected durations of one year or less. |
Mergers and Acquisitions
Mergers and Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Acquisitions and Dispositions [Abstract] | |
Acquisitions and Dispositions | Note 3 – Mergers and Acquisitions Proposed Acquisition of Express Scripts On March 8, 2018, the Company entered into an Agreement and Plan of Merger , as amended by Amendment No. 1, dated as of June 27, 2018 ( as amended, the “Merger Agreement”) with Express Scripts Holding Company (“Express Scripts”), Halfmoon Parent, Inc., a direct wholly owned subsidiary of the Company (“New Cigna”), Halfmoon I, Inc., a direct wholly owned subsidiary of New Cigna (“Cigna Merger Sub”), an d Halfmoon II, Inc., a direct wholly owned subsidiary of New Cigna (“Express Scripts Merger Sub”). Subject to the terms and conditions of the Merger Agreement, the Company will acquire Express Scripts in a cash and stock transaction through (1) the merger of Cigna Merger Sub with and into the Company, with the Company surviving as a direct wholly owned subsidiary of New Cigna and (2) the merger of Express Scripts Merger Sub with and into Express Scripts, with Express Scripts surviving as a direct wholly ow ned subsidiary of New Cigna (collectively, the “Merger”). New Cigna will be renamed “Cigna Corporation” immediately after the Merger. Upon completion of the Merger, Cigna stockholders will receive one share of New Cigna common stock in exchange for each share of Cigna common stock held immediately prior to the Merger, and Express Scripts stockholders will receive (1) 0.2434 of a share of New Cigna common stock and (2) the right to receive $48.75 in cash, without interest, subject to applicable withho lding taxes (the “ Merger Consideration ”), in exchange for each share of Express Scripts common stock held immediately prior to the Merger. Upon completion of the Merger, shares of New Cigna common stock are expected to be listed for trading on the New Yor k Stock Exchange. In August 2018, the stockholders of each of Cigna and Express Scripts gave the requisite stockholder approvals for the Merger. In September 2018, the Antitrust Division of the U.S. Department of Justice ( “ DOJ ” ) cleared the M erg er, terminating the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 . Completion of the Merger remains subject to certain state regulatory approvals and filings required in connection with the transaction, including clearances from certain departments of insurance, and the satisfaction or valid waiver of all closing conditions. The Merger is not subject to a financing condition. The Company intends to fund the cash portion of the Merger Consideration through a comb ination of cash on hand, assumed Express Scripts debt and new debt issuance. See Note 5 for additional information about the financing of the Merger. The Merger is expected to be completed by December 31, 2018. The Merger Agreement provides for certain termination rights and fees for both the Company and Express Scripts. If the Merger Agreement is terminated under certain circumstances and within 12 months after the date of such termination the Company enters into an agreement regarding a sale of a majo rity of the Company's assets or equity or consummates such a sale, then the Comp any will be required to pay a $1.6 billion termination fee to Express Scripts prior to or contemporaneously with such a transaction . Express Scripts has reciprocal obligations under specified circumstances to pay a $ 1.6 billion termination fee to the Company. Additionally, in the event that the Merger Agreement is terminated by either the Company or Express Scripts due to (1) a legal restraint rela ting to a regulatory law prohibiting consummation of the Merger having become final and non-appealable or (2) the Merger not having been consummated on or prior to December 8, 2018 (subject to an extension to June 8, 2019 if extended by the Company or Expr ess Scripts under certain circumstances); and, in the case of clause (2), at the time of such termination, all of the conditions to the Company's obligation to consummate the Merger have been satisfied or waived other than those that relate to the absence of a legal restraint relating to a regulatory law or the receipt of a regulatory approval, the Company may be required to pay Express Scripts a reverse termination fee of $ 2.1 billion. Other transactions In May 2018, the Company announced an agreement to acquire OnePath Life NZ Limited from ANZ Bank New Zealand Limited, a part of Australia and Ne w Zealand Banking Group Limited, for NZ$ 700 million (approximately $ 460 million as of September 30, 2018 ). The Company expects that the transaction will be completed no later than the first quarter of 2019, s ubject to final regulatory approval. Transaction-related costs The Company has incurred costs detailed in the table below in connection with the proposed acquisition of Express Scripts, the terminated merger with Anthem, Inc. (“Anthem”) and other transactions. These costs consisted primarily of fees for legal, advisory and other professional services, amortizatio n of the Bridge Facility fees in 2018 and interest expense on the debt issued to fund the Express Scripts merger net of investment income earned on the proceeds of the debt issuance. Three Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Interest expense on newly issued debt $ 33 $ 26 $ - $ - Net investment income on debt proceeds (13) (10) - - All other transaction-related costs 108 92 9 6 Transaction-related costs, net $ 128 $ 108 $ 9 $ 6 Nine Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Interest expense on newly issued debt $ 33 $ 26 $ - $ - Net investment income on debt proceeds (13) (10) - - All other transaction-related costs 298 251 88 67 Tax (benefit) - previously non-deductible costs - - - (59) Transaction-related costs, net $ 318 $ 267 $ 88 $ 8 In the second quarter of 2017, the Company recognized an incremental tax benefit of $ 59 million for costs that became deductible upon the termination of its merger agreement with Anthem. When the Express Scripts acquisition is consummated, a portion of the costs related to that acquisition will not be deductible for federal income tax purposes, as is currently reflected in the Company’s financial results. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 4 – E arnings P er S hare Basic and diluted earnings per share (“EPS”) w ere computed as follows: Three Months Ended September 30, 2018 September 30, 2017 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Shareholders' net income $ 772 $ 772 $ 560 $ 560 Shares Weighted average 242,577 242,577 249,242 249,242 Common stock equivalents 3,535 3,535 4,168 4,168 Total shares 242,577 3,535 246,112 249,242 4,168 253,410 EPS $ 3.18 $ (0.04) $ 3.14 $ 2.25 $ (0.04) $ 2.21 Nine Months Ended September 30, 2018 September 30, 2017 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Shareholders' net income $ 2,493 $ 2,493 $ 1,971 $ 1,971 Shares Weighted average 242,404 242,404 252,980 252,980 Common stock equivalents 3,343 3,343 4,078 4,078 Total shares 242,404 3,343 245,747 252,980 4,078 257,058 EPS $ 10.28 $ (0.14) $ 10.14 $ 7.79 $ (0.12) $ 7.67 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, 2018 and 2017 because their effect was anti-dilutive. Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Anti-dilutive options 0.9 - 0.9 1.2 The Company held approximately 52.6 million shares of common stock in Treasury as of September 30, 2018 , and 48.6 million shares as of September 30, 2017 . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 5 ― Deb t The outstanding amounts of debt and capital leases were as follows: September 30, December 31, (In millions) 2018 2017 Short-term Commercial paper $ - $ 100 Current maturities of long-term debt - 131 Other, including capital leases 9 9 Total short-term debt $ 9 $ 240 Long-term $250 million, 4.375% Notes due 2020 $ 247 $ 249 $300 million, 5.125% Notes due 2020 298 299 $1,000 million, Floating Rate Notes due 2020 996 - $1,750 million, 3.2% Notes due 2020 1,741 - $78 million, 6.37% Notes due 2021 78 78 $300 million, 4.5% Notes due 2021 296 299 $1,000 million, Floating Rate Notes due 2021 995 - $1,250 million, 3.4% Notes due 2021 1,244 - $750 million, 4% Notes due 2022 746 745 $100 million, 7.65% Notes due 2023 100 100 $17 million, 8.3% Notes due 2023 17 17 $700 million, Floating Rate Notes due 2023 696 - $3,100 million, 3.75% Notes due 2023 3,082 - $900 million, 3.25% Notes due 2025 895 894 $2,200 million, 4.125% Notes due 2025 2,185 - $600 million, 3.05% Notes due 2027 594 594 $259 million, 7.875% Debentures due 2027 259 258 $3,800 million, 4.375% Notes due 2028 3,771 - $45 million, 8.3% Step Down Notes due 2033 45 45 $191 million, 6.15% Notes due 2036 190 190 $2,200 million, 4.8% Notes due 2038 2,176 - $121 million, 5.875% Notes due 2041 119 119 $317 million, 5.375% Notes due 2042 315 315 $1,000 million, 3.875% Notes due 2047 988 988 $3,000 million, 4.9% Notes due 2048 2,961 - Other, including capital leases 7 9 Total long-term debt $ 25,041 $ 5,199 Notes. In September 2018, New Cigna issued $20.0 billion of senior unsecured notes at maturities ranging from 18 months to 30 years (the “Notes”). The various tranches of the Notes are included in the table above and can be identified as those having no balance at December 31, 2017. Of the Notes issued, the Company would be required to redeem $17 billion at a redemption price equal to 101% of the principal amount plus accrued interest if the Merger does not close. The proceeds of these mandatory redeem able notes and a portion of the proceeds of the notes due 2048, both of which reported in cash and cash equivalents, are restricted in order to redeem the debt if necessary. The proceeds of all the notes are intended to be used to pay a portion of the cas h consideration for the Merger, to repay certain indebtedness of Express Scripts and its subsidiaries and/or to pay related fees and expenses. Proceeds not required for these purposes may be used by New Cigna for general corporate purposes. Interest is p ayable semi-annually in the case of the fixed rate notes and quarterly in the case of the floating rate notes. F ollowing closing of the Merger , the n otes will be guaranteed by the Company and Express Scripts Holding Company (collectively “the Guarantors” ), and guarantees will terminate when certain conditions are met, primarily when the debt issued by the Guarantors is collectively less than 20% of the debt issued by New Cigna and its subsidiaries in the aggregate . Bridge Facility . In March 2018, in connection with the proposed Merger, the Company and New Cigna entered into a commitment letter (the “Commitment Letter”) with Morgan Stanley Senior Funding, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and 21 additional banks, to provide a $26.7 billion 364-day senior unsecured bridge facility (the “Bridge Facility”) . The Bridge Facility commitment has been reduced to $3.9 billio n as of September 30, 2018 after issuing the Notes in the third quarter of 2018 (described above) and entering into the Term Loan Credit Agreement (described below). The Bridge Facility commitment may be used to finance the Merger, repay certain existing Express Scripts debt or pay related fees and expenses. T he Bridge Facility contain s customary covenants and restrictions, including a financial covenant that the Company or New Cigna may not permit its leverage ratio – which is the ratio of total consolid ated debt to total consolidated capitalization – to be greater than 60 % . These covenants and restrictions will apply only if New Cigna draws upon the Bridge Facility at closing. The Bridge Facility expires at the Merger closing if not drawn upon. The Co mpany accrued approximately $140 million in fees upon entering into the Commitment Letter. The Company paid $ 111 million during the nine months ended September 30, 2018 and expects to pay the remainder of the fees over the balance of 2018. The fees were capitalized in ot her assets and are be ing amortized to operating expenses over the period the Bridge Facility is outstanding. The Company recorded amortization of the Bridge Facility fees of $50 million during the three months and $135 million during the nine months ended September 30, 2018 . Revolving Credit Agreement. On April 6, 2018, in connection with the proposed Merger, the Company and New Cigna entered into the Revolving Credit and Letter of Credit Agreement (the “Rev olving Credit Agreement”) that matures on April 6, 2023 and is diversified among 23 banks. Prior to the Merger, the Company can borrow up to $1.5 billion for general corporate purposes, of which up to $500 million is available for the issuance of letters of credit. On and after the Merger, New Cigna can borrow up to $3.25 billion for general corporate purposes, of which up to $500 million is available for the issuance of letters of credit. The Revolving Credit Agreement also includes an option to increase the facility amount by up to $500 million and an option to extend the termination date for additional one year periods, subject to the consent of the banks. The Revolving Credit Agreement contains customary covenants and restrictions, including a financial covenant that the Company or New Cigna may not permit it s leverage ratio to be greater than 50% prior to the Merger or 60% after the Merger. Prior to the Merger, the debt issued in the third quarter of 2018 is excluded from determining the leverage ratio. Term Loan Credit Agreement. On April 6, 2018, the Co mpany and New Cigna entered into a Term Loan Credit Agreement (the “Ter m Loan Credit Agreement”) that is diversified among 26 banks. The Term Loan Credit Agreement provides for a three-year unsecured term loan facility in aggregate principal amount of $3. 0 billion, which will be available to finance the Merger, repay certain existing indebtedness of Express Scripts, and pay fees and expenses in connection with the Merger. The Term Loan Credit Agreement contains customary covenants and restrictions, incl uding a fina ncial covenant that the Company or , after the Merger, New Cigna may not permit its leverage ratio to be greater than 60%. Prior to the Merger, the Company is the borrower under the Bridge Facility, the Revolving Credit Agreement and the Term Loan Credit Agreement. On and after the Merger, New Cigna will be the borrower un der each of these agreements. In certain circumstances, cert ain subsidiaries of the Company or , after the Merger, New Cigna will be required to guarantee each other’s obliga tions under the Bridge Facility, the Term Loan Credit Agreement and the Revolving Credit Agreement. The Company was in compliance with its debt covenants as of September 30, 2018 . In the third quarter of 2017, the Company completed a cash tender offer to purchase $1.0 billion of aggregate principal amount of certain of its outstanding debt securities. The Company recorded a pre-tax loss of $321 million ($209 million after-tax), consisting primarily of premium payments on the tender. |
Global Health Care Medical Cost
Global Health Care Medical Costs Payable | 9 Months Ended |
Sep. 30, 2018 | |
Global Health Benefits Segment [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Global Health Care Medical Costs Payable | N ote 6 — 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 reported , including expected development on reported claims , 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. See Note 7 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability. Activity in medical cos ts payable was as follows: Nine Months Ended September 30, September 30, (In millions) 2018 2017 Beginning balance $ 2,719 $ 2,532 Less: Reinsurance and other amounts recoverable 265 275 Beginning balance, net 2,454 2,257 Incurred costs related to: Current year 16,287 14,952 Prior years (189) (268) Total incurred 16,098 14,684 Paid costs related to: Current year 13,915 12,689 Prior years 1,925 1,730 Total paid 15,840 14,419 Ending balance, net 2,712 2,522 Add: Reinsurance and other amounts recoverable 243 261 Ending balance $ 2,955 $ 2,783 Reinsurance and other amounts recoverable in the above table includes amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business for which the Company administers the plan benefits but the right of offset does not exist. See Note 8 for additional information on reinsurance. The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 2.8 b illion at September 30, 2018 and $ 2.6 billion at September 30, 2017 . The remaining balance in both periods reflects amounts due for physician incentives and other medical care expenses and services payable. For the periods ended September 30, incurred costs rel ated to prior years were attributable to the following factors: Nine Months Ended (Dollars in millions) September 30, 2018 September 30, 2017 $ % (1) $ % (2) Actual completion factors $ 114 0.6 % $ 128 0.7 % Medical cost trend 66 0.3 131 0.7 Other 9 - 9 - Total favorable (unfavorable) variance $ 189 0.9 % $ 268 1.4 % (1) Percentage of current year incurred costs as reported for the year ended December 31, 2017. (2) Percentage of current year incurred costs as reported for the year ended December 31, 2016. Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income . The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established 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. Favorable p rior year development increased shareholders’ net income by $ 85 million for the nine months ended September 30, 2018 compared with $116 million for the nine months ended September 30, 2017 . T his development was attributed to both medical cost tre nd and completion factors resulting from lower than expected utilization of medical services in both periods . |
Liabilities for Unpaid Claims a
Liabilities for Unpaid Claims and Claims Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for Unpaid Claims and Claims Expenses | N ote 7 ― Liabilities for Unpaid Claims and Claim Expenses The following information relates to unpaid claims and claim expense liabilities for short-duration insurance contracts other than those sold by the Global Health Care segment . See Note 8 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability. The liability for unpaid claims and claim expenses by segment as of September 30 is as follow s: (In millions) September 30, 2018 September 30, 2017 Group Disability and Life $ 4,584 $ 4,442 Global Supplemental Benefits 496 453 Other Operations 179 182 Unpaid claims and claim expenses $ 5,259 $ 5,077 Activity in the Group Disability and Life and the Global Supplemental Benefits segments’ liabilities for unpaid claims and claim expenses is presented in the following table. Liabilities associated with Other Operations are excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fully reinsured. Nine Months Ended (In millions) September 30, 2018 September 30, 2017 Beginning balance $ 4,975 $ 4,726 Less: Reinsurance 137 121 Beginning balance, net 4,838 4,605 Incurred claims related to: Current year 3,590 3,290 Prior years: Interest accretion 115 119 All other incurred (130) (59) Total incurred 3,575 3,350 Paid claims related to: Current year 2,060 1,880 Prior years 1,390 1,327 Total paid 3,450 3,207 Foreign currency (16) 13 Ending balance, net 4,947 4,761 Add: Reinsurance 133 134 Ending balance $ 5,080 $ 4,895 Reinsurance in the table above reflect s amounts due from reinsurers related to unpaid claims liabilities. The Company's insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses. See Note 8 for additional information on reinsurance. The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part o f pricing and reserving . Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims. This i nterest is calculated by applying the average discount rate used in determining the liability balance to th e average liability balance over the period. The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectat ions reflected in determining the liability. Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business and variations in mortality and morbidity being the most significant factors for other business . Favorable prior year i ncurred claims reported for the nine months ended September 30, 2018 largely reflect fa vorable long-term disability loss ratio experience relative to expectations. Favorable prior year i ncurred claims reported for the nine months ended September 30, 2017 largely reflect improved long-term disability resolution rate experience relative to expectations . |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2018 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | N ote 8 ― 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 and disposition transactions when the underwriting company is not being acquired. Because r einsurance does not relieve the originating insurer of liability , such liabilities must contin ue to be reported along with the related reinsurance recoverables. The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk. Reinsurance Recoverables The majority of the Company’s reinsuran ce recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. 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) 2018 2017 at September 30, 2018 Ongoing operations Global Health Care, Global Supplemental Benefits, Group Disability and Life, COLI Various $ 439 $ 454 Recoverables from approximately 80 reinsurers, used in the ordinary course of business. Current balances range from less than $1 million up to $70 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor's, and 13% is secured by assets in trusts or letters of credit. Total recoverables related to ongoing operations 439 454 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,319 3,436 Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance. GMDB Berkshire 864 928 100% secured by assets in a trust. Other 31 34 100% secured by assets in a trust or letters of credit. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 806 850 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 265 283 100% secured by assets in a trust. Other run-off reinsurance Various 56 61 100% secured by assets in trusts. Total recoverables related to acquisition, disposition or runoff activities 5,341 5,592 Total reinsurance recoverables $ 5,780 $ 6,046 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. The Company reviews its reinsurance arrangements and establishes reserves against the recoverables if recovery is not considered probable. 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 (In millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Ceded premiums Individual life insurance and annuity business sold $ 32 $ 33 $ 103 $ 105 Other 81 70 277 205 Total ceded premiums $ 113 $ 103 $ 380 $ 310 Reinsurance recoveries Individual life insurance and annuity business sold $ 70 $ 62 $ 183 $ 198 Other 70 33 117 79 Total reinsurance recoveries $ 140 $ 95 $ 300 $ 277 Effective Exit of GMDB and GMIB Business In 2013, the Company entered into an agreement with Berkshire to effectively exit the GMDB and GMIB business via a reinsurance transaction. Berkshire reinsured 100 % of the Company's future claim payments of this business, net of other reinsurance arrangements existing at that time. The Berkshire reinsurance agreement is subject to an overall limit with approximately $ 3.4 billion remaining as of September 30, 2018 . GMDB is acc ounted for as reinsurance and GMIB assets and liabilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other assets, including intangibles, and GMIB liabilities are reported in accounts payable, accrued expense s and other liabilities. GMDB The Company estimates th e gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over an extended period, consistent with the long-term nature of this pro duct. 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 presented be low ). The following table presents the account value, net amount at risk and number of underlying contractholders for guarantees assumed by the Company in the event of death. 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 reinsurance limit i s exceeded, the Company should be reimbursed in full for these payments . (Dollars in millions, excludes impact of reinsurance ceded) September 30, 2018 December 31, 2017 Account value $ 9,666 $ 10,109 Net amount at risk $ 1,962 $ 2,112 Number of contractholders 225,000 245,000 GMIB In this business, the Company reinsured contracts with issuers of GMIB products. The Company’s exposure represents the excess of a contractually guaranteed amount over the level of variable annuity account values. 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 that must occur within 30 days of a policy anniversary after the appropriate waiting period. The Com pany has purchased retrocessional coverage (“GMIB assets”) for these contracts. 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 intere st rates, but are without significant life insurance risk and are settled in lump sum payments. As of September 30, 2018 and December 31, 2017 , there were three reinsurers for GMIB as follow s: (In millions) September 30, December 31, Collateral and Other Terms Line of Business Reinsurer 2018 2017 at September 30, 2018 GMIB Berkshire $ 299 $ 359 100% secured by assets in a trust. Sun Life Assurance Company of Canada 177 221 Liberty Re (Bermuda) Ltd. 160 197 100% secured by assets in a trust. Total GMIB recoverables reported in other assets $ 636 $ 777 Assumptions used in fair value measurement. GMIB assets and liabilities are established using capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). As assumptions related to future annuitant behavior are largely unobservable , the Company classifies GMIB assets and liabilities in Level 3 in the f air value hierarchy presented in Note 9 . The only assumption expected to impact the Company’s future shareholders’ net income is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an addit ional spread to the discount rate in the fair value calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The Company regularly evaluates each of the ass umptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calcul ate the non-performance risk of the reinsurers, 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 guarantees. Future payments are not fixed and d eterminable under the terms of these contracts. Accordingly, the Company calculated the exposure, without considering any reinsurance 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 (2018 through 2022); and all underlying mutual fund investment values remained at the September 30, 2018 value of $ 786 million with no future returns. Th e Company has reinsurance coverage in place that covers the exposures on these contracts. Using these hypothetical assumptions, the GMIB exposure of $ 514 million is lower than the recorded liability for GMIB calculated using fair value assump tions. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | N ote 9 ― Fair Value Measurements The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, certain 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 c reditor. 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 sig nificant 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 t hat 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 s imilar 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 as sumptions 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 instrumen ts or pricing models. The Company is responsible for determining fair value, as well as for assigning the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes an d 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 for a sample of securities held across various asset types to validate the documented prici ng process. Financial Assets and Financial Liabilities Carried at Fair Value The following table provides information as of September 30, 2018 and December 31, 2017 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 in the Separate Accounts section as gains and losses related to these assets generally accrue directly to policyholders. (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total As of September 30, 2018 As of December 31, 2017 As of September 30, 2018 As of December 31, 2017 As of September 30, 2018 As of December 31, 2017 As of September 30, 2018 As of December 31, 2017 Financial assets at fair value Fixed maturities Federal government and agency $ 246 $ 253 $ 501 $ 526 $ - $ - $ 747 $ 779 State and local government - - 990 1,287 - - 990 1,287 Foreign government - - 2,485 2,442 6 45 2,491 2,487 Corporate - - 18,214 17,658 288 430 18,502 18,088 Mortgage and other asset-backed - - 397 343 141 154 538 497 Total fixed maturities 246 253 22,587 22,256 435 629 23,268 23,138 Equity securities (1) 392 412 66 73 33 103 491 588 Subtotal 638 665 22,653 22,329 468 732 23,759 23,726 Short-term investments - - 102 199 - - 102 199 GMIB assets - - - - 636 777 636 777 Other derivative assets - - 24 2 - - 24 2 Total financial assets at fair value, excluding separate accounts and real estate funds $ 638 $ 665 $ 22,779 $ 22,530 $ 1,104 $ 1,509 $ 24,521 $ 24,704 Real estate funds priced at NAV as a practical expedient (2) 244 N/A Financial liabilities at fair value GMIB liabilities $ - $ - $ - $ - $ 613 $ 762 $ 613 $ 762 Other derivative liabilities - - 21 25 - - 21 25 Total financial liabilities at fair value, excluding separate accounts $ - $ - $ 21 $ 25 $ 613 $ 762 $ 634 $ 787 (1) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). As of December 31, 2017, private equity securities of $70 million were included in the Level 3 amount. See Note 10 for additional information on this accounting policy change. (2) Beginning in 2018 upon adopting ASU 2016-01, certain real estate funds are carried at fair value (previously carried at cost) based on the Company's ownership share of the equity of the investee (Net Asset Value ("NAV") as a practical expedient) including changes in the fair value of its underlying investments. The funds have a quarterly redemption frequency, a 45-90 day redemption notice period and $68 million in unfunded commitments as of September 30, 2018. See Note 10 for additional information on this accounting policy change. Prior periods are designated as not applicable ("N/A") in this table. 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 95 % of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and hybrid 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 valuation methods often use recent trades of securities with similar fe atures 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 y ields, 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 attr ibutes, 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 represents foreign bonds that are valued using a singl e 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 pric es 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 i nterest 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 arrang ements with counterparties and determined that no adjustment for credit risk was required as of September 30, 2018 or December 31, 2017 . The nature and use of these other derivatives are described in Note 11 . Level 3 Financial Assets and Financial Liabilities C ertain 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, i n Level 3. A pproximately 2 % of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category . Fair values of mortgage and other asset-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 mortgage and other asset-backed securities, inputs and assumptions for pricing may a lso 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 the issuer’s financial state ments. Quantitative Information about Unobservable Inputs The following table summarizes the fair value and significant unobservable inputs used in pricing the following securities that were developed directly by the Company as of September 30, 2018 and December 31, 2017 . The range and weighted average basis point amounts (“bps”) for liquidity and credit 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 mar ket participant would make to calculate the se fair values. Mortgage and o ther asset-backed securities . The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spre ads. When there is limited trading activity for the security, an 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 pro portional cash flows supporting the bond obligations. Corporate and government fixed maturities. The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is lim ited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances. Private equity securities. The significant unobservable input use d to value the following private 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 ci rcumstances and relative risk characteristics. Hybrid e quit y securit ies. The significant unobservable input used to value the following hybrid equity securities is an adjustment for liquidity due to limited trading activity. These cumulative preferred s hares are deemed likely to exercise certain call options and the Company estimates an adjustment used to discount cash flows based on current market conditions and issuer circumstances . Fair Value as of Unobservable Input Unobservable Adjustment Range (Weighted Average) as of (Fair value in millions ) September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Fixed maturities Mortgage and other asset-backed $ 141 $ 154 Liquidity 60 - 370 (80) bps 60 - 370 (90) bps securities Weighting of credit spreads 180 - 310 (240) bps 180 - 290 (230) bps Corporate and government fixed maturities 275 446 Liquidity 70 - 930 (250) bps 70 - 1,650 (300) bps Total fixed maturities 416 600 Equity securities Private equity securities (1) N/A 70 Price-to-EBITDA multiples N/A 5.0 - 12.0 (8.9) Hybrid equity securities 33 33 Liquidity 240 bps (3) 270 bps (3) Total equity securities 33 103 Subtotal 449 703 Securities not priced by the Company (2) 19 29 Total Level 3 securities $ 468 $ 732 (1) Beginning in 2018, private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). Current periods are designated as N/A in this table. (2) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. (3) The range and weighted average is equivalent for this security type. Significant increases in liquidity or credit spreads would result in lower fair value measurement s while decreases in these inputs would result in higher fair value measurement s . Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements. 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. See discussion in Note 8 . Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value T he following table summarize s the changes in financial assets and financial liabilities classified in Level 3 for the three months and nine months ended September 30, 2018 and 2017 . Separate account asset changes are reported separately in the Separate Accounts section as the changes in fair values of these assets generally accrue directly to the policyholders. 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, (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities 2018 2017 2018 2017 2018 2017 Balance at July 1, $ 528 $ 751 $ 684 $ 777 $ (653) $ (764) Gains (losses) included in shareholders' net income GMIB fair value gain/(loss) - - (39) 40 39 (40) Other - (2) 2 (1) (10) 6 Total gains (losses) included in shareholders' net income - (2) (37) 39 29 (34) Gains (losses) included in other comprehensive income 2 (9) - - - - Losses required to adjust future policy benefits for settlement annuities (1) (2) (2) - - - - Purchases, sales, settlements Purchases 3 37 - - - - Sales - (3) - - - - Settlements (14) (30) (11) (18) 11 18 Total purchases, sales and settlements (11) 4 (11) (18) 11 18 Transfers into/(out of) Level 3 Transfers into Level 3 24 178 - - - - Transfers out of Level 3 (73) (116) - - - - Total transfers into/(out of) Level 3 (49) 62 - - - - Balance at September 30, $ 468 $ 804 $ 636 $ 798 $ (613) $ (780) Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (1) $ 1 $ (37) $ 39 $ 29 $ (34) For the Nine Months Ended September 30, (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities 2018 2017 2018 2017 2018 2017 Balance at January 1, $ 732 $ 776 $ 777 $ 799 $ (762) $ (780) Gains (losses) included in shareholders' net income GMIB fair value gain (loss) - - (106) 44 108 (44) Other (21) 22 - - 1 (1) Total gains (losses) included in shareholders' net income (21) 22 (106) 44 109 (45) Losses included in other comprehensive income (8) (12) - - - - Gains (losses) required to adjust future policy benefits for settlement annuities (1) (8) 7 - - - - Purchases, sales, settlements Purchases 19 127 - - - - Sales (11) (73) - - - - Settlements (29) (69) (35) (45) 40 45 Total purchases, sales and settlements (21) (15) (35) (45) 40 45 Transfers into/(out of) Level 3 Transfers into Level 3 44 254 - - - - Transfers out of Level 3 (2) (250) (228) - - - - Total transfers into/(out of) Level 3 (206) 26 - - - - Balance at September 30, $ 468 $ 804 $ 636 $ 798 $ (613) $ (780) Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (9) $ - $ (106) $ 44 $ 109 $ (45) (1) Amounts do not accrue to shareholders. (2) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). Private equity securities of $70 million as of December 31, 2017 are included in the September 30, 2018 Transfers out of Level 3 amount. As noted in the preceding tables, 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; and Other operating expenses for amounts related to GMIB assets and liabiliti es (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 Consoli dated Statements of Comprehensive Income. 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 les s significant to the fair value measurement. During 2018 and 2017 , transfers between Level 2 and Level 3 primarily reflect ed changes in liquidity and credit risk estimates for certain private placement issuers across several sectors including foreign government , capital goods, consumer products , electric , energy, meta ls, mining, and transportation . As noted above, transfers out of Level 3 during 2018 also include $70 million of private equity securities that are no longer carried at fair value. Separate Accounts 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. See Note 10 to the Consolidated Financial Statements contained in the Company’s 2017 Form 10-K for additional policy information related to separate accounts. As of September 30, 2018 and December 31, 2017 , 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 December September December September December September December 30, 31, 30, 31, 30, 31, 30, 31, 2018 2017 2018 2017 2018 2017 2018 2017 Guaranteed separate accounts (see Note 16) $ 206 $ 215 $ 276 $ 308 $ - $ - $ 482 $ 523 Non-guaranteed separate accounts (1) 1,335 1,536 5,353 5,298 257 292 6,945 7,126 Subtotal $ 1,541 $ 1,751 $ 5,629 $ 5,606 $ 257 $ 292 7,427 7,649 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 735 774 Total separate account assets $ 8,162 $ 8,423 (1) Non-guaranteed separate accounts included $3.9 billion in assets supporting the Company's pension plans as of September 30, 2018 and December 31, 2017, including $0.2 billion classified in Level 3 as of September 30, 2018 and $0.3 billion classified in Level 3 as of December 31, 2017. 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. Separate account assets classified in Level 3 primarily support Cigna's pension plans, and include certain newly issued, privatel y-placed, complex, or illiquid securities that are priced using methods discussed above , as well as commercial mortgage loans. The following tables summarize the changes in separate account assets reported in Level 3 for the periods ending September 30 . Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Balance, beginning of period $ 256 $ 316 $ 292 $ 331 Policyholder (losses) gains (1) (1) 42 36 Purchases, sales and settlements Purchases 8 9 20 26 Sales (1) - (73) (52) Settlements (9) (12) (21) (13) Total purchases, sales and settlements (2) (3) (74) (39) Transfers into (out of) Level 3 Transfers into Level 3 12 4 12 5 Transfers out of Level 3 (8) (16) (15) (33) Total transfers into (out of) Level 3 4 (12) (3) (28) Balance, end of period $ 257 $ 300 $ 257 $ 300 Separate account investments 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. Substantially all of these assets support the Cigna Pension Plans. The table below provides additional information on these investments. Fair Value as of Unfunded Commitments as of September 30, 2018 (In millions) September 30, 2018 December 31, 2017 Redemption Frequency (if currently eligible) Redemption Notice Period Securities Partnerships $ 472 $ 458 $ 302 Not applicable Not applicable Real Estate Funds 244 239 - Quarterly 30-90 days Hedge Funds 19 77 - Up to Annually, varying by fund 30-90 days Total $ 735 $ 774 $ 302 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 when they become impaired in cluding real estate, partnership entities, c ommercial mortgage loans , and certain equity securities with no readily determinable fair value . There were no such impaired investments written down to fair value during the nine months ended September 30, 2018 . Impaired values for these asset types representing less than 1 % of total investments, were written down to their fair values, resulting in immaterial realized losses during the nine months ended September 30, 2017 . 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, 2018 and December 31, 2017 . 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, 2018 December 31, 2017 (In millions) Classification in the Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,819 $ 1,867 $ 1,766 $ 1,761 Long-term debt, including current maturities, excluding capital leases Level 2 $ 25,153 $ 25,034 $ 5,730 $ 5,321 Fair values of off-balance sheet fina ncial instruments were not material as of September 30, 2018 and December 31, 2017 . |
Investments
Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments: | |
Investments | Note 10 — Investments Cigna's investment portfolio consists of a broad range of investments including fixed maturities and equity securities, commercial mortgage loans, other long-term investments and short-term investments. The sections below provide more detail regarding our investment balances, net investment income and realized investment gains and losses. See Note 9 for information about the valuation of the Company’s investment portfolio. See Note 11 to the Consolidated Financial Statements contained in the Company’s 2017 Form 10-K for accounting policies for each investment type . Updates to these policies resulting from the adoption of new accounting guidance in 2018 are provided below. Investment Portfolio Fixed Maturiti es The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at September 30, 2018 : Amortized Fair (In millions) Cost Value Due in one year or less $ 1,650 $ 1,656 Due after one year through five years 6,364 6,446 Due after five years through ten years 10,363 10,154 Due after ten years 3,960 4,474 Mortgage and other asset-backed securities 532 538 Total fixed maturities $ 22,869 $ 23,268 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 appreciation (depreciation) on fi xed maturities by type of issuer is shown below. Gross Gross Unrealized Unrealized Amortized Appre- Depre- Fair (In millions) Cost ciation ciation Value As of September 30, 2018 Federal government and agency $ 558 $ 194 $ (5) $ 747 State and local government 934 59 (3) 990 Foreign government 2,369 136 (14) 2,491 Corporate 18,476 421 (395) 18,502 Mortgage and other asset-backed 532 16 (10) 538 Total fixed maturities $ 22,869 $ 826 $ (427) $ 23,268 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,266 $ 471 $ (27) $ 2,710 As of December 31, 2017 Federal government and agency $ 541 $ 239 $ (1) $ 779 State and local government 1,196 93 (2) 1,287 Foreign government 2,360 142 (15) 2,487 Corporate 17,301 868 (81) 18,088 Mortgage and other asset-backed 469 29 (1) 497 Total fixed maturities $ 21,867 $ 1,371 $ (100) $ 23,138 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,200 $ 681 $ (2) $ 2,879 (1) Net unrealized appreciation for these investments is excluded from 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. Based on this review, management believes the unrealized depreciation below to be temporary, and therefore has not impaired these amounts. The table below summarizes fixed maturities in an unrealized loss position at September 30, 2018 and December 31, 2017 by the length of time these securities have been in an unrealized loss position. These fixe d maturities were primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase. September 30, 2018 December 31, 2017 Fair Amortized Unrealized Number Fair Amortized Unrealized Number (Dollars in millions) Value Cost Depreciation of Issues Value Cost Depreciation of Issues One year or less Investment grade $ 9,018 $ 9,281 $ (263) 1,936 $ 3,272 $ 3,309 $ (37) 797 Below investment grade $ 878 $ 900 $ (22) 959 $ 543 $ 553 $ (10) 643 More than one year Investment grade $ 2,365 $ 2,496 $ (131) 630 $ 1,503 $ 1,549 $ (46) 373 Below investment grade $ 185 $ 196 $ (11) 122 $ 155 $ 162 $ (7) 42 Equity Securities Accounting policy. Beginning in 2018, upon adopting ASU 2016-01 changes in the fair values of equity securities that have a readily determinable fair value (primarily exchange-traded funds) are reported in other realized investment gains (losses). As of September 30, 2018 , the fair values of these securities were $ 443 million and cost was $ 452 million. Also beginning in 2018, private equity securities of $ 88 million as of September 30, 2018 , that do not have a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The amount of impairments or value changes resulting from observable price changes was not material. Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair val ue with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. As of September 30, 2018 , fair values of these securities were $ 48 million and cost was $ 63 million, comp ared with fair value of $ 49 million and cost of $ 61 million as of December 31, 2017. 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 per iod. 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 evalu ates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Q uality rating s are based on our evaluation of a number of key inputs related to the loan including real estat e 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 cover age 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 summarize s 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, 2018 and December 31, 2017 : (Dollars in millions) As of September 30, 2018 As of December 31, 2017 Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Below 60% $ 1,141 2.12 $ 1,109 2.03 60% to 79% 650 1.93 652 2.24 80% to 100% 76 1.49 - - Total $ 1,867 2.03 58% $ 1,761 2.11 57% 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 8 and included an analysis of each underlying property’s December 31, 2017 annual financial statements, rent rolls, operating plans and budgets for 2018, 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 for each loan. Based on property values and cash flows estimated as part of this r eview, and considering updates for loans where material changes were subsequently identified, the average loan to value ratio at September 30, 2018 is generally consistent with last year and remains very strong. The portfolio’s average debt service coverage ratio decr eased slightly at September 30, 2018 compared with December 31, 2017 due to loans transitioning from interest only to amortizing payments. The Company will reevaluate a loan’s credit quality between annual reviews if new property information is received or an even t 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. Impaired commercial mortgage lo ans. 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. Th e 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 because it is less than the fair value of the underlying real estate. The Company recognizes interest income on impaired mortgage loans only w hen payment is actually received. As of September 30, 2018 and December 31, 2017 , there were no impaired commercial mortgage loans. Other Long-Term Investments Accounting policy. Other long-term investments include investments in unconsolidated entities. These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence. Upon adopting ASU 2016-01 beginning in 2018, the investments are carried at fair value using NAV as a practical expedient in cases when the Company does not have significan t influence . Short-Term Investments and Cash Equivalents A significant portion of the $19.9 billion of proceeds from the recent debt issuance referred to in Note 5 is included in cash equivalents. Credit quality or maturity date restrictions were placed on the investment of this portion of the proceeds as required by the debt issuance. In compliance with these restrictions, $ 16 billion was invested in cash equivalents including money market funds a nd Federal government securities as of September 30, 2018. The remaining proceeds are invested in interest-bearing cash accounts. Total short-term investments and cash equivalents included the following types of issuers: September 30, December 31, (In millions) 2018 2017 Corporate securities $ 2,621 $ 1,143 Federal government securities $ 6,495 $ 604 Foreign government securities $ 98 $ 159 Money market funds $ 10,015 $ 12 Realized Investment Gains and Losses Realized investment gains and losses are based on specifically identified assets and result from sales, investment asset write-downs, changes in the fair values of certain derivatives and equity securities and changes in valuation reserves on commercial mortgage loans. 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) 2018 2017 2018 2017 Fixed maturities $ 1 $ 20 $ (45) $ 36 Equity securities - 6 (26) 40 Commercial mortgage loans - - - (1) Other investments, including derivatives (1) 91 35 139 Realized investment gains (losses) before income taxes - 117 (36) 214 Less income tax (benefit) expense (2) 42 (13) 74 Net realized investment gains (losses) $ 2 $ 75 $ (23) $ 140 Included in the realized investment gains and losses in the above table were pre-tax asset write-downs on debt securities and other asset write-downs of $ 23 million for the nine months ended September 30, 2018 and $ 19 million for the nine months ended September 30, 2017 . Realized losses on equity securities still held at September 30, 2018 were $ 2 million for the three months and $ 28 million for the nine months ended September 30, 2018 . The following table presents sales information for available-for-sale securities (fixed maturities in 2018, and fixed maturities and equity securities in 2017) . Gross gains on sales and gross losses on sales 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) 2018 2017 2018 2017 Proceeds from sales $ 657 $ 446 $ 1,930 $ 1,376 Gross gains on sales $ 5 $ 26 $ 23 $ 85 Gross losses on sales $ (4) $ (3) $ (33) $ (7) |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 11 — 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) . The Company also uses derivative financial instruments to hedge the risk of changes in the net assets of certain of its foreign subsidiaries due to chang es in foreign currency exchange rates, and to hedge the interest rate risk of its long-term debt. The Company has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives and d iscussed further in Note 8 . 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. Accounting policy. During the fi rst quarter of 2018 , the Company early adopted ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities) with no material impact to its financial statements. The Company applies hedge accounting when derivatives are designated, qualified an d highly effective as hedges. Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income. Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative or quantitative methods appropriate for each hedge. The Company excludes certain components of derivative instruments’ changes in fair value from the assessme nt of hedge effectiveness . Derivatives are recorded on our balance sheet at fair value , s ee Note 9 for further information on our policies for determining fair value. Derivative cash flows are generally reported in operating activities. Swaption contracts used to hedge the benchmark interest rate on debt issued in 2018 expired during the third quarter of 2018 with no material impact to the Company’s financial statements. In addition, during the first quarter of 2018, the Company terminated its F air Value Hedge of Long-Term Corporate Debt (notional value of $750 million as of December 31, 2017) with no material impact to the Company’s financial statements. The following tables provide information on the Company’s other specific applications of de rivative financial instruments as of September 30, 2018 and December 31, 2017. Fair Value Hedges of Fixed Maturity Bonds Notional Value (in millions) Type of instrument. Foreign currency swap contracts September 30, 2018 December 31, 2017 $ 478 $ 318 Purpose. To hedge the foreign exchange-related changes in fair values of certain fixed maturity foreign-denominated bonds. Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros, British pounds and Australian dollars, and have terms for periods of up to thirty years. The notional value of these derivatives matches the amortized cost of the hedged bonds. Accounting. Using fair value hedge accounting, swap fair values are reported in other long-term investments or in accounts payable, accrued expenses and other liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses. The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign denominated coupons received on the designated bonds. Prior to adopting ASU 2017-12, changes in fair value of excluded components of the swap contracts were recognized immediately in realized investment gains and losses. Net Investment Hedge of Certain International Subsidiaries Notional Value (in millions) Type of instrument. Foreign currency swap contracts September 30, 2018 December 31, 2017 $ 439 $ - Purpose. During the first quarter of 2018, the Company entered into fixed-for-fixed currency swaps to reduce the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in Euros. Terms of derivative instruments. The Company receives fixed rate U.S. dollar coupon and principal payments, and pays fixed rate coupon and principal payments denominated in the functional currency of the hedged foreign subsidiary. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swaps are denominated in Euros. Accounting. As a net investment hedge, the fair values of the swap contracts are reported in other assets, including other intangibles, or in accounts payable, accrued expenses, and other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in swap fair value are excluded from the effectiveness assessment and recognized in other operating expenses as swap coupon payments are accrued. Economic Hedges of a Fixed Maturity Bond Portfolio Notional Value (in millions) Type of instrument. Foreign currency forward contracts September 30, 2018 December 31, 2017 $ 509 $ 255 Purpose. To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated fixed maturity bond portfolio to reflect the local currency for the Company's foreign subsidiary in South Korea. Terms of derivative instruments. The Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contracts' trade dates. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio. Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses. Gross fair values of our derivative financial instruments are presented in Note 9 . As of September 30, 2018 and December 31, 2017 , and for the three months and nine months ended September 30, 2018 and 2017 , the effects of these derivative instruments on the Consolidated Financial Statements were not material, including amounts excluded from the assessment of hedge effectiveness, as well as associated gains or losses reclassified from accumulated other compr ehensive income into shareholders’ net income. Collateral and termination features. The Company routinely monitors exposure to credit risk associated with derivatives and diversifies the portfolio among approved dealers of high credit quality to minimiz e this risk. 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 pred efined 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, 2018 or December 31, 2017 . |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2018 | |
Variable Interest Entities [Abstract] | |
Variable interest entities | Note 12 – Variable Interest Entities 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 must determine if it is the primary beneficiary and must consolidate the entity. The Company would be considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities or has the right to receive benefits or obligation to absorb losses that could be signifi cant to the entity. The Company evaluates the following criteria: 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 determined it was not a primary beneficiary in any material variable interest entities as of September 30, 2018 or December 31, 2017 . The Company’s involvement in variable interest entities where it is not the primary beneficiary is described below. Securities limited partnerships and real estate limited partnerships . The Company owns interests in securities limited partnerships and real estate limited partnerships defined as variable interest entities that invest in the equity or mezzanine debt of privately held companies and real estate properties. General partners unaffiliated with the Company control decisions th at most signi ficantly impact these 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 $ 2.7 billion across approximately 130 li mited partnerships as of September 30, 2018 includes $ 1.4 b illion reported in other long-term investments and commitments to contribute an additional $ 1.3 b illion. The Company’s non-controlling interest in each of these limited partnersh ips is generally less than 10 % of the partnership ownership interests . Other asset-backed and corporate securities. 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 its carrying amount of $ 0.6 b illion as of September 30, 2018 , 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. The Company is also invol ved in real estate joint ventures, independent physician associations (“IPAs”) and a joint venture in India that are variable interest entities. The carrying values and maximum exposures associated with these arrangements are immaterial. The Company has not provided, and does not intend to provide, financial support to any of the above entities that it is not contractually required to provide. The Company performs ongoing qualitative analyses of its involvement with these variable interest entities to de termine if consolidation is required. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 13 — Accumulated Other Comprehensive Income ( Loss ) (“AOCI”) AOCI includes the Company’s share from entities accounted for using the equity method. AOCI 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. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCI reclassifications are recognized. As discussed in Note 2, the Company early adopted ASU 2018-02 effective January 1, 2018 and $ 229 million of stranded tax effects resulting from U.S. tax reform legislation enacted in 2017 were reclassified from AOCI to retained earnings. Changes in the components of AOCI, including the reclassification of the stranded tax effects, were a s follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Securities Beginning balance $ (31) $ 436 $ 328 $ 362 Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) - - 65 - Reclassification adjustment to retained earnings related to new financial instruments guidance (1) - - (4) - Adjusted beginning balance (31) 436 389 362 Appreciation (depreciation) on securities 2 (5) (553) 163 Tax (expense) benefit (1) - 112 (62) Net appreciation (depreciation) on securities 1 (5) (441) 101 Reclassification adjustment for (gains) losses included in shareholders' net income (net realized investment gains) (1) (26) 27 (76) Tax benefit (expense) - 9 (6) 27 Net (gains) losses reclassified from AOCI to net income (1) (17) 21 (49) Other comprehensive (loss) income, net of tax - (22) (420) 52 Ending balance $ (31) $ 414 $ (31) $ 414 Derivatives Beginning balance $ (19) $ - $ - $ 3 Reclassification adjustment from retained earnings related to new hedging guidance (1) - - (6) - Adjusted beginning balance (19) - (6) 3 Appreciation (depreciation) on derivatives 2 (1) (14) (1) Tax benefit - - 3 - Net appreciation (depreciation) on derivatives 2 (1) (11) (1) Reclassification adjustment for losses (gains) included in shareholders' net income (net realized investment gains) - 1 - (3) Tax benefit - - - 1 Net losses (gains) reclassified from AOCI to net income - 1 - (2) Other comprehensive income (loss), net of tax 2 - (11) (3) Ending balance $ (17) $ - $ (17) $ - Translation of foreign currencies Beginning balance $ (176) $ (230) $ (65) $ (369) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) - - (4) - Adjusted beginning balance (176) (230) (69) (369) Translation of foreign currencies (31) 38 (136) 179 Tax (expense) benefit 2 (4) - (6) Net translation of foreign currencies (29) 34 (136) 173 Ending balance $ (205) $ (196) $ (205) $ (196) (1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018. Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Postretirement benefits liability Beginning balance $ (1,617) $ (1,352) $ (1,345) $ (1,378) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) - - (290) - Adjusted beginning balance (1,617) (1,352) (1,635) (1,378) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 19 16 53 48 Reclassification adjustment for settlement (other operating expenses) - - - 6 Tax (expense) (6) (6) (13) (20) Net adjustments reclassified from AOCI to net income 13 10 40 34 Valuation update - - (12) 2 Tax benefit (expense) - - 3 - Net change due to valuation update - - (9) 2 Other comprehensive income, net of tax 13 10 31 36 Ending balance $ (1,604) $ (1,342) $ (1,604) $ (1,342) (1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2018 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefit Plans | Note 14 — 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 medi cal plan in 2013 and its primary domestic pension plans in 2009. As further discussed in Note 16 , Cigna Corporation and the Cigna Pension Plan are defendants in a class action lawsuit related to the Plan’s conversion of certain employees from an annu ity to a cash balance benefit in 1998 . When the required plan amendment related to this litigation is adopted, the pension benefit obligation will be updated to reflect benefits resulting from this litigation. 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) 2018 2017 2018 2017 2018 2017 2018 2017 Service cost $ - $ - $ 1 $ 1 $ - $ - $ - $ - Interest cost 42 47 126 140 2 2 6 7 Expected long-term return on plan assets (64) (66) (192) (195) - - - - Amortization of: Net loss (gain) from past experience 19 16 54 49 1 - 1 - Prior service cost - - - - (1) - (2) (1) Settlement loss - - - 6 - - - - Net cost $ (3) $ (3) $ (11) $ 1 $ 2 $ 2 $ 5 $ 6 A ll components of pension and other postretirement benefit costs are reported in operating expenses. The Company funds its domestic qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006. The Company did not make any pension contributions d uring the nine months ended September 30, 2018 , and does not expect to make any pension contributions for the remainder of 2018 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | Note 15 ― Income Taxes A. Income Tax Expense The consolidated effective tax rate decreased to 25.5 % for the nine months ended September 30, 2018 compared with 31.0 % for the nine months ended September 30, 2017 . The significantly lower effective tax rate for 2018 was attributable to a lower U.S. tax rate effective January 1, 2018 resulting from U.S. tax reform legislation enacted in 2017. This favorable effect was partially offset by the reinstatement of the non-deductible health insurance industry tax in 20 18 and the absence of an incremental tax benefit recognized in the second quarter of 2017 associated with merger-related costs (see Note 3). During the third quarter of 2018, the Company updated its accounting for the provisional amounts first recognized in fourth quarter 2017 as a result of U.S. tax reform legislation by recording a tax benefit of $ 7 million . The Company is subject to the global intangible low-taxed income (“GILTI”) provisions of U.S. tax reform that became effective Janua ry 1, 2018. Unlike the rate change and the tax on unremitted foreign earnings, the GILTI rules did not trigger any provisional accounting in 2017. However, they are effective prospectively beginning in 2018. Based on our current understanding of these rules, the GILTI tax impact was immaterial f or the nine months ended September 30, 2018. Given the complexity of these provisions, further guidance is expected to be released in the fourth quarter of 2018. The Company will evaluate the new guidance upon its release and make a determination of the impact . It is the Company’s policy to recognize any GILTI taxes as period costs when incurred. The Com pany’s foreign operations continue to maintain a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the United States predominantly in support of the liquidity and regulatory capital requirements of our fo reign operations as well as to support growth initiatives overseas. The Company does not intend to repatriate these earnings to the United States. If the Company had intended to repatriate these foreign earnings to the United States, the Company would ha ve recorded additional deferred tax liabilities of approximately $ 148 million for foreign withholding taxes as of September 30, 2018 . A portion of these taxes may be eligible for credit against the Company’s U.S. tax liability. B. Unrecognized Tax Benefits Changes in unrecognized tax benefits were immaterial for the nine months ended September 30, 2018 . |
Contingencies and Other Matters
Contingencies and Other Matters | 9 Months Ended |
Sep. 30, 2018 | |
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. 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 fo r retirement and insurance contracts written in separate accounts and 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 ac count 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 p ercentage of benefit obligations. If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business (Prudential Retirement Insurance and Annuity Company or “Prudential”) has the right to redirect the management of th e related assets to provide for benefit payments. As of September 30, 2018 employers maintained assets that exceeded the benefit obligations under these arrangements of approximately $ 460 million. Approximately 11 % of these are reinsured by Prudential. The remaining guarantees are provided by the Company with minimal reinsurance from third parties. T here were no additional liabilities required for these guarantees as of September 30, 2018 . Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy (see Note 9 ). The Company does not expect t hat these financial guarantees will have a material effect on the Company’s consolidated results of operations, liquidity or financial condition. GMIB Contracts See Note 8 f or discussion . C. Certain Other Guarantees The Company had indemnification obligations to a lender of approximately $ 89 million as of September 30, 2018 , related to a borrowing by a certain real estate joint venture that the Company records as an investment. This borrowing (a nonrecourse obligation of the Company) matures in 2021 and is secured by the joint venture’s real estate property with a fair value in excess of the loan amount as of September 30, 2018 . The Company’s indemnification obligation would require payment to the l ender 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 Comp any does not expect that payments will be required under this indemnification obligation. Any payment that might be required could be recovered through a refinancing or sale of the assets. The Company also has recourse to the partner for their proportion ate share of amounts paid. There were no liabilities required for this indemnification obligation as of September 30, 2018 . 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. In first quarter 2017, the Commonwealth Court of Pennsylvania entered an order of liquidation of Penn Treaty Network America Insurance Company, together with its subsidiary American Network Insurance Company (collectively “Penn Treaty”, a long-term care insurance carrier), triggering guaranty fund coverage and a charge of approximately $ 130 million before-tax ($ 85 million after-tax) . As of September 30, 2018 , the recorded liability for this assessment was approximately $ 42 million . Updates to the amount of the Penn Treaty assessment were not material in 2018 . A portion of this assessment is expected to be offset in the future by premium tax credits that will be recognize d in the period received . 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 managing a global health services business. Except for the specific matters noted below, 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 operations, fina ncial condition or liquidity based upon our current knowledge and taking into consideration current accruals. Disputed tax matters arising from audits by the Internal Revenue Service (“IRS”) or other state and foreign jurisdictions, including those result ing in litigation, are accounted for under GAAP guidance for uncertain tax positions. Further information on income tax matters can be found in Note 15 . Pending litigation and legal or regulatory matters that the Company has identified with a rea sonably possible material loss are described below. When litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to shareholders’ net income. The estimated loss is the Company’s best estimate of the probable loss at the time or an amount within a range of estimated losses reflecting the most likely outcome or the minimum amount of the range (if no amount is better than any other estimated amount in the range). F or material pending litigation and legal or regulatory matters discussed below, the Company provides disclosure in the aggregate of accruals and range of loss, or a statement that such information cannot be estimated. The Company had pre-tax accruals as o f September 30, 2018 of $ 240 million ($ 190 million after-tax) for the matter discussed below under “Litigation Matter” as well as litigation related to certain of the Company’s claim operating practices and disputes around reimbursement r ates to providers . 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 assuran ce 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 particula r period. Litigation Matter 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 tha t 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 inaccurat e 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. From 2008 through 2015, this case has undergone a series of court proceedings that resulted i n 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 January 2016, the Distri ct 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. From that time through July 25, 2018, both partie s have disputed various aspects of the Court’s interpretation and the Court has attempted to clarify. On July 14, 2017, the Court issued a ruling clarifying certain aspects of the January 2016 order. The Plaintiffs filed a motion for reconsideration of t he July 14, 2017 ruling that was denied by the Court on November 7, 2017. On July 25, 2018, the Court issued a preliminary oral ruling indicating that the Plan should be amended promptly and remedy benefits should begin to be paid as soon as practicable thereafter. However, a final written ruling was not issued. After additional disputes were raised by the parties following the oral ruling, the Court ordered additional briefing, which was completed on September 6, 2018. On October 17, 2018, the Court m ade an interim ruling on two issues relating only to the calculation of attorneys’ fees that increased the amount of the fees immediately payable as compared to previous guidance. Based on preliminary analysis, management believes that the Company’s reser ve for this litigation remains adequate. Regulatory Matters Civil Investigative Demand. The DOJ is conducting an industry review of Medicare Advantage organizations’ risk adjustment practices under Medicare Parts C and D, including medical chart reviews and health exams. The Company is currently responding to information requests (civil investigative demands) received from the DOJ (U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the S outhern District of New York). We will continue to cooperate with the DOJ’s investigation. 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 ha ndling practices. The agreement requires primarily: (1) enhanced procedures related to documentation and disposition and (2) a two-year monitoring period followed by a re-examination. Management believes the Company has addressed the 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 earning s for this business. Other Legal Matters Litigation related to the Merger. Following announcement of the Company’s Merger Agreement with Express Scripts as discussed in Note 3, putative class action complaints (collectively the “complaints”) have been f iled against Express Scripts and the Express Scripts board of directors. Certain of these complaints also include Cigna, New Cigna, Cigna Merger Sub and Express Scripts Merger Sub as defendants. The complaints allege that the registration statement filed in connection with the Merger (and certain amendments thereto) omitted material information in violation of Sections 14(a) and 20(a) of the Exchange Act, rendering the registration statement false and misleading. Among other remedies, the complaints seek to enjoin the Express Scripts special meeting and the closing of the Merger, as well as damages, costs and attorneys’ fees. The defendants believe that the lawsuits are without merit. Litigation with Anthem. In February 2017, the Company delivered a notice to Anthem terminating the 2015 merger agreement, and notifying Anthem that it must pay the Company the $1.85 billion reverse termination fee pursuant to the terms of the merger agreement. Also in February 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”) seeking declaratory judgments that the Company’s termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date. The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $13 billion, including the lost premium value to the Company’s shareholders caused by Anthem’s willful breaches of the merger agreement. Also in February 2017, Anthem filed a lawsuit in the Chancery Court against the Company seeking (i) a temporary restraining order to enjoin Cigna from terminating and taking any action contrary to the terms of the merger agreement, (ii) specific perform ance compelling Cigna to comply with the merger agreement and (iii) damages. On February 15, 2017, the Chancery Court granted Anthem's motion for a temporary restraining order and temporarily enjoined the Company from terminating the merger agreement. In May 2017, the Chancery Court denied Anthem's motion for a preliminary injunction to enjoin Cigna from terminating the merger agreement but stayed its ruling pending Anthem's determination as to whether to seek an appeal. Anthem subsequently notified Cigna and the Chancery Court that it did not intend to appeal the Chancery Court's decision. As a result, the merger agreement was terminated. The litigation between the parties remains pending. Trial is scheduled for February 2019. We believe in the merits of our claims and dispute Anthem’s claims, and we intend to vigorously defend ourselves and pursue our claims. The outcomes of lawsuits are inherently unpredictable, and we may be unsuccessful in the ongoing litigation or any future claims or liti gation. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information [Abstract] | |
Segment Information [Text Block] | Note 17 ― Segment Information See Note 1 for a description of the Company’s reporting segments. In the Company’s segment disclosures, w e present “operating revenues,” defined as total revenues excluding realized investment results and certain net investment income described in special items below . Beginning in 2018, certain realized investment results from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded due to the potential increased volatility in investment results after adopting ASU 2016-01. Investment gains or losses are managed based on factors largely unrelated to the underlying business purpose of each segment and are not indicative of the underlying performance of the Company’s core business operations, so they are excluded from operating revenues. 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 core business operatio ns and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders’ net income (loss) excluding after-adjustments for realized investment gains and losses, amortization of other acquired intangible assets and special items. Income or expense amounts that are excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include: Realized investment results, including changes in market values of financial instruments between balance sheet dates, as well as gains and losses associated with invested asset sales. As discussed above, beginning in 2018, certain realized investment resu lts from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded . Amortization of other intangible assets related to costs incurred for acquisitions Special items, if any, that management believes are not re presentative of the un derlying results of operations due to the nature or size of these matters. Further context about these items is provided in the footnotes listed in the following tables . Three Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Transaction-related costs - Net investment income - see Note 3 $ (13) $ (10) $ - $ - - Other operating expenses - see Note 3 141 118 9 6 Total transaction-related costs 128 108 9 6 Charges associated with litigation matters - see Note 16 45 35 - - Charges associated with U.S. tax reform - Other operating expenses - see Note 15 2 2 - - - Tax (benefit) - see Note 15 - (7) - - Total charges (benefits) associated with U.S. tax reform 2 (5) - - Debt extinguishment costs - See Note 5 - - 321 209 Total impact from special items $ 175 $ 138 $ 330 $ 215 Nine Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Transaction-related costs - Net investment income - see Note 3 $ (13) $ (10) $ - $ - - Other operating expenses - see Note 3 331 277 88 8 Total transaction-related costs 318 267 88 8 Charges associated with litigation matters - see Note 16 45 35 - - Charges associated with U.S. tax reform - Other operating expenses - see Note 15 2 2 - - - Tax (benefit) - see Note 15 - (7) - - Total charges (benefits) associated with U.S. tax reform 2 (5) - - Debt extinguishment costs - See Note 5 - - 321 209 Long-term care guaranty fund assessment - see Note 16(D) - - 129 83 Total impact from special items $ 365 $ 297 $ 538 $ 300 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, 2018 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 8,995 $ 1,055 $ 1,032 $ 33 $ (13) $ 11,102 Net investment income 122 37 89 87 20 355 Less net realized investment (losses) from equity method subsidiaries (2) - (1) - - - (1) Less special item (transaction-related costs) - - - - 13 13 Operating revenues $ 9,117 $ 1,093 $ 1,121 $ 120 $ (6) $ 11,445 Total revenues $ 9,121 $ 1,093 $ 1,124 $ 112 $ 7 $ 11,457 Shareholders' net income (loss) $ 750 $ 80 $ 106 $ 9 $ (173) $ 772 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) losses (2) (4) - (4) 8 (1) (1) Amortization of other acquired intangible assets, net 32 4 - - - 36 Special items Transaction-related costs - - - - 108 108 Charges associated with litigation matters 35 - - - - 35 U.S. tax reform (9) 9 (2) (1) (2) (5) Total special items 26 9 (2) (1) 106 138 Adjusted income (loss) from operations $ 804 $ 93 $ 100 $ 16 $ (68) $ 945 Three Months Ended September 30, 2017 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 8,087 $ 954 $ 1,015 $ 29 $ (11) $ 10,074 Net investment income 89 31 84 86 8 298 Operating revenues $ 8,176 $ 985 $ 1,099 $ 115 $ (3) $ 10,372 Total revenues $ 8,251 $ 985 $ 1,136 $ 120 $ (3) $ 10,489 Shareholders' net income (loss) $ 610 $ 105 $ 97 $ 18 $ (270) $ 560 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (47) - (24) (4) - (75) Amortization of other acquired intangible assets, net 12 4 - - - 16 Special items Transaction-related costs - - - - 6 6 Debt extinguishment costs - - - - 209 209 Total special items - - - - 215 215 Adjusted income (loss) from operations $ 575 $ 109 $ 73 $ 14 $ (55) $ 716 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (2) Beginning in 2018, the Company's share of certain realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in fees and other revenues) is excluded from operating revenues and adjusted income from operations. (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total Nine Months Ended September 30, 2018 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 26,994 $ 3,171 $ 3,089 $ 97 $ (37) $ 33,314 Net investment income including special items 362 107 275 260 32 1,036 Less net realized investment (losses) on equity method subsidiaries (2) - (23) - - - (23) Less special item (transaction related costs) - - - - 13 13 Operating revenues $ 27,356 $ 3,301 $ 3,364 $ 357 $ (18) $ 34,360 Total revenues $ 27,345 $ 3,268 $ 3,356 $ 351 $ (6) $ 34,314 Shareholders' net income (loss) $ 2,372 $ 271 $ 267 $ 57 $ (474) $ 2,493 After-tax adjustments to reconcile to adjusted income from operations Net realized investment losses (2) 7 28 5 5 1 46 Amortization of other acquired intangible assets 59 15 - - - 74 Special items Transaction-related costs - - - - 267 267 Charges associated with litigation matters 35 - - - - 35 U.S. tax reform (9) 9 (2) (1) (2) (5) Total special items 26 9 (2) (1) 265 297 Adjusted income (loss) from operations $ 2,464 $ 323 $ 270 $ 61 $ (208) $ 2,910 Nine Months Ended September 30, 2017 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 24,382 $ 2,759 $ 3,070 $ 89 $ (35) $ 30,265 Net investment income 273 90 262 260 24 909 Operating revenues $ 24,655 $ 2,849 $ 3,332 $ 349 $ (11) $ 31,174 Total revenues $ 24,788 $ 2,861 $ 3,399 $ 351 $ (11) $ 31,388 Shareholders' net income (loss) $ 1,753 $ 283 $ 253 $ 55 $ (373) $ 1,971 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (85) (9) (44) (2) - (140) Amortization of other acquired intangible assets 40 14 - - - 54 Special items Transaction-related costs - - - - 8 8 Debt extinguishment costs - - - - 209 209 Long-term care guaranty fund assessment 68 - 15 - - 83 Total special items 68 - 15 - 217 300 Adjusted income (loss) from operations $ 1,776 $ 288 $ 224 $ 53 $ (156) $ 2,185 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (2) Beginning in 2018, the Company's share of certain realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in fees and other revenues) is excluded from operating revenues and adjusted income from operations. Revenue from external customers includes p remiums , fees and other revenues and mail order pharmacy revenues . The following table presents these revenues by product type for the periods ended September 30 : (In millions) Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Premiums by product (ASC 944 - insurance activities) Global Health Care Commercial Guaranteed cost $ 2,080 $ 1,591 $ 6,125 $ 4,656 Experience-rated 711 737 2,186 2,191 Stop loss 1,010 874 2,983 2,582 International health care 513 484 1,541 1,438 Dental 486 452 1,447 1,334 Other 260 247 777 736 Government Medicare 1,455 1,324 4,414 4,174 Medicaid 247 253 725 806 Medicare Part D 157 169 574 601 Total Global Health Care 6,919 6,131 20,772 18,518 Disability 507 493 1,522 1,485 Life, Accident and Supplemental Health 1,539 1,428 4,629 4,208 Total premiums from ongoing operations 8,965 8,052 26,923 24,211 Fees (ASC 606 - service activities) Global Health Care 1,325 1,219 3,984 3,652 Global Supplemental Benefits 7 6 22 18 Group Disability and Life 24 25 74 77 Total fees from ongoing operations 1,356 1,250 4,080 3,747 Mail order pharmacy (ASC 606 - service activities) 747 733 2,222 2,200 Other 34 39 89 107 Total revenues from external customers $ 11,102 $ 10,074 $ 33,314 $ 30,265 Premiums from the Centers for Medicare and Medicaid Services (“ CMS ”) were 18 % of consolidated revenues for the nine months ended September 30, 2018 and 17 % for the nine months ended September 30, 2017 . These amounts were reported in the Global Health Care segment. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation 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 Ame rica (“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 throughou t 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 c urrent presentation. These interim Consolidated Financial Statements 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 op erations for the periods reported. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s 2017 Annual Report on Form 10-K (“ 2017 Form 1 0-K”). The preparation of interim Consolidated Financial Statements 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 competitiv e and other market conditions, call for caution in estimating full- year results based on interim results of operations. |
Recent Accounting Changes | Recent Accounting Pronouncements The Company’s 2017 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our finan cial statements in the future. The following tables provide information about recently adopted and recently issued or changed accounting guidance ( applicable to Cigna) that have occurred since the Company filed its 2017 Form 10-K. Recently Adopted Accounting Guidance Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments) Adopted as of January 1, 2018 Requires: • Revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services • Additional revenue-related disclosures Effects of adoption: • Applies to the Company’s service and mail order pharmacy contracts with customers • Adopted through full retrospective restatement • Cumulative effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2016 balance of retained earnings. Adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates. Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial. • Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation. The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer. Companies are required to identify and evaluate distinct performance obligations within their contracts. These clarifications resulted in reclassifications within the Global Health Care segment affecting premiums, fees and other revenues, Global Health Care medical costs, and other operating expenses and had no impact on recognition patterns or net income. • Prior period balances in the Company's footnote disclosures have been updated to reflect adjustments resulting from the adoption of this ASU. Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01 and related amendments) Adopted as of January 1, 2018 Requires entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method Effects of adoption: • Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018. Subsequent changes in fair value are reported in net investment income. • Changes in fair value for equity securities that have a readily determinable fair value that were previously reported in accumulated other comprehensive income are now reported in net realized investment gains. • Cumulative effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018. • See Notes 9 and 10 for updated disclosures about equity securities. Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Early adopted as of January 1, 2018 Guidance: • Relaxes requirements for financial and nonfinancial hedging strategies to be eligible for hedge accounting and changes how companies assess effectiveness • Amends presentation and disclosure requirements to improve transparency about the uses and results of hedging programs Effects of adoption: • An immaterial amount of retained earnings was reclassified to accumulated other comprehensive income, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges. • See Note 11 for the Company's disclosures about derivatives. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) Early adopted as of January 1, 2018 Guidance: • Allows companies to reclassify the tax effects stranded in accumulated other comprehensive income to retained earnings as a result of H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (referred to throughout this Form 10-Q as "U.S. tax reform" or "U.S. tax reform legislation") • Requires additional disclosures of the Company's accounting policy for releasing income tax effects from accumulated other comprehensive income • Allows companies to apply the guidance retrospectively or in the period of adoption Effects of adoption: Accumulated other comprehensive income of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 13 for additional information including accounting policy disclosures. In addition to the standards listed above, the Company adopted the following guidance in first quarter 2018 with no material impact to our financial statements: Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16) , Clarifying the Definition of a Business (ASU 2017-01) , Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07) , Statement of Cash Flows: Restricted Cash (ASU 2016-18), Gains and Losses from the Derecognition of N onfinancial Assets (ASU 2017-05) and Stock Compensation Scope of Modification Accounting (ASU 2017-09) . Accounting Guidance Not Yet Adopted Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of Guidance Not Yet Adopted Leases (ASU 2016-02 and related amendments) Required as of January 1, 2019 Requires: • Balance sheet recognition of assets and liabilities arising from leases, including leases embedded in other contracts • Additional disclosures of the amount, timing and uncertainty of cash flows from leases • Modified retrospective approach for leases in effect as of and after the date of adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate the impact this standard will have on its financial statements. • While we continue to refine the estimated impact of this standard, the Company currently expects an increase to assets and liabilities of approximately $500 million. The actual increase in assets and liabilities will depend on the volume, terms and discount rates of leases in place at the time of adoption. • The Company plans to elect the optional practical expedient to retain the current classification of leases, and therefore, does not anticipate a material impact to the Consolidated Statements of Income or Cash Flows. • The Company is implementing a new lease system and also expects that adoption of the new standard will require changes to internal control over financial reporting. • The Company intends to adopt this new guidance as of the adoption date and will not present comparative periods in the financial statements, as recently allowed. Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) Required as of January 1, 2021 Requires (for insurance entities that issue long-duration contracts): • Cash flow assumptions used to measure the liability for future policy benefits for traditional and limited-pay contract to be reconsidered at least annually with any changes reflected in net income. • Discount rate assumptions to be reviewed quarterly (based on an upper-medium grade (low-credit-risk) fixed-income instrument yield that maximizes the use of observable market inputs) with any changes reflected in other comprehensive income. • Deferred policy acquisition costs to be amortized on a constant-level basis over the expected term of the related contract. • Fair value measurement of all market risk benefits. • Additional disclosures, including liability rollforwards and information about significant inputs, judgments, assumptions and methods used in measurement. • Transition methods at adoption vary. - Changes to the liability for future policy benefits will use a modified retrospective approach (applied to all contracts on the basis of their carrying amounts as of the beginning of the earliest period presented), with an option to elect a full retrospective transition under certain criteria. - Deferred policy acquisition costs are to be transitioned consistent with the method applied to the liability for future policyholder benefits. - Market risk benefits are required to transition using retrospective application. Expected effects: • The Company is evaluating the impact of this newly-issued guidance, but it is expected to have a significant impact on our processes, controls, systems and financial results. The new guidance will apply to insurance products predominantly sold in the Company's businesses other than the Global Health Care segment. |
Revenue Recognition Policy | Accou nting for Contracts with Customers – Service and Mail Order Pharmacy Arrangements Service Fees and Expenses The majority of the Company’s service fees are derived from administrative services only (“ASO”) arrangements that allow corporate clients to self-fund claims and assume the risk of medical or other benefit costs. Most of the Company’s ASO arrangements are for Global Health Care medical and specialty ser vices, including pharmacy benefits and, to a lesser extent, ASO services in its Group Disabi lity and Life and Global Supplemental Benefits segments. Generally, the Compa ny’s ASO arrangements are short- term. Contract modifications typically occur on renewal and are prospective in nature. In return for fees from these clients, the Company provid es or makes available various services supporting benefit management and claims administration. In addition, Global Health C are’s services include access to the Company’s participating provider networks, disease management, utilization management, and cos t containment services. In general, the Company considers these services to be a combined performance obligation to provide cost effective administration of plan benefits over the contract period. Fees are billed, due and recognized monthly at contract ed rates based on curre nt membership or utilization. This recognition pattern aligns with the benefits from services provided to clients. These revenues are reported in fees and other revenues in the Consol idated Statements of Income. For most ASO arran gements, the Company is required to perform services for a limited period after a client cancels. If these services will not be separately billed to the client as they are performed, the Company estimates and defers a portion of compensation attributable to this service obligation received in advance. Deferred revenue is recorded as a contract liability in accounts payable, accrued expenses and other liabilities and recognized when the related services are performed. The Company may also provide performa nce guarantees that result in refunds to clients only if certain service standards, clinical outcomes or financial metrics are not met. If these standards, outcomes and metrics are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accounts payable, accrued exp enses and other liabilities. The amount of revenue deferred is estimated for each type of guarantee, using either a most likely amount or expected value method depending upon the nature of the guarantee and the information available to estimate refunds. Estimates are refined each reporting period as additional infor mation on the Company’s performance becomes available, and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for performance guarantees during the reporti ng periods were not material. Service fees are recognized net of estimated pharmaceutical manufacturer rebates payable to ASO clients using our network of retail pharmacies. Net rebates retained by the Company from pharmaceutical manufacturers resulting from ASO c lient utilization at retail pharmacies represent compensation for pharmacy services and are reflected as fee revenue. Rebates generally represent a per script amount from the manufacturer and are determined based on scripts filled during the reporting period. Expenses associated with administrative programs and services are recognized in other operating expenses as incurred. Mail Order Pharmacy Revenues and Costs Mail order pharmacy revenues are due and recognized as each prescription is shipped . Mail order pharmacy revenues are presented net of estimated pharmaceutical manufacturer rebates payable to ASO clients that use our mail order business . Rebates are generally determined based on actual prescriptions filled during the reporting period. Mail order pharmacy costs ar e recognized as each prescription is shipped and include the cost of prescriptions sold and other costs to operate this business (including supplies, shipping and handling), net of estimated pharmaceutical rebates from manufacturers for prescriptions fille d through our mail order business. The incremental costs of obtaining ASO and mail order pharmacy contracts (such as sales commissions) are expensed as incurred and the Company does not disclose information about remaining performance obligations for these contracts in accordance with elections made by the Company as they are generally short-term with original expected durations of one year or less. |
Reinsurance | Because r einsurance does not relieve the originating insurer of liability , such liabilities must contin ue to be reported along with the related reinsurance recoverables. The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk. GMDB The Company estimates th e gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over an extended period, consistent with the long-term nature of this pro duct. 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 presented be low ). |
Fair Value Measurements | Assumptions used in fair value measurement. GMIB assets and liabilities are established using capital market assumptions (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments) and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). As assumptions related to future annuitant behavior are largely unobservable , the Company classifies GMIB assets and liabilities in Level 3 in the f air value hierarchy presented in Note 9 . The only assumption expected to impact the Company’s future shareholders’ net income is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an addit ional spread to the discount rate in the fair value calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The Company regularly evaluates each of the ass umptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calcul ate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, certain 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 c reditor. 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 sig nificant 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 t hat 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 s imilar 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 as sumptions 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 instrumen ts or pricing models. The Company is responsible for determining fair value, as well as for assigning the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. The Company reviews methodologies, processes an d 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 for a sample of securities held across various asset types to validate the documented prici ng process. 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 95 % of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and hybrid 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 valuation methods often use recent trades of securities with similar fe atures 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 y ields, 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 attr ibutes, 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 represents foreign bonds that are valued using a singl e 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 pric es 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 i nterest 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 arrang ements with counterparties and determined that no adjustment for credit risk was required as of September 30, 2018 or December 31, 2017 . The nature and use of these other derivatives are described in Note 11 . Level 3 Financial Assets and Financial Liabilities C ertain 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, i n Level 3. Fair values of mortgage and other asset-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 mortgage and other asset-backed securities, inputs and assumptions for pricing may a lso 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 the issuer’s financial state ments. Mortgage and o ther asset-backed securities . The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spre ads. When there is limited trading activity for the security, an 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 pro portional cash flows supporting the bond obligations. Corporate and government fixed maturities. The significant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. When there is lim ited trading activity for the security, an adjustment is needed to reflect current market conditions and issuer circumstances. Private equity securities. The significant unobservable input use d to value the following private 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 ci rcumstances and relative risk characteristics. Hybrid e quit y securit ies. The significant unobservable input used to value the following hybrid equity securities is an adjustment for liquidity due to limited trading activity. These cumulative preferred s hares are deemed likely to exercise certain call options and the Company estimates an adjustment used to discount cash flows based on current market conditions and issuer circumstances . Significant increases in liquidity or credit spreads would result in lower fair value measurement s while decreases in these inputs would result in higher fair value measurement s . Significant decreases in equity price-to-EBITDA multiples would result in lower fair value measurements while increases in these inputs would result in higher fair value measurements. 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. As noted in the preceding tables, 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; and Other operating expenses for amounts related to GMIB assets and liabiliti es (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 Consoli dated Statements of Comprehensive Income. 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 les s significant to the fair value measurement. 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. Separate account assets classified in Level 3 primarily support Cigna's pension plans, and include certain newly issued, privatel y-placed, complex, or illiquid securities that are priced using methods discussed above , as well as commercial mortgage loans. Separate account investments 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. Substantially all of these assets support the Cigna Pension Plans. 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 when they become impaired in cluding real estate, partnership entities, c ommercial mortgage loans , and certain equity securities with no readily determinable fair value |
Separate Accounts | 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. See Note 10 to the Consolidated Financial Statements contained in the Company’s 2017 Form 10-K for additional policy information related to separate accounts. |
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. Accounting policy. Beginning in 2018, upon adopting ASU 2016-01 changes in the fair values of equity securities that have a readily determinable fair value (primarily exchange-traded funds) are reported in other realized investment gains (losses). As of September 30, 2018 , the fair values of these securities were $ 443 million and cost was $ 452 million. Also beginning in 2018, private equity securities of $ 88 million as of September 30, 2018 , that do not have a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The amount of impairments or value changes resulting from observable price changes was not material. Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair val ue with changes in fair value reported in other realized investment gains (losses) and dividends reported in net investment income. 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 per iod. 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 evalu ates and monitors credit quality on an ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Q uality rating s are based on our evaluation of a number of key inputs related to the loan including real estat e 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 cover age 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 8 and included an analysis of each underlying property’s December 31, 2017 annual financial statements, rent rolls, operating plans and budgets for 2018, 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 for each loan. The Company will reevaluate a loan’s credit quality between annual reviews if new property information is received or an even t 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. Impaired commercial mortgage lo ans. 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. Th e 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 because it is less than the fair value of the underlying real estate. The Company recognizes interest income on impaired mortgage loans only w hen payment is actually received. Other Long-Term Investments Accounting policy. Other long-term investments include investments in unconsolidated entities. These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence. Upon adopting ASU 2016-01 beginning in 2018, the investments are carried at fair value using NAV as a practical expedient in cases when the Company does not have significan t influence . Realized Investment Gains and Losses Realized investment gains and losses are based on specifically identified assets and result from sales, investment asset write-downs, changes in the fair values of certain derivatives and equity securities and changes in valuation reserves on commercial mortgage loans. The following realized gains and (losses) on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business. |
Derivative Financial Instruments | 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 intere st rates, but are without significant life insurance risk and are settled in lump sum payments. Accounting policy. During the fi rst quarter of 2018 , the Company early adopted ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities) with no material impact to its financial statements. The Company applies hedge accounting when derivatives are designated, qualified an d highly effective as hedges. Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income. Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative or quantitative methods appropriate for each hedge. The Company excludes certain components of derivative instruments’ changes in fair value from the assessme nt of hedge effectiveness . Derivatives are recorded on our balance sheet at fair value , s ee Note 9 for further information on our policies for determining fair value. Derivative cash flows are generally reported in operating activities. Accounting. Using fair value hedge accounting, swap fair values are reported in other long-term investments or in accounts payable, accrued expenses and other liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses. The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign denominated coupons received on the designated bonds. Prior to adopting ASU 2017-12, changes in fair value of excluded components of the swap contracts were recognized immediately in realized investment gains and losses. Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses. Accounting. As a net investment hedge, the fair values of the swap contracts are reported in other assets, including other intangibles, or in accounts payable, accrued expenses, and other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in swap fair value are excluded from the effectiveness assessment and recognized in other operating expenses as swap coupon payments are accrued. |
Accumulated Other Comprehensive Income | AOCI includes the Company’s share from entities accounted for using the equity method. AOCI 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. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCI reclassifications are recognized. |
Income Taxes | It is the Company’s policy to recognize any GILTI taxes as period costs when incurred. The Com pany’s foreign operations continue to maintain a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the United States predominantly in support of the liquidity and regulatory capital requirements of our fo reign operations as well as to support growth initiatives overseas. The Company does not intend to repatriate these earnings to the United States. |
Commitments and Contingencies | GMIB guarantees. Future payments are not fixed and d eterminable under the terms of these contracts. Accordingly, the Company calculated the exposure, without considering any reinsurance 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 (2018 through 2022); and all underlying mutual fund investment values remained at the September 30, 2018 value of $ 786 million with no future returns. Th e Company has reinsurance coverage in place that covers the exposures on these contracts. 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 fo r retirement and insurance contracts written in separate accounts and establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees. 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 managing a global health services business. Except for the specific matters noted below, 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 operations, fina ncial condition or liquidity based upon our current knowledge and taking into consideration current accruals. Disputed tax matters arising from audits by the Internal Revenue Service (“IRS”) or other state and foreign jurisdictions, including those result ing in litigation, are accounted for under GAAP guidance for uncertain tax positions. Further information on income tax matters can be found in Note 15 . Pending litigation and legal or regulatory matters that the Company has identified with a rea sonably possible material loss are described below. When litigation and regulatory matters present loss contingencies that are both probable and estimable, the Company accrues the estimated loss by a charge to shareholders’ net income. The estimated loss is the Company’s best estimate of the probable loss at the time or an amount within a range of estimated losses reflecting the most likely outcome or the minimum amount of the range (if no amount is better than any other estimated amount in the range). |
Segment Information | In the Company’s segment disclosures, w e present “operating revenues,” defined as total revenues excluding realized investment results and certain net investment income described in special items below . Beginning in 2018, certain realized investment results from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded due to the potential increased volatility in investment results after adopting ASU 2016-01. Investment gains or losses are managed based on factors largely unrelated to the underlying business purpose of each segment and are not indicative of the underlying performance of the Company’s core business operations, so they are excluded from operating revenues. 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 core business operatio ns and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders’ net income (loss) excluding after-adjustments for realized investment gains and losses, amortization of other acquired intangible assets and special items. Income or expense amounts that are excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include: Realized investment results, including changes in market values of financial instruments between balance sheet dates, as well as gains and losses associated with invested asset sales. As discussed above, beginning in 2018, certain realized investment resu lts from the Company's equity method joint ventures in the Global Supplemental Benefits segment are also excluded . Amortization of other intangible assets related to costs incurred for acquisitions Special items, if any, that management believes are not re presentative of the un derlying results of operations due to the nature or size of these matters. |
Accounting Policies - Unpaid Cl
Accounting Policies - Unpaid Claims and Claims Expenses (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Global Health Benefits Segment [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for unpaid claims and claims expenses | Medical costs payable for the Global Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not reported , including expected development on reported claims , 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. See Note 7 to the Consolidated Financial Statements in the Company’s 2017 Form 10-K for further information about the assumptions and estimates used to establish this liability. Reinsurance and other amounts recoverable in the above table includes amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business for which the Company administers the plan benefits but the right of offset does not exist. See Note 8 for additional information on reinsurance. Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income . The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established 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. |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for unpaid claims and claims expenses | Reinsurance in the table above reflect s amounts due from reinsurers related to unpaid claims liabilities. The Company's insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses. See Note 8 for additional information on reinsurance. The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part o f pricing and reserving . Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims. This i nterest is calculated by applying the average discount rate used in determining the liability balance to th e average liability balance over the period. The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectat ions reflected in determining the liability. Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business and variations in mortality and morbidity being the most significant factors for other business . GMIB In this business, the Company reinsured contracts with issuers of GMIB products. The Company’s exposure represents the excess of a contractually guaranteed amount over the level of variable annuity account values. 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 that must occur within 30 days of a policy anniversary after the appropriate waiting period. The Com pany has purchased retrocessional coverage (“GMIB assets”) for these contracts. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Requirements and Effects of New Accounting Guidance | Recently Adopted Accounting Guidance Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance Revenue from Contracts with Customers (Accounting Standards Update ("ASU") 2014-09 and related amendments) Adopted as of January 1, 2018 Requires: • Revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services • Additional revenue-related disclosures Effects of adoption: • Applies to the Company’s service and mail order pharmacy contracts with customers • Adopted through full retrospective restatement • Cumulative effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2016 balance of retained earnings. Adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates. Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial. • Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation. The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer. Companies are required to identify and evaluate distinct performance obligations within their contracts. These clarifications resulted in reclassifications within the Global Health Care segment affecting premiums, fees and other revenues, Global Health Care medical costs, and other operating expenses and had no impact on recognition patterns or net income. • Prior period balances in the Company's footnote disclosures have been updated to reflect adjustments resulting from the adoption of this ASU. Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01 and related amendments) Adopted as of January 1, 2018 Requires entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method Effects of adoption: • Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018. Subsequent changes in fair value are reported in net investment income. • Changes in fair value for equity securities that have a readily determinable fair value that were previously reported in accumulated other comprehensive income are now reported in net realized investment gains. • Cumulative effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018. • See Notes 9 and 10 for updated disclosures about equity securities. Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Early adopted as of January 1, 2018 Guidance: • Relaxes requirements for financial and nonfinancial hedging strategies to be eligible for hedge accounting and changes how companies assess effectiveness • Amends presentation and disclosure requirements to improve transparency about the uses and results of hedging programs Effects of adoption: • An immaterial amount of retained earnings was reclassified to accumulated other comprehensive income, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges. • See Note 11 for the Company's disclosures about derivatives. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) Early adopted as of January 1, 2018 Guidance: • Allows companies to reclassify the tax effects stranded in accumulated other comprehensive income to retained earnings as a result of H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (referred to throughout this Form 10-Q as "U.S. tax reform" or "U.S. tax reform legislation") • Requires additional disclosures of the Company's accounting policy for releasing income tax effects from accumulated other comprehensive income • Allows companies to apply the guidance retrospectively or in the period of adoption Effects of adoption: Accumulated other comprehensive income of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 13 for additional information including accounting policy disclosures. Accounting Guidance Not Yet Adopted Accounting Standard and Effective Date Applicable for Cigna Requirements and Expected Effects of Guidance Not Yet Adopted Leases (ASU 2016-02 and related amendments) Required as of January 1, 2019 Requires: • Balance sheet recognition of assets and liabilities arising from leases, including leases embedded in other contracts • Additional disclosures of the amount, timing and uncertainty of cash flows from leases • Modified retrospective approach for leases in effect as of and after the date of adoption with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate the impact this standard will have on its financial statements. • While we continue to refine the estimated impact of this standard, the Company currently expects an increase to assets and liabilities of approximately $500 million. The actual increase in assets and liabilities will depend on the volume, terms and discount rates of leases in place at the time of adoption. • The Company plans to elect the optional practical expedient to retain the current classification of leases, and therefore, does not anticipate a material impact to the Consolidated Statements of Income or Cash Flows. • The Company is implementing a new lease system and also expects that adoption of the new standard will require changes to internal control over financial reporting. • The Company intends to adopt this new guidance as of the adoption date and will not present comparative periods in the financial statements, as recently allowed. Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) Required as of January 1, 2021 Requires (for insurance entities that issue long-duration contracts): • Cash flow assumptions used to measure the liability for future policy benefits for traditional and limited-pay contract to be reconsidered at least annually with any changes reflected in net income. • Discount rate assumptions to be reviewed quarterly (based on an upper-medium grade (low-credit-risk) fixed-income instrument yield that maximizes the use of observable market inputs) with any changes reflected in other comprehensive income. • Deferred policy acquisition costs to be amortized on a constant-level basis over the expected term of the related contract. • Fair value measurement of all market risk benefits. • Additional disclosures, including liability rollforwards and information about significant inputs, judgments, assumptions and methods used in measurement. • Transition methods at adoption vary. - Changes to the liability for future policy benefits will use a modified retrospective approach (applied to all contracts on the basis of their carrying amounts as of the beginning of the earliest period presented), with an option to elect a full retrospective transition under certain criteria. - Deferred policy acquisition costs are to be transitioned consistent with the method applied to the liability for future policyholder benefits. - Market risk benefits are required to transition using retrospective application. Expected effects: • The Company is evaluating the impact of this newly-issued guidance, but it is expected to have a significant impact on our processes, controls, systems and financial results. The new guidance will apply to insurance products predominantly sold in the Company's businesses other than the Global Health Care segment. |
Receivables and Contract Liabilities from Contracts with Clients | (In millions) September 30, 2018 December 31, 2017 Receivables, net $ 898 $ 885 Contract liabilities $ 50 $ 54 |
Mergers and Acquisitions (Table
Mergers and Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Acquisitions and Dispositions [Abstract] | |
Merger-related costs | Three Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Interest expense on newly issued debt $ 33 $ 26 $ - $ - Net investment income on debt proceeds (13) (10) - - All other transaction-related costs 108 92 9 6 Transaction-related costs, net $ 128 $ 108 $ 9 $ 6 Nine Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Interest expense on newly issued debt $ 33 $ 26 $ - $ - Net investment income on debt proceeds (13) (10) - - All other transaction-related costs 298 251 88 67 Tax (benefit) - previously non-deductible costs - - - (59) Transaction-related costs, net $ 318 $ 267 $ 88 $ 8 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Three Months Ended September 30, 2018 September 30, 2017 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Shareholders' net income $ 772 $ 772 $ 560 $ 560 Shares Weighted average 242,577 242,577 249,242 249,242 Common stock equivalents 3,535 3,535 4,168 4,168 Total shares 242,577 3,535 246,112 249,242 4,168 253,410 EPS $ 3.18 $ (0.04) $ 3.14 $ 2.25 $ (0.04) $ 2.21 Nine Months Ended September 30, 2018 September 30, 2017 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Shareholders' net income $ 2,493 $ 2,493 $ 1,971 $ 1,971 Shares Weighted average 242,404 242,404 252,980 252,980 Common stock equivalents 3,343 3,343 4,078 4,078 Total shares 242,404 3,343 245,747 252,980 4,078 257,058 EPS $ 10.28 $ (0.14) $ 10.14 $ 7.79 $ (0.12) $ 7.67 |
Antidilutive Options Table | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Anti-dilutive options 0.9 - 0.9 1.2 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt [Table] [Abstract] | |
Short-term and Long-term Debt | September 30, December 31, (In millions) 2018 2017 Short-term Commercial paper $ - $ 100 Current maturities of long-term debt - 131 Other, including capital leases 9 9 Total short-term debt $ 9 $ 240 Long-term $250 million, 4.375% Notes due 2020 $ 247 $ 249 $300 million, 5.125% Notes due 2020 298 299 $1,000 million, Floating Rate Notes due 2020 996 - $1,750 million, 3.2% Notes due 2020 1,741 - $78 million, 6.37% Notes due 2021 78 78 $300 million, 4.5% Notes due 2021 296 299 $1,000 million, Floating Rate Notes due 2021 995 - $1,250 million, 3.4% Notes due 2021 1,244 - $750 million, 4% Notes due 2022 746 745 $100 million, 7.65% Notes due 2023 100 100 $17 million, 8.3% Notes due 2023 17 17 $700 million, Floating Rate Notes due 2023 696 - $3,100 million, 3.75% Notes due 2023 3,082 - $900 million, 3.25% Notes due 2025 895 894 $2,200 million, 4.125% Notes due 2025 2,185 - $600 million, 3.05% Notes due 2027 594 594 $259 million, 7.875% Debentures due 2027 259 258 $3,800 million, 4.375% Notes due 2028 3,771 - $45 million, 8.3% Step Down Notes due 2033 45 45 $191 million, 6.15% Notes due 2036 190 190 $2,200 million, 4.8% Notes due 2038 2,176 - $121 million, 5.875% Notes due 2041 119 119 $317 million, 5.375% Notes due 2042 315 315 $1,000 million, 3.875% Notes due 2047 988 988 $3,000 million, 4.9% Notes due 2048 2,961 - Other, including capital leases 7 9 Total long-term debt $ 25,041 $ 5,199 |
Global Health Care Medical Co_2
Global Health Care Medical Costs Payable (Tables) - Global Health Benefits Segment [Member] | 9 Months Ended |
Sep. 30, 2018 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Activity in medical costs payable | Nine Months Ended September 30, September 30, (In millions) 2018 2017 Beginning balance $ 2,719 $ 2,532 Less: Reinsurance and other amounts recoverable 265 275 Beginning balance, net 2,454 2,257 Incurred costs related to: Current year 16,287 14,952 Prior years (189) (268) Total incurred 16,098 14,684 Paid costs related to: Current year 13,915 12,689 Prior years 1,925 1,730 Total paid 15,840 14,419 Ending balance, net 2,712 2,522 Add: Reinsurance and other amounts recoverable 243 261 Ending balance $ 2,955 $ 2,783 |
Variances in incurred costs related to prior years' medical costs payable | Nine Months Ended (Dollars in millions) September 30, 2018 September 30, 2017 $ % (1) $ % (2) Actual completion factors $ 114 0.6 % $ 128 0.7 % Medical cost trend 66 0.3 131 0.7 Other 9 - 9 - Total favorable (unfavorable) variance $ 189 0.9 % $ 268 1.4 % (1) Percentage of current year incurred costs as reported for the year ended December 31, 2017. (2) Percentage of current year incurred costs as reported for the year ended December 31, 2016. |
Liabilities for Unpaid Claims_2
Liabilities for Unpaid Claims and Claims Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details | (In millions) September 30, 2018 September 30, 2017 Group Disability and Life $ 4,584 $ 4,442 Global Supplemental Benefits 496 453 Other Operations 179 182 Unpaid claims and claim expenses $ 5,259 $ 5,077 |
Group Disability and Life and Global Supplemental Benefits [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details | Nine Months Ended (In millions) September 30, 2018 September 30, 2017 Beginning balance $ 4,975 $ 4,726 Less: Reinsurance 137 121 Beginning balance, net 4,838 4,605 Incurred claims related to: Current year 3,590 3,290 Prior years: Interest accretion 115 119 All other incurred (130) (59) Total incurred 3,575 3,350 Paid claims related to: Current year 2,060 1,880 Prior years 1,390 1,327 Total paid 3,450 3,207 Foreign currency (16) 13 Ending balance, net 4,947 4,761 Add: Reinsurance 133 134 Ending balance $ 5,080 $ 4,895 |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Effects Of Reinsurance [Line Items] | |
Components of reinsurance recoverables | (In millions) September 30, December 31, Collateral and Other Terms Line of Business Reinsurer(s) 2018 2017 at September 30, 2018 Ongoing operations Global Health Care, Global Supplemental Benefits, Group Disability and Life, COLI Various $ 439 $ 454 Recoverables from approximately 80 reinsurers, used in the ordinary course of business. Current balances range from less than $1 million up to $70 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor's, and 13% is secured by assets in trusts or letters of credit. Total recoverables related to ongoing operations 439 454 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,319 3,436 Both companies' ratings are sufficient to avoid triggering a contractual obligation to fully secure the outstanding balance. GMDB Berkshire 864 928 100% secured by assets in a trust. Other 31 34 100% secured by assets in a trust or letters of credit. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 806 850 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 265 283 100% secured by assets in a trust. Other run-off reinsurance Various 56 61 100% secured by assets in trusts. Total recoverables related to acquisition, disposition or runoff activities 5,341 5,592 Total reinsurance recoverables $ 5,780 $ 6,046 |
Effects of Reinsurance | Three Months Ended Nine Months Ended (In millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Ceded premiums Individual life insurance and annuity business sold $ 32 $ 33 $ 103 $ 105 Other 81 70 277 205 Total ceded premiums $ 113 $ 103 $ 380 $ 310 Reinsurance recoveries Individual life insurance and annuity business sold $ 70 $ 62 $ 183 $ 198 Other 70 33 117 79 Total reinsurance recoveries $ 140 $ 95 $ 300 $ 277 |
Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Account value, net amount at risk and number of contractholders | (Dollars in millions, excludes impact of reinsurance ceded) September 30, 2018 December 31, 2017 Account value $ 9,666 $ 10,109 Net amount at risk $ 1,962 $ 2,112 Number of contractholders 225,000 245,000 |
Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Components of reinsurance recoverables | (In millions) September 30, December 31, Collateral and Other Terms Line of Business Reinsurer 2018 2017 at September 30, 2018 GMIB Berkshire $ 299 $ 359 100% secured by assets in a trust. Sun Life Assurance Company of Canada 177 221 Liberty Re (Bermuda) Ltd. 160 197 100% secured by assets in a trust. Total GMIB recoverables reported in other assets $ 636 $ 777 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities carried at fair value | (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total As of September 30, 2018 As of December 31, 2017 As of September 30, 2018 As of December 31, 2017 As of September 30, 2018 As of December 31, 2017 As of September 30, 2018 As of December 31, 2017 Financial assets at fair value Fixed maturities Federal government and agency $ 246 $ 253 $ 501 $ 526 $ - $ - $ 747 $ 779 State and local government - - 990 1,287 - - 990 1,287 Foreign government - - 2,485 2,442 6 45 2,491 2,487 Corporate - - 18,214 17,658 288 430 18,502 18,088 Mortgage and other asset-backed - - 397 343 141 154 538 497 Total fixed maturities 246 253 22,587 22,256 435 629 23,268 23,138 Equity securities (1) 392 412 66 73 33 103 491 588 Subtotal 638 665 22,653 22,329 468 732 23,759 23,726 Short-term investments - - 102 199 - - 102 199 GMIB assets - - - - 636 777 636 777 Other derivative assets - - 24 2 - - 24 2 Total financial assets at fair value, excluding separate accounts and real estate funds $ 638 $ 665 $ 22,779 $ 22,530 $ 1,104 $ 1,509 $ 24,521 $ 24,704 Real estate funds priced at NAV as a practical expedient (2) 244 N/A Financial liabilities at fair value GMIB liabilities $ - $ - $ - $ - $ 613 $ 762 $ 613 $ 762 Other derivative liabilities - - 21 25 - - 21 25 Total financial liabilities at fair value, excluding separate accounts $ - $ - $ 21 $ 25 $ 613 $ 762 $ 634 $ 787 (1) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). As of December 31, 2017, private equity securities of $70 million were included in the Level 3 amount. See Note 10 for additional information on this accounting policy change. (2) Beginning in 2018 upon adopting ASU 2016-01, certain real estate funds are carried at fair value (previously carried at cost) based on the Company's ownership share of the equity of the investee (Net Asset Value ("NAV") as a practical expedient) including changes in the fair value of its underlying investments. The funds have a quarterly redemption frequency, a 45-90 day redemption notice period and $68 million in unfunded commitments as of September 30, 2018. See Note 10 for additional information on this accounting policy change. Prior periods are designated as not applicable ("N/A") in this table. |
Level 3 fixed maturities and equity securities priced using significant unobservable inputs | Fair Value as of Unobservable Input Unobservable Adjustment Range (Weighted Average) as of (Fair value in millions ) September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Fixed maturities Mortgage and other asset-backed $ 141 $ 154 Liquidity 60 - 370 (80) bps 60 - 370 (90) bps securities Weighting of credit spreads 180 - 310 (240) bps 180 - 290 (230) bps Corporate and government fixed maturities 275 446 Liquidity 70 - 930 (250) bps 70 - 1,650 (300) bps Total fixed maturities 416 600 Equity securities Private equity securities (1) N/A 70 Price-to-EBITDA multiples N/A 5.0 - 12.0 (8.9) Hybrid equity securities 33 33 Liquidity 240 bps (3) 270 bps (3) Total equity securities 33 103 Subtotal 449 703 Securities not priced by the Company (2) 19 29 Total Level 3 securities $ 468 $ 732 (1) Beginning in 2018, private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). Current periods are designated as N/A in this table. (2) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. (3) The range and weighted average is equivalent for this security type. |
Changes in level 3 financial assets and liabilities carried at fair value | For the Three Months Ended September 30, (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities 2018 2017 2018 2017 2018 2017 Balance at July 1, $ 528 $ 751 $ 684 $ 777 $ (653) $ (764) Gains (losses) included in shareholders' net income GMIB fair value gain/(loss) - - (39) 40 39 (40) Other - (2) 2 (1) (10) 6 Total gains (losses) included in shareholders' net income - (2) (37) 39 29 (34) Gains (losses) included in other comprehensive income 2 (9) - - - - Losses required to adjust future policy benefits for settlement annuities (1) (2) (2) - - - - Purchases, sales, settlements Purchases 3 37 - - - - Sales - (3) - - - - Settlements (14) (30) (11) (18) 11 18 Total purchases, sales and settlements (11) 4 (11) (18) 11 18 Transfers into/(out of) Level 3 Transfers into Level 3 24 178 - - - - Transfers out of Level 3 (73) (116) - - - - Total transfers into/(out of) Level 3 (49) 62 - - - - Balance at September 30, $ 468 $ 804 $ 636 $ 798 $ (613) $ (780) Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (1) $ 1 $ (37) $ 39 $ 29 $ (34) For the Nine Months Ended September 30, (In millions) Fixed Maturities & Equity Securities GMIB Assets GMIB Liabilities 2018 2017 2018 2017 2018 2017 Balance at January 1, $ 732 $ 776 $ 777 $ 799 $ (762) $ (780) Gains (losses) included in shareholders' net income GMIB fair value gain (loss) - - (106) 44 108 (44) Other (21) 22 - - 1 (1) Total gains (losses) included in shareholders' net income (21) 22 (106) 44 109 (45) Losses included in other comprehensive income (8) (12) - - - - Gains (losses) required to adjust future policy benefits for settlement annuities (1) (8) 7 - - - - Purchases, sales, settlements Purchases 19 127 - - - - Sales (11) (73) - - - - Settlements (29) (69) (35) (45) 40 45 Total purchases, sales and settlements (21) (15) (35) (45) 40 45 Transfers into/(out of) Level 3 Transfers into Level 3 44 254 - - - - Transfers out of Level 3 (2) (250) (228) - - - - Total transfers into/(out of) Level 3 (206) 26 - - - - Balance at September 30, $ 468 $ 804 $ 636 $ 798 $ (613) $ (780) Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (9) $ - $ (106) $ 44 $ 109 $ (45) (1) Amounts do not accrue to shareholders. (2) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). Private equity securities of $70 million as of December 31, 2017 are included in the September 30, 2018 Transfers out of Level 3 amount. |
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 December September December September December September December 30, 31, 30, 31, 30, 31, 30, 31, 2018 2017 2018 2017 2018 2017 2018 2017 Guaranteed separate accounts (see Note 16) $ 206 $ 215 $ 276 $ 308 $ - $ - $ 482 $ 523 Non-guaranteed separate accounts (1) 1,335 1,536 5,353 5,298 257 292 6,945 7,126 Subtotal $ 1,541 $ 1,751 $ 5,629 $ 5,606 $ 257 $ 292 7,427 7,649 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 735 774 Total separate account assets $ 8,162 $ 8,423 (1) Non-guaranteed separate accounts included $3.9 billion in assets supporting the Company's pension plans as of September 30, 2018 and December 31, 2017, including $0.2 billion classified in Level 3 as of September 30, 2018 and $0.3 billion classified in Level 3 as of December 31, 2017. |
Changes in level 3 separate account assets | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Balance, beginning of period $ 256 $ 316 $ 292 $ 331 Policyholder (losses) gains (1) (1) 42 36 Purchases, sales and settlements Purchases 8 9 20 26 Sales (1) - (73) (52) Settlements (9) (12) (21) (13) Total purchases, sales and settlements (2) (3) (74) (39) Transfers into (out of) Level 3 Transfers into Level 3 12 4 12 5 Transfers out of Level 3 (8) (16) (15) (33) Total transfers into (out of) Level 3 4 (12) (3) (28) Balance, end of period $ 257 $ 300 $ 257 $ 300 |
Separate account assets priced at net asset value | Fair Value as of Unfunded Commitments as of September 30, 2018 (In millions) September 30, 2018 December 31, 2017 Redemption Frequency (if currently eligible) Redemption Notice Period Securities Partnerships $ 472 $ 458 $ 302 Not applicable Not applicable Real Estate Funds 244 239 - Quarterly 30-90 days Hedge Funds 19 77 - Up to Annually, varying by fund 30-90 days Total $ 735 $ 774 $ 302 |
Financial instruments not carried at fair value | September 30, 2018 December 31, 2017 (In millions) Classification in the Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,819 $ 1,867 $ 1,766 $ 1,761 Long-term debt, including current maturities, excluding capital leases Level 2 $ 25,153 $ 25,034 $ 5,730 $ 5,321 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investment [Line Items] | |
Schedule of short-term investments and cash equivalents | September 30, December 31, (In millions) 2018 2017 Corporate securities $ 2,621 $ 1,143 Federal government securities $ 6,495 $ 604 Foreign government securities $ 98 $ 159 Money market funds $ 10,015 $ 12 |
Realized gains and losses on investments | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Fixed maturities $ 1 $ 20 $ (45) $ 36 Equity securities - 6 (26) 40 Commercial mortgage loans - - - (1) Other investments, including derivatives (1) 91 35 139 Realized investment gains (losses) before income taxes - 117 (36) 214 Less income tax (benefit) expense (2) 42 (13) 74 Net realized investment gains (losses) $ 2 $ 75 $ (23) $ 140 |
Sales information for available-for-sale fixed maturities and equity securities | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Proceeds from sales $ 657 $ 446 $ 1,930 $ 1,376 Gross gains on sales $ 5 $ 26 $ 23 $ 85 Gross losses on sales $ (4) $ (3) $ (33) $ (7) |
Fixed Maturities [Member] | |
Investment [Line Items] | |
Investment maturities | Amortized Fair (In millions) Cost Value Due in one year or less $ 1,650 $ 1,656 Due after one year through five years 6,364 6,446 Due after five years through ten years 10,363 10,154 Due after ten years 3,960 4,474 Mortgage and other asset-backed securities 532 538 Total fixed maturities $ 22,869 $ 23,268 |
Gross unrealized appreciation (depreciation) on fixed maturities | Gross Gross Unrealized Unrealized Amortized Appre- Depre- Fair (In millions) Cost ciation ciation Value As of September 30, 2018 Federal government and agency $ 558 $ 194 $ (5) $ 747 State and local government 934 59 (3) 990 Foreign government 2,369 136 (14) 2,491 Corporate 18,476 421 (395) 18,502 Mortgage and other asset-backed 532 16 (10) 538 Total fixed maturities $ 22,869 $ 826 $ (427) $ 23,268 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,266 $ 471 $ (27) $ 2,710 As of December 31, 2017 Federal government and agency $ 541 $ 239 $ (1) $ 779 State and local government 1,196 93 (2) 1,287 Foreign government 2,360 142 (15) 2,487 Corporate 17,301 868 (81) 18,088 Mortgage and other asset-backed 469 29 (1) 497 Total fixed maturities $ 21,867 $ 1,371 $ (100) $ 23,138 Investments supporting liabilities of the Company's run-off settlement annuity business (included in above total) (1) $ 2,200 $ 681 $ (2) $ 2,879 (1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income. |
Fixed maturities with a decline in fair value from amortized cost | September 30, 2018 December 31, 2017 Fair Amortized Unrealized Number Fair Amortized Unrealized Number (Dollars in millions) Value Cost Depreciation of Issues Value Cost Depreciation of Issues One year or less Investment grade $ 9,018 $ 9,281 $ (263) 1,936 $ 3,272 $ 3,309 $ (37) 797 Below investment grade $ 878 $ 900 $ (22) 959 $ 543 $ 553 $ (10) 643 More than one year Investment grade $ 2,365 $ 2,496 $ (131) 630 $ 1,503 $ 1,549 $ (46) 373 Below investment grade $ 185 $ 196 $ (11) 122 $ 155 $ 162 $ (7) 42 |
Commercial Mortgage Loans [Member] | |
Investment [Line Items] | |
Credit risk profile of commercial mortgage loan portfolio | (Dollars in millions) As of September 30, 2018 As of December 31, 2017 Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Below 60% $ 1,141 2.12 $ 1,109 2.03 60% to 79% 650 1.93 652 2.24 80% to 100% 76 1.49 - - Total $ 1,867 2.03 58% $ 1,761 2.11 57% |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Designated as Hedging Instrument [Member] | Net Investment Hedge [Member] | Foreign Currency Swaps [Member] | |
Derivative [Line Items] | |
Schedule of derivative instruments | Net Investment Hedge of Certain International Subsidiaries Notional Value (in millions) Type of instrument. Foreign currency swap contracts September 30, 2018 December 31, 2017 $ 439 $ - Purpose. During the first quarter of 2018, the Company entered into fixed-for-fixed currency swaps to reduce the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in Euros. Terms of derivative instruments. The Company receives fixed rate U.S. dollar coupon and principal payments, and pays fixed rate coupon and principal payments denominated in the functional currency of the hedged foreign subsidiary. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swaps are denominated in Euros. Accounting. As a net investment hedge, the fair values of the swap contracts are reported in other assets, including other intangibles, or in accounts payable, accrued expenses, and other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in swap fair value are excluded from the effectiveness assessment and recognized in other operating expenses as swap coupon payments are accrued. |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | |
Derivative [Line Items] | |
Schedule of derivative instruments | Fair Value Hedges of Fixed Maturity Bonds Notional Value (in millions) Type of instrument. Foreign currency swap contracts September 30, 2018 December 31, 2017 $ 478 $ 318 Purpose. To hedge the foreign exchange-related changes in fair values of certain fixed maturity foreign-denominated bonds. Terms of derivative instruments. The Company periodically exchanges cash flows between two currencies for both principal and interest. Foreign currency swaps are Euros, British pounds and Australian dollars, and have terms for periods of up to thirty years. The notional value of these derivatives matches the amortized cost of the hedged bonds. Accounting. Using fair value hedge accounting, swap fair values are reported in other long-term investments or in accounts payable, accrued expenses and other liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses. The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign denominated coupons received on the designated bonds. Prior to adopting ASU 2017-12, changes in fair value of excluded components of the swap contracts were recognized immediately in realized investment gains and losses. |
Non designated [Member] | Forward Contracts [Member] | |
Derivative [Line Items] | |
Schedule of derivative instruments | Economic Hedges of a Fixed Maturity Bond Portfolio Notional Value (in millions) Type of instrument. Foreign currency forward contracts September 30, 2018 December 31, 2017 $ 509 $ 255 Purpose. To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated fixed maturity bond portfolio to reflect the local currency for the Company's foreign subsidiary in South Korea. Terms of derivative instruments. The Company agrees to purchase South Korean won in exchange for U.S. dollars at a future date, generally within three months from the contracts' trade dates. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio. Accounting. As these arrangements were not designated as accounting hedges, fair values are reported in short-term investments or accounts payable, accrued expenses, and other liabilities, and changes in fair values are reported in other realized investment gains and losses. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Changes in accumulated other comprehensive income (loss) | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Securities Beginning balance $ (31) $ 436 $ 328 $ 362 Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) - - 65 - Reclassification adjustment to retained earnings related to new financial instruments guidance (1) - - (4) - Adjusted beginning balance (31) 436 389 362 Appreciation (depreciation) on securities 2 (5) (553) 163 Tax (expense) benefit (1) - 112 (62) Net appreciation (depreciation) on securities 1 (5) (441) 101 Reclassification adjustment for (gains) losses included in shareholders' net income (net realized investment gains) (1) (26) 27 (76) Tax benefit (expense) - 9 (6) 27 Net (gains) losses reclassified from AOCI to net income (1) (17) 21 (49) Other comprehensive (loss) income, net of tax - (22) (420) 52 Ending balance $ (31) $ 414 $ (31) $ 414 Derivatives Beginning balance $ (19) $ - $ - $ 3 Reclassification adjustment from retained earnings related to new hedging guidance (1) - - (6) - Adjusted beginning balance (19) - (6) 3 Appreciation (depreciation) on derivatives 2 (1) (14) (1) Tax benefit - - 3 - Net appreciation (depreciation) on derivatives 2 (1) (11) (1) Reclassification adjustment for losses (gains) included in shareholders' net income (net realized investment gains) - 1 - (3) Tax benefit - - - 1 Net losses (gains) reclassified from AOCI to net income - 1 - (2) Other comprehensive income (loss), net of tax 2 - (11) (3) Ending balance $ (17) $ - $ (17) $ - Translation of foreign currencies Beginning balance $ (176) $ (230) $ (65) $ (369) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) - - (4) - Adjusted beginning balance (176) (230) (69) (369) Translation of foreign currencies (31) 38 (136) 179 Tax (expense) benefit 2 (4) - (6) Net translation of foreign currencies (29) 34 (136) 173 Ending balance $ (205) $ (196) $ (205) $ (196) (1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018. Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2018 2017 2018 2017 Postretirement benefits liability Beginning balance $ (1,617) $ (1,352) $ (1,345) $ (1,378) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) - - (290) - Adjusted beginning balance (1,617) (1,352) (1,635) (1,378) Reclassification adjustment for amortization of net losses from past experience and prior service costs (other operating expenses) 19 16 53 48 Reclassification adjustment for settlement (other operating expenses) - - - 6 Tax (expense) (6) (6) (13) (20) Net adjustments reclassified from AOCI to net income 13 10 40 34 Valuation update - - (12) 2 Tax benefit (expense) - - 3 - Net change due to valuation update - - (9) 2 Other comprehensive income, net of tax 13 10 31 36 Ending balance $ (1,604) $ (1,342) $ (1,604) $ (1,342) (1) See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018. |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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) 2018 2017 2018 2017 2018 2017 2018 2017 Service cost $ - $ - $ 1 $ 1 $ - $ - $ - $ - Interest cost 42 47 126 140 2 2 6 7 Expected long-term return on plan assets (64) (66) (192) (195) - - - - Amortization of: Net loss (gain) from past experience 19 16 54 49 1 - 1 - Prior service cost - - - - (1) - (2) (1) Settlement loss - - - 6 - - - - Net cost $ (3) $ (3) $ (11) $ 1 $ 2 $ 2 $ 5 $ 6 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information [Abstract] | |
Special item charges | Three Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Transaction-related costs - Net investment income - see Note 3 $ (13) $ (10) $ - $ - - Other operating expenses - see Note 3 141 118 9 6 Total transaction-related costs 128 108 9 6 Charges associated with litigation matters - see Note 16 45 35 - - Charges associated with U.S. tax reform - Other operating expenses - see Note 15 2 2 - - - Tax (benefit) - see Note 15 - (7) - - Total charges (benefits) associated with U.S. tax reform 2 (5) - - Debt extinguishment costs - See Note 5 - - 321 209 Total impact from special items $ 175 $ 138 $ 330 $ 215 Nine Months Ended September 30, 2018 September 30, 2017 (In millions) Before-tax After-tax Before-tax After-tax Transaction-related costs - Net investment income - see Note 3 $ (13) $ (10) $ - $ - - Other operating expenses - see Note 3 331 277 88 8 Total transaction-related costs 318 267 88 8 Charges associated with litigation matters - see Note 16 45 35 - - Charges associated with U.S. tax reform - Other operating expenses - see Note 15 2 2 - - - Tax (benefit) - see Note 15 - (7) - - Total charges (benefits) associated with U.S. tax reform 2 (5) - - Debt extinguishment costs - See Note 5 - - 321 209 Long-term care guaranty fund assessment - see Note 16(D) - - 129 83 Total impact from special items $ 365 $ 297 $ 538 $ 300 |
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, 2018 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 8,995 $ 1,055 $ 1,032 $ 33 $ (13) $ 11,102 Net investment income 122 37 89 87 20 355 Less net realized investment (losses) from equity method subsidiaries (2) - (1) - - - (1) Less special item (transaction-related costs) - - - - 13 13 Operating revenues $ 9,117 $ 1,093 $ 1,121 $ 120 $ (6) $ 11,445 Total revenues $ 9,121 $ 1,093 $ 1,124 $ 112 $ 7 $ 11,457 Shareholders' net income (loss) $ 750 $ 80 $ 106 $ 9 $ (173) $ 772 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) losses (2) (4) - (4) 8 (1) (1) Amortization of other acquired intangible assets, net 32 4 - - - 36 Special items Transaction-related costs - - - - 108 108 Charges associated with litigation matters 35 - - - - 35 U.S. tax reform (9) 9 (2) (1) (2) (5) Total special items 26 9 (2) (1) 106 138 Adjusted income (loss) from operations $ 804 $ 93 $ 100 $ 16 $ (68) $ 945 Three Months Ended September 30, 2017 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 8,087 $ 954 $ 1,015 $ 29 $ (11) $ 10,074 Net investment income 89 31 84 86 8 298 Operating revenues $ 8,176 $ 985 $ 1,099 $ 115 $ (3) $ 10,372 Total revenues $ 8,251 $ 985 $ 1,136 $ 120 $ (3) $ 10,489 Shareholders' net income (loss) $ 610 $ 105 $ 97 $ 18 $ (270) $ 560 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (47) - (24) (4) - (75) Amortization of other acquired intangible assets, net 12 4 - - - 16 Special items Transaction-related costs - - - - 6 6 Debt extinguishment costs - - - - 209 209 Total special items - - - - 215 215 Adjusted income (loss) from operations $ 575 $ 109 $ 73 $ 14 $ (55) $ 716 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (2) Beginning in 2018, the Company's share of certain realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in fees and other revenues) is excluded from operating revenues and adjusted income from operations. (In millions) Global Health Care Global Supplemental Benefits Group Disability and Life Other Operations Corporate Total Nine Months Ended September 30, 2018 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 26,994 $ 3,171 $ 3,089 $ 97 $ (37) $ 33,314 Net investment income including special items 362 107 275 260 32 1,036 Less net realized investment (losses) on equity method subsidiaries (2) - (23) - - - (23) Less special item (transaction related costs) - - - - 13 13 Operating revenues $ 27,356 $ 3,301 $ 3,364 $ 357 $ (18) $ 34,360 Total revenues $ 27,345 $ 3,268 $ 3,356 $ 351 $ (6) $ 34,314 Shareholders' net income (loss) $ 2,372 $ 271 $ 267 $ 57 $ (474) $ 2,493 After-tax adjustments to reconcile to adjusted income from operations Net realized investment losses (2) 7 28 5 5 1 46 Amortization of other acquired intangible assets 59 15 - - - 74 Special items Transaction-related costs - - - - 267 267 Charges associated with litigation matters 35 - - - - 35 U.S. tax reform (9) 9 (2) (1) (2) (5) Total special items 26 9 (2) (1) 265 297 Adjusted income (loss) from operations $ 2,464 $ 323 $ 270 $ 61 $ (208) $ 2,910 Nine Months Ended September 30, 2017 Premiums, fees and other revenues and mail order pharmacy revenues (1) $ 24,382 $ 2,759 $ 3,070 $ 89 $ (35) $ 30,265 Net investment income 273 90 262 260 24 909 Operating revenues $ 24,655 $ 2,849 $ 3,332 $ 349 $ (11) $ 31,174 Total revenues $ 24,788 $ 2,861 $ 3,399 $ 351 $ (11) $ 31,388 Shareholders' net income (loss) $ 1,753 $ 283 $ 253 $ 55 $ (373) $ 1,971 After-tax adjustments to reconcile to adjusted income from operations Net realized investment (gains) (85) (9) (44) (2) - (140) Amortization of other acquired intangible assets 40 14 - - - 54 Special items Transaction-related costs - - - - 8 8 Debt extinguishment costs - - - - 209 209 Long-term care guaranty fund assessment 68 - 15 - - 83 Total special items 68 - 15 - 217 300 Adjusted income (loss) from operations $ 1,776 $ 288 $ 224 $ 53 $ (156) $ 2,185 (1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment. (2) Beginning in 2018, the Company's share of certain realized investment results of equity method joint ventures in the Global Supplemental Benefits segment (reported in fees and other revenues) is excluded from operating revenues and adjusted income from operations. |
Revenue from external customers | (In millions) Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Premiums by product (ASC 944 - insurance activities) Global Health Care Commercial Guaranteed cost $ 2,080 $ 1,591 $ 6,125 $ 4,656 Experience-rated 711 737 2,186 2,191 Stop loss 1,010 874 2,983 2,582 International health care 513 484 1,541 1,438 Dental 486 452 1,447 1,334 Other 260 247 777 736 Government Medicare 1,455 1,324 4,414 4,174 Medicaid 247 253 725 806 Medicare Part D 157 169 574 601 Total Global Health Care 6,919 6,131 20,772 18,518 Disability 507 493 1,522 1,485 Life, Accident and Supplemental Health 1,539 1,428 4,629 4,208 Total premiums from ongoing operations 8,965 8,052 26,923 24,211 Fees (ASC 606 - service activities) Global Health Care 1,325 1,219 3,984 3,652 Global Supplemental Benefits 7 6 22 18 Group Disability and Life 24 25 74 77 Total fees from ongoing operations 1,356 1,250 4,080 3,747 Mail order pharmacy (ASC 606 - service activities) 747 733 2,222 2,200 Other 34 39 89 107 Total revenues from external customers $ 11,102 $ 10,074 $ 33,314 $ 30,265 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 9 Months Ended | |||||
Sep. 30, 2018 | Mar. 31, 2019 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Cumulative effect on equity in period of adoption | [1] | $ 58 | ||||
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Cumulative effect on equity, retrospective adjustment | $ (24) | |||||
Accounting Standards Update 2016-01 [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Carrying value of certain limited partnership interests | 275 | $ 200 | ||||
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Cumulative effect on equity in period of adoption | 62 | |||||
Accounting Standards Update 2017-12 [Member] | Retained Earnings [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Cumulative effect on equity in period of adoption | ||||||
Accounting Standards Update 2017-12 [Member] | Accumulated Other Comprehensive Income [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Cumulative effect on equity in period of adoption | ||||||
Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Cumulative effect on equity in period of adoption | 229 | |||||
Accounting Standards Update 2018-02 [Member] | Accumulated Other Comprehensive Income [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Cumulative effect on equity in period of adoption | $ (229) | |||||
Accounting Standards Update 2016-02 [Member] | Scenario Forecast [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Impact of accounting standard on Total Assets | $ 500 | |||||
Impact of accounting standard on Total Liabilities | $ 500 | |||||
Accounting Standards Update 2018-12 [Member] | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Material effect on Company's financial statements | Yes | |||||
[1] | See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Contract with Customer, Asset and Liability [Abstract] | |||||
Allowance for doubtful accounts for receivables | |||||
Contract assets | |||||
Receivables, net | 898 | 898 | 885 | ||
Contract liabilities | 50 | 50 | $ 54 | ||
Revenue recognized that was included in the contract liability balance at the beginning of the reporting period | |||||
Revenue recognized from performance obligations satisfied in prior periods | |||||
Performance Guarantee [Member] | |||||
Loss Contingencies [Line Items] | |||||
Amounts accrued for performance guarantees | |||||
Amounts paid for performance guarantees |
Mergers and Acquistions (Detail
Mergers and Acquistions (Details) $ / shares in Units, $ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018NZD ($)shares | Sep. 30, 2018USD ($)$ / sharesshares | |
Business Acquisition [Line Items] | |||||||
Interest expense on newly issued debt | $ 33 | $ 0 | $ 33 | $ 0 | |||
Net investment income on debt proceeds | (13) | 0 | (13) | 0 | |||
All other transaction-related costs | 108 | 9 | 298 | 88 | |||
Transaction-related costs, net | 128 | 9 | 318 | 88 | |||
Interest expense on newly issued debt, after-tax | 26 | 0 | 26 | 0 | |||
Net investment income on debt proceeds, after-tax | (10) | 0 | (10) | 0 | |||
All other transaction-related costs, after-tax | 92 | 6 | 251 | 67 | |||
Tax (benefit) - previously non-deductible costs | $ (59) | 0 | (59) | ||||
Transaction-related costs, net - after-tax | $ 108 | $ 6 | $ 267 | $ 8 | |||
Express Scripts Holding Company [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Stock consideration per share | shares | 0.2434 | 0.2434 | |||||
Cash consideration per share | $ / shares | $ 48.75 | ||||||
Parent termination fee payable to Express Scripts | $ 1,600 | ||||||
Reciprocal termination fee payable to Company | 1,600 | ||||||
Reverse termination fee payable to Express Scripts | 2,100 | ||||||
OnePath Insurance [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Merger consideration | $ 700 | $ 460 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Shareholders' net income | $ 772 | $ 560 | $ 2,493 | $ 1,971 |
Shares: | ||||
Weighted average | 242,577 | 249,242 | 242,404 | 252,980 |
Common stock equivalents | 3,535 | 4,168 | 3,343 | 4,078 |
Total shares | 246,112 | 253,410 | 245,747 | 257,058 |
EPS, basic | $ 3.18 | $ 2.25 | $ 10.28 | $ 7.79 |
EPS, effect of dilution | (0.04) | (0.04) | (0.14) | (0.12) |
EPS, diluted | $ 3.14 | $ 2.21 | $ 10.14 | $ 7.67 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Common shares held in Treasury | 52,600 | 48,600 | 52,600 | 48,600 |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive options | 900 | 0 | 900 | 1,200 |
Debt - Short-term and Long-term
Debt - Short-term and Long-term Debt (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Commercial paper | $ 0 | $ 100,000,000 | |
Current maturities of long-term debt | 0 | 131,000,000 | |
Other, including capital leases | 9,000,000 | 9,000,000 | |
Total short-term debt | 9,000,000 | 240,000,000 | |
Long-term debt, carrying value | 25,041,000,000 | 5,199,000,000 | |
Repayment of long-term debt | 131,000,000 | $ 1,250,000,000 | |
$250 million, 4.375% Notes due 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 250,000,000 | $ 250,000,000 | |
Long-term debt, stated interest rate | 4.375% | 4.375% | |
Long-term debt, carrying value | $ 247,000,000 | $ 249,000,000 | |
$300 million, 5.125% Notes due 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 300,000,000 | $ 300,000,000 | |
Long-term debt, stated interest rate | 5.125% | 5.125% | |
Long-term debt, carrying value | $ 298,000,000 | $ 299,000,000 | |
$1,000 million, Floating Rate Notes due 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | 1,000,000,000 | ||
Long-term debt, carrying value | 996,000,000 | ||
$1,750 million, 3.2% Notes due 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 1,750,000,000 | ||
Long-term debt, stated interest rate | 3.20% | ||
Long-term debt, carrying value | $ 1,741,000,000 | ||
$78 million, 6.37% Notes due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 78,000,000 | $ 78,000,000 | |
Long-term debt, stated interest rate | 6.37% | 6.37% | |
Long-term debt, carrying value | $ 78,000,000 | $ 78,000,000 | |
$300 million, 4.5% Notes due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 300,000,000 | $ 300,000,000 | |
Long-term debt, stated interest rate | 4.50% | 4.50% | |
Long-term debt, carrying value | $ 296,000,000 | $ 299,000,000 | |
$1,000 million, Floating Rate Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | 1,000,000,000 | ||
Long-term debt, carrying value | 995,000,000 | ||
$1,250 million, 3.4% Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 1,250,000,000 | ||
Long-term debt, stated interest rate | 3.40% | ||
Long-term debt, carrying value | $ 1,244,000,000 | ||
$750 million, 4% Notes due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 750,000,000 | $ 750,000,000 | |
Long-term debt, stated interest rate | 4.00% | 4.00% | |
Long-term debt, carrying value | $ 746,000,000 | $ 745,000,000 | |
$100 million, 7.65% Notes due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 100,000,000 | $ 100,000,000 | |
Long-term debt, stated interest rate | 7.65% | 7.65% | |
Long-term debt, carrying value | $ 100,000,000 | $ 100,000,000 | |
$17 million, 8.3% Notes due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 17,000,000 | $ 17,000,000 | |
Long-term debt, stated interest rate | 8.30% | 8.30% | |
Long-term debt, carrying value | $ 17,000,000 | $ 17,000,000 | |
$700 million, Floating Rate Notes due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | 700,000,000 | ||
Long-term debt, carrying value | 696,000,000 | ||
$3,100 million, 3.75% Notes due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 3,100,000,000 | ||
Long-term debt, stated interest rate | 3.75% | ||
Long-term debt, carrying value | $ 3,082,000,000 | ||
$900 million, 3.25% Notes Due 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 900,000,000 | $ 900,000,000 | |
Long-term debt, stated interest rate | 3.25% | 3.25% | |
Long-term debt, carrying value | $ 895,000,000 | $ 894,000,000 | |
$2,200 million, 4.125% Notes due 2025 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 2,200,000,000 | ||
Long-term debt, stated interest rate | 4.125% | ||
Long-term debt, carrying value | $ 2,185,000,000 | ||
$600 million, 3.05% Notes due 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 600,000,000 | $ 600,000,000 | |
Long-term debt, stated interest rate | 3.05% | 3.05% | |
Long-term debt, carrying value | $ 594,000,000 | $ 594,000,000 | |
$259 million, 7.875% Debentures due 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 259,000,000 | $ 259,000,000 | |
Long-term debt, stated interest rate | 7.875% | 7.875% | |
Long-term debt, carrying value | $ 259,000,000 | $ 258,000,000 | |
$3,800 million, 4.375% Notes due 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 3,800,000,000 | ||
Long-term debt, stated interest rate | 4.375% | ||
Long-term debt, carrying value | $ 3,771,000,000 | ||
$45 million, 8.3% Step Down Notes due 2033 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 45,000,000 | $ 45,000,000 | |
Long-term debt, stated interest rate | 8.30% | 8.30% | |
Long-term debt, carrying value | $ 45,000,000 | $ 45,000,000 | |
$191 million, 6.15% Notes due 2036 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 191,000,000 | $ 191,000,000 | |
Long-term debt, stated interest rate | 6.15% | 6.15% | |
Long-term debt, carrying value | $ 190,000,000 | $ 190,000,000 | |
$2,200 million, 4.8% Notes due 2038 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 2,200,000,000 | ||
Long-term debt, stated interest rate | 4.80% | ||
Long-term debt, carrying value | $ 2,176,000,000 | ||
$121 million, 5.875% Notes due 2041 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 121,000,000 | $ 121,000,000 | |
Long-term debt, stated interest rate | 5.875% | 5.875% | |
Long-term debt, carrying value | $ 119,000,000 | $ 119,000,000 | |
$317 million, 5.375% Notes due 2042 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 317,000,000 | $ 317,000,000 | |
Long-term debt, stated interest rate | 5.375% | 5.375% | |
Long-term debt, carrying value | $ 315,000,000 | $ 315,000,000 | |
$1,000 million, 3.875% Notes due 2047 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 1,000,000,000 | $ 1,000,000,000 | |
Long-term debt, stated interest rate | 3.875% | 3.875% | |
Long-term debt, carrying value | $ 988,000,000 | $ 988,000,000 | |
$3,000 million, 4.9% Notes due 2048 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face value | $ 3,000,000,000 | ||
Long-term debt, stated interest rate | 4.90% | ||
Long-term debt, carrying value | $ 2,961,000,000 | ||
Other, including capital leases [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | $ 7,000,000 | $ 9,000,000 |
Debt - Long-tem Debt Issued (De
Debt - Long-tem Debt Issued (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Amount net of discount and fees | $ 25,041,000,000 | $ 5,199,000,000 |
Notes issued in 2018 in connection with Express Scripts Merger [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 20,000,000,000 | |
Debt guarantee termination percentage | 20.00% | |
Notes issued in 2018 in connection with Express Scripts Merger [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, term | 18 months | |
Notes issued in 2018 in connection with Express Scripts Merger [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, term | 30 years | |
Notes issued in 2018 with a special mandatory redemption [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 17,000,000,000 | |
Debt instrument redemption price percentage | 101.00% | |
$1,000 million, Floating Rate Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 1,000,000,000 | |
Amount net of discount and fees | 996,000,000 | |
$1,750 million, 3.2% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 1,750,000,000 | |
Long-term debt, stated interest rate | 3.20% | |
Amount net of discount and fees | $ 1,741,000,000 | |
$1,000 million, Floating Rate Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | 1,000,000,000 | |
Amount net of discount and fees | 995,000,000 | |
$1,250 million, 3.4% Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 1,250,000,000 | |
Long-term debt, stated interest rate | 3.40% | |
Amount net of discount and fees | $ 1,244,000,000 | |
$700 million, Floating Rate Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | 700,000,000 | |
Amount net of discount and fees | 696,000,000 | |
$3,100 million, 3.75% Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 3,100,000,000 | |
Long-term debt, stated interest rate | 3.75% | |
Amount net of discount and fees | $ 3,082,000,000 | |
$2,200 million, 4.125% Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 2,200,000,000 | |
Long-term debt, stated interest rate | 4.125% | |
Amount net of discount and fees | $ 2,185,000,000 | |
$3,800 million, 4.375% Notes due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 3,800,000,000 | |
Long-term debt, stated interest rate | 4.375% | |
Amount net of discount and fees | $ 3,771,000,000 | |
$2,200 million, 4.8% Notes due 2038 | ||
Debt Instrument [Line Items] | ||
Long-term debt, face value | $ 2,200,000,000 | |
Long-term debt, stated interest rate | 4.80% | |
Amount net of discount and fees | $ 2,176,000,000 |
Debt - Extinguishment (Details)
Debt - Extinguishment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Extinguishment of Debt [Line Items] | ||||
Debt extinguishment costs | $ 0 | $ 321 | $ 0 | $ 321 |
Debt extinguishment costs, after-tax | $ 0 | $ 209 | $ 0 | $ 209 |
Debt - Revolving Credit and Let
Debt - Revolving Credit and Letter of Credit (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018USD ($)Banks | Sep. 30, 2018USD ($)Banks | Mar. 31, 2018USD ($) | |
Bridge Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of participating banks | Banks | 23 | 23 | |
Credit agreement term | 364 days | ||
Maximum borrowing capacity | $ 3,900 | $ 3,900 | $ 26,700 |
Leverage ratio covenant | 60.00% | 60.00% | |
Fees incurred | $ 140 | ||
Fees paid | $ 111 | ||
Amortization of fees | $ 50 | $ 135 | |
Revolving Credit And Letter Of Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of participating banks | Banks | 23 | 23 | |
Credit agreement term | 5 years | ||
Maximum borrowing capacity | $ 1,500 | $ 1,500 | |
Maximum borrowing capacity on or after the Merger | 3,250 | 3,250 | |
Amount by which credit facilty amount can be increased | $ 500 | $ 500 | |
Amount by which credit facilty term length can be increased | 1 year | ||
Leverage ratio covenant | 50.00% | 50.00% | |
Leverage ratio covenant post-Merger | 60.00% | 60.00% | |
Letter of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 500 | $ 500 | |
Maximum borrowing capacity on or after the Merger | $ 500 | $ 500 | |
Term Loan Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of participating banks | Banks | 26 | 26 | |
Credit agreement term | 3 years | ||
Aggregate principal amount | $ 3,000 | $ 3,000 | |
Leverage ratio covenant | 60.00% | 60.00% |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - $ / shares shares in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Common: Par value $.25, 600,000,000 shares authorized | |||
Treasury stock | 52.6 | 48.6 | |
Common Stock, par value and shares authorized | |||
Common stock, par value per share | $ 0.25 | $ 0.25 | |
Common stock shares authorized | 600 | 600 |
Global Health Care Medical Co_3
Global Health Care Medical Costs Payable - Activity (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Medical Claims Payable Activity [Abstract] | ||
Beginning balance, unpaid claims, gross | $ 2,719 | $ 2,532 |
Less: Reinsurance and other amounts recoverable | 265 | 275 |
Beginning balance, unpaid claims, net | 2,454 | 2,257 |
Incurred claims related to: | ||
Current year | 16,287 | 14,952 |
Prior years | (189) | (268) |
Total incurred | 16,098 | 14,684 |
Paid claims related to: | ||
Current year | 13,915 | 12,689 |
Prior years | 1,925 | 1,730 |
Total paid | 15,840 | 14,419 |
Ending balance, unpaid claims, net | 2,712 | 2,522 |
Add: Reinsurance and other amounts recoverable | 243 | 261 |
Ending balance, unpaid claims, gross | 2,955 | 2,783 |
Total of incurred but not reported liabilities plus expected claim development on reported claims, including reported claims in process | $ 2,800 | $ 2,600 |
Global Health Care Medical Co_4
Global Health Care Medical Costs Payable - Prior Year Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 189 | $ 268 |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.90% | 1.40% |
Net impact (unfavorable) of prior development on shareholders' net income | $ 85 | $ 116 |
Completion Factors [Member] | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 114 | $ 128 |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.60% | 0.70% |
Medical Cost Trend [Member] | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 66 | $ 131 |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.30% | 0.70% |
Other [Member] | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 9 | $ 9 |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.00% | 0.00% |
Global Health Care Medical Co_5
Global Health Care Medical Costs Payable - Unpaid Claims Development (Details) - Global Health Benefits Segment [Member] - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Claims Development [Line Items] | ||||
Liability for unpaid claims and claims expenses, net of reinsurance | $ 2,712 | $ 2,454 | $ 2,522 | $ 2,257 |
Reinsurance recoverable on unpaid claims | 243 | 265 | 261 | 275 |
Total liability for unpaid claims and claims expenses | $ 2,955 | $ 2,719 | $ 2,783 | $ 2,532 |
Liabilities for Unpaid Claims_3
Liabilities for Unpaid Claims and Claims Expenses - Liability Balance Details (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 5,259 | $ 5,077 |
Group Disability And Life Segment [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 4,584 | 4,442 |
Global Supplemental Benefits Segment [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 496 | 453 |
Other Operations Segment [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 179 | $ 182 |
Liabilities for Unpaid Claims_4
Liabilities for Unpaid Claims and Claims Expenses - Activity in Liabilities for Unpaid Claims and Claims Expenses (Details) - Group Disability and Life and Global Supplemental Benefits [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Beginning balance, unpaid claims, gross | $ 4,975 | $ 4,726 |
Less: Reinsurance and other amounts recoverable | 137 | 121 |
Beginning balance, unpaid claims, net | 4,838 | 4,605 |
Incurred claims related to: | ||
Current year | 3,590 | 3,290 |
Interest accretion | 115 | 119 |
All other prior years | (130) | (59) |
Total incurred | 3,575 | 3,350 |
Paid claims related to: | ||
Current year | 2,060 | 1,880 |
Prior years | 1,390 | 1,327 |
Total paid | 3,450 | 3,207 |
Foreign currency | (16) | 13 |
Ending balance, unpaid claims, net | 4,947 | 4,761 |
Add: Reinsurance and other amounts recoverable | 133 | 134 |
Ending balance, unpaid claims, gross | $ 5,080 | $ 4,895 |
Liabilities for Unpaid Claims_5
Liabilities for Unpaid Claims and Claims Expenses - Reconciliation to the Liability for Unpaid Claims and Claims Expense (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
Group Disability and Life, Global Supplemental Beneftits and Other Operations [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 5,259 | $ 5,077 |
Group Disability And Life Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 4,584 | 4,442 |
Global Supplemental Benefits Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 496 | 453 |
Other Operations Segment [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 179 | $ 182 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverables (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2018USD ($)Reinsurers | Dec. 31, 2017USD ($) | |
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 5,780 | $ 6,046 |
Acquisition, disposition or runoff activities [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | 5,341 | 5,592 |
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 | 3,319 | 3,436 |
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 864 | 928 |
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Prudential Retirement Insurance And Annuity Company [Member] | Retirement Benefits Business (sold in 2004) [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 806 | 850 |
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 | $ 265 | 283 |
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 [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 439 | 454 |
Number of external reinsurers | Reinsurers | 80 | |
Maximum reinsurance recoverable from a single reinsurer | $ 70 | |
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Maximum [Member] | ||
Ceded Credit Risk [Line Items] | ||
Minimum reinsurance recoverable from a single reinsurer | $ 1 | |
Other Retrocessionaires [Member] | Global Health Care, Global Supplemental Benefits, Group Disability and Life [Member] | Minimum [Member] | Standard & Poor's Investment Grade [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 70.00% | |
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 | 13.00% | |
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 31 | 34 |
Other Retrocessionaires [Member] | Guaranteed Minimum Death Benefits [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | |
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 56 | $ 61 |
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | Ceded Credit Risk Secured [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% |
Reinsurance - Effects of Reinsu
Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Premiums Earned, Net [Abstract] | ||||
Ceded | $ 113 | $ 103 | $ 380 | $ 310 |
Premiums Earned Net | 8,994 | 8,075 | 27,005 | 24,283 |
Reinsurance Recoveries [Abstract] | ||||
Reinsurance recoveries | 140 | 95 | 300 | 277 |
Individual Life Insurance And Annuity Business Sold [Member] | ||||
Premiums Earned, Net [Abstract] | ||||
Ceded | 32 | 33 | 103 | 105 |
Reinsurance Recoveries [Abstract] | ||||
Reinsurance recoveries | 70 | 62 | 183 | 198 |
Other Subsegments [Member] | ||||
Premiums Earned, Net [Abstract] | ||||
Ceded | 81 | 70 | 277 | 205 |
Reinsurance Recoveries [Abstract] | ||||
Reinsurance recoveries | $ 70 | $ 33 | $ 117 | $ 79 |
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, 2018 | Dec. 31, 2013 |
Ceded Credit Risk [Line Items] | ||
Percent of future claim payments reinsured | 100.00% | |
Ceded Reinsurance Agreement, Coverage Limit, Amount Remaining | $ 3.4 |
Reinsurance - Account Value, Ne
Reinsurance - Account Value, Net Amount at Risk and Contractholders for GMDB Business (Details) - Variable Annuity [Member] - Guaranteed Minimum Death Benefit [Member] $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018USD ($)Contractholders | Dec. 31, 2017USD ($)Contractholders | |
Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk And Average Age Table [Line Items] | ||
Account value | $ 9,666 | $ 10,109 |
Net amount at risk | $ 1,962 | $ 2,112 |
Number of contractholders | Contractholders | 225,000 | 245,000 |
Reinsurance - GMIB Reinsurers (
Reinsurance - GMIB Reinsurers (Details) - Guaranteed Minimum Income Benefit [Member] $ in Millions | 9 Months Ended | |
Sep. 30, 2018USD ($)Reinsurers | Dec. 31, 2017USD ($) | |
Ceded Credit Risk [Line Items] | ||
Annuitization election period | 30 days | |
Number of external reinsurers | Reinsurers | 3 | |
GMIB Assets | $ 636 | $ 777 |
Berkshire [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 299 | 359 |
Berkshire [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration percentage | 100.00% | |
Sun Life Assurance Company Of Canada [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 177 | 221 |
Liberty Re (Bermuda) Ltd. [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 160 | $ 197 |
Liberty Re (Bermuda) Ltd. [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration percentage | 100.00% |
Reinsurance - GMIB Guarantees (
Reinsurance - GMIB Guarantees (Details) - Guarantee Type, Other [Member] - Guaranteed Minimum Income Benefit [Member] - Variable Annuity [Member] $ in Millions | Sep. 30, 2018USD ($) |
Guarantee Obligations [Line Items] | |
Underlying mutual fund investment values | $ 786 |
Maximum Exposure, Undiscounted | $ 514 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Financial Liabilities Carried at Fair Value (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Financial assets at fair value: | ||
Fixed maturities | $ 23,268 | $ 23,138 |
Equity securities | 579 | 588 |
Short-term investments | 102 | 199 |
Financial liabilities at fair value: | ||
Unfunded Commitments | $ 68 | |
Minimum [Member] | ||
Financial liabilities at fair value: | ||
Redemption Notice Period | 45 days | |
Maximum [Member] | ||
Financial liabilities at fair value: | ||
Redemption Notice Period | 90 days | |
Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | $ 23,268 | 23,138 |
Equity securities | 491 | 588 |
Subtotal | 23,759 | 23,726 |
Short-term investments | 102 | 199 |
Total financial assets at fair value, excluding separate accounts | 24,521 | 24,704 |
Real estate funds priced at NAV as a practical expedient | 244 | |
Financial liabilities at fair value: | ||
Total financial liabilities at fair value | $ 634 | 787 |
Redemption Frequency | Quarterly redemption frequency | |
Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | $ 24 | 2 |
Financial liabilities at fair value: | ||
Derivative liabilities | 21 | 25 |
Guaranteed Minimum Income Benefit [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 636 | 777 |
Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 636 | 777 |
Financial liabilities at fair value: | ||
Derivative liabilities | 613 | 762 |
Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 747 | 779 |
State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 990 | 1,287 |
Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 2,491 | 2,487 |
Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 18,502 | 18,088 |
Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 538 | 497 |
Fair Value Inputs Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 246 | 253 |
Equity securities | 392 | 412 |
Subtotal | 638 | 665 |
Short-term investments | 0 | 0 |
Total financial assets at fair value, excluding separate accounts | 638 | 665 |
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 | 0 |
Fair Value Inputs Level 1 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 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 | 246 | 253 |
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 and 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 | 22,587 | 22,256 |
Equity securities | 66 | 73 |
Subtotal | 22,653 | 22,329 |
Short-term investments | 102 | 199 |
Total financial assets at fair value, excluding separate accounts | 22,779 | 22,530 |
Financial liabilities at fair value: | ||
Total financial liabilities at fair value | 21 | 25 |
Fair Value Inputs Level 2 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 24 | 2 |
Financial liabilities at fair value: | ||
Derivative liabilities | 21 | 25 |
Fair Value Inputs Level 2 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 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 | 501 | 526 |
Fair Value Inputs Level 2 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 990 | 1,287 |
Fair Value Inputs Level 2 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 2,485 | 2,442 |
Fair Value Inputs Level 2 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 18,214 | 17,658 |
Fair Value Inputs Level 2 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 397 | 343 |
Fair Value Inputs Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 435 | 629 |
Equity securities | 33 | 103 |
Subtotal | 468 | 732 |
Short-term investments | 0 | 0 |
Total financial assets at fair value, excluding separate accounts | 1,104 | 1,509 |
Financial liabilities at fair value: | ||
Total financial liabilities at fair value | 613 | 762 |
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 | 0 |
Fair Value Inputs Level 3 [Member] | Guaranteed Minimum Income Benefit [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 636 | 777 |
Financial liabilities at fair value: | ||
Derivative liabilities | 613 | 762 |
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 | 6 | 45 |
Fair Value Inputs Level 3 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 288 | 430 |
Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | $ 141 | 154 |
Fair Value Inputs Level 3 [Member] | Private equity securities [Member] | ||
Financial assets at fair value: | ||
Equity securities | $ 70 |
Fair Value Measurements - Level
Fair Value Measurements - Level 2 Financial Assets and Financial Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Percentage of investments in fixed maturities and equity securities classified as Level 2 | 95.00% | |
Maximum percentage of investments classified in Level 2 representing foreign bonds priced using unadjusted broker quotes | 1.00% | |
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 - Lev_2
Fair Value Measurements - Level 3 Financial Assets and Liabilities (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Fair Value Disclosures [Abstract] | ||
Percentage of investments in fixed maturities and equity securities classified in Level 3 | 2.00% | |
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 | $ 23,759 | $ 23,726 |
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 | 468 | 732 |
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 | 449 | 703 |
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 | 19 | 29 |
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 | 33 | 103 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private 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 | $ 70 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private 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. | 12 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private 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. | 5 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Private 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. | 8.9 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid 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 | $ 33 | $ 33 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid 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] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 2.40% | 2.70% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid 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] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 2.40% | 2.70% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Hybrid 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] | ||
Liquidity adjustment to discount rates used to value fixed maturities and equity securities | 2.40% | 2.70% |
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 | $ 416 | $ 600 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government 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 | $ 275 | $ 446 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [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 | 9.30% | 16.50% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [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 | 0.70% | 0.70% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Corporate and government fixed maturities [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 | 2.50% | 3.00% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-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 | $ 141 | $ 154 |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-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 | 3.70% | 3.70% |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 3.10% | 2.90% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-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 | 1.80% | 1.80% |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Mortgage and other asset-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 | 0.80% | 0.90% |
Adjustment to discount rates used to value fixed maturities and equity securities for weighting of credit spreads | 2.40% | 2.30% |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fixed Maturities And Equity Securities [Member] | ||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Beginning Balance | $ 528 | $ 751 | $ 732 | $ 776 |
Gains (losses) included in shareholders' net income: | ||||
GMIB fair value gain/(loss) | 0 | 0 | 0 | 0 |
Other | 0 | (2) | (21) | 22 |
Total gains (losses) included in shareholders' net income | 0 | (2) | (21) | 22 |
Gains (losses) included in other comprehensive income | 2 | (9) | (8) | (12) |
Gains (losses) required to adjust future policy benefits for settlement annuities | (2) | (2) | (8) | 7 |
Purchases, sales, and settlements: | ||||
Purchases | 3 | 37 | 19 | 127 |
Sales | 0 | (3) | (11) | (73) |
Settlements | (14) | (30) | (29) | (69) |
Total purchases, sales, settlements | (11) | 4 | (21) | (15) |
Transfers into/(out of) Level 3: | ||||
Transfers into Level 3 | 24 | 178 | 44 | 254 |
Transfers out of Level 3 | (73) | (116) | (250) | (228) |
Total transfers into/(out of) Level 3 | (49) | 62 | (206) | 26 |
Ending Balance | 468 | 804 | 468 | 804 |
Total gains (losses) included in income attributable to instruments held at the reporting date | (1) | 1 | (9) | 0 |
Fixed Maturities And Equity Securities [Member] | Accounting Standards Update 2016-01 [Member] | ||||
Transfers into/(out of) Level 3: | ||||
Transfers out of Level 3 | (70) | |||
Derivative Financial Instruments, Assets [Member] | Guaranteed Minimum Income Benefit [Member] | ||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||
Beginning Balance | 684 | 777 | 777 | 799 |
Gains (losses) included in shareholders' net income: | ||||
GMIB fair value gain/(loss) | (39) | 40 | (106) | 44 |
Other | 2 | (1) | 0 | 0 |
Total gains (losses) included in shareholders' net income | (37) | 39 | (106) | 44 |
Gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 |
Gains (losses) required to adjust future policy benefits for settlement annuities | 0 | 0 | 0 | 0 |
Purchases, sales, and settlements: | ||||
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (11) | (18) | (35) | (45) |
Total purchases, sales, settlements | (11) | (18) | (35) | (45) |
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 | 636 | 798 | 636 | 798 |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ (37) | $ 39 | $ (106) | $ 44 |
Fair Value Measurements - Cha_2
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ (653) | $ (764) | $ (762) | $ (780) |
Gains (losses) included in shareholders' net income: | ||||
GMIB fair value gain/(loss) | 39 | (40) | 108 | (44) |
Other | (10) | 6 | 1 | (1) |
Total gains (losses) included in shareholders' net income | 29 | (34) | 109 | (45) |
Gains (losses) included in other comprehensive income | 0 | 0 | 0 | 0 |
Gains (losses) required to adjust future policy benefits for settlement annuities | 0 | 0 | 0 | 0 |
Purchases, sales, settlements: | ||||
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 11 | 18 | 40 | 45 |
Total purchases, sales, and settlements | 11 | 18 | 40 | 45 |
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 | (613) | (780) | (613) | (780) |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ 29 | $ (34) | $ 109 | $ (45) |
Fair Value Measurements - Separ
Fair Value Measurements - Separate Account Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Financial assets and financial liabilities carried at fair value [Line Items] | |||||
Guaranteed separate accounts | $ 482 | $ 482 | $ 523 | ||
Non-guaranteed separate accounts | 6,945 | 6,945 | 7,126 | ||
Subtotal | 7,427 | 7,427 | 7,649 | ||
Non-guaranteed separate accounts priced at NAV as a practical expedient | 735 | 735 | 774 | ||
Total separate account assets | 8,162 | 8,162 | 8,423 | ||
Pension Benefits [Member] | |||||
Financial assets and financial liabilities carried at fair value [Line Items] | |||||
Non-guaranteed separate accounts | 3,900 | 3,900 | 3,900 | ||
Fair Value Inputs Level 1 [Member] | |||||
Financial assets and financial liabilities carried at fair value [Line Items] | |||||
Guaranteed separate accounts | 206 | 206 | 215 | ||
Non-guaranteed separate accounts | 1,335 | 1,335 | 1,536 | ||
Subtotal | 1,541 | 1,541 | 1,751 | ||
Fair Value Inputs Level 2 [Member] | |||||
Financial assets and financial liabilities carried at fair value [Line Items] | |||||
Guaranteed separate accounts | 276 | 276 | 308 | ||
Non-guaranteed separate accounts | 5,353 | 5,353 | 5,298 | ||
Subtotal | 5,629 | 5,629 | 5,606 | ||
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 | 257 | 257 | 292 | ||
Subtotal | 257 | 257 | 292 | ||
Fair Value Inputs Level 3 [Member] | Pension Benefits [Member] | |||||
Financial assets and financial liabilities carried at fair value [Line Items] | |||||
Non-guaranteed separate accounts | 200 | 200 | $ 300 | ||
Separate Account Assets [Member] | |||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||
Beginning Balance | 256 | $ 316 | 292 | $ 331 | |
Policyholder gains (losses) | (1) | (1) | 42 | 36 | |
Purchases, sales, and settlements: | |||||
Purchases | 8 | 9 | 20 | 26 | |
Sales | (1) | 0 | (73) | (52) | |
Settlements | (9) | (12) | (21) | (13) | |
Total purchases, sales, and settlements | (2) | (3) | (74) | (39) | |
Transfers into/(out of) Level 3: | |||||
Transfers into Level 3 | 12 | 4 | 12 | 5 | |
Transfers out of Level 3 | (8) | (16) | (15) | (33) | |
Total transfers into/(out of) Level 3 | 4 | (12) | (3) | (28) | |
Ending Balance | $ 257 | $ 300 | $ 257 | $ 300 |
Fair Value Measurements - Sep_2
Fair Value Measurements - Separate Account Assets Priced at NAV (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 68 | |
Minimum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 45 days | |
Maximum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 90 days | |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Frequency | Quarterly redemption frequency | |
Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 302 | |
Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | 735 | $ 774 |
Security Partnerships [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 302 | |
Redemption Frequency | Not applicable | |
Security Partnerships [Member] | Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | $ 472 | 458 |
Real Estate Funds [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 0 | |
Redemption Frequency | Quarterly | |
Real Estate Funds [Member] | Separate Account Assets [Member] | Minimum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 30 days | |
Real Estate Funds [Member] | Separate Account Assets [Member] | Maximum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 90 days | |
Real Estate Funds [Member] | Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | $ 244 | 239 |
Hedge Funds [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 0 | |
Redemption Frequency | Up to Annually, varying by fund | |
Hedge Funds [Member] | Separate Account Assets [Member] | Minimum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 30 days | |
Hedge Funds [Member] | Separate Account Assets [Member] | Maximum [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Redemption Notice Period | 90 days | |
Hedge Funds [Member] | Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | $ 19 | $ 77 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured Under Certain Conditions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Financing Receivable, Impaired [Line Items] | ||
Realized investment losses on impaired real estate, partnership entities, and commercial mortgage loans, after-tax | $ 0 | |
Maximum [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired real estate, partnership entities, and commercial mortgage loans as a percent of total investments | 1.00% |
Fair Value Measurements - Not C
Fair Value Measurements - Not Carried at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial mortgage loans | $ 1,867 | $ 1,761 |
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 | 25,153 | 5,730 |
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 | 1,819 | 1,766 |
Carrying Reported Amount Fair Value Disclosure [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial mortgage loans | 1,867 | 1,761 |
Long-term debt, including current maturities, excluding capital leases | $ 25,034 | $ 5,321 |
Fair Value Measurements - Off-B
Fair Value Measurements - Off-Balance Sheet Financial Instruments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Fair value of off-balance-sheet financial assets | ||
Fair value of off-balance-sheet financial liabilities |
Investments - Fixed Maturities
Investments - Fixed Maturities by Contractual Maturity Periods (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Amortized Cost: | ||
Due in one year or less | $ 1,650 | |
Due after one year through five years | 6,364 | |
Due after five years through ten years | 10,363 | |
Due after ten years | 3,960 | |
Mortgage and other asset-backed securities | 532 | |
Amortized Cost | 22,869 | $ 21,867 |
Fair Value: | ||
Due in one year or less | 1,656 | |
Due after one year through five years | 6,446 | |
Due after five years through ten years | 10,154 | |
Due after ten years | 4,474 | |
Mortgage and other asset-backed securities | 538 | |
Total fair value | $ 23,268 |
Investments - Gross Unrealized
Investments - Gross Unrealized Appreciation (Depreciation) on Fixed Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 22,869 | $ 21,867 |
Unrealized Appreciation | 826 | 1,371 |
Unrealized (Depreciation) | (427) | (100) |
Total Fair Value | 23,268 | 23,138 |
Run-off Settlement Annuity Business [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,266 | 2,200 |
Unrealized Appreciation | 471 | 681 |
Unrealized (Depreciation) | (27) | (2) |
Total Fair Value | 2,710 | 2,879 |
Federal government and agency [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 558 | 541 |
Unrealized Appreciation | 194 | 239 |
Unrealized (Depreciation) | (5) | (1) |
Total Fair Value | 747 | 779 |
State and local government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 934 | 1,196 |
Unrealized Appreciation | 59 | 93 |
Unrealized (Depreciation) | (3) | (2) |
Total Fair Value | 990 | 1,287 |
Foreign government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,369 | 2,360 |
Unrealized Appreciation | 136 | 142 |
Unrealized (Depreciation) | (14) | (15) |
Total Fair Value | 2,491 | 2,487 |
Corporate [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 18,476 | 17,301 |
Unrealized Appreciation | 421 | 868 |
Unrealized (Depreciation) | (395) | (81) |
Total Fair Value | 18,502 | 18,088 |
Mortgage and other asset-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 532 | 469 |
Unrealized Appreciation | 16 | 29 |
Unrealized (Depreciation) | (10) | (1) |
Total Fair Value | $ 538 | $ 497 |
Investments - Securities with a
Investments - Securities with a Decline in Fair Value (Details) - Fixed Maturities [Member] $ in Millions | Sep. 30, 2018USD ($)Securities | Dec. 31, 2017USD ($)Securities |
Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 9,018 | $ 3,272 |
Amortized cost, one year or less | 9,281 | 3,309 |
Unrealized depreciation, one year or less | $ (263) | $ (37) |
Number of issues, one year or less | Securities | 1,936 | 797 |
Fair value, more than one year | $ 2,365 | $ 1,503 |
Amortized cost, more than one year | 2,496 | 1,549 |
Unrealized depreciation, more than one year | $ (131) | $ (46) |
Number of issues, more than one year | Securities | 630 | 373 |
Below Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 878 | $ 543 |
Amortized cost, one year or less | 900 | 553 |
Unrealized depreciation, one year or less | $ (22) | $ (10) |
Number of issues, one year or less | Securities | 959 | 643 |
Fair value, more than one year | $ 185 | $ 155 |
Amortized cost, more than one year | 196 | 162 |
Unrealized depreciation, more than one year | $ (11) | $ (7) |
Number of issues, more than one year | Securities | 122 | 42 |
Investments - Equity Securities
Investments - Equity Securities (Details) $ in Millions | Sep. 30, 2018USD ($) |
Investments: | |
Fair value of equity securities that have a readily determinable fair value | $ 443 |
Amortized cost of equity securities that have a readily determinable fair value | 452 |
Carrying value of private equity securities that do not have a readily determinable fair value | 88 |
Impairment or value changes of equity securities without a readily determinable fair value |
Investments - Hybrid Securities
Investments - Hybrid Securities (Details) - Equity securities [Member] - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Hybrid securities | $ 48 | $ 49 |
Hybrid instruments, cost | $ 63 | $ 61 |
Investments - Commerical Mortga
Investments - Commerical Mortgage Loans by Property Type and Geographic Region (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Mortgage Loans on Real Estate [Line Items] | ||
Commercial mortgage loans | $ 1,867 | $ 1,761 |
Investments - Credit Risk Profi
Investments - Credit Risk Profile, Commercial Mortgage Loans (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 1,867 | $ 1,761 |
Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 2.03 | 2.11 |
Average Loan-to-Value Ratio | 58.00% | 57.00% |
Below 60% [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 1,141 | $ 1,109 |
Below 60% [Member] | Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 2.12 | 2.03 |
60% to 79% [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 650 | $ 652 |
60% to 79% [Member] | Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 1.93 | 2.24 |
80% to 100% [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 76 | $ 0 |
80% to 100% [Member] | Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 1.49 | 0 |
Investments - Impaired Commerci
Investments - Impaired Commercial Mortgage Loans (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Mortgage Loans on Real Estate [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired commercial mortgage loans, gross | $ 0 | $ 0 |
Investments - Other Long-Term I
Investments - Other Long-Term Investments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Other Long Term Investments [Line Items] | ||
Other long-term investments | $ 1,739 | $ 1,518 |
Unfunded Commitments | $ 68 |
Investments - Short-Term Invest
Investments - Short-Term Investments and Cash Equivalents (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Short Term Investments And Cash Equivalents [Line Items] | |||
Net proceeds on issuance of long-term debt | $ 19,884 | $ 1,584 | |
Debt issuance proceeds invested in cash equivalents | 16,000 | ||
Corporate Securities [Member] | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | 2,621 | $ 1,143 | |
Federal goverment securities | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | 6,495 | 604 | |
Foreign government [Member] | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | 98 | 159 | |
Money Market Funds [Member] | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | $ 10,015 | $ 12 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule Of Investment Income Reported Amounts By Category [Line Items] | ||||
Net investment income | $ 355 | $ 298 | $ 1,036 | $ 909 |
Investments - Realized Investme
Investments - Realized Investment Gains and Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | $ 0 | $ 117 | $ (36) | $ 214 |
Less income taxes (benefits) | (2) | 42 | (13) | 74 |
Net realized investment gains (losses) | 2 | 75 | (23) | 140 |
Fixed Maturities [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | 1 | 20 | (45) | 36 |
Equity securities [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | 0 | 6 | (26) | 40 |
Realized gains (losses) on investments still held at reporting date | (2) | (28) | ||
Commercial Mortgage Loans [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | 0 | 0 | 0 | (1) |
Other Investments Including Derivatives [Member] | ||||
Realized Gains (Losses) on Investments [Line Items] | ||||
Realized investment gains (losses) before income taxes | $ (1) | $ 91 | $ 35 | $ 139 |
Investments - Write Downs and S
Investments - Write Downs and Sales (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pre-Tax Asset Write-downs [Line Items] | ||||
Pre-Tax Asset Write-Downs | $ 23 | $ 19 | ||
Sales Information For Available For Sale Fixed Maturities Equity Securities [Abstract] | ||||
Proceeds from sales | $ 657 | $ 446 | 1,930 | 1,376 |
Gross gains on sales | 5 | 26 | 23 | 85 |
Gross losses on sales | $ (4) | $ (3) | $ (33) | $ (7) |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative [Line Items] | |||||
Gains (losses) reclassified from other comprehensive income into shareholders' net income | |||||
Amounts excluded from assessment of hedge effectiveness | |||||
Gains (losses) recognized due to hedge ineffectiveness | |||||
Fair Value | |||||
Net liability position of derivatives that contain certain credit risk-related contingent features | |||||
Gain (Loss) Recognized in Other Comprehensive Income | |||||
Gain (Loss) Recognized in Income Statement | |||||
Designated as Hedging Instrument [Member] | Net Investment Hedge [Member] | Foreign Currency Swaps [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | 439 | 439 | 0 | ||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Swaps [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | 750 | ||||
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | 478 | $ 478 | 318 | ||
Derivative contract term | 30 years | ||||
Non designated [Member] | Swaption [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | |||||
Non designated [Member] | Forward Contracts [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount | 509 | 509 | $ 255 | ||
Non designated [Member] | Cash Flow Hedging [Member] | Swaption [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Billions | 9 Months Ended |
Sep. 30, 2018USD ($)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 must determine if it is the primary beneficiary and must consolidate the entity. The Company would be considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities or has the right to receive benefits or obligation to absorb losses that could be significant to the entity. The Company evaluates the following criteria: 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 determined it was not a primary beneficiary in any material variable interest entities as of September 30, 2018 or December 31, 2017. The Company’s involvement in variable interest entities where it is not the primary beneficiary is described below. |
Securities limited partnerships and real estate limited partnerships [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | $ 2.7 |
Number of limited partnerships defined as variable interest entities | LimitedPartnerships | 130 |
Carrying amount of assets | $ 1.4 |
Commitments to contribute additional cash, amount | $ 1.3 |
Securities limited partnerships and real estate limited partnerships [Member] | Maximum [Member] | |
Variable Interest Entity [Line Items] | |
Non-controlling interest percentage | 10.00% |
Other asset-backed and corporate securities [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | $ 0.6 |
Carrying amount of assets | $ 0.6 |
Non-controlling interest percentage | |
Real estate joint ventures [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | |
Carrying amount of assets | |
Independent physician associations [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | |
Carrying amount of assets | |
India Joint Venture [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | |
Carrying amount of assets |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | $ (1,082) | |||
Shareholders' other comprehensive income (loss), net of tax | $ (14) | $ 22 | (536) | $ 258 |
Accumulated other comprehensive income (loss), ending | (1,857) | (1,857) | ||
Securities [ Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (31) | 436 | 389 | 362 |
Other comprehensive income (loss) before reclassifications, pre-tax | 2 | (5) | (553) | 163 |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | (1) | 0 | 112 | (62) |
Other comprehensive income (loss) before reclassifications, after-tax | 1 | (5) | (441) | 101 |
Reclassification adjustment, pre-tax | (1) | (26) | 27 | (76) |
Reclassification adjustment, tax (expense) benefit | 0 | 9 | (6) | 27 |
Reclassification adjustment, after-tax | (1) | (17) | 21 | (49) |
Shareholders' other comprehensive income (loss), net of tax | 0 | (22) | (420) | 52 |
Accumulated other comprehensive income (loss), ending | (31) | 414 | (31) | 414 |
Securities [ Member] | Previously Reported [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (31) | 436 | 328 | 362 |
Securities [ Member] | Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | 0 | 0 | 65 | 0 |
Securities [ Member] | Restatement Adjustment [Member] | Accounting Standards Update 2016-01 [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | 0 | 0 | (4) | 0 |
Derivatives [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (19) | 0 | (6) | 3 |
Other comprehensive income (loss) before reclassifications, pre-tax | 2 | (1) | (14) | (1) |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 0 | 0 | 3 | 0 |
Other comprehensive income (loss) before reclassifications, after-tax | 2 | (1) | (11) | (1) |
Reclassification adjustment, pre-tax | 0 | 1 | 0 | (3) |
Reclassification adjustment, tax (expense) benefit | 0 | 0 | 0 | 1 |
Reclassification adjustment, after-tax | 0 | 1 | 0 | (2) |
Shareholders' other comprehensive income (loss), net of tax | 2 | 0 | (11) | (3) |
Accumulated other comprehensive income (loss), ending | (17) | 0 | (17) | 0 |
Derivatives [Member] | Previously Reported [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (19) | 0 | 0 | 3 |
Derivatives [Member] | Restatement Adjustment [Member] | Accounting Standards Update 2017-12 [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | 0 | 0 | (6) | 0 |
Translation of foreign currencies [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (176) | (230) | (69) | (369) |
Other comprehensive income (loss) before reclassifications, pre-tax | (31) | 38 | (136) | 179 |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 2 | (4) | 0 | (6) |
Other comprehensive income (loss) before reclassifications, after-tax | (29) | 34 | (136) | 173 |
Accumulated other comprehensive income (loss), ending | (205) | (196) | (205) | (196) |
Translation of foreign currencies [Member] | Previously Reported [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (176) | (230) | (65) | (369) |
Translation of foreign currencies [Member] | Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | 0 | 0 | (4) | 0 |
Postretirement benefits liability [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (1,617) | (1,352) | (1,635) | (1,378) |
Other comprehensive income (loss) before reclassifications, pre-tax | 0 | 0 | (12) | 2 |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 0 | 0 | 3 | 0 |
Other comprehensive income (loss) before reclassifications, after-tax | 0 | 0 | (9) | 2 |
Reclassification adjustment, tax (expense) benefit | (6) | (6) | (13) | (20) |
Reclassification adjustment, after-tax | 13 | 10 | 40 | 34 |
Shareholders' other comprehensive income (loss), net of tax | 13 | 10 | 31 | 36 |
Accumulated other comprehensive income (loss), ending | (1,604) | (1,342) | (1,604) | (1,342) |
Postretirement benefits liability [Member] | Previously Reported [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | (1,617) | (1,352) | (1,345) | (1,378) |
Postretirement benefits liability [Member] | Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning | 0 | 0 | (290) | 0 |
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 | 19 | 16 | 53 | 48 |
Reclassification adjustment for settlement losses [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Reclassification adjustment, pre-tax | $ 0 | $ 0 | $ 0 | $ 6 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Realized investment (gains) losses | $ 0 | $ (117) | $ 36 | $ (214) |
Other operating expenses | 2,971 | 2,838 | 8,666 | 7,905 |
Securities [ Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Realized investment (gains) losses | (1) | (26) | 27 | (76) |
Derivatives [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Realized investment (gains) losses | 0 | 1 | 0 | (3) |
Reclassification adjustment for amortization of net losses from past experience and prior service costs [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Other operating expenses | 19 | 16 | 53 | 48 |
Reclassification adjustment for settlement losses [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||||
Other operating expenses | $ 0 | $ 0 | $ 0 | $ 6 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefits - About our Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan cost | $ (3) | $ (3) | $ (11) | $ 1 |
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan cost | $ 2 | $ 2 | $ 5 | $ 6 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefits - Funded Status (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pension Benefits [Member] | ||||
Change in benefit obligation [Abstract] | ||||
Service cost | $ 0 | $ 0 | $ 1 | $ 1 |
Interest cost | 42 | 47 | 126 | 140 |
Pension Benefits [Member] | United States [Member] | Qualified Plan [Member] | ||||
Change in plan assets [Roll Forward] | ||||
Contributions | 0 | |||
Expected plan contributions for the remaining fiscal year | 0 | 0 | ||
Other Postretirement Benefits [Member] | ||||
Change in benefit obligation [Abstract] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | $ 2 | $ 2 | $ 6 | $ 7 |
Pension and Other Postretirem_5
Pension and Other Postretirement Benefits - Cost of our Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pension Benefits [Member] | ||||
Components of net pension and other postretirement benefits cost [Abstract] | ||||
Service cost | $ 0 | $ 0 | $ 1 | $ 1 |
Interest cost | 42 | 47 | 126 | 140 |
Expected long-term return on plan assets | (64) | (66) | (192) | (195) |
Amortization of net loss from past experience | 19 | 16 | 54 | 49 |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 | 6 |
Net plan cost | (3) | (3) | (11) | 1 |
Other Postretirement Benefits [Member] | ||||
Components of net pension and other postretirement benefits cost [Abstract] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 2 | 2 | 6 | 7 |
Expected long-term return on plan assets | 0 | 0 | 0 | 0 |
Amortization of net loss from past experience | 1 | 0 | 1 | 0 |
Amortization of prior service cost | (1) | 0 | (2) | (1) |
Settlement loss | 0 | 0 | 0 | 0 |
Net plan cost | $ 2 | $ 2 | $ 5 | $ 6 |
Goodwill, Other Intangibles, an
Goodwill, Other Intangibles, and Property and Equipment - Goodwill Activity (Details) $ in Millions | Sep. 30, 2018USD ($) |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 6,164 |
Goodwill, Ending Balance | $ 6,129 |
Goodwill, Other Intangibles, _2
Goodwill, Other Intangibles, and Property and Equipment - Property and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Net carrying value | $ 1,559 | $ 1,563 |
Goodwill, Other Intangibles, _3
Goodwill, Other Intangibles, and Property and Equipment - Depreciation and Amortization (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Depreciation And Amortization By Type [Line Items] | ||
Depreciation and amortization | $ 438 | $ 425 |
Income Taxes - U.S. Tax Reform
Income Taxes - U.S. Tax Reform Legislation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Line Items] | ||||
Tax impact of global intangible low-taxed income ("GILTI") provisions of U.S. tax reform | ||||
Adjustments to provisional tax expense (benefit) first recognized in 2017 as a result of U.S. tax reform legislation | $ (7) | $ 0 | $ (7) | $ 0 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current taxes | ||||
Total taxes, current | $ 248 | $ 231 | $ 837 | $ 821 |
Deferred taxes (benefits) | ||||
Total taxes (benefits), deferred | 11 | 31 | 17 | 62 |
Total taxes | $ 259 | $ 262 | $ 854 | $ 883 |
Income Taxes - Reconciliation t
Income Taxes - Reconciliation to Nominal Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of total taxes to nominal federal rate details [Abstract] | ||||
Total income taxes | $ 259 | $ 262 | $ 854 | $ 883 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes [Abstract] | ||
Consolidated effective tax rate | 25.50% | 31.00% |
Cumulative unrecognized deferred tax liabilities | $ 148 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred tax liabilities [Abstract] | ||
Net deferred income tax assets | $ 132 | $ 39 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Reconciliation of unrecognized tax benefits details [Abstract] | |
Changes in unrecognized tax benefits |
Contingencies and Other Matte_2
Contingencies and Other Matters - Guarantees (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | |
Guarantee Obligations [Line Items] | |
Maximum Exposure, Undiscounted | $ 460 |
Percentage of benefit obligations reinsured | 11.00% |
Guarantee obligations carrying value | $ 0 |
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | Minimum [Member] | |
Guarantee Obligations [Line Items] | |
Assets maintained by employers | 460 |
Indemnification obligations to lenders [Member] | |
Guarantee Obligations [Line Items] | |
Maximum Exposure, Undiscounted | 89 |
Guarantee obligations carrying value | $ 0 |
Contingencies and Other Matte_3
Contingencies and Other Matters - Legal and Regulatory Matters (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Sep. 30, 2018 | |
Guaranty Fund Assessments [Member] | ||
Loss Contingencies [Line Items] | ||
Charges for loss contingency, pre-tax | $ 130 | |
Charges for loss contingency, after-tax | $ 85 | |
Recorded liability, Penn Treaty assessment | 42 | |
Pending Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Reserves for litigation matters, pre-tax | 240 | |
Reserves for litigation matters, after-tax | $ 190 |
Contingencies and Other Matte_4
Contingencies and Other Matters - Anthem Litigation (Details) $ in Millions | Sep. 30, 2018USD ($) |
Contingencies And Other Matters [Abstract] | |
Termination fee payable to Company | $ 1,850 |
Positive Outcome Of Litigation [Member] | Minimum [Member] | |
Gain Contingencies [Line Items] | |
Damages sought | $ 13,000 |
Segment Information - Special I
Segment Information - Special Items (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Before-tax [Abstract] | ||||
Transaction-related costs | $ 128 | $ 9 | $ 318 | $ 88 |
Charges associated with litigation matters | 45 | 0 | 45 | 0 |
Other operating expenses - see Note 15 | 2 | 0 | 2 | 0 |
Total charges (benefits) associated with U.S. tax reform | 2 | 0 | 2 | 0 |
Debt extinguishment costs | 0 | 321 | 0 | 321 |
Long-term care guaranty fund assessment | 0 | 129 | ||
Total impact from special items, before-tax | 175 | 330 | 365 | 538 |
After-tax [Abstract] | ||||
Transaction-related costs | 108 | 6 | 267 | 8 |
Charges associated with litigation matters | 35 | 0 | 35 | 0 |
Other operating expenses - see Note 15 | 2 | 0 | 2 | 0 |
Tax (benefit) - see Note 15 | (7) | 0 | (7) | 0 |
Total charges (benefits) associated with U.S. tax reform | (5) | 0 | (5) | 0 |
Debt extinguishment costs | 0 | 209 | 0 | 209 |
Long-term care guaranty fund assessment | 0 | 83 | ||
Total impact of special items, after-tax | 138 | 215 | 297 | 300 |
Net Investment Income [Member] | ||||
Before-tax [Abstract] | ||||
Transaction-related costs | (13) | 0 | (13) | 0 |
After-tax [Abstract] | ||||
Transaction-related costs | (10) | 0 | (10) | 0 |
Other Operating Expenses [Member] | ||||
Before-tax [Abstract] | ||||
Transaction-related costs | 141 | 9 | 331 | 88 |
After-tax [Abstract] | ||||
Transaction-related costs | $ 118 | $ 6 | $ 277 | $ 8 |
Segment Information - Summarize
Segment Information - Summarized Segment Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | $ 11,102 | $ 10,074 | $ 33,314 | $ 30,265 |
Net investment income | 355 | 298 | 1,036 | 909 |
Less net realized investment gains (losses) on equity method subsidiaries | (1) | (23) | ||
Less special item (transaction related costs) | 13 | 13 | ||
Total operating revenues | 11,445 | 10,372 | 34,360 | 31,174 |
Total revenues | 11,457 | 10,489 | 34,314 | 31,388 |
Shareholders' net income | 772 | 560 | 2,493 | 1,971 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Net realized investment (gains) losses | (1) | (75) | 46 | (140) |
Amortization of other acquired intangible assets, net | 36 | 16 | 74 | 54 |
Special items: | ||||
Transaction-related costs | 108 | 6 | 267 | 8 |
Charges associated with litigation matters | 35 | 0 | 35 | 0 |
U.S. tax reform | (5) | 0 | (5) | 0 |
Debt extinguishment costs | 0 | 209 | 0 | 209 |
Long-term care guaranty fund assessment | 0 | 83 | ||
Total special items | 138 | 215 | 297 | 300 |
Adjusted income (loss) from operations | 945 | 716 | 2,910 | 2,185 |
Operating Segments [Member] | Global Health Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 8,995 | 8,087 | 26,994 | 24,382 |
Net investment income | 122 | 89 | 362 | 273 |
Less net realized investment gains (losses) on equity method subsidiaries | 0 | 0 | ||
Less special item (transaction related costs) | 0 | 0 | ||
Total operating revenues | 9,117 | 8,176 | 27,356 | 24,655 |
Total revenues | 9,121 | 8,251 | 27,345 | 24,788 |
Shareholders' net income | 750 | 610 | 2,372 | 1,753 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Net realized investment (gains) losses | (4) | (47) | 7 | (85) |
Amortization of other acquired intangible assets, net | 32 | 12 | 59 | 40 |
Special items: | ||||
Transaction-related costs | 0 | 0 | 0 | 0 |
Charges associated with litigation matters | 35 | 35 | ||
U.S. tax reform | (9) | (9) | ||
Debt extinguishment costs | 0 | 0 | ||
Long-term care guaranty fund assessment | 68 | |||
Total special items | 26 | 0 | 26 | 68 |
Adjusted income (loss) from operations | 804 | 575 | 2,464 | 1,776 |
Operating Segments [Member] | Global Supplemental Benefits Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 1,055 | 954 | 3,171 | 2,759 |
Net investment income | 37 | 31 | 107 | 90 |
Less net realized investment gains (losses) on equity method subsidiaries | (1) | (23) | ||
Less special item (transaction related costs) | 0 | 0 | ||
Total operating revenues | 1,093 | 985 | 3,301 | 2,849 |
Total revenues | 1,093 | 985 | 3,268 | 2,861 |
Shareholders' net income | 80 | 105 | 271 | 283 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Net realized investment (gains) losses | 0 | 0 | 28 | (9) |
Amortization of other acquired intangible assets, net | 4 | 4 | 15 | 14 |
Special items: | ||||
Transaction-related costs | 0 | 0 | 0 | 0 |
Charges associated with litigation matters | 0 | 0 | ||
U.S. tax reform | 9 | 9 | ||
Debt extinguishment costs | 0 | 0 | ||
Long-term care guaranty fund assessment | 0 | |||
Total special items | 9 | 0 | 9 | 0 |
Adjusted income (loss) from operations | 93 | 109 | 323 | 288 |
Operating Segments [Member] | Group Disability And Life Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 1,032 | 1,015 | 3,089 | 3,070 |
Net investment income | 89 | 84 | 275 | 262 |
Less net realized investment gains (losses) on equity method subsidiaries | 0 | 0 | ||
Less special item (transaction related costs) | 0 | 0 | ||
Total operating revenues | 1,121 | 1,099 | 3,364 | 3,332 |
Total revenues | 1,124 | 1,136 | 3,356 | 3,399 |
Shareholders' net income | 106 | 97 | 267 | 253 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Net realized investment (gains) losses | (4) | (24) | 5 | (44) |
Amortization of other acquired intangible assets, net | 0 | 0 | 0 | 0 |
Special items: | ||||
Transaction-related costs | 0 | 0 | 0 | 0 |
Charges associated with litigation matters | 0 | 0 | ||
U.S. tax reform | (2) | (2) | ||
Debt extinguishment costs | 0 | 0 | ||
Long-term care guaranty fund assessment | 15 | |||
Total special items | (2) | 0 | (2) | 15 |
Adjusted income (loss) from operations | 100 | 73 | 270 | 224 |
Operating Segments [Member] | Other Operations Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | 33 | 29 | 97 | 89 |
Net investment income | 87 | 86 | 260 | 260 |
Less net realized investment gains (losses) on equity method subsidiaries | 0 | 0 | ||
Less special item (transaction related costs) | 0 | 0 | ||
Total operating revenues | 120 | 115 | 357 | 349 |
Total revenues | 112 | 120 | 351 | 351 |
Shareholders' net income | 9 | 18 | 57 | 55 |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Net realized investment (gains) losses | 8 | (4) | 5 | (2) |
Amortization of other acquired intangible assets, net | 0 | 0 | 0 | 0 |
Special items: | ||||
Transaction-related costs | 0 | 0 | 0 | 0 |
Charges associated with litigation matters | 0 | 0 | ||
U.S. tax reform | (1) | (1) | ||
Debt extinguishment costs | 0 | 0 | ||
Long-term care guaranty fund assessment | 0 | |||
Total special items | (1) | 0 | (1) | 0 |
Adjusted income (loss) from operations | 16 | 14 | 61 | 53 |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Premiums, fees and other revenues and mail order pharmacy revenues | (13) | (11) | (37) | (35) |
Net investment income | 20 | 8 | 32 | 24 |
Less net realized investment gains (losses) on equity method subsidiaries | 0 | 0 | ||
Less special item (transaction related costs) | 13 | 13 | ||
Total operating revenues | (6) | (3) | (18) | (11) |
Total revenues | 7 | (3) | (6) | (11) |
Shareholders' net income | (173) | (270) | (474) | (373) |
After-tax adjustments to reconcile to adjusted income from operations: | ||||
Net realized investment (gains) losses | (1) | 0 | 1 | 0 |
Amortization of other acquired intangible assets, net | 0 | 0 | 0 | 0 |
Special items: | ||||
Transaction-related costs | 108 | 6 | 267 | 8 |
Charges associated with litigation matters | 0 | 0 | ||
U.S. tax reform | (2) | (2) | ||
Debt extinguishment costs | 209 | 209 | ||
Long-term care guaranty fund assessment | 0 | |||
Total special items | 106 | 215 | 265 | 217 |
Adjusted income (loss) from operations | $ (68) | $ (55) | $ (208) | $ (156) |
Segment Information - Revenue f
Segment Information - Revenue from External Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue from External Customer [Line Items] | ||||
Mail order pharmacy revenues | $ 747 | $ 733 | $ 2,222 | $ 2,200 |
Other | 34 | 39 | 89 | 107 |
Revenues from external customers | 11,102 | 10,074 | 33,314 | 30,265 |
Operating Segments [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 8,965 | 8,052 | 26,923 | 24,211 |
Total fees from ongoing operations | 1,356 | 1,250 | 4,080 | 3,747 |
Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 6,919 | 6,131 | 20,772 | 18,518 |
Total fees from ongoing operations | 1,325 | 1,219 | 3,984 | 3,652 |
Revenues from external customers | 8,995 | 8,087 | 26,994 | 24,382 |
Operating Segments [Member] | Global Supplemental Benefits Segment [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total fees from ongoing operations | 7 | 6 | 22 | 18 |
Revenues from external customers | 1,055 | 954 | 3,171 | 2,759 |
Operating Segments [Member] | Group Disability And Life Segment [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total fees from ongoing operations | 24 | 25 | 74 | 77 |
Revenues from external customers | 1,032 | 1,015 | 3,089 | 3,070 |
Guaranteed Cost [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 2,080 | 1,591 | 6,125 | 4,656 |
Experience Rated [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 711 | 737 | 2,186 | 2,191 |
Stop Loss [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 1,010 | 874 | 2,983 | 2,582 |
International Health Care [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 513 | 484 | 1,541 | 1,438 |
Dental [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 486 | 452 | 1,447 | 1,334 |
Other Medical [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 260 | 247 | 777 | 736 |
Medicare [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 1,455 | 1,324 | 4,414 | 4,174 |
Medicaid [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 247 | 253 | 725 | 806 |
Medicare Part D [Member] | Operating Segments [Member] | Global Health Care [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 157 | 169 | 574 | 601 |
Disability [Member] | Operating Segments [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | 507 | 493 | 1,522 | 1,485 |
Life, Accident and Supplemental Health [Member] | Operating Segments [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total premiums from ongoing operations | $ 1,539 | $ 1,428 | $ 4,629 | $ 4,208 |
Segment Information - Foreign a
Segment Information - Foreign and U.S. Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues from external customers | $ 11,102 | $ 10,074 | $ 33,314 | $ 30,265 |
Segment Information - Concentra
Segment Information - Concentration Risk (Details) - Revenue Consolidated [Member] - Customer Concentration Risk [Member] | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 18.00% | 17.00% |
Concentration Risk, Benchmark Description | Consolidated revenues | |
Concentration Risk, Additional Characteristic | Premiums and fees from CMS |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Consolidated Results | ||||
Total revenues | $ 11,457 | $ 10,489 | $ 34,314 | $ 31,388 |
Income (loss) before income taxes | 1,033 | 824 | 3,353 | 2,848 |
Shareholders' net income | $ 772 | $ 560 | $ 2,493 | $ 1,971 |
Shareholders' net income per share: | ||||
EPS, basic | $ 3.18 | $ 2.25 | $ 10.28 | $ 7.79 |
EPS, diluted | 3.14 | 2.21 | 10.14 | 7.67 |
Stock and Dividend Data | ||||
Dividends declared per share | $ 0 | $ 0 | $ 0.04 | $ 0.04 |
Special items | ||||
U.S. tax reform | $ (5) | $ 0 | $ (5) | $ 0 |
Debt extinguishment costs | 0 | 209 | 0 | 209 |
Long-term care guaranty fund assessment | 0 | 83 | ||
Transaction-related costs | 108 | 6 | 267 | 8 |
Charges associated with litigation matters | 35 | 0 | 35 | 0 |
Total special items | $ 138 | $ 215 | $ 297 | $ 300 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information, Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating expenses: | ||||
Debt extinguishment costs | $ 0 | $ 321 | $ 0 | $ 321 |
Total operating expenses | 2,971 | 2,838 | 8,666 | 7,905 |
Income before Income Taxes | 1,033 | 824 | 3,353 | 2,848 |
Income tax expense (benefit) | 259 | 262 | 854 | 883 |
Shareholders' net income | 772 | 560 | 2,493 | 1,971 |
Shareholders' other comprehensive income (loss), net of tax: | ||||
Net unrealized appreciation (depreciation) on securities | 0 | (22) | (420) | 52 |
Net unrealized appreciation (depreciation), derivatives | 2 | 0 | (11) | (3) |
Net translation of foreign currencies | (29) | 34 | (136) | 173 |
Postretirement benefits liability adjustment | 13 | 10 | 31 | 36 |
Shareholders' other comprehensive income (loss) | (14) | 22 | (536) | 258 |
Shareholders' comprehensive income (loss) | $ 758 | $ 582 | $ 1,957 | $ 2,229 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||||
Cash and cash equivalents | $ 24,032 | $ 2,972 | $ 3,656 | $ 3,185 |
Short-term investments | 102 | 199 | ||
Other assets | 2,227 | 2,316 | ||
Total assets | 82,956 | 61,759 | ||
Liabilities: | ||||
Short-term debt | 9 | 240 | ||
Long-term debt | 25,041 | 5,199 | ||
Total liabilities | 67,371 | 47,999 | ||
Shareholders Equity: | ||||
Common stock (shares issued, 296; authorized, 600) | 74 | 74 | ||
Additional paid-in capital | 2,985 | 2,940 | ||
Accumulated other comprehensive loss | (1,857) | (1,082) | ||
Retained earnings | 18,474 | 15,800 | ||
Less: treasury stock, at cost | (4,121) | (4,021) | ||
Total shareholders' equity | 15,555 | 13,711 | ||
Total liabilities and shareholders' equity | $ 82,956 | $ 61,759 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information, Balance Sheets - Parentheticals (Details) - shares shares in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Common stock shares issued | 296 | 296 |
Common stock shares authorized | 600 | 600 |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities | ||||
Shareholders' net income | $ 772 | $ 560 | $ 2,493 | $ 1,971 |
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | ||||
Other liabilities | 113 | 221 | ||
Debt extinguishment costs | 0 | 321 | 0 | 321 |
Other, net | (69) | 33 | ||
Net cash provided by (used in) operating activities | 3,644 | 3,511 | ||
Cash Flows from Investing Activities | ||||
Short term investments purchased | (660) | (722) | ||
Other, net | (12) | 0 | ||
Net cash provided by (used in) investing activities | (1,674) | (1,100) | ||
Cash Flows from Financing Activities | ||||
Net change in short-term debt | (109) | (16) | ||
Payments for debt extinguishment | 0 | (313) | ||
Repayment of long-term debt | (131) | (1,250) | ||
Net proceeds on issuance of long-term debt | 19,884 | 1,584 | ||
Issuance of common stock | 41 | 111 | ||
Repurchase of common stock | (310) | (1,961) | ||
Other, net | (204) | (9) | ||
Net cash provided by (used in) financing activities | 19,115 | (1,968) | ||
Net increase (decrease) in cash and cash equivalents | 21,060 | 471 | ||
Cash and cash equivalents, January 1, | 2,972 | 3,185 | ||
Cash and cash equivalents, September 30, | $ 24,032 | $ 3,656 | $ 24,032 | $ 3,656 |
Schedule II - Condensed Finan_5
Schedule II - Condensed Financial Information, Short-term and Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 25,041 | $ 5,199 |
$78 million, 6.37% Notes due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 78 | $ 78 |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Supplementary Insurance Information, by Segment [Line Items] | ||||
Reduction of operating expenses resulting from tax reform | $ (2) | $ 0 | $ (2) | $ 0 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Premiums: | ||||
Ceded to other companies, premiums | $ 113 | $ 103 | $ 380 | $ 310 |
Net amount | $ 8,994 | $ 8,075 | $ 27,005 | $ 24,283 |
Uncategorized Items - ci-201809
Label | Element | Value | [1] |
Retained Earnings [Member] | |||
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 68,000,000 | |
Shareholders' Equity [Member] | |||
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 58,000,000 | |
Accumulated Other Comprehensive Income [Member] | |||
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (10,000,000) | |
[1] | See Note 2 for further information about adjustments resulting from the Company's adoption of new accounting standards in 2018. |