Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Billions | 12 Months Ended | |||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Document Document And Entity Information [Abstract] | ||||
Document Type | 10-K | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2,018 | |||
Document Period End Date | Dec. 31, 2018 | |||
Current Fiscal Year End Date | --12-31 | |||
Registrant Name | CIGNA Corporation | |||
Central Index Key | 1,739,940 | |||
Common stock, par value per share | $ 0.01 | $ 0.25 | ||
Trading Symbol | CI | |||
Well Known Seasoned Issuer | Yes | |||
Voluntary Filers | No | |||
Current Reporting Status | Yes | |||
Filer Category | Large Accelerated Filer | |||
Smaller reporting company | false | |||
Emerging growth company | false | |||
Shell company | false | |||
Common Stock outstanding | 380,058,967 | |||
Public float | $ 41.2 | |||
Amendment Flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||||||||||
Premiums | $ 36,113 | $ 32,491 | $ 30,824 | ||||||||
Net investment income | 1,480 | 1,226 | 1,147 | ||||||||
Total revenues | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 10,632 | $ 10,372 | $ 10,374 | $ 10,428 | 48,650 | 41,806 | 39,838 |
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 27,528 | 25,263 | 24,341 | ||||||||
Pharmacy and other service costs | 4,793 | 2,456 | 2,468 | ||||||||
Selling, general and administrative expenses | 11,934 | 10,030 | 9,790 | ||||||||
Amortization of other acquired intangible assets | 235 | 115 | 151 | ||||||||
Total operating expenses | 44,490 | 37,864 | 36,750 | ||||||||
Income from operations | 4,160 | 3,942 | 3,088 | ||||||||
Interest expense and other | (498) | (252) | (278) | ||||||||
Debt extinguishment costs | (321) | 0 | (321) | 0 | |||||||
Net realized investment gains (losses) | (81) | 237 | 169 | ||||||||
Income (loss) before income taxes | 228 | 1,033 | 1,102 | 1,218 | 758 | 824 | 1,134 | 890 | 3,581 | 3,606 | 2,979 |
Total income taxes | 935 | 1,374 | 1,136 | ||||||||
Net Income | 2,646 | 2,232 | 1,843 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 9 | (5) | (24) | ||||||||
Shareholders' net income | $ 144 | $ 772 | $ 806 | $ 915 | $ 266 | $ 560 | $ 813 | $ 598 | $ 2,637 | $ 2,237 | $ 1,867 |
Shareholders' net income per share: | |||||||||||
Basic | $ 0.56 | $ 3.18 | $ 3.32 | $ 3.78 | $ 1.09 | $ 2.25 | $ 3.2 | $ 2.34 | $ 10.69 | $ 8.92 | $ 7.31 |
Diluted | 0.55 | 3.14 | 3.29 | 3.72 | 1.07 | 2.21 | 3.15 | 2.3 | $ 10.54 | $ 8.77 | $ 7.19 |
Dividends declared per share | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0 | $ 0 | $ 0 | $ 0.04 | |||
Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | $ 5,578 | $ 5,110 | $ 4,901 | ||||||||
Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | $ 5,479 | $ 2,979 | $ 2,966 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Comprehensive Income | |||||||||||
Shareholders' net income | $ 144 | $ 772 | $ 806 | $ 915 | $ 266 | $ 560 | $ 813 | $ 598 | $ 2,637 | $ 2,237 | $ 1,867 |
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Net unrealized appreciation (depreciation), securities and derivatives | (365) | (37) | (60) | ||||||||
Net translation (losses) gains on foreign currencies | (152) | 304 | (95) | ||||||||
Postretirement benefits liability adjustment | 127 | 33 | 23 | ||||||||
Shareholders' other comprehensive income (loss), net of tax | (390) | 300 | (132) | ||||||||
Shareholders' comprehensive income (loss) | $ 2,247 | $ 2,537 | $ 1,735 |
Consolidated Statements of Tota
Consolidated Statements of Total Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Comprehensive Income | |||
Shareholders' comprehensive income (loss) | $ 2,247 | $ 2,537 | $ 1,735 |
Comprehensive income (loss) attributable to noncontrolling interests: | |||
Net income (loss) attributable to redeemable noncontrolling interests | 9 | 0 | (7) |
Net income (loss) attributable to other noncontrolling interests | 0 | (5) | (17) |
Other comprehensive income (loss) attributable to redeemable noncontrolling interests | (15) | (3) | (10) |
Total comprehensive income (loss) attributable to noncontrolling interests | (6) | (8) | (34) |
Total comprehensive income | $ 2,241 | $ 2,529 | $ 1,701 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets | |||
Cash and cash equivalents | $ 3,855 | $ 2,972 | |
Investments | 2,045 | 2,136 | |
Accounts receivable, net | 10,473 | 3,155 | |
Inventories | 2,821 | 228 | |
Other current assets | 1,236 | 820 | |
Total current assets | 20,430 | 9,311 | |
Long-term investments | 26,929 | 26,483 | |
Reinsurance recoverables | 5,507 | 5,763 | |
Deferred policy acquisition costs | 2,821 | 2,237 | |
Property and equipment | 4,562 | 1,563 | |
Deferred tax assets, net | 0 | 39 | |
Goodwill | 44,505 | 6,164 | |
Other intangible assets | 39,003 | 345 | |
Other assets | 1,630 | 1,431 | |
Separate account assets | 7,839 | 8,423 | |
TOTAL ASSETS | 153,226 | 61,759 | |
Liabilities: | |||
Current insurance and contractholder liabilities | 6,801 | 6,317 | |
Pharmacy and service costs payable | 10,702 | 305 | |
Accounts payable | 4,366 | 184 | |
Accrued expenses and other liabilities | 7,071 | 3,963 | |
Short-term debt | 2,955 | 240 | |
Total current liabilities | 31,895 | 11,009 | |
Non-current insurance and contractholder liabilities | 19,974 | 20,530 | |
Deferred tax liabilities, net | 9,453 | 0 | |
Other non-current liabilities | 3,470 | 2,838 | |
Long-term debt | 39,523 | 5,199 | |
Separate account liabilities | 7,839 | 8,423 | |
TOTAL LIABILITIES | 112,154 | 47,999 | |
Redeemable noncontrolling interests | 37 | 49 | |
Shareholders' Equity | |||
Common stock | [1] | 4 | 74 |
Additional paid-in capital | 27,751 | 2,940 | |
Accumulated other comprehensive income (loss) | (1,711) | (1,082) | |
Retained earnings | 15,088 | 15,800 | |
Less: treasury stock, at cost | (104) | (4,021) | |
TOTAL SHAREHOLDERS' EQUITY | 41,028 | 13,711 | |
Noncontrolling interests | 7 | 0 | |
Total equity | 41,035 | 13,711 | |
Total liabilities and shareholders' equity | $ 153,226 | $ 61,759 | |
Shareholders' Equity Per Share | $ 107.71 | $ 56.2 | |
[1] | Par value per share, $0.01 in 2018 and $0.25 in 2017; shares issued, 381 million in 2018 and 296 million in 2017; authorized shares, 600 million in 2018 and 2017. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | |||
Common stock, par value per share | $ 0.01 | $ 0.25 | |
Common stock shares issued | 381,494,000 | 296,145,000 | 0 |
Common stock shares authorized | 600,000,000 | 600,000,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Total Equity - USD ($) $ in Millions | Total | Previously Reported [Member] | Restatement Adjustment [Member] | Shareholders' Equity [Member] | Shareholders' Equity [Member]Previously Reported [Member] | Shareholders' Equity [Member]Restatement Adjustment [Member] | Common Stock [Member] | Common Stock [Member]Previously Reported [Member] | Additional Paid In Capital [Member] | Additional Paid In Capital [Member]Previously Reported [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Other Comprehensive Income [Member]Previously Reported [Member] | Retained Earnings [Member] | Retained Earnings [Member]Previously Reported [Member] | Retained Earnings [Member]Restatement Adjustment [Member] | Treasury Stock [Member] | Treasury Stock [Member]Previously Reported [Member] | Other noncontrolling interests [Member] | Other noncontrolling interests [Member]Previously Reported [Member] |
Total Equity, beginning of period at Dec. 31, 2015 | $ 12,020 | $ 12,044 | $ (24) | $ 12,011 | $ 12,035 | $ (24) | $ 74 | $ 74 | $ 2,859 | $ 2,859 | $ (1,250) | $ (1,250) | $ 12,097 | $ 12,121 | $ (24) | $ (1,769) | $ (1,769) | $ 9 | $ 9 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | |||||||||||||||||||
Effect of issuing stock for employee benefit plans | 91 | 91 | 51 | (123) | 163 | ||||||||||||||
Other comprehensive income (loss) | (132) | (132) | (132) | 0 | |||||||||||||||
Net income (loss) | 1,850 | 1,867 | 1,867 | (17) | |||||||||||||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | ||||||||||||||||
Repurchase of common stock | (110) | (110) | (110) | ||||||||||||||||
Other transactions impacting noncontrolling interest | (6) | (18) | (18) | 12 | |||||||||||||||
Total Equity, end of period at Dec. 31, 2016 | 13,703 | 13,699 | 74 | 2,892 | (1,382) | 13,831 | (1,716) | 4 | |||||||||||
Beginning Balance at Dec. 31, 2015 | 69 | $ 69 | |||||||||||||||||
Redeemable Noncontrolling Interests | |||||||||||||||||||
Other comprehensive income (loss) | (10) | ||||||||||||||||||
Net income (loss) | (7) | ||||||||||||||||||
Other transactions impacting noncontrolling interest | 6 | ||||||||||||||||||
Ending Balance at Dec. 31, 2016 | 58 | ||||||||||||||||||
Increase (Decrease) In Stockholders Equity [Roll Forward] | |||||||||||||||||||
Effect of issuing stock for employee benefit plans | 248 | 248 | 51 | (258) | 455 | ||||||||||||||
Other comprehensive income (loss) | 300 | 300 | 300 | ||||||||||||||||
Net income (loss) | 2,232 | 2,237 | 2,237 | (5) | |||||||||||||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | ||||||||||||||||
Repurchase of common stock | (2,760) | (2,760) | (2,760) | ||||||||||||||||
Other transactions impacting noncontrolling interest | (2) | (3) | (3) | 1 | |||||||||||||||
Total Equity, end of period at Dec. 31, 2017 | 13,711 | 13,711 | 74 | 2,940 | (1,082) | 15,800 | (4,021) | 0 | |||||||||||
Redeemable Noncontrolling Interests | |||||||||||||||||||
Other comprehensive income (loss) | (3) | ||||||||||||||||||
Net income (loss) | 0 | ||||||||||||||||||
Other transactions impacting noncontrolling interest | (6) | ||||||||||||||||||
Ending Balance at Dec. 31, 2017 | 49 | ||||||||||||||||||
Increase (Decrease) In Stockholders Equity [Roll Forward] | |||||||||||||||||||
Reclassification adjustment related to U.S. tax reform legislation | 0 | 0 | (229) | 229 | |||||||||||||||
Exchange of Old Cigna common stock | 0 | 0 | (58) | 58 | |||||||||||||||
Acquisition of Express Scripts (see Note 3) | 25,231 | 25,224 | 1 | 25,223 | 7 | ||||||||||||||
Effect of issuing stock for employee benefit plans | 127 | 127 | 59 | (138) | 206 | ||||||||||||||
Other comprehensive income (loss) | (390) | (390) | (390) | ||||||||||||||||
Net income (loss) | 2,637 | 2,637 | 2,637 | 0 | |||||||||||||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | ||||||||||||||||
Repurchase of common stock | (329) | (329) | (329) | ||||||||||||||||
Retirement of treasury stock | 0 | 0 | (13) | (529) | (3,498) | 4,040 | |||||||||||||
Other transactions impacting noncontrolling interest | 0 | 0 | 0 | 0 | |||||||||||||||
Total Equity, end of period at Dec. 31, 2018 | 41,035 | $ 41,028 | $ 4 | $ 27,751 | $ (1,711) | $ 15,088 | $ (104) | $ 7 | |||||||||||
Redeemable Noncontrolling Interests | |||||||||||||||||||
Other comprehensive income (loss) | (15) | ||||||||||||||||||
Net income (loss) | 9 | ||||||||||||||||||
Other transactions impacting noncontrolling interest | (6) | ||||||||||||||||||
Ending Balance at Dec. 31, 2018 | $ 37 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | |||
Net Income | $ 2,646 | $ 2,232 | $ 1,843 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 695 | 566 | 610 |
Realized investment (gains) losses | 81 | (237) | (169) |
Deferred income taxes (benefits) | (101) | 242 | 74 |
Debt extinguishment costs | 0 | 321 | 0 |
Net changes in assets and liabilities, net of non-operating effects: | |||
Accounts receivable | 705 | (233) | 663 |
Inventories | (107) | (72) | 30 |
Deferred policy acquisition costs | (237) | (282) | (213) |
Reinsurance recoverables and other assets | (234) | 115 | 246 |
Insurance liabilities | 560 | 506 | 683 |
Pharmacy and service costs payable | (842) | 35 | (46) |
Accounts payable, accrued expenses and other liabilities | 332 | 696 | 171 |
Other, net | 272 | 197 | 134 |
Net cash provided by (used in) operating activities | 3,770 | 4,086 | 4,026 |
Proceeds from investments sold: | |||
Fixed maturities and equity securities | 2,655 | 2,012 | 1,544 |
Investment maturities and repayments: | |||
Fixed maturities and equity securities | 2,151 | 2,051 | 1,755 |
Commercial mortgage loans | 215 | 335 | 316 |
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 734 | 1,702 | 1,431 |
Investments purchased or originated: | |||
Fixed maturities and equity securities | (5,637) | (5,628) | (5,191) |
Commercial mortgage loans | (312) | (430) | (165) |
Other (primarily short-term and other long-term investments) | (1,189) | (1,065) | (1,698) |
Property and equipment purchases | (528) | (471) | (461) |
Acquisitions, net of cash acquired | (24,455) | (209) | (4) |
Other, net | (12) | 0 | (101) |
Net cash provided by (used in) investing activities | (26,378) | (1,703) | (2,574) |
Cash Flows from Financing Activities | |||
Deposits and interest credited to contractholder deposit funds | 1,040 | 1,230 | 1,460 |
Withdrawals and benefit payments from contractholder deposit funds | (1,151) | (1,363) | (1,362) |
Net change in short-term debt | 1,487 | 80 | (148) |
Payments for debt extinguishment | 0 | (313) | 0 |
Repayment of long-term debt | (131) | (1,250) | 0 |
Net proceeds on issuance of long-term debt | 22,856 | 1,581 | 0 |
Repurchase of common stock | (342) | (2,725) | (139) |
Issuance of common stock | 68 | 131 | 36 |
Other, net | (312) | (22) | (72) |
Net cash provided by (used in) financing activities | 23,515 | (2,651) | (225) |
Effect of foreign currency rate changes on cash and cash equivalents | (24) | 55 | (10) |
Net increase / (decrease) in cash and cash equivalents | 883 | (213) | 1,217 |
Cash and cash equivalents, January 1, | 2,972 | 3,185 | 1,968 |
Cash and cash equivalents, December 31, | 3,855 | 2,972 | 3,185 |
Supplemental Disclosure of Cash Information: | |||
Income taxes paid, net of refunds | 1,019 | 1,036 | 1,064 |
Interest paid | $ 267 | $ 240 | $ 244 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 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 service organization dedicated to a mission of helping those we serve improve their health, well-being and peace of mind. Our evolved strategy in support of our mission is Go Deeper , Go Local , Go Beyond using a differentiated set of medical, pharmacy, dental, disability, life and accident i nsurance and related products and services offered by our 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 co mmercial 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 these ongoing operations, Cigna also has certain run-off operations. As described more fully in Note 3, on March 8, 2018, the Company entered into a merger agreement with Express Scripts Holding Company (“Express Scripts”). Following entry into the merger agreement and throughout the pendency of the transaction, Cigna and Express Scripts designed integration plans to implement a new management and business reporting structure for the combined company immediately upon closing. On December 20, 2018, Cigna completed the acquisition of Express Scripts. As a result, our segme nts have changed as described below, effective in the fourth quarter of 2018. Financial data for all prior periods presented was re stated to reflect this new segment presentation . Integrated Medical offers a variety of medical solutions to employers an d individuals. The Commercial operating segment serves employers (also referred to as “clients”) and their employees (also referred to as “customers”) and other groups. This segment provides deeply integrated medical and specialty offerings including m edical, pharmacy, dental, behavioral health and vision, health advocacy programs and other products and services to insured and self-insured clients. The Government operating segment offers Medicare Advantage, Medicare Supplement, and Medicare Part D plans to Medicare-eligible beneficiaries as well as Medicaid plans. This operating segment also offers health insurance coverage to individual customers both on and off the public exchanges. This segment includes the acquired Express Scripts’ Medicare Part D business. Health Services includes pharmacy benefits management (“PBM”), pharmacy home delivery, and certain medical management services. This segment includes Express Scripts’ business from the date of acquisition with the exception of Express Scripts’ Medicare Part D business that is reported in the Government operating segment. International Markets includes supplemental health, life and accident insurance products and health care coverage in our international markets as well as health care benefits to globally mobile employees of multinational organizations. The remainder of our business operations are reported in Group Disability and Other, consisting of the following: Group Disability and Life provides group long-term and short-term disability , group life, accident, voluntary and specialty insurance products and related services. Corporate-Owned Life Insurance (“COLI”) offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for the purpose of financing employer-paid future benefit obligations. Run-off businesses: Reinsurance: predominantly comprised of guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) business effectively exited through reinsurance wi th Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire”) in 2013. Settlement Annuity business in run-off. Individual Life Insurance and Annuity and Retirement Benefits Businesses: deferred gains from the sales of these businesses. Certain international run-off businesses Corporate reflects amounts not allocated to operating segments, including interest expense , net investment income on investments not supporting segment and other operations, interest on uncertain tax positions, certain lit igation matters, compensation cost for stock options and related excess tax benefits , expense associated with our fr ozen pension plans, severance, certain overhead and project costs and intersegment eliminations for products and services sold between segments . |
Summary of Signficant Accountin
Summary of Signficant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The Consolidated Financial Statements include the accounts of Cigna Corporation and its consolidated subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company adopted Article 5 of Regulation S-X issued by the Securit ies and Exchange Commission effective December 31, 2018 in conjunction with the acquisition of Express Scripts. As a result, the Company now presents current assets and liabilities on its balance sheet. T he Company reclassified realized investment gains (losses) from revenue and now reports them below income from operations with interest expense in our Consolidated Statements of I ncome, in conformity with Article 5 . Prior year s’ information was reclassified to conform to this new presentation. Amounts r ecorded in the Consolidated F inancial S tatements necessarily reflect management’s estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, a ctual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. Certain reclassifications have been made to prior year amounts to conform to the current presentation. Variable interest entities. See Note 11 for a discussion of variable interest entities. Recent Accounting Guidance Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance GUIDANCE ADOPTED JANUARY 1, 2018 Revenue from Contracts with Customers (Accounting Standards Update (“ASU”) 2014-09 and related amendments) 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 pharmacy contracts with customers • Adopted through full retrospective restatement • Cumulative-effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2015 balance of retained earnings. This 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 Integrated Medical segment affecting premiums, fees and other revenues, benefit expenses, and selling, general and administrative expenses and had no impact on revenue recognition patterns or net income. Expedients and exemptions elected: • Incremental costs of obtaining service and pharmacy contracts for short-term arrangements are expensed as incurred. • The Company does not disclose information about the aggregate amount of transaction price allocated to remaining performance obligations as its contracts are either short-term, or the remaining transaction price consists of variable consideration that relates specifically to wholly unsatisfied future periods of service. See the discussion of the Company’s accounting policies for fees and pharmacy revenues beginning on page 91. Accounting Standard and Adoption date Requirements and Effects of Adopting New Guidance GUIDANCE ADOPTED JANUARY 1, 2018 Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) 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 having a readily determinable fair value that were previously reported in accumulated other comprehensive income (“AOCI”) are now reported in net realized investment gains (losses). • 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 eligibility requirements for financial and nonfinancial hedging strategies 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 AOCI, 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 9 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 AOCI 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-K 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 AOCI • Allows companies to apply the guidance retrospectively or in the period of adoption Effects of adoption: AOCI of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 12 for additional information including accounting policy disclosures. In addition to these standards, 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 Nonfinanci al Assets (ASU 2017-05), and Stock Compensation Scope of Modification Accounting (ASU 2017-09). Accounting Guidance Not Yet Adopted Accounting Standard and Effective Date Requirements and Expected Effects of New 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 will adopt this ASU in the first quarter of 2019 on a modified retrospective basis and will not restate comparative periods. While we are still finalizing our adoption procedures, we estimate the primary impact to our Consolidated Balance Sheet will be an increase to assets and liabilities of approximately $700 million for the right-of-use asset and corresponding lease liability related to existing operating leases. We do not expect the impact to retained earnings to be material. • The Company elected the optional practical expedient to retain the current classification of leases, and therefore, we do not expect a material impact to the Consolidated Statements of Income or Cash Flows. • The Company has implemented a new lease system and developed requisite changes to internal controls over financial reporting. • The Company is continuing to work to develop required disclosures. • The Company adopted this new guidance as of the effective date and will not present comparative periods in the financial statements, as recently allowed. Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020, with early adoption permitted as of January 1, 2019 Requires: • A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments such as mortgage loans, reinsurance recoverables and other receivables when such instruments are first originated or acquired. • Changes in the criteria for impairment of available-for-sale debt securities • Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate this new standard and its effects on our financial statements and disclosures. We expect to adopt the standard as of January 1, 2020. • An additional allowance for future expected credit losses for certain financial instruments may be required at adoption. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020, with early adoption permitted as of January 1, 2017 Guidance: • Simplifies the accounting for goodwill impairment by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment • Redefines the amount of goodwill impairment to equal the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill of the reporting unit • Requires prospective adoption Expected effects: • The Company is evaluating this new standard and its expected timing of adoption. Accounting Standard and Effective Date Requirements and Expected Effects of New Guidance Not Yet Adopted 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 International Markets segment and Group Disability and Other. Significant Accounting Policies The Company’s accounting policies are described either in this Note or in the applicable Notes to the Consolidated Financial Statements as indicated in the table below. Note Number Footnote and policy Page 4 Earnings per share ##item8fnepspage 7 Insurance and contractholder liabilities ##item8fninsliabpage · Contractholder deposit funds ##item8fninsliabpage · Future policy benefits ##item8fninsliabpage · Liabilities for unpaid claims and claim expenses - Integrated Medical ##item8fnhcmcppage[2][2] · Liabilities for unpaid claims and claim expenses - International Markets and Group Disability and Other ##item8ucpolicy 8 Reinsurance ##item8fnrpage · GMDB ##FN9GMDB · GMIB ##FN9GMIB 9 Investments, derivatives, investment income and gains and losses ##item8fnipage · Fixed maturities ##FN11fixedmaturies · Equity securities ##FN11equities · Commercial mortgage loans ##FN11CommercialMortgageLoans · Other long-term investments ##FN11OLTI · Short-term investments and cash equivalents ##FN11ShortTermInvestments · Derivative financial instruments ##FN11Derivatives · Net investment income ##FN11NII · Realized investment gains and losses ##FN11RIGS 10 Fair value measurements ##item8fnfvpage · Fixed maturities, equity securities, short-term investments and derivatives ##FN10FVDiscussion · Separate accounts ##FN10SeparateAccounts · Commercial mortgage loans ##FN10AssetsNotCarriedatFVDiscussion · Long-term debt ##FN10AssetsNotCarriedatFVDiscussion 11 Variable interest entities ##item8fnviepage 13 Pension and other postretirement benefit plans ##item8fnpaopbpage 14 Employee incentive plans ##item8fneippage 15 Goodwill, other intangibles and property and equipment ##item8gwpage 18 Income taxes ##item8fnitpage 19 Contingencies and other matters ##item8fncpage A. Cash and Cash Equivalents Cash and cash equivalents are carried at cost that approximates fair value. Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase. The Company reclassifies cash overdraft positions to liabilities when the legal right of offset does not exist. B. Accounts R eceivable , Net The following amounts are included within accounts receivable , net : (In millions) 2018 2017 Insurance customer receivables $ 1,888 $ 1,818 Noninsurance customer receivables 4,988 441 Pharmaceutical manufacturers receivable (1) 3,321 645 Other receivables 276 251 Total accounts receivable, net $ 10,473 $ 3,155 (1) Includes $406 million at December 31, 2018 and $336 million at December 31, 2017 of receivables under noninsurance customer contracts. These accounts receivable balances primarily include amounts due from clients, third-party payors, customers and pharmaceutical manufacturers. Receivables totaling $1. 2 billion related to the acquired Express Scripts business are unbilled as of December 31, 2018 and are typically billed to PBM clients within 30 days based on contractual billing schedules. Unbilled receivables for medical benefit management services represent amounts due from clients at contracted rates, and are billed when se ttlement provisions for capitated risk contracts are met, at least annually. The receivables balances above are reported net of allowances for doubtful accounts of $217 million as of December 31, 2018 and $210 million as of December 31, 2017. The allow ances are based on the current status of each customer’s receivable balance as well as current economic and market conditions and a variety of other factors including the length of time the receivables are past due, the financial health of customers and ou r past experience. Receivables are written off against allowances only when such amounts are determined to be not recoverable and all collection attempts have failed. We regularly review the adequacy of these allowances based on a variety of factors, inc luding age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted. Express Scripts’ receivables were recorded at their estimated fair values at the acquisition date. These fair values considered estimated discounts and claims adjustments issued to customers in the form of client credits, and amounts from third-party payors and pharmaceutical manufacturers that are not considered r ealizable based on contract terms and historical payment experience. C. Inventories Inventories consist of prescription drugs and medical supplies and are stated at the lower of first-in-first-out cost or net realizable value. D . Reinsurance Recover ables Reinsurance recoverables represent amounts due from reinsurers for both paid and unpaid claims of the Company’s insurance businesses. Most reinsurance recoverables are classified as non-current assets. The current portion of reinsurance recoverab les is reported in other current assets and consists primarily of recoverables on paid claims expected to be settled within one year. Reinsurance recoverables are presented net of allowances for uncollectible reinsurance that were immaterial as of Decembe r 31, 2018 and 2017. E. Deferred Policy Acquisition Costs Costs eligible for deferral include incremental, direct costs of acquiring new or renewal insurance and investment contracts and other costs directly related to successful contract acquisition. Examples of deferrable costs include commissions, sales compensation and benefits, policy issuance and underwriting costs and premium taxes. The Company records acquisition costs differently depending on the product line. Acquisition costs for: Supplem ental health, life and accident insurance products (primarily individual products) that comprise the majority of the Company’s deferred policy acquisition costs and group health and accident insurance products are deferred and amortized, generally in propo rtion to the ratio of periodic revenue to the estimated total revenues over the contract periods. Universal life products are deferred and amortized in proportion to the present value of total estimated gross profits over the expected lives of the contract s. Other products are expensed as incurred. Deferred policy acquisition costs also include the value of business acquired (“VOBA”) for certain acquisitions with material long-duration insurance contracts. The Company recorded amortization of deferred policy acquisition costs of $ 406 million in 2018 , $ 322 million in 2017 and $ 292 million in 2016 primarily in selling, general and administrative expenses. Each year, deferred policy acquisition costs are tested for recoverability. For universal life and other individual products, management estimates the present value of future revenues less expected payments. For group health and accident insurance products, management estimates the sum of un earned premiums and anticipated net investment income less future expected claims and related costs. If management’s estimates of these sums are less than the deferred costs, the Company reduces deferred policy acquisition costs and records an additional expense. F. Other Assets (Current and Non-Current) Other current assets consist primarily of prepaid expenses, accrued investment income and the current portion of reinsurance recoverables. Other non-current assets consist primarily of GMIB assets a nd various other insurance-related assets. See Note 8 for the Company’s accounting policy for GMIB assets. Additionally, other non-current assets include the carrying value of our equity-method investments in joint ventures in China, India, the U.S . and other foreign jurisdictions. G. Redeemable Noncontrolling Interests Products and services are offered in Turkey and India through joint venture entities. The Company is the principal equity holder and primary beneficiary of the Turkey joint ven ture and accordingly, this entity is consolidated. In 2017, Cigna modified the agreement governing its joint venture in India due to changes in the local regulatory environment that require control by a local partner. As a result of the changes in the jo int venture agreement, the Company determined that it is no longer the primary beneficiary of the joint venture and, effective with the third quarter of 2017, no longer consolidates its results. Redeemable noncontrolling interests on our Consolidated Ba lance Sheets represent the Turkey joint venture partner’s preferred and common stock interests in the entity as of December 31, 2018 and 2017 . Our joint venture partner may choose to require the Company to purchase their redeemable noncontrolling interests. We also have the right to require our joint venture partner to sell their redeemable noncontrolling interests to us. The redeemable noncontrolling interests were recorded at fair value as of the dates of purchase. When the estimated redemption value for a redeemable noncontrolling interest exceeds its carrying value, an adjustment to increase the redeemable noncontrolling interest is recorded with an offsetting reduction to additional paid-in capital. When an adjustment is made to the carrying value of t he redeemable noncontrolling interest, the calculation of shareholders’ net income per share will be adjusted if the redemption value exceeds the greater of the carrying value or fair value. H. Accrued Expenses and Other Current and Non-Current Liabili ties Accrued expenses (current) includes financial and performance guarantee liabilities under pharmacy contracts (see section L), management compensation, and various insurance-related liabilities, including experience-rated refunds, reinsurance contract s and the risk adjustment and minimum medical loss ratio rebate accruals under The Patient Protection and Affordable Care Act. Other non-current liabilities include obligations for pension, other postretirement and postemployment benefits (see Note 13 ), GMIB contract liabilities (see Note 8 ) and self-insured exposures not expected to be settled within one year. Legal costs to defend the Company’s litigation and arbitration matters are expensed when incurred in cases where the Company cannot reasonably estimate the ultimate cost to defend. If the Company can reasonably estimate the cost to defend, a liability for these costs is accrued when the claim is reported. I. Translation of Foreign Currencies The Company generally conducts its int ernational business through foreign operating entities that maintain assets and liabilities in local currencies that are generally their functional currencies. The Company uses exchange rates as of the balance sheet date to translate assets and liabilitie s into U.S. dollars. Translation gains or losses on functional currencies, net of applicable taxes, are recorded in accumulated other comprehensive income (loss). The Company uses average monthly exchange rates during the year to translate revenues and e xpenses into U.S. dollars. J. Premiums and Related Expenses Premiums for group life, accident and health insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period. Benefits and expenses are recogniz ed when incurred and, for our Integrated Medical insured business, are presented net of pharmaceutical manufacturer rebates. For experience-rated contracts, premium revenue includes an adjustment for experience-rated refunds based on contract terms and ca lculated using the customer’s experience (including estimates of incurred but not reported claims). Premium revenue also includes an adjustment to reflect the estimated effect of rebates due to customers under the commercial minimum medical loss ratio provisions of the ACA. These rebates are settled in the year following the policy year. Premiums received for the Company’s Medicare Advantage plans and Medicare Part D products from the Centers for Medicare and Medicaid Services (“CMS”) and customers ar e recognized as revenue ratably over the contract period. CMS provides risk-adjusted premium payments for Medicare Advantage Plans and Medicare Part D products based on the demographics and wellness of customers. The Company recognizes periodic changes t o risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured. Additionally, Medicare Part D premiums include payments from CMS for risk sharing adjustments. The risk sharing adjustments are estimated quarterl y based on claim experience by comparing actual incurred drug benefit costs to estimated costs submitted in original contracts. These adjustments may result in more or less revenue from CMS. Final revenue adjustments are determined and settled with CMS i n the year following the contract year. Premium revenue also includes an adjustment to reflect the estimated effect of rebates due to CMS under the Medicare Advantage and Medicare Part D minimum medical loss ratio provisions of the ACA. The ACA prescribe d three programs to mitigate the risk for participating health insurance companies selling coverage on the public exchanges: risk adjustment, reinsurance and risk corridor. The reinsurance and risk corridor programs expired at the end of 2016, while the permanent risk adjustment program continues. The risk adjustment program reallocates funds from insurers with lower risk populations to insurers with higher risk populations based on the relative risk scores of participants in non-grandfathered plans in the individual and small group markets, both on and off the exchanges. We estimate our receivable or payable based on the risk of our members compared to the risk of other members in the same state and market, considering data obtained from industry studi es and the United States Department of Health and Human Services (“HHS”). Receivables or payables are recorded as adjustments to premium revenue based on our year-to-date experience when the amounts are reasonably estimable and collection is reasonably as sured. Final revenue adjustments are determined by HHS in the year following the policy year. Premiums for individual life, accident and supplemental health insurance and annuity products, excluding universal life and investment-related products, are reco gnized as revenue when due. Benefits and expenses are matched with premiums. Revenue for universal life products is recognized as follows: Investment income on assets supporting universal life products is recognized in net investment income as earned. C harges for mortality, administration and policy surrender are recognized in premiums as earned. Administrative fees are considered earned when services are provided. Benefits and expenses for universal life products consist of benefit claims in excess of policyholder account balances and income earned by policyholders. Expenses are recognized when claims are incurred, and income is credited to policyholders in accordance with contract provisions. The unrecognized portion of premiums received is recorded as unearned premiums included in insurance and contractholder liabilities (see Note 7 for further information ). K. Fees and Related Expenses The majority of the Company’s service fees are derived from administrative services only (“ASO”) a rrangements 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 medical and specialty services, including pharmacy benefits. Generally, the Company’s ASO a rrangements are short-term. Contract modifications typically occur on renewal and are prospective in nature. In return for fees from these clients, the Company provides or makes available various services supporting benefit management and claims admini stration. In addition, services offered through our Integrated Medical segment include access to the Company’s participating provider networks, disease management, utilization management, and cost 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 contracted rates based on current 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 Consolidated Statements of Income. For most ASO arrangements, 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 advan ce. Deferred revenue is recorded as a contract liability and recognized when the related services are performed. The balance was immaterial as of December 31, 2018 and 2017. The Company may also provide performance guarantees that provide potential refu nds to clients 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 dolla r amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accrued expenses and other liabilities (current). The amount of revenue deferred is estimated for each type of guarantee, using ei ther 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 information on the Company’s performance becomes ava ilable, and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for performance guarantees during the reporting periods were not material. Rebates from pharmaceutical manufacturers resulting from ASO clie nt utilization at retail pharmacies, net of amounts payable to ASO clients, are compensation for pharmacy services and recorded in fees and other revenues. Rebates generally represent a per-script amount from the manufacturer and are determined based on s cripts filled during the reporting period. Expenses associated with administrative programs and services are recognized in selling, general and administrative expenses as incurred. The Company also earns fees by providing integrated medical benefit ma nagement solutions that drive cost reductions and improve quality outcomes. These solutions were part of the business acquired from Express Scripts. Clients are primarily sponsors of health benefit plans and f ees ma y be stated as a per-member-per- month f ee or as a per-claim fee. The Company considers the services to be a single performance obligation to stand ready to provide utilization management services over the contract period (generally three years). In certain arrangements, the Company assumes th e financial obligation for third-party provider costs for medical services provided to the health plan’s members. Fees are recorded gross in revenues because the Company is acting as a principal in arranging for and controlling the services provided by th ird-party network providers. Contractual fees vary based on enrollment and provider costs and are estimated, billed, due and recognized monthly. Direct costs associated with these programs are included in pharmacy and service costs. Certain medical bene fit management contracts require the Company to share the results of medical cost experience that differs from specified targets. This variable consideration is estimated at contract inception and adjusted through the contract period. The estimated profi ts and costs are recognized net in revenues. L. Pharmacy Revenues and Costs Pharmacy Revenues. Pharmacy revenues include revenue from the acquired Express Scripts business and the Company’s legacy mail order pharmacy business. Pharmacy revenues are recognized when control of the promised goods or services is transferred to clients, in an amount that reflects the consideration the Company expects to receive for those goods or services. The Express Scripts business provides or makes available vari |
Mergers and Acquisitions
Mergers and Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions and Dispositions [Abstract] | |
Acquisitions and Dispositions | Note 3 – Mergers, Acquisitions and Dispositions Acquisition of Express Scripts On December 20, 2018, Cigna acquired Express Scripts through a series of mergers (collectively, the “Merger”). Cigna Holding Company (formerly named Cigna Corporation and referred to as “Old Cigna”) and Express Scripts each merged with and into a wholly-owned subsidiary of Cigna. As a result of these transactions, Cigna became the parent of the combined company. Old Cigna sh are holders receive d one share of Cigna common stock in exchange for each share of Old Cigna common stock held immediately prior to the M erger. Express Scripts share holders receive d (1) 0.2434 of a share of Cigna common stock and (2) cash of $48.75, withou t interest, subject to applicable withholding tax es (the “Merger Consideration”) , in exchange for each share of Express Scripts common stock held immediately prior to the Merger. Cash consideration was funded primarily through a combination of cash availa ble and debt financing discussed further in Note 5 . After completion of the Merger, shares of Cigna common stock were listed for trading on the New York Stock Exchange . The acquired Express Scripts business accelerates Cigna’s Go Deeper, Go Local, Go Beyond strategy by greatly increasing the Company’s ability to put medicine within reach of customers and also helping to make it more affordable. We can improve patient outcomes and help control the cost of the drug benefit by: 1) identifying products and offering solutions that improve patient outcomes and assist in controlling costs; 2) evaluating drugs for efficacy, value and price to select a cost-effective formulary; 3) offering cost-effective home delivery pharmacy and specialty services that produce cost savings for plan sponsors and better care for members; 4) leveraging purchasing volume to provide discounts to health benefit providers; and 5) p romoting generic and lower-cost brands. Merger consideration : The estimated merger consider ation of $52.8 billion was calculated as follows: (Dollars and shares in millions, except per share amounts) Cash consideration Express Scripts common stock outstanding 564.3 Cash consideration per share $ 48.75 Cash consideration paid to Express Scripts common stockholders $ 27,510 Cash paid in lieu of fractional shares $ 4 Cash consideration paid to Express Scripts performance share holders $ 65 Total cash consideration $ 27,579 Stock consideration Express Scripts common stock outstanding 564.3 Per share exchange ratio 0.2434 Shares of Cigna issued to Express Scripts common stockholders 137.3 Shares of Cigna issued to Express Scripts performance share holders and other equity holders 0.3 Shares of Cigna issued to Express Scripts shareholders 137.6 Closing price of Cigna common stock on December 20, 2018 $ 179.80 Total stock consideration $ 24,745 Noncontrolling interest $ 7 Fair value of other share-based compensation awards $ 479 Total merger consideration $ 52,810 Fair value of share-based compensation award. Express Scripts employees’ awards of options and restricted stock units of Express Scripts stock were rolled over to Cigna stock options and restricted stock units on the date of the acquisition. Each holder of an Express Scripts stock option or restricted stock unit received 0.4802 of a Cigna stock option or restricted stock award. The Cigna stock option exercise price was determined by using this same conversion ratio. Vesting periods and the remaining li fe of the options remained consistent with the original Express Scripts awards. The Company valued the restricted stock units at Cigna’s stock price and stock options using a Black-Scholes pricing model as of the acquisition date. The assumptions used we re generally consistent with those disclosed in Note 14 , except the expected life of these options averaged 4.3 years and the exercise price did not equal the market value at the date of grant. The fair value of these options and restricted stock unit awards was included in the purchase price to the extent that services had been provided prior to the acquisition based on the grant date of the original Express Scripts award and vesting period. The remaining fair value not included in the purchase price will be recorded as compensation expense in future periods over the remaining vesting periods. Most of the expense is expected to be recognized in 2019 and 2020. Purchase price allocation: In accordance with GAAP, the total purchase price has been allocated to the tangible and intangible net assets acquired based on management’s preliminary estimates of their fair values and may change as additional information becomes available over the n ext several months. Most of the goodwill ($33.7 billion) is assigned to the Health Services segment, with the remainder to the Integrated Medical segment and is not deductible for federal income tax purposes. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the closing date. (In millions) Cash and cash equivalents $ 3,517 Receivables 7,802 Inventory 2,483 Other current assets 600 Property and equipment 2,973 Goodwill 38,361 Other identifiable intangible assets 38,725 Other assets acquired, non-current 314 Total assets acquired 94,775 Other current liabilities 18,616 Long-term debt, including current portion 12,816 Deferred income tax liabilities 9,511 Other liabilities, non-current assumed 1,022 Total liabilities acquired 41,965 Total $ 52,810 A portion of the purchase price has been allocated to intangible assets that are presented and discussed below. Estimated Estimated Useful Amortization (In millions) Fair Value Life in Years Method Customer relationships $ 30,210 14-29 Cash flow trended Internal-use software (1) 2,443 3-7 Straight Line Trade name - Express Scripts 8,400 N/A Indefinite Trade name - Other 115 10 Straight Line Total $ 41,168 (1) Reported in property and equipment. The fair value of the customer relationships and the amortization period and method were determined using an income approach that relies heavily on projected future net cash flows including key assumptions for customer attrition, margins, and discount rates. The estimated useful life reflects the time period and pattern that Cigna expects to receive the benefits of the related cash flows. The results of Express Scripts have been included in the Company’s Consolidated Financial Statements from the date of the acquisition. Revenues of Express Scripts included in the Company’s results for 2018 approximated $2.6 billion and Express Scripts’ results of operations were immaterial to Cigna's net income. Unaudited pro forma information. The fo llowing table presents selected unaudited pro forma information for the Company assuming the acquisition of Express Scripts had occurred on January 1, 2017. The primary adjustments reflected in the pro forma results relate to the interest expense on the debt issued to fund the M erger , the amortization of the acquired intangible assets and the presentation of transaction related costs. Transaction related costs incurred by the Company and Express Scripts in 2018 have been presented as if they had been incu rred on January 1, 2017. The pro forma information does not purport to represent what the Company’s actual results would have been if the acquisition had occurred as of the date indicated or what such results would be for any future periods. Unaudited Year Ended December 31, (In millions, except per share amounts) 2018 2017 Total revenues $ 149,544 $ 143,288 Shareholders’ net income $ 5,632 $ 4,435 Pro form a shareholders’ net income for the year ended December 31, 2017 includes $1.2 billion in transaction-related costs incurred in connection with the acquisition. Acquisition of OnePath Life NZ Limited (“OnePath Life”) On November 30, 2018, the Company acquired OnePath Life for NZ$700 million (approximately $480 million at closing) using internal cash resources. OnePath Life is one of the largest life insurance companies in New Zealand. This acquisition will support diversifying distribution ca pabilities and product offerings in the New Zealand market. It will also enable better service delivery to clients and customers. The purchase price has been allocated to the tangible and intangible net assets acquired based on management’s preliminary e stimates of their fair value and may change as additional information becomes available over the next several months. Goodwill has been assigned to the International Markets segment as of December 31, 2018 and is not tax deductible. The results of this business have been included in the Company’s Consolidated Financial Statements from the date of acquisition and were not material. In addition, the pro forma effects on total revenues and net income assuming the acquisition had occurred January 1, 2017 were not material to the Company for the years ended December 31, 2018 and 2017. Transaction-related C osts The Company has incurred costs detailed in the table below in the acquisition of Express Scripts, the terminated merger wi th Anthem, Inc. (“Anthem”) and other transactions. These costs consisted primarily of fees for legal, advisory and other professional services, amortization of the Bridge Facility fees in 2018 and interest expense on debt issued to fund the Express Script s merger through the closing date, net of investment income earned on the debt proceeds. A portion of the costs , primarily legal and advisory fees, related to the completed Express Scripts acquisition are not deductible for federal income tax purposes. 2018 2017 2016 (In millions) Before-tax After-tax Before-tax After-tax Before-tax After-tax Interest expense on newly issued debt $ 227 $ 179 $ - $ - $ - $ - Net investment income on debt proceeds (123) (97) - - - - Charitable contributions 200 158 - - - - Legal and advisory fees 204 185 36 23 96 95 Bridge facility fees 140 111 - - - - All other transaction-related costs 204 133 90 69 70 52 Tax (benefit) - previously non-deductible costs - - - (59) - - Transaction-related costs, net $ 852 $ 669 $ 126 $ 33 $ 166 $ 147 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 4 – E arnings P er S hare (“EPS”) Accounting policy. The Company computes basic earnings per share using the weighted-average number of unrestricted common and deferred shares outstanding. Diluted earnings per share also includes the dilutive effect of outstanding employee stock options and restricted stock using the treasury stock method and the effect of strategic performance shares. Basic and diluted earnings per share were computed as follows: 2018 2017 2016 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Basic Dilution Diluted Shareholders’ net income $ 2,637 $ - $ 2,637 $ 2,237 $ - $ 2,237 $ 1,867 $ - $ 1,867 Shares Weighted average 246,652 - 246,652 250,892 - 250,892 255,360 - 255,360 Common stock equivalents 3,573 3,573 4,180 4,180 4,287 4,287 Total shares 246,652 3,573 250,225 250,892 4,180 255,072 255,360 4,287 259,647 EPS $ 10.69 $ (0.15) $ 10.54 $ 8.92 $ (0.15) $ 8.77 $ 7.31 $ (0.12) $ 7.19 The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect w as anti - dilutive. (In millions) 2018 2017 2016 Anti-dilutive options 0.9 0.9 2.3 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 5 – Debt The outstanding amounts of debt and capital leases for the years ended December 31 were as follows: (In millions) Issuer 2018 2017 Short-term debt Current maturities: $1,000 million, 2.25% Senior Notes Express Scripts $ 995 $ - Current maturities: $337 million, 7.25% Senior Notes ESI 343 - Commercial paper Old Cigna 1,500 100 Current maturities: $131 million, 6.35% Notes Old Cigna - 131 Other, including capital leases various 117 9 Total short-term debt $ 2,955 $ 240 Long-term uncollateralized debt Cigna debt (issued to finance acquisition) $1,000 million, Floating Rate Notes due 2020 Cigna $ 997 $ - $1,750 million, 3.2% Notes due 2020 Cigna 1,743 - $1,000 million, Floating Rate Notes due 2021 Cigna 996 - $1,250 million, 3.4% Notes due 2021 Cigna 1,245 - $3,000 million, Floating Rate Term Loan due 2021 Cigna 2,997 - $700 million, Floating Rate Notes due 2023 Cigna 697 - $3,100 million, 3.75% Notes due 2023 Cigna 3,085 - $2,200 million, 4.125% Notes due 2025 Cigna 2,187 - $3,800 million, 4.375% Notes due 2028 Cigna 3,774 - $2,200 million, 4.8% Notes due 2038 Cigna 2,178 - $3,000 million, 4.9% Notes due 2048 Cigna 2,964 - Express Scripts debt (assumed in acquisition) $500 million, 4.125% Senior Notes due 2020 Medco 506 - $500 million, 2.600% Senior Notes due 2020 Express Scripts 493 - $400 million, Floating Rate Senior Notes due 2020 Express Scripts 399 - $500 million, 3.300% Senior Notes due 2021 Express Scripts 499 - $1,250 million, 4.750% Senior Notes due 2021 Express Scripts 1,285 - $1,000 million, 3.900% Senior Notes due 2022 Express Scripts 998 - $500 million, 3.050% Senior Notes due 2022 Express Scripts 481 - $1,000 million, 3.000% Senior Notes due 2023 Express Scripts 959 - $1,000 million, 3.500% Senior Notes due 2024 Express Scripts 966 - $1,500 million, 4.500% Senior Notes due 2026 Express Scripts 1,508 - $1,500 million, 3.400% Senior Notes due 2027 Express Scripts 1,386 - $449 million, 6.125% Senior Notes due 2041 Express Scripts 493 - $1,500 million, 4.800% Senior Notes due 2046 Express Scripts 1,465 - Old Cigna debt (pre-acquisition) $250 million, 4.375% Notes due 2020 Old Cigna 248 249 $300 million, 5.125% Notes due 2020 Old Cigna 298 299 $78 million, 6.37% Notes due 2021 CGC 78 78 $300 million, 4.5% Notes due 2021 Old Cigna 297 299 $750 million, 4% Notes due 2022 Old Cigna 746 745 $100 million, 7.65% Notes due 2023 Old Cigna 100 100 $17 million, 8.3% Notes due 2023 Old Cigna 17 17 $900 million, 3.25% Notes due 2025 Old Cigna 895 894 $600 million, 3.05% Notes due 2027 Old Cigna 595 594 $259 million, 7.875% Debentures due 2027 Old Cigna 259 258 $45 million, 8.3% Step Down Notes due 2033 Old Cigna 45 45 $191 million, 6.15% Notes due 2036 Old Cigna 190 190 $121 million, 5.875% Notes due 2041 Old Cigna 119 119 $317 million, 5.375% Notes due 2042 Old Cigna 315 315 $1,000 million, 3.875% Notes due 2047 Old Cigna 988 988 Other, including capital leases Other 32 9 Total long-term debt $ 39,523 $ 5,199 Notes issued to fund the Express Scripts acquisition. As presented in the table above, the Company issued private placement Notes with registration rights in the third quarter of 2018 to finance the Express Scripts acquisition. Total proceeds were approximately $20.0 billion. Interest on this debt is generally paid semi-annually except for quarterly interest payments on the floating rate notes. Term Loan Credit Agreement. Cigna borrowed $3.0 billion under its Term Loan Credit Agreement (the “Term Loan Credit Agreement”) to finance the Merger and to pay fees and expenses of the Merger. The Term Loan Credit Agreement is diversified among 26 banks and contains customary covenants and restrictions, including a financial covenant that Cigna’s leverage ratio may not exceed 60%. There is no remaining amount available for borrowing under this agreement. Bridge Facility . In March 2018, Cigna entered into a commitment letter (the “Commitment Letter”) with Morgan Stanley Senior Fundi ng, 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”) in connection with the Merger . The Company incurred approximately $140 million in fees in 2018 for the Bridge Facility that expired upon the close of the Merger. Revolving Credit Agreement. Cigna has a Revolving Credit and Letter of Credit Agreement (the “Revolving Credit Agreement”) that matures on April 6, 2023 and is diversified among 23 banks. Cigna can borrow up to $3.25 billion for general corporate purposes, with up to $500 million available for issuance of letters of credit, decreased by $22 million of letters of credit under the Revolving Credit Agreement as of December 31, 2018. The Revolving Credit Agreement also includes an option to increase the facility amount up to $500 million and an option to extend the termination date for additional one year periods, subject to consent of the banks. The Revolving Credit Agreement contai ns customary covenants and restrictions, including a financial covenant that the Company’s leverage ratio may not exceed 60%. Cigna is the borrower under the Revolving Credit Agreement and the Term Loan Credit Agreement and certain subsidiaries of Cigna may be required to guarantee these obligations under certain circumstances. Commercial P aper . Old Cigna issued $1.5 billion under the commercial paper program to finance the Merger. Assumption of Express Scripts Debt. The Company assumed debt obligations of Express Scripts, ESI and Medco as described in the table above in the acquisition under substantially unchanged terms. The Company was in compliance with its debt covenants as of December 31, 2018. Ot her debt financing transactions. In the third quarter of 2017, Old Cigna entered into the following debt transactions: On September 14, 2017, Old Cigna issued $1.6 billion long-term debt and the proceeds were used to pay for the cash tender offer described below. Old Cigna also used the proceeds for general corporate purposes, including the repayment of its Notes that matured in 2018. Old Cigna completed a cash ten der offer to purchase $1.0 billion of aggregate principal amount of certain of its outstanding debt securities in the third quarter of 2017 and recorded a pre-tax loss of $321 million ($209 million after-tax), primarily for premiums paid. Old Cigna repaid $131 million and $250 million of long-term notes that matured during the first quarter of 2018 and 2017 respectively. Maturi ties of outstanding long-term debt and capital leases a re as follows: Scheduled Maturities (In millions) Long-term Debt (1) Capital Leases 2019 $ 1,337 $ 17 2020 $ 4,700 $ 14 2021 $ 7,378 $ 4 2022 $ 2,250 $ 4 2023 $ 4,917 $ 4 Maturities after 2023 $ 20,582 $ 7 (1) Long-term debt maturity amounts exclude capital leases. Inte rest expense on long-term and short-term debt was $ 507 million in 2018 , $ 243 million in 2017 , and $ 251 million in 2016 , excluding losses on the early extinguishment of debt. |
Common and Preferred Stock
Common and Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Common And Preferred Stock [Abstract] | |
Common and preferred stock | Note 6 – Common and Preferred Stock As more fully described in Note 3, Cigna acquired Express Scripts on December 20, 2018. Old Cigna shareholders exchanged each of their shares for a share of Cigna common stock and shareholders of Express Scripts received 0.2434 of a share of Cigna (and $48.75 in cash) for each share of Express Scripts. Following the Merger, Old Cigna was de-listed and shares of Cigna were listed on the New York Stock Exchange for trading. Cigna (and, prior to the Merger, Old Cigna) has a total of 25 million shares of $1 par value preferred stock authorized for issuance. No shares of preferred stock were outstanding at December 31, 2018 , 2017 or 2016 . The following table presents the share activity of Old Cigna and Ci gna for the years ended December 31, 2018 , 2017 and 2016 . (Shares in thousands) 2018 2017 2016 Common: Par value $0.25; 600,000 shares authorized - Old Cigna Outstanding - January 1, 243,967 256,869 256,544 Issued for stock option exercises and other benefit plans 1,118 2,761 1,110 Repurchased common stock (1,300) (15,663) (785) Balance, December 20, 2018 (Merger Date) 243,785 - - Exchange of Old Cigna shares for shares of Cigna (243,785) - - Outstanding - December 31, - 243,967 256,869 Retirement of treasury stock on December 20, 2018 (52,358) - - Exchange of Old Cigna certificated treasury stock for new Cigna certificated treasury stock (2) - - Treasury stock - December 31, 2018 - 52,178 39,276 Issued - December 31, - 296,145 296,145 Common: Par value $0.01; 600,000 shares authorized - Cigna Shares issued to Old Cigna shareholders 243,785 - - Shares issued to Express Scripts shareholders 137,337 - - Issued for stock option exercises and other benefit plans including Express Scripts performance share holders 91 - - Repurchased common stock (289) - - Outstanding - December 31, 2018 380,924 - - Treasury stock 570 - - Issued - December 31, 2018 381,494 - - |
Insurance and Contractholder Li
Insurance and Contractholder Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Insurance and Contractholder Liabilities [Abstract] | |
Insurance and Contractholder Liabilities | N ote 7 – Insurance and Contractholder Liabilities Account Balances – Insurance and Contractholder Liabilities As of December 31, 2018 and 2017 , t he Company’s insurance and contractholder liabilities co mprised the following: December 31, 2018 December 31, 2017 (In millions) Current Non-current Total Current Non-current Total Contractholder deposit funds $ 641 $ 7,365 $ 8,006 $ 713 $ 7,483 $ 8,196 Future policy benefits 740 8,981 9,721 706 9,334 10,040 Unpaid claims and claim expenses Integrated Medical 2,678 19 2,697 2,401 19 2,420 Other segments 2,394 3,230 5,624 2,178 3,289 5,467 Unearned premiums 348 379 727 319 405 724 Total insurance and contractholder liabilities $ 6,801 $ 19,974 $ 26,775 $ 6,317 $ 20,530 $ 26,847 Insurance and contractholder liabilities expected to be paid within one year are classified as current. Accounting Policy - Contractholder Deposit Funds : Liabilities for contractholder deposit funds primarily include deposits received from customers for investment-related and universal life products and investment earnings on their fund balances. These liabilities are adjusted to reflect administrative charges and, f or universal life fund balances, mortality charges. In addition, this caption includes: 1) premium stabilization reserves under group insurance contracts representing experience refunds left with the Company to pay future premiums; 2) deposit administrat ion funds used to fund non-pension retiree insurance programs; 3) retained asset accounts; and 4) annuities or supplementary contracts without significant life contingencies. Interest credited on these funds is accrued ratably over the contract period. Accounting Policy - Future Policy Benef i ts: Future policy benefits represent the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force. These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (see Note 8 for additional information) and certain health, life and accident insurance products of our International M arkets segment. Obligations for annuities represent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Obligations for life insurance policies and GMDB contracts represent benefits expected to be paid to policyholders, net of future premiums expected to be received. Management estimates these obligations based on assumptions as to premiums, interest rates, mortality or morbidity, future claim adjudication expenses and surrenders, allowing for adve rse deviation as appropriate. Mortality, morbidity and surrender assumptions are based on the Company’s own experience and published actuarial tables. Interest rate assumptions are based on management’s judgment considering the Company’s experience and f uture expectations, and range from 1 % to 9 %. Obligations for the run-off settlement annuity business include adjustments for realized and unrealized investment returns consistent with GAAP when a premium deficiency exists. Unpaid Claims and Claim Expenses – Integrated Medical This liability 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 expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities. This liability no longer includes amount s from the international health care business now reported in International Markets following our change in segment reporting in 2018 . Prior year rollforwards have been updated to reflect this segment change. Accounting policy. The Company uses actuaria l principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best est imate of the ultimate liability along with a margin for adverse deviation . This approach is consistent with actuarial standards of practi ce that the liabilities be adequate under moderately adverse conditions. T he Company compares key assumptions used to establish the medical costs payable to actual experience for each reporting period. The unpaid claims liability is adjusted through current period shareholders’ net income w hen actual experience differs from these assumptions. Additionally, the Company evaluates expected future developments and emerging trends tha t may impact key assumptions. The process used to det ermine this liability requires the Company to make critical accounting estimates that involve considerable judgment , reflecting the variability inherent in forecasting future claim payments. These estimates are highly sensitive to changes in the Company’s key assumptions, specifically completion factors and medical cost trends. The liability is primarily calculated using “completion factors” developed by comparing the claim incurral date to the date claims were paid. Completion factors are impacted by several key items including changes in: 1) electronic (auto-adjudication) versus manual claim processing; 2) p rovider claims submission rates; 3) membership ; and 4) the mix of products. The Company uses historical completion factors combined with an anal ysis of current trends and operational factors to develop current estimates of completion factors. T he Company estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims dat a. This approach implicitly assumes that historical completion rates will be a useful indicator for the current period. The Company relies more heavily on medical cost trend analysis that reflects expected claim payment patterns and other relevant oper ational considerations f or more recent months . Medical cost trend is primarily impacted by medical service utilization and unit costs that are affected by changes in the level and mix of medical benefits offered, including inpatient, outpatient and pharma cy, the impact of copays and deductibles, changes in provider practices and changes in consumer demographics and consumption behavior. This liability predominately consists of incurred but not reported amounts and reported claims in process including expe cted development on reported claims. The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 2.5 billion at December 31, 2018 and $ 2.3 billion at December 31, 2017 . The remaining balance in both periods reflects amounts due for physician incentives and other medical care expenses and services payable. Activity in the unpaid claims liability for the Integrated Medical segment for the years ended December 31 was as follows: (In millions) 2018 2017 2016 Balance at January 1, $ 2,420 $ 2,261 $ 2,105 Less: Reinsurance and other amounts recoverable 262 273 237 Balance at January 1, net 2,158 1,988 1,868 Acquired, net 40 - - Incurred costs related to: Current year 21,331 19,334 18,085 Prior years (173) (227) (70) Total incurred 21,158 19,107 18,015 Paid costs related to: Current year 18,978 17,179 16,142 Prior years 1,945 1,758 1,753 Total paid 20,923 18,937 17,895 Balance at December 31, net 2,433 2,158 1,988 Add: Reinsurance and other amounts recoverable 264 262 273 Balance at December 31, $ 2,697 $ 2,420 $ 2,261 Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business where the Company administers the plan benefits but the right of offset does not exist. See Note 8 for additio nal information on reinsurance. Variances in incurred costs related to prior years’ unpaid claims and claims expenses that resulted from the differences between actual experience and the Company’s key assumptions were a s follows for the years ended December 31: 2018 2017 ($ in millions) $ % (1) $ % (2) Actual completion factors $ 92 0.5 % $ 87 0.6 % Medical cost trend 72 0.4 131 0.7 Other 9 - 9 - Total favorable variance $ 173 0.9 % $ 227 1.3 % (1) Percentage of current year incurred costs as reported for 2017. (2) Percentage of current year incurred costs as reported for 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 f or moderately adverse conditions. P rior year development increased shareholders’ net income by $ 77 million ($ 97 million before tax) for the year ended December 31, 2018 , compared with $ 96 million ($ 148 million before tax) in 2017 . F avorable prior year development implies primarily low er than expected utilization of medical services while unfavorable prior year development implies higher than expected utilization of medical services . Prior year development amounts close to zero imply utilization of medical services that are consistent with expectations . The following table depicts the incurred and paid claims development as of December 31, 2018 (net of reinsurance), claims frequency metrics and incurred but not reported liabilities reported in the Integrated Medical segment. The information about incurred and paid claims development for the year ended December 31, 2017 is presented as supplementary information and is unaudited. Incurred Costs Incurral Year 2017 (Unaudited) 2018 Unpaid Claims & Claim Expenses Claims Frequency (in millions) 2017 $ 18,692 $ 18,528 $ 22 2.6 million 2018 20,458 $ 2,266 2.9 million Cumulative incurred costs plus acquired for the periods presented $ 38,986 Cumulative Costs Paid Incurral Year 2017 (Unaudited) 2018 2017 $ 16,628 $ 18,506 2018 18,192 Cumulative paid costs for the periods presented $ 36,698 Outstanding liabilities for the periods presented, net of reinsurance $ 2,288 Other long-duration liabilities not included in development table above 145 Net unpaid claims and claims expenses - Integrated Medical 2,433 Reinsurance and other amounts recoverable 264 Unpaid claims and claim expenses - Integrated Medical $ 2,697 More than 95% of health claims for an accident year are paid within one year of their incurred date. There is no single or common claim frequency metric used in the health care industry. The Company believes a relevant metric for its health insurance business is the number of customers for whom an insured medical claim was paid. Customers for whom no insured medical claim was paid are excluded from the calculation. Claims that did not result in a liability are not included in the frequency metric. Unpaid Claims and Claim Expenses – International Markets and Group Disability and Other This liability now includes amounts from international health care following our change in segment reporting in 2018. Prior year rollforwards have been updated to reflect this segment change. Accounting policy. Liabilities for unpaid claims and claim expenses are established by book of business within the Company ’ s International Markets segment and Group Disability and Other . L iabilit ies for unpaid claims and claim expenses within the g roup d isability and l ife business consist of the following primary products: long-term and short-term disability, life insurance, and accident coverages. Unpaid claims and claim expenses consist of (1) case o r claims reserves for reported claims that are unpaid as of the balance sheet date; (2) incurred but not reported reserves for claims whe n the insured event has occurred but has not been reported to the Company; and (3) loss adjustment expense reserves for the expected costs of settling the se claims . The Company consistently estimates incurred but not yet reported losses using actuarial principles and assumptions based on historical and projected claim incidence patterns, claim size and the expected paymen t period. The Company recognizes the actuarial best estimate of the ultimate liability within a level of confidence, consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. T he Company immediately records an adjustment in medical costs and other benefit expenses w hen estimates of these liabilities change. The majority of the Company’s liability for disability claims consists of the present value of estimated future benefit payments, including expected development, for each reported claim that is currently receiving benefit payments, or pending a decision on eligibility for benefits, over the expected disability period. The Company projects the expected disability period by using historical resolution rates combined with an analysis of current trends and operational factors to develop current estimates of resolution rates. Expected claim resolution rates may vary based upon the Company’s experience for the anticipated disabi lity period, the covered benefit period, the cause of disability, the benefit design and the claimant’s age, gender and income level. The gross monthly benefit is reduced (offset) by disability income received under other benefit programs, most commonly S ocial Security Disability Income, workers’ compensation, statutory disability or other group benefit plans. The Company estimates the probability and amount of future offset awards and lapses based on the Company’s experience for certain offsets not yet f inalized. The Company also establishes a liability for the expected present value of future benefit payments for known claims that have recently been resolved but may reopen in the future, based on Company experience. Prior to a claim becoming known, th e Company establishes a liability for incurred but not reported claims, using standard actuarial techniques and calculations based on completion factors and loss ratio assumptions using the Company’s experience combined with an analysis of current trends a nd operational factors. Completion factors are impacted by several key items including changes in claim inventory levels, claim payment patterns, changes in business volume and other factors. Loss ratio assumptions are developed using historical Company experience, adjusted prospectively for expected changes in the underlying business including rate actions, persistency and inforce growth. Liability balance details. The liability details for unpaid claims and claim expenses as of December 31 are as follows: (In millions) 2018 2017 Group Disability and Other Group Disability and Life $ 4,674 $ 4,491 Other Operations 192 193 Total Group Disability and Other 4,866 4,684 International Markets 758 783 Unpaid claims and claim expenses Group Disability and Other and International Markets $ 5,624 $ 5,467 The Company discounts certain liabilities, predominantly long-term disability, because benefits payments are made over extended periods. Discount rate assumptions for these liabilities are based on projected investment returns for the supporting asset portfolios . Details of the Company’s unpaid claim discounted liability balances as of December 31 were as follows: (In billions) 2018 2017 Discounted liabilities $ 4.2 $ 4.0 Aggregate amount of discount $ 1.1 $ 1.0 Range of discount rates 4.2 % - 5.2 % 4.5 % - 5.2 % Interest is a ccreted and recognized in medical costs and other benefit expenses in the Consolidated Statement s of Income. Activity in the Company’s liabilities for unpaid claims and claim expenses, excluding Other Operations, are presented in the following table. Liabilities associated with Other Operations are excluded because they pertain to obligations for long-duration i nsurance contracts or, if short-duration, the liabilities have been fully reinsured. (In millions) 2018 2017 2016 Balance at January 1, $ 5,274 $ 4,997 $ 4,609 Less: Reinsurance 140 123 121 Balance at January 1, net 5,134 4,874 4,488 Incurred claims related to: Current year 5,350 5,097 5,116 Prior years Interest accretion 156 163 161 All other incurred (147) (43) 85 Total incurred 5,359 5,217 5,362 Paid claims related to: Current year 3,391 3,229 3,221 Prior years 1,808 1,757 1,739 Total paid 5,199 4,986 4,960 Acquisitions 23 - Foreign currency (41) 29 (16) Balance at December 31, net 5,276 5,134 4,874 Add: Reinsurance 156 140 123 Balance at December 31, $ 5,432 $ 5,274 $ 4,997 Reinsurance in the previous table reflect s amounts due from reinsurers related to unpaid c laims 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 li ability 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 of pricing and reserving. Therefore, interest accreted on prior year balances i s 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 the 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 expectations 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. Favorable p rior year incurred claims reported in 2018 largely reflect favorable loss ratio experience for long-term disability and life relative to expectations. Favorable prior year incurred claims reported in 2017 largely reflect improved resolution rate experienc e for long-term disability relative to expectations. Prior year i ncurred claims reported in 2016 included the impact of changes made to our disability claims management process and a period of elevated life claims. Long- t erm d isability d evelopment t ables. The table below presents information about incurred and paid claims development as of December 31, 2018 ( net of reinsurance ), to tal incurred but not reported liabilities , and cumulative claims frequency for the Company’ s long-term disability book of business. The information about incurred and paid claims d evelopment for the years ended 2012 through 2017 is presented as supplementary information and is unaudited. As permitted under GAAP, the Company presented develo pment table information beginning in 2012 because obtaining information beyond this period was impracticable as historical data was not maintained in such detail. (In millions, except for claims frequency) Incurred Incurred Claims (undiscounted) But Not Unaudited Reported Claims Accident Year 2012 2013 2014 2015 2016 2017 2018 Liabilities (1) Frequency 2012 $ 995 $ 951 $ 889 $ 876 $ 883 $ 880 $ 861 $ - 21,183 2013 1,063 1,037 1,062 1,072 1,057 1,032 - 23,526 2014 1,158 1,129 1,167 1,146 1,094 - 25,314 2015 1,184 1,154 1,185 1,160 - 25,737 2016 1,246 1,184 1,199 3 25,349 2017 1,226 1,193 10 23,382 2018 1,348 515 12,025 Cumulative incurred claims for the periods presented $ 7,887 (1) Incurred but not reported amounts are included in 2018 incurred claims. Cumulative Paid Claims Unaudited Accident Year 2012 2013 2014 2015 2016 2017 2018 2012 $ 81 $ 288 $ 429 $ 504 $ 571 $ 621 $ 661 2013 92 342 503 600 670 732 2014 111 379 575 667 743 2015 114 417 603 702 2016 122 411 598 2017 110 396 2018 116 Cumulative paid claims for the periods presented $ 3,948 All outstanding liabilities for the periods presented, net of reinsurance $ 3,939 All outstanding liabilities prior to 2012, net of reinsurance 921 Impact of discounting (885) Liability for long-term disability unpaid claims and claim expenses, net of reinsurance $ 3,975 The claims frequency metric used for the Company’s long-term disability line of business represents the number of unique claim events for which benefits have been approved and payments made. Claim events are identified using a unique claimant identifier and incurral date. Thus, if an individual has multiple claims for different disabling events (and therefore different incurral dates), each will be determined to be a unique claim event. However, if an individual receives multiple benefits under more tha n one policy (for example for supplemental disability benefits such as pension contribution benefits or survivor benefits), the Company treats this as a single claim occurrence because they related to the same claim event. Claims frequency metrics for the most recent year are expected to be low reflecting the long-term disability product features including waiting and elimination periods that result in delayed eligibility for contract benefits. Claims that did not result in a liability are not included in the frequency metric. The following is supplementary and unaudited information about average historical claims payout patterns for the long-term disability business for the years presented in the development table as of December 31, 2018 . The average annual perc entage payout of incurred claims, net of reinsurance, is approximately 9 % in year one, 24 % in year two, 16 % in year three, 9 % in year four , 7 % in year five , 6 % in year six and 5% in year seven. The following table reconciles the long-term disability net incurred and paid claims development table to the liability for unpaid claims an d claim expenses in the Company’ s C onsolidated B alance S heet s as of December 31, 2018 . (In millions) Net outstanding liabilities – Group Disability and Life businesses Long-term disability liabilities, net of reinsurance $ 3,975 Other short-duration insurance books of business, net of reinsurance 594 Liabilities for unpaid claims and claim expenses, net of reinsurance 4,569 Reinsurance recoverable on unpaid claims – Group Disability and Life businesses Long-term disability 94 Other short-duration insurance books of business 11 Total reinsurance recoverable on unpaid claims 105 Total liability for unpaid claims and claim expenses – Group Disability and Life businesses 4,674 International Markets segment 758 Other Operations 192 Unpaid claims and claim expenses - Group Disability and Other and International Markets $ 5,624 The other short-duration insurance books of business, net of reinsurance, primarily include liabilities for life, accident and short-term disability insurance products. Liabilities for these products are typically complete within one year. Claim development on these liabilities is largely driven by completion factors and loss ratio assumptions. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 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 in acquisition and disposition transactions when the underwriting company is not being acquired . Reinsurance is also used to limit losses from large exposures and to permit recovery of a portion of direct or assumed losses . Reinsurance does not relieve the originating insurer of liability. Therefore, reinsured liabilities mu st continue 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 reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. Components of the Company’s reinsurance recoverables are presented in the following table. Included in the table below is $297 million as of December 31, 2018 and $282 million as of December 31, 2017 of current reinsurance recoverables that are reported in other current assets. (Dollars in millions) Line of Business Reinsurer(s) December 31, 2018 December 31, 2017 Collateral and Other Terms at December 31, 2018 Ongoing Operations Integrated Medical, International Markets, Group Disability, COLI Various $ 464 $ 454 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. Total recoverables related to ongoing operations 464 454 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,312 3,436 Both companies’ ratings were well above the level that would trigger a contractual obligation to fully secure the outstanding balance. GMDB (effectively exited in 2013) Berkshire 893 928 100% secured by assets in a trust. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 787 850 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 261 283 100% secured by assets in a trust. Other Various 87 95 100% secured by assets in a trust or other deposits. Total recoverables related to acquisition, disposition or runoff activities 5,340 5,592 Total reinsurance recoverables $ 5,804 $ 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 Company. The Company reviews its reinsurance arrangements and establishes reserves against the recoverables if recovery is not considered probable. Effects of Reinsurance The following table presents direct, assumed and ceded premiums for both short-duration and long-duration insurance contracts. It also presents reinsurance recoveries that have been netted against benefit expenses in the Company’s Consolidated Statements of Income. (In millions) 2018 2017 2016 Premiums Short-duration contracts Direct $ 32,148 $ 28,838 $ 27,694 Assumed 77 199 247 Ceded (182) (150) (229) Total short-duration contract premiums 32,043 28,887 27,712 Long-duration contracts Direct 4,268 3,748 3,259 Assumed 116 130 137 Ceded Individual life insurance and annuity business sold (133) (143) (153) Other (181) (131) (131) Total long-duration contract premiums 4,070 3,604 3,112 Total premiums $ 36,113 $ 32,491 $ 30,824 Reinsurance recoveries Individual life insurance and annuity business sold $ 249 $ 259 $ 279 Other 203 66 261 Total reinsurance recoveries $ 452 $ 325 $ 540 The effects of reinsurance on written premiums for short-duration contracts were not materially different from the recognized premium amounts shown in the table above. Effective Exit of GMDB and GMIB Business The Company entered into an agreement with Berkshire to effectively exit the GMDB and GMIB business via a reinsurance transaction in 2013. Berkshire reinsured 100% of the Company's future claim payments in this business, net of other reinsurance arrangements existing at that time. The reinsurance agreement is subject to an overall limit with approximately $3.4 billion remaining at December 31, 2018. GMDB is accounted for as reinsurance and GMIB assets and liab ilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other current assets and other assets, and GMIB liabilities are reported in accrued expenses and other liabilities and other non-current liabilities. GMDB The GMDB exposure arises under annuities written by ceding companies that guarantee the benefit received at death . The Company’s exposure arises when the guaranteed minimum death benefit exc eeds the fair value of the related mutual fund investments at the tim e of a contractholder’s death. Accounting policy. 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 product. 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 below ). The following table presents the account value, net amount at risk and average attained age 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 is exceeded, t he Company sh ould be reimbursed in full for these payments . (Dollars in millions, excludes impact of reinsurance ceded) 2018 2017 Account value $ 8,402 $ 10,109 Net amount at risk $ 2,466 $ 2,112 Average attained age of contractholders (weighted by exposure) 74 75 Number of contractholders 220,000 245,000 GMIB T he 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 a ppropriate waiting period . The Company has purchased retrocessional coverage (“GMIB assets”), including retrocessional coverage from Berkshire, for these contracts. Accounting policy. The Company reports GMIB liabilities and assets as derivatives at fai r value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments . The Company receives and pays fees periodically based on ei ther contractholders’ account values or deposits increased at a contractual rate. The Company will also pay and receive cash depending on changes in account values and interest rates when contractholders first elect to receive minimum income payments. Ca sh flows on these contracts are reported in operating activities. Assumptions used in fair value measurement. GMIB assets and liabilities are established using capital market assumptions and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). The Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy described in Note 10 because assumptions related to future annuitant behavior are largely unobservable. The only assumption expected to impact future shareholders’ net i ncome is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, a nd (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calculate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these ass umptions is not necessarily accompanied by a change in another assumption. GMIB liabilities totaling $706 million as of December 31, 2018 and $762 million as of December 31, 2017 were reported in accrued expenses and other liabilities and other non-curren t liabilities. There were three reinsurers covering 100% of the GMIB exposures as of December 31, 2018 and 2017 as follows: (In millions) Line of Business Reinsurer December 31, 2018 December 31, 2017 Collateral and Other Terms at December 31, 2018 GMIB Berkshire $ 341 $ 359 100% were secured by assets in a trust. Sun Life Assurance Company of Canada 208 221 Liberty Re (Bermuda) Ltd. 184 197 86% were secured by assets in a trust. Total GMIB recoverables reported in other current assets and other assets $ 733 $ 777 A mounts included in shareholders net income for GMIB assets and liabilities were not material in 2018, 2017 and 2016 . |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments: | |
Investments | Note 9 – Investments, Investment Income and Gains and Losses Cigna’s investment portfolio consists of a broad range of investments including fixed maturities, equity securities, commercial mortgage loans, policy loans, other long-term investments, short-term investments, and derivative financial instruments. The sections below provide more detail regarding our accounting policies, investment balances, net investment income and realized investment gains and losses. See Note 10 for information about valuation of the Company’s investment portfolio. Fixed maturities, commercial mortgage loans, derivative financial instruments, and short-term investments with contractual maturities during the next 12 months are classified on the balance sheet as curren t investments, unless they are held as statutory deposits or restricted for other purposes, where they are classified in long-term investments. Equity securities classified as current include exchange traded funds that are used in our cash management proc ess. All other investments are classified in long-term investments. The following table summarizes the Company’s investments by category and current or long-term classification . December 31, 2018 December 31, 2017 (In millions) Current Long-term Total Current Long-term Total Fixed Maturities $ 1,320 $ 21,608 $ 22,928 $ 1,516 $ 21,622 $ 23,138 Equity securities 377 171 548 406 182 588 Commercial mortgage loans 32 1,826 1,858 15 1,746 1,761 Policy loans - 1,423 1,423 - 1,415 1,415 Other long-term investments - 1,901 1,901 - 1,518 1,518 Short-term investments 316 - 316 199 - 199 Total $ 2,045 $ 26,929 $ 28,974 $ 2,136 $ 26,483 $ 28,619 Investment Portfolio Fixed Maturities Accounting policy. Fixed maturities (including bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor) are classified as available for sale and are carried at fair value with changes in fair value recorded in accumulated other comprehensive income (loss) within shareholders’ equity. Net unrealized appreciation on investments supporting the Company’s run-off settlement annuity business is reporte d in future policy benefit liabilities rather than accumulated other comprehensive income (loss). The Company records impairment losses in net income for fixed maturities with fair value below amortized cost that meet either of the following conditions: If the Company intends to sell or determines that it is more likely than not to be required to sell these fixed maturities before the ir fair values recover , an impairment loss is recognized for the excess of the amortized cost over fair value. If the net present value of projected future cash flows of a fixed maturity (based on qualitative and quantitative factors, including the probability of default, and the estimated timing and amount of recovery) is below the amortized cost basis, that difference is re cognized as an impairment loss. For mortgage and asset-backed securities, estimated future cash flows are also based on assumptions about the collateral attributes including prepayment speeds, default rates and changes in value. Debt securities are classified as either current or long-term investments based on their contractual maturities. The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at December 31, 2018 : Amortized Fair (In millions) Cost Value Due in one year or less $ 1,323 $ 1,327 Due after one year through five years 6,452 6,522 Due after five years through ten years 10,205 9,992 Due after ten years 4,064 4,577 Mortgage and other asset-backed securities 506 510 Total $ 22,550 $ 22,928 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 fixed maturities by type of issuer is shown below . Amortized Unrealized Unrealized Fair (In millions) Cost Appreciation Depreciation Value December 31, 2018 Federal government and agency $ 507 $ 204 $ (1) $ 710 State and local government 920 66 (1) 985 Foreign government 2,214 155 (7) 2,362 Corporate 18,403 411 (453) 18,361 Mortgage and other asset-backed 506 16 (12) 510 Total $ 22,550 $ 852 $ (474) $ 22,928 Investments supporting liabilities of the Company‘s run-off settlement annuity business (included in total above) (1) $ 2,264 $ 479 $ (40) $ 2,703 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 $ 21,867 $ 1,371 $ (100) $ 23,138 Investments supporting liabilities of the Company‘s run-off settlement annuity business (included in total above) (1) $ 2,200 $ 681 $ (2) $ 2,879 (1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income. T he Company had commitments to purchase $ 106 million of fixed maturities as of December 31, 2018 , all of which bear interest at a fixed market rate. 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 recovery. M anagement believ es the unrealized depreciation below to be temporary based on this review , and therefore has not impaired these amounts. The table below summarizes fixed maturities with a decline in fair value from amortized cost by the length of time these securities have been in an unreali zed loss position. December 31, 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 $ 7,127 $ 7,367 $ (240) 1,324 $ 3,272 $ 3,309 $ (37) 797 Below investment grade $ 1,185 $ 1,240 $ (55) 1,190 $ 543 $ 553 $ (10) 643 More than one year Investment grade $ 3,023 $ 3,181 $ (158) 784 $ 1,503 $ 1,549 $ (46) 373 Below investment grade $ 249 $ 270 $ (21) 245 $ 155 $ 162 $ (7) 42 Equity Securities Accounting policy. Upon adopting ASU 2016-01 beginning in 2018, changes in the fair values of equity securities that have a readily determinable fair value (primarily exchange-traded funds) are reported in net realized investment gains (losses). As of December 31, 2018 , the fair values of these securities were $ 415 million and cost was $ 433 million. Also beginning in 2018, private equity securities of $ 89 million as of December 31, 2018 without a readily determin able 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 inclu de hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in net realized investment gains (losses) and dividends reported in net investment income. As of December 31, 2018 , fair value s of these securities were $ 44 million and cost was $ 58 million, compared 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 properties. Accounting policy. Commercial mortgage loans are carried at unpaid principal balances or, if impaired, the lower of unpaid principal or fair value of the underlying real estate. See the “Impaired commercial mortgage loans” section below for the Company’s accounting policy for impaired commercial mortgage loans. Commercial mortgage loans are classified as either current or long-term investments based on their contractual maturiti es. As of December 31, 2018 , approximately 93% of the Company’s commercial mortgage loan portfolio is scheduled to mature in 2022 or thereafter. Actual maturities could differ from contractual maturities for several reasons: borrowers may have the right to prepay obligations with or without prepayment penalties; the maturity date may be extended; and loans may be refinanced. Credit quality . The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating sys tem designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on a consistent and ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Quality ratings are based on our evaluation of a number of key inputs related to the loan, including real estate market-related factors such as rental rates and vacancies, and proper ty-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on debt, with a ratio below 1.0 indicating 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 collateralizing the loan. The following table summarizes the credit risk profile of the Company’s commercial mortgage loan portfolio based on loan-to-value and debt service coverage ratios as of December 31, 2018 a nd 2017 : (Dollars in millions) 2018 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% $ 1,132 2.14 $ 1,109 2.03 60% to 79% 650 1.93 652 2.24 80% to 100% 76 1.49 - - Total $ 1,858 2.04 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 most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current l eases, lease expirations and rental conditions in each market, the Company estimated the current year and future stabilized property income and fair value for each loan. The Company re - evaluate s a loan’s credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been i mpacted. Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due per the terms of the promissory note. Impaired loans are carried at the lower of the unp aid principal balance or fair value of the underlying collateral. Interest income on impaired mortgage loans is only recognized when a payment is received . T here were no impaired commercial mortgage loans a s of December 31, 2018 and 2017 . Policy Loans Accounting p olicy. Policy loans, primarily associated with our corporate owned life insurance business, are carried at unpaid principal balances plus accumulated interest, the total of which approximates fair value. These loans are collateralized by life insurance policy cash values and therefore have minimal exposure to credit loss. Interest rates are re set annually based on a rolling average of benchmark interest rates. 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 , based on the financial statements of the underlying investments that are generally reported at fair value. Income from these investments is reported on a one quarter lag due to the timing of when financial information is received from the general partner or manager of the investments. Other long-term investments also include investment real estate carried at depreciated cost less any impairment write- downs to fair value when cash flows indicate that the carrying value may not be recoverable. Depreciation is generally recorded using the straight-line method based on the estimated useful life of each asset. Investment real estate as of December 31, 201 8 and 2017 is expected to be held longer than one year and includes real estate acquired through the foreclosure of commercial mortgage loans. Additionally, other long-term investments includes foreign currency swaps carried at fair value. See discussio n below for information on the Company’s accounting policies for these derivative financial instruments. Other long-term investments and related commitments are diversified by issuer, property type and geographic regions. The following table provides un funded commitment and carrying value information for these investments. The Company expects to disburse approximately 26% of the committed amounts in 2019. Unfunded Carrying value as of December 31, Commitments as of (In millions) 2018 2017 December 31, 2018 Real estate investments $ 679 $ 591 $ 376 Securities partnerships 1,045 863 1,063 Other 177 64 33 Total $ 1,901 $ 1,518 $ 1,472 Short-Term Investments and Cash Equivalents Accounting policy. Security investments with maturities of greater than three months to one year from time of purchase are classified as short-term, available for sale and carried at fair value that approximates cost. Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase and are carried at cost that approximates fair value. Short-term investments and cash equivalents included the following types of issuers: December 31, December 31, (In millions) 2018 2017 Corporate securities $ 581 $ 1,143 Federal government securities $ 82 $ 604 Foreign government securities $ 238 $ 159 Money market funds $ 1,174 $ 12 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 contract holder liabilities. 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 changes in foreign currency exchange rates. The Company has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives and discussed further in Note 8. Derivatives in the Company’s separate accounts are excluded from the following discussion because associated gai ns and losses generally accrue directly to separate account policyholders. Derivative instruments used by the Company typically include foreign currency swap contracts and foreign currency forward contracts. Foreign currency swap contracts periodically e xchange cash flows between two currencies for principal and interest. Foreign currency forward contracts require the Company to purchase a foreign currency in exchange for the functional currency of its operating unit at a future date, generally within th ree months from the contracts’ trade dates. The Company manages the credit risk of these derivative instruments by diversifying its portfolio among approved dealers of high credit quality, and through routine monitoring of credit risk exposures. Certai n of the Company’s over-the-counter derivative instruments require either the Company or the counterparty to post collateral or demand immediate payment depending on the amount of the net liability position of the derivative instrument and predefined finan cial strength or credit rating thresholds. These collateral posting requirements vary by counterparty and amounts posted were not significant as of December 31, 2018 or 2017. Accounting policy. Derivatives are recorded on our balance sheet at fair value and are classified as current or non-current according to their contractual maturities. Further information on our policies for determining fair value are discussed in Note 10 . Derivative cash flows are generally reported in operating activities. The Company applies hedge accounting when derivatives are designated, qualified and 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 othe r when reported in shareholders’ net income. Various qualitative or quantitative methods appropriate for each hedge are used to formally assess and document hedge effectiveness at inception and each period throughout the life of a hedge. Fair value hed ges of the foreign exchange-related changes in fair values of certain fixed maturity foreign-denominated bonds: Swap fair values are reported in long -term investments or o ther non-current 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. Th e 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. Net investment hedges of c ertain foreign subsidiaries that conduct their business principally in Euros: The fair values of the swap contracts are reported in o ther assets o r other non-current liabilities. The changes in fair values of these instruments are reported in other compr ehensive 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 remainin g changes in swap fair value are excluded from the effectiveness assessment and recognized in selling, general and administrative expenses as swap coupon payments are accrued. The notional value of hedging instruments matches the hedged amount of subsidia ry net assets. Economic hedges for derivatives not designated as accounting hedges: Fair values of derivative instruments are reported in current investments or accrued ex penses and other liabilities . The c hanges in fair values are reported in net realiz ed investment gains and losses. Gross fair values of our derivative financial instruments are presented in Note 10 . As of December 31, 2018 and 2017, the effects of derivative instruments on the Consolidated Financial Statements were not material, including gains or losses reclassified from accumulated other comprehensive income into shareholders’ net income, as well as amounts excluded from the assessment of hedge effectiveness. The following table summarizes the types and notional quantity of der ivative instruments held by the C ompany. (In millions) Notional Value as of December 31, Type of Instrument Purpose 2018 2017 Foreign currency swap contracts Fair value hedge: To hedge the foreign exchange-related changes in fair values of certain fixed maturity foreign-denominated bonds. The notional value of these derivatives matches the amortized cost of the hedged bonds. $ 525 $ 318 Foreign currency swap contracts Net investment hedge : 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. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. $ 439 $ - Foreign currency forward contracts Economic hedge: 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. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio. $ 309 $ 255 Concentration of Risk The Company did not have a concentration of investments in a single issuer or borrower exceeding 10% of shareholders’ equity as of December 31, 2018 and 2017 . Net Investment Income Accounting policy. When interest and principal payments on investments are current, the Company recognizes interest income when it is earned. The Company recognizes interest income on a cash basis when interest payments are delinquent based on contractual terms or when certain terms (interest rate or maturity date) of the investment have been restructured . For unconsolidated entities that are included in Other long-term investments, investment income is generally recognized according to the Company’s share of the reported income or loss on the underlying investments . Investment income attributed to the Company’s separate accounts is excluded from our earnings because associated gains and losses generally accrue directly to separate account policyholders. The components of pre-tax net investment income for the years ended December 31 were as follows: (In millions) 2018 2017 2016 Fixed maturities $ 1,009 $ 946 $ 899 Equity securities 28 14 4 Commercial mortgage loans 78 81 91 Policy loans 70 69 72 Other long-term investments 156 124 98 Short-term investments and cash 194 42 26 Total investment income 1,535 1,276 1,190 Less investment expenses 55 50 43 Net investment income $ 1,480 $ 1,226 $ 1,147 Real estate investments and securities partnerships with a carrying value of $ 150 million at December 31, 2018 and $ 191 million at December 31, 2017 were non-income producing during the preceding twelve months. Realized Investment Gains And L osses Accounting policy. Realized investment gains and losses are based on specifically identified assets and result s 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 for the years ended December 31 exclude amounts required to adjust future policy benefits for the run-off settl ement annuity business , as well as realized gains and losses attributed to the Company’s separate accounts because those gains and losses generally accrue directly to separate account policyholders . (In millions) 2018 2017 2016 Net realized investment (losses) gains, excluding investment asset write-downs $ (34) $ 268 $ 227 Write-downs on debt securities (43) (26) (35) Write-downs on other invested assets (4) (5) (23) Net realized investment (losses) gains, before income taxes $ (81) $ 237 $ 169 Net realized investment losses, excluding investment asset write-downs in 2018 represent primarily mark to market losses on equity securities and derivatives and net losses on sales of fixed maturities, partially offset by net gains on sales of real estate properties held in joint ventures. Net realized investment gains, excluding asset write-downs in 2017 and 2016 represented primarily gains on sales of real estate properties held in joint ventures and gains on sales of fixed maturities and equity securities. Realized losses on equity securities still held at December 31, 2018 were $ 33 million in 2018 . The following table presents s ales information for available-for-sale securities ( fixed maturities for the year ended in 2018, and fixed maturities and equity securities for the years ended in 2017 and 2016) . Gross gains on sales and gross losses on sales exclude amounts required to adjust future policy benefits for the run-off settlement annuity business. (In millions) 2018 2017 2016 Proceeds from sales $ 2,625 $ 2,012 $ 1,544 Gross gains on sales $ 28 $ 103 $ 83 Gross losses on sales $ (47) $ (18) $ (7) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | N ote 10 – 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 co nditions, 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 t he liability with the creditor. The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GA AP. 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 unob servable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobse rvable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair valu e. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quali ty, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participa nt would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining f air 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 and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent approp riate 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 e xceptions 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 th eir 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 pricing process. Financial Assets and Financial Liabilities Carried at Fair Value The following table provides information as of December 31, 2018 and 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 a ccrue directly to policyholders. As of December 31, (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total 2018 2017 2018 2017 2018 2017 2018 2017 Financial assets at fair value Fixed maturities Federal government and agency $ 209 $ 253 $ 501 $ 526 $ - $ - $ 710 $ 779 State and local government - - 985 1,287 - - 985 1,287 Foreign government - - 2,356 2,442 6 45 2,362 2,487 Corporate - - 18,127 17,658 234 430 18,361 18,088 Mortgage and other asset-backed - - 372 343 138 154 510 497 Total fixed maturities 209 253 22,341 22,256 378 629 22,928 23,138 Equity securities (1) 384 412 43 73 32 103 459 588 Short-term investments - - 316 199 - - 316 199 Derivative assets - - 53 2 - - 53 2 Real estate funds priced at NAV as a practical expedient (2) 239 N/A Financial liabilities at fair value Derivative liabilities $ - $ - $ 10 $ 25 $ - $ - $ 10 $ 25 (1) 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) beginning in 2018. Such private equity securities of $70 million were included in the Level 3 amount as of December 31, 2017. See Note 9 for additional information on this accounting policy change. (2) 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 upon adopting ASU 2016-01 beginning in 2018. The funds have a quarterly redemption frequency, 45-90 day redemption notice period and $57 million in unfunded commitments as of December 31, 2018. See Note 9 for additional information on this accounting change. Prior years 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 bonds and exchange-listed equity securities. A relatively small portion of the Company’s investment assets are classified in this category given the narro w definition of Level 1 and the Company's investment asset strategy to maximize investment returns. Level 2 Financial Assets and Financial Liabilities Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant. Fixed maturities and equity securities. Approximately 96 % of the Company’s investments in f ixed 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. Third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics because many fixed maturities do not trade daily. Pricing models are used to determine these prices when recent trades are not available. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry a nd economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pri cing models. Less than 1 % of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice. Short-term investments are carried at fair value which approximates cost. The Company compares market prices for these securities to recorded amounts on a regular basis to validate that current carrying amounts approximate exit prices. The sh ort-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. Derivative assets and liabilities classified in Level 2 represent over-the-counter instruments such as foreign currency forward and swap contracts. Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and wide ly published market observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties a nd determined that no adjustment for credit risk was required as of December 31, 2018 or 2017 . The nature and use of these derivative financial instruments are described in Note 9 . Level 3 Financial Assets and Financial Liabilities Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants woul d 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 in Level 3. Approximately 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 as well as 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. Inputs and assumptions for pricing may also include collateral attributes and prepayment speeds for mortgage and other asset-backed securities. Re cent 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 statements. Quantitative Information about Unobservable Inputs The following table summarizes the fair value and significant unobservable inputs used in pricing the following fixed maturities that were developed directly by the Company as of December 31, 2018 and 2017 . The range and weighted average basis point amounts ( “bps”) for liquidity and credit spreads (adjustme nt to discount rates) reflect the Company’s best estimates of the unobservable adjustments a market participant would make to calculate the se fair values. Mortgage and other asset-backed securities. The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads. An adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure when there is limited trading activity for the security. A n adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no stand ard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations. Corporate and government fixed maturities . The signifi cant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. An adjustment is needed to reflect current market conditions and issuer circumstances when there is limited trading activity for the security. As of December 31, Fair Value Unobservable Input Unobservable Adjustment Range (Weighted Average) (Fair value in millions ) 2018 2017 2018 2017 Fixed maturities Mortgage and other asset-backed securities $ 138 $ 154 Liquidity 60- 340 (70) bps 60 - 370 (90) bps Weighting of credit spreads 190 - 340 (260) bps 180 - 290 (230) bps Corporate and government fixed maturities 229 446 Liquidity 50 - 930 (230) bps 70 - 1,650 (300) bps Securities not priced by the Company (1) 11 29 Total Level 3 fixed maturities $ 378 $ 629 (1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. 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. T he unobservable inputs are generally not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input. Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Valu e The following table summarize s the changes in financial assets and financial liabilities classified in Level 3 for the years ended December 31, 2018 and 2017 . G ains and losses reported in this table may include net changes in fair value that a re attributable to both observable and unobservable inputs. (In millions) Fixed Maturities & Equity Securities 2018 2017 Balance at January 1, $ 732 $ 776 Total gains (losses) included in shareholders‘ net income (22) 25 Losses included in other comprehensive income (8) (11) Gains (losses) required to adjust future policy benefits for settlement annuities (1) (8) 7 Purchases, sales, settlements Purchases 22 133 Sales (11) (95) Settlements (70) (74) Total purchases, sales and settlements (59) (36) Transfers into/(out of) Level 3 Transfers into Level 3 44 275 Transfers out of Level 3 (2) (269) (304) Total transfers into/(out of) Level 3 (225) (29) Balance at December 31, $ 410 $ 732 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (9) $ (9) (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 2018 Transfers out of Level 3 amount. Total gains and losses included in shareholders’ net income in the table above are reflected in the Consolidated Statements of Income as realized investment gains (losses) and net investment income. Gains and losses included in other comprehensive income in the tables above are reflected in net unrealized appreciation (depreciation) on securities in the Consolidated Statements of Comprehensive Income. Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company’s bes t estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. T ransfers between Level 2 and Level 3 during 2018 and 2017 primarily reflect ed changes in li quidity and credit risk estimates for certain private placement issuers across several sectors. 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 A ccount s Accounting policy. Separate account assets and liabilities are contractholder funds maintained in accounts with specific investment objectives. The assets of these accounts are legally segregated and are not subject to claims that arise out of any of the Company’s other businesses. These separate account assets are carried at fair value with equal amounts recorded for related separate account liabilities. The investment income and fair value gains and losses of these accounts gene rally accrue directly to the contractholders and, together with their deposits and withdrawals, are excluded from the Company’s Consolidated Statements of Income and Cash Flows. Fees and charges earned for mortality risks, asset management or administrati ve services are reported in either premiums or fees and other revenues. I nvestments that are measured using the practical expedient of NAV are excluded from the fair value hierarchy. F air values of separate account assets at December 31 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 2018 2017 2018 2017 2018 2017 2018 2017 Guaranteed separate accounts (See Note 19) $ 187 $ 215 $ 267 $ 308 $ - $ - $ 454 $ 523 Non-guaranteed separate accounts (1) 1,204 1,536 5,216 5,298 233 292 6,653 7,126 Subtotal $ 1,391 $ 1,751 $ 5,483 $ 5,606 $ 233 $ 292 7,107 7,649 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 732 774 Total separate account assets $ 7,839 $ 8,423 (1) Non-guaranteed separate accounts included $3.8 billion as of December 31, 2018 and $3.9 billion as of December 31, 2017 in assets supporting the Company‘s pension plans, including $0.2 billion classified in Level 3 as of December 31, 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 commercial mortgage loans as we ll as certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above. Activity, including transfers into and out of Level 3, was not material for 2018 or 2017. 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 following table provides additional information on these investments. Unfunded Commitments Redemption Frequency Fair Value as of as of (if currently Redemption Notice (In millions) December 31, 2018 December 31, 2017 December 31, 2018 eligible) Period Securities partnerships $ 477 $ 458 $ 308 Not applicable Not applicable Real estate funds 237 239 - Quarterly 30-90 days Hedge funds 18 77 - Up to annually, varying by fund 30-90 days Total $ 732 $ 774 $ 308 Assets and Liabilities Measured at Fair Value 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 including investment real estate and commercial mortgage loans, and certain equity securities with no readily determinable fair value. Recorded values for these asset types representing less than 1 % of total investments, were written down to their fair values, resulting in immaterial realized investment losses in 2018 and 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 December 31, 2018 and 2017 . In addition to universal life products and capital leases, f inancial instruments that are carried in the Company’s C onsolidated F inancial S tatements at amounts that approximate fair value are excluded from the following table. (In millions) December 31, 2018 December 31, 2017 Classification in Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,832 $ 1,858 $ 1,766 $ 1,761 Long-term debt, including current maturities, excluding capital leases Level 2 $ 40,819 $ 40,829 $ 5,730 $ 5,321 Fair values of off-balance sheet financial instruments were not material as of December 31, 2018 and 2017 . |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2018 | |
Variable Interest Entities [Abstract] | |
Variable interest entities | Note 11 – Variable Interest Entities When the Company becomes involved with a variable interest entity, as well as when the re is a change in the Company’s involvement with an entity, the Company 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. T he Company determined it was not a primary beneficiary in any material variable interest entities a s of December 31, 2018 and 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 that are defined as variable interest entities . These partnerships invest in the equity or mezzanine debt of privately held companies and real estate properties. General partners unaffiliated with the Com pany control decisions that most significantly impact the partnership’s operations and the limited partners do not have substantive kick-out or participating rights. The Company’s maximum exposure to these entities of $ 2.9 billion across approximately 130 li mited partnerships as of December 31, 2018 includes $ 1.5 billion reported in long-term investments and commitments to contribute an additional $ 1.4 b illion. The Compa ny’s non-controlling interest in each of these limited partnerships 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 p assive 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 maximu m potential exposure to loss is limited to the carrying amount of $ 0.6 b illion as of December 31, 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 involved in real estate joint ventures, independent physician associat ion s (“IPAs”) and a joint venture in India that are variable interest entities . The carrying values and maximum exposures associated wit h 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 i nvolvement with these variable interest entities to determine if consolidation is required. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 12 – 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 accumulated other comprehensive income (loss) were as follows: (In millions) 2018 2017 2016 Securities and Derivatives Beginning balance $ 328 $ 365 $ 425 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) - - Reclassification adjustment from retained earnings related to new hedging guidance (1) (6) - - Adjusted beginning balance 383 365 425 (Depreciation) appreciation on securities and derivatives (512) 34 (48) Tax benefit (expense) 100 (19) 6 Net (depreciation) appreciation on securities and derivatives (412) 15 (42) Reclassification adjustment for losses (gains) included in shareholders‘ net income (net realized investment losses (gains)) 60 (81) (29) Reclassification adjustment for losses included in shareholders‘ net income (selling, general and administrative expenses) - 1 1 Tax (expense) benefit (13) 28 10 Net losses (gains) reclassified from AOCI to net income 47 (52) (18) Other comprehensive (loss), net of tax (365) (37) (60) Ending balance $ 18 $ 328 $ 365 Translation of foreign currencies Beginning balance $ (65) $ (369) $ (274) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) (4) - - Adjusted beginning balance (69) (369) (274) Translation of foreign currencies (152) 309 (95) Tax (expense) - (5) - Net translation of foreign currencies (152) 304 (95) Ending balance $ (221) $ (65) $ (369) (In millions) 2018 2017 2016 Postretirement benefits liability Beginning balance $ (1,345) $ (1,378) $ (1,401) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) (290) - - Adjusted beginning balance (1,635) (1,378) (1,401) Reclassification adjustment for amortization of net losses from past experience and prior service costs (selling, general and administrative expenses) 69 64 64 Reclassification adjustment for settlement (selling, general and administrative expenses) - 7 - Tax (expense) (15) (24) (22) Net adjustments reclassified from AOCI to net income 54 47 42 Valuation update 93 (22) (29) Tax (expense) benefit (20) 8 10 Net change due to valuation update 73 (14) (19) Other comprehensive income, net of tax 127 33 23 Ending balance $ (1,508) $ (1,345) $ (1,378) (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 | 12 Months Ended |
Dec. 31, 2018 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefit Plans | Note 13 – Pension and Other Postretirement Benefit Plans About our Plans Pension plans . We froze future benefit accruals for the Company’s principal domestic defined benefit pension plans in 2009. The Company also has foreign pension and other postretirement benefit plans that are immaterial to our results of operations, liquidity and financial position. Additionally, in connection with the acquisition of Express Scripts on December 20, 2018, the Company assumed a frozen cash balance reti rement plan, the results of which are immaterial to our results of operations, liquidity and financial position. Other postretirement benefit plans. The Company’s postretirement medical plan w as frozen in 2013. The Company also offers certain postreti rement life insurance benefits through various plans. Accounting policy. The Company measures the assets and liabilities of its domestic pension and other postretirement benefit plans as of December 31. Benefit obligations are measured at the present value of estimated future payments bas ed on actuarial assumptions. C hanges in these assumptions are called net unrecognized actuarial gains (losses) because t he Company uses the “corridor” method to account for changes in the benefit obligation when actua l results differ from those assumed, or when assumptions change. Under the corridor method, net unrecognized actuarial gains (losses) are initially recorded in accumulated other comprehensive income. When the unrecognized gain (loss) exceeds 10% of the b enefit obligation, that excess is amortized to expense over the expected remaining lives of plan participants. The net plan expense is reported in interest expense and other in the Consolidated Statements of Income. For balance sheet purposes, we measure plan assets at fair value. When the actual return differs from the expected return, those differences are reflected in the net unrealized actuarial gain (loss) discussed above. However, to measure pension benefit costs, we use a “market-related” asset v aluation that differs from the actual fair value for domestic pension plan assets invested in non-fixed income investments. The “market-related” value recognizes the difference between actual and expected long-term returns in the portfolio over five years , a method that reduces the short-term impact of market fluctuations on pension costs. T he market-related asset value was approximately $ 4.0 billion, compared with a fair value of approximately $ 4.2 billion a t December 31, 2018 . Funded S tatus and Amounts Included in Accumulated Other Comprehensive Income The following table summarizes the projected benefit obligations and assets related to our domestic and international pension and other postretirement benefit plans as of, and for the years ended, December 31: Pension Other Postretirement Benefits Benefits (In millions) 2018 2017 2018 2017 Change in benefit obligation Benefit obligation, January 1 $ 4,969 $ 4,888 $ 258 $ 277 Service cost 3 3 - - Interest cost 169 186 8 9 Assumed in acquisition 137 - - - Partial litigation settlement-attorneys' fees 32 - - - (Gain) loss from past experience (235) (1) 181 (2) (31) 1 Benefits paid from plan assets (314) (277) - (3) Benefits paid — other (20) (12) (25) (26) Benefit obligation, December 31 4,741 4,969 210 258 Change in plan assets Fair value of plan assets, January 1 4,281 3,977 2 5 Assumed in acquisition 96 - - - Actual return on plan assets 85 418 - - Benefits paid (314) (277) (2) (3) Contributions 3 163 - - Fair value of plan assets, December 31 4,151 4,281 - 2 Funded status $ (590) $ (688) $ (210) $ (256) Liability in Consolidated Balance Sheets Accrued expenses and other liabilities $ (30) $ (25) $ (23) $ (27) Other non-current liabilities $ (560) $ (663) $ (187) $ (229) (1) Gain reflects an increase in the discount rate and a favorable change in the mortality assumption. (2) Loss reflects a decrease in the discount rate, partially offset by a favorable change in the mortality assumption. We fund our 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. For 2019, contributions to the qualified pension plans are expected to be immaterial. Future years’ contributions will ultimately be based on a wide range of factors including but not limited to asset returns, discount rates and funding targets. Non-qualified pens ion and other postretirement benefit plans are generally funded on a pay-as-you-go basis as there are no plan assets for these plans. Benefit payments. The following benefit payments are expected to be paid in: Pension Other Postretirement (In millions) Benefits Benefits 2019 $ 324 $ 25 2020 $ 311 $ 23 2021 $ 313 $ 22 2022 $ 316 $ 20 2023 $ 318 $ 19 2024-2028 $ 1,549 $ 72 Amounts reflected in the pension and other postretirement benefit liabilities shown above that have not yet been reported in net income and therefore are included in accumulated other comprehensive loss consisted of the following as of December 31: Pension Other Benefits Postretirement Benefits (In millions) 2018 2017 2018 2017 Unrecognized net gains (losses) $ (1,980) $ (2,113) $ 32 $ - Unrecognized prior service cost (6) (6) 44 46 Postretirement benefits liability adjustment $ (1,986) $ (2,119) $ 76 $ 46 Cost of Our Plans Net pension and other postretirement benefits cost was as follows f or the years ended December 31: Pension Benefits Other Postretirement Benefits (In millions) 2018 2017 2016 2018 2017 2016 Service cost $ 3 $ 3 $ 2 $ - $ - $ - Interest cost 169 186 199 8 9 11 Expected long-term return on plan assets (257) (260) (249) - - - Partial litigation settlement - attorneys' fees 32 - - - - - Amortization of: Net loss from past experience 70 66 65 1 1 1 Prior service cost - - 1 (2) (3) (3) Settlement loss - 7 - - - - Net plan cost $ 17 $ 2 $ 18 $ 7 $ 7 $ 9 As further discussed in Note 19 , Old Cigna and the Cigna Pension Plan are defendants in a class action lawsuit related to the Plan’s conversion of certain employees from an annuity to a cash balance benefit in 1997. In the fourth quarter of 2018, the Court ordered the Plan to pay $32 million representing the attorney fee portion of the settlement. This payment was recognized as an expense in 2018. An offsetting expense credit of $32 million was also recorded to reduce the litigation reserve held, resulting in no impact to net income in 2018 related to this matter. In 2019, barring any new order from the Court, it is expected that: 1) class participants will be notified of their increased benefits; 2) the plan will be amended; and 3) benefits wil l begin to be paid. However, the exact timing and amount of these actions remain uncertain. The Company’s remaining litigation reserve is adequate to cover the expected benefits due to class participants. Assumptions Used for Pension and O ther Postreti rement Benefit Plans Management determined the present value of the projected benefit obligation and the accumulated other postretirement benefit obligation and related benefit costs based on the following weighted average assumptions as of and for the ye ars ended December 31: 2018 2017 Discount rate: Pension benefit obligation 4.23% 3.51% Other postretirement benefit obligation 4.09% 3.37% Pension benefit cost 3.51% 3.95% Other postretirement benefit cost 3.37% 3.70% Expected long-term return on plan assets: Pension benefit cost 7.00% 7.25% Other postretirement benefit cost 5.00% 5.00% Mortality table for pension and postretirement benefit obligations RP 2014 with MP 2018 projection scale RP 2014 with MP 2017 projection scale The Company used the Society of Actuaries mortality table RP2014 and the updated improvement scales published in 2017 and 2018 to value its benefit obligations because the Company’s mortality experience closely matched these tables based on internal stud ies. The updated improvement scales published in 2017 and 2018 both indicated that mortality improvement is expected to be lower than was originally projected when the study was first published in 2014, resulting in decreases to the benefit obligations in both years. The Company set s discount rates by applying actual annualized yields for high quality bonds at various durations to the expected cash flows of the pension and other postretirement benefits liabilities. A discount rate curve is constructe d using an array of bonds in various industries throughout the domestic market, but only selects those for the curve that have an above average return at each duration. Management believe s that this curve is representative of the yields that the Company i s able to achieve through its plan asset investment strategy. Expected long-term rates of return on plan assets were developed considering actual long-term historical returns, expected long-term market conditions, plan asset mix and management’s investmen t strategy that continues a significant allocation to domestic and foreign equity securities as well as securities partnerships, real estate and hedge funds. Expected long-term market conditions take into consideration certain key macroeconomic trends inc luding expected domestic and foreign GDP growth, employment levels and inflation. Pension Plan Assets As of December 31, 2018 , pension assets included $ 3.8 billion invested in the separate accounts of Connecticut General Life Insurance Company and Life Insurance Company of North America, subsidiaries of the Company, as well as an additional $ 265 million invested directly in funds offered by the buyer of the retirement benefits business, and $116 million invested by others. The fair values of pension assets by category are as follows as of December 31, 2018 and 2017 . (In millions) 2018 2017 Fixed maturities: Federal government and agency $ - $ 1 Corporate 1,446 1,124 Asset-backed 32 22 Fund investments 768 884 Total fixed maturities 2,246 2,031 Equity securities: Domestic 506 689 International, including funds and pooled separate accounts (1) 360 476 Total equity securities 866 1,165 Securities partnerships 477 457 Real estate funds, including pooled separate accounts (1) 250 300 Commercial mortgage loans 110 140 Hedge funds 36 73 Guaranteed deposit account contract 107 63 Cash equivalents and other current assets, net 59 52 Total pension assets at fair value $ 4,151 $ 4,281 (1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. The Company’s current target investment allocation percentages ( 55 % fixed income, 25 % public equity securities and 20 % in other investments, including private equity (securities partnerships) and real estate, are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of c hanges in market conditions. The Company would expect to further reduce the allocation to equity securities and other investments a nd increase the allocation to fixed income investments as funding levels improve. See Note 10 for further details regarding how fair value is determined, including the level within the fair value hierarchy and the procedures we use to validate fai r value measurements . The Company classifies substantially all fixed maturities in Level 2 for pension plan assets. These assets are valued using recent trades of similar securities or are fund investments priced using their daily net asset value that is the exit price. A substantial portion of domestic equity securities within pension assets are classified as Level 1, while international equity funds within pension assets are predominantly classified in Level 2 using daily net asset value. S ecurities pa rtnerships, r eal estate and hedge funds are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. See Note 10 for additional disclosures related to these assets invested in the separate accounts of the Company’s s ubsidiaries. Certain securities as described in Note 10 , as well as commercial mortgage loans and guaranteed deposit account contracts , are classified in L evel 3 because unobservable inputs used in their valuation are significant. 401(k) Plans The Company sponsors a 401(k) plan in which the Company matches a portion of employees’ pre-tax contributions. Participants in the plan may invest in various fund s that inves t in the Company’s common stock , several diversified stock funds, a bond fund or a fixed-income fund. The Company may elect to increase its matching contributions if the Company’s annual performance meets certain targets. The Company’s annual expense for these plans was as follows: (In millions) 2018 2017 2016 Expense $ 196 $ 122 $ 113 |
Employee Incentive Plans
Employee Incentive Plans | 12 Months Ended |
Dec. 31, 2018 | |
Employee Incentive Plans [Abstract] | |
Employee Incentive Plans | Note 14 – Employee Incentive Plans A. About Our Plans The People Resources Committee (the “Committee”) of the Board of Directors awards stock options, restricted stock , restricted stock units, deferred stock and strategic performance shares (“SPS”) to certain employees. T he Committee has issued common stock instead of cash compensation . Prior to t he acquisition of Express Scripts, the Company issued shares from Treasury stock for these awards. Following the acquisition, original issues shares were used. A wards of Express Scripts options and restricted stock units were rolled over to Cigna stock options and restricted stock units in connection with the Express Scripts acquisition on December 20, 2018 a s explained further in Note 3 . I nformation in this footnote includes the effect of the Express Scripts r ollover awards u nless otherwise indicated. The Company record s compens ation expense for stock and option awards over their vesting periods pri marily based on the estimated fair value at the grant date. Fair value is determined differently for each type of award as discussed below. Shares of common stock available for award at December 31 were as follows: (In millions) 2018 2017 2016 Common shares available for award 25.7 14.0 6.8 B. Stock Options Accounting policy. The Company awards options to purchase Cigna common stock at the market price of the stock on the grant date except for rollover option awards issued to Express Scripts employees in connection with the acquisition (see Note 3 ). Options vest over periods ranging from one to three years and expire no later than 10 years from grant date. Fair value is estimated using the Black-Scholes option-pricing model by applying the assumptions presented below. That fa ir value is reduced by options expected to be forfeited during the vesting period. The Company estimates forfeitures at the grant date based on our experience and adjusts the expense to reflect actual forfeitures over the vesting period. The fair value o f options, net of forfeitures, is recognized in selling, general and administrative expenses on a straight line basis over the vesting period. Black-Scholes option-pricing model assumptions and the resulting fair value of options are presented in the following table. The average fair value of options, and the expected option life exclude the rollover options granted to Express Scripts employees in connection with the acquisition. See Note 3 for further information. 2018 2017 2016 Dividend yield 0.0% 0.0% 0.0% Expected volatility 35.0% 35.0% 35.0% Risk-free interest rate 2.5% 1.8% 1.2% Expected option life 4.4 years 4.3 years 4.3 years Weighted average fair value of options $ 64.18 $ 46.38 $ 42.01 The expected volatility reflects the past daily stock price volatility of Cigna stock. The Company does not consider volatility implied in the market prices of traded options to be a good indicator of future volatility because remaining traded options will expire within one year. The risk-free interest rate is derived using the four-year U.S. Treasury bond yield rate as of the award date for the primary annual grant. Expected option life reflects the Company’s historical experience. The following t able shows the status of, and changes in, common stock options during the la st three years. (Options in thousands) 2018 2017 2016 Weighted Weighted Weighted Average Average Average Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - January 1 6,156 $ 100.79 7,097 $ 82.01 6,433 $ 68.86 Granted 7,080 $ 143.62 1,230 $ 149.17 1,336 $ 139.20 Exercised (771) $ 88.35 (2,072) $ 63.41 (577) $ 62.09 Expired or canceled (95) $ 165.04 (99) $ 138.41 (95) $ 117.18 Outstanding - December 31 12,370 $ 125.46 6,156 $ 100.79 7,097 $ 82.01 Options exercisable at year-end 9,446 $ 114.22 3,894 $ 77.36 4,409 $ 58.36 Compensation expense of $ 61 million related to unvested stock options at December 31, 2018 will be recognized over the next two years (weighted average period). The table below summarizes information for stock options exercised during the last three years: (In millions) 2018 2017 2016 Intrinsic value of options exercised $ 86 $ 218 $ 41 Cash received for options exercised $ 68 $ 131 $ 36 Tax benefit from options exercised $ 8 $ 41 $ 11 The following table summarizes information for outstanding common stock options at December 31, 2018 : Options Options Outstanding Exercisable Number (in thousands) 12,370 9,446 Total intrinsic value (in millions) $ 804 $ 715 Weighted average exercise price $ 125.46 $ 114.22 Weighted average remaining contractual life 5.4 years 4.5 years C. Restricted Stock The Company awards restricted stock to the Company’s employees with vesting periods ranging from three to five years. Recipients of restricted stock awards accumulate dividends during the vesting period, but forfeit their awards and accumulated dividends if their employment terminates before the vesting date. Accounting policy. Fair value of restricted stock awards is equal to the market price of Cigna’s common stock on the date of grant. This fair value is reduced by awards tha t are expected to forfeit. At the grant date, the Company estimates forfeitures based on experience and adjusts the expense to reflect actual forfeitures over the vesting period. This fair value, net of forfeitures, is recognized in selling, general and administrative expenses over the vesting period on a straight- line basis. The following table shows the status of, and changes in, restricted stock awards during the last three years. (Awards in thousands) 2018 2017 2016 Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Grants/Units Grants/Units Grants/Units Outstanding - January 1 1,295 $ 126.44 1,309 $ 97.78 1,642 $ 72.58 Awarded 1,451 $ 183.29 451 $ 155.21 315 $ 138.61 Vested (560) $ 112.53 (409) $ 67.09 (591) $ 50.01 Forfeited (48) $ 150.84 (56) $ 121.74 (57) $ 92.51 Outstanding - December 31 2,138 $ 168.12 1,295 $ 126.44 1,309 $ 97.78 T he fair value of vested restricted stock at the vesting date for the years ended December 31 was as follows : (In millions) 2018 2017 2016 Fair value of vested restricted stock $ 107 $ 62 $ 82 A pproximately 10,400 employees held 2.1 million restricted stock awards a t the end of 2018 with $ 174 million of related compensation expense to be recognized over the next two years (weighted average period). D. Strategic Performance Shares (“SPS”) The Company awards SPSs to executives and certain other key employees generally with a perfor mance period of three years. Half of these shares are subject to a market condition (total shareholder return relative to industry peer companies) and half are subject to a performance condition (cumulative adjusted net income). These targets are set by the Committee. H olders of these aw ards receive shares of Cigna common stock a t the end of the performance period ranging anywhere from 0 to 200% of the original awards . Accounting policy. Compensation expense for SPSs is recorded over the performance period. F air value is determined at the grant date f or “market condition” SPSs using a Monte Carlo simulation model and not subsequently adjusted regardless of the final outcome. E xpense is initially accrued f or “performance condition” SPSs based on the most likel y outcome, but evaluated for adjustment each period for updates in the expected outcome. E xpense is adjusted to the actual outcome (number of shares awarded times the share price at the grant date) a t the e nd of the performance period. T he Company estima tes forfeitures a t the grant date based on experience and adjusts the expense to reflect actual forfeitures over the vesting period. The following table shows the status of, and changes in, SPSs duri ng the last three years : 2018 2017 2016 Weighted Weighted Weighted Average Fair Value Average Fair Value Average Fair Value (Awards in thousands) Shares at Award Date Shares at Award Date Shares at Award Date Outstanding - January 1 778 $ 136.57 942 $ 109.14 1,188 $ 81.68 Awarded 221 $ 197.51 275 $ 150.06 286 $ 139.05 Vested (269) $ 121.57 (386) $ 78.91 (494) $ 60.15 Forfeited (23) $ 158.16 (53) $ 138.19 (38) $ 112.70 Outstanding - December 31 707 $ 160.74 778 $ 136.57 942 $ 109.14 T he fair value of vested SPSs at the vesting date for the years ended December 31 was as follows: 2018 2017 2016 (Shares in thousands; $ in millions) Shares Fair Value Shares Fair Value Shares Fair Value Shares of Cigna common stock distributed upon SPS vesting 380 $ 73 476 $ 70 768 $ 109 Approximately 1,500 employees held 707,000 SPSs at the end of 2018 and $ 51 million of related compensation expense is expected to be recognized over the next two years . The amount of expense for “performance condition” SPSs may vary based on actual performance in 2019 and 2020 . E. One- T ime E mployee S tock Award T he Company granted most employees a one-time stock award i n 2017 of five sh ares that immediately vested. A pproximately 205,000 shares were issued i n connection with this program at a price of $162.96, resulting in a pre-tax cost of $33 million . F. Compensation Cost and Tax Effects of Share-based Compensation T he Company records tax benefits in shareholders’ net income d uring the vesting period based on the amount of expense being recognized . T he difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in net income w hen stock options are exercised, or when restricted stock and SPSs vest . (In millions) 2018 2017 2016 Total compensation cost for shared-based awards $ 180 $ 178 $ 128 Tax benefits recognized $ 36 $ 79 $ 57 |
Goodwill, Other Intangibles, an
Goodwill, Other Intangibles, and Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Goodwill, Other Intangibles, and Property and Equipment | Note 15 – Goodwill , O ther Intangibles and Property and Equipment Goodwill Accounting policy. Goodwill represents the excess of the cost of businesses acquired over the fair value of their net assets. The resulting goodwill is assigned to those reporting units expected to realize cash flows from the acquisition, allocated to reporting units based on relative fair values, primarily reported in the Health Services segment ($ 33.7 billion), the Integrated Medical segment ($ 10.5 billion) and, to a lesser extent, the International Markets segment ($0.3 billion). The Company evaluates goodwill for impairment at least annually during the third quarter at the reporting unit level and writes it down through shareholders’ net income if impaired. Fair value of a reporting unit is generally estimated based on either market data or a discoun ted cash flow analysis using assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. The significant assumptions and estimates used in determining fair value include the discount rate and future cash flows. A discount rate is selected to correspond with each reporting unit’s weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies with in that reporting unit. Projections of future cash flows for each reporting unit are consistent with our annual planning process for revenues, claims, operating expenses, taxes, capital levels and long-term growth rates. Goodwill activity. Goodwill activity during 2018 and 2017 was as follows: (In millions) 2018 2017 Balance at January 1, $ 6,164 $ 5,980 Goodwill acquired, net 38,371 154 Impact of foreign currency translation (30) 30 Balance at December 31, $ 44,505 $ 6,164 The significant increase in goodwill during 2018 reflects the Company’s acquisition of Express Scripts as further discussed in Note 3 . Other Intangibles Accounting policy. The Company’s other intangible assets include purchased customer and producer relationships, provider networks and trademarks. The fair value of purchased customer relationships and the amortization method were determined as of the dates of purchase using an income approach that relies on projected future net cash flows in cluding key assumptions for customer attrition and discount rate s . The Company amortizes other intangibles on an accelerated or straight-line basis over periods from 0.3 to 39 years. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value. Costs incurred to renew or extend the terms of these intangible assets are generally expensed as incurred. Components of other assets, incl uding other intangibles. Other intangible assets were comprised of the following at December 31: Accumulated Net Carrying (In millions) Cost Amortization Value 2018 Customer relationships $ 31,451 1,213 30,238 Trade Name - Express Scripts 8,400 - 8,400 Other 560 195 365 Other intangible assets 40,411 1,408 39,003 Value of business acquired (reported in deferred policy acquisition costs) 665 102 563 Total $ 41,076 1,510 39,566 2017 Customer relationships $ 1,280 1,056 224 Other 291 170 121 Other intangible assets 1,571 1,226 345 Value of business acquired (reported in deferred policy acquisition costs) 232 86 146 Total $ 1,803 1,312 491 The significant increase reflects the intangible assets acquired from Express Scripts as discussed further in Note 3 . Property and Equipment Accounting policy. Property and equipment is carried at cost less accumulated depreciation. Cost includes interest, real estate taxes and other costs incurred during construction when applicable. Internal-use software that is acquired, developed or modified solely to meet the Company’s internal needs, with no plan to market externally, is also includ ed in this category. Costs directly related to acquiring, developing or modifying internal-use software are capitalized. The Company calculates depreciation and amortization principally using the straight-line method generally based on the estimated usef ul life of each asset as follows: buildings and improvements, 10 to 40 years; purchased software, three to five years; internally developed software, three to seven years; and furniture and equ ipment (including computer equipment), three to 10 years. Improvements to leased facilities are depreciated over the lesser of the remaining lease term or the estimated life of the improvement. The Company considers events and circ umstances that would indicate the carrying value of property, equipment or capitalized software might not be recoverable. An impairment charge is recorded if the Company determines the carrying value of any of these assets is not recoverable. The Company also reviews and shortens the estimated useful lives of these assets, if necessary. Components of property and equipment. Property and equipment was comprised of the following as of December 31: Accumulated Net Carrying (In millions) Cost Amortization Value 2018 Internal-use software $ 5,694 $ 2,415 $ 3,279 Other property and equipment Assets recorded under capital leases (1) 56 4 52 Other property and equipment not recorded under capital leases 2,208 977 1,231 Total other property and equipment 2,264 981 1,283 Total property and equipment $ 7,958 $ 3,396 $ 4,562 2017 Internal-use software $ 2,991 $ 2,184 $ 807 Other property and equipment Assets recorded under capital leases (1) 49 31 18 Other property and equipment not recorded under capital leases 1,573 835 738 Total other property and equipment 1,622 866 756 Total property and equipment $ 4,613 $ 3,050 $ 1,563 (1) Current capital lease agreements are for equipment and generally have a term of 48 months with the equipment expected to be returned to the lessor at termination. Components of depreciation and amortization. Depreciation and amortization was comprised of the following for the years ended December 31: (In millions) 2018 2017 2016 Internal-use software $ 323 $ 298 $ 303 Other property and equipment (1) 146 153 158 Value of business acquired (reported in deferred policy acquisition costs) 16 18 20 Other intangibles 210 97 129 Total depreciation and amortization $ 695 $ 566 $ 610 (1) Other property and equipment includes amortization on assets recorded under capital leases of $9 million in 2018, $14 million in 2017 and $20 million in 2016. The Company estimates annual pre-tax amortization for intangible assets, including internal-use software, over the next five calendar years to be as follows: (In millions) Pre-tax Amortization 2019 $ 3,169 2020 $ 2,164 2021 $ 2,062 2022 $ 1,844 2023 $ 1,777 |
Leases and Rentals
Leases and Rentals | 12 Months Ended |
Dec. 31, 2018 | |
Leases and Rentals [Abstract] | |
Leases and Rentals | Note 16 – Leases and Rentals Description of operating leases. The Company’s operating le ases are primarily for office space and certain computer and other equipment . Some of these leases include renewal options and other incentives that are amortized over the life of the lease . L eases active in 2018 had terms ranging from one month to 18 years . Rental expense and payments. For the years ended December 31, net r ental expenses for operating leases were approximately : (In millions) 2018 2017 2016 Net rental expense for operating leases $ 162 $ 162 $ 151 F uture net minimum rental payments under non-cancelable operating leases were approximately $ 860 million as of December 31, 2018 , pa yable as follows: (In millions) Operating Lease Payments 2019 $ 199 2020 $ 182 2021 $ 148 2022 $ 116 2023 $ 84 2024 and thereafter $ 132 The Company also has capital lease arrangements. See Note 15 and Note 5 for further information on assets recorded under capital leases and our related obligations. |
Shareholders Equity and Dividen
Shareholders Equity and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Stockholders' Equity And Dividend Restrictions | Note 17 – Shareholders’ Equity and Dividend Restrictions State insurance departments and foreign jurisdictions that regulate certain of the Company’s subsidiaries prescribe accounting practices (differ ing in some respects from GAAP ) to determine statutory net income and surplus. The Company’s life , accident and health insurance and Health Maintenance Organization (“HMO”) subsidiaries are regulated by such statutory requirements . R egulatory changes in the jurisdiction of one of our foreign insurance affiliate s caused a significant increase in surplus in 2017 , primarily from beginning to include deferred policy acquisition costs as an admitted asset. The statutory net income of the Company’ s life, accident and health insurance and HMO subsidiaries for the years ended, and their sta tutory surplus as of December 31, were as follows: (In billions) 2018 2017 2016 Net income $ 3.4 $ 2.5 $ 2.0 Surplus $ 12.2 $ 10.4 $ 8.5 The Company’s HMO and life, accident and health insurance subsidiaries are also subject to minimum statutory surplus requirements and may be required to maintain investments on deposit with state departments of insurance or other regulatory bodies. Additionally, these subsidiaries may be subject to re gulatory restrictions on the amount of annual dividends or other distributions (such as loans or cash advances) that insurance companies may extend to their parent companies without prior approval. As of December 31, 2018 , these amounts, including restricted GAAP net assets of the Company’s subsidiaries, were as follows: (In billions) 2018 Minimum statutory surplus required by regulators $ 3.9 Investments on deposit with regulatory bodies $ 0.6 Maximum dividend distributions permitted in 2019 without regulatory approval $ 2.1 Maximum loans to the parent company permitted without regulatory approval $ 1.3 Restricted GAAP net assets of Cigna Corporation's subsidiaries $ 15.5 P ermitted practices used by the Company’s insurance subsidiaries in 2018 that differed from prescribed regulatory accounting had an immaterial impact on statutory net income and surplus. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | Note 18 – Income Taxes Accounting policy. Deferred income taxes are reflected in the balance sheet for differences between the financial and income tax reporting bases of the underlying assets and liabilities, and established based upon enacted tax rates and laws. Deferred income tax assets are recognized when available evidence indicates that realization is more likely than not, and to the extent this standard is not met a valuation allowance is established. The deferred income tax provision g enerally represents the net change in deferred income tax assets and liabilities during the reporting period excluding adjustments to accumulated other comprehensive income or amounts recorded in connection with a business combination. The current income tax provision generally represents estimated amounts due on income tax returns for the year reported to various jurisdictions plus the effect of any uncertain tax positions. The Company recognizes a liability for uncertain tax positions if management beli eves the probability that the positions will be sustained is less than 50 percent. Income taxes attributable to the Company’s foreign operations are generally provided using the respective foreign jurisdictions’ tax rate. The Company’s foreign operation s continue to retain a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the United States in support of the liquidity and capital needs of our foreign operations as well as to support growth initiatives overseas. The Company generally does not intend to repatriate these earnings. Income Tax Expense The federal corporate income tax rate declined to 21% effective January 1, 2018 because of U.S. tax reform legislation enacted in late 2017. As a result, the Company’s U.S. income tax expense and effective tax rate were notably lower in 2018. Prior year consolidated tax expense included a $232 million charge due to U.S. tax reform, driven by revaluation of deferred tax balances and the deemed repatriation tax on accumulated foreign earnings. The Company has continued to evaluate the provisional tax reform adjustments first recorded in 2017. The one-year measurement period under SEC requirements has expired with only minor adjustments to the initial amoun ts recorded. The components of income taxes for the years ended December 31 were as follows: (In millions) 2018 2017 2016 Current taxes U.S. income taxes $ 804 $ 974 $ 935 Foreign income taxes 185 122 95 State income taxes 47 36 32 Total current taxes 1,036 1,132 1,062 Deferred taxes (benefits) U.S. income taxes (benefits) (75) 204 69 Foreign income taxes 8 39 9 State income tax (benefits) (34) (1) (4) Total deferred taxes (benefits) (101) 242 74 Total income taxes $ 935 $ 1,374 $ 1,136 Total income taxes for the years ended December 31 were different from the amount computed using the nominal federal income tax rate for the following reasons: 2018 2017 2016 (In millions) $ % $ % $ % Tax expense at nominal rate $ 752 21.0 % $ 1,262 35.0 % $ 1,043 35.0 % Effect of U.S. tax reform legislation (4) (0.1) 232 6.4 - - Effect of foreign earnings 74 2.1 (70) (1.9) (57) (1.9) Health insurance industry tax 78 2.2 - - 108 3.6 State income tax (net of federal income tax benefit) 10 0.3 23 0.6 18 0.6 Other 25 0.6 (73) (2.0) 24 0.8 Total income taxes $ 935 26.1 % $ 1,374 38.1 % $ 1,136 38.1 % Consolidated pre-tax income from the Company’s foreign operations was approximately 15 % of the Company’s pre-tax income in 2018. The comparable amount in prior years was 14 % in 2017 and 11 % in 2016. South Korean operations produced a majority of the Company’s foreign pre-tax earnings. The effective tax rate for 2018 of 26.1% was considerably lower than the 38.1% rate for 2017. The decline was due to the reduction in the U.S. tax rate, an d was partially offset by reinstatement of the non-deductible health insurance industry tax. The health insurance industry tax will again be suspended for 2019. The Company continues to retain a significant portion of its foreign earnings overseas, where they are generally subject to a higher tax rate than that imposed in the U.S. Additional deferred tax liabilities of approximately $135 million for foreign withholding taxes would have been recorded if these earnings were intended to be remitted. A port ion of these withholding taxes may be eligible for credit against the Company’s U.S. tax liability. Deferred Income Taxes Deferred income tax assets and liabilitie s as of December 31 were as follows: (In millions) 2018 2017 Deferred tax assets Employee and retiree benefit plans $ 411 $ 279 Other insurance and contractholder liabilities 402 358 Loss carryforwards 255 105 Other accrued liabilities 340 101 Other 205 91 Deferred tax assets before valuation allowance 1,613 934 Valuation allowance for deferred tax assets (199) (72) Deferred tax assets, net of valuation allowance 1,414 862 Deferred tax liabilities Depreciation and amortization 838 176 Acquisition-related basis differences 9,792 320 Policy acquisition expenses 211 190 Unrealized appreciation on investments and foreign currency translation (29) 102 Other 55 35 Total deferred tax liabilities 10,867 823 Net deferred income tax (liabilities) assets $ (9,453) $ 39 The net deferred tax balance changed significantly due to the Company’s acquisition of Express Scripts, primarily representing deferred tax liabilities on the intangible assets recognized in purchase accounting. No deferred tax liability has been reco gnized for goodwill that is nondeductible for tax purposes. Also certain prior year balances have been reclassified to align with our presentation as of December 31, 2018. Management believes that future results will generally be sufficient to realize th e Company’s gross deferred tax assets. The Company establishes a valuation allowance when it determines that it is not at least more likely than not the asset will be recognized. The Company has recognized deferred tax assets related to federal, state an d foreign losses, a portion of which have been offset by a valuation allowance. There are multiple expiration dates associated with these losses, though a significant portion expires in 2021 . C. Uncertain Tax Positions A reconciliation of unrecognized tax benefits for the years ended December 31 was as follows: (In millions) 2018 2017 2016 Balance at January 1, $ 35 $ 31 $ 31 Increase due to prior year positions 40 - - Increase due to business combinations 860 - - Increase due to current year positions 6 7 10 Reduction related to settlements with taxing authorities (1) (1) (2) Reduction related to lapse of applicable statute of limitations (12) (2) (8) Balance at December 31, $ 928 $ 35 $ 31 The liability for uncertain tax positions has increased significantly due to the Company’s acquisition of Express Scripts , the majority of which would impact shareholder’s net income, if recognized. It is reasonably possible that the liability for uncertain tax positions could decline over the intervening twelve months. The Company classifies net interest expense on uncer tain tax positions as a component of income tax expense, but excludes this amount from the disclosed liability for uncertain tax positions. The liability for net interest expense was not material as of December 31, 2018 or 2017. Other Tax Matters Th e statute of limitations for Cigna’s consolidated income tax returns through 2014 has closed, and there are no pending examinations. The Company has filed an amended 2014 consolidated tax return and the claim is subject to Internal Revenue Service (“IRS”) review. The IRS has examined Express Scripts’ tax returns for 2010 through 2012, for which there is a significant disputed tax matter, and is currently examining returns for 2013 through 2015. The Company conducts business in a number of state and forei gn jurisdictions, and may be engaged in multiple audit proceedings at any given time. Generally, no further state or foreign audit activity is expected for tax years prior to 2011 for Cigna’s entities and 2006 for Express Scripts’ entities. |
Contingencies and Other Matters
Contingencies and Other Matters | 12 Months Ended |
Dec. 31, 2018 | |
Contingencies And Other Matters [Abstract] | |
Contingencies and Other Matters | N ote 19 – 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 The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits. For the majority of these benefits , the sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations. If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business (Prudential Retirement Insurance and A nnuity Company or “Prudential”) has the right to redirect the management of the related assets to provide for benefit payments. As of December 31, 2018 , employers maintained assets that exceeded the benefit obligations under these arrangements of approximately $ 455 million. A pproximately 11 % of these are reinsured by Prudential . The remaining guarantees are provided by the Company with minimal reinsurance from third parties. The Company establishes an additional liability if management believes that the Company will be required to make payment under the guarantees; t here were no additional liabilities required for th ese guarantees, net of reinsurance, as of December 31, 2018 . Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy (s ee Note 10 ). The Company does not expect that these financial guarantees will have a material effect on the Company’s consolidated results of operations, liquidity or financial condition. B. Certain Other Guarantees The Company had indemnification obligations as of December 31, 2018 in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, the filing of tax returns, compliance with law or the identification of outstanding litigation. These obligations are typically subject to various time limitations, defined by the contr act or by operation of law, such as statutes of limitation. In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified o r applicable. The Company does not believe that it is possible to determine the maximum potential amount due under these obligations because not all amounts due under these indemnification obligations are subject to limitation. There were no liabilities for these indemnification obligations as of December 31, 2018 . C. 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 Insu rance 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 December 31, 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 recognized in the period received . D. Legal and Reg ulatory Matters The Company is routinely involved in numerous claims, lawsuits, regulatory inquiries and audits, government investigations, including under the federal False Claims Act and state false claims acts initiated by a government investigating body or by a qui tam relator’s filing of a complaint under court seal, and other legal matters arising, for the most part, in the ordinary course of managing a global health services business. Additionally, the Company has received and is cooperating with subpoenas or similar processes from various governmental agencies requesting information, all arising in the normal course of its 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, financial condition or liquidity based upon our current knowledge and taking into consideration current accruals. This includes certain matters previously discussed in Express Scripts’ annual and quarterly reports that are no longer disclosed because they are not considered material legal proceedings for the combined company. Disputed tax matters arising from audits by the IRS or other state and foreign jurisdictions, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions. Further information on income tax matters can be found in Note 18 . Pending litigation and legal or regulatory matters that the Company has identified with a reasonably 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 shareho lders’ 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 ot her 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. In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company. The Company has accrued approximately $ 190 million ($ 150 million after-tax) as of December 31, 2018 for the matters discussed below under “Litigation Matters” as well as litigation related to certain of the Company’s claim operating practices and disputes around reimbursement rates to providers. Due to numerous uncer tain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time. In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will no t exceed the amounts currently accrued by the Company. An adverse outcome in one or more of these matters could be material to the Company’s results of operations, financial condition or liquidity for any particular period. Litigation Matters Amara cash balance pension plan litigation. In December 2001, Janice Amara filed a class action lawsuit in the U.S. District Court for the District of Connecticut against Cigna Corporation and the Cigna Pension Plan (the “Plan”) on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a ca sh balance formula. The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), including that the Plan’s cash balance formula discriminates against older employees; that the conversion resulted in a wear-awa y period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions. In 2008, the District Court (1) affirmed the Company’s righ t 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 un der the post-conversion cash balance formula. From 2008 through 2015, this case has undergone a series of court proceedings that resulted in the original District Court order being largely upheld. In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015. Since then, there has been continued litigation regarding the calculation of benefits, attorneys’ fees, and the administration of the remedy payments. On November 29, 2018, the Court ordered the Pension Plan to pay attorneys’ and incentive fees of $32 million, and that the Plan must pay any past due lump sums and back benefits within 90 days of the Order. The se payments were mad e as ordered in December 2018. Barring any new Order by the Court impacting the timing, the Company expects to amend the Plan and commence remedy benefit payments in 2019. Once these events occur, the Plan will reflect the additional remedy benefits orde red by the Court as an increase to the pension liability (see Note 13) and the Company will reduce the remaining litigation reserve accordingly. Management believes that the Company’s remaining reserve is adequate as of December 31, 2018. Litigation re lated 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 filed against Express Scripts and the Express Scripts boa rd of directors. Certain of these complaints also include Cigna, Old Cigna, Cigna Merger Sub and Express Scripts Merger Sub as defendants. The complaints alleged 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. The parties entered into a settlement agreement in November 2018 and notices of voluntary dismis sal have been filed. Cigna 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 t he 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. 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 Co urt 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 t hat 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 commenced on February 25, 2019 and we await the outcome. 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 litigation. Express Scripts Litigation with Anthem. In March 2016, Anthem filed a lawsuit in the United States District Court for the Southern District of New York alleging various breach of contract claims against Express Scripts relating to the parties’ rights and obligations under the periodic pricing review section of the pharmacy benefit management agreement between the parties, including allegations that Express Scripts failed to negotiate new pricing concessions in good faith, as well as various alleged ser vice issues. Anthem requests the court enter declaratory judgment that Express Script s is required to provide Anthem competitive benchmark pricing, that Anthem can terminate the agreement, and that Express Script s is required to provide Anthem with post-t ermination services at competitive benchmark pricing for one year following any termination by Anthem. Anthem claims it is entitled to $13.0 billion in additional pricing concessions over the remaining term of the agreement as well as $1.8 billion for one year following any contract termination by Anthem, and $150 million in damages for service issues (“Anthem’s Allegations”). On April 19, 2016, in response to Anthem’s complaint, Express Script s filed its answer denying Anthem’s Allegations in their entir ety and asserting affirmative defenses and counterclaims against Anthem. The court subsequently granted Anthem’s motion to dismiss two of six counts of Express Script s’ amended counterclaims. The current scheduling order runs through the completion of su mmary judgment briefing in December 2019. There is no tentative trial date. Regulatory Matters Civil Investigative Demand. The U.S. Department of Justice (“DOJ”) is conducting an industry review of Medicare Advantage organizations’ risk adjustment prac tices 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 Penn sylvania and the Southern 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 cla ims handling 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 that began in the second quarter of 2016. Management believes th e 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 practi ces that could negatively impact future earnings for this business. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Financial Information | Note 20 – Condensed Consolidating Financial I nformation Effective with the Merger that closed on December 20, 2018 (see Note 3 for further information) t he senior notes issued by Cigna, Old Cigna, E xpress Scripts, Inc. (“E SI ”) , Medco Health Solutions, Inc. (“Medco”), and Express Scripts became jointly and severally and fully and unconditionally (subject to certain customary release provisions, including sale, exchange, transfer or liquidation of the guarantor subsidiary) guaranteed by Cigna, Old Cigna, ESI, Medco and Express Scripts , as applicable. Details of these debt obligations are presented in Note 5 . The following condensed consolidating financial information has been prepared in accordance with the requirements as prescr ibed by the SEC in Regulation S-X . The condensed consolidating financial information presented below is not indicative of what the financial position, results of operations or cash flows would have been had each of the entities operated as an independent company during the periods for various reasons, including, but not limited to, intercompany transactions and integration of systems. The condensed consolidating financial information is presented separately for: (i) Cigna (the Parent Company), guarantor , the issuer of additional guaranteed obligations; (ii) Old Cigna (former Parent Company for the fiscal years ended 2017 and 2016), guarantor, the issuer of additional guaranteed obligations; (iii) Express Scripts, guarantor, the issuer of additional guaranteed obligations; (iv) ESI, guarantor, the issuer of additional guaranteed obligations; (v) Medco, guarantor, the issuer of additional guaranteed obligations; (vi) Non-guarantor subsidiaries, on a combined basis; (vii) Consolidating entries and eliminations representing adjustments to (a) eliminate intercompan y transactions between or among Cigna, Old Cigna, Express Scripts, ESI, Medco and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidati ng entries; and (viii) Cigna and subsidiaries on a consolidated basis. Condensed Consolidating Statements of Income (In millions) For the year ended December 31, 2018 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Revenues Premiums $ - $ - $ - $ - $ - $ 36,113 $ - $ 36,113 Fees and other revenues - - - 23 7 5,596 (48) 5,578 Pharmacy revenues - - - 1,866 418 4,165 (970) 5,479 Net investment income 123 1 2 - - 1,354 - 1,480 Total revenues 123 1 2 1,889 425 47,228 (1,018) 48,650 Benefits and expenses Medical costs and other benefit expenses - - - - - 27,528 - 27,528 Pharmacy and other service costs - - - 1,763 417 3,583 (970) 4,793 Selling, general and administrative expenses 200 535 - 44 8 11,195 (48) 11,934 Amortization of acquired intangible assets - - - 94 13 128 - 235 Total benefits and expenses 200 535 - 1,901 438 42,434 (1,018) 44,490 Income (loss) from operations (77) (534) 2 (12) (13) 4,794 - 4,160 Interest and other income (expense) (244) (264) 15 (17) (10) 22 - (498) Intercompany interest income (expense) (5) (58) (15) 7 5 66 - - Net realized investment (losses) (1) - - - - (80) - (81) Income (loss) before income taxes (327) (856) 2 (22) (18) 4,802 - 3,581 Total income tax (benefit) expense (74) (163) - (4) (4) 1,180 - 935 Income (loss) before equity in earnings of subsidiaries (253) (693) 2 (18) (14) 3,622 - 2,646 Equity in earnings (loss) of subsidiaries 2,890 3,613 (32) (33) 29 - (6,467) - Net income (loss) 2,637 2,920 (30) (51) 15 3,622 (6,467) 2,646 Less: Net income attributable to noncontrolling interests - - - - - 9 - 9 Shareholders' net income (loss) $ 2,637 $ 2,920 $ (30) $ (51) $ 15 $ 3,613 $ (6,467) $ 2,637 Other comprehensive (loss), net of tax (390) (390) - - - (536) 926 (390) Shareholders' comprehensive income (loss) $ 2,247 $ 2,530 $ (30) $ (51) $ 15 $ 3,077 $ (5,541) $ 2,247 Condensed Consolidating Statements of Income (In millions) For the year ended December 31, 2017 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Revenues Premiums $ - $ - $ - $ - $ - $ 32,491 $ - $ 32,491 Fees and other revenues - - - - - 5,110 - 5,110 Pharmacy revenues - - - - - 2,979 - 2,979 Net investment income - - - - - 1,226 - 1,226 Total revenues - - - - - 41,806 - 41,806 Benefits and expenses Medical costs and other benefit expenses - - - - - 25,263 - 25,263 Pharmacy and other service costs - - - - - 2,456 - 2,456 Selling, general and administrative expenses - 195 - - - 9,835 - 10,030 Amortization of acquired intangible assets - - - - - 115 - 115 Total benefits and expenses - 195 - - - 37,669 - 37,864 Income (loss) from operations - (195) - - - 4,137 - 3,942 Interest and other (expense) - (246) - - - (6) - (252) Intercompany interest income (expense) - (18) - - - 18 - - Debt extinguishment (costs) - (321) - - - - - (321) Net realized investment gains - - - - - 237 - 237 Income (loss) before income taxes - (780) - - - 4,386 - 3,606 Total income tax (benefit) expense - (194) - - - 1,568 - 1,374 Income (loss) before equity in earnings of subsidiaries - (586) - - - 2,818 - 2,232 Equity in earnings of subsidiaries - 2,823 - - - - (2,823) - Net income - 2,237 - - - 2,818 (2,823) 2,232 Less: Net (loss) attributable to noncontrolling interests - - - - - (5) - (5) Shareholders' net income $ - $ 2,237 $ - $ - $ - $ 2,823 $ (2,823) $ 2,237 Other comprehensive income, net of tax - 300 - - - 269 (269) 300 Shareholders' comprehensive income $ - $ 2,537 $ - $ - $ - $ 3,092 $ (3,092) $ 2,537 Condensed Consolidating Statements of Income (In millions) For the year ended December 31, 2016 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Revenues Premiums $ - $ - $ - $ - $ - $ 30,824 $ - $ 30,824 Fees and other revenues - - - - - 4,901 - 4,901 Pharmacy revenues - - - - - 2,966 - 2,966 Net investment income - - - - - 1,147 - 1,147 Total revenues - - - - - 39,838 - 39,838 Benefits and expenses Medical costs and other benefit expenses - - - - - 24,341 - 24,341 Pharmacy and other service costs - - - - - 2,468 - 2,468 Selling, general and administrative expenses - 281 - - - 9,509 - 9,790 Amortization of acquired intangible assets - - - - - 151 - 151 Total benefits and expenses - 281 - - - 36,469 - 36,750 Income (loss) from operations - (281) - - - 3,369 - 3,088 Interest and other (expense) - (244) - - - (34) - (278) Intercompany interest income (expense) - (3) - - - 3 - - Net realized investment gains - - - - - 169 - 169 Income (loss) before income taxes - (528) - - - 3,507 - 2,979 Total income tax (benefit) expense - (146) - - - 1,282 - 1,136 Income (loss) before equity in earnings of subsidiaries - (382) - - - 2,225 - 1,843 Equity in earnings of subsidiaries - 2,249 - - - - (2,249) - Net income - 1,867 - - - 2,225 (2,249) 1,843 Less: Net (loss) attributable to noncontrolling interests - - - - - (24) - (24) Shareholders' net income $ - $ 1,867 $ - $ - $ - $ 2,249 $ (2,249) $ 1,867 Other comprehensive (loss), net of tax - (132) - - - (154) 154 (132) Shareholders' comprehensive income $ - $ 1,735 $ - $ - $ - $ 2,095 $ (2,095) $ 1,735 Condensed Consolidating Balance Sheets (In millions) As of December 31, 2018 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Assets Cash and cash equivalents $ 243 $ - $ 633 $ 43 $ - $ 2,936 $ - $ 3,855 Investments - - - - - 2,045 - 2,045 Accounts receivable, net - - - 4,206 748 5,519 - 10,473 Inventories - - - - - 2,821 - 2,821 Other current assets 14 59 - 310 - 1,063 (210) 1,236 Total current assets 257 59 633 4,559 748 14,384 (210) 20,430 Long-term investments - 10 - - - 26,919 - 26,929 Reinsurance recoverables - - - - - 5,507 - 5,507 Deferred policy acquisition costs - - - - - 2,821 - 2,821 Property and equipment - - - 2,432 - 2,130 - 4,562 Investments in subsidiaries 68,969 27,544 52,035 17,115 8,117 - (173,780) - Intercompany receivables - 4,505 - 7,425 2,335 24,882 (39,147) - Goodwill - - 31,049 - - 13,456 - 44,505 Other intangible assets - - 8,400 18,962 7,040 4,601 - 39,003 Other assets 48 198 - 68 74 1,488 (246) 1,630 Separate account assets - - - - - 7,839 - 7,839 TOTAL ASSETS $ 69,274 $ 32,316 $ 92,117 $ 50,561 $ 18,314 $ 104,027 $ (213,383) $ 153,226 Liabilities Current insurance and contractholder liabilities $ - $ - $ - $ - $ - $ 6,801 $ - $ 6,801 Pharmacy and service costs payable - - - 8,422 1,579 701 - 10,702 Accounts payable 22 - - 834 4 3,506 - 4,366 Accrued expenses and other liabilities 396 182 129 1,387 189 4,998 (210) 7,071 Short-term debt - 1,500 995 353 - 107 - 2,955 Total current liabilities 418 1,682 1,124 10,996 1,772 16,113 (210) 31,895 Non-current insurance and contractholder liabilities - - - - - 19,974 - 19,974 Deferred tax liabilities, net - - 2,001 5,012 1,685 1,001 (246) 9,453 Other non-current liabilities - 685 - 497 290 1,998 - 3,470 Intercompany payables 4,965 4,361 29,569 - - 252 (39,147) - Long-term debt 22,863 5,110 10,932 24 506 88 - 39,523 Separate account liabilities - - - - - 7,839 - 7,839 TOTAL LIABILITIES 28,246 11,838 43,626 16,529 4,253 47,265 (39,603) 112,154 Redeemable noncontrolling interests - - - - - 37 - 37 TOTAL SHAREHOLDERS’ EQUITY 41,028 20,478 48,491 34,032 14,061 56,718 (173,780) 41,028 Noncontrolling interests - - - - - 7 - 7 TOTAL EQUITY 41,028 20,478 48,491 34,032 14,061 56,725 (173,780) 41,035 TOTAL LIABILITIES AND EQUITY $ 69,274 $ 32,316 $ 92,117 $ 50,561 $ 18,314 $ 104,027 $ (213,383) $ 153,226 Condensed Consolidating Balance Sheets (In millions) As of December 31, 2017 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Assets Cash and cash equivalents $ - $ 9 $ - $ - $ - $ 2,963 $ - $ 2,972 Investments - 63 - - - 2,073 - 2,136 Accounts receivable, net - - - - - 3,155 - 3,155 Inventories - - - - - 228 - 228 Other current assets - 31 - - - 789 - 820 Total current assets - 103 - - - 9,208 - 9,311 Long-term investments - - - - - 26,483 - 26,483 Reinsurance recoverables - - - - - 5,763 - 5,763 Deferred policy acquisition costs - - - - - 2,237 - 2,237 Property and equipment - - - - - 1,563 - 1,563 Investments in subsidiaries - 22,631 - - - - (22,631) - Intercompany receivables - 200 - - - 2,980 (3,180) - Deferred tax assets, net - 221 - - - (182) - 39 Goodwill - - - - - 6,164 - 6,164 Other intangible assets - - - - - 345 - 345 Other assets - - - - - 1,431 - 1,431 Separate account assets - - - - - 8,423 - 8,423 TOTAL ASSETS $ - $ 23,155 $ - $ - $ - $ 64,415 $ (25,811) $ 61,759 Liabilities Current insurance and contractholder liabilities - - - - - 6,317 - 6,317 Pharmacy and service costs payable - - - - - 305 - 305 Accounts payable, accrued expenses and other liabilities - 270 - - - 3,877 - 4,147 Short-term debt - 231 - - - 9 - 240 Total current liabilities - 501 - - - 10,508 - 11,009 Non-current insurance and contractholder liabilities - - - - - 20,530 - 20,530 Intercompany payables - 2,980 - - - 200 (3,180) - Other non-current liabilities - 851 - - - 1,987 - 2,838 Long-term debt - 5,112 - - - 87 - 5,199 Separate account liabilities - - - - - 8,423 - 8,423 TOTAL LIABILITIES - 9,444 - - - 41,735 (3,180) 47,999 Redeemable noncontrolling interests - - - - - 49 - 49 SHAREHOLDERS’ EQUITY - 13,711 - - - 22,631 (22,631) 13,711 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ - $ 23,155 $ - $ - $ - $ 64,415 $ (25,811) $ 61,759 Condensed Consolidating Cash Flow Statements (In millions) For the year ended December 31, 2018 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Net cash provided by (used in) operating activities $ 145 $ 2,416 $ (36) $ 80 $ (304) $ 3,987 $ (2,518) $ 3,770 Cash Flows from Investing Activities Net change in loans due (from) affiliates - (4,412) (200) - - (1,121) 5,733 - Proceeds from investments sold: Fixed maturities and equity securities - - - - - 2,655 - 2,655 Investment maturities and repayments: Fixed maturities and equity securities - - - - - 2,151 - 2,151 Commercial mortgage loans - - - - - 215 - 215 Other sales, maturities and repayments (primarily short-term and other long-term investments) - 63 - - - 671 - 734 Investments purchased or originated: Fixed maturities and equity securities - (10) - - - (5,627) - (5,637) Commercial mortgage loans - - - - - (312) - (312) Other sales, maturities and repayments (primarily short-term and other long-term investments) - - - - - (1,189) - (1,189) Property and equipment purchases, net - - - (6) - (522) - (528) Acquisitions, net of cash acquired (27,115) - 1,676 23 - 961 - (24,455) Other, net - - - - - (12) - (12) NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (27,115) (4,359) 1,476 17 - (2,130) 5,733 (26,378) Cash Flows from Financing Activities Net change in amounts due to (from) affiliates 4,437 1,121 (807) (54) 304 732 (5,733) - Intercompany dividends paid - - - - - (2,518) 2,518 - Deposits and interest credited to contractholder deposit funds - - - - - 1,040 - 1,040 Withdrawals and benefit payments from contractholder deposit funds - - - - - (1,151) - (1,151) Net change in short-term debt - 1,400 - - - 87 - 1,487 Payments for debt extinguishment - - - - - - - - Repayment of long-term debt - (131) - - - - - (131) Net proceeds on issuance of long-term debt 22,856 - - - - - - 22,856 Repurchase of common stock (32) (310) - - - - - (342) Issuance of common stock 1 67 - - - - - 68 Other, net (49) (213) - - - (50) - (312) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 27,213 1,934 (807) (54) 304 (1,860) (3,215) 23,515 Effect of foreign currency rate changes on cash and cash equivalents - - - - - (24) - (24) Net increase (decrease) in cash and cash equivalents 243 (9) 633 43 - (27) - 883 Cash and cash equivalents, January 1, - 9 - - - 2,963 - 2,972 Cash and cash equivalents, December 31, $ 243 $ - $ 633 $ 43 $ - $ 2,936 $ - $ 3,855 Condensed Consolidating Cash Flow Statements (In millions) For the year ended December 31, 2017 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Net cash provided by operating activities $ - $ 602 $ - $ - $ - $ 4,242 $ (758) $ 4,086 Cash Flows from Investing Activities Net change in loans due (from) affiliates - - - - - (1,955) 1,955 - Proceeds from investments sold: Fixed maturities and equity securities - - - - - 2,012 - 2,012 Investment maturities and repayments: Fixed maturities and equity securities - - - - - 2,051 - 2,051 Commercial mortgage loans - - - - - 335 - 335 Other sales, maturities and repayments (primarily short-term and other long-term investments) - - - - - 1,702 - 1,702 Investments purchased or originated: Fixed maturities and equity securities - - - - - (5,628) - (5,628) Commercial mortgage loans - - - - - (430) - (430) Other sales, maturities and repayments (primarily short-term and other long-term investments) - (6) - - - (1,059) - (1,065) Property and equipment purchases, net - - - - - (471) - (471) Acquisitions, net of cash acquired - - - - - (209) - (209) Other, net - (11) - - - 11 - - NET CASH (USED IN) INVESTING ACTIVITIES - (17) - - - (3,641) 1,955 (1,703) Cash Flows from Financing Activities Net change in amounts due to affiliates - 1,955 - - - - (1,955) - Intercompany dividends paid - - - - - (758) 758 - Deposits and interest credited to contractholder deposit funds - - - - - 1,230 - 1,230 Withdrawals and benefit payments from contractholder deposit funds - - - - - (1,363) - (1,363) Net change in short-term debt - 100 - - - (20) - 80 Payments for debt extinguishment - (313) - - - - - (313) Repayment of long-term debt - (1,250) - - - - - (1,250) Net proceeds on issuance of long-term debt - 1,581 - - - - - 1,581 Repurchase of common stock - (2,725) - - - - - (2,725) Issuance of common stock - 131 - - - - - 131 Other, net - (73) - - - 51 - (22) NET CASH (USED IN) FINANCING ACTIVITIES - (594) - - - (860) (1,197) (2,651) Effect of foreign currency rate changes on cash and cash equivalents - - - - - 55 - 55 Net decrease in cash and cash equivalents - (9) - - - (204) - (213) Cash and cash equivalents, January 1, - 18 - - - 3,167 - 3,185 Cash and cash equivalents, December 31, $ - $ 9 $ - $ - $ - $ 2,963 $ - $ 2,972 Condensed Consolidating Cash Flow Statements (In millions) For the year ended December 31, 2016 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Net cash provided by operating activities $ - $ 376 $ - $ - $ - $ 4,230 $ (580) $ 4,026 Cash Flows from Investing Activities Net change in loans due to affiliates - - - - - 78 (78) - Proceeds from investments sold: Fixed maturities and equity securities - - - - - 1,544 - 1,544 Investment maturities and repayments: Fixed maturities and equity securities - - - - - 1,755 - 1,755 Commercial mortgage loans - - - - - 316 - 316 Other sales, maturities and repayments (primarily short-term and other long-term investments) - - - - - 1,431 - 1,431 Investments purchased or originated: Fixed maturities and equity securities - - - - - (5,191) - (5,191) Commercial mortgage loans - - - - - (165) - (165) Other sales, maturities and repayments (primarily short-term and other long-term investments) - (3) - - - (1,695) - (1,698) Property and equipment purchases, net - - - - - (461) - (461) Acquisitions, net of cash acquired - - - - - (4) - (4) Other, net - (8) - - - (93) - (101) NET CASH (USED IN) INVESTING ACTIVITIES - (11) - - - (2,485) (78) (2,574) Cash Flows from Financing Activities Net change in amounts due (from) affiliates - (78) - - - - 78 - Intercompany dividends paid - - - - - (580) 580 - Deposits and interest credited to contractholder deposit funds - - - - - 1,460 - 1,460 Withdrawals and benefit payments from contractholder deposit funds - - - - - (1,362) - (1,362) Net change in short-term debt - (100) - - - (48) - (148) Payments for debt extinguishment - - - - - - - - Repayment of long-term debt - - - - - - - - Net proceeds on issuance of long-term debt - - - - - - - - Repurchase of common stock - (139) - - - - - (139) Issuance of common stock - 36 - - - - - 36 Other, net - (82) - - - 10 - (72) NET CASH (USED IN) FINANCING ACTIVITIES - (363) - - - (520) 658 (225) Effect of foreign currency rate changes on cash and cash equivalents - - - - - (10) - (10) Net increase in cash and cash equivalents - 2 - - - 1,215 - 1,217 Cash and cash equivalents, January 1, - 16 - - - 1,952 - 1,968 Cash and cash equivalents, December 31, $ - $ 18 $ - $ - $ - $ 3,167 $ - $ 3,185 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information [Abstract] | |
Segment Information [Text Block] | Note 21 – Segment Information See Note 1 for a description of our segments. Effective with the fourth quarter of 2018, the Company uses adjusted income from operations on a before-tax basis as its principal financial measure of segment operating performance. Prior year segment information has been adjusted to reflect this change and a description of our basis for reporting segment operating results is outlined below. Intersegment transactions primarily reflect home delivery pharmacy sales to insured customers of the Integrated Medical segment. These transactions are eliminated in consolidation. The Comp any uses “pre-tax adjusted income from operations” as its pri ncipal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability. Pre-tax adjusted income from operations is defined as income before taxes excluding realized investment results, amortization of acquired intangible assets, results of transitioning clients 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 gains (losses) , including changes in market values of certain financial instruments between balance sh eet dates, as well as gains and losses associa ted with invested asset sales Amortization of acquired intangible assets , because these relate to costs incurred for acquisitions Results of transitioning clients, because those results are not indicative of o ngoing results Special items, if any, that management believes are not representative of the underlying 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 table below. The following table presents the special items recorded by the Compa ny for the years ended December 31, 2018 , 2017 and 2016 . (In millions) Description of Special Item Charges (Benefits) and Financial Statement Line Item(s) After-tax Before-tax Year ended December 31, 2018 Transaction-related costs - Selling, general and administrative expenses (see Note 3) $ 587 $ 748 - Interest expense and other (see Note 3) 179 227 - Net investment income (see Note 3) (97) (123) Total transaction-related costs $ 669 $ 852 Charges associated with litigation matters (Selling, general and administrative expenses, see Note 19D.) $ 19 $ 25 Total charges associated with U.S. tax reform - Selling, general and administrative expenses $ 1 $ 2 - Tax expense (3) - Total charges associated with U.S. tax reform $ (2) $ 2 Year ended December 31, 2017 Transaction-related costs (see Note 3) $ 33 $ 126 Charges associated with U.S. tax reform - Selling, general and administrative expenses $ (36) $ (56) - Tax expense (see Note 18) 232 - Total charges associated with U.S. tax reform $ 196 $ (56) Debt extinguishment costs (see Note 5) $ 209 $ 321 Long-term care guaranty fund assessment (Selling, general and administrative expenses, see Note 19D. for details) $ 83 $ 129 Year ended December 31, 2016 Transaction-related costs (see Note 3) $ 147 $ 166 Charges associated with litigation matters (Selling, general and administrative expenses, see Note 19D. for details) $ 25 $ 40 Risk corridor allowance (Selling, general and administrative expenses) $ 80 $ 124 Summarized segment financial information for the years ended December 31 , was as follows: (In millions) Integrated Medical Health Services International Markets Group Disability and Other Corporate and Eliminations Total 2018 Revenues from external customers (1) $ 31,759 $ 5,902 $ 5,174 $ 4,335 $ - $ 47,170 Inter-segment revenues 573 1,154 - 14 (1,741) - Net investment income 459 9 149 712 151 1,480 Total revenues 32,791 7,065 5,323 5,061 (1,590) 48,650 Revenue contributions from transitioning clients - (459) - - - (459) Net realized investment results from equity method subsidiaries (2) - - 43 - - 43 Special items reported in transaction-related costs - - - - (123) (123) Adjusted revenues $ 32,791 $ 6,606 $ 5,366 $ 5,061 $ (1,713) $ 48,111 Depreciation and amortization $ 466 $ 120 $ 55 $ 53 $ 1 $ 695 Income (loss) before taxes $ 3,342 $ 329 $ 670 $ 497 $ (1,257) $ 3,581 Pre-tax adjustments to reconcile to adjusted income from operations Adjustment for transitioning clients - (62) - - - (62) (Income) loss attributable to noncontrolling interests - - (14) - - (14) Net realized investment (gains) losses (2) 36 - 61 25 2 124 Amortization of acquired intangible assets 99 113 18 5 - 235 Special items Transaction-related costs - - - - 852 852 Charges associated with litigation matters 25 - - - - 25 U.S. tax reform - - - 2 - 2 Pre-tax adjusted income (loss) from operations $ 3,502 $ 380 $ 735 $ 529 $ (403) $ 4,743 (In millions) Integrated Medical Health Services International Markets Group Disability and Other Corporate and Eliminations Total 2017 Revenues from external customers (1) $ 28,193 $ 3,250 $ 4,774 $ 4,363 $ - $ 40,580 Inter-segment revenues 476 988 - 12 (1,476) - Net investment income 366 3 127 700 30 1,226 Total revenues $ 29,035 $ 4,241 $ 4,901 $ 5,075 $ (1,446) $ 41,806 Adjusted revenues $ 29,035 $ 4,241 $ 4,901 $ 5,075 $ (1,446) $ 41,806 Depreciation and amortization $ 470 $ - $ 61 $ 31 $ 4 $ 566 Income (loss) before taxes $ 2,859 $ 288 $ 667 $ 614 $ (822) $ 3,606 Pre-tax adjustments to reconcile to adjusted income from operations (Income) loss attributable to noncontrolling interests 1 - 1 - - 2 Net realized investment (gains) losses (137) - (31) (69) - (237) Amortization of acquired intangible assets 93 - 17 5 - 115 Special items Transaction-related costs - - - - 126 126 U.S. tax reform - - - (56) - (56) Debt extinguishment costs - - - - 321 321 Long-term care guaranty fund assessment 106 - - 23 - 129 Pre-tax adjusted income (loss) from operations $ 2,922 $ 288 $ 654 $ 517 $ (375) $ 4,006 (1) Includes the Company’s share of the earnings of its joint ventures reported in the International Markets segment using the equity method of accounting. (2) Beginning in 2018, includes the Company's share of the realized investment gains (losses) of its joint ventures reported using the equity method of accounting. (In millions) Integrated Medical Health Services International Markets Group Disability and Other Corporate and Eliminations Total 2016 Revenues from external customers (1) $ 26,695 $ 3,169 $ 4,424 $ 4,403 $ - $ 38,691 Inter-segment revenues 395 894 - - (1,289) - Net investment income 305 3 113 705 21 1,147 Total revenues $ 27,395 $ 4,066 $ 4,537 $ 5,108 $ (1,268) $ 39,838 Adjusted revenues $ 27,395 $ 4,066 $ 4,537 $ 5,108 $ (1,268) $ 39,838 Depreciation and amortization $ 519 $ - $ 61 $ 29 $ 1 $ 610 Income (loss) before taxes $ 2,417 $ 268 $ 497 $ 324 $ (527) $ 2,979 Pre-tax adjustments to reconcile to adjusted income from operations (Income) loss attributable to noncontrolling interests 2 - 18 - - 20 Net realized investment (gains) losses (116) - 2 (54) (1) (169) Amortization of acquired intangible assets 125 - 21 5 - 151 Special items Transaction-related costs - - - - 166 166 Risk corridor allowance 124 - - - - 124 Charges associated with litigation matters 40 - - - - 40 Pre-tax adjusted income (loss) from operations $ 2,592 $ 268 $ 538 $ 275 $ (362) $ 3,311 (1) Includes the Company’s share of the earnings of its joint ventures reported in the International Markets segment using the equity method of accounting. Revenue from external customers includes p remiums , pharmacy revenues , and fees and other revenues . The following table presents these revenues by premium, service and product type for the years ended December 31: (In millions) 2018 2017 2016 Insurance premiums Integrated Medical premiums (ASC 944) Commercial Premiums Risk $ 10,710 $ 9,439 $ 7,911 Stop loss 4,008 3,483 3,082 Other 1,038 917 886 Government Medicare Advantage 5,832 5,534 6,621 Medicare Part D 764 764 1,122 Other 4,496 3,494 2,640 Total Integrated Medical premiums 26,848 23,631 22,262 International Markets premiums 5,043 4,619 4,273 Domestic disability, life and accident premiums 4,000 3,973 4,002 Other premiums 222 268 287 Total premiums 36,113 32,491 30,824 Services (ASC 606) Fees 5,558 5,053 4,844 Other external revenues 20 57 57 2016-2017 other revenues adjustment 57 57 Total services 5,578 5,110 4,901 Products (Pharmacy revenues) (ASC 606) Home delivery and specialty revenues 3,997 2,979 2,966 Network revenues 1,415 - - Other 67 - - Total pharmacy revenues 5,479 2,979 2,966 Total revenues from external customers $ 47,170 $ 40,580 $ 38,691 Foreign and U.S. revenues from external customers for the three years ended December 31 are shown below. The Company’s foreign revenues are generated by its foreign operating entities. In the periods shown, no foreign country contributed more than 5% of consolidated revenues from external customers. (In millions) 2018 2017 2016 United States $ 42,773 $ 36,555 $ 35,011 South Korea 2,093 1,892 1,666 All other foreign countries 2,304 2,133 2,014 Total $ 47,170 $ 40,580 $ 38,691 Revenues from CMS were 16 % of consolidated revenues in 2018 and 2017, compared with 19 % in 2016. These amounts were reported in the Integrated Medical segment. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | Quarterly Financial Data (unaudited) The following unaudited quarterly financial data is presented on a consolidated basis for each of the years ended December 31, 2018 and December 31, 2017 . Quarterly financial results necessarily rely heavily on estimates. This and certain other factors, such as the seasonal nature of portions of the insurance business, suggest the need to exercise caution in drawing specific conclusions from q uarterly consolidated results. (In millions, except per share amounts) Three Months Ended March 31, June 30, September 30, December 31, Consolidated Results 2018 Total revenues $ 11,413 $ 11,480 $ 11,457 $ 14,300 Income before income taxes 1,218 1,102 1,033 228 Shareholders’ net income 915 (1) 806 (1) 772 (1) 144 (1) Shareholders’ net income per share 1 Basic 3.78 3.32 3.18 0.56 Diluted 3.72 3.29 3.14 0.55 2017 Total revenues $ 10,428 $ 10,374 $ 10,372 $ 10,632 Income before income taxes 890 1,134 824 758 Shareholders’ net income 598 (1) 813 (1) 560 (1) 266 (1) Shareholders’ net income per share 1 Basic 2.34 3.20 2.25 1.09 Diluted 2.30 3.15 2.21 1.07 Stock and dividend data 2018 Price range of common stock — high $ 227.13 $ 182.10 $ 208.73 $ 226.61 — low $ 163.02 $ 163.80 $ 166.88 $ 176.52 Dividends declared per common share $ 0.04 $ - $ - $ - 2017 Price range of common stock — high $ 154.83 $ 173.21 $ 188.36 $ 212.46 — low $ 133.52 $ 146.70 $ 166.81 $ 183.08 Dividends declared per common share $ 0.04 $ - $ - $ - (1) Shareholders’ net income includes the following after-tax charges (benefits), described in Note 21 to the Consolidated Financial Statements: March 31, June 30, September 30, December 31, 2018 Transaction-related costs $ 50 $ 109 $ 108 $ 402 2018 Charges associated with litigation matters - - 35 (16) 2018 U.S. tax reform - - (5) 3 Total 2018 charges $ 50 $ 109 $ 138 $ 389 March 31, June 30, September 30, December 31, 2017 U.S. tax reform $ - $ - $ - $ 196 2017 Debt extinguishment costs - - 209 - 2017 Long-term care guaranty fund assessment 83 - - - 2017 Transaction-related costs 49 (47) 6 25 Total 2017 charges (benefits) $ 132 $ (47) $ 215 $ 221 |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information of Cigna Corporation (Registrant) [Abstract] | |
Condensed Financial Information of Cigna Corporation (Registrant) | CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE I CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) STATEMENTS OF INCOME For the years ended December 31, Cigna* Old Cigna* Old Cigna* (in millions) 2018 2017 2016 Revenues Net investment income $ 123 $ - $ - Total revenues 123 - - Operating expenses Selling, general and administrative expenses 200 195 281 Total operating expenses 200 195 281 Income (loss) from operations (77) (195) (281) Interest and other (expense) (244) (246) (244) Intercompany interest (expense) (5) (18) (3) Debt extinguishment costs - (321) - Realized investment (loss) (1) - - Loss before taxes (327) (780) (528) Income tax (benefit) (74) (194) (146) Loss of Parent Company (253) (586) (382) Equity in income of subsidiaries 2,890 2,823 2,249 Shareholders' net income 2,637 2,237 1,867 Shareholders’ other comprehensive income (loss) Net unrealized (depreciation) on securities and derivatives (365) (37) (60) Net translation gains (losses) of foreign currencies (152) 304 (95) Postretirement benefits liability adjustment 127 33 23 Shareholders’ other comprehensive income (loss): (390) 300 (132) Shareholders' comprehensive income $ 2,247 $ 2,537 $ 1,735 * As described in Note 3, on December 20, 2018, through the "Merger," Old Cigna merged into a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. Refer to Note 20 for Condensed Consolidated Financial Statements of Cigna and Old Cigna. See Notes to Financial Statements on the following pages. CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE I CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) BALANCE SHEETS As of December 31, Cigna* Old Cigna* (in millions) 2018 2017 Assets Cash and cash equivalents $ 243 $ 9 Short-term investments - 63 Other current assets 14 31 Total current assets 257 103 Intercompany receivable - 200 Investments in subsidiaries 68,969 22,631 Other noncurrent assets 48 221 TOTAL ASSETS $ 69,274 $ 23,155 Liabilities Short-term debt $ - $ 231 Other current liabilities 418 270 Total current liabilities 418 501 Intercompany payable 4,965 2,980 Long-term debt 22,863 5,112 Other noncurrent liabilities - 851 TOTAL LIABILITIES 28,246 9,444 Shareholders’ Equity Common stock (shares issued, 381 and 296; authorized, 600) 4 74 Additional paid-in capital 27,751 2,940 Accumulated other comprehensive loss (1,711) (1,082) Retained earnings 15,088 15,800 Less treasury stock, at cost (104) (4,021) TOTAL SHAREHOLDERS’ EQUITY 41,028 13,711 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 69,274 $ 23,155 * As described in Note 3, on December 20, 2018, through the "Merger," Old Cigna merged into a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. Refer to Note 20 for Condensed Consolidated Financial Statements of Cigna and Old Cigna. See Notes to Financ ial Statements on the following pages . CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE I CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) STATEMENTS OF CASH FLOWS For the years ended December 31, Cigna* Old Cigna* Old Cigna* (in millions) 2018 2017 2016 Cash Flows from Operating Activities Shareholders’ net income $ 2,637 $ 2,237 $ 1,867 Adjustments to reconcile shareholders’ net income to net cash provided by operating activities Equity in income of subsidiaries (2,890) (2,823) (2,249) Dividends received from subsidiaries - 758 580 Other liabilities 412 (224) (9) Debt extinguishment costs - 321 - Other, net (14) 333 187 NET CASH PROVIDED BY OPERATING ACTIVITIES 145 602 376 Cash Flows from Investing Activities Short-term investment purchased, net - (6) (3) Other, net (27,115) (11) (8) NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (27,115) (17) (11) Cash Flows from Financing Activities Net change in amounts due to (from) affiliates 4,437 1,955 (78) Net change in short-term debt - 100 (100) Payments for debt extinguishment - (313) - Repayment of long-term debt - (1,250) - Net proceeds on issuance of long-term debt 22,856 1,581 - Issuance of common stock 1 131 36 Common dividends paid - (10) (10) Repurchase of common stock (32) (2,725) (139) Tax withholding on stock compensation and other (49) (63) (72) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 27,213 (594) (363) Net increase (decrease) in cash and cash equivalents 243 (9) 2 Cash and cash equivalents, beginning of year - 18 16 Cash and cash equivalents, end of year $ 243 $ 9 $ 18 * As described in Note 3, on December 20, 2018, through the "Merger," Old Cigna merged into a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. Refer to Note 20 for Condensed Consolidated Financial Statements of Cigna and Old Cigna. (1) As required in adopting ASU 2016-09, the Company retrospectively reclassified $79 million cash payments from operating to financing activities in 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amounts reported in financing activities were $61 million in 2017 and $72 million in 2016. See Notes to Fi nancial Statements on the following pages . CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE I CONDENSED FINANCIAL INFORMATION OF CIGNA CORPORATION (REGISTRANT) NOTES TO CONDENSED FINANCIAL STATEMENTS The accompanying condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto contained in this Annual Report on Form 10-K (“Form 10-K”). Note 1 — For purposes of these condensed financial statements, Cigna Corporation’s (the “Company”) wholly-owned and majority-owned subsidi aries are recorded using the equity basis of accounting. Note 2 — See Note 5 – Debt included in Part II, Item 8 of this Form 10-K for a description of the short-term and long-term debt obligations of Cigna Corporation and its subsidiaries. Maturity of the Company’s long-term debt is as follows: Note 3 — Intercompany liabilities of the Company consist primarily of payables to Old Cigna of $4.3 billion as of December 31, 2018 . Intercompany liabilities of Old Cigna consisted primarily of payables to Cigna Holdings, Inc. of $2.8 billion as of December 31, 2017. Interest was accrued at an average monthly rate of 2.33% for 2018 and 1.47% for 2017. Note 4 — The Company had guarantees of approximately $19.6 billion as of December 31, 2018 . These guarantees are related to outstanding debt of certain wholly-owned subsidiaries as described in Not e 5 and Note 20. In 2018 , no payments have been made on these guarantees. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Dec. 31, 2018 | |
Valuation and Qualifying Accounts and Reserves [Abstract] | |
Valuation and Qualifying Accounts and Reserves | CIGNA CORPORATION AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES Charged Charged Balance at (Credited) to (Credited) Balance at (in millions) beginning costs and to other Other end Description of year expenses accounts deductions of year 2018 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 207 $ 18 $ (3) $ (5) $ 217 Deferred tax asset valuation allowance $ 72 $ (5) $ 132 $ - $ 199 Reinsurance recoverables $ 3 $ (1) $ - $ - $ 2 2017 Investment asset valuation reserves Commercial mortgage loans $ 5 $ 1 $ - $ (6) $ - Allowance for doubtful accounts Premiums, accounts and notes receivable $ 200 $ 19 $ (11) $ (1) $ 207 Deferred tax asset valuation allowance (1) $ 87 $ 11 $ (26) $ - $ 72 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 2016 Investment asset valuation reserves Commercial mortgage loans $ 15 $ - $ - $ (10) $ 5 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 75 $ 134 $ (8) $ (1) $ 200 Deferred tax asset valuation allowance $ 71 $ 21 $ (5) $ - $ 87 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 (1) Deferred tax valuation allowance amount includes amount assumed from Express Scripts in 2018. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Consolidated Financial Statements include the accounts of Cigna Corporation and its consolidated subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company adopted Article 5 of Regulation S-X issued by the Securit ies and Exchange Commission effective December 31, 2018 in conjunction with the acquisition of Express Scripts. As a result, the Company now presents current assets and liabilities on its balance sheet. T he Company reclassified realized investment gains (losses) from revenue and now reports them below income from operations with interest expense in our Consolidated Statements of I ncome, in conformity with Article 5 . Prior year s’ information was reclassified to conform to this new presentation. Amounts r ecorded in the Consolidated F inancial S tatements necessarily reflect management’s estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, a ctual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. Certain reclassifications have been made to prior year amounts to conform to the current presentation. |
Recent Accounting Changes | Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance GUIDANCE ADOPTED JANUARY 1, 2018 Revenue from Contracts with Customers (Accounting Standards Update (“ASU”) 2014-09 and related amendments) 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 pharmacy contracts with customers • Adopted through full retrospective restatement • Cumulative-effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2015 balance of retained earnings. This 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 Integrated Medical segment affecting premiums, fees and other revenues, benefit expenses, and selling, general and administrative expenses and had no impact on revenue recognition patterns or net income. Expedients and exemptions elected: • Incremental costs of obtaining service and pharmacy contracts for short-term arrangements are expensed as incurred. • The Company does not disclose information about the aggregate amount of transaction price allocated to remaining performance obligations as its contracts are either short-term, or the remaining transaction price consists of variable consideration that relates specifically to wholly unsatisfied future periods of service. See the discussion of the Company’s accounting policies for fees and pharmacy revenues beginning on page 91. Accounting Standard and Adoption date Requirements and Effects of Adopting New Guidance GUIDANCE ADOPTED JANUARY 1, 2018 Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) 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 having a readily determinable fair value that were previously reported in accumulated other comprehensive income (“AOCI”) are now reported in net realized investment gains (losses). • 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 eligibility requirements for financial and nonfinancial hedging strategies 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 AOCI, 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 9 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 AOCI 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-K 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 AOCI • Allows companies to apply the guidance retrospectively or in the period of adoption Effects of adoption: AOCI of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 12 for additional information including accounting policy disclosures. Accounting Standard and Effective Date Requirements and Expected Effects of New 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 will adopt this ASU in the first quarter of 2019 on a modified retrospective basis and will not restate comparative periods. While we are still finalizing our adoption procedures, we estimate the primary impact to our Consolidated Balance Sheet will be an increase to assets and liabilities of approximately $700 million for the right-of-use asset and corresponding lease liability related to existing operating leases. We do not expect the impact to retained earnings to be material. • The Company elected the optional practical expedient to retain the current classification of leases, and therefore, we do not expect a material impact to the Consolidated Statements of Income or Cash Flows. • The Company has implemented a new lease system and developed requisite changes to internal controls over financial reporting. • The Company is continuing to work to develop required disclosures. • The Company adopted this new guidance as of the effective date and will not present comparative periods in the financial statements, as recently allowed. Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020, with early adoption permitted as of January 1, 2019 Requires: • A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments such as mortgage loans, reinsurance recoverables and other receivables when such instruments are first originated or acquired. • Changes in the criteria for impairment of available-for-sale debt securities • Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate this new standard and its effects on our financial statements and disclosures. We expect to adopt the standard as of January 1, 2020. • An additional allowance for future expected credit losses for certain financial instruments may be required at adoption. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020, with early adoption permitted as of January 1, 2017 Guidance: • Simplifies the accounting for goodwill impairment by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment • Redefines the amount of goodwill impairment to equal the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill of the reporting unit • Requires prospective adoption Expected effects: • The Company is evaluating this new standard and its expected timing of adoption. Accounting Standard and Effective Date Requirements and Expected Effects of New Guidance Not Yet Adopted 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 International Markets segment and Group Disability and Other. These accounts receivable balances primarily include amounts due from clients, third-party payors, customers and pharmaceutical manufacturers. Receivables totaling $1. 2 billion related to the acquired Express Scripts business are unbilled as of December 31, 2018 and are typically billed to PBM clients within 30 days based on contractual billing schedules. Unbilled receivables for medical benefit management services represent amounts due from clients at contracted rates, and are billed when se ttlement provisions for capitated risk contracts are met, at least annually. The receivables balances above are reported net of allowances for doubtful accounts of $217 million as of December 31, 2018 and $210 million as of December 31, 2017. The allow ances are based on the current status of each customer’s receivable balance as well as current economic and market conditions and a variety of other factors including the length of time the receivables are past due, the financial health of customers and ou r past experience. Receivables are written off against allowances only when such amounts are determined to be not recoverable and all collection attempts have failed. We regularly review the adequacy of these allowances based on a variety of factors, inc luding age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted. Express Scripts’ receivables were recorded at their estimated fair values at the acquisition date. These fair values considered estimated discounts and claims adjustments issued to customers in the form of client credits, and amounts from third-party payors and pharmaceutical manufacturers that are not considered r ealizable based on contract terms and historical payment experience. C. Inventories Inventories consist of prescription drugs and medical supplies and are stated at the lower of first-in-first-out cost or net realizable value. D . Reinsurance Recover ables Reinsurance recoverables represent amounts due from reinsurers for both paid and unpaid claims of the Company’s insurance businesses. Most reinsurance recoverables are classified as non-current assets. The current portion of reinsurance recoverab les is reported in other current assets and consists primarily of recoverables on paid claims expected to be settled within one year. Reinsurance recoverables are presented net of allowances for uncollectible reinsurance that were immaterial as of Decembe r 31, 2018 and 2017. E. Deferred Policy Acquisition Costs Costs eligible for deferral include incremental, direct costs of acquiring new or renewal insurance and investment contracts and other costs directly related to successful contract acquisition. Examples of deferrable costs include commissions, sales compensation and benefits, policy issuance and underwriting costs and premium taxes. The Company records acquisition costs differently depending on the product line. Acquisition costs for: Supplem ental health, life and accident insurance products (primarily individual products) that comprise the majority of the Company’s deferred policy acquisition costs and group health and accident insurance products are deferred and amortized, generally in propo rtion to the ratio of periodic revenue to the estimated total revenues over the contract periods. Universal life products are deferred and amortized in proportion to the present value of total estimated gross profits over the expected lives of the contract s. Other products are expensed as incurred. Deferred policy acquisition costs also include the value of business acquired (“VOBA”) for certain acquisitions with material long-duration insurance contracts. The Company recorded amortization of deferred policy acquisition costs of $ 406 million in 2018 , $ 322 million in 2017 and $ 292 million in 2016 primarily in selling, general and administrative expenses. Each year, deferred policy acquisition costs are tested for recoverability. For universal life and other individual products, management estimates the present value of future revenues less expected payments. For group health and accident insurance products, management estimates the sum of un earned premiums and anticipated net investment income less future expected claims and related costs. If management’s estimates of these sums are less than the deferred costs, the Company reduces deferred policy acquisition costs and records an additional expense. F. Other Assets (Current and Non-Current) Other current assets consist primarily of prepaid expenses, accrued investment income and the current portion of reinsurance recoverables. Other non-current assets consist primarily of GMIB assets a nd various other insurance-related assets. See Note 8 for the Company’s accounting policy for GMIB assets. Additionally, other non-current assets include the carrying value of our equity-method investments in joint ventures in China, India, the U.S . and other foreign jurisdictions. G. Redeemable Noncontrolling Interests Products and services are offered in Turkey and India through joint venture entities. The Company is the principal equity holder and primary beneficiary of the Turkey joint ven ture and accordingly, this entity is consolidated. In 2017, Cigna modified the agreement governing its joint venture in India due to changes in the local regulatory environment that require control by a local partner. As a result of the changes in the jo int venture agreement, the Company determined that it is no longer the primary beneficiary of the joint venture and, effective with the third quarter of 2017, no longer consolidates its results. Redeemable noncontrolling interests on our Consolidated Ba lance Sheets represent the Turkey joint venture partner’s preferred and common stock interests in the entity as of December 31, 2018 and 2017 . Our joint venture partner may choose to require the Company to purchase their redeemable noncontrolling interests. We also have the right to require our joint venture partner to sell their redeemable noncontrolling interests to us. The redeemable noncontrolling interests were recorded at fair value as of the dates of purchase. When the estimated redemption value for a redeemable noncontrolling interest exceeds its carrying value, an adjustment to increase the redeemable noncontrolling interest is recorded with an offsetting reduction to additional paid-in capital. When an adjustment is made to the carrying value of t he redeemable noncontrolling interest, the calculation of shareholders’ net income per share will be adjusted if the redemption value exceeds the greater of the carrying value or fair value. H. Accrued Expenses and Other Current and Non-Current Liabili ties Accrued expenses (current) includes financial and performance guarantee liabilities under pharmacy contracts (see section L), management compensation, and various insurance-related liabilities, including experience-rated refunds, reinsurance contract s and the risk adjustment and minimum medical loss ratio rebate accruals under The Patient Protection and Affordable Care Act. Other non-current liabilities include obligations for pension, other postretirement and postemployment benefits (see Note 13 ), GMIB contract liabilities (see Note 8 ) and self-insured exposures not expected to be settled within one year. Legal costs to defend the Company’s litigation and arbitration matters are expensed when incurred in cases where the Company cannot reasonably estimate the ultimate cost to defend. If the Company can reasonably estimate the cost to defend, a liability for these costs is accrued when the claim is reported. I. Translation of Foreign Currencies The Company generally conducts its int ernational business through foreign operating entities that maintain assets and liabilities in local currencies that are generally their functional currencies. The Company uses exchange rates as of the balance sheet date to translate assets and liabilitie s into U.S. dollars. Translation gains or losses on functional currencies, net of applicable taxes, are recorded in accumulated other comprehensive income (loss). The Company uses average monthly exchange rates during the year to translate revenues and e xpenses into U.S. dollars. J. Premiums and Related Expenses Premiums for group life, accident and health insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period. Benefits and expenses are recogniz ed when incurred and, for our Integrated Medical insured business, are presented net of pharmaceutical manufacturer rebates. For experience-rated contracts, premium revenue includes an adjustment for experience-rated refunds based on contract terms and ca lculated using the customer’s experience (including estimates of incurred but not reported claims). Premium revenue also includes an adjustment to reflect the estimated effect of rebates due to customers under the commercial minimum medical loss ratio provisions of the ACA. These rebates are settled in the year following the policy year. Premiums received for the Company’s Medicare Advantage plans and Medicare Part D products from the Centers for Medicare and Medicaid Services (“CMS”) and customers ar e recognized as revenue ratably over the contract period. CMS provides risk-adjusted premium payments for Medicare Advantage Plans and Medicare Part D products based on the demographics and wellness of customers. The Company recognizes periodic changes t o risk-adjusted premiums as revenue when the amounts are determinable and collection is reasonably assured. Additionally, Medicare Part D premiums include payments from CMS for risk sharing adjustments. The risk sharing adjustments are estimated quarterl y based on claim experience by comparing actual incurred drug benefit costs to estimated costs submitted in original contracts. These adjustments may result in more or less revenue from CMS. Final revenue adjustments are determined and settled with CMS i n the year following the contract year. Premium revenue also includes an adjustment to reflect the estimated effect of rebates due to CMS under the Medicare Advantage and Medicare Part D minimum medical loss ratio provisions of the ACA. The ACA prescribe d three programs to mitigate the risk for participating health insurance companies selling coverage on the public exchanges: risk adjustment, reinsurance and risk corridor. The reinsurance and risk corridor programs expired at the end of 2016, while the permanent risk adjustment program continues. The risk adjustment program reallocates funds from insurers with lower risk populations to insurers with higher risk populations based on the relative risk scores of participants in non-grandfathered plans in the individual and small group markets, both on and off the exchanges. We estimate our receivable or payable based on the risk of our members compared to the risk of other members in the same state and market, considering data obtained from industry studi es and the United States Department of Health and Human Services (“HHS”). Receivables or payables are recorded as adjustments to premium revenue based on our year-to-date experience when the amounts are reasonably estimable and collection is reasonably as sured. Final revenue adjustments are determined by HHS in the year following the policy year. Premiums for individual life, accident and supplemental health insurance and annuity products, excluding universal life and investment-related products, are reco gnized as revenue when due. Benefits and expenses are matched with premiums. Revenue for universal life products is recognized as follows: Investment income on assets supporting universal life products is recognized in net investment income as earned. C harges for mortality, administration and policy surrender are recognized in premiums as earned. Administrative fees are considered earned when services are provided. Benefits and expenses for universal life products consist of benefit claims in excess of policyholder account balances and income earned by policyholders. Expenses are recognized when claims are incurred, and income is credited to policyholders in accordance with contract provisions. The unrecognized portion of premiums received is recorded as unearned premiums included in insurance and contractholder liabilities (see Note 7 for further information ). K. Fees and Related Expenses The majority of the Company’s service fees are derived from administrative services only (“ASO”) a rrangements 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 medical and specialty services, including pharmacy benefits. Generally, the Company’s ASO a rrangements are short-term. Contract modifications typically occur on renewal and are prospective in nature. In return for fees from these clients, the Company provides or makes available various services supporting benefit management and claims admini stration. In addition, services offered through our Integrated Medical segment include access to the Company’s participating provider networks, disease management, utilization management, and cost 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 contracted rates based on current 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 Consolidated Statements of Income. For most ASO arrangements, 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 advan ce. Deferred revenue is recorded as a contract liability and recognized when the related services are performed. The balance was immaterial as of December 31, 2018 and 2017. The Company may also provide performance guarantees that provide potential refu nds to clients 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 dolla r amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accrued expenses and other liabilities (current). The amount of revenue deferred is estimated for each type of guarantee, using ei ther 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 information on the Company’s performance becomes ava ilable, and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for performance guarantees during the reporting periods were not material. Rebates from pharmaceutical manufacturers resulting from ASO clie nt utilization at retail pharmacies, net of amounts payable to ASO clients, are compensation for pharmacy services and recorded in fees and other revenues. Rebates generally represent a per-script amount from the manufacturer and are determined based on s cripts filled during the reporting period. Expenses associated with administrative programs and services are recognized in selling, general and administrative expenses as incurred. The Company also earns fees by providing integrated medical benefit ma nagement solutions that drive cost reductions and improve quality outcomes. These solutions were part of the business acquired from Express Scripts. Clients are primarily sponsors of health benefit plans and f ees ma y be stated as a per-member-per- month f ee or as a per-claim fee. The Company considers the services to be a single performance obligation to stand ready to provide utilization management services over the contract period (generally three years). In certain arrangements, the Company assumes th e financial obligation for third-party provider costs for medical services provided to the health plan’s members. Fees are recorded gross in revenues because the Company is acting as a principal in arranging for and controlling the services provided by th ird-party network providers. Contractual fees vary based on enrollment and provider costs and are estimated, billed, due and recognized monthly. Direct costs associated with these programs are included in pharmacy and service costs. Certain medical bene fit management contracts require the Company to share the results of medical cost experience that differs from specified targets. This variable consideration is estimated at contract inception and adjusted through the contract period. The estimated profi ts and costs are recognized net in revenues. L. Pharmacy Revenues and Costs Pharmacy Revenues. Pharmacy revenues include revenue from the acquired Express Scripts business and the Company’s legacy mail order pharmacy business. Pharmacy revenues are recognized when control of the promised goods or services is transferred to clients, in an amount that reflects the consideration the Company expects to receive for those goods or services. The Express Scripts business provides or makes available vari ous services supporting benefit management and claims administration and is generally obligated to provide prescription drugs to clients’ members through multiple distribution methods including retail networks, home delivery and specialty pharmacies. Thes e goods and services are integrated into a single performance obligation to process claims, dispense prescription drugs, and provide other services over the contract period (generally three years). The Company has elected the practical expedient to accoun t for shipping and handling as a fulfillment activity. This performance obligation is satisfied as the business stands ready to fulfill its obligation. Fees are billed, due and recognized at contract rates either on a periodic basis or as services are provided (such as, based on volume of claims processed). This recognition pattern aligns with the benefits from services provided. Revenues for dispensing prescription drugs through retail pharmacies consist of the prescription price (ingredient cost and dispensing fee) contracted with clients, including the member co-payment, and any associated fees for services because we act as principal in these arrangements. When a prescription is presented to a retail network pharmacy, we are solely responsible for member eligibility, drug utilization review, drug-to-drug interaction review, any required clinical intervention, plan provision information, payment to the pharmacy and client billin g. These revenues are recognized based on the full prescription price when the pharmacy claim is processed and approved for payment. We also provide benefit design and formulary consultation services to clients, and negotiate separate contractual relatio nships with clients and network pharmacies. These factors indicate that we have control over these transactions until the prescription is dispensed. Home delivery and specialty pharmacy revenues are due and recognized as each prescription is shipped, net of reserves for discounts and contractual allowances estimated based on historical experience. Any differences between estimates and actual collections are reflected in operations when payments are received. Historically, adjustments to original estimat es and returns have not been material. We may also provide certain financial and performance guarantees, including a minimum level of discounts a client may receive, generic utilization rates and various service levels. Clients may be entitled to receive performance penalties if we fail to meet guarantees. Actual performance is compared to the guarantee for each measure throughout the period and the Company defers revenue for any estimated payouts within accrued expenses and other liabilities (current). These estimates are adjusted at the end of the guarantee period. Historically, adjustments to original estimates have not been material. The balance was $ 895 m illion as of December 31, 2018 and immaterial as of December 31, 2017 . The ac quired Ex press Scripts business and Cigna’s legacy home delivery business administer a program through which we receive rebates and administrative fees from pharmaceutical manufacturers. If these rebates and administrative fees are provided in conjunction with cla ims processing and home delivery services provided to clients, the amount payable to clients is recorded as a reduction of pharmacy revenues. These amounts are based on expected sharing percentages in contractual arrangements. These estimated payables ar e adjusted when amounts are collected from pharmaceutical manufacturers. Historically, these adjustments have not been material. If pharmacy rebates and administrative fees are provided in a contract that does not include claims processing, the performan ce obligation is to arrange for the customer to receive these rebates. In these cases, rebates and administrative fees are recorded as pharmacy revenue, net of contractual amounts payable to the client. Other pharmacy service r evenues are earned by distr ibuting specialty pharmaceuticals and medical supplies to providers, clinics and hospitals and services to specialty pharmacy manufacturers. These revenues are recognized as prescriptions and supplies are shipped and services provided. Pharmacy costs. P harmacy costs include the cost of prescriptions sold and for the acquired Express Scripts business, network pharmacy claim costs and co-payments. Also included are direct costs of dispensing prescriptions including supplies, shipping and handling. Home d elivery costs are recognize d when the drug is shipped and r etail network costs are recognized when the drug is dispensed. Pharmacy rebates and administrative fees received for providing claims processing and home delivery services are recorded as a reduct ion of pharmacy costs. Rebates are recognized as prescriptions are shipped or dispensed. For periods followin |
Cash and Cash Equivalents | A. Cash and Cash Equivalents Cash and cash equivalents are carried at cost that approximates fair value. Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase. The Company reclassifies cash overdraft positions to liabilities when the legal right of offset does not exist. |
Earnings Per Share | Accounting policy. The Company computes basic earnings per share using the weighted-average number of unrestricted common and deferred shares outstanding. Diluted earnings per share also includes the dilutive effect of outstanding employee stock options and restricted stock using the treasury stock method and the effect of strategic performance shares. |
Reinsurance | Reinsurance does not relieve the originating insurer of liability. Therefore, reinsured liabilities mu st continue to be reported along with the related reinsurance recoverables. GMDB is accounted for as reinsurance and GMIB assets and liab ilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other current assets and other assets, and GMIB liabilities are reported in accrued expenses and other liabilities and other non-current liabilities. Accounting policy. 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 product. 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 below ). |
Fair Value Measurements | Assumptions used in fair value measurement. GMIB assets and liabilities are established using capital market assumptions and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). The Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy described in Note 10 because assumptions related to future annuitant behavior are largely unobservable. The only assumption expected to impact future shareholders’ net i ncome is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, a nd (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calculate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these ass umptions 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 co nditions, 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 t he liability with the creditor. The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GA AP. 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 unob servable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobse rvable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant may use to estimate fair valu e. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quali ty, as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participa nt would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining f air 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 and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent approp riate 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 e xceptions 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 th eir 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 pricing process. Level 2 Financial Assets and Financial Liabilities Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant. Fixed maturities and equity securities. Approximately 96 % of the Company’s investments in f ixed 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. Third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics because many fixed maturities do not trade daily. Pricing models are used to determine these prices when recent trades are not available. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry a nd economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pri cing models. Less than 1 % of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice. Short-term investments are carried at fair value which approximates cost. The Company compares market prices for these securities to recorded amounts on a regular basis to validate that current carrying amounts approximate exit prices. The sh ort-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. Derivative assets and liabilities classified in Level 2 represent over-the-counter instruments such as foreign currency forward and swap contracts. Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and wide ly published market observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties a nd determined that no adjustment for credit risk was required as of December 31, 2018 or 2017 . The nature and use of these derivative financial instruments are described in Note 9 . 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 bonds and exchange-listed equity securities. A relatively small portion of the Company’s investment assets are classified in this category given the narro w definition of Level 1 and the Company's investment asset strategy to maximize investment returns. Level 3 Financial Assets and Financial Liabilities Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants woul d 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 in Level 3. Approximately 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 as well as 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. Inputs and assumptions for pricing may also include collateral attributes and prepayment speeds for mortgage and other asset-backed securities. Re cent 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 statements. Mortgage and other asset-backed securities. The significant unobservable inputs used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads. An adjustment for liquidity is made as of the measurement date that considers current market conditions, issuer circumstances and complexity of the security structure when there is limited trading activity for the security. A n adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no stand ard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations. Corporate and government fixed maturities . The signifi cant unobservable input used to value the following corporate and government fixed maturities is an adjustment for liquidity. An adjustment is needed to reflect current market conditions and issuer circumstances when there is limited trading activity for the security. 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. T he unobservable inputs are generally not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input. Total gains and losses included in shareholders’ net income in the table above are reflected in the Consolidated Statements of Income as realized investment gains (losses) and net investment income. Gains and losses included in other comprehensive income in the tables above are reflected in net unrealized appreciation (depreciation) on securities in the Consolidated Statements of Comprehensive Income. Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company’s bes t estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Separate account assets 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 commercial mortgage loans as we ll as certain newly issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above. 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 including investment real estate and commercial mortgage loans, and certain equity securities with no readily determinable fair value. |
Separate Accounts | Separate A ccount s Accounting policy. Separate account assets and liabilities are contractholder funds maintained in accounts with specific investment objectives. The assets of these accounts are legally segregated and are not subject to claims that arise out of any of the Company’s other businesses. These separate account assets are carried at fair value with equal amounts recorded for related separate account liabilities. The investment income and fair value gains and losses of these accounts gene rally accrue directly to the contractholders and, together with their deposits and withdrawals, are excluded from the Company’s Consolidated Statements of Income and Cash Flows. Fees and charges earned for mortality risks, asset management or administrati ve services are reported in either premiums or fees and other revenues. I nvestments that are measured using the practical expedient of NAV are excluded from the fair value hierarchy. |
Investments | Cigna’s investment portfolio consists of a broad range of investments including fixed maturities, equity securities, commercial mortgage loans, policy loans, other long-term investments, short-term investments, and derivative financial instruments. The sections below provide more detail regarding our accounting policies, investment balances, net investment income and realized investment gains and losses. See Note 10 for information about valuation of the Company’s investment portfolio. Fixed maturities, commercial mortgage loans, derivative financial instruments, and short-term investments with contractual maturities during the next 12 months are classified on the balance sheet as curren t investments, unless they are held as statutory deposits or restricted for other purposes, where they are classified in long-term investments. Equity securities classified as current include exchange traded funds that are used in our cash management proc ess. All other investments are classified in long-term investments. The following table summarizes the Company’s investments by category and current or long-term classification . Fixed Maturities Accounting policy. Fixed maturities (including bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor) are classified as available for sale and are carried at fair value with changes in fair value recorded in accumulated other comprehensive income (loss) within shareholders’ equity. Net unrealized appreciation on investments supporting the Company’s run-off settlement annuity business is reporte d in future policy benefit liabilities rather than accumulated other comprehensive income (loss). The Company records impairment losses in net income for fixed maturities with fair value below amortized cost that meet either of the following conditions: If the Company intends to sell or determines that it is more likely than not to be required to sell these fixed maturities before the ir fair values recover , an impairment loss is recognized for the excess of the amortized cost over fair value. If the net present value of projected future cash flows of a fixed maturity (based on qualitative and quantitative factors, including the probability of default, and the estimated timing and amount of recovery) is below the amortized cost basis, that difference is re cognized as an impairment loss. For mortgage and asset-backed securities, estimated future cash flows are also based on assumptions about the collateral attributes including prepayment speeds, default rates and changes in value. Debt securities are classified as either current or long-term investments based on their contractual maturities. 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 recovery. Equity Securities Accounting policy. Upon adopting ASU 2016-01 beginning in 2018, changes in the fair values of equity securities that have a readily determinable fair value (primarily exchange-traded funds) are reported in net realized investment gains (losses). As of December 31, 2018 , the fair values of these securities were $ 415 million and cost was $ 433 million. Also beginning in 2018, private equity securities of $ 89 million as of December 31, 2018 without a readily determin able 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 inclu de hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in net realized investment gains (losses) and dividends reported in net investment income. Accounting policy. Commercial mortgage loans are carried at unpaid principal balances or, if impaired, the lower of unpaid principal or fair value of the underlying real estate. See the “Impaired commercial mortgage loans” section below for the Company’s accounting policy for impaired commercial mortgage loans. Commercial mortgage loans are classified as either current or long-term investments based on their contractual maturiti es. Credit quality . The Company regularly evaluates and monitors credit risk, beginning with the initial underwriting of a mortgage loan and continuing throughout the investment holding period. Mortgage origination professionals employ an internal credit quality rating sys tem designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on a consistent and ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan. Quality ratings are based on our evaluation of a number of key inputs related to the loan, including real estate market-related factors such as rental rates and vacancies, and proper ty-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on debt, with a ratio below 1.0 indicating 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 collateralizing the loan. The Company re - evaluate s a loan’s credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been i mpacted. 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 most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current l eases, lease expirations and rental conditions in each market, the Company estimated the current year and future stabilized property income and fair value for each loan. Impaired commercial mortgage loans. A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due per the terms of the promissory note. Impaired loans are carried at the lower of the unp aid principal balance or fair value of the underlying collateral. Interest income on impaired mortgage loans is only recognized when a payment is received . Policy Loans Accounting p olicy. Policy loans, primarily associated with our corporate owned life insurance business, are carried at unpaid principal balances plus accumulated interest, the total of which approximates fair value. These loans are collateralized by life insurance policy cash values and therefore have minimal exposure to credit loss. Interest rates are re set annually based on a rolling average of benchmark interest rates. 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 , based on the financial statements of the underlying investments that are generally reported at fair value. Income from these investments is reported on a one quarter lag due to the timing of when financial information is received from the general partner or manager of the investments. Other long-term investments also include investment real estate carried at depreciated cost less any impairment write- downs to fair value when cash flows indicate that the carrying value may not be recoverable. Depreciation is generally recorded using the straight-line method based on the estimated useful life of each asset. Short-Term Investments and Cash Equivalents Accounting policy. Security investments with maturities of greater than three months to one year from time of purchase are classified as short-term, available for sale and carried at fair value that approximates cost. Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase and are carried at cost that approximates fair value. Accounting policy. Derivatives are recorded on our balance sheet at fair value and are classified as current or non-current according to their contractual maturities. Further information on our policies for determining fair value are discussed in Note 10 . Derivative cash flows are generally reported in operating activities. The Company applies hedge accounting when derivatives are designated, qualified and 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 othe r when reported in shareholders’ net income. Various qualitative or quantitative methods appropriate for each hedge are used to formally assess and document hedge effectiveness at inception and each period throughout the life of a hedge. Fair value hed ges of the foreign exchange-related changes in fair values of certain fixed maturity foreign-denominated bonds: Swap fair values are reported in long -term investments or o ther non-current 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. Th e 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. Net investment hedges of c ertain foreign subsidiaries that conduct their business principally in Euros: The fair values of the swap contracts are reported in o ther assets o r other non-current liabilities. The changes in fair values of these instruments are reported in other compr ehensive 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 remainin g changes in swap fair value are excluded from the effectiveness assessment and recognized in selling, general and administrative expenses as swap coupon payments are accrued. The notional value of hedging instruments matches the hedged amount of subsidia ry net assets. Economic hedges for derivatives not designated as accounting hedges: Fair values of derivative instruments are reported in current investments or accrued ex penses and other liabilities . The c hanges in fair values are reported in net realiz ed investment gains and losses. Net Investment Income Accounting policy. When interest and principal payments on investments are current, the Company recognizes interest income when it is earned. The Company recognizes interest income on a cash basis when interest payments are delinquent based on contractual terms or when certain terms (interest rate or maturity date) of the investment have been restructured . For unconsolidated entities that are included in Other long-term investments, investment income is generally recognized according to the Company’s share of the reported income or loss on the underlying investments . Investment income attributed to the Company’s separate accounts is excluded from our earnings because associated gains and losses generally accrue directly to separate account policyholders. Realized Investment Gains And L osses Accounting policy. Realized investment gains and losses are based on specifically identified assets and result s 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. |
Derivative Financial Instruments | Accounting policy. The Company reports GMIB liabilities and assets as derivatives at fai r value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments . The Company receives and pays fees periodically based on ei ther contractholders’ account values or deposits increased at a contractual rate. The Company will also pay and receive cash depending on changes in account values and interest rates when contractholders first elect to receive minimum income payments. Ca sh flows on these contracts are reported in operating activities. |
Variable Interest Entities | When the Company becomes involved with a variable interest entity, as well as when the re is a change in the Company’s involvement with an entity, the Company 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. |
Pension and other postretirement benefits | Accounting policy. The Company measures the assets and liabilities of its domestic pension and other postretirement benefit plans as of December 31. Benefit obligations are measured at the present value of estimated future payments bas ed on actuarial assumptions. C hanges in these assumptions are called net unrecognized actuarial gains (losses) because t he Company uses the “corridor” method to account for changes in the benefit obligation when actua l results differ from those assumed, or when assumptions change. Under the corridor method, net unrecognized actuarial gains (losses) are initially recorded in accumulated other comprehensive income. When the unrecognized gain (loss) exceeds 10% of the b enefit obligation, that excess is amortized to expense over the expected remaining lives of plan participants. The net plan expense is reported in interest expense and other in the Consolidated Statements of Income. For balance sheet purposes, we measure plan assets at fair value. When the actual return differs from the expected return, those differences are reflected in the net unrealized actuarial gain (loss) discussed above. However, to measure pension benefit costs, we use a “market-related” asset v aluation that differs from the actual fair value for domestic pension plan assets invested in non-fixed income investments. The “market-related” value recognizes the difference between actual and expected long-term returns in the portfolio over five years , a method that reduces the short-term impact of market fluctuations on pension costs. The Company used the Society of Actuaries mortality table RP2014 and the updated improvement scales published in 2017 and 2018 to value its benefit obligations because the Company’s mortality experience closely matched these tables based on internal stud ies. The updated improvement scales published in 2017 and 2018 both indicated that mortality improvement is expected to be lower than was originally projected when the study was first published in 2014, resulting in decreases to the benefit obligations in both years. The Company set s discount rates by applying actual annualized yields for high quality bonds at various durations to the expected cash flows of the pension and other postretirement benefits liabilities. A discount rate curve is constructe d using an array of bonds in various industries throughout the domestic market, but only selects those for the curve that have an above average return at each duration. Management believe s that this curve is representative of the yields that the Company i s able to achieve through its plan asset investment strategy. Expected long-term rates of return on plan assets were developed considering actual long-term historical returns, expected long-term market conditions, plan asset mix and management’s investmen t strategy that continues a significant allocation to domestic and foreign equity securities as well as securities partnerships, real estate and hedge funds. Expected long-term market conditions take into consideration certain key macroeconomic trends inc luding expected domestic and foreign GDP growth, employment levels and inflation. See Note 10 for further details regarding how fair value is determined, including the level within the fair value hierarchy and the procedures we use to validate fai r value measurements . The Company classifies substantially all fixed maturities in Level 2 for pension plan assets. These assets are valued using recent trades of similar securities or are fund investments priced using their daily net asset value that is the exit price. A substantial portion of domestic equity securities within pension assets are classified as Level 1, while international equity funds within pension assets are predominantly classified in Level 2 using daily net asset value. S ecurities pa rtnerships, r eal estate and hedge funds are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. See Note 10 for additional disclosures related to these assets invested in the separate accounts of the Company’s s ubsidiaries. Certain securities as described in Note 10 , as well as commercial mortgage loans and guaranteed deposit account contracts , are classified in L evel 3 because unobservable inputs used in their valuation are significant. |
Employee Incentive Plans | Prior to t he acquisition of Express Scripts, the Company issued shares from Treasury stock for these awards. Following the acquisition, original issues shares were used. A wards of Express Scripts options and restricted stock units were rolled over to Cigna stock options and restricted stock units in connection with the Express Scripts acquisition on December 20, 2018 a s explained further in Note 3 . I nformation in this footnote includes the effect of the Express Scripts r ollover awards u nless otherwise indicated. The Company record s compens ation expense for stock and option awards over their vesting periods pri marily based on the estimated fair value at the grant date. Fair value is determined differently for each type of award as discussed below. Accounting policy. The Company awards options to purchase Cigna common stock at the market price of the stock on the grant date except for rollover option awards issued to Express Scripts employees in connection with the acquisition (see Note 3 ). Options vest over periods ranging from one to three years and expire no later than 10 years from grant date. Fair value is estimated using the Black-Scholes option-pricing model by applying the assumptions presented below. That fa ir value is reduced by options expected to be forfeited during the vesting period. The Company estimates forfeitures at the grant date based on our experience and adjusts the expense to reflect actual forfeitures over the vesting period. The fair value o f options, net of forfeitures, is recognized in selling, general and administrative expenses on a straight line basis over the vesting period. Black-Scholes option-pricing model assumptions and the resulting fair value of options are presented in the following table. 2018 2017 2016 Dividend yield 0.0% 0.0% 0.0% Expected volatility 35.0% 35.0% 35.0% Risk-free interest rate 2.5% 1.8% 1.2% Expected option life 4.4 years 4.3 years 4.3 years Weighted average fair value of options $ 64.18 $ 46.38 $ 42.01 The expected volatility reflects the past daily stock price volatility of Cigna stock. The Company does not consider volatility implied in the market prices of traded options to be a good indicator of future volatility because remaining traded options will expire within one year. The risk-free interest rate is derived using the four-year U.S. Treasury bond yield rate as of the award date for the primary annual grant. Expected option life reflects the Company’s historical experience. Accounting policy. Fair value of restricted stock awards is equal to the market price of Cigna’s common stock on the date of grant. This fair value is reduced by awards tha t are expected to forfeit. At the grant date, the Company estimates forfeitures based on experience and adjusts the expense to reflect actual forfeitures over the vesting period. This fair value, net of forfeitures, is recognized in selling, general and administrative expenses over the vesting period on a straight- line basis. Accounting policy. Compensation expense for SPSs is recorded over the performance period. F air value is determined at the grant date f or “market condition” SPSs using a Monte Carlo simulation model and not subsequently adjusted regardless of the final outcome. E xpense is initially accrued f or “performance condition” SPSs based on the most likel y outcome, but evaluated for adjustment each period for updates in the expected outcome. E xpense is adjusted to the actual outcome (number of shares awarded times the share price at the grant date) a t the e nd of the performance period. T he Company estima tes forfeitures a t the grant date based on experience and adjusts the expense to reflect actual forfeitures over the vesting period. Compensation Cost and Tax Effects of Share-based Compensation T he Company records tax benefits in shareholders’ net income d uring the vesting period based on the amount of expense being recognized . T he difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in net income w hen stock options are exercised, or when restricted stock and SPSs vest . |
Goodwill | Accounting policy. Goodwill represents the excess of the cost of businesses acquired over the fair value of their net assets. The resulting goodwill is assigned to those reporting units expected to realize cash flows from the acquisition, allocated to reporting units based on relative fair values, primarily reported in the Health Services segment ($ 33.7 billion), the Integrated Medical segment ($ 10.5 billion) and, to a lesser extent, the International Markets segment ($0.3 billion). The Company evaluates goodwill for impairment at least annually during the third quarter at the reporting unit level and writes it down through shareholders’ net income if impaired. Fair value of a reporting unit is generally estimated based on either market data or a discoun ted cash flow analysis using assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. The significant assumptions and estimates used in determining fair value include the discount rate and future cash flows. A discount rate is selected to correspond with each reporting unit’s weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies with in that reporting unit. Projections of future cash flows for each reporting unit are consistent with our annual planning process for revenues, claims, operating expenses, taxes, capital levels and long-term growth rates. |
Other intangibles | The significant increase in goodwill during 2018 reflects the Company’s acquisition of Express Scripts as further discussed in Note 3 . Other Intangibles Accounting policy. The Company’s other intangible assets include purchased customer and producer relationships, provider networks and trademarks. The fair value of purchased customer relationships and the amortization method were determined as of the dates of purchase using an income approach that relies on projected future net cash flows in cluding key assumptions for customer attrition and discount rate s . The Company amortizes other intangibles on an accelerated or straight-line basis over periods from 0.3 to 39 years. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value. Costs incurred to renew or extend the terms of these intangible assets are generally expensed as incurred. |
Property and Equipment | Accounting policy. Property and equipment is carried at cost less accumulated depreciation. Cost includes interest, real estate taxes and other costs incurred during construction when applicable. Internal-use software that is acquired, developed or modified solely to meet the Company’s internal needs, with no plan to market externally, is also includ ed in this category. Costs directly related to acquiring, developing or modifying internal-use software are capitalized. The Company calculates depreciation and amortization principally using the straight-line method generally based on the estimated usef ul life of each asset as follows: buildings and improvements, 10 to 40 years; purchased software, three to five years; internally developed software, three to seven years; and furniture and equ ipment (including computer equipment), three to 10 years. Improvements to leased facilities are depreciated over the lesser of the remaining lease term or the estimated life of the improvement. The Company considers events and circ umstances that would indicate the carrying value of property, equipment or capitalized software might not be recoverable. An impairment charge is recorded if the Company determines the carrying value of any of these assets is not recoverable. The Company also reviews and shortens the estimated useful lives of these assets, if necessary. |
Income Taxes | Accounting policy. Deferred income taxes are reflected in the balance sheet for differences between the financial and income tax reporting bases of the underlying assets and liabilities, and established based upon enacted tax rates and laws. Deferred income tax assets are recognized when available evidence indicates that realization is more likely than not, and to the extent this standard is not met a valuation allowance is established. The deferred income tax provision g enerally represents the net change in deferred income tax assets and liabilities during the reporting period excluding adjustments to accumulated other comprehensive income or amounts recorded in connection with a business combination. The current income tax provision generally represents estimated amounts due on income tax returns for the year reported to various jurisdictions plus the effect of any uncertain tax positions. The Company recognizes a liability for uncertain tax positions if management beli eves the probability that the positions will be sustained is less than 50 percent. |
Commitments and Contingencies | Pending litigation and legal or regulatory matters that the Company has identified with a reasonably 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 shareho lders’ 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 ot her 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. |
Segment Information | Effective with the fourth quarter of 2018, the Company uses adjusted income from operations on a before-tax basis as its principal financial measure of segment operating performance. Prior year segment information has been adjusted to reflect this change and a description of our basis for reporting segment operating results is outlined below. Intersegment transactions primarily reflect home delivery pharmacy sales to insured customers of the Integrated Medical segment. These transactions are eliminated in consolidation. The Comp any uses “pre-tax adjusted income from operations” as its pri ncipal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability. Pre-tax adjusted income from operations is defined as income before taxes excluding realized investment results, amortization of acquired intangible assets, results of transitioning clients 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 gains (losses) , including changes in market values of certain financial instruments between balance sh eet dates, as well as gains and losses associa ted with invested asset sales Amortization of acquired intangible assets , because these relate to costs incurred for acquisitions Results of transitioning clients, because those results are not indicative of o ngoing results Special items, if any, that management believes are not representative of the underlying 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 table below. |
Accounting Policies - Unpaid Cl
Accounting Policies - Unpaid Claims and Claims Expenses (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Integrated Medical [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for unpaid claims and claims expenses | Accounting policy. The Company uses actuaria l principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best est imate of the ultimate liability along with a margin for adverse deviation . This approach is consistent with actuarial standards of practi ce that the liabilities be adequate under moderately adverse conditions. |
Other Segments [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for unpaid claims and claims expenses | Accounting policy. Liabilities for unpaid claims and claim expenses are established by book of business within the Company ’ s International Markets segment and Group Disability and Other . L iabilit ies for unpaid claims and claim expenses within the g roup d isability and l ife business consist of the following primary products: long-term and short-term disability, life insurance, and accident coverages. Unpaid claims and claim expenses consist of (1) case o r claims reserves for reported claims that are unpaid as of the balance sheet date; (2) incurred but not reported reserves for claims whe n the insured event has occurred but has not been reported to the Company; and (3) loss adjustment expense reserves for the expected costs of settling the se claims . The Company consistently estimates incurred but not yet reported losses using actuarial principles and assumptions based on historical and projected claim incidence patterns, claim size and the expected paymen t period. The Company recognizes the actuarial best estimate of the ultimate liability within a level of confidence, consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. T he Company immediately records an adjustment in medical costs and other benefit expenses w hen estimates of these liabilities change. |
Accounting Policies - Guarantee
Accounting Policies - Guaranteed Minimum Death Benefits (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member] | |
Activity in future policy benefits reserves for GMDB business [Line Items] | |
Future Policy Benefits | GMDB is accounted for as reinsurance and GMIB assets and liab ilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other current assets and other assets, and GMIB liabilities are reported in accrued expenses and other liabilities and other non-current liabilities. Accounting policy. 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 product. 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 below ). The ending net retained reserve covers ongoing administrative expenses, as well as minor claim exposure retained by the Company. Accounting policy. The Company reports GMIB liabilities and assets as derivatives at fai r value because cash flows of these liabilities and assets are affected by equity markets and interest rates, but are without significant life insurance risk and are settled in lump sum payments . The Company receives and pays fees periodically based on ei ther contractholders’ account values or deposits increased at a contractual rate. The Company will also pay and receive cash depending on changes in account values and interest rates when contractholders first elect to receive minimum income payments. Ca sh flows on these contracts are reported in operating activities. Assumptions used in fair value measurement. GMIB assets and liabilities are established using capital market assumptions and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). The Company classifies GMIB assets and liabilities in Level 3 in the fair value hierarchy described in Note 10 because assumptions related to future annuitant behavior are largely unobservable. The only assumption expected to impact future shareholders’ net i ncome is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, a nd (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities. Significant decreases in assumed lapse rates or spreads used to calculate non-performance risk of the Company, or significant increases in assumed annuity election rates or spreads used to calculate the non-performance risk of the reinsurers, would result in higher fair value measurements. A change in one of these ass umptions is not necessarily accompanied by a change in another assumption. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Requirements and Effects of New Accounting Guidance | Accounting Standard and Adoption Date Requirements and Effects of Adopting New Guidance GUIDANCE ADOPTED JANUARY 1, 2018 Revenue from Contracts with Customers (Accounting Standards Update (“ASU”) 2014-09 and related amendments) 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 pharmacy contracts with customers • Adopted through full retrospective restatement • Cumulative-effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2015 balance of retained earnings. This 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 Integrated Medical segment affecting premiums, fees and other revenues, benefit expenses, and selling, general and administrative expenses and had no impact on revenue recognition patterns or net income. Expedients and exemptions elected: • Incremental costs of obtaining service and pharmacy contracts for short-term arrangements are expensed as incurred. • The Company does not disclose information about the aggregate amount of transaction price allocated to remaining performance obligations as its contracts are either short-term, or the remaining transaction price consists of variable consideration that relates specifically to wholly unsatisfied future periods of service. See the discussion of the Company’s accounting policies for fees and pharmacy revenues beginning on page 91. Accounting Standard and Adoption date Requirements and Effects of Adopting New Guidance GUIDANCE ADOPTED JANUARY 1, 2018 Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) 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 having a readily determinable fair value that were previously reported in accumulated other comprehensive income (“AOCI”) are now reported in net realized investment gains (losses). • 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 eligibility requirements for financial and nonfinancial hedging strategies 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 AOCI, 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 9 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 AOCI 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-K 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 AOCI • Allows companies to apply the guidance retrospectively or in the period of adoption Effects of adoption: AOCI of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 12 for additional information including accounting policy disclosures. Accounting Standard and Effective Date Requirements and Expected Effects of New 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 will adopt this ASU in the first quarter of 2019 on a modified retrospective basis and will not restate comparative periods. While we are still finalizing our adoption procedures, we estimate the primary impact to our Consolidated Balance Sheet will be an increase to assets and liabilities of approximately $700 million for the right-of-use asset and corresponding lease liability related to existing operating leases. We do not expect the impact to retained earnings to be material. • The Company elected the optional practical expedient to retain the current classification of leases, and therefore, we do not expect a material impact to the Consolidated Statements of Income or Cash Flows. • The Company has implemented a new lease system and developed requisite changes to internal controls over financial reporting. • The Company is continuing to work to develop required disclosures. • The Company adopted this new guidance as of the effective date and will not present comparative periods in the financial statements, as recently allowed. Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020, with early adoption permitted as of January 1, 2019 Requires: • A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments such as mortgage loans, reinsurance recoverables and other receivables when such instruments are first originated or acquired. • Changes in the criteria for impairment of available-for-sale debt securities • Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings Expected effects: • The Company is continuing to evaluate this new standard and its effects on our financial statements and disclosures. We expect to adopt the standard as of January 1, 2020. • An additional allowance for future expected credit losses for certain financial instruments may be required at adoption. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020, with early adoption permitted as of January 1, 2017 Guidance: • Simplifies the accounting for goodwill impairment by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment • Redefines the amount of goodwill impairment to equal the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill of the reporting unit • Requires prospective adoption Expected effects: • The Company is evaluating this new standard and its expected timing of adoption. Accounting Standard and Effective Date Requirements and Expected Effects of New Guidance Not Yet Adopted 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 International Markets segment and Group Disability and Other. |
Accounts Receivable, Net | (In millions) 2018 2017 Insurance customer receivables $ 1,888 $ 1,818 Noninsurance customer receivables 4,988 441 Pharmaceutical manufacturers receivable (1) 3,321 645 Other receivables 276 251 Total accounts receivable, net $ 10,473 $ 3,155 (1) Includes $406 million at December 31, 2018 and $336 million at December 31, 2017 of receivables under noninsurance customer contracts. |
Mergers and Acquisitions (Table
Mergers and Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions and Dispositions [Abstract] | |
Merger-related costs | (Dollars and shares in millions, except per share amounts) Cash consideration Express Scripts common stock outstanding 564.3 Cash consideration per share $ 48.75 Cash consideration paid to Express Scripts common stockholders $ 27,510 Cash paid in lieu of fractional shares $ 4 Cash consideration paid to Express Scripts performance share holders $ 65 Total cash consideration $ 27,579 Stock consideration Express Scripts common stock outstanding 564.3 Per share exchange ratio 0.2434 Shares of Cigna issued to Express Scripts common stockholders 137.3 Shares of Cigna issued to Express Scripts performance share holders and other equity holders 0.3 Shares of Cigna issued to Express Scripts shareholders 137.6 Closing price of Cigna common stock on December 20, 2018 $ 179.80 Total stock consideration $ 24,745 Noncontrolling interest $ 7 Fair value of other share-based compensation awards $ 479 Total merger consideration $ 52,810 (In millions) Cash and cash equivalents $ 3,517 Receivables 7,802 Inventory 2,483 Other current assets 600 Property and equipment 2,973 Goodwill 38,361 Other identifiable intangible assets 38,725 Other assets acquired, non-current 314 Total assets acquired 94,775 Other current liabilities 18,616 Long-term debt, including current portion 12,816 Deferred income tax liabilities 9,511 Other liabilities, non-current assumed 1,022 Total liabilities acquired 41,965 Total $ 52,810 Estimated Estimated Useful Amortization (In millions) Fair Value Life in Years Method Customer relationships $ 30,210 14-29 Cash flow trended Internal-use software (1) 2,443 3-7 Straight Line Trade name - Express Scripts 8,400 N/A Indefinite Trade name - Other 115 10 Straight Line Total $ 41,168 (1) Reported in property and equipment. Unaudited Year Ended December 31, (In millions, except per share amounts) 2018 2017 Total revenues $ 149,544 $ 143,288 Shareholders’ net income $ 5,632 $ 4,435 2018 2017 2016 (In millions) Before-tax After-tax Before-tax After-tax Before-tax After-tax Interest expense on newly issued debt $ 227 $ 179 $ - $ - $ - $ - Net investment income on debt proceeds (123) (97) - - - - Charitable contributions 200 158 - - - - Legal and advisory fees 204 185 36 23 96 95 Bridge facility fees 140 111 - - - - All other transaction-related costs 204 133 90 69 70 52 Tax (benefit) - previously non-deductible costs - - - (59) - - Transaction-related costs, net $ 852 $ 669 $ 126 $ 33 $ 166 $ 147 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 2018 2017 2016 (Shares in thousands, dollars in millions, except per share amounts) Effect of Effect of Effect of Basic Dilution Diluted Basic Dilution Diluted Basic Dilution Diluted Shareholders’ net income $ 2,637 $ - $ 2,637 $ 2,237 $ - $ 2,237 $ 1,867 $ - $ 1,867 Shares Weighted average 246,652 - 246,652 250,892 - 250,892 255,360 - 255,360 Common stock equivalents 3,573 3,573 4,180 4,180 4,287 4,287 Total shares 246,652 3,573 250,225 250,892 4,180 255,072 255,360 4,287 259,647 EPS $ 10.69 $ (0.15) $ 10.54 $ 8.92 $ (0.15) $ 8.77 $ 7.31 $ (0.12) $ 7.19 |
Antidilutive Options Table | (In millions) 2018 2017 2016 Anti-dilutive options 0.9 0.9 2.3 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt [Table] [Abstract] | |
Short-term and Long-term Debt | (In millions) Issuer 2018 2017 Short-term debt Current maturities: $1,000 million, 2.25% Senior Notes Express Scripts $ 995 $ - Current maturities: $337 million, 7.25% Senior Notes ESI 343 - Commercial paper Old Cigna 1,500 100 Current maturities: $131 million, 6.35% Notes Old Cigna - 131 Other, including capital leases various 117 9 Total short-term debt $ 2,955 $ 240 Long-term uncollateralized debt Cigna debt (issued to finance acquisition) $1,000 million, Floating Rate Notes due 2020 Cigna $ 997 $ - $1,750 million, 3.2% Notes due 2020 Cigna 1,743 - $1,000 million, Floating Rate Notes due 2021 Cigna 996 - $1,250 million, 3.4% Notes due 2021 Cigna 1,245 - $3,000 million, Floating Rate Term Loan due 2021 Cigna 2,997 - $700 million, Floating Rate Notes due 2023 Cigna 697 - $3,100 million, 3.75% Notes due 2023 Cigna 3,085 - $2,200 million, 4.125% Notes due 2025 Cigna 2,187 - $3,800 million, 4.375% Notes due 2028 Cigna 3,774 - $2,200 million, 4.8% Notes due 2038 Cigna 2,178 - $3,000 million, 4.9% Notes due 2048 Cigna 2,964 - Express Scripts debt (assumed in acquisition) $500 million, 4.125% Senior Notes due 2020 Medco 506 - $500 million, 2.600% Senior Notes due 2020 Express Scripts 493 - $400 million, Floating Rate Senior Notes due 2020 Express Scripts 399 - $500 million, 3.300% Senior Notes due 2021 Express Scripts 499 - $1,250 million, 4.750% Senior Notes due 2021 Express Scripts 1,285 - $1,000 million, 3.900% Senior Notes due 2022 Express Scripts 998 - $500 million, 3.050% Senior Notes due 2022 Express Scripts 481 - $1,000 million, 3.000% Senior Notes due 2023 Express Scripts 959 - $1,000 million, 3.500% Senior Notes due 2024 Express Scripts 966 - $1,500 million, 4.500% Senior Notes due 2026 Express Scripts 1,508 - $1,500 million, 3.400% Senior Notes due 2027 Express Scripts 1,386 - $449 million, 6.125% Senior Notes due 2041 Express Scripts 493 - $1,500 million, 4.800% Senior Notes due 2046 Express Scripts 1,465 - Old Cigna debt (pre-acquisition) $250 million, 4.375% Notes due 2020 Old Cigna 248 249 $300 million, 5.125% Notes due 2020 Old Cigna 298 299 $78 million, 6.37% Notes due 2021 CGC 78 78 $300 million, 4.5% Notes due 2021 Old Cigna 297 299 $750 million, 4% Notes due 2022 Old Cigna 746 745 $100 million, 7.65% Notes due 2023 Old Cigna 100 100 $17 million, 8.3% Notes due 2023 Old Cigna 17 17 $900 million, 3.25% Notes due 2025 Old Cigna 895 894 $600 million, 3.05% Notes due 2027 Old Cigna 595 594 $259 million, 7.875% Debentures due 2027 Old Cigna 259 258 $45 million, 8.3% Step Down Notes due 2033 Old Cigna 45 45 $191 million, 6.15% Notes due 2036 Old Cigna 190 190 $121 million, 5.875% Notes due 2041 Old Cigna 119 119 $317 million, 5.375% Notes due 2042 Old Cigna 315 315 $1,000 million, 3.875% Notes due 2047 Old Cigna 988 988 Other, including capital leases Other 32 9 Total long-term debt $ 39,523 $ 5,199 |
Maturities of long-term debt and capital leases | Scheduled Maturities (In millions) Long-term Debt (1) Capital Leases 2019 $ 1,337 $ 17 2020 $ 4,700 $ 14 2021 $ 7,378 $ 4 2022 $ 2,250 $ 4 2023 $ 4,917 $ 4 Maturities after 2023 $ 20,582 $ 7 (1) Long-term debt maturity amounts exclude capital leases. (In millions) Operating Lease Payments 2019 $ 199 2020 $ 182 2021 $ 148 2022 $ 116 2023 $ 84 2024 and thereafter $ 132 |
Common and Preferred Stock (Tab
Common and Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Common And Preferred Stock [Abstract] | |
Schedule of issued shares | (Shares in thousands) 2018 2017 2016 Common: Par value $0.25; 600,000 shares authorized - Old Cigna Outstanding - January 1, 243,967 256,869 256,544 Issued for stock option exercises and other benefit plans 1,118 2,761 1,110 Repurchased common stock (1,300) (15,663) (785) Balance, December 20, 2018 (Merger Date) 243,785 - - Exchange of Old Cigna shares for shares of Cigna (243,785) - - Outstanding - December 31, - 243,967 256,869 Retirement of treasury stock on December 20, 2018 (52,358) - - Exchange of Old Cigna certificated treasury stock for new Cigna certificated treasury stock (2) - - Treasury stock - December 31, 2018 - 52,178 39,276 Issued - December 31, - 296,145 296,145 Common: Par value $0.01; 600,000 shares authorized - Cigna Shares issued to Old Cigna shareholders 243,785 - - Shares issued to Express Scripts shareholders 137,337 - - Issued for stock option exercises and other benefit plans including Express Scripts performance share holders 91 - - Repurchased common stock (289) - - Outstanding - December 31, 2018 380,924 - - Treasury stock 570 - - Issued - December 31, 2018 381,494 - - |
Insurance and Contractholder _2
Insurance and Contractholder Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details / activity | December 31, 2018 December 31, 2017 (In millions) Current Non-current Total Current Non-current Total Contractholder deposit funds $ 641 $ 7,365 $ 8,006 $ 713 $ 7,483 $ 8,196 Future policy benefits 740 8,981 9,721 706 9,334 10,040 Unpaid claims and claim expenses Integrated Medical 2,678 19 2,697 2,401 19 2,420 Other segments 2,394 3,230 5,624 2,178 3,289 5,467 Unearned premiums 348 379 727 319 405 724 Total insurance and contractholder liabilities $ 6,801 $ 19,974 $ 26,775 $ 6,317 $ 20,530 $ 26,847 |
Details of unpaid claim discounted liability | (In billions) 2018 2017 Discounted liabilities $ 4.2 $ 4.0 Aggregate amount of discount $ 1.1 $ 1.0 Range of discount rates 4.2 % - 5.2 % 4.5 % - 5.2 % |
Long-term Disability [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Incurred and paid claims development | (In millions, except for claims frequency) Incurred Incurred Claims (undiscounted) But Not Unaudited Reported Claims Accident Year 2012 2013 2014 2015 2016 2017 2018 Liabilities (1) Frequency 2012 $ 995 $ 951 $ 889 $ 876 $ 883 $ 880 $ 861 $ - 21,183 2013 1,063 1,037 1,062 1,072 1,057 1,032 - 23,526 2014 1,158 1,129 1,167 1,146 1,094 - 25,314 2015 1,184 1,154 1,185 1,160 - 25,737 2016 1,246 1,184 1,199 3 25,349 2017 1,226 1,193 10 23,382 2018 1,348 515 12,025 Cumulative incurred claims for the periods presented $ 7,887 (1) Incurred but not reported amounts are included in 2018 incurred claims. Cumulative Paid Claims Unaudited Accident Year 2012 2013 2014 2015 2016 2017 2018 2012 $ 81 $ 288 $ 429 $ 504 $ 571 $ 621 $ 661 2013 92 342 503 600 670 732 2014 111 379 575 667 743 2015 114 417 603 702 2016 122 411 598 2017 110 396 2018 116 Cumulative paid claims for the periods presented $ 3,948 All outstanding liabilities for the periods presented, net of reinsurance $ 3,939 All outstanding liabilities prior to 2012, net of reinsurance 921 Impact of discounting (885) Liability for long-term disability unpaid claims and claim expenses, net of reinsurance $ 3,975 |
Reconciliation of net inucurred and paid claims development table to the liability for unpaid claims and claim expenses | (In millions) Net outstanding liabilities – Group Disability and Life businesses Long-term disability liabilities, net of reinsurance $ 3,975 Other short-duration insurance books of business, net of reinsurance 594 Liabilities for unpaid claims and claim expenses, net of reinsurance 4,569 Reinsurance recoverable on unpaid claims – Group Disability and Life businesses Long-term disability 94 Other short-duration insurance books of business 11 Total reinsurance recoverable on unpaid claims 105 Total liability for unpaid claims and claim expenses – Group Disability and Life businesses 4,674 International Markets segment 758 Other Operations 192 Unpaid claims and claim expenses - Group Disability and Other and International Markets $ 5,624 |
Integrated Medical [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details / activity | (In millions) 2018 2017 2016 Balance at January 1, $ 2,420 $ 2,261 $ 2,105 Less: Reinsurance and other amounts recoverable 262 273 237 Balance at January 1, net 2,158 1,988 1,868 Acquired, net 40 - - Incurred costs related to: Current year 21,331 19,334 18,085 Prior years (173) (227) (70) Total incurred 21,158 19,107 18,015 Paid costs related to: Current year 18,978 17,179 16,142 Prior years 1,945 1,758 1,753 Total paid 20,923 18,937 17,895 Balance at December 31, net 2,433 2,158 1,988 Add: Reinsurance and other amounts recoverable 264 262 273 Balance at December 31, $ 2,697 $ 2,420 $ 2,261 |
Variances in incurred costs related to prior years' medical costs payable | 2018 2017 ($ in millions) $ % (1) $ % (2) Actual completion factors $ 92 0.5 % $ 87 0.6 % Medical cost trend 72 0.4 131 0.7 Other 9 - 9 - Total favorable variance $ 173 0.9 % $ 227 1.3 % (1) Percentage of current year incurred costs as reported for 2017. (2) Percentage of current year incurred costs as reported for 2016. |
Incurred and paid claims development | Incurred Costs Incurral Year 2017 (Unaudited) 2018 Unpaid Claims & Claim Expenses Claims Frequency (in millions) 2017 $ 18,692 $ 18,528 $ 22 2.6 million 2018 20,458 $ 2,266 2.9 million Cumulative incurred costs plus acquired for the periods presented $ 38,986 Cumulative Costs Paid Incurral Year 2017 (Unaudited) 2018 2017 $ 16,628 $ 18,506 2018 18,192 Cumulative paid costs for the periods presented $ 36,698 Outstanding liabilities for the periods presented, net of reinsurance $ 2,288 Other long-duration liabilities not included in development table above 145 Net unpaid claims and claims expenses - Integrated Medical 2,433 Reinsurance and other amounts recoverable 264 Unpaid claims and claim expenses - Integrated Medical $ 2,697 |
Intenational Markets and Global Disability and Life [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details / activity | (In millions) 2018 2017 Group Disability and Other Group Disability and Life $ 4,674 $ 4,491 Other Operations 192 193 Total Group Disability and Other 4,866 4,684 International Markets 758 783 Unpaid claims and claim expenses Group Disability and Other and International Markets $ 5,624 $ 5,467 (In millions) 2018 2017 2016 Balance at January 1, $ 5,274 $ 4,997 $ 4,609 Less: Reinsurance 140 123 121 Balance at January 1, net 5,134 4,874 4,488 Incurred claims related to: Current year 5,350 5,097 5,116 Prior years Interest accretion 156 163 161 All other incurred (147) (43) 85 Total incurred 5,359 5,217 5,362 Paid claims related to: Current year 3,391 3,229 3,221 Prior years 1,808 1,757 1,739 Total paid 5,199 4,986 4,960 Acquisitions 23 - Foreign currency (41) 29 (16) Balance at December 31, net 5,276 5,134 4,874 Add: Reinsurance 156 140 123 Balance at December 31, $ 5,432 $ 5,274 $ 4,997 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Effects Of Reinsurance [Line Items] | |
Components of reinsurance recoverables | (Dollars in millions) Line of Business Reinsurer(s) December 31, 2018 December 31, 2017 Collateral and Other Terms at December 31, 2018 Ongoing Operations Integrated Medical, International Markets, Group Disability, COLI Various $ 464 $ 454 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. Total recoverables related to ongoing operations 464 454 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,312 3,436 Both companies’ ratings were well above the level that would trigger a contractual obligation to fully secure the outstanding balance. GMDB (effectively exited in 2013) Berkshire 893 928 100% secured by assets in a trust. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 787 850 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 261 283 100% secured by assets in a trust. Other Various 87 95 100% secured by assets in a trust or other deposits. Total recoverables related to acquisition, disposition or runoff activities 5,340 5,592 Total reinsurance recoverables $ 5,804 $ 6,046 |
Effects of Reinsurance | (In millions) 2018 2017 2016 Premiums Short-duration contracts Direct $ 32,148 $ 28,838 $ 27,694 Assumed 77 199 247 Ceded (182) (150) (229) Total short-duration contract premiums 32,043 28,887 27,712 Long-duration contracts Direct 4,268 3,748 3,259 Assumed 116 130 137 Ceded Individual life insurance and annuity business sold (133) (143) (153) Other (181) (131) (131) Total long-duration contract premiums 4,070 3,604 3,112 Total premiums $ 36,113 $ 32,491 $ 30,824 Reinsurance recoveries Individual life insurance and annuity business sold $ 249 $ 259 $ 279 Other 203 66 261 Total reinsurance recoveries $ 452 $ 325 $ 540 |
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) 2018 2017 Account value $ 8,402 $ 10,109 Net amount at risk $ 2,466 $ 2,112 Average attained age of contractholders (weighted by exposure) 74 75 Number of contractholders 220,000 245,000 |
Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Effects of Reinsurance | (In millions) Line of Business Reinsurer December 31, 2018 December 31, 2017 Collateral and Other Terms at December 31, 2018 GMIB Berkshire $ 341 $ 359 100% were secured by assets in a trust. Sun Life Assurance Company of Canada 208 221 Liberty Re (Bermuda) Ltd. 184 197 86% were secured by assets in a trust. Total GMIB recoverables reported in other current assets and other assets $ 733 $ 777 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investment [Line Items] | |
Investments by category | December 31, 2018 December 31, 2017 (In millions) Current Long-term Total Current Long-term Total Fixed Maturities $ 1,320 $ 21,608 $ 22,928 $ 1,516 $ 21,622 $ 23,138 Equity securities 377 171 548 406 182 588 Commercial mortgage loans 32 1,826 1,858 15 1,746 1,761 Policy loans - 1,423 1,423 - 1,415 1,415 Other long-term investments - 1,901 1,901 - 1,518 1,518 Short-term investments 316 - 316 199 - 199 Total $ 2,045 $ 26,929 $ 28,974 $ 2,136 $ 26,483 $ 28,619 |
Commercial mortgage loans by property type and geographic region | (In millions) 2018 2017 Insurance customer receivables $ 1,888 $ 1,818 Noninsurance customer receivables 4,988 441 Pharmaceutical manufacturers receivable (1) 3,321 645 Other receivables 276 251 Total accounts receivable, net $ 10,473 $ 3,155 (1) Includes $406 million at December 31, 2018 and $336 million at December 31, 2017 of receivables under noninsurance customer contracts. |
Other long-term investments | Unfunded Carrying value as of December 31, Commitments as of (In millions) 2018 2017 December 31, 2018 Real estate investments $ 679 $ 591 $ 376 Securities partnerships 1,045 863 1,063 Other 177 64 33 Total $ 1,901 $ 1,518 $ 1,472 |
Schedule of short-term investments and cash equivalents | December 31, December 31, (In millions) 2018 2017 Corporate securities $ 581 $ 1,143 Federal government securities $ 82 $ 604 Foreign government securities $ 238 $ 159 Money market funds $ 1,174 $ 12 |
Schedule of derivative instruments | (In millions) Notional Value as of December 31, Type of Instrument Purpose 2018 2017 Foreign currency swap contracts Fair value hedge: To hedge the foreign exchange-related changes in fair values of certain fixed maturity foreign-denominated bonds. The notional value of these derivatives matches the amortized cost of the hedged bonds. $ 525 $ 318 Foreign currency swap contracts Net investment hedge : 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. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. $ 439 $ - Foreign currency forward contracts Economic hedge: 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. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio. $ 309 $ 255 |
Components of pre-tax net investment income | (In millions) 2018 2017 2016 Fixed maturities $ 1,009 $ 946 $ 899 Equity securities 28 14 4 Commercial mortgage loans 78 81 91 Policy loans 70 69 72 Other long-term investments 156 124 98 Short-term investments and cash 194 42 26 Total investment income 1,535 1,276 1,190 Less investment expenses 55 50 43 Net investment income $ 1,480 $ 1,226 $ 1,147 |
Realized gains and losses on investments | (In millions) 2018 2017 2016 Net realized investment (losses) gains, excluding investment asset write-downs $ (34) $ 268 $ 227 Write-downs on debt securities (43) (26) (35) Write-downs on other invested assets (4) (5) (23) Net realized investment (losses) gains, before income taxes $ (81) $ 237 $ 169 |
Sales information for available-for-sale fixed maturities and equity securities | (In millions) 2018 2017 2016 Proceeds from sales $ 2,625 $ 2,012 $ 1,544 Gross gains on sales $ 28 $ 103 $ 83 Gross losses on sales $ (47) $ (18) $ (7) |
Fixed maturities [Member] | |
Investment [Line Items] | |
Investment maturities | Amortized Fair (In millions) Cost Value Due in one year or less $ 1,323 $ 1,327 Due after one year through five years 6,452 6,522 Due after five years through ten years 10,205 9,992 Due after ten years 4,064 4,577 Mortgage and other asset-backed securities 506 510 Total $ 22,550 $ 22,928 |
Gross unrealized appreciation (depreciation) on fixed maturities | Amortized Unrealized Unrealized Fair (In millions) Cost Appreciation Depreciation Value December 31, 2018 Federal government and agency $ 507 $ 204 $ (1) $ 710 State and local government 920 66 (1) 985 Foreign government 2,214 155 (7) 2,362 Corporate 18,403 411 (453) 18,361 Mortgage and other asset-backed 506 16 (12) 510 Total $ 22,550 $ 852 $ (474) $ 22,928 Investments supporting liabilities of the Company‘s run-off settlement annuity business (included in total above) (1) $ 2,264 $ 479 $ (40) $ 2,703 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 $ 21,867 $ 1,371 $ (100) $ 23,138 Investments supporting liabilities of the Company‘s run-off settlement annuity business (included in total above) (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 | December 31, 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 $ 7,127 $ 7,367 $ (240) 1,324 $ 3,272 $ 3,309 $ (37) 797 Below investment grade $ 1,185 $ 1,240 $ (55) 1,190 $ 543 $ 553 $ (10) 643 More than one year Investment grade $ 3,023 $ 3,181 $ (158) 784 $ 1,503 $ 1,549 $ (46) 373 Below investment grade $ 249 $ 270 $ (21) 245 $ 155 $ 162 $ (7) 42 |
Commercial mortgage loans [Member] | |
Investment [Line Items] | |
Credit risk profile of commercial mortgage loan portfolio | (Dollars in millions) 2018 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% $ 1,132 2.14 $ 1,109 2.03 60% to 79% 650 1.93 652 2.24 80% to 100% 76 1.49 - - Total $ 1,858 2.04 58% $ 1,761 2.11 57% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities carried at fair value | As of December 31, (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total 2018 2017 2018 2017 2018 2017 2018 2017 Financial assets at fair value Fixed maturities Federal government and agency $ 209 $ 253 $ 501 $ 526 $ - $ - $ 710 $ 779 State and local government - - 985 1,287 - - 985 1,287 Foreign government - - 2,356 2,442 6 45 2,362 2,487 Corporate - - 18,127 17,658 234 430 18,361 18,088 Mortgage and other asset-backed - - 372 343 138 154 510 497 Total fixed maturities 209 253 22,341 22,256 378 629 22,928 23,138 Equity securities (1) 384 412 43 73 32 103 459 588 Short-term investments - - 316 199 - - 316 199 Derivative assets - - 53 2 - - 53 2 Real estate funds priced at NAV as a practical expedient (2) 239 N/A Financial liabilities at fair value Derivative liabilities $ - $ - $ 10 $ 25 $ - $ - $ 10 $ 25 (1) 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) beginning in 2018. Such private equity securities of $70 million were included in the Level 3 amount as of December 31, 2017. See Note 9 for additional information on this accounting policy change. (2) 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 upon adopting ASU 2016-01 beginning in 2018. The funds have a quarterly redemption frequency, 45-90 day redemption notice period and $57 million in unfunded commitments as of December 31, 2018. See Note 9 for additional information on this accounting change. Prior years are designated as not applicable (“N/A“) in this table. |
Level 3 fixed maturities and equity securities priced using significant unobservable inputs | As of December 31, Fair Value Unobservable Input Unobservable Adjustment Range (Weighted Average) (Fair value in millions ) 2018 2017 2018 2017 Fixed maturities Mortgage and other asset-backed securities $ 138 $ 154 Liquidity 60- 340 (70) bps 60 - 370 (90) bps Weighting of credit spreads 190 - 340 (260) bps 180 - 290 (230) bps Corporate and government fixed maturities 229 446 Liquidity 50 - 930 (230) bps 70 - 1,650 (300) bps Securities not priced by the Company (1) 11 29 Total Level 3 fixed maturities $ 378 $ 629 (1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company. |
Changes in level 3 financial assets and liabilities carried at fair value | (In millions) Fixed Maturities & Equity Securities 2018 2017 Balance at January 1, $ 732 $ 776 Total gains (losses) included in shareholders‘ net income (22) 25 Losses included in other comprehensive income (8) (11) Gains (losses) required to adjust future policy benefits for settlement annuities (1) (8) 7 Purchases, sales, settlements Purchases 22 133 Sales (11) (95) Settlements (70) (74) Total purchases, sales and settlements (59) (36) Transfers into/(out of) Level 3 Transfers into Level 3 44 275 Transfers out of Level 3 (2) (269) (304) Total transfers into/(out of) Level 3 (225) (29) Balance at December 31, $ 410 $ 732 Total gains (losses) included in shareholders' net income attributable to instruments held at the reporting date $ (9) $ (9) (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 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 2018 2017 2018 2017 2018 2017 2018 2017 Guaranteed separate accounts (See Note 19) $ 187 $ 215 $ 267 $ 308 $ - $ - $ 454 $ 523 Non-guaranteed separate accounts (1) 1,204 1,536 5,216 5,298 233 292 6,653 7,126 Subtotal $ 1,391 $ 1,751 $ 5,483 $ 5,606 $ 233 $ 292 7,107 7,649 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 732 774 Total separate account assets $ 7,839 $ 8,423 (1) Non-guaranteed separate accounts included $3.8 billion as of December 31, 2018 and $3.9 billion as of December 31, 2017 in assets supporting the Company‘s pension plans, including $0.2 billion classified in Level 3 as of December 31, 2018 and $0.3 billion classified in Level 3 as of December 31, 2017. |
Separate account assets priced at net asset value | Unfunded Commitments Redemption Frequency Fair Value as of as of (if currently Redemption Notice (In millions) December 31, 2018 December 31, 2017 December 31, 2018 eligible) Period Securities partnerships $ 477 $ 458 $ 308 Not applicable Not applicable Real estate funds 237 239 - Quarterly 30-90 days Hedge funds 18 77 - Up to annually, varying by fund 30-90 days Total $ 732 $ 774 $ 308 |
Financial instruments not carried at fair value | (In millions) December 31, 2018 December 31, 2017 Classification in Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,832 $ 1,858 $ 1,766 $ 1,761 Long-term debt, including current maturities, excluding capital leases Level 2 $ 40,819 $ 40,829 $ 5,730 $ 5,321 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Changes in accumulated other comprehensive income (loss) | (In millions) 2018 2017 2016 Securities and Derivatives Beginning balance $ 328 $ 365 $ 425 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) - - Reclassification adjustment from retained earnings related to new hedging guidance (1) (6) - - Adjusted beginning balance 383 365 425 (Depreciation) appreciation on securities and derivatives (512) 34 (48) Tax benefit (expense) 100 (19) 6 Net (depreciation) appreciation on securities and derivatives (412) 15 (42) Reclassification adjustment for losses (gains) included in shareholders‘ net income (net realized investment losses (gains)) 60 (81) (29) Reclassification adjustment for losses included in shareholders‘ net income (selling, general and administrative expenses) - 1 1 Tax (expense) benefit (13) 28 10 Net losses (gains) reclassified from AOCI to net income 47 (52) (18) Other comprehensive (loss), net of tax (365) (37) (60) Ending balance $ 18 $ 328 $ 365 Translation of foreign currencies Beginning balance $ (65) $ (369) $ (274) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) (4) - - Adjusted beginning balance (69) (369) (274) Translation of foreign currencies (152) 309 (95) Tax (expense) - (5) - Net translation of foreign currencies (152) 304 (95) Ending balance $ (221) $ (65) $ (369) (In millions) 2018 2017 2016 Postretirement benefits liability Beginning balance $ (1,345) $ (1,378) $ (1,401) Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1) (290) - - Adjusted beginning balance (1,635) (1,378) (1,401) Reclassification adjustment for amortization of net losses from past experience and prior service costs (selling, general and administrative expenses) 69 64 64 Reclassification adjustment for settlement (selling, general and administrative expenses) - 7 - Tax (expense) (15) (24) (22) Net adjustments reclassified from AOCI to net income 54 47 42 Valuation update 93 (22) (29) Tax (expense) benefit (20) 8 10 Net change due to valuation update 73 (14) (19) Other comprehensive income, net of tax 127 33 23 Ending balance $ (1,508) $ (1,345) $ (1,378) (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) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Projected benefit obligations and assets | Pension Other Postretirement Benefits Benefits (In millions) 2018 2017 2018 2017 Change in benefit obligation Benefit obligation, January 1 $ 4,969 $ 4,888 $ 258 $ 277 Service cost 3 3 - - Interest cost 169 186 8 9 Assumed in acquisition 137 - - - Partial litigation settlement-attorneys' fees 32 - - - (Gain) loss from past experience (235) (1) 181 (2) (31) 1 Benefits paid from plan assets (314) (277) - (3) Benefits paid — other (20) (12) (25) (26) Benefit obligation, December 31 4,741 4,969 210 258 Change in plan assets Fair value of plan assets, January 1 4,281 3,977 2 5 Assumed in acquisition 96 - - - Actual return on plan assets 85 418 - - Benefits paid (314) (277) (2) (3) Contributions 3 163 - - Fair value of plan assets, December 31 4,151 4,281 - 2 Funded status $ (590) $ (688) $ (210) $ (256) Liability in Consolidated Balance Sheets Accrued expenses and other liabilities $ (30) $ (25) $ (23) $ (27) Other non-current liabilities $ (560) $ (663) $ (187) $ (229) (1) Gain reflects an increase in the discount rate and a favorable change in the mortality assumption. (2) Loss reflects a decrease in the discount rate, partially offset by a favorable change in the mortality assumption. |
Expected benefit payments | Pension Other Postretirement (In millions) Benefits Benefits 2019 $ 324 $ 25 2020 $ 311 $ 23 2021 $ 313 $ 22 2022 $ 316 $ 20 2023 $ 318 $ 19 2024-2028 $ 1,549 $ 72 |
Postretirement benefits liability adjustment included in AOCI | Pension Other Benefits Postretirement Benefits (In millions) 2018 2017 2018 2017 Unrecognized net gains (losses) $ (1,980) $ (2,113) $ 32 $ - Unrecognized prior service cost (6) (6) 44 46 Postretirement benefits liability adjustment $ (1,986) $ (2,119) $ 76 $ 46 |
Components of net defined benefit plan costs | Pension Benefits Other Postretirement Benefits (In millions) 2018 2017 2016 2018 2017 2016 Service cost $ 3 $ 3 $ 2 $ - $ - $ - Interest cost 169 186 199 8 9 11 Expected long-term return on plan assets (257) (260) (249) - - - Partial litigation settlement - attorneys' fees 32 - - - - - Amortization of: Net loss from past experience 70 66 65 1 1 1 Prior service cost - - 1 (2) (3) (3) Settlement loss - 7 - - - - Net plan cost $ 17 $ 2 $ 18 $ 7 $ 7 $ 9 |
Assumptions for pension and other postretirement benefit plans | 2018 2017 Discount rate: Pension benefit obligation 4.23% 3.51% Other postretirement benefit obligation 4.09% 3.37% Pension benefit cost 3.51% 3.95% Other postretirement benefit cost 3.37% 3.70% Expected long-term return on plan assets: Pension benefit cost 7.00% 7.25% Other postretirement benefit cost 5.00% 5.00% Mortality table for pension and postretirement benefit obligations RP 2014 with MP 2018 projection scale RP 2014 with MP 2017 projection scale |
Annual expense for 401(k) plans | (In millions) 2018 2017 2016 Expense $ 196 $ 122 $ 113 |
Pension Benefits [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Fair value of pension plan assets | (In millions) 2018 2017 Fixed maturities: Federal government and agency $ - $ 1 Corporate 1,446 1,124 Asset-backed 32 22 Fund investments 768 884 Total fixed maturities 2,246 2,031 Equity securities: Domestic 506 689 International, including funds and pooled separate accounts (1) 360 476 Total equity securities 866 1,165 Securities partnerships 477 457 Real estate funds, including pooled separate accounts (1) 250 300 Commercial mortgage loans 110 140 Hedge funds 36 73 Guaranteed deposit account contract 107 63 Cash equivalents and other current assets, net 59 52 Total pension assets at fair value $ 4,151 $ 4,281 (1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. |
Employee Incentive Plans (Table
Employee Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Compensation cost | (In millions) 2018 2017 2016 Total compensation cost for shared-based awards $ 180 $ 178 $ 128 Tax benefits recognized $ 36 $ 79 $ 57 |
Information for stock options exercised | Options Options Outstanding Exercisable Number (in thousands) 12,370 9,446 Total intrinsic value (in millions) $ 804 $ 715 Weighted average exercise price $ 125.46 $ 114.22 Weighted average remaining contractual life 5.4 years 4.5 years |
Black-Scholes option-pricing model assumptions | 2018 2017 2016 Dividend yield 0.0% 0.0% 0.0% Expected volatility 35.0% 35.0% 35.0% Risk-free interest rate 2.5% 1.8% 1.2% Expected option life 4.4 years 4.3 years 4.3 years Weighted average fair value of options $ 64.18 $ 46.38 $ 42.01 |
Status of, and changes in, common stock options | (Options in thousands) 2018 2017 2016 Weighted Weighted Weighted Average Average Average Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - January 1 6,156 $ 100.79 7,097 $ 82.01 6,433 $ 68.86 Granted 7,080 $ 143.62 1,230 $ 149.17 1,336 $ 139.20 Exercised (771) $ 88.35 (2,072) $ 63.41 (577) $ 62.09 Expired or canceled (95) $ 165.04 (99) $ 138.41 (95) $ 117.18 Outstanding - December 31 12,370 $ 125.46 6,156 $ 100.79 7,097 $ 82.01 Options exercisable at year-end 9,446 $ 114.22 3,894 $ 77.36 4,409 $ 58.36 |
Status of, and changes in, restricted stock grants and units | (Awards in thousands) 2018 2017 2016 Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Weighted Average Fair Value at Award Date Grants/Units Grants/Units Grants/Units Outstanding - January 1 1,295 $ 126.44 1,309 $ 97.78 1,642 $ 72.58 Awarded 1,451 $ 183.29 451 $ 155.21 315 $ 138.61 Vested (560) $ 112.53 (409) $ 67.09 (591) $ 50.01 Forfeited (48) $ 150.84 (56) $ 121.74 (57) $ 92.51 Outstanding - December 31 2,138 $ 168.12 1,295 $ 126.44 1,309 $ 97.78 |
Status of, and changes in, strategic performance shares | 2018 2017 2016 Weighted Weighted Weighted Average Fair Value Average Fair Value Average Fair Value (Awards in thousands) Shares at Award Date Shares at Award Date Shares at Award Date Outstanding - January 1 778 $ 136.57 942 $ 109.14 1,188 $ 81.68 Awarded 221 $ 197.51 275 $ 150.06 286 $ 139.05 Vested (269) $ 121.57 (386) $ 78.91 (494) $ 60.15 Forfeited (23) $ 158.16 (53) $ 138.19 (38) $ 112.70 Outstanding - December 31 707 $ 160.74 778 $ 136.57 942 $ 109.14 |
Employee Stock Option [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Information for stock options exercised | (In millions) 2018 2017 2016 Intrinsic value of options exercised $ 86 $ 218 $ 41 Cash received for options exercised $ 68 $ 131 $ 36 Tax benefit from options exercised $ 8 $ 41 $ 11 |
Shares available for award / Fair value of vested shares | (In millions) 2018 2017 2016 Common shares available for award 25.7 14.0 6.8 |
Restricted Stock Grants And Units [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Shares available for award / Fair value of vested shares | (In millions) 2018 2017 2016 Fair value of vested restricted stock $ 107 $ 62 $ 82 |
Performance Shares [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Shares available for award / Fair value of vested shares | 2018 2017 2016 (Shares in thousands; $ in millions) Shares Fair Value Shares Fair Value Shares Fair Value Shares of Cigna common stock distributed upon SPS vesting 380 $ 73 476 $ 70 768 $ 109 |
Goodwill, Other Intangibles, _2
Goodwill, Other Intangibles, and Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Goodwill activity | (In millions) 2018 2017 Balance at January 1, $ 6,164 $ 5,980 Goodwill acquired, net 38,371 154 Impact of foreign currency translation (30) 30 Balance at December 31, $ 44,505 $ 6,164 |
Components of other assets, including other intangbiles | Accumulated Net Carrying (In millions) Cost Amortization Value 2018 Customer relationships $ 31,451 1,213 30,238 Trade Name - Express Scripts 8,400 - 8,400 Other 560 195 365 Other intangible assets 40,411 1,408 39,003 Value of business acquired (reported in deferred policy acquisition costs) 665 102 563 Total $ 41,076 1,510 39,566 2017 Customer relationships $ 1,280 1,056 224 Other 291 170 121 Other intangible assets 1,571 1,226 345 Value of business acquired (reported in deferred policy acquisition costs) 232 86 146 Total $ 1,803 1,312 491 |
Components of property and equipment | Accumulated Net Carrying (In millions) Cost Amortization Value 2018 Internal-use software $ 5,694 $ 2,415 $ 3,279 Other property and equipment Assets recorded under capital leases (1) 56 4 52 Other property and equipment not recorded under capital leases 2,208 977 1,231 Total other property and equipment 2,264 981 1,283 Total property and equipment $ 7,958 $ 3,396 $ 4,562 2017 Internal-use software $ 2,991 $ 2,184 $ 807 Other property and equipment Assets recorded under capital leases (1) 49 31 18 Other property and equipment not recorded under capital leases 1,573 835 738 Total other property and equipment 1,622 866 756 Total property and equipment $ 4,613 $ 3,050 $ 1,563 (1) Current capital lease agreements are for equipment and generally have a term of 48 months with the equipment expected to be returned to the lessor at termination. |
Components of depreciation and amortization | (In millions) 2018 2017 2016 Internal-use software $ 323 $ 298 $ 303 Other property and equipment (1) 146 153 158 Value of business acquired (reported in deferred policy acquisition costs) 16 18 20 Other intangibles 210 97 129 Total depreciation and amortization $ 695 $ 566 $ 610 (1) Other property and equipment includes amortization on assets recorded under capital leases of $9 million in 2018, $14 million in 2017 and $20 million in 2016. |
Pre-tax amortization for intangible assets, including internal-use software | (In millions) Pre-tax Amortization 2019 $ 3,169 2020 $ 2,164 2021 $ 2,062 2022 $ 1,844 2023 $ 1,777 |
Leases and Rentals (Tables)
Leases and Rentals (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases and Rentals [Abstract] | |
Net rental expenses for operating leases | (In millions) 2018 2017 2016 Net rental expense for operating leases $ 162 $ 162 $ 151 |
Future net minimum rental payments under non-cancelable operating leases | Scheduled Maturities (In millions) Long-term Debt (1) Capital Leases 2019 $ 1,337 $ 17 2020 $ 4,700 $ 14 2021 $ 7,378 $ 4 2022 $ 2,250 $ 4 2023 $ 4,917 $ 4 Maturities after 2023 $ 20,582 $ 7 (1) Long-term debt maturity amounts exclude capital leases. (In millions) Operating Lease Payments 2019 $ 199 2020 $ 182 2021 $ 148 2022 $ 116 2023 $ 84 2024 and thereafter $ 132 |
Shareholders Equity and Divid_2
Shareholders Equity and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Statutory net income and surplus | (In billions) 2018 2017 2016 Net income $ 3.4 $ 2.5 $ 2.0 Surplus $ 12.2 $ 10.4 $ 8.5 (In billions) 2018 Minimum statutory surplus required by regulators $ 3.9 Investments on deposit with regulatory bodies $ 0.6 Maximum dividend distributions permitted in 2019 without regulatory approval $ 2.1 Maximum loans to the parent company permitted without regulatory approval $ 1.3 Restricted GAAP net assets of Cigna Corporation's subsidiaries $ 15.5 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Componenets of income taxes | (In millions) 2018 2017 2016 Current taxes U.S. income taxes $ 804 $ 974 $ 935 Foreign income taxes 185 122 95 State income taxes 47 36 32 Total current taxes 1,036 1,132 1,062 Deferred taxes (benefits) U.S. income taxes (benefits) (75) 204 69 Foreign income taxes 8 39 9 State income tax (benefits) (34) (1) (4) Total deferred taxes (benefits) (101) 242 74 Total income taxes $ 935 $ 1,374 $ 1,136 |
Reconciliation of total income taxes to the amount computed using the nominal federal income tax rate | 2018 2017 2016 (In millions) $ % $ % $ % Tax expense at nominal rate $ 752 21.0 % $ 1,262 35.0 % $ 1,043 35.0 % Effect of U.S. tax reform legislation (4) (0.1) 232 6.4 - - Effect of foreign earnings 74 2.1 (70) (1.9) (57) (1.9) Health insurance industry tax 78 2.2 - - 108 3.6 State income tax (net of federal income tax benefit) 10 0.3 23 0.6 18 0.6 Other 25 0.6 (73) (2.0) 24 0.8 Total income taxes $ 935 26.1 % $ 1,374 38.1 % $ 1,136 38.1 % |
Deferred income tax assets and liabilities | (In millions) 2018 2017 Deferred tax assets Employee and retiree benefit plans $ 411 $ 279 Other insurance and contractholder liabilities 402 358 Loss carryforwards 255 105 Other accrued liabilities 340 101 Other 205 91 Deferred tax assets before valuation allowance 1,613 934 Valuation allowance for deferred tax assets (199) (72) Deferred tax assets, net of valuation allowance 1,414 862 Deferred tax liabilities Depreciation and amortization 838 176 Acquisition-related basis differences 9,792 320 Policy acquisition expenses 211 190 Unrealized appreciation on investments and foreign currency translation (29) 102 Other 55 35 Total deferred tax liabilities 10,867 823 Net deferred income tax (liabilities) assets $ (9,453) $ 39 |
Reconciliation of unrecognized tax benefits | (In millions) 2018 2017 2016 Balance at January 1, $ 35 $ 31 $ 31 Increase due to prior year positions 40 - - Increase due to business combinations 860 - - Increase due to current year positions 6 7 10 Reduction related to settlements with taxing authorities (1) (1) (2) Reduction related to lapse of applicable statute of limitations (12) (2) (8) Balance at December 31, $ 928 $ 35 $ 31 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Statements of Income | Condensed Consolidating Statements of Income (In millions) For the year ended December 31, 2018 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Revenues Premiums $ - $ - $ - $ - $ - $ 36,113 $ - $ 36,113 Fees and other revenues - - - 23 7 5,596 (48) 5,578 Pharmacy revenues - - - 1,866 418 4,165 (970) 5,479 Net investment income 123 1 2 - - 1,354 - 1,480 Total revenues 123 1 2 1,889 425 47,228 (1,018) 48,650 Benefits and expenses Medical costs and other benefit expenses - - - - - 27,528 - 27,528 Pharmacy and other service costs - - - 1,763 417 3,583 (970) 4,793 Selling, general and administrative expenses 200 535 - 44 8 11,195 (48) 11,934 Amortization of acquired intangible assets - - - 94 13 128 - 235 Total benefits and expenses 200 535 - 1,901 438 42,434 (1,018) 44,490 Income (loss) from operations (77) (534) 2 (12) (13) 4,794 - 4,160 Interest and other income (expense) (244) (264) 15 (17) (10) 22 - (498) Intercompany interest income (expense) (5) (58) (15) 7 5 66 - - Net realized investment (losses) (1) - - - - (80) - (81) Income (loss) before income taxes (327) (856) 2 (22) (18) 4,802 - 3,581 Total income tax (benefit) expense (74) (163) - (4) (4) 1,180 - 935 Income (loss) before equity in earnings of subsidiaries (253) (693) 2 (18) (14) 3,622 - 2,646 Equity in earnings (loss) of subsidiaries 2,890 3,613 (32) (33) 29 - (6,467) - Net income (loss) 2,637 2,920 (30) (51) 15 3,622 (6,467) 2,646 Less: Net income attributable to noncontrolling interests - - - - - 9 - 9 Shareholders' net income (loss) $ 2,637 $ 2,920 $ (30) $ (51) $ 15 $ 3,613 $ (6,467) $ 2,637 Other comprehensive (loss), net of tax (390) (390) - - - (536) 926 (390) Shareholders' comprehensive income (loss) $ 2,247 $ 2,530 $ (30) $ (51) $ 15 $ 3,077 $ (5,541) $ 2,247 Condensed Consolidating Statements of Income (In millions) For the year ended December 31, 2017 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Revenues Premiums $ - $ - $ - $ - $ - $ 32,491 $ - $ 32,491 Fees and other revenues - - - - - 5,110 - 5,110 Pharmacy revenues - - - - - 2,979 - 2,979 Net investment income - - - - - 1,226 - 1,226 Total revenues - - - - - 41,806 - 41,806 Benefits and expenses Medical costs and other benefit expenses - - - - - 25,263 - 25,263 Pharmacy and other service costs - - - - - 2,456 - 2,456 Selling, general and administrative expenses - 195 - - - 9,835 - 10,030 Amortization of acquired intangible assets - - - - - 115 - 115 Total benefits and expenses - 195 - - - 37,669 - 37,864 Income (loss) from operations - (195) - - - 4,137 - 3,942 Interest and other (expense) - (246) - - - (6) - (252) Intercompany interest income (expense) - (18) - - - 18 - - Debt extinguishment (costs) - (321) - - - - - (321) Net realized investment gains - - - - - 237 - 237 Income (loss) before income taxes - (780) - - - 4,386 - 3,606 Total income tax (benefit) expense - (194) - - - 1,568 - 1,374 Income (loss) before equity in earnings of subsidiaries - (586) - - - 2,818 - 2,232 Equity in earnings of subsidiaries - 2,823 - - - - (2,823) - Net income - 2,237 - - - 2,818 (2,823) 2,232 Less: Net (loss) attributable to noncontrolling interests - - - - - (5) - (5) Shareholders' net income $ - $ 2,237 $ - $ - $ - $ 2,823 $ (2,823) $ 2,237 Other comprehensive income, net of tax - 300 - - - 269 (269) 300 Shareholders' comprehensive income $ - $ 2,537 $ - $ - $ - $ 3,092 $ (3,092) $ 2,537 Condensed Consolidating Statements of Income (In millions) For the year ended December 31, 2016 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Revenues Premiums $ - $ - $ - $ - $ - $ 30,824 $ - $ 30,824 Fees and other revenues - - - - - 4,901 - 4,901 Pharmacy revenues - - - - - 2,966 - 2,966 Net investment income - - - - - 1,147 - 1,147 Total revenues - - - - - 39,838 - 39,838 Benefits and expenses Medical costs and other benefit expenses - - - - - 24,341 - 24,341 Pharmacy and other service costs - - - - - 2,468 - 2,468 Selling, general and administrative expenses - 281 - - - 9,509 - 9,790 Amortization of acquired intangible assets - - - - - 151 - 151 Total benefits and expenses - 281 - - - 36,469 - 36,750 Income (loss) from operations - (281) - - - 3,369 - 3,088 Interest and other (expense) - (244) - - - (34) - (278) Intercompany interest income (expense) - (3) - - - 3 - - Net realized investment gains - - - - - 169 - 169 Income (loss) before income taxes - (528) - - - 3,507 - 2,979 Total income tax (benefit) expense - (146) - - - 1,282 - 1,136 Income (loss) before equity in earnings of subsidiaries - (382) - - - 2,225 - 1,843 Equity in earnings of subsidiaries - 2,249 - - - - (2,249) - Net income - 1,867 - - - 2,225 (2,249) 1,843 Less: Net (loss) attributable to noncontrolling interests - - - - - (24) - (24) Shareholders' net income $ - $ 1,867 $ - $ - $ - $ 2,249 $ (2,249) $ 1,867 Other comprehensive (loss), net of tax - (132) - - - (154) 154 (132) Shareholders' comprehensive income $ - $ 1,735 $ - $ - $ - $ 2,095 $ (2,095) $ 1,735 |
Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets (In millions) As of December 31, 2018 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Assets Cash and cash equivalents $ 243 $ - $ 633 $ 43 $ - $ 2,936 $ - $ 3,855 Investments - - - - - 2,045 - 2,045 Accounts receivable, net - - - 4,206 748 5,519 - 10,473 Inventories - - - - - 2,821 - 2,821 Other current assets 14 59 - 310 - 1,063 (210) 1,236 Total current assets 257 59 633 4,559 748 14,384 (210) 20,430 Long-term investments - 10 - - - 26,919 - 26,929 Reinsurance recoverables - - - - - 5,507 - 5,507 Deferred policy acquisition costs - - - - - 2,821 - 2,821 Property and equipment - - - 2,432 - 2,130 - 4,562 Investments in subsidiaries 68,969 27,544 52,035 17,115 8,117 - (173,780) - Intercompany receivables - 4,505 - 7,425 2,335 24,882 (39,147) - Goodwill - - 31,049 - - 13,456 - 44,505 Other intangible assets - - 8,400 18,962 7,040 4,601 - 39,003 Other assets 48 198 - 68 74 1,488 (246) 1,630 Separate account assets - - - - - 7,839 - 7,839 TOTAL ASSETS $ 69,274 $ 32,316 $ 92,117 $ 50,561 $ 18,314 $ 104,027 $ (213,383) $ 153,226 Liabilities Current insurance and contractholder liabilities $ - $ - $ - $ - $ - $ 6,801 $ - $ 6,801 Pharmacy and service costs payable - - - 8,422 1,579 701 - 10,702 Accounts payable 22 - - 834 4 3,506 - 4,366 Accrued expenses and other liabilities 396 182 129 1,387 189 4,998 (210) 7,071 Short-term debt - 1,500 995 353 - 107 - 2,955 Total current liabilities 418 1,682 1,124 10,996 1,772 16,113 (210) 31,895 Non-current insurance and contractholder liabilities - - - - - 19,974 - 19,974 Deferred tax liabilities, net - - 2,001 5,012 1,685 1,001 (246) 9,453 Other non-current liabilities - 685 - 497 290 1,998 - 3,470 Intercompany payables 4,965 4,361 29,569 - - 252 (39,147) - Long-term debt 22,863 5,110 10,932 24 506 88 - 39,523 Separate account liabilities - - - - - 7,839 - 7,839 TOTAL LIABILITIES 28,246 11,838 43,626 16,529 4,253 47,265 (39,603) 112,154 Redeemable noncontrolling interests - - - - - 37 - 37 TOTAL SHAREHOLDERS’ EQUITY 41,028 20,478 48,491 34,032 14,061 56,718 (173,780) 41,028 Noncontrolling interests - - - - - 7 - 7 TOTAL EQUITY 41,028 20,478 48,491 34,032 14,061 56,725 (173,780) 41,035 TOTAL LIABILITIES AND EQUITY $ 69,274 $ 32,316 $ 92,117 $ 50,561 $ 18,314 $ 104,027 $ (213,383) $ 153,226 Condensed Consolidating Balance Sheets (In millions) As of December 31, 2017 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Assets Cash and cash equivalents $ - $ 9 $ - $ - $ - $ 2,963 $ - $ 2,972 Investments - 63 - - - 2,073 - 2,136 Accounts receivable, net - - - - - 3,155 - 3,155 Inventories - - - - - 228 - 228 Other current assets - 31 - - - 789 - 820 Total current assets - 103 - - - 9,208 - 9,311 Long-term investments - - - - - 26,483 - 26,483 Reinsurance recoverables - - - - - 5,763 - 5,763 Deferred policy acquisition costs - - - - - 2,237 - 2,237 Property and equipment - - - - - 1,563 - 1,563 Investments in subsidiaries - 22,631 - - - - (22,631) - Intercompany receivables - 200 - - - 2,980 (3,180) - Deferred tax assets, net - 221 - - - (182) - 39 Goodwill - - - - - 6,164 - 6,164 Other intangible assets - - - - - 345 - 345 Other assets - - - - - 1,431 - 1,431 Separate account assets - - - - - 8,423 - 8,423 TOTAL ASSETS $ - $ 23,155 $ - $ - $ - $ 64,415 $ (25,811) $ 61,759 Liabilities Current insurance and contractholder liabilities - - - - - 6,317 - 6,317 Pharmacy and service costs payable - - - - - 305 - 305 Accounts payable, accrued expenses and other liabilities - 270 - - - 3,877 - 4,147 Short-term debt - 231 - - - 9 - 240 Total current liabilities - 501 - - - 10,508 - 11,009 Non-current insurance and contractholder liabilities - - - - - 20,530 - 20,530 Intercompany payables - 2,980 - - - 200 (3,180) - Other non-current liabilities - 851 - - - 1,987 - 2,838 Long-term debt - 5,112 - - - 87 - 5,199 Separate account liabilities - - - - - 8,423 - 8,423 TOTAL LIABILITIES - 9,444 - - - 41,735 (3,180) 47,999 Redeemable noncontrolling interests - - - - - 49 - 49 SHAREHOLDERS’ EQUITY - 13,711 - - - 22,631 (22,631) 13,711 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ - $ 23,155 $ - $ - $ - $ 64,415 $ (25,811) $ 61,759 |
Condensed Consolidating Cash Flow Statements | Condensed Consolidating Cash Flow Statements (In millions) For the year ended December 31, 2018 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Net cash provided by (used in) operating activities $ 145 $ 2,416 $ (36) $ 80 $ (304) $ 3,987 $ (2,518) $ 3,770 Cash Flows from Investing Activities Net change in loans due (from) affiliates - (4,412) (200) - - (1,121) 5,733 - Proceeds from investments sold: Fixed maturities and equity securities - - - - - 2,655 - 2,655 Investment maturities and repayments: Fixed maturities and equity securities - - - - - 2,151 - 2,151 Commercial mortgage loans - - - - - 215 - 215 Other sales, maturities and repayments (primarily short-term and other long-term investments) - 63 - - - 671 - 734 Investments purchased or originated: Fixed maturities and equity securities - (10) - - - (5,627) - (5,637) Commercial mortgage loans - - - - - (312) - (312) Other sales, maturities and repayments (primarily short-term and other long-term investments) - - - - - (1,189) - (1,189) Property and equipment purchases, net - - - (6) - (522) - (528) Acquisitions, net of cash acquired (27,115) - 1,676 23 - 961 - (24,455) Other, net - - - - - (12) - (12) NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (27,115) (4,359) 1,476 17 - (2,130) 5,733 (26,378) Cash Flows from Financing Activities Net change in amounts due to (from) affiliates 4,437 1,121 (807) (54) 304 732 (5,733) - Intercompany dividends paid - - - - - (2,518) 2,518 - Deposits and interest credited to contractholder deposit funds - - - - - 1,040 - 1,040 Withdrawals and benefit payments from contractholder deposit funds - - - - - (1,151) - (1,151) Net change in short-term debt - 1,400 - - - 87 - 1,487 Payments for debt extinguishment - - - - - - - - Repayment of long-term debt - (131) - - - - - (131) Net proceeds on issuance of long-term debt 22,856 - - - - - - 22,856 Repurchase of common stock (32) (310) - - - - - (342) Issuance of common stock 1 67 - - - - - 68 Other, net (49) (213) - - - (50) - (312) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 27,213 1,934 (807) (54) 304 (1,860) (3,215) 23,515 Effect of foreign currency rate changes on cash and cash equivalents - - - - - (24) - (24) Net increase (decrease) in cash and cash equivalents 243 (9) 633 43 - (27) - 883 Cash and cash equivalents, January 1, - 9 - - - 2,963 - 2,972 Cash and cash equivalents, December 31, $ 243 $ - $ 633 $ 43 $ - $ 2,936 $ - $ 3,855 Condensed Consolidating Cash Flow Statements (In millions) For the year ended December 31, 2017 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Net cash provided by operating activities $ - $ 602 $ - $ - $ - $ 4,242 $ (758) $ 4,086 Cash Flows from Investing Activities Net change in loans due (from) affiliates - - - - - (1,955) 1,955 - Proceeds from investments sold: Fixed maturities and equity securities - - - - - 2,012 - 2,012 Investment maturities and repayments: Fixed maturities and equity securities - - - - - 2,051 - 2,051 Commercial mortgage loans - - - - - 335 - 335 Other sales, maturities and repayments (primarily short-term and other long-term investments) - - - - - 1,702 - 1,702 Investments purchased or originated: Fixed maturities and equity securities - - - - - (5,628) - (5,628) Commercial mortgage loans - - - - - (430) - (430) Other sales, maturities and repayments (primarily short-term and other long-term investments) - (6) - - - (1,059) - (1,065) Property and equipment purchases, net - - - - - (471) - (471) Acquisitions, net of cash acquired - - - - - (209) - (209) Other, net - (11) - - - 11 - - NET CASH (USED IN) INVESTING ACTIVITIES - (17) - - - (3,641) 1,955 (1,703) Cash Flows from Financing Activities Net change in amounts due to affiliates - 1,955 - - - - (1,955) - Intercompany dividends paid - - - - - (758) 758 - Deposits and interest credited to contractholder deposit funds - - - - - 1,230 - 1,230 Withdrawals and benefit payments from contractholder deposit funds - - - - - (1,363) - (1,363) Net change in short-term debt - 100 - - - (20) - 80 Payments for debt extinguishment - (313) - - - - - (313) Repayment of long-term debt - (1,250) - - - - - (1,250) Net proceeds on issuance of long-term debt - 1,581 - - - - - 1,581 Repurchase of common stock - (2,725) - - - - - (2,725) Issuance of common stock - 131 - - - - - 131 Other, net - (73) - - - 51 - (22) NET CASH (USED IN) FINANCING ACTIVITIES - (594) - - - (860) (1,197) (2,651) Effect of foreign currency rate changes on cash and cash equivalents - - - - - 55 - 55 Net decrease in cash and cash equivalents - (9) - - - (204) - (213) Cash and cash equivalents, January 1, - 18 - - - 3,167 - 3,185 Cash and cash equivalents, December 31, $ - $ 9 $ - $ - $ - $ 2,963 $ - $ 2,972 Condensed Consolidating Cash Flow Statements (In millions) For the year ended December 31, 2016 Cigna Old Cigna Express Scripts Holding Company Express Scripts, Inc. Medco Health Solutions, Inc. Non-Guarantors Eliminations and Consolidation Adjustments Consolidated Net cash provided by operating activities $ - $ 376 $ - $ - $ - $ 4,230 $ (580) $ 4,026 Cash Flows from Investing Activities Net change in loans due to affiliates - - - - - 78 (78) - Proceeds from investments sold: Fixed maturities and equity securities - - - - - 1,544 - 1,544 Investment maturities and repayments: Fixed maturities and equity securities - - - - - 1,755 - 1,755 Commercial mortgage loans - - - - - 316 - 316 Other sales, maturities and repayments (primarily short-term and other long-term investments) - - - - - 1,431 - 1,431 Investments purchased or originated: Fixed maturities and equity securities - - - - - (5,191) - (5,191) Commercial mortgage loans - - - - - (165) - (165) Other sales, maturities and repayments (primarily short-term and other long-term investments) - (3) - - - (1,695) - (1,698) Property and equipment purchases, net - - - - - (461) - (461) Acquisitions, net of cash acquired - - - - - (4) - (4) Other, net - (8) - - - (93) - (101) NET CASH (USED IN) INVESTING ACTIVITIES - (11) - - - (2,485) (78) (2,574) Cash Flows from Financing Activities Net change in amounts due (from) affiliates - (78) - - - - 78 - Intercompany dividends paid - - - - - (580) 580 - Deposits and interest credited to contractholder deposit funds - - - - - 1,460 - 1,460 Withdrawals and benefit payments from contractholder deposit funds - - - - - (1,362) - (1,362) Net change in short-term debt - (100) - - - (48) - (148) Payments for debt extinguishment - - - - - - - - Repayment of long-term debt - - - - - - - - Net proceeds on issuance of long-term debt - - - - - - - - Repurchase of common stock - (139) - - - - - (139) Issuance of common stock - 36 - - - - - 36 Other, net - (82) - - - 10 - (72) NET CASH (USED IN) FINANCING ACTIVITIES - (363) - - - (520) 658 (225) Effect of foreign currency rate changes on cash and cash equivalents - - - - - (10) - (10) Net increase in cash and cash equivalents - 2 - - - 1,215 - 1,217 Cash and cash equivalents, January 1, - 16 - - - 1,952 - 1,968 Cash and cash equivalents, December 31, $ - $ 18 $ - $ - $ - $ 3,167 $ - $ 3,185 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information [Abstract] | |
Special item charges | (In millions) Description of Special Item Charges (Benefits) and Financial Statement Line Item(s) After-tax Before-tax Year ended December 31, 2018 Transaction-related costs - Selling, general and administrative expenses (see Note 3) $ 587 $ 748 - Interest expense and other (see Note 3) 179 227 - Net investment income (see Note 3) (97) (123) Total transaction-related costs $ 669 $ 852 Charges associated with litigation matters (Selling, general and administrative expenses, see Note 19D.) $ 19 $ 25 Total charges associated with U.S. tax reform - Selling, general and administrative expenses $ 1 $ 2 - Tax expense (3) - Total charges associated with U.S. tax reform $ (2) $ 2 Year ended December 31, 2017 Transaction-related costs (see Note 3) $ 33 $ 126 Charges associated with U.S. tax reform - Selling, general and administrative expenses $ (36) $ (56) - Tax expense (see Note 18) 232 - Total charges associated with U.S. tax reform $ 196 $ (56) Debt extinguishment costs (see Note 5) $ 209 $ 321 Long-term care guaranty fund assessment (Selling, general and administrative expenses, see Note 19D. for details) $ 83 $ 129 Year ended December 31, 2016 Transaction-related costs (see Note 3) $ 147 $ 166 Charges associated with litigation matters (Selling, general and administrative expenses, see Note 19D. for details) $ 25 $ 40 Risk corridor allowance (Selling, general and administrative expenses) $ 80 $ 124 |
Summarized segment financial information | (In millions) Integrated Medical Health Services International Markets Group Disability and Other Corporate and Eliminations Total 2018 Revenues from external customers (1) $ 31,759 $ 5,902 $ 5,174 $ 4,335 $ - $ 47,170 Inter-segment revenues 573 1,154 - 14 (1,741) - Net investment income 459 9 149 712 151 1,480 Total revenues 32,791 7,065 5,323 5,061 (1,590) 48,650 Revenue contributions from transitioning clients - (459) - - - (459) Net realized investment results from equity method subsidiaries (2) - - 43 - - 43 Special items reported in transaction-related costs - - - - (123) (123) Adjusted revenues $ 32,791 $ 6,606 $ 5,366 $ 5,061 $ (1,713) $ 48,111 Depreciation and amortization $ 466 $ 120 $ 55 $ 53 $ 1 $ 695 Income (loss) before taxes $ 3,342 $ 329 $ 670 $ 497 $ (1,257) $ 3,581 Pre-tax adjustments to reconcile to adjusted income from operations Adjustment for transitioning clients - (62) - - - (62) (Income) loss attributable to noncontrolling interests - - (14) - - (14) Net realized investment (gains) losses (2) 36 - 61 25 2 124 Amortization of acquired intangible assets 99 113 18 5 - 235 Special items Transaction-related costs - - - - 852 852 Charges associated with litigation matters 25 - - - - 25 U.S. tax reform - - - 2 - 2 Pre-tax adjusted income (loss) from operations $ 3,502 $ 380 $ 735 $ 529 $ (403) $ 4,743 (In millions) Integrated Medical Health Services International Markets Group Disability and Other Corporate and Eliminations Total 2017 Revenues from external customers (1) $ 28,193 $ 3,250 $ 4,774 $ 4,363 $ - $ 40,580 Inter-segment revenues 476 988 - 12 (1,476) - Net investment income 366 3 127 700 30 1,226 Total revenues $ 29,035 $ 4,241 $ 4,901 $ 5,075 $ (1,446) $ 41,806 Adjusted revenues $ 29,035 $ 4,241 $ 4,901 $ 5,075 $ (1,446) $ 41,806 Depreciation and amortization $ 470 $ - $ 61 $ 31 $ 4 $ 566 Income (loss) before taxes $ 2,859 $ 288 $ 667 $ 614 $ (822) $ 3,606 Pre-tax adjustments to reconcile to adjusted income from operations (Income) loss attributable to noncontrolling interests 1 - 1 - - 2 Net realized investment (gains) losses (137) - (31) (69) - (237) Amortization of acquired intangible assets 93 - 17 5 - 115 Special items Transaction-related costs - - - - 126 126 U.S. tax reform - - - (56) - (56) Debt extinguishment costs - - - - 321 321 Long-term care guaranty fund assessment 106 - - 23 - 129 Pre-tax adjusted income (loss) from operations $ 2,922 $ 288 $ 654 $ 517 $ (375) $ 4,006 (1) Includes the Company’s share of the earnings of its joint ventures reported in the International Markets segment using the equity method of accounting. (2) Beginning in 2018, includes the Company's share of the realized investment gains (losses) of its joint ventures reported using the equity method of accounting. (In millions) Integrated Medical Health Services International Markets Group Disability and Other Corporate and Eliminations Total 2016 Revenues from external customers (1) $ 26,695 $ 3,169 $ 4,424 $ 4,403 $ - $ 38,691 Inter-segment revenues 395 894 - - (1,289) - Net investment income 305 3 113 705 21 1,147 Total revenues $ 27,395 $ 4,066 $ 4,537 $ 5,108 $ (1,268) $ 39,838 Adjusted revenues $ 27,395 $ 4,066 $ 4,537 $ 5,108 $ (1,268) $ 39,838 Depreciation and amortization $ 519 $ - $ 61 $ 29 $ 1 $ 610 Income (loss) before taxes $ 2,417 $ 268 $ 497 $ 324 $ (527) $ 2,979 Pre-tax adjustments to reconcile to adjusted income from operations (Income) loss attributable to noncontrolling interests 2 - 18 - - 20 Net realized investment (gains) losses (116) - 2 (54) (1) (169) Amortization of acquired intangible assets 125 - 21 5 - 151 Special items Transaction-related costs - - - - 166 166 Risk corridor allowance 124 - - - - 124 Charges associated with litigation matters 40 - - - - 40 Pre-tax adjusted income (loss) from operations $ 2,592 $ 268 $ 538 $ 275 $ (362) $ 3,311 (1) Includes the Company’s share of the earnings of its joint ventures reported in the International Markets segment using the equity method of accounting. (In millions) 2018 2017 2016 Insurance premiums Integrated Medical premiums (ASC 944) Commercial Premiums Risk $ 10,710 $ 9,439 $ 7,911 Stop loss 4,008 3,483 3,082 Other 1,038 917 886 Government Medicare Advantage 5,832 5,534 6,621 Medicare Part D 764 764 1,122 Other 4,496 3,494 2,640 Total Integrated Medical premiums 26,848 23,631 22,262 International Markets premiums 5,043 4,619 4,273 Domestic disability, life and accident premiums 4,000 3,973 4,002 Other premiums 222 268 287 Total premiums 36,113 32,491 30,824 Services (ASC 606) Fees 5,558 5,053 4,844 Other external revenues 20 57 57 2016-2017 other revenues adjustment 57 57 Total services 5,578 5,110 4,901 Products (Pharmacy revenues) (ASC 606) Home delivery and specialty revenues 3,997 2,979 2,966 Network revenues 1,415 - - Other 67 - - Total pharmacy revenues 5,479 2,979 2,966 Total revenues from external customers $ 47,170 $ 40,580 $ 38,691 |
Foreign and U.S. revenues from external customers | (In millions) 2018 2017 2016 United States $ 42,773 $ 36,555 $ 35,011 South Korea 2,093 1,892 1,666 All other foreign countries 2,304 2,133 2,014 Total $ 47,170 $ 40,580 $ 38,691 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | (In millions, except per share amounts) Three Months Ended March 31, June 30, September 30, December 31, Consolidated Results 2018 Total revenues $ 11,413 $ 11,480 $ 11,457 $ 14,300 Income before income taxes 1,218 1,102 1,033 228 Shareholders’ net income 915 (1) 806 (1) 772 (1) 144 (1) Shareholders’ net income per share 1 Basic 3.78 3.32 3.18 0.56 Diluted 3.72 3.29 3.14 0.55 2017 Total revenues $ 10,428 $ 10,374 $ 10,372 $ 10,632 Income before income taxes 890 1,134 824 758 Shareholders’ net income 598 (1) 813 (1) 560 (1) 266 (1) Shareholders’ net income per share 1 Basic 2.34 3.20 2.25 1.09 Diluted 2.30 3.15 2.21 1.07 Stock and dividend data 2018 Price range of common stock — high $ 227.13 $ 182.10 $ 208.73 $ 226.61 — low $ 163.02 $ 163.80 $ 166.88 $ 176.52 Dividends declared per common share $ 0.04 $ - $ - $ - 2017 Price range of common stock — high $ 154.83 $ 173.21 $ 188.36 $ 212.46 — low $ 133.52 $ 146.70 $ 166.81 $ 183.08 Dividends declared per common share $ 0.04 $ - $ - $ - (1) Shareholders’ net income includes the following after-tax charges (benefits), described in Note 21 to the Consolidated Financial Statements: March 31, June 30, September 30, December 31, 2018 Transaction-related costs $ 50 $ 109 $ 108 $ 402 2018 Charges associated with litigation matters - - 35 (16) 2018 U.S. tax reform - - (5) 3 Total 2018 charges $ 50 $ 109 $ 138 $ 389 March 31, June 30, September 30, December 31, 2017 U.S. tax reform $ - $ - $ - $ 196 2017 Debt extinguishment costs - - 209 - 2017 Long-term care guaranty fund assessment 83 - - - 2017 Transaction-related costs 49 (47) 6 25 Total 2017 charges (benefits) $ 132 $ (47) $ 215 $ 221 |
Schedule I - Condensed Financ_2
Schedule I - Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information of Cigna Corporation (Registrant) [Abstract] | |
Condensed Financial Information Of Parent Company Only, Statements Of Income | For the years ended December 31, Cigna* Old Cigna* Old Cigna* (in millions) 2018 2017 2016 Revenues Net investment income $ 123 $ - $ - Total revenues 123 - - Operating expenses Selling, general and administrative expenses 200 195 281 Total operating expenses 200 195 281 Income (loss) from operations (77) (195) (281) Interest and other (expense) (244) (246) (244) Intercompany interest (expense) (5) (18) (3) Debt extinguishment costs - (321) - Realized investment (loss) (1) - - Loss before taxes (327) (780) (528) Income tax (benefit) (74) (194) (146) Loss of Parent Company (253) (586) (382) Equity in income of subsidiaries 2,890 2,823 2,249 Shareholders' net income 2,637 2,237 1,867 Shareholders’ other comprehensive income (loss) Net unrealized (depreciation) on securities and derivatives (365) (37) (60) Net translation gains (losses) of foreign currencies (152) 304 (95) Postretirement benefits liability adjustment 127 33 23 Shareholders’ other comprehensive income (loss): (390) 300 (132) Shareholders' comprehensive income $ 2,247 $ 2,537 $ 1,735 * As described in Note 3, on December 20, 2018, through the "Merger," Old Cigna merged into a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. Refer to Note 20 for Condensed Consolidated Financial Statements of Cigna and Old Cigna. See Notes to Financial Statements on the following pages. |
Condensed Financial Information Of Parent Company Only, Balance Sheets | As of December 31, Cigna* Old Cigna* (in millions) 2018 2017 Assets Cash and cash equivalents $ 243 $ 9 Short-term investments - 63 Other current assets 14 31 Total current assets 257 103 Intercompany receivable - 200 Investments in subsidiaries 68,969 22,631 Other noncurrent assets 48 221 TOTAL ASSETS $ 69,274 $ 23,155 Liabilities Short-term debt $ - $ 231 Other current liabilities 418 270 Total current liabilities 418 501 Intercompany payable 4,965 2,980 Long-term debt 22,863 5,112 Other noncurrent liabilities - 851 TOTAL LIABILITIES 28,246 9,444 Shareholders’ Equity Common stock (shares issued, 381 and 296; authorized, 600) 4 74 Additional paid-in capital 27,751 2,940 Accumulated other comprehensive loss (1,711) (1,082) Retained earnings 15,088 15,800 Less treasury stock, at cost (104) (4,021) TOTAL SHAREHOLDERS’ EQUITY 41,028 13,711 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 69,274 $ 23,155 * As described in Note 3, on December 20, 2018, through the "Merger," Old Cigna merged into a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. Refer to Note 20 for Condensed Consolidated Financial Statements of Cigna and Old Cigna. See Notes to Financ ial Statements on the following pages . |
Condensed Financial Information Of Parent Company Only, Statements Of Cash Flows | For the years ended December 31, Cigna* Old Cigna* Old Cigna* (in millions) 2018 2017 2016 Cash Flows from Operating Activities Shareholders’ net income $ 2,637 $ 2,237 $ 1,867 Adjustments to reconcile shareholders’ net income to net cash provided by operating activities Equity in income of subsidiaries (2,890) (2,823) (2,249) Dividends received from subsidiaries - 758 580 Other liabilities 412 (224) (9) Debt extinguishment costs - 321 - Other, net (14) 333 187 NET CASH PROVIDED BY OPERATING ACTIVITIES 145 602 376 Cash Flows from Investing Activities Short-term investment purchased, net - (6) (3) Other, net (27,115) (11) (8) NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (27,115) (17) (11) Cash Flows from Financing Activities Net change in amounts due to (from) affiliates 4,437 1,955 (78) Net change in short-term debt - 100 (100) Payments for debt extinguishment - (313) - Repayment of long-term debt - (1,250) - Net proceeds on issuance of long-term debt 22,856 1,581 - Issuance of common stock 1 131 36 Common dividends paid - (10) (10) Repurchase of common stock (32) (2,725) (139) Tax withholding on stock compensation and other (49) (63) (72) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 27,213 (594) (363) Net increase (decrease) in cash and cash equivalents 243 (9) 2 Cash and cash equivalents, beginning of year - 18 16 Cash and cash equivalents, end of year $ 243 $ 9 $ 18 * As described in Note 3, on December 20, 2018, through the "Merger," Old Cigna merged into a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. Refer to Note 20 for Condensed Consolidated Financial Statements of Cigna and Old Cigna. (1) As required in adopting ASU 2016-09, the Company retrospectively reclassified $79 million cash payments from operating to financing activities in 2015. These payments were related to employee tax obligations associated with stock compensation. The comparable amounts reported in financing activities were $61 million in 2017 and $72 million in 2016. See Notes to Fi nancial Statements on the following pages . |
Condensed Financial Information Of Parent Company Only, Maturity of Long-term Debt | Maturity of the Company’s long-term debt is as follows: (In millions) 2019 $ - 2020 $ 2,750 2021 $ 5,250 2022 $ - 2023 $ 3,800 Maturities after 2023 $ 11,200 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts and Reserves (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Valuation and Qualifying Accounts and Reserves [Abstract] | |
Schedule Of Valuation And Qualifying Accounts Disclosure [Table Text Block] | Charged Charged Balance at (Credited) to (Credited) Balance at (in millions) beginning costs and to other Other end Description of year expenses accounts deductions of year 2018 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 207 $ 18 $ (3) $ (5) $ 217 Deferred tax asset valuation allowance $ 72 $ (5) $ 132 $ - $ 199 Reinsurance recoverables $ 3 $ (1) $ - $ - $ 2 2017 Investment asset valuation reserves Commercial mortgage loans $ 5 $ 1 $ - $ (6) $ - Allowance for doubtful accounts Premiums, accounts and notes receivable $ 200 $ 19 $ (11) $ (1) $ 207 Deferred tax asset valuation allowance (1) $ 87 $ 11 $ (26) $ - $ 72 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 2016 Investment asset valuation reserves Commercial mortgage loans $ 15 $ - $ - $ (10) $ 5 Allowance for doubtful accounts Premiums, accounts and notes receivable $ 75 $ 134 $ (8) $ (1) $ 200 Deferred tax asset valuation allowance $ 71 $ 21 $ (5) $ - $ 87 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 (1) Deferred tax valuation allowance amount includes amount assumed from Express Scripts in 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | Dec. 31, 2018 | 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 | $ 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] | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Impact of accounting standard on Total Assets | $ 700 | |||
Impact of accounting standard on Total Liabilities | $ 700 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts Receivable, Net [Abstract] | |||
Insurance customer receivables | $ 1,888 | $ 1,818 | |
Noninsurance customer receivables | 4,988 | 441 | |
Pharmaceutical manufacturer receivable | 3,321 | 645 | |
Other receivables | 276 | 251 | |
Total accounts receivable, net | 10,473 | 3,155 | |
Pharmaceutical manufacturer receivables under noninsurance customer contracts | 406 | 336 | |
Unbilled receivables | 1,200 | ||
Allowance for doubtful accounts for receivables | 217 | 210 | |
Allowances for uncollectible reinsurance | |||
Amortization of deferred policy acquisition costs | 406 | 322 | $ 292 |
Performance Guarantee [Member] | |||
Loss Contingencies [Line Items] | |||
Reserves for performance guarantees | $ 895 |
Mergers and Acquistions - Merge
Mergers and Acquistions - Merger Consideration (Details) $ / shares in Units, $ in Millions, $ in Millions | Dec. 31, 2018USD ($)shares | Nov. 30, 2018NZD ($) | Nov. 30, 2018USD ($) | Dec. 20, 2018$ / sharesshares | Dec. 31, 2017shares | Dec. 31, 2016shares |
Merger consideration [Abstract] | ||||||
Common shares outstanding | 380,924,000 | 0 | 0 | |||
Common Stock Shares Outstanding | 380,924,000 | 0 | 0 | |||
Express Scripts Holding Company [Member] | ||||||
Merger consideration [Abstract] | ||||||
Common shares outstanding | 564,300,000 | |||||
Cash consideration per share | $ / shares | $ 48.75 | |||||
Cash consideration paid to Express Scripts common stockholders | $ | $ 27,510 | |||||
Cash consideration paid in lieu of fractional shares | $ | 4 | |||||
Cash consideration paid to Express Scripts performance share holders | $ | 65 | |||||
Total cash consideration | $ | $ 27,579 | |||||
Common Stock Shares Outstanding | 564,300,000 | |||||
Per share exchange ratio | 0.2434 | |||||
Shares of Cigna issued to Express Scripts common stockholders | 137,300,000 | |||||
Shares of Cigna issued to Express Scripts performance share holders and other equity holders | 300,000 | |||||
Shares of Cigna issued to Express Scripts shareholders | 137,600,000 | |||||
Closing price of Cigna common stock | $ / shares | $ 179.8 | |||||
Total stock consideration | $ | $ 24,745 | |||||
Noncontrolling interest | $ | 7 | |||||
Fair value of other share-based compensation awards | $ | 479 | |||||
Total merger consideration | $ | $ 52,810 | |||||
Number of Cigna stock options or restricted stock units awarded to holder of acquiree stock options and restricted stock units | 0.4802 | |||||
Expected life of acquiree stock option awards | 4 years 3 months 18 days | |||||
OnePath Insurance [Member] | ||||||
Merger consideration [Abstract] | ||||||
Total cash consideration | $ 700 | $ 480 |
Mergers and Acquisitions - Purc
Mergers and Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Purchase price allocation [Abstract] | ||||
Goodwill | $ 44,505 | $ 6,164 | $ 5,980 | |
Health Services [Member] | ||||
Purchase price allocation [Abstract] | ||||
Goodwill | $ 33,700 | $ 33,700 | ||
Express Scripts Holding Company [Member] | Health Services [Member] | ||||
Purchase price allocation [Abstract] | ||||
Cash and cash equivalents | 3,517 | |||
Receivables | 7,802 | |||
Inventory | 2,483 | |||
Other current assets | 600 | |||
Property and equipment | 2,973 | |||
Goodwill | 38,361 | |||
Other identifiable intangible assets | 38,725 | |||
Other assets acquired, non-current | 314 | |||
Total assets acquired | 94,775 | |||
Other current liabilities | 18,616 | |||
Long-term debt, including current portion | 12,816 | |||
Deferred income tax liabilities | 9,511 | |||
Other liabilities, non-current assumed | 1,022 | |||
Total liabilities acquired | 41,965 | |||
Total | $ 52,810 |
Mergers and Acquistions - Intan
Mergers and Acquistions - Intangible Assets (Details) - Express Scripts Holding Company [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Acquired Intangible Assets [Line Items] | |
Total | $ 41,168 |
Customer relationships [Member] | |
Acquired Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 30,210 |
Customer relationships [Member] | Minimum [Member] | |
Acquired Intangible Assets [Line Items] | |
Estimated useful life | 14 years |
Customer relationships [Member] | Maximum [Member] | |
Acquired Intangible Assets [Line Items] | |
Estimated useful life | 29 years |
Internal-use software [Member] | |
Acquired Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 2,443 |
Internal-use software [Member] | Minimum [Member] | |
Acquired Intangible Assets [Line Items] | |
Estimated useful life | 3 years |
Internal-use software [Member] | Maximum [Member] | |
Acquired Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Trade Name [Member] | |
Acquired Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 115 |
Indefinite-lived Intangible Assets Acquired | $ 8,400 |
Trade Name [Member] | Minimum [Member] | |
Acquired Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Mergers and Acquisitions - Pro
Mergers and Acquisitions - Pro Forma Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Unaudited pro forma information [Abstract] | |||||||||||
Total revenues | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 10,632 | $ 10,372 | $ 10,374 | $ 10,428 | $ 48,650 | $ 41,806 | $ 39,838 |
Express Scripts Holding Company [Member] | |||||||||||
Unaudited pro forma information [Abstract] | |||||||||||
Total revenues | 2,600 | ||||||||||
Express Scripts Holding Company [Member] | |||||||||||
Unaudited pro forma information [Abstract] | |||||||||||
Pro forma total revenues | 149,544 | 143,288 | |||||||||
Pro forma shareholders' net income | 5,632 | 4,435 | |||||||||
Transaction-related costs included in pro forma shareholders' net income | $ 1,200 | 1,200 | |||||||||
OnePath Insurance [Member] | |||||||||||
Unaudited pro forma information [Abstract] | |||||||||||
Pro forma total revenues | |||||||||||
Pro forma shareholders' net income |
Mergers and Acquisitions - Tran
Mergers and Acquisitions - Transaction-related Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Before-tax [Abstract] | |||||||||||
Interest expense on newly issued debt | $ 227 | $ 0 | $ 0 | ||||||||
Net investment income on debt proceeds | (123) | 0 | 0 | ||||||||
Charitable contributions | 200 | 0 | 0 | ||||||||
Legal and advisory fees | 204 | 36 | 96 | ||||||||
Bridge facility fees | 140 | 0 | 0 | ||||||||
All other transaction-related costs | 204 | 90 | 70 | ||||||||
Transaction-related costs, net | 852 | 126 | 166 | ||||||||
After-tax [Abstract] | |||||||||||
Interest expense on newly issued debt, after-tax | 179 | 0 | 0 | ||||||||
Net investment income on debt proceeds, after-tax | (97) | 0 | 0 | ||||||||
Charitable contributions, after-tax | 158 | 0 | 0 | ||||||||
Legal and advisory fees, after-tax | 185 | 23 | 95 | ||||||||
Bridge facility fees, after-tax | 111 | 0 | 0 | ||||||||
All other transaction-related costs, after-tax | 133 | 69 | 52 | ||||||||
Tax (benefit) - previously non-deductible costs | (59) | ||||||||||
Transaction-related costs, net - after-tax | $ 402 | $ 108 | $ 109 | $ 50 | $ 25 | $ 6 | $ (47) | $ 49 | $ 669 | $ 33 | $ 147 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Shareholders' net income | $ 144 | $ 772 | $ 806 | $ 915 | $ 266 | $ 560 | $ 813 | $ 598 | $ 2,637 | $ 2,237 | $ 1,867 |
Shares: | |||||||||||
Weighted average | 246,652,000 | 250,892,000 | 255,360,000 | ||||||||
Common stock equivalents | 3,573,000 | 4,180,000 | 4,287,000 | ||||||||
Total shares | 250,225,000 | 255,072,000 | 259,647,000 | ||||||||
EPS, basic | $ 0.56 | $ 3.18 | $ 3.32 | $ 3.78 | $ 1.09 | $ 2.25 | $ 3.2 | $ 2.34 | $ 10.69 | $ 8.92 | $ 7.31 |
EPS, effect of dilution | (0.15) | (0.15) | (0.12) | ||||||||
EPS, diluted | $ 0.55 | $ 3.14 | $ 3.29 | $ 3.72 | $ 1.07 | $ 2.21 | $ 3.15 | $ 2.3 | $ 10.54 | $ 8.77 | $ 7.19 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||||
Antidilutive options | 900,000 | 900,000 | 2,300,000 | ||||||||
Common shares held in Treasury | 570,000 | 0 | 570,000 | 0 | 0 |
Debt - Short-term and Long-term
Debt - Short-term and Long-term Debt (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||||
Commercial paper | $ 1,500,000,000 | $ 100,000,000 | |||
Current maturities of long-term debt | 0 | 131,000,000 | |||
Other, including capital leases | 117,000,000 | 9,000,000 | |||
Total short-term debt | 2,955,000,000 | 240,000,000 | |||
Long-term debt, carrying value | 39,523,000,000 | 5,199,000,000 | |||
Repayment of long-term debt | $ 131,000,000 | $ 250,000,000 | 131,000,000 | 1,250,000,000 | $ 0 |
$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 | 997,000,000 | 0 | |||
$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 | $ 1,743,000,000 | 0 | |||
$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 | 996,000,000 | 0 | |||
$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 | $ 1,245,000,000 | 0 | |||
$3,000 million Floating Rate Term Loan due 2021 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | 3,000,000,000 | ||||
Long-term debt, carrying value | 2,997,000,000 | 0 | |||
$700 million, Floating Rate Notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | 700,000,000 | ||||
Long-term debt, carrying value | 697,000,000 | 0 | |||
$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 | $ 3,085,000,000 | 0 | |||
$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 | $ 2,187,000,000 | 0 | |||
$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 | $ 3,774,000,000 | 0 | |||
$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 | $ 2,178,000,000 | 0 | |||
$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 | $ 2,964,000,000 | 0 | |||
$500 million, 4.125% Senior Notes due 2020 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 500,000,000 | ||||
Long-term debt, stated interest rate | 4.125% | ||||
Long-term debt, carrying value | $ 506,000,000 | 0 | |||
$500 million, 2.600% Senior Notes due 2020 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 500,000,000 | ||||
Long-term debt, stated interest rate | 2.60% | ||||
Long-term debt, carrying value | $ 493,000,000 | 0 | |||
$400 million, Floating Rate Senior Notes due 2020 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | 400,000,000 | ||||
Long-term debt, carrying value | 399,000,000 | 0 | |||
$500 million, 3.300% Senior Notes due 2021 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 500,000,000 | ||||
Long-term debt, stated interest rate | 3.30% | ||||
Long-term debt, carrying value | $ 499,000,000 | 0 | |||
$1,250 million, 4.750% Senior Notes due 2021 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,250,000,000 | ||||
Long-term debt, stated interest rate | 4.75% | ||||
Long-term debt, carrying value | $ 1,285,000,000 | 0 | |||
$1,000 million, 3.900% Senior Notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,000,000,000 | ||||
Long-term debt, stated interest rate | 3.90% | ||||
Long-term debt, carrying value | $ 998,000,000 | 0 | |||
$500 million, 3.050% Senior Notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 500,000,000 | ||||
Long-term debt, stated interest rate | 3.05% | ||||
Long-term debt, carrying value | $ 481,000,000 | 0 | |||
$1,000 million, 3.000% Senior Notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,000,000,000 | ||||
Long-term debt, stated interest rate | 3.30% | ||||
Long-term debt, carrying value | $ 959,000,000 | 0 | |||
$1,000 million, 3.500% Senior Notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,000,000,000 | ||||
Long-term debt, stated interest rate | 3.50% | ||||
Long-term debt, carrying value | $ 966,000,000 | 0 | |||
$1,500 million, 4.500% Senior Notes due 2026 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,500,000,000 | ||||
Long-term debt, stated interest rate | 4.50% | ||||
Long-term debt, carrying value | $ 1,508,000,000 | 0 | |||
$1,500 million, 3.400% Senior Notes due 2027 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,500,000,000 | ||||
Long-term debt, stated interest rate | 3.40% | ||||
Long-term debt, carrying value | $ 1,386,000,000 | 0 | |||
$449 million, 6.125% Senior Notes due 2041 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 449,000,000 | ||||
Long-term debt, stated interest rate | 6.125% | ||||
Long-term debt, carrying value | $ 493,000,000 | 0 | |||
$1,500 million, 4.800% Senior Notes due 2046 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face value | $ 1,500,000,000 | ||||
Long-term debt, stated interest rate | 4.80% | ||||
Long-term debt, carrying value | $ 1,465,000,000 | 0 | |||
$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 | $ 248,000,000 | $ 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 | |||
$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 | $ 297,000,000 | $ 299,000,000 | |||
$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 | |||
$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 | |||
$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 | $ 595,000,000 | $ 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 | |||
$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 | |||
$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 | |||
Other, including capital leases [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, carrying value | $ 32,000,000 | $ 9,000,000 |
Debt - Long-tem Debt Issued (De
Debt - Long-tem Debt Issued (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Amount net of discount and fees | $ 39,523,000,000 | $ 5,199,000,000 | ||
Commercial paper | 1,500,000,000 | 100,000,000 | ||
Net proceeds on issuance of long-term debt | $ 20,000,000,000 | 22,856,000,000 | 1,581,000,000 | $ 0 |
$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 | 997,000,000 | 0 | ||
$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 | $ 1,743,000,000 | 0 | ||
$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 | 996,000,000 | 0 | ||
$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 | $ 1,245,000,000 | 0 | ||
$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 | 697,000,000 | 0 | ||
$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 | $ 3,085,000,000 | 0 | ||
$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 | $ 2,187,000,000 | 0 | ||
$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 | $ 3,774,000,000 | 0 | ||
$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 | $ 2,178,000,000 | 0 | ||
$3,000 million Floating Rate Term Loan due 2021 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, face value | 3,000,000,000 | |||
Amount net of discount and fees | 2,997,000,000 | 0 | ||
$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% | |||
Amount net of discount and fees | $ 2,964,000,000 | 0 | ||
Notes Issued Third Quarter 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, issuance date | Sep. 14, 2017 | |||
Long-term debt, face value | $ 1,600,000,000 | |||
$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% | ||
Amount net of discount and fees | $ 595,000,000 | $ 594,000,000 | ||
$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% | ||
Amount net of discount and fees | $ 988,000,000 | $ 988,000,000 |
Debt - Extinguishment (Details)
Debt - Extinguishment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Extinguishment of Debt [Line Items] | |||||||
Extinguishment of Debt, Amount | $ 1,000 | ||||||
Debt extinguishment costs | 321 | $ 0 | $ 321 | $ 0 | |||
Debt extinguishment costs, after-tax | $ 0 | $ 209 | $ 0 | $ 0 | $ 209 |
Debt - Revolving Credit and Let
Debt - Revolving Credit and Letter of Credit (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Banks | Dec. 20, 2018USD ($)Banks | Mar. 31, 2018USD ($)Banks | |
Bridge Loan [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of participating banks | Banks | 23 | ||
Credit agreement term | 364 days | ||
Maximum borrowing capacity | $ 26,700 | ||
Fees incurred | $ 140 | ||
Revolving Credit And Letter Of Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of participating banks | Banks | 23 | ||
Expiration date | Apr. 6, 2023 | ||
Maximum borrowing capacity | $ 3,250 | ||
Amount by which credit facilty amount can be increased | $ 500 | ||
Leverage ratio covenant | 60.00% | ||
Debt covenant compliance | The Company was in compliance with its debt covenants as of December 31, 2018. | ||
Letter of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 500 | ||
Letters of credit outstanding | $ 22 | ||
Term Loan Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of participating banks | Banks | 26 | ||
Aggregate principal amount | $ 3,000 | ||
Remaining amount available for borrowing | $ 0 | ||
Leverage ratio covenant | 60.00% |
Debt - Maturities and Interest
Debt - Maturities and Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Maturities Of Debt Excluding Capital Leases [Abstract] | |||
Scheduled maturities, long-term debt, 2019 | $ 1,337 | ||
Scheduled maturities, long-term debt, 2020 | 4,700 | ||
Scheduled maturities, long-term debt, 2021 | 7,378 | ||
Scheduled maturities, long-term debt, 2022 | 2,250 | ||
Scheduled maturities, long-term debt, 2023 | 4,917 | ||
Scheduled maturities, long-term debt, after 2023 | 20,582 | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Scheduled maturities, capital leases, 2019 | 17 | ||
Scheduled maturities, capital leases, 2020 | 14 | ||
Scheduled maturities, capital leases, 2021 | 4 | ||
Scheduled maturities, capital leases, 2022 | 4 | ||
Scheduled maturities, capital leases, 2023 | 4 | ||
Scheduled maturities, capital leases, after 2023 | 7 | ||
Interest Expense [Abstract] | |||
Interest expense on long-term and short-term debt | $ 507 | $ 243 | $ 251 |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - $ / shares | Dec. 31, 2018 | Dec. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Common: Old Cigna - Par value $.25, 600,000,000 shares authorized; New Cigna - Par value $.01, 600,000,000 shares authorized | ||||
Outstanding - beginning balance | 0 | 0 | ||
Shares issued in connection with acquisition | 137,337,000 | |||
Issued for stock option exercises and other benefit plans | 91,000 | |||
Repurchase of common stock | (289,000) | |||
Exchange of old Cigna shares for shares of Cigna | 243,785,000 | |||
Outstanding - ending balance | 380,924,000 | 0 | 0 | |
Treasury stock | 570,000 | 0 | 0 | |
Issued - December 31 | 381,494,000 | 296,145,000 | 0 | |
Common Stock, par value and shares authorized | ||||
Common stock, par value per share | $ 0.01 | $ 0.25 | ||
Common stock shares authorized | 600,000,000 | 600,000,000 | ||
Preferred Stock [Abstract] | ||||
Preferred Stock, Shares Authorized | 25,000,000 | |||
Preferred Stock, Par Value Per Share | $ 1 | |||
Preferred Stock, Shares Outstanding | 0 | |||
Express Scripts Holding Company [Member] | ||||
Cash consideration per share | $ 48.75 | |||
Per share exchange ratio | 0.2434 | |||
Common: Old Cigna - Par value $.25, 600,000,000 shares authorized; New Cigna - Par value $.01, 600,000,000 shares authorized | ||||
Outstanding - beginning balance | 564,300,000 | |||
Outstanding - ending balance | 564,300,000 | |||
Old Cigna [Member] | ||||
Common: Old Cigna - Par value $.25, 600,000,000 shares authorized; New Cigna - Par value $.01, 600,000,000 shares authorized | ||||
Outstanding - beginning balance | 243,785,000 | 243,967,000 | 256,869,000 | 256,544,000 |
Issued for stock option exercises and other benefit plans | 1,118,000 | 2,761,000 | 1,110,000 | |
Repurchase of common stock | (1,300,000) | (15,663,000) | (785,000) | |
Exchange of old Cigna shares for shares of Cigna | (243,785,000) | |||
Outstanding - ending balance | 0 | 243,785,000 | 243,967,000 | 256,869,000 |
Retirement of treasury stock | (52,358,000) | |||
Exchange of old Cigna certificated treasury stock for new Cigna certificated treasury stock | (2,000) | |||
Treasury stock | 0 | 52,178,000 | 39,276,000 | |
Issued - December 31 | 0 | 296,145,000 | 296,145,000 | |
Common Stock, par value and shares authorized | ||||
Common stock, par value per share | $ 0.25 | $ 0.25 | $ 0.25 | |
Common stock shares authorized | 600,000,000 | 600,000,000 | 600,000,000 | |
Preferred Stock [Abstract] | ||||
Preferred Stock, Shares Authorized | 25,000,000 | 25,000,000 | 25,000,000 | |
Preferred Stock, Par Value Per Share | $ 1 | $ 1 | $ 1 | |
Preferred Stock, Shares Outstanding | 0 | 0 | 0 |
Insurance and Contractholder _3
Insurance and Contractholder Liabilities - Integrated Medical - Summary (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Insurance and Contractholder Liabilities [Line Items] | ||||
Contractholder deposit funds, current | $ 641 | $ 713 | ||
Future policy benefits, current | 740 | 706 | ||
Unearned premiums, current | 348 | 319 | ||
Total insurance and contractholder liabilities, current | 6,801 | 6,317 | ||
Contractholder deposit funds, non-current | 7,365 | 7,483 | ||
Future policy benefits, non-current | 8,981 | 9,334 | ||
Unearned premiums, non-current | 379 | 405 | ||
Total insurance and contractholder liabilities, non-current | 19,974 | 20,530 | ||
Contractholder deposit funds | 8,006 | 8,196 | ||
Future policy benefits | 9,721 | 10,040 | ||
Unearned premiums | 727 | 724 | ||
Total insurance and contractholder liabilities | $ 26,775 | 26,847 | ||
Maximum [Member] | ||||
Insurance and Contractholder Liabilities [Line Items] | ||||
Interest rate assumptions for Future policy benefits obligations | 9.00% | |||
Minimum [Member] | ||||
Insurance and Contractholder Liabilities [Line Items] | ||||
Interest rate assumptions for Future policy benefits obligations | 1.00% | |||
Integrated Medical [Member] | ||||
Insurance and Contractholder Liabilities [Line Items] | ||||
Unpaid claims and claim expenses, current | $ 2,678 | 2,401 | ||
Unpaid claims and claim expenses, non-current | 19 | 19 | ||
Total liability for unpaid claims and claims expenses | 2,697 | 2,420 | $ 2,261 | $ 2,105 |
Other Segments [Member] | ||||
Insurance and Contractholder Liabilities [Line Items] | ||||
Unpaid claims and claim expenses, current | 2,394 | 2,178 | ||
Unpaid claims and claim expenses, non-current | 3,230 | 3,289 | ||
Total liability for unpaid claims and claims expenses | $ 5,624 | $ 5,467 |
Insurance and Contractholder _4
Insurance and Contractholder Liabilities - Integrated Medical - Activity (Details) - Integrated Medical [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Medical Claims Payable Activity [Abstract] | |||
Beginning balance, unpaid claims, gross | $ 2,420 | $ 2,261 | $ 2,105 |
Less: Reinsurance and other amounts recoverable | 262 | 273 | 237 |
Beginning balance, unpaid claims, net | 2,158 | 1,988 | 1,868 |
Acquired net: | 40 | 0 | 0 |
Incurred claims related to: | |||
Current year | 21,331 | 19,334 | 18,085 |
Prior years | (173) | (227) | (70) |
Total incurred | 21,158 | 19,107 | 18,015 |
Paid claims related to: | |||
Current year | 18,978 | 17,179 | 16,142 |
Prior years | 1,945 | 1,758 | 1,753 |
Total paid | 20,923 | 18,937 | 17,895 |
Ending balance, unpaid claims, net | 2,433 | 2,158 | 1,988 |
Add: Reinsurance and other amounts recoverable | 264 | 262 | 273 |
Ending balance, unpaid claims, gross | $ 2,697 | $ 2,420 | $ 2,261 |
Insurance and Contractholder _5
Insurance and Contractholder Liabilities - Integrated Medical - Prior Year Development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Favorable (unfavorable) impact of prior year development on pre-tax income | $ 97 | $ 148 | |
Integrated Medical [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 | $ 173 | $ 227 | $ 70 |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.90% | 1.30% | |
Favorable (unfavorable) impact of prior year development on shareholders' net income | $ 77 | $ 96 | |
Completion Factors [Member] | Integrated Medical [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 | $ 92 | $ 87 | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.50% | 0.60% | |
Medical Cost Trend [Member] | Integrated Medical [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 | $ 72 | $ 131 | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.40% | 0.70% | |
Other [Member] | Integrated Medical [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% |
Insurance and Contractholder _6
Insurance and Contractholder Liabilities - Integrated Medical - Unpaid Claims Development (Details) - Integrated Medical [Member] Claims in Millions, $ in Millions | Dec. 31, 2018USD ($)Claims | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Claims Development [Line Items] | ||||
Incurred claims | $ 38,986 | |||
Cumulative Paid Claims | 36,698 | |||
Outstanding liabilities for the periods presented, net of reinsurance | 2,288 | |||
Other long-duration liabilities not included in development table above | 145 | |||
Liability for unpaid claims and claims expenses, net of reinsurance | 2,433 | $ 2,158 | $ 1,988 | $ 1,868 |
Reinsurance recoverable on unpaid claims | 264 | 262 | 273 | 237 |
Total liability for unpaid claims and claims expenses | $ 2,697 | 2,420 | $ 2,261 | $ 2,105 |
Percent of health claims paid within one year | 95.00% | |||
Minimum [Member] | ||||
Claims Development [Line Items] | ||||
Percent of health claims paid within one year | 95.00% | |||
Accident Year 2017 [Member] | ||||
Claims Development [Line Items] | ||||
Incurred claims | $ 18,528 | 18,692 | ||
Cumulative Paid Claims | 18,506 | $ 16,628 | ||
Liability for unpaid claims and claims expenses, net of reinsurance | $ 22 | |||
Claim frequency | Claims | 2.6 | |||
Accident Year 2018 [Member] | ||||
Claims Development [Line Items] | ||||
Incurred claims | $ 20,458 | |||
Cumulative Paid Claims | 18,192 | |||
Liability for unpaid claims and claims expenses, net of reinsurance | $ 2,266 | |||
Claim frequency | Claims | 2.9 |
Insurance and Contractholder _7
Insurance and Contractholder Liabilities - Other Segments - Liability Balance Details (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other Segments [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 5,624 | $ 5,467 |
Group Disability and Other [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 4,866 | 4,684 |
Group Disability And Life [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 4,674 | 4,491 |
Other Operations [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 192 | 193 |
International Markets [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 758 | $ 783 |
Insurance and Contractholder _8
Insurance and Contractholder Liabilities - Other Segments - Discounted Liabilities (Details) - USD ($) $ in Billions | Dec. 31, 2018 | Dec. 31, 2017 |
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Discounted liabilities | $ 4.2 | $ 4 |
Aggregate amount of discount | $ 1.1 | $ 1 |
Minimum [Member] | ||
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Range of discount rates | 4.20% | 4.50% |
Maximum [Member] | ||
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Range of discount rates | 5.20% | 5.20% |
Insurance and Contractholder _9
Insurance and Contractholder Liabilities - Other Segments - Activity in Liabilities for Unpaid Claims and Claims Expenses (Details) - Intenational Markets and Global Disability and Life [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |||
Beginning balance, unpaid claims, gross | $ 5,274 | $ 4,997 | $ 4,609 |
Less: Reinsurance and other amounts recoverable | 140 | 123 | 121 |
Beginning balance, unpaid claims, net | 5,134 | 4,874 | 4,488 |
Incurred claims related to: | |||
Current year | 5,350 | 5,097 | 5,116 |
Interest accretion | 156 | 163 | 161 |
All other prior years | (147) | (43) | 85 |
Total incurred | 5,359 | 5,217 | 5,362 |
Paid claims related to: | |||
Current year | 3,391 | 3,229 | 3,221 |
Prior years | 1,808 | 1,757 | 1,739 |
Total paid | 5,199 | 4,986 | 4,960 |
Acquisitions | 23 | 0 | 0 |
Foreign currency | (41) | 29 | (16) |
Ending balance, unpaid claims, net | 5,276 | 5,134 | 4,874 |
Add: Reinsurance and other amounts recoverable | 156 | 140 | 123 |
Ending balance, unpaid claims, gross | $ 5,432 | $ 5,274 | $ 4,997 |
Insurance and Contractholder_10
Insurance and Contractholder Liabilities - Other Segments - Long-term Disability Claims Development Tables (Details) - Long-term Disability [Member] $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2018USD ($)Claims | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Claims Development [Line Items] | |||||||
Incurred claims | $ 7,887 | ||||||
Cumulative Paid Claims | 3,948 | ||||||
Outstanding liabilities for the periods presented, net of reinsurance | 3,939 | ||||||
All outstanding liabilities prior to 2012, net of reinsurance | 921 | ||||||
Impact of discounting | (885) | ||||||
Liability for unpaid claims and claims expenses, net of reinsurance | $ 3,975 | ||||||
Claims frequency, methodology | The claims frequency metric used for the Company’s long-term disability line of business represents the number of unique claim events for which benefits have been approved and payments made. Claim events are identified using a unique claimant identifier and incurral date. Thus, if an individual has multiple claims for different disabling events (and therefore different incurral dates), each will be determined to be a unique claim event. However, if an individual receives multiple benefits under more than one policy (for example for supplemental disability benefits such as pension contribution benefits or survivor benefits), the Company treats this as a single claim occurrence because they related to the same claim event. Claims frequency metrics for the most recent year are expected to be low reflecting the long-term disability product features including waiting and elimination periods that result in delayed eligibility for contract benefits. Claims that did not result in a liability are not included in the frequency metric. | ||||||
Accident Year 2012 [Member] | |||||||
Claims Development [Line Items] | |||||||
Incurred claims | $ 861 | $ 880 | $ 883 | $ 876 | $ 889 | $ 951 | $ 995 |
Cumulative Paid Claims | 661 | 621 | 571 | 504 | 429 | 288 | $ 81 |
Incurred But Not Reported Liabilities | $ 0 | ||||||
Claim frequency | Claims | 21,183 | ||||||
Accident Year 2013 [Member] | |||||||
Claims Development [Line Items] | |||||||
Incurred claims | $ 1,032 | 1,057 | 1,072 | 1,062 | 1,037 | 1,063 | |
Cumulative Paid Claims | 732 | 670 | 600 | 503 | 342 | $ 92 | |
Incurred But Not Reported Liabilities | $ 0 | ||||||
Claim frequency | Claims | 23,526 | ||||||
Accident Year 2014 [Member] | |||||||
Claims Development [Line Items] | |||||||
Incurred claims | $ 1,094 | 1,146 | 1,167 | 1,129 | 1,158 | ||
Cumulative Paid Claims | 743 | 667 | 575 | 379 | $ 111 | ||
Incurred But Not Reported Liabilities | $ 0 | ||||||
Claim frequency | Claims | 25,314 | ||||||
Accident Year 2015 [Member] | |||||||
Claims Development [Line Items] | |||||||
Incurred claims | $ 1,160 | 1,185 | 1,154 | 1,184 | |||
Cumulative Paid Claims | 702 | 603 | 417 | $ 114 | |||
Incurred But Not Reported Liabilities | $ 0 | ||||||
Claim frequency | Claims | 25,737 | ||||||
Accident Year 2016 [Member] | |||||||
Claims Development [Line Items] | |||||||
Incurred claims | $ 1,199 | 1,184 | 1,246 | ||||
Cumulative Paid Claims | 598 | 411 | $ 122 | ||||
Incurred But Not Reported Liabilities | $ 3 | ||||||
Claim frequency | Claims | 25,349 | ||||||
Accident Year 2017 [Member] | |||||||
Claims Development [Line Items] | |||||||
Incurred claims | $ 1,193 | 1,226 | |||||
Cumulative Paid Claims | 396 | $ 110 | |||||
Incurred But Not Reported Liabilities | $ 10 | ||||||
Claim frequency | Claims | 23,382 | ||||||
Accident Year 2018 [Member] | |||||||
Claims Development [Line Items] | |||||||
Incurred claims | $ 1,348 | ||||||
Cumulative Paid Claims | 116 | ||||||
Incurred But Not Reported Liabilities | $ 515 | ||||||
Claim frequency | Claims | 12,025 |
Insurance and Contractholder_11
Insurance and Contractholder Liabilities - Other Segments - Annual Percentage Payout of Incurred Claims (Details) | Dec. 31, 2018 |
Long-term Disability [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred claims in year one, net of reinsurance | 9.00% |
Average annual percentage payout of incurred claims in year two, net of reinsurance | 24.00% |
Average annual percentage payout of incurred claims in year three, net of reinsurance | 16.00% |
Average annual percentage payout of incurred claims in year four, net of reinsurance | 9.00% |
Average annual percentage payout of incurred claims in year five, net of reinsurance | 7.00% |
Average annual percentage payout of incurred claims in year six, net of reinsurance | 6.00% |
Average annual percentage payout of incurred claims in year seven, net of reinsurance | 5.00% |
Other Short-duration Insurance Product Line [Member] | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Average annual percentage payout of incurred claims in year one, net of reinsurance | 100.00% |
Insurance and Contractholder_12
Insurance and Contractholder Liabilities - Other Segments - Reconciliation to the Liability for Unpaid Claims and Claims Expense (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other Segments [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 5,624 | $ 5,467 |
International Markets [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 758 | 783 |
Group Disability And Life [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 4,569 | |
Reinsurance recoverable on unpaid claims | 105 | |
Total liability for unpaid claims and claims expenses | 4,674 | 4,491 |
Other Operations [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 192 | $ 193 |
Long-term Disability [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 3,975 | |
Long-term Disability [Member] | Group Disability And Life [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 3,975 | |
Reinsurance recoverable on unpaid claims | 94 | |
Other Short-duration Insurance Product Line [Member] | Group Disability And Life [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Liability for unpaid claims and claims expenses, net of reinsurance | 594 | |
Reinsurance recoverable on unpaid claims | $ 11 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Integrated Medical, International Markets, Group Disability, COLI [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 464 | $ 454 |
Maximum reinsurance recoverable from a single reinsurer | 70 | |
Integrated Medical, International Markets, Group Disability, COLI [Member] | Maximum [Member] | ||
Ceded Credit Risk [Line Items] | ||
Minimum reinsurance recoverable from a single reinsurer | $ 1 | |
Integrated Medical, International Markets, Group Disability, COLI [Member] | Minimum [Member] | Standard & Poor's Investment Grade [Member] | Reinsurance Recoverable [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration Risk, Percentage | 70.00% | |
Acquisition, disposition or runoff activities [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 5,340 | 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 | 3,312 | 3,436 |
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 893 | 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 | $ 787 | 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 | $ 261 | 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] | Other run-off reinsurance [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables | $ 87 | $ 95 |
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 | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Premiums Earned, Net [Abstract] | |||
Premiums Earned Net | $ 36,113 | $ 32,491 | $ 30,824 |
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 452 | 325 | 540 |
Individual Life Insurance And Annuity Business Sold [Member] | |||
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 249 | 259 | 279 |
Other Subsegments [Member] | |||
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 203 | 66 | 261 |
Short Duration Contracts [Member] | |||
Premiums Earned, Net [Abstract] | |||
Direct | 32,148 | 28,838 | 27,694 |
Assumed | 77 | 199 | 247 |
Ceded | (182) | (150) | (229) |
Premiums Earned Net | 32,043 | 28,887 | 27,712 |
Premiums Written, Net [Abstract] | |||
Direct premiums, written versus earned | |||
Assumed premiums, written versus earned | |||
Ceded premiums, written versus earned | |||
Net premiums, written versus earned | |||
Long Duration Contracts [Member] | |||
Premiums Earned, Net [Abstract] | |||
Direct | 4,268 | 3,748 | 3,259 |
Assumed | 116 | 130 | 137 |
Premiums Earned Net | 4,070 | 3,604 | 3,112 |
Long Duration Contracts [Member] | Individual Life Insurance And Annuity Business Sold [Member] | |||
Premiums Earned, Net [Abstract] | |||
Ceded | (133) | (143) | (153) |
Long Duration Contracts [Member] | Other Subsegments [Member] | |||
Premiums Earned, Net [Abstract] | |||
Ceded | $ (181) | $ (131) | $ (131) |
Reinsurance - Effective Exit of
Reinsurance - Effective Exit of GMDB and GMIB Business (Details) - Berkshire Hathway Life Insurance Company Of Nebraska [Member] - Variable Annuity [Member] $ in Billions | Dec. 31, 2018USD ($) |
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 | 12 Months Ended | |
Dec. 31, 2018USD ($)Contractholders | Dec. 31, 2017USD ($)Contractholders | |
Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk And Average Age Table [Line Items] | ||
Account value | $ 8,402 | $ 10,109 |
Net amount at risk | $ 2,466 | $ 2,112 |
Average attained age of contractholders (weighted by exposure) | 74 years | 75 years |
Number of contractholders | Contractholders | 220,000 | 245,000 |
Reinsurance - GMIB Reinsurers (
Reinsurance - GMIB Reinsurers (Details) - Guaranteed Minimum Income Benefit [Member] Reinsurers in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)Reinsurers | Dec. 31, 2017USD ($) | |
Ceded Credit Risk [Line Items] | ||
Annuitization election period | 30 days | |
Number of external reinsurers | Reinsurers | 3 | |
GMIB Assets | $ 733 | $ 777 |
Berkshire [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 341 | 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 | $ 208 | 221 |
Liberty Re (Bermuda) Ltd. [Member] | ||
Ceded Credit Risk [Line Items] | ||
GMIB Assets | $ 184 | $ 197 |
Liberty Re (Bermuda) Ltd. [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration percentage | 86.00% |
Investments - Fixed Maturities
Investments - Fixed Maturities by Contractual Maturity Periods (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized Cost: | ||
Due in one year or less | $ 1,323 | |
Due after one year through five years | 6,452 | |
Due after five years through ten years | 10,205 | |
Due after ten years | 4,064 | |
Mortgage and other asset-backed securities | 506 | |
Amortized Cost | 22,550 | $ 21,867 |
Fair Value: | ||
Due in one year or less | 1,327 | |
Due after one year through five years | 6,522 | |
Due after five years through ten years | 9,992 | |
Due after ten years | 4,577 | |
Mortgage and other asset-backed securities | 510 | |
Total fair value | $ 22,928 |
Investments - Gross Unrealized
Investments - Gross Unrealized Appreciation (Depreciation) on Fixed Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 22,550 | $ 21,867 |
Unrealized Appreciation | 852 | 1,371 |
Unrealized (Depreciation) | (474) | (100) |
Total Fair Value | 22,928 | 23,138 |
Run-off Settlement Annuity Business [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,264 | 2,200 |
Unrealized Appreciation | 479 | 681 |
Unrealized (Depreciation) | (40) | (2) |
Total Fair Value | 2,703 | 2,879 |
Fixed maturities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Commitments to make additional investments | 106 | |
Federal government and agency [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 507 | 541 |
Unrealized Appreciation | 204 | 239 |
Unrealized (Depreciation) | (1) | (1) |
Total Fair Value | 710 | 779 |
State and local government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 920 | 1,196 |
Unrealized Appreciation | 66 | 93 |
Unrealized (Depreciation) | (1) | (2) |
Total Fair Value | 985 | 1,287 |
Foreign government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,214 | 2,360 |
Unrealized Appreciation | 155 | 142 |
Unrealized (Depreciation) | (7) | (15) |
Total Fair Value | 2,362 | 2,487 |
Corporate [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 18,403 | 17,301 |
Unrealized Appreciation | 411 | 868 |
Unrealized (Depreciation) | (453) | (81) |
Total Fair Value | 18,361 | 18,088 |
Mortgage and other asset-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 506 | 469 |
Unrealized Appreciation | 16 | 29 |
Unrealized (Depreciation) | (12) | (1) |
Total Fair Value | $ 510 | $ 497 |
Investments - Investments by Ca
Investments - Investments by Category (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Investments [Line Items] | ||
Current investments | $ 2,045 | $ 2,136 |
Non-current investments | 26,929 | 26,483 |
Total investments | 28,974 | 28,619 |
Fixed maturities [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 1,320 | 1,516 |
Non-current investments | 21,608 | 21,622 |
Total investments | 22,928 | 23,138 |
Equity securities [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 377 | 406 |
Non-current investments | 171 | 182 |
Total investments | 548 | 588 |
Commercial mortgage loans [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 32 | 15 |
Non-current investments | 1,826 | 1,746 |
Total investments | 1,858 | 1,761 |
Policy loans [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 0 | 0 |
Non-current investments | 1,423 | 1,415 |
Total investments | 1,423 | 1,415 |
Short-term investments [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 316 | 199 |
Non-current investments | 0 | 0 |
Total investments | 316 | 199 |
Other long-term investments [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 0 | 0 |
Non-current investments | 1,901 | 1,518 |
Total investments | $ 1,901 | $ 1,518 |
Investments - Securities with a
Investments - Securities with a Decline in Fair Value (Details) $ in Millions | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 3,272 | |
Amortized cost, one year or less | 3,309 | |
Unrealized depreciation, one year or less | (37) | |
Fair value, more than one year | 1,503 | |
Amortized cost, more than one year | 1,549 | |
Unrealized depreciation, more than one year | $ (46) | |
Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 797 | |
Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 373 | |
Below Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 543 | |
Amortized cost, one year or less | 553 | |
Unrealized depreciation, one year or less | (10) | |
Fair value, more than one year | 155 | |
Amortized cost, more than one year | 162 | |
Unrealized depreciation, more than one year | $ (7) | |
Below Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 643 | |
Below Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 42 | |
Fixed maturities [Member] | Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 7,127 | |
Amortized cost, one year or less | 7,367 | |
Unrealized depreciation, one year or less | (240) | |
Fair value, more than one year | 3,023 | |
Amortized cost, more than one year | 3,181 | |
Unrealized depreciation, more than one year | $ (158) | |
Fixed maturities [Member] | Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 1,324 | |
Fixed maturities [Member] | Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 784 | |
Fixed maturities [Member] | Below Investment Grade [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Fair value, one year or less | $ 1,185 | |
Amortized cost, one year or less | 1,240 | |
Unrealized depreciation, one year or less | (55) | |
Fair value, more than one year | 249 | |
Amortized cost, more than one year | 270 | |
Unrealized depreciation, more than one year | $ (21) | |
Fixed maturities [Member] | Below Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 1,190 | |
Fixed maturities [Member] | Below Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 245 |
Investments - Equity Securities
Investments - Equity Securities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Investments: | |
Fair equity securities that have a readily determinable fair value | $ 415 |
Amortized cost of equity securities that have a readily determinable fair value | 433 |
Carrying value of private equity securities that do not have a readily determinable fair value | 89 |
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 | Dec. 31, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Hybrid securities | $ 44 | $ 49 |
Hybrid instruments, cost | $ 58 | $ 61 |
Investments - Commercial Mortga
Investments - Commercial Mortgage Loan Maturities (Details) | Dec. 31, 2018 |
Investments: | |
Percentage of commercial mortage loan portfolio scheduled to mature in 2022 or thereafter | 93.00% |
Investments - Credit Risk Profi
Investments - Credit Risk Profile, Commercial Mortgage Loans (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 1,858 | $ 1,761 |
Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 2.04 | 2.11 |
Average Loan-to-Value Ratio | 58.00% | 57.00% |
Below 60% [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial mortgage loan | $ 1,132 | $ 1,109 |
Below 60% [Member] | Weighted Average [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Average Debt Service Coverage Ratio | 2.14 | 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 ($) | Dec. 31, 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 | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Other Long Term Investments [Line Items] | ||
Percentage of the committed amounts expected to be disbursed in the next fiscal year | 26.00% | |
Other long-term investments | $ 1,901 | $ 1,518 |
Unfunded Commitments | 1,472 | |
Real Estate Entities [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 679 | 591 |
Unfunded Commitments | 376 | |
Security Partnerships [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 1,045 | 863 |
Unfunded Commitments | 1,063 | |
Other Long Term Investments [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 177 | $ 64 |
Unfunded Commitments | $ 33 |
Investments - Short-Term Invest
Investments - Short-Term Investments and Cash Equivalents (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Short Term Investments And Cash Equivalents [Line Items] | ||||
Net proceeds on issuance of long-term debt | $ 20,000 | $ 22,856 | $ 1,581 | $ 0 |
Corporate Securities [Member] | ||||
Short Term Investments And Cash Equivalents [Line Items] | ||||
Short-term investments and cash equivalents | 581 | 1,143 | ||
Federal goverment securities | ||||
Short Term Investments And Cash Equivalents [Line Items] | ||||
Short-term investments and cash equivalents | 82 | 604 | ||
Foreign government [Member] | ||||
Short Term Investments And Cash Equivalents [Line Items] | ||||
Short-term investments and cash equivalents | 238 | 159 | ||
Money Market Funds [Member] | ||||
Short Term Investments And Cash Equivalents [Line Items] | ||||
Short-term investments and cash equivalents | $ 1,174 | $ 12 |
Investments - Derivative Financ
Investments - Derivative Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Fair Value | ||
Net liability position of derivatives that contain certain credit risk-related contingent features | ||
Gain (Loss) Recognized in Income Statement | ||
Gain (Loss) Recognized in Other Comprehensive Income | ||
Gains (losses) reclassified from other comprehensive income into shareholders' net income | ||
Amounts excluded from assessment of hedge effectiveness | ||
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Foreign Currency Swaps [Member] | ||
Derivative [Line Items] | ||
Notional Amount | 525 | 318 |
Designated as Hedging Instrument [Member] | Net Investment Hedge [Member] | Foreign Currency Swaps [Member] | ||
Derivative [Line Items] | ||
Notional Amount | 439 | 0 |
Non designated [Member] | Forward Contracts [Member] | ||
Derivative [Line Items] | ||
Notional Amount | $ 309 | $ 255 |
Derivative contract term | 3 months |
Investments - Concentration of
Investments - Concentration of Risk (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Shareholders' Equity [Member] | Investments [Member] | Maximum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 1,535 | $ 1,276 | $ 1,190 |
Less: investment expenses | 55 | 50 | 43 |
Net investment income | 1,480 | 1,226 | 1,147 |
Non-income producing real estate investments and securities partnerships, carrying value | 150 | 191 | |
Fixed maturities [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 1,009 | 946 | 899 |
Equity securities [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 28 | 14 | 4 |
Commercial mortgage loans [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 78 | 81 | 91 |
Policy Loans [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 70 | 69 | 72 |
Other Long Term Investments [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 156 | 124 | 98 |
Short-term investments and cash [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 194 | $ 42 | $ 26 |
Investments - Realized Gains an
Investments - Realized Gains and Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pre-Tax Realized Gains and Losses [Line Items] | |||
Net realized investement gains (losses), excluding investment asset writedowns | $ (34) | $ 268 | $ 227 |
Net realized investment gains (losses), before income taxes | (81) | 237 | 169 |
Sales Information For Available For Sale Fixed Maturities Equity Securities [Abstract] | |||
Proceeds from sales, fixed maturities | 2,625 | ||
Proceeds from sales, fixed maturities and equity securities | 2,655 | 2,012 | 1,544 |
Gross gains on sales | 28 | 103 | 83 |
Gross losses on sales | (47) | (18) | (7) |
Fixed maturities [Member] | |||
Pre-Tax Realized Gains and Losses [Line Items] | |||
Write-downs | (43) | (26) | (35) |
Other [Member] | |||
Pre-Tax Realized Gains and Losses [Line Items] | |||
Write-downs | (4) | $ (5) | $ (23) |
Equity securities [Member] | |||
Pre-Tax Realized Gains and Losses [Line Items] | |||
Realized gains (losses) on investments still held at reporting date | $ (33) |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Financial Liabilities Carried at Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financial assets at fair value: | ||
Fixed maturities | $ 22,928 | $ 23,138 |
Equity securities | $ 415 | |
Financial liabilities at fair value: | ||
Redemption Frequency | Quarterly redemption frequency | |
Unfunded Commitments | $ 57 | |
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 | $ 22,928 | 23,138 |
Equity securities | 459 | 588 |
Short-term investments | 316 | 199 |
Real estate funds priced at NAV as a practical expedient | 239 | |
Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 53 | 2 |
Financial liabilities at fair value: | ||
Derivative liabilities | 10 | 25 |
Federal government and agency [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 710 | 779 |
Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 710 | 779 |
State and local government [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 985 | 1,287 |
State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 985 | 1,287 |
Foreign government [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 2,362 | 2,487 |
Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 2,362 | 2,487 |
Corporate [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 18,361 | 18,088 |
Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 18,361 | 18,088 |
Mortgage and other asset-backed [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 510 | 497 |
Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 510 | 497 |
Private equity securities [Member] | ||
Financial assets at fair value: | ||
Equity securities | 70 | |
Fair Value Inputs Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 209 | 253 |
Equity securities | 384 | 412 |
Short-term investments | 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] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 209 | 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 | 22,341 | 22,256 |
Equity securities | 43 | 73 |
Short-term investments | 316 | 199 |
Fair Value Inputs Level 2 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 53 | 2 |
Financial liabilities at fair value: | ||
Derivative liabilities | 10 | 25 |
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 | 985 | 1,287 |
Fair Value Inputs Level 2 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 2,356 | 2,442 |
Fair Value Inputs Level 2 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 18,127 | 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 | 372 | 343 |
Fair Value Inputs Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Fixed maturities | 378 | 629 |
Equity securities | 32 | 103 |
Subtotal | 378 | 629 |
Short-term investments | 0 | 0 |
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] | 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 | 234 | 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 | $ 138 | $ 154 |
Fair Value Measurements - Level
Fair Value Measurements - Level 2 Financial Assets and Financial Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Percentage of investments in fixed maturities and equity securities classified as Level 2 | 96.00% | |
Maximum percentage of investments classified in Level 2 representing foreign bonds priced using unadjusted broker quotes | 1.00% | |
Other derivatives [Member] | 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) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
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 Inputs Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fixed Maturities | $ 378 | $ 629 |
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 | 11 | 29 |
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 | $ 229 | $ 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] | ||
Unobservable adjustment, liquidity | 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] | ||
Unobservable adjustment, liquidity | 0.50% | 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] | ||
Unobservable adjustment, liquidity | 2.30% | 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 | $ 138 | $ 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] | ||
Unobservable adjustment, liquidity | 3.40% | 3.70% |
Unobservable adjustment, weighting of credit spreads | 3.40% | 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] | ||
Unobservable adjustment, liquidity | 0.60% | 0.60% |
Unobservable adjustment, weighting of credit spreads | 1.90% | 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] | ||
Unobservable adjustment, liquidity | 0.70% | 0.90% |
Unobservable adjustment, weighting of credit spreads | 2.60% | 2.30% |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Financial Assets (Details) - Fixed Maturities And Equity Securities [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 732 | $ 776 |
Total gains (losses) included in shareholders' net income | (22) | 25 |
Gains (losses) included in other comprehensive income | (8) | (11) |
Gains (losses) required to adjust future policy benefits for settlement annuities | (8) | 7 |
Purchases, sales, and settlements: | ||
Purchases | 22 | 133 |
Sales | (11) | (95) |
Settlements | (70) | (74) |
Total purchases, sales, settlements | (59) | (36) |
Transfers into/(out of) Level 3: | ||
Transfers into Level 3 | 44 | 275 |
Transfers out of Level 3 | (269) | (304) |
Total transfers into/(out of) Level 3 | (225) | (29) |
Ending Balance | 410 | 732 |
Total gains (losses) included in income attributable to instruments held at the reporting date | (9) | $ (9) |
Accounting Standards Update 2016-01 [Member] | ||
Transfers into/(out of) Level 3: | ||
Transfers out of Level 3 | $ (70) |
Fair Value Measurements - Separ
Fair Value Measurements - Separate Account Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | $ 454 | $ 523 |
Non-guaranteed separate accounts | 6,653 | 7,126 |
Subtotal | 7,107 | 7,649 |
Non-guaranteed separate accounts priced at NAV as a practical expedient | 732 | 774 |
Total separate account assets | 7,839 | 8,423 |
Pension Benefits [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Non-guaranteed separate accounts | 3,800 | 3,900 |
Fair Value Inputs Level 1 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 187 | 215 |
Non-guaranteed separate accounts | 1,204 | 1,536 |
Subtotal | 1,391 | 1,751 |
Fair Value Inputs Level 2 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 267 | 308 |
Non-guaranteed separate accounts | 5,216 | 5,298 |
Subtotal | 5,483 | 5,606 |
Fair Value Inputs Level 3 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 0 | 0 |
Non-guaranteed separate accounts | 233 | 292 |
Subtotal | 233 | 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 | $ 300 |
Separate Account Assets [Member] | ||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Financial assets classified in Level 3, period increase (decrease) |
Fair Value Measurements - Sep_2
Fair Value Measurements - Separate Account Assets Priced at NAV (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 57 | |
Redemption Frequency | Quarterly redemption frequency | |
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] | ||
Fair Value | $ 239 | |
Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | 308 | |
Separate Account Assets [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value | 732 | $ 774 |
Security Partnerships [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 308 | |
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 | $ 477 | 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 | $ 237 | 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 | $ 18 | $ 77 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured Under Certain Conditions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | ||
Realized investment losses on impaired real estate, partnership entities, and commercial mortgage loans, after-tax | ||
Maximum [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Impaired real estate, partnership entities, and commercial mortgage loans as a percent of total investments | 1.00% | 1.00% |
Fair Value Measurements - Not C
Fair Value Measurements - Not Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial mortgage loans | $ 1,858 | $ 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 | 40,819 | 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 | 1,832 | 1,766 |
Carrying Reported Amount Fair Value Disclosure [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial mortgage loans | 1,858 | 1,761 |
Long-term debt, including current maturities, excluding capital leases | $ 40,829 | $ 5,321 |
Fair Value Measurements - Off-B
Fair Value Measurements - Off-Balance Sheet Financial Instruments (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Fair value of off-balance-sheet financial assets | ||
Fair value of off-balance-sheet financial liabilities |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Billions | 12 Months Ended |
Dec. 31, 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. |
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 | $ 2.9 |
Number of limited partnerships defined as variable interest entities | LimitedPartnerships | 130 |
Carrying amount of assets | $ 1.5 |
Commitments to contribute additional cash, amount | $ 1.4 |
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 | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | $ (1,082) | ||
Shareholders' other comprehensive income (loss), net of tax | (390) | $ 300 | $ (132) |
Accumulated other comprehensive income (loss), ending | (1,711) | (1,082) | |
Securities and Derivatives [ Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 383 | 365 | 425 |
Other comprehensive income (loss) before reclassifications, pre-tax | (512) | 34 | (48) |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 100 | (19) | 6 |
Other comprehensive income (loss) before reclassifications, after-tax | (412) | 15 | (42) |
Reclassification adjustment, tax (expense) benefit | (13) | 28 | 10 |
Reclassification adjustment, after-tax | 47 | (52) | (18) |
Shareholders' other comprehensive income (loss), net of tax | (365) | (37) | (60) |
Accumulated other comprehensive income (loss), ending | 18 | 383 | 365 |
Securities and Derivatives [ Member] | Previously Reported [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 328 | 365 | 425 |
Accumulated other comprehensive income (loss), ending | 328 | 365 | |
Securities and Derivatives [ Member] | Restatement Adjustment [Member] | Accounting Standards Update 2018-02 [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 65 | 0 | 0 |
Accumulated other comprehensive income (loss), ending | 65 | 0 | |
Securities and Derivatives [ Member] | Restatement Adjustment [Member] | Accounting Standards Update 2016-01 [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (4) | 0 | 0 |
Accumulated other comprehensive income (loss), ending | (4) | 0 | |
Securities and Derivatives [ Member] | Restatement Adjustment [Member] | Accounting Standards Update 2017-12 [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (6) | 0 | 0 |
Accumulated other comprehensive income (loss), ending | (6) | 0 | |
Securities and Derivatives [ Member] | Selling, general and administrative expenses [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | 0 | 1 | 1 |
Securities and Derivatives [ Member] | Net Realized Investment Gains [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | 60 | (81) | (29) |
Translation of foreign currencies [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (69) | (369) | (274) |
Other comprehensive income (loss) before reclassifications, pre-tax | (152) | 309 | (95) |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 0 | (5) | 0 |
Other comprehensive income (loss) before reclassifications, after-tax | (152) | 304 | (95) |
Accumulated other comprehensive income (loss), ending | (221) | (69) | (369) |
Translation of foreign currencies [Member] | Previously Reported [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (65) | (369) | (274) |
Accumulated other comprehensive income (loss), ending | (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 | (4) | 0 | 0 |
Accumulated other comprehensive income (loss), ending | (4) | 0 | |
Postretirement benefits liability [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (1,635) | (1,378) | (1,401) |
Other comprehensive income (loss) before reclassifications, pre-tax | 93 | (22) | (29) |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | (20) | 8 | 10 |
Other comprehensive income (loss) before reclassifications, after-tax | 73 | (14) | (19) |
Reclassification adjustment, tax (expense) benefit | (15) | (24) | (22) |
Reclassification adjustment, after-tax | 54 | 47 | 42 |
Shareholders' other comprehensive income (loss), net of tax | 127 | 33 | 23 |
Accumulated other comprehensive income (loss), ending | (1,508) | (1,635) | (1,378) |
Postretirement benefits liability [Member] | Previously Reported [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (1,345) | (1,378) | (1,401) |
Accumulated other comprehensive income (loss), ending | (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 | (290) | 0 | 0 |
Accumulated other comprehensive income (loss), ending | (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 | 69 | 64 | 64 |
Reclassification adjustment for settlement losses [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | $ 0 | $ 7 | $ 0 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Realized investment (gains) losses | $ 81 | $ (237) | $ (169) |
Selling, general and administrative expenses | 11,934 | 10,030 | 9,790 |
Securities and Derivatives [ Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Realized investment (gains) losses | 60 | (81) | (29) |
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] | |||
Selling, general and administrative expenses | 69 | 64 | 64 |
Reclassification adjustment for settlement losses [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Selling, general and administrative expenses | $ 0 | $ 7 | $ 0 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefits - About our Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
United States [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Market-related valuation of pension plan assets | $ 4,000 | ||
Plan assets at fair value | 4,151 | $ 4,281 | $ 3,977 |
Defined benefit plan cost | 17 | 2 | 18 |
Defined benefit plan benefit obligation | 4,741 | 4,969 | 4,888 |
United States [Member] | Other Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 0 | 2 | 5 |
Defined benefit plan cost | 7 | 7 | 9 |
Defined benefit plan benefit obligation | 210 | $ 258 | $ 277 |
Foreign Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | |||
Defined benefit plan cost | |||
Defined benefit plan benefit obligation |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefits - Funded Status (Details) - United States [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefits [Member] | |||
Change in benefit obligation [Abstract] | |||
Benefit obligation, January 1 | $ 4,969 | $ 4,888 | |
Service cost | 3 | 3 | $ 2 |
Interest cost | 169 | 186 | 199 |
Assumed in acquisition | 137 | 0 | |
Partial litigation settlement - attorneys' fees | 32 | 0 | |
(Gain) loss from past experience | (235) | 181 | |
Benefits paid from plan assets | (314) | (277) | |
Benefits paid - other | (20) | (12) | |
Benefit obligation, December 31 | 4,741 | 4,969 | 4,888 |
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, January 1 | 4,281 | 3,977 | |
Assumed in acquisition | 96 | 0 | |
Actual return on plan assets | 85 | 418 | |
Benefits paid | (314) | (277) | |
Contributions | 3 | 163 | |
Fair value of plan assets, December 31 | 4,151 | 4,281 | 3,977 |
Funded Status | (590) | (688) | |
Current liability recorded in Accrued expenses and other liabilities | (30) | (25) | |
Non-current liability recorded in Other non-current assets | (560) | (663) | |
Pension Benefits [Member] | Qualified Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Expected total pension plan contributions for next fiscal year | 0 | ||
Pension Benefits [Member] | Non-qualifed Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, December 31 | 0 | ||
Other Postretirement Benefits [Member] | |||
Change in benefit obligation [Abstract] | |||
Benefit obligation, January 1 | 258 | 277 | |
Service cost | 0 | 0 | 0 |
Interest cost | 8 | 9 | 11 |
Assumed in acquisition | 0 | 0 | |
Partial litigation settlement - attorneys' fees | 0 | 0 | |
(Gain) loss from past experience | (31) | 1 | |
Benefits paid from plan assets | 0 | (3) | |
Benefits paid - other | (25) | (26) | |
Benefit obligation, December 31 | 210 | 258 | 277 |
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, January 1 | 2 | 5 | |
Assumed in acquisition | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Benefits paid | (2) | (3) | |
Contributions | 0 | 0 | |
Fair value of plan assets, December 31 | 0 | 2 | $ 5 |
Funded Status | (210) | (256) | |
Current liability recorded in Accrued expenses and other liabilities | (23) | (27) | |
Non-current liability recorded in Other non-current assets | (187) | $ (229) | |
Other Postretirement Benefits [Member] | Non-qualifed Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, December 31 | $ 0 |
Pension and Other Postretirem_5
Pension and Other Postretirement Benefit Plans - Benefit Payments (Details) - United States [Member] $ in Millions | Dec. 31, 2018USD ($) |
Pension Benefits [Member] | |
Benefit payments including expected future services [Abstract] | |
Paid in 2019 | $ 324 |
Paid in 2020 | 311 |
Paid in 2021 | 313 |
Paid in 2022 | 316 |
Paid in 2023 | 318 |
Paid in 2024-2028 | 1,549 |
Other Postretirement Benefits [Member] | |
Benefit payments including expected future services [Abstract] | |
Paid in 2019 | 25 |
Paid in 2020 | 23 |
Paid in 2021 | 22 |
Paid in 2022 | 20 |
Paid in 2023 | 19 |
Paid in 2024-2028 | $ 72 |
Pension and Other Postretirem_6
Pension and Other Postretirement Benefit Plans - Amounts included in AOCI (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Pension Benefits [Member] | ||
Amounts included in AOCI [Abstract] | ||
Unrecognized net gains (losses) | $ (1,980) | $ (2,113) |
Unrecognized prior service cost | (6) | (6) |
Postretirement benefits liabilty adjustment | (1,986) | (2,119) |
Other Postretirement Benefits [Member] | ||
Amounts included in AOCI [Abstract] | ||
Unrecognized net gains (losses) | 32 | 0 |
Unrecognized prior service cost | 44 | 46 |
Postretirement benefits liabilty adjustment | $ 76 | $ 46 |
Pension and Other Postretirem_7
Pension and Other Postretirement Benefits - Cost of our Plans (Details) - United States [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefits [Member] | |||
Components of net pension and other postretirement benefits cost [Abstract] | |||
Service cost | $ 3 | $ 3 | $ 2 |
Interest cost | 169 | 186 | 199 |
Expected long-term return on plan assets | (257) | (260) | (249) |
Partial litigation settlement - attorneys' fees | 32 | 0 | 0 |
Amortization of net loss from past experience | 70 | 66 | 65 |
Amortization of prior service cost | 0 | 0 | 1 |
Settlement loss | 0 | 7 | 0 |
Net plan cost | 17 | 2 | 18 |
Other Postretirement Benefits [Member] | |||
Components of net pension and other postretirement benefits cost [Abstract] | |||
Service cost | 0 | 0 | 0 |
Interest cost | 8 | 9 | 11 |
Expected long-term return on plan assets | 0 | 0 | 0 |
Partial litigation settlement - attorneys' fees | 0 | 0 | 0 |
Amortization of net loss from past experience | 1 | 1 | 1 |
Amortization of prior service cost | (2) | (3) | (3) |
Settlement loss | 0 | 0 | 0 |
Net plan cost | $ 7 | $ 7 | $ 9 |
Pension and Other Postretirem_8
Pension and Other Postretirement Benefits - Assumptions Used (Details) - United States [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assumptions for pension and other postretirement benefits [Abstract] | ||
Mortality table for pension and postretirement benefit obligations, current year | RP 2014 with MP 2018 projection scale | |
Mortality table for pension and postretirement benefit obligations, prior year | RP 2014 with MP 2017 projection scale | |
Pension Benefits [Member] | ||
Assumptions for pension and other postretirement benefits [Abstract] | ||
Discount rate: Benefit obligation | 4.23% | 3.51% |
Discount rate: Benefit cost | 3.51% | 3.95% |
Expected long-term return on plan assets: Benefit cost | 7.00% | 7.25% |
Other Postretirement Benefits [Member] | ||
Assumptions for pension and other postretirement benefits [Abstract] | ||
Discount rate: Benefit obligation | 4.09% | 3.37% |
Discount rate: Benefit cost | 3.37% | 3.70% |
Expected long-term return on plan assets: Benefit cost | 5.00% | 5.00% |
Pension and Other Postretirem_9
Pension and Other Postretirement Benefits - Pension Plan Assets (Details) - Pension Benefits [Member] - United States [Member] - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets invested in separate accounts of subsidiaries | $ 3,800 | ||
Plan assets invested in funds offered by the buyer of the retirement benefits business | 265 | ||
Plan assets invested by others | 116 | ||
Plan assets at fair value | 4,151 | $ 4,281 | $ 3,977 |
Fixed Maturities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 2,246 | 2,031 | |
Target allocation percentages | 55.00% | ||
Federal government and agency [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 0 | 1 | |
Corporate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 1,446 | 1,124 | |
Asset-backed [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 32 | 22 | |
Fund Investments {Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 768 | 884 | |
Equity securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 866 | 1,165 | |
Target allocation percentages | 25.00% | ||
Domestic [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 506 | 689 | |
International, including funds and pooled seperate accounts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 360 | 476 | |
Other Plan Asset Categories [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation percentages | 20.00% | ||
Securities Partnerships [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 477 | 457 | |
Real estate, including pooled separate accounts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 250 | 300 | |
Commercial mortgage loans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 110 | 140 | |
Hedge Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 36 | 73 | |
Guaranteed Deposit Account Contract [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 107 | 63 | |
Cash equivalents and other current assets, net [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 59 | $ 52 |
Pension and Other Postretire_10
Pension and Other Postretirement Benefit Plans - 401(k) Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |||
Expense for matching contributions in the 401K plan | $ 196 | $ 122 | $ 113 |
Employee Incentive Plans - Abou
Employee Incentive Plans - About our Plans (Details) - shares shares in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Employee Incentive Plans [Abstract] | |||
Common shares available for award | 25.7 | 14 | 6.8 |
Employee Incentive Plans - Stoc
Employee Incentive Plans - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Compensation cost | $ 180 | $ 178 | $ 128 | |||
Employee Stock Option [Member] | ||||||
Black-Scholes option-pricing model assumptions and resulting fair value of options [Abstract] | ||||||
Dividend Yield | 0.00% | 0.00% | 0.00% | |||
Expected volatility | 35.00% | 35.00% | 35.00% | |||
Risk-free interest rate | 2.50% | 1.80% | 1.20% | |||
Expected option life | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 3 months 18 days | |||
Weighted average fair value of options | $ 64.18 | $ 46.38 | $ 42.01 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||
Options outstanding - January 1 | 6,156 | 7,097 | 6,433 | |||
Options Granted | 7,080 | 1,230 | 1,336 | |||
Options Exercised | (771) | (2,072) | (577) | |||
Options Expired or canceled | (95) | (99) | (95) | |||
Options outstanding - December 31 | 12,370 | 6,156 | 7,097 | |||
Options Exercisable - Number (in thousands) | 9,446 | 3,894 | 4,409 | |||
Share Based Compensation Arrangement By Share Based Payment Award, Options Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||||
Weighted Average Exercise Price - Options Outstanding - January 1 | $ 100.79 | $ 82.01 | $ 68.86 | |||
Weighted Average Exercise Price - Options Granted | 143.62 | 149.17 | 139.2 | |||
Weighted Average Exercise Price - Options Exercised | 88.35 | 63.41 | 62.09 | |||
Weighted Average Exercise Price - Options Expired or canceled | 165.04 | 138.41 | 117.18 | |||
Weighted Average Exercise Price - Options Outstanding - December 31 | $ 125.46 | $ 100.79 | $ 82.01 | |||
Options Exercisable - Weighted Average Exercise Price | $ 114.22 | $ 77.36 | $ 58.36 | |||
Related compensation expense to be recognized | $ 61 | |||||
Period over which compensation expense will be recognized | 2 years | |||||
Information For Stock Options Exercised Details [Abstract] | ||||||
Intrinsic value of options exercised | $ 86 | $ 218 | $ 41 | |||
Cash received for options exercised | 68 | 131 | 36 | |||
Tax benefit from options exercised | $ 8 | $ 41 | $ 11 | |||
Information for Outstanding Common Stock Options [Abstract] | ||||||
Options Outstanding - Number (in thousands) | 12,370 | 6,156 | 6,433 | 12,370 | 6,156 | 7,097 |
Options Outstanding - Total intrinsic value | $ 804 | |||||
Options Outstanding - Weighted Average Exercise Price | $ 100.79 | $ 100.79 | $ 68.86 | $ 125.46 | $ 100.79 | $ 82.01 |
Options Outstanding - Weighted average remaining contractual life | 5 years 4 months 24 days | |||||
Options Exercisable - Number (in thousands) | 9,446 | 3,894 | 4,409 | |||
Options Exercisable - Total Intrinsic Value | $ 715 | |||||
Options Exercisable - Weighted Average Exercise Price | $ 114.22 | $ 77.36 | $ 58.36 | |||
Options Exercisable - Weighted Average Remaining Contractual Life | 4 years 6 months | |||||
Employee Stock Option [Member] | Minimum [Member] | ||||||
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Award vesting period | 1 year | |||||
Employee Stock Option [Member] | Maximum [Member] | ||||||
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Award vesting period | 3 years | |||||
Award expiration period | 10 years | |||||
Black-Scholes option-pricing model assumptions and resulting fair value of options [Abstract] | ||||||
Remaining maturity of traded options | 1 year |
Employee Incentive Plans - Rest
Employee Incentive Plans - Restricted Stock (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Employees$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ | $ 180 | $ 178 | $ 128 |
Restricted Stock Grants And Units [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award, Equity Instruments Other Than Options, Nonvested, Roll Forward | |||
Outstanding - January 1 | shares | 1,295 | 1,309 | 1,642 |
Awarded | shares | 1,451 | 451 | 315 |
Vested | shares | (560) | (409) | (591) |
Forfeited | shares | (48) | (56) | (57) |
Outstanding - December 31 | shares | 2,138 | 1,295 | 1,309 |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Weighted Average Grant Date Fair Value Roll Forward [Abstract] | |||
Outstanding - January 1 | $ / shares | $ 126.44 | $ 97.78 | $ 72.58 |
Awarded | $ / shares | 183.29 | 155.21 | 138.61 |
Vested | $ / shares | 112.53 | 67.09 | 50.01 |
Forfeited | $ / shares | 150.84 | 121.74 | 92.51 |
Outstanding - December 31 | $ / shares | $ 168.12 | $ 126.44 | $ 97.78 |
Fair value of shares vested | $ | $ 107 | $ 62 | $ 82 |
Number of employees holding share-based payment awards | Employees | 10,400 | ||
Related compensation expense to be recognized | $ | $ 174 | ||
Period over which compensation expense will be recognized | 2 years | ||
Restricted Stock Grants And Units [Member] | Minimum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Award vesting period | 3 years | ||
Restricted Stock Grants And Units [Member] | Maximum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Award vesting period | 5 years |
Employee Incentive Plans - Stra
Employee Incentive Plans - Strategic Performance Shares (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Employees$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ | $ 180 | $ 178 | $ 128 |
Strategic Performance Shares [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Performance period | 3 years | ||
Percent of shares subject to market conditions | 50.00% | ||
Percent of shares subject to performance conditions | 50.00% | ||
Share Based Compensation Arrangement By Share Based Payment Award, Equity Instruments Other Than Options, Nonvested, Roll Forward | |||
Outstanding - January 1 | 778 | 942 | 1,188 |
Awarded | 221 | 275 | 286 |
Vested | (269) | (386) | (494) |
Forfeited | (23) | (53) | (38) |
Outstanding - December 31 | 707 | 778 | 942 |
Share Based Compensation Arrangement By Share Based Payment Award, Equity Instruments Other Than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding - January 1 | $ / shares | $ 136.57 | $ 109.14 | $ 81.68 |
Awarded | $ / shares | 197.51 | 150.06 | 139.05 |
Vested | $ / shares | 121.57 | 78.91 | 60.15 |
Forfeited | $ / shares | 158.16 | 138.19 | 112.7 |
Outstanding - December 31 | $ / shares | $ 160.74 | $ 136.57 | $ 109.14 |
Employee Service Share-based Compensation, Additional Disclosures [Abstract] | |||
Shares of Cigna common stock distributed upon SPS vesting | 380 | 476 | 768 |
Fair value of shares vested | $ | $ 73 | $ 70 | $ 109 |
Number of employees holding share-based payment awards | Employees | 1,500 | ||
Related compensation expense to be recognized | $ | $ 51 | ||
Period over which compensation expense will be recognized | 2 years | ||
Strategic Performance Shares [Member] | Minimum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Percentage of original shares granted that may be awarded at end of performance period | 0.00% | ||
Strategic Performance Shares [Member] | Maximum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Percentage of original shares granted that may be awarded at end of performance period | 200.00% |
Employee Incentive Plans - One-
Employee Incentive Plans - One-time Employee Stock Award (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ 180 | $ 178 | $ 128 |
Stock award [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Shares issued | 205,000 | ||
Stock award price | $ 162.96 | ||
Compensation cost | $ 33 |
Employee Incentive Plans - Comp
Employee Incentive Plans - Compensation Cost and Tax Effects of Share-based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Incentive Plans [Abstract] | |||
Compensation cost | $ 180 | $ 178 | $ 128 |
Tax benefits recognized in earnings based on expense | $ 36 | $ 79 | $ 57 |
Goodwill, Other Intangibles, _3
Goodwill, Other Intangibles, and Property and Equipment - Goodwill Activity (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $ 6,164 | $ 5,980 |
Goodwill acquired, net | 38,371 | 154 |
Impact of foreign currency translation | (30) | 30 |
Goodwill, Ending Balance | 44,505 | $ 6,164 |
Integrated Medical [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Ending Balance | 10,500 | |
Health Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Ending Balance | 33,700 | |
International Markets [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Ending Balance | $ 300 |
Goodwill, Other Intangibles, _4
Goodwill, Other Intangibles, and Property and Equipment - Amoritzation Periods (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum [Member] | |
Finite Lived Intangible Assets Net [Line Items] | |
Other intangibles amortization period | 1 year |
Maximum [Member] | |
Finite Lived Intangible Assets Net [Line Items] | |
Other intangibles amortization period | 39 years |
Goodwill, Other Intangibles, _5
Goodwill, Other Intangibles, and Property and Equipment - Other Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets Net [Line Items] | ||
Finite-lived intangible assets, cost | $ 1,571 | |
Finite-lived intangible assets, accumulated amortization | $ 1,408 | 1,226 |
Finite-lived intangible assets, net | 345 | |
Indefinite-lived intangible assets, Express Scripts Trade Name | 8,400 | |
Intangible assets, gross | 40,411 | |
Intangible assets, net | 39,003 | 345 |
Value of business acquired, cost | 665 | 232 |
Value of business acquired, accumulated amortization | 102 | 86 |
Value of business acquired, net | 563 | 146 |
Total, cost | 41,076 | 1,803 |
Total, accumulated amortization | 1,510 | 1,312 |
Total, net | 39,566 | 491 |
Customer relationships [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Finite-lived intangible assets, cost | 31,451 | 1,280 |
Finite-lived intangible assets, accumulated amortization | 1,213 | 1,056 |
Finite-lived intangible assets, net | 30,238 | 224 |
Other intangibles [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Finite-lived intangible assets, cost | 560 | 291 |
Finite-lived intangible assets, accumulated amortization | 195 | 170 |
Finite-lived intangible assets, net | $ 365 | $ 121 |
Goodwill, Other Intangibles, _6
Goodwill, Other Intangibles, and Property and Equipment - Useful Life (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Building improvements [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 10 years |
Building improvements [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 40 years |
Purchased software [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Purchased software [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 5 years |
Internally developed software [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Internally developed software [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 7 years |
Furniture and equipment (including computer equipment) [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Furniture and equipment (including computer equipment) [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Property, plant and equipment useful life | 10 years |
Goodwill, Other Intangibles, _7
Goodwill, Other Intangibles, and Property and Equipment - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Line Items] | ||
Cost | $ 7,958 | $ 4,613 |
Accumulated amortization | 3,396 | 3,050 |
Net carrying value | $ 4,562 | 1,563 |
Capital lease agreements, term length | 4 years | |
Internal-use software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | $ 5,694 | 2,991 |
Accumulated amortization | 2,415 | 2,184 |
Net carrying value | 3,279 | 807 |
Total other property and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 2,264 | 1,622 |
Accumulated amortization | 981 | 866 |
Net carrying value | 1,283 | 756 |
Assets recorded under capital leases [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 56 | 49 |
Accumulated amortization | 4 | 31 |
Net carrying value | 52 | 18 |
Other property and equipment not recorded under capital leases [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 2,208 | 1,573 |
Accumulated amortization | 977 | 835 |
Net carrying value | $ 1,231 | $ 738 |
Goodwill, Other Intangibles, _8
Goodwill, Other Intangibles, and Property and Equipment - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | $ 695 | $ 566 | $ 610 |
Internal-use software [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 323 | 298 | 303 |
Other property and equipment [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 146 | 153 | 158 |
Assets recorded under capital leases [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Amortization on assets under capital leases | 9 | 14 | 20 |
Value of business acquired [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 16 | 18 | 20 |
Other intangibles [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | $ 210 | $ 97 | $ 129 |
Goodwill, Other Intangibles, _9
Goodwill, Other Intangibles, and Property and Equipment - Amortization for Intangible Assets (Details) $ in Millions | Dec. 31, 2018USD ($) |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Estimated pre-tax intangible asset amortization expense in 2019 | $ 3,169 |
Estimated pre-tax intangible asset amortization expense in 2020 | 2,164 |
Estimated pre-tax intangible asset amortization expense in 2021 | 2,062 |
Estimated pre-tax intangible asset amortization expense in 2022 | 1,844 |
Estimated pre-tax intangible asset amortization expense in 2023 | $ 1,777 |
Leases and Rentals (Details)
Leases and Rentals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases Rentals And Outsourced Service Arrangements [Line Items] | |||
Net rental expense for operating leases | $ 162 | $ 162 | $ 151 |
Future net minimum rental payments under non-cancelable operating leases [Abstract] | |||
Future net minimum rental payments under non-cancelable operating leases | 860 | ||
Payable in 2019 | 199 | ||
Payable in 2020 | 182 | ||
Payable in 2021 | 148 | ||
Payable in 2022 | 116 | ||
Payable in 2023 | 84 | ||
Payable in 2024 and thereafter | $ 132 |
Shareholders Equity and Divid_3
Shareholders Equity and Dividend Restrictions (Details) - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Accounting Practices [Line Items] | |||
Statutory net income | $ 3.4 | $ 2.5 | $ 2 |
Statutory surplus | 12.2 | $ 10.4 | $ 8.5 |
Minimum statutory surplus required by regulators | 3.9 | ||
Investments on deposit with regulatory bodies | 0.6 | ||
Maximum dividend distributions permitted in 2019 without regulatory approval | 2.1 | ||
Maximum loans to parent company permitted without regulatory approval | 1.3 | ||
Restricted GAAP net assets of Cigna Corporation's subsidiaries | $ 15.5 |
Income Taxes - U.S. Tax Reform
Income Taxes - U.S. Tax Reform Legislation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
Nominal federal income tax rate | 21.00% | 35.00% | 35.00% |
Effect of U.S. tax reform legislation | $ 232 | $ 0 | |
Effect of U.S. tax reform legislation, measurement period adjustment | $ (3) |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current taxes | |||
U.S. income taxes | $ 804 | $ 974 | $ 935 |
Foreign income taxes | 185 | 122 | 95 |
State income taxes | 47 | 36 | 32 |
Total taxes, current | 1,036 | 1,132 | 1,062 |
Deferred taxes (benefits) | |||
U.S. Income taxes (benefits) | (75) | 204 | 69 |
Foreign income taxes (benefits) | 8 | 39 | 9 |
State income taxes (benefits) | (34) | (1) | (4) |
Total taxes (benefits), deferred | (101) | 242 | 74 |
Total income taxes | $ 935 | $ 1,374 | $ 1,136 |
Income Taxes - Reconciliation t
Income Taxes - Reconciliation to Nominal Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
Nominal federal income tax rate | 21.00% | 35.00% | 35.00% |
Reconciliation of total taxes to nominal federal rate, amount [Abstract] | |||
Tax expense at nominal rate | $ 752 | $ 1,262 | $ 1,043 |
Effect of U.S. tax reform legislation | (4) | 232 | 0 |
Effect of undistributed foreign earnings | 74 | (70) | (57) |
Health insurance industry tax | 78 | 0 | 108 |
State income taxes (net of federal income tax benefit) | 10 | 23 | 18 |
Other | 25 | (73) | 24 |
Total income taxes | $ 935 | $ 1,374 | $ 1,136 |
Reconciliation of total taxes to nominal federal rate, percent [Abstract] | |||
Tax expense at nominal rate | 21.00% | 35.00% | 35.00% |
Effect of U.S. tax reform legislation | (0.10%) | 6.40% | 0.00% |
Effect of undistributed foreign earnings | 2.10% | (1.90%) | (1.90%) |
Health insurance industry tax | 2.20% | 0.00% | 3.60% |
State income taxes (net of federal income tax benefit) | 0.30% | 0.60% | 0.60% |
Other | 0.60% | (2.00%) | 0.80% |
Total income taxes | 26.10% | 38.10% | 38.10% |
Income Taxes - Foreign Earnings
Income Taxes - Foreign Earnings Percentage (Details) - Pre-tax income [Member] - Geographic Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 15.00% | 14.00% | 11.00% |
Concentration Risk, Benchmark Description | Pre-tax income, consolidated | ||
Concentration Risk, Additional Characteristic | Foreign operations |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rates (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | |||
Consolidated effective tax rate | 26.10% | 38.10% | 38.10% |
Cumulative unrecognized deferred tax liabilities related to unremitted foreign earnings | $ 135 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets [Abstract] | ||
Employee and retiree benefit plans | $ 411 | $ 279 |
Other insurance and contractholder liabilities | 402 | 358 |
Loss carryforwards | 255 | 105 |
Other accrued liabilities | 340 | 101 |
Other | 205 | 91 |
Deferred tax assets before valuation allowance | 1,613 | 934 |
Valuation allowance for deferred tax assets | (199) | (72) |
Deferred tax assets, net of valuation allowance | 1,414 | 862 |
Deferred tax liabilities [Abstract] | ||
Depreciation and amortization | 838 | 176 |
Acquisition-related basis differences | 9,792 | 320 |
Policy acquisition expenses | 211 | 190 |
Unrealized appreciation (depreciation) on investments and foreign currency translation | (29) | 102 |
Other | 55 | 35 |
Total deferred tax liabilities | 10,867 | 823 |
Net deferred income tax assets | $ (9,453) | $ 39 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of unrecognized tax benefits details [Abstract] | |||
Balance at January 1, | $ 35 | $ 31 | $ 31 |
Increase due to prior year positions | 40 | 0 | 0 |
Increase due to business combination | 860 | 0 | 0 |
Increase due to current year positions | 6 | 7 | 10 |
Reduction related to settlements with taxing authorities | (1) | (1) | (2) |
Reduction related to lapse of applicable statute of limitations | (12) | (2) | (8) |
Balance at December 31, | $ 928 | $ 35 | $ 31 |
Contingencies and Other Matte_2
Contingencies and Other Matters - Guarantees (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | |
Guarantee Obligations [Line Items] | |
Maximum Exposure, Undiscounted | $ 455,000,000 |
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 | 455,000,000 |
Indemnification Guarantee [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee obligations carrying value | $ 0 |
Contingencies and Other Matte_3
Contingencies and Other Matters - Legal and Regulatory Matters (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2018 | |
Amara cash balance pension plan litigation [Member] | ||
Contingency Accrual [Roll Forward] | ||
Amounts paid for loss contigency | $ 32,280 | |
Guaranty Fund Assessments [Member] | ||
Contingency Accrual [Roll Forward] | ||
Charges for loss contingency, pre-tax | $ 130,000 | |
Charges for loss contingency, after-tax | $ 85,000 | |
Loss Contingency, Insurance-related Assessment [Abstract] | ||
Recorded liability, Penn Treaty assessment | 42,000 | |
Pending Litigation [Member] | ||
Contingency Accrual [Roll Forward] | ||
Reserves for litigation matters, pre-tax | 190,000 | |
Reserves for litigation matters, after-tax | 150,000 | |
Pending Litigation [Member] | Pricing concessions through remaining contract term [Member] | Express Scripts litigation with Antherm [Member] | ||
Loss Contingency, Information about Litigation Matters [Abstract] | ||
Loss Contingency, Damages Sought | 13,000,000 | |
Pending Litigation [Member] | Pricing concessions after remaining term of agreement [Member] | Express Scripts litigation with Antherm [Member] | ||
Loss Contingency, Information about Litigation Matters [Abstract] | ||
Loss Contingency, Damages Sought | 1,800,000 | |
Pending Litigation [Member] | Damages for service issues [Member] | Express Scripts litigation with Antherm [Member] | ||
Loss Contingency, Information about Litigation Matters [Abstract] | ||
Loss Contingency, Damages Sought | $ 150,000 |
Contingencies and Other Matte_4
Contingencies and Other Matters - Anthem Litigation (Details) $ in Millions | Dec. 31, 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 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||||||||||
Premiums | $ 36,113 | $ 32,491 | $ 30,824 | ||||||||
Net investment income | 1,480 | 1,226 | 1,147 | ||||||||
Total revenues | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 10,632 | $ 10,372 | $ 10,374 | $ 10,428 | 48,650 | 41,806 | 39,838 |
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 27,528 | 25,263 | 24,341 | ||||||||
Pharmacy and other service costs | 4,793 | 2,456 | 2,468 | ||||||||
Selling, general and administrative expenses | 11,934 | 10,030 | 9,790 | ||||||||
Amortization of other acquired intangible assets | 235 | 115 | 151 | ||||||||
Total benefits and expenses | 44,490 | 37,864 | 36,750 | ||||||||
Income from operations | 4,160 | 3,942 | 3,088 | ||||||||
Interest and other income (expense) | (498) | (252) | (278) | ||||||||
Debt extinguishment costs | (321) | 0 | (321) | 0 | |||||||
Net realized investment gains (losses) | (81) | 237 | 169 | ||||||||
Income (loss) before income taxes | 228 | 1,033 | 1,102 | 1,218 | 758 | 824 | 1,134 | 890 | 3,581 | 3,606 | 2,979 |
Total income taxes | 935 | 1,374 | 1,136 | ||||||||
Net Income | 2,646 | 2,232 | 1,843 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 9 | (5) | (24) | ||||||||
Shareholders' net income | $ 144 | $ 772 | $ 806 | $ 915 | $ 266 | $ 560 | $ 813 | $ 598 | 2,637 | 2,237 | 1,867 |
Other comprehensive income (loss), net of tax | (390) | 300 | (132) | ||||||||
Shareholders' comprehensive income (loss) | 2,247 | 2,537 | 1,735 | ||||||||
Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 5,578 | 5,110 | 4,901 | ||||||||
Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 5,479 | 2,979 | 2,966 | ||||||||
Consolidation, Eliminations [Member] | |||||||||||
Revenues | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Net investment income | 0 | 0 | 0 | ||||||||
Total revenues | (1,018) | 0 | 0 | ||||||||
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 0 | 0 | 0 | ||||||||
Pharmacy and other service costs | (970) | 0 | |||||||||
Selling, general and administrative expenses | (48) | 0 | 0 | ||||||||
Amortization of other acquired intangible assets | 0 | 0 | 0 | ||||||||
Total benefits and expenses | (1,018) | 0 | 0 | ||||||||
Income from operations | 0 | 0 | 0 | ||||||||
Interest and other income (expense) | 0 | 0 | 0 | ||||||||
Intercompany interest income (expense) | 0 | 0 | 0 | ||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | 0 | 0 | 0 | ||||||||
Total income taxes | 0 | 0 | 0 | ||||||||
Income before equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Equity in income from subsidiaries | (6,467) | (2,823) | (2,249) | ||||||||
Net Income | (6,467) | (2,823) | (2,249) | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Shareholders' net income | (6,467) | (2,823) | (2,249) | ||||||||
Other comprehensive income (loss), net of tax | 926 | (269) | 154 | ||||||||
Shareholders' comprehensive income (loss) | (5,541) | (3,092) | (2,095) | ||||||||
Consolidation, Eliminations [Member] | Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | (48) | 0 | 0 | ||||||||
Consolidation, Eliminations [Member] | Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | (970) | 0 | 0 | ||||||||
Cigna [Member] | |||||||||||
Revenues | |||||||||||
Net investment income | (123) | ||||||||||
Total revenues | 123 | ||||||||||
Benefits and Expenses | |||||||||||
Selling, general and administrative expenses | 200 | ||||||||||
Total benefits and expenses | 200 | ||||||||||
Income from operations | (77) | ||||||||||
Interest and other income (expense) | (244) | ||||||||||
Intercompany interest income (expense) | (5) | ||||||||||
Debt extinguishment costs | 0 | ||||||||||
Net realized investment gains (losses) | 1 | ||||||||||
Income (loss) before income taxes | (327) | ||||||||||
Total income taxes | (74) | ||||||||||
Income before equity in earnings of subsidiaries | (253) | ||||||||||
Equity in income from subsidiaries | 2,890 | ||||||||||
Shareholders' net income | 2,637 | ||||||||||
Other comprehensive income (loss), net of tax | (390) | ||||||||||
Shareholders' comprehensive income (loss) | 2,247 | ||||||||||
Cigna [Member] | Reportable Legal Entities [Member] | |||||||||||
Revenues | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Net investment income | 123 | 0 | 0 | ||||||||
Total revenues | 123 | 0 | 0 | ||||||||
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 0 | 0 | 0 | ||||||||
Pharmacy and other service costs | 0 | 0 | 0 | ||||||||
Selling, general and administrative expenses | 200 | 0 | 0 | ||||||||
Amortization of other acquired intangible assets | 0 | 0 | 0 | ||||||||
Total benefits and expenses | 200 | 0 | 0 | ||||||||
Income from operations | (77) | 0 | 0 | ||||||||
Interest and other income (expense) | (244) | 0 | 0 | ||||||||
Intercompany interest income (expense) | (5) | 0 | 0 | ||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Net realized investment gains (losses) | (1) | 0 | 0 | ||||||||
Income (loss) before income taxes | (327) | 0 | 0 | ||||||||
Total income taxes | (74) | 0 | 0 | ||||||||
Income before equity in earnings of subsidiaries | (253) | 0 | 0 | ||||||||
Equity in income from subsidiaries | 2,890 | 0 | 0 | ||||||||
Net Income | 2,637 | 0 | 0 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Shareholders' net income | 2,637 | 0 | 0 | ||||||||
Other comprehensive income (loss), net of tax | (390) | 0 | 0 | ||||||||
Shareholders' comprehensive income (loss) | 2,247 | 0 | 0 | ||||||||
Cigna [Member] | Reportable Legal Entities [Member] | Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 0 | 0 | 0 | ||||||||
Cigna [Member] | Reportable Legal Entities [Member] | Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 0 | 0 | 0 | ||||||||
Old Cigna [Member] | |||||||||||
Revenues | |||||||||||
Net investment income | 0 | 0 | |||||||||
Total revenues | 0 | 0 | |||||||||
Benefits and Expenses | |||||||||||
Selling, general and administrative expenses | 195 | 281 | |||||||||
Total benefits and expenses | 195 | 281 | |||||||||
Income from operations | (195) | (281) | |||||||||
Interest and other income (expense) | (246) | (244) | |||||||||
Intercompany interest income (expense) | (18) | (3) | |||||||||
Debt extinguishment costs | (321) | 0 | |||||||||
Net realized investment gains (losses) | 0 | 0 | |||||||||
Income (loss) before income taxes | (780) | (528) | |||||||||
Total income taxes | (194) | (146) | |||||||||
Income before equity in earnings of subsidiaries | (586) | (382) | |||||||||
Equity in income from subsidiaries | 2,823 | 2,249 | |||||||||
Shareholders' net income | 2,237 | 1,867 | |||||||||
Other comprehensive income (loss), net of tax | 300 | (132) | |||||||||
Shareholders' comprehensive income (loss) | 2,537 | 1,735 | |||||||||
Old Cigna [Member] | Reportable Legal Entities [Member] | |||||||||||
Revenues | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Net investment income | 1 | 0 | 0 | ||||||||
Total revenues | 1 | 0 | 0 | ||||||||
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 0 | 0 | 0 | ||||||||
Pharmacy and other service costs | 0 | 0 | 0 | ||||||||
Selling, general and administrative expenses | 535 | 195 | 281 | ||||||||
Amortization of other acquired intangible assets | 0 | 0 | 0 | ||||||||
Total benefits and expenses | 535 | 195 | 281 | ||||||||
Income from operations | (534) | (195) | (281) | ||||||||
Interest and other income (expense) | (264) | (246) | (244) | ||||||||
Intercompany interest income (expense) | (58) | (18) | (3) | ||||||||
Debt extinguishment costs | (321) | 0 | |||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | (856) | (780) | (528) | ||||||||
Total income taxes | (163) | (194) | (146) | ||||||||
Income before equity in earnings of subsidiaries | (693) | (586) | (382) | ||||||||
Equity in income from subsidiaries | 3,613 | 2,823 | 2,249 | ||||||||
Net Income | 2,920 | 2,237 | 1,867 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Shareholders' net income | 2,920 | 2,237 | 1,867 | ||||||||
Other comprehensive income (loss), net of tax | (390) | 300 | (132) | ||||||||
Shareholders' comprehensive income (loss) | 2,530 | 2,537 | 1,735 | ||||||||
Old Cigna [Member] | Reportable Legal Entities [Member] | Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 0 | 0 | 0 | ||||||||
Old Cigna [Member] | Reportable Legal Entities [Member] | Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 0 | 0 | 0 | ||||||||
Express Scripts Holding Company [Member] | Reportable Legal Entities [Member] | |||||||||||
Revenues | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Net investment income | 2 | 0 | 0 | ||||||||
Total revenues | 2 | 0 | 0 | ||||||||
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 0 | 0 | 0 | ||||||||
Pharmacy and other service costs | 0 | 0 | 0 | ||||||||
Selling, general and administrative expenses | 0 | 0 | 0 | ||||||||
Amortization of other acquired intangible assets | 0 | 0 | 0 | ||||||||
Total benefits and expenses | 0 | 0 | 0 | ||||||||
Income from operations | 2 | 0 | 0 | ||||||||
Interest and other income (expense) | 15 | 0 | 0 | ||||||||
Intercompany interest income (expense) | (15) | 0 | 0 | ||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | 2 | 0 | 0 | ||||||||
Total income taxes | 0 | 0 | 0 | ||||||||
Income before equity in earnings of subsidiaries | 2 | 0 | 0 | ||||||||
Equity in income from subsidiaries | (32) | 0 | 0 | ||||||||
Net Income | (30) | 0 | 0 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Shareholders' net income | (30) | 0 | 0 | ||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | ||||||||
Shareholders' comprehensive income (loss) | (30) | 0 | 0 | ||||||||
Express Scripts Holding Company [Member] | Reportable Legal Entities [Member] | Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 0 | 0 | 0 | ||||||||
Express Scripts Holding Company [Member] | Reportable Legal Entities [Member] | Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 0 | 0 | 0 | ||||||||
Express Scripts Incorporated [Member] | Reportable Legal Entities [Member] | |||||||||||
Revenues | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Net investment income | 0 | 0 | 0 | ||||||||
Total revenues | 1,889 | 0 | 0 | ||||||||
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 0 | 0 | 0 | ||||||||
Pharmacy and other service costs | 1,763 | 0 | 0 | ||||||||
Selling, general and administrative expenses | 44 | 0 | 0 | ||||||||
Amortization of other acquired intangible assets | 94 | 0 | 0 | ||||||||
Total benefits and expenses | 1,901 | 0 | 0 | ||||||||
Income from operations | (12) | 0 | 0 | ||||||||
Interest and other income (expense) | (17) | 0 | 0 | ||||||||
Intercompany interest income (expense) | 7 | 0 | 0 | ||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | (22) | 0 | 0 | ||||||||
Total income taxes | (4) | 0 | 0 | ||||||||
Income before equity in earnings of subsidiaries | (18) | 0 | 0 | ||||||||
Equity in income from subsidiaries | (33) | 0 | 0 | ||||||||
Net Income | (51) | 0 | 0 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Shareholders' net income | (51) | 0 | 0 | ||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | ||||||||
Shareholders' comprehensive income (loss) | (51) | 0 | 0 | ||||||||
Express Scripts Incorporated [Member] | Reportable Legal Entities [Member] | Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 23 | 0 | 0 | ||||||||
Express Scripts Incorporated [Member] | Reportable Legal Entities [Member] | Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 1,866 | 0 | 0 | ||||||||
Medco Health Solutions Incorporated [Member] | Reportable Legal Entities [Member] | |||||||||||
Revenues | |||||||||||
Premiums | 0 | 0 | 0 | ||||||||
Net investment income | 0 | 0 | 0 | ||||||||
Total revenues | 425 | 0 | 0 | ||||||||
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 0 | 0 | 0 | ||||||||
Pharmacy and other service costs | 417 | 0 | 0 | ||||||||
Selling, general and administrative expenses | 8 | 0 | 0 | ||||||||
Amortization of other acquired intangible assets | 13 | 0 | 0 | ||||||||
Total benefits and expenses | 438 | 0 | 0 | ||||||||
Income from operations | (13) | 0 | 0 | ||||||||
Interest and other income (expense) | (10) | 0 | 0 | ||||||||
Intercompany interest income (expense) | 5 | 0 | 0 | ||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Net realized investment gains (losses) | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | (18) | 0 | 0 | ||||||||
Total income taxes | (4) | 0 | 0 | ||||||||
Income before equity in earnings of subsidiaries | (14) | 0 | 0 | ||||||||
Equity in income from subsidiaries | 29 | 0 | 0 | ||||||||
Net Income | 15 | 0 | 0 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Shareholders' net income | 15 | 0 | 0 | ||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | ||||||||
Shareholders' comprehensive income (loss) | 15 | 0 | 0 | ||||||||
Medco Health Solutions Incorporated [Member] | Reportable Legal Entities [Member] | Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 7 | 0 | 0 | ||||||||
Medco Health Solutions Incorporated [Member] | Reportable Legal Entities [Member] | Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 418 | 0 | 0 | ||||||||
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | |||||||||||
Revenues | |||||||||||
Premiums | 36,113 | 32,491 | 30,824 | ||||||||
Net investment income | 1,354 | 1,226 | 1,147 | ||||||||
Total revenues | 47,228 | 41,806 | 39,838 | ||||||||
Benefits and Expenses | |||||||||||
Medical costs and other benefit expenses | 27,528 | 25,263 | 24,341 | ||||||||
Pharmacy and other service costs | 3,583 | 2,456 | 2,468 | ||||||||
Selling, general and administrative expenses | 11,195 | 9,835 | 9,509 | ||||||||
Amortization of other acquired intangible assets | 128 | 115 | 151 | ||||||||
Total benefits and expenses | 42,434 | 37,669 | 36,469 | ||||||||
Income from operations | 4,794 | 4,137 | 3,369 | ||||||||
Interest and other income (expense) | 22 | (6) | (34) | ||||||||
Intercompany interest income (expense) | 66 | 18 | 3 | ||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Net realized investment gains (losses) | (80) | 237 | 169 | ||||||||
Income (loss) before income taxes | 4,802 | 4,386 | 3,507 | ||||||||
Total income taxes | 1,180 | 1,568 | 1,282 | ||||||||
Income before equity in earnings of subsidiaries | 3,622 | 2,818 | 2,225 | ||||||||
Equity in income from subsidiaries | 0 | 0 | 0 | ||||||||
Net Income | 3,622 | 2,818 | 2,225 | ||||||||
Less: net income (loss) attributable to noncontrolling interests | 9 | (5) | (24) | ||||||||
Shareholders' net income | 3,613 | 2,823 | 2,249 | ||||||||
Other comprehensive income (loss), net of tax | (536) | 269 | (154) | ||||||||
Shareholders' comprehensive income (loss) | 3,077 | 3,092 | 2,095 | ||||||||
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | Fees and other revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | 5,596 | 5,110 | 4,901 | ||||||||
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | Pharmacy revenues [Member] | |||||||||||
Revenues | |||||||||||
Pharmacy revenues, fees and other revenues | $ 4,165 | $ 2,979 | $ 2,966 |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | |||||
Cash and cash equivalents | $ 3,855 | $ 2,972 | $ 3,185 | $ 1,968 | |
Investments | 2,045 | 2,136 | |||
Accounts receivable, net | 10,473 | 3,155 | |||
Inventories | 2,821 | 228 | |||
Other current assets | 1,236 | 820 | |||
Total current assets | 20,430 | 9,311 | |||
Long-term investments | 26,929 | 26,483 | |||
Reinsurance recoverables | 5,507 | 5,763 | |||
Deferred policy acquisition costs | 2,821 | 2,237 | |||
Property and equipment | 4,562 | 1,563 | |||
Investments in subsidiaries | 0 | 0 | |||
Intercompany receivables | 0 | 0 | |||
Deferred tax assets, net | 0 | 39 | |||
Goodwill | 44,505 | 6,164 | 5,980 | ||
Other intangible assets | 39,003 | 345 | |||
Other assets | 1,630 | 1,431 | |||
Separate account assets | 7,839 | 8,423 | |||
TOTAL ASSETS | 153,226 | 61,759 | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 6,801 | 6,317 | |||
Pharmacy and service costs payable | 10,702 | 305 | |||
Accounts payable | 4,366 | 184 | |||
Accrued expenses and other liabilities | 7,071 | 3,963 | |||
Accounts payable, accrued expenses and other liabilities | 4,147 | ||||
Short-term debt | 2,955 | 240 | |||
Total current liabilities | 31,895 | 11,009 | |||
Non-current insurance and contractholder liabilities | 19,974 | 20,530 | |||
Deferred tax liabilities, net | 9,453 | 0 | |||
Other non-current liabilities | 3,470 | 2,838 | |||
Intercompany payables | 0 | 0 | |||
Long-term debt | 39,523 | 5,199 | |||
Separate account liabilities | 7,839 | 8,423 | |||
TOTAL LIABILITIES | 112,154 | 47,999 | |||
Redeemable noncontrolling interest | 37 | 49 | |||
Total shareholders' equity | 41,028 | 13,711 | |||
Noncontrolling interests | 7 | 0 | |||
Total Equity | 41,035 | 13,711 | 13,703 | 12,020 | |
Total liabilities and equity | 153,226 | 61,759 | |||
Consolidation, Eliminations [Member] | |||||
Assets | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Investments | 0 | 0 | |||
Accounts receivable, net | 0 | 0 | |||
Inventories | 0 | 0 | |||
Other current assets | (210) | 0 | |||
Total current assets | (210) | 0 | |||
Long-term investments | 0 | 0 | |||
Reinsurance recoverables | 0 | ||||
Deferred policy acquisition costs | 0 | 0 | |||
Property and equipment | 0 | 0 | |||
Investments in subsidiaries | (173,780) | (22,631) | |||
Intercompany receivables | (39,147) | (3,180) | |||
Deferred tax assets, net | 0 | ||||
Goodwill | 0 | 0 | |||
Other intangible assets | 0 | 0 | |||
Other assets | (246) | 0 | |||
Separate account assets | 0 | 0 | |||
TOTAL ASSETS | (213,383) | (25,811) | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 0 | 0 | |||
Pharmacy and service costs payable | 0 | 0 | |||
Accounts payable | 0 | ||||
Accrued expenses and other liabilities | (210) | ||||
Accounts payable, accrued expenses and other liabilities | 0 | ||||
Short-term debt | 0 | 0 | |||
Total current liabilities | (210) | 0 | |||
Non-current insurance and contractholder liabilities | 0 | 0 | |||
Deferred tax liabilities, net | (246) | ||||
Other non-current liabilities | 0 | 0 | |||
Intercompany payables | (39,147) | (3,180) | |||
Long-term debt | 0 | 0 | |||
Separate account liabilities | 0 | 0 | |||
TOTAL LIABILITIES | (39,603) | (3,180) | |||
Redeemable noncontrolling interest | 0 | 0 | |||
Total shareholders' equity | (173,780) | (22,631) | |||
Noncontrolling interests | 0 | ||||
Total Equity | (173,780) | ||||
Total liabilities and equity | (213,383) | (25,811) | |||
Cigna [Member] | |||||
Assets | |||||
Cash and cash equivalents | 243 | $ 0 | |||
Other current assets | 14 | ||||
Total current assets | 257 | ||||
Investments in subsidiaries | 68,969 | ||||
Other assets | 48 | ||||
TOTAL ASSETS | 69,274 | ||||
Liabilities Abstract | |||||
Short-term debt | 0 | ||||
Total current liabilities | 418 | ||||
Other non-current liabilities | 0 | ||||
Long-term debt | 22,863 | ||||
TOTAL LIABILITIES | 28,246 | ||||
Total shareholders' equity | 41,028 | ||||
Total liabilities and equity | 69,274 | ||||
Cigna [Member] | Reportable Legal Entities [Member] | |||||
Assets | |||||
Cash and cash equivalents | 243 | 0 | 0 | ||
Investments | 0 | 0 | |||
Accounts receivable, net | 0 | 0 | |||
Inventories | 0 | 0 | |||
Other current assets | 14 | 0 | |||
Total current assets | 257 | 0 | |||
Long-term investments | 0 | 0 | |||
Reinsurance recoverables | 0 | 0 | |||
Deferred policy acquisition costs | 0 | 0 | |||
Property and equipment | 0 | 0 | |||
Investments in subsidiaries | 68,969 | 0 | |||
Intercompany receivables | 0 | 0 | |||
Deferred tax assets, net | 0 | ||||
Goodwill | 0 | 0 | |||
Other intangible assets | 0 | 0 | |||
Other assets | 48 | 0 | |||
Separate account assets | 0 | 0 | |||
TOTAL ASSETS | 69,274 | 0 | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 0 | 0 | |||
Pharmacy and service costs payable | 0 | 0 | |||
Accounts payable | 22 | ||||
Accrued expenses and other liabilities | 396 | ||||
Accounts payable, accrued expenses and other liabilities | 0 | ||||
Short-term debt | 0 | 0 | |||
Total current liabilities | 418 | 0 | |||
Non-current insurance and contractholder liabilities | 0 | 0 | |||
Deferred tax liabilities, net | 0 | ||||
Other non-current liabilities | 0 | 0 | |||
Intercompany payables | 4,965 | 0 | |||
Long-term debt | 22,863 | 0 | |||
Separate account liabilities | 0 | 0 | |||
TOTAL LIABILITIES | 28,246 | 0 | |||
Redeemable noncontrolling interest | 0 | 0 | |||
Total shareholders' equity | 41,028 | 0 | |||
Noncontrolling interests | 0 | ||||
Total Equity | 41,028 | ||||
Total liabilities and equity | 69,274 | 0 | |||
Old Cigna [Member] | |||||
Assets | |||||
Cash and cash equivalents | 9 | 18 | 16 | ||
Other current assets | 31 | ||||
Total current assets | 103 | ||||
Investments in subsidiaries | 22,631 | ||||
Other assets | 221 | ||||
TOTAL ASSETS | 23,155 | ||||
Liabilities Abstract | |||||
Short-term debt | 231 | ||||
Total current liabilities | 501 | ||||
Other non-current liabilities | 851 | ||||
Long-term debt | 5,112 | ||||
TOTAL LIABILITIES | 9,444 | ||||
Total shareholders' equity | 13,711 | ||||
Total liabilities and equity | 23,155 | ||||
Old Cigna [Member] | Reportable Legal Entities [Member] | |||||
Assets | |||||
Cash and cash equivalents | 0 | 9 | 18 | 16 | |
Investments | 0 | 63 | |||
Accounts receivable, net | 0 | 0 | |||
Inventories | 0 | 0 | |||
Other current assets | 59 | 31 | |||
Total current assets | 59 | 103 | |||
Long-term investments | 10 | 0 | |||
Reinsurance recoverables | 0 | 0 | |||
Deferred policy acquisition costs | 0 | 0 | |||
Property and equipment | 0 | 0 | |||
Investments in subsidiaries | 27,544 | 22,631 | |||
Intercompany receivables | 4,505 | 200 | |||
Deferred tax assets, net | 221 | ||||
Goodwill | 0 | 0 | |||
Other intangible assets | 0 | 0 | |||
Other assets | 198 | 0 | |||
Separate account assets | 0 | 0 | |||
TOTAL ASSETS | 32,316 | 23,155 | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 0 | 0 | |||
Pharmacy and service costs payable | 0 | 0 | |||
Accounts payable | 0 | ||||
Accrued expenses and other liabilities | 182 | ||||
Accounts payable, accrued expenses and other liabilities | 270 | ||||
Short-term debt | 1,500 | 231 | |||
Total current liabilities | 1,682 | 501 | |||
Non-current insurance and contractholder liabilities | 0 | 0 | |||
Deferred tax liabilities, net | 0 | ||||
Other non-current liabilities | 685 | 851 | |||
Intercompany payables | 4,361 | 2,980 | |||
Long-term debt | 5,110 | 5,112 | |||
Separate account liabilities | 0 | 0 | |||
TOTAL LIABILITIES | 11,838 | 9,444 | |||
Redeemable noncontrolling interest | 0 | 0 | |||
Total shareholders' equity | 20,478 | 13,711 | |||
Noncontrolling interests | 0 | ||||
Total Equity | 20,478 | ||||
Total liabilities and equity | 32,316 | 23,155 | |||
Express Scripts Holding Company [Member] | Reportable Legal Entities [Member] | |||||
Assets | |||||
Cash and cash equivalents | 633 | 0 | 0 | 0 | |
Investments | 0 | 0 | |||
Accounts receivable, net | 0 | 0 | |||
Inventories | 0 | 0 | |||
Other current assets | 0 | 0 | |||
Total current assets | 633 | 0 | |||
Long-term investments | 0 | 0 | |||
Reinsurance recoverables | 0 | 0 | |||
Deferred policy acquisition costs | 0 | 0 | |||
Property and equipment | 0 | 0 | |||
Investments in subsidiaries | 52,035 | 0 | |||
Intercompany receivables | 0 | 0 | |||
Deferred tax assets, net | 0 | ||||
Goodwill | 31,049 | 0 | |||
Other intangible assets | 8,400 | 0 | |||
Other assets | 0 | 0 | |||
Separate account assets | 0 | 0 | |||
TOTAL ASSETS | 92,117 | 0 | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 0 | 0 | |||
Pharmacy and service costs payable | 0 | 0 | |||
Accounts payable | 0 | ||||
Accrued expenses and other liabilities | 129 | ||||
Accounts payable, accrued expenses and other liabilities | 0 | ||||
Short-term debt | 995 | 0 | |||
Total current liabilities | 1,124 | 0 | |||
Non-current insurance and contractholder liabilities | 0 | 0 | |||
Deferred tax liabilities, net | 2,001 | ||||
Other non-current liabilities | 0 | 0 | |||
Intercompany payables | 29,569 | 0 | |||
Long-term debt | 10,932 | 0 | |||
Separate account liabilities | 0 | 0 | |||
TOTAL LIABILITIES | 43,626 | 0 | |||
Redeemable noncontrolling interest | 0 | 0 | |||
Total shareholders' equity | 48,491 | 0 | |||
Noncontrolling interests | 0 | ||||
Total Equity | 48,491 | ||||
Total liabilities and equity | 92,117 | 0 | |||
Express Scripts Incorporated [Member] | Reportable Legal Entities [Member] | |||||
Assets | |||||
Cash and cash equivalents | 43 | 0 | 0 | 0 | |
Investments | 0 | 0 | |||
Accounts receivable, net | 4,206 | 0 | |||
Inventories | 0 | 0 | |||
Other current assets | 310 | 0 | |||
Total current assets | 4,559 | 0 | |||
Long-term investments | 0 | 0 | |||
Reinsurance recoverables | 0 | 0 | |||
Deferred policy acquisition costs | 0 | 0 | |||
Property and equipment | 2,432 | 0 | |||
Investments in subsidiaries | 17,115 | 0 | |||
Intercompany receivables | 7,425 | 0 | |||
Deferred tax assets, net | 0 | ||||
Goodwill | 0 | 0 | |||
Other intangible assets | 18,962 | 0 | |||
Other assets | 68 | 0 | |||
Separate account assets | 0 | 0 | |||
TOTAL ASSETS | 50,561 | 0 | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 0 | 0 | |||
Pharmacy and service costs payable | 8,422 | 0 | |||
Accounts payable | 834 | ||||
Accrued expenses and other liabilities | 1,387 | ||||
Accounts payable, accrued expenses and other liabilities | 0 | ||||
Short-term debt | 353 | 0 | |||
Total current liabilities | 10,996 | 0 | |||
Non-current insurance and contractholder liabilities | 0 | 0 | |||
Deferred tax liabilities, net | 5,012 | ||||
Other non-current liabilities | 497 | 0 | |||
Intercompany payables | 0 | 0 | |||
Long-term debt | 24 | 0 | |||
Separate account liabilities | 0 | 0 | |||
TOTAL LIABILITIES | 16,529 | 0 | |||
Redeemable noncontrolling interest | 0 | 0 | |||
Total shareholders' equity | 34,032 | 0 | |||
Noncontrolling interests | 0 | ||||
Total Equity | 34,032 | ||||
Total liabilities and equity | 50,561 | 0 | |||
Medco Health Solutions Incorporated [Member] | Reportable Legal Entities [Member] | |||||
Assets | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Investments | 0 | 0 | |||
Accounts receivable, net | 748 | 0 | |||
Inventories | 0 | 0 | |||
Other current assets | 0 | 0 | |||
Total current assets | 748 | 0 | |||
Long-term investments | 0 | 0 | |||
Reinsurance recoverables | 0 | 0 | |||
Deferred policy acquisition costs | 0 | 0 | |||
Property and equipment | 0 | 0 | |||
Investments in subsidiaries | 8,117 | 0 | |||
Intercompany receivables | 2,335 | 0 | |||
Deferred tax assets, net | 0 | ||||
Goodwill | 0 | 0 | |||
Other intangible assets | 7,040 | 0 | |||
Other assets | 74 | 0 | |||
Separate account assets | 0 | 0 | |||
TOTAL ASSETS | 18,314 | 0 | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 0 | 0 | |||
Pharmacy and service costs payable | 1,579 | 0 | |||
Accounts payable | 4 | ||||
Accrued expenses and other liabilities | 189 | ||||
Accounts payable, accrued expenses and other liabilities | 0 | ||||
Short-term debt | 0 | 0 | |||
Total current liabilities | 1,772 | 0 | |||
Non-current insurance and contractholder liabilities | 0 | 0 | |||
Deferred tax liabilities, net | 1,685 | ||||
Other non-current liabilities | 290 | 0 | |||
Intercompany payables | 0 | 0 | |||
Long-term debt | 506 | 0 | |||
Separate account liabilities | 0 | 0 | |||
TOTAL LIABILITIES | 4,253 | 0 | |||
Redeemable noncontrolling interest | 0 | 0 | |||
Total shareholders' equity | 14,061 | 0 | |||
Noncontrolling interests | 0 | ||||
Total Equity | 14,061 | ||||
Total liabilities and equity | 18,314 | 0 | |||
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | |||||
Assets | |||||
Cash and cash equivalents | 2,936 | 2,963 | $ 3,167 | $ 1,952 | |
Investments | 2,045 | 2,073 | |||
Accounts receivable, net | 5,519 | 3,155 | |||
Inventories | 2,821 | 228 | |||
Other current assets | 1,063 | 789 | |||
Total current assets | 14,384 | 9,208 | |||
Long-term investments | 26,919 | 26,483 | |||
Reinsurance recoverables | 5,507 | 5,763 | |||
Deferred policy acquisition costs | 2,821 | 2,237 | |||
Property and equipment | 2,130 | 1,563 | |||
Investments in subsidiaries | 0 | 0 | |||
Intercompany receivables | 24,882 | 2,980 | |||
Deferred tax assets, net | (182) | ||||
Goodwill | 13,456 | 6,164 | |||
Other intangible assets | 4,601 | 345 | |||
Other assets | 1,488 | 1,431 | |||
Separate account assets | 7,839 | 8,423 | |||
TOTAL ASSETS | 104,027 | 64,415 | |||
Liabilities Abstract | |||||
Current insurance and contractholder liabilities | 6,801 | 6,317 | |||
Pharmacy and service costs payable | 701 | 305 | |||
Accounts payable | 3,506 | ||||
Accrued expenses and other liabilities | 4,998 | ||||
Accounts payable, accrued expenses and other liabilities | 3,877 | ||||
Short-term debt | 107 | 9 | |||
Total current liabilities | 16,113 | 10,508 | |||
Non-current insurance and contractholder liabilities | 19,974 | 20,530 | |||
Deferred tax liabilities, net | 1,001 | ||||
Other non-current liabilities | 1,998 | 1,987 | |||
Intercompany payables | 252 | 200 | |||
Long-term debt | 88 | 87 | |||
Separate account liabilities | 7,839 | 8,423 | |||
TOTAL LIABILITIES | 47,265 | 41,735 | |||
Redeemable noncontrolling interest | 37 | 49 | |||
Total shareholders' equity | 56,718 | 22,631 | |||
Noncontrolling interests | 7 | ||||
Total Equity | 56,725 | ||||
Total liabilities and equity | $ 104,027 | $ 64,415 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Cash Flow Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | $ 3,770 | $ 4,086 | $ 4,026 | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | 0 | 0 | 0 | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 2,655 | 2,012 | 1,544 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 2,151 | 2,051 | 1,755 | |||
Commercial mortgage loans | 215 | 335 | 316 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 734 | 1,702 | 1,431 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | (5,637) | (5,628) | (5,191) | |||
Commercial mortgage loans | (312) | (430) | (165) | |||
Other (primarily short-term and other long-term investments) | (1,189) | (1,065) | (1,698) | |||
Property and equipment purchases, net | (528) | (471) | (461) | |||
Acquisitions, net of cash acquired | (24,455) | (209) | (4) | |||
Other, net | (12) | 0 | (101) | |||
Net cash provided by (used in) investing activities | (26,378) | (1,703) | (2,574) | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | 0 | 0 | 0 | |||
Intercompany dividends paid | 0 | 0 | 0 | |||
Deposits and interest credited to contractholder deposit funds | 1,040 | 1,230 | 1,460 | |||
Withdrawals and benefit payments from contractholder deposit funds | (1,151) | (1,363) | (1,362) | |||
Net change in short-term debt | 1,487 | 80 | (148) | |||
Payments for debt extinguishment | 0 | (313) | 0 | |||
Repayment of long-term debt | $ (131) | $ (250) | (131) | (1,250) | 0 | |
Net proceeds on issuance of long-term debt | $ 20,000 | 22,856 | 1,581 | 0 | ||
Repurchase of common stock | (342) | (2,725) | (139) | |||
Issuance of common stock | 68 | 131 | 36 | |||
Other, net | (312) | (22) | (72) | |||
Net cash provided by (used in) financing activities | 23,515 | (2,651) | (225) | |||
Effect of foreign currency rate changes on cash and cash equivalents | (24) | 55 | (10) | |||
Net increase in cash and cash equivalents | 883 | (213) | 1,217 | |||
Cash and cash equivalents, January 1, | 2,972 | 3,185 | 2,972 | 3,185 | 1,968 | |
Cash and cash equivalents, December 31, | 3,855 | 2,972 | 3,185 | |||
Consolidation, Eliminations [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | (2,518) | (758) | (580) | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | 5,733 | 1,955 | (78) | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Property and equipment purchases, net | 0 | 0 | 0 | |||
Acquisitions, net of cash acquired | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) investing activities | 5,733 | 1,955 | (78) | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | (5,733) | (1,955) | 78 | |||
Intercompany dividends paid | 2,518 | 758 | 580 | |||
Deposits and interest credited to contractholder deposit funds | 0 | 0 | 0 | |||
Withdrawals and benefit payments from contractholder deposit funds | 0 | 0 | 0 | |||
Net change in short-term debt | 0 | 0 | 0 | |||
Payments for debt extinguishment | 0 | 0 | 0 | |||
Repayment of long-term debt | 0 | 0 | 0 | |||
Net proceeds on issuance of long-term debt | 0 | 0 | 0 | |||
Repurchase of common stock | 0 | 0 | 0 | |||
Issuance of common stock | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) financing activities | (3,215) | (1,197) | 658 | |||
Effect of foreign currency rate changes on cash and cash equivalents | 0 | 0 | 0 | |||
Net increase in cash and cash equivalents | 0 | 0 | 0 | |||
Cash and cash equivalents, January 1, | 0 | 0 | 0 | 0 | 0 | |
Cash and cash equivalents, December 31, | 0 | 0 | 0 | |||
Cigna [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | 145 | |||||
Investments purchased or originated: | ||||||
Other (primarily short-term and other long-term investments) | 0 | |||||
Other, net | (27,115) | |||||
Net cash provided by (used in) investing activities | (27,115) | |||||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | 4,437 | |||||
Net change in short-term debt | 0 | |||||
Payments for debt extinguishment | 0 | |||||
Repayment of long-term debt | 0 | |||||
Net proceeds on issuance of long-term debt | 22,856 | |||||
Repurchase of common stock | (32) | |||||
Issuance of common stock | 1 | |||||
Net cash provided by (used in) financing activities | 27,213 | |||||
Net increase in cash and cash equivalents | 243 | |||||
Cash and cash equivalents, December 31, | 243 | |||||
Cigna [Member] | Reportable Legal Entities [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | 145 | 0 | 0 | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | 0 | 0 | 0 | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Property and equipment purchases, net | 0 | 0 | 0 | |||
Acquisitions, net of cash acquired | (27,115) | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) investing activities | (27,115) | 0 | 0 | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | 4,437 | 0 | 0 | |||
Intercompany dividends paid | 0 | 0 | 0 | |||
Deposits and interest credited to contractholder deposit funds | 0 | 0 | 0 | |||
Withdrawals and benefit payments from contractholder deposit funds | 0 | 0 | 0 | |||
Net change in short-term debt | 0 | 0 | 0 | |||
Payments for debt extinguishment | 0 | 0 | 0 | |||
Repayment of long-term debt | 0 | 0 | 0 | |||
Net proceeds on issuance of long-term debt | 22,856 | 0 | 0 | |||
Repurchase of common stock | (32) | 0 | 0 | |||
Issuance of common stock | 1 | 0 | 0 | |||
Other, net | (49) | 0 | 0 | |||
Net cash provided by (used in) financing activities | 27,213 | 0 | 0 | |||
Effect of foreign currency rate changes on cash and cash equivalents | 0 | 0 | 0 | |||
Net increase in cash and cash equivalents | 243 | 0 | 0 | |||
Cash and cash equivalents, January 1, | 0 | 0 | 0 | 0 | ||
Cash and cash equivalents, December 31, | 243 | 0 | 0 | |||
Old Cigna [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | 602 | 376 | ||||
Investments purchased or originated: | ||||||
Other (primarily short-term and other long-term investments) | (6) | (3) | ||||
Other, net | (11) | (8) | ||||
Net cash provided by (used in) investing activities | (17) | (11) | ||||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | 1,955 | (78) | ||||
Net change in short-term debt | 100 | (100) | ||||
Payments for debt extinguishment | (313) | 0 | ||||
Repayment of long-term debt | (1,250) | 0 | ||||
Net proceeds on issuance of long-term debt | 1,581 | 0 | ||||
Repurchase of common stock | (2,725) | (139) | ||||
Issuance of common stock | 131 | 36 | ||||
Net cash provided by (used in) financing activities | (594) | (363) | ||||
Net increase in cash and cash equivalents | (9) | 2 | ||||
Cash and cash equivalents, January 1, | 9 | 18 | 9 | 18 | 16 | |
Cash and cash equivalents, December 31, | 9 | 18 | ||||
Old Cigna [Member] | Reportable Legal Entities [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | 2,416 | 602 | 376 | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | (4,412) | 0 | 0 | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 63 | 0 | 0 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | (10) | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other (primarily short-term and other long-term investments) | 0 | (6) | (3) | |||
Property and equipment purchases, net | 0 | 0 | 0 | |||
Acquisitions, net of cash acquired | 0 | 0 | 0 | |||
Other, net | 0 | (11) | (8) | |||
Net cash provided by (used in) investing activities | (4,359) | (17) | (11) | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | 1,121 | 1,955 | (78) | |||
Intercompany dividends paid | 0 | 0 | 0 | |||
Deposits and interest credited to contractholder deposit funds | 0 | 0 | 0 | |||
Withdrawals and benefit payments from contractholder deposit funds | 0 | 0 | 0 | |||
Net change in short-term debt | 1,400 | 100 | (100) | |||
Payments for debt extinguishment | 0 | (313) | 0 | |||
Repayment of long-term debt | (131) | (1,250) | 0 | |||
Net proceeds on issuance of long-term debt | 0 | 1,581 | 0 | |||
Repurchase of common stock | (310) | (2,725) | (139) | |||
Issuance of common stock | 67 | 131 | 36 | |||
Other, net | (213) | (73) | (82) | |||
Net cash provided by (used in) financing activities | 1,934 | (594) | (363) | |||
Effect of foreign currency rate changes on cash and cash equivalents | 0 | 0 | 0 | |||
Net increase in cash and cash equivalents | (9) | (9) | 2 | |||
Cash and cash equivalents, January 1, | 9 | 18 | 9 | 18 | 16 | |
Cash and cash equivalents, December 31, | 0 | 9 | 18 | |||
Express Scripts Holding Company [Member] | Reportable Legal Entities [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | (36) | 0 | 0 | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | (200) | 0 | 0 | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Property and equipment purchases, net | 0 | 0 | 0 | |||
Acquisitions, net of cash acquired | 1,676 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) investing activities | 1,476 | 0 | 0 | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | (807) | 0 | 0 | |||
Intercompany dividends paid | 0 | 0 | 0 | |||
Deposits and interest credited to contractholder deposit funds | 0 | 0 | 0 | |||
Withdrawals and benefit payments from contractholder deposit funds | 0 | 0 | 0 | |||
Net change in short-term debt | 0 | 0 | 0 | |||
Payments for debt extinguishment | 0 | 0 | 0 | |||
Repayment of long-term debt | 0 | 0 | 0 | |||
Net proceeds on issuance of long-term debt | 0 | 0 | 0 | |||
Repurchase of common stock | 0 | 0 | 0 | |||
Issuance of common stock | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) financing activities | (807) | 0 | 0 | |||
Effect of foreign currency rate changes on cash and cash equivalents | 0 | 0 | 0 | |||
Net increase in cash and cash equivalents | 633 | 0 | 0 | |||
Cash and cash equivalents, January 1, | 0 | 0 | 0 | 0 | 0 | |
Cash and cash equivalents, December 31, | 633 | 0 | 0 | |||
Express Scripts Incorporated [Member] | Reportable Legal Entities [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | 80 | 0 | 0 | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | 0 | 0 | 0 | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Property and equipment purchases, net | (6) | 0 | 0 | |||
Acquisitions, net of cash acquired | 23 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) investing activities | 17 | 0 | 0 | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | (54) | 0 | 0 | |||
Intercompany dividends paid | 0 | 0 | 0 | |||
Deposits and interest credited to contractholder deposit funds | 0 | 0 | 0 | |||
Withdrawals and benefit payments from contractholder deposit funds | 0 | 0 | 0 | |||
Net change in short-term debt | 0 | 0 | 0 | |||
Payments for debt extinguishment | 0 | 0 | 0 | |||
Repayment of long-term debt | 0 | 0 | 0 | |||
Net proceeds on issuance of long-term debt | 0 | 0 | 0 | |||
Repurchase of common stock | 0 | 0 | 0 | |||
Issuance of common stock | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) financing activities | (54) | 0 | 0 | |||
Effect of foreign currency rate changes on cash and cash equivalents | 0 | 0 | 0 | |||
Net increase in cash and cash equivalents | 43 | 0 | 0 | |||
Cash and cash equivalents, January 1, | 0 | 0 | 0 | 0 | 0 | |
Cash and cash equivalents, December 31, | 43 | 0 | 0 | |||
Medco Health Solutions Incorporated [Member] | Reportable Legal Entities [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | (304) | 0 | 0 | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | 0 | 0 | 0 | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | 0 | 0 | 0 | |||
Commercial mortgage loans | 0 | 0 | 0 | |||
Other (primarily short-term and other long-term investments) | 0 | 0 | 0 | |||
Property and equipment purchases, net | 0 | 0 | 0 | |||
Acquisitions, net of cash acquired | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) investing activities | 0 | 0 | 0 | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | 304 | 0 | 0 | |||
Intercompany dividends paid | 0 | 0 | 0 | |||
Deposits and interest credited to contractholder deposit funds | 0 | 0 | 0 | |||
Withdrawals and benefit payments from contractholder deposit funds | 0 | 0 | 0 | |||
Net change in short-term debt | 0 | 0 | 0 | |||
Payments for debt extinguishment | 0 | 0 | 0 | |||
Repayment of long-term debt | 0 | 0 | 0 | |||
Net proceeds on issuance of long-term debt | 0 | 0 | 0 | |||
Repurchase of common stock | 0 | 0 | 0 | |||
Issuance of common stock | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Net cash provided by (used in) financing activities | 304 | 0 | 0 | |||
Effect of foreign currency rate changes on cash and cash equivalents | 0 | 0 | 0 | |||
Net increase in cash and cash equivalents | 0 | 0 | 0 | |||
Cash and cash equivalents, January 1, | 0 | 0 | 0 | 0 | 0 | |
Cash and cash equivalents, December 31, | 0 | 0 | 0 | |||
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net cash provided by operating activities | 3,987 | 4,242 | 4,230 | |||
Cash Flows from Investing Activities | ||||||
Net change in loans due to (from) affiliates | (1,121) | (1,955) | 78 | |||
Proceeds from investments sold: | ||||||
Fixed maturities and equity securities | 2,655 | 2,012 | 1,544 | |||
Investment maturities and repayments: | ||||||
Fixed maturities and equity securities | 2,151 | 2,051 | 1,755 | |||
Commercial mortgage loans | 215 | 335 | 316 | |||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 671 | 1,702 | 1,431 | |||
Investments purchased or originated: | ||||||
Fixed maturities and equity securities | (5,627) | (5,628) | (5,191) | |||
Commercial mortgage loans | (312) | (430) | (165) | |||
Other (primarily short-term and other long-term investments) | (1,189) | (1,059) | (1,695) | |||
Property and equipment purchases, net | (522) | (471) | (461) | |||
Acquisitions, net of cash acquired | 961 | (209) | (4) | |||
Other, net | (12) | 11 | (93) | |||
Net cash provided by (used in) investing activities | (2,130) | (3,641) | (2,485) | |||
Cash Flows from Financing Activities | ||||||
Net change in amounts due to (from) affiliates | 732 | 0 | 0 | |||
Intercompany dividends paid | (2,518) | (758) | (580) | |||
Deposits and interest credited to contractholder deposit funds | 1,040 | 1,230 | 1,460 | |||
Withdrawals and benefit payments from contractholder deposit funds | (1,151) | (1,363) | (1,362) | |||
Net change in short-term debt | 87 | (20) | (48) | |||
Payments for debt extinguishment | 0 | 0 | 0 | |||
Repayment of long-term debt | 0 | 0 | 0 | |||
Net proceeds on issuance of long-term debt | 0 | 0 | 0 | |||
Repurchase of common stock | 0 | 0 | 0 | |||
Issuance of common stock | 0 | 0 | 0 | |||
Other, net | (50) | 51 | 10 | |||
Net cash provided by (used in) financing activities | (1,860) | (860) | (520) | |||
Effect of foreign currency rate changes on cash and cash equivalents | (24) | 55 | (10) | |||
Net increase in cash and cash equivalents | (27) | (204) | 1,215 | |||
Cash and cash equivalents, January 1, | $ 2,963 | $ 3,167 | 2,963 | 3,167 | 1,952 | |
Cash and cash equivalents, December 31, | $ 2,936 | $ 2,963 | $ 3,167 |
Segment Information - Special I
Segment Information - Special Items (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Before-tax [Abstract] | |||||||||||
Transaction-related costs | $ 852 | $ 126 | $ 166 | ||||||||
Charges associated with litigation matters | 25 | 40 | |||||||||
Selling, general and administrative expense, measurement period adjustment | 2 | (56) | |||||||||
Total charges (benefits) associated with U.S. tax reform | 2 | (56) | |||||||||
Debt extinguishment costs | $ 321 | 0 | 321 | 0 | |||||||
Long-term care guaranty fund assessment | 129 | ||||||||||
Risk corridor allowance | 124 | ||||||||||
After-tax [Abstract] | |||||||||||
Transaction-related costs | $ 402 | $ 108 | $ 109 | $ 50 | $ 25 | 6 | $ (47) | $ 49 | 669 | 33 | 147 |
Charges associated with litigation matters | (16) | 35 | 0 | 0 | 19 | 25 | |||||
Selling, general and administrative expense, provisional | (36) | ||||||||||
Selling, general and administrative expense, measurement period adjustment | 1 | ||||||||||
Tax expense, provisional | 232 | 0 | |||||||||
Tax expense, measurement period adjustment | (3) | ||||||||||
Total charges (benefits) associated with U.S. tax reform | 3 | (5) | 0 | 0 | 196 | 0 | 0 | 0 | (2) | 196 | |
Debt extinguishment costs | 0 | 209 | 0 | 0 | 209 | ||||||
Long-term care guaranty fund assessment | 0 | 0 | 0 | 83 | $ 83 | ||||||
Risk corridor allowance | 0 | 0 | 0 | 0 | $ 80 | ||||||
Total impact of special items, after-tax | $ 389 | $ 138 | $ 109 | $ 50 | $ 221 | $ 215 | $ (47) | $ 132 | |||
Selling, general and administrative expenses [Member] | |||||||||||
Before-tax [Abstract] | |||||||||||
Transaction-related costs | 748 | ||||||||||
After-tax [Abstract] | |||||||||||
Transaction-related costs | 587 | ||||||||||
Interest expense and other [Member] | |||||||||||
Before-tax [Abstract] | |||||||||||
Transaction-related costs | 227 | ||||||||||
After-tax [Abstract] | |||||||||||
Transaction-related costs | 179 | ||||||||||
Net Investment Income [Member] | |||||||||||
Before-tax [Abstract] | |||||||||||
Transaction-related costs | (123) | ||||||||||
After-tax [Abstract] | |||||||||||
Transaction-related costs | $ (97) |
Segment Information - Summarize
Segment Information - Summarized Segment Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | $ 47,170 | $ 40,580 | $ 38,691 | ||||||||
Net investment income | 1,480 | 1,226 | 1,147 | ||||||||
Total revenues | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 10,632 | $ 10,372 | $ 10,374 | $ 10,428 | 48,650 | 41,806 | 39,838 |
Revenue from transitioning clients | (459) | ||||||||||
Net realized investment results from equity method subsidiaries | 43 | ||||||||||
Special items reported in transaction-related costs | (123) | ||||||||||
Adjusted revenues | (48,111) | 41,806 | 39,838 | ||||||||
Depreciation and amortization | 695 | 566 | 610 | ||||||||
Income (loss) before income taxes | $ 228 | $ 1,033 | $ 1,102 | $ 1,218 | $ 758 | 824 | $ 1,134 | $ 890 | 3,581 | 3,606 | 2,979 |
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | (62) | ||||||||||
(Income) loss attributable to non-controlling interests | (14) | 2 | 20 | ||||||||
Net realized investments (gains) losses | 124 | (237) | (169) | ||||||||
Amortization of acquired intangible assets | 235 | 115 | 151 | ||||||||
Special items [Abstract] | |||||||||||
Transaction-related costs | 852 | 126 | 166 | ||||||||
Charges associated with litigation matters | 25 | 40 | |||||||||
U.S. Tax reform | 2 | (56) | |||||||||
Debt extinguishment costs | $ 321 | 0 | 321 | 0 | |||||||
Long-term care guaranty fund assessment | 129 | ||||||||||
Risk corridor allowance | 124 | ||||||||||
Pre-tax adjusted income (loss) from operations | 4,743 | 4,006 | 3,311 | ||||||||
Integrated Medical [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 31,759 | 28,193 | 26,695 | ||||||||
Health Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 5,902 | 3,250 | 3,169 | ||||||||
International Markets [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 5,174 | 4,774 | 4,424 | ||||||||
Group Disability and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 4,335 | 4,363 | 4,403 | ||||||||
Operating Segments [Member] | Integrated Medical [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 459 | 366 | 305 | ||||||||
Total revenues | 32,791 | 29,035 | 27,395 | ||||||||
Revenue from transitioning clients | 0 | ||||||||||
Net realized investment results from equity method subsidiaries | 0 | ||||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 32,791 | 29,035 | 27,395 | ||||||||
Depreciation and amortization | 466 | 470 | 519 | ||||||||
Income (loss) before income taxes | 3,342 | 2,859 | 2,417 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | ||||||||||
(Income) loss attributable to non-controlling interests | 0 | 1 | 2 | ||||||||
Net realized investments (gains) losses | 36 | (137) | (116) | ||||||||
Amortization of acquired intangible assets | 99 | 93 | 125 | ||||||||
Special items [Abstract] | |||||||||||
Transaction-related costs | 0 | 0 | 0 | ||||||||
Charges associated with litigation matters | 25 | 40 | |||||||||
U.S. Tax reform | 0 | 0 | |||||||||
Debt extinguishment costs | 0 | ||||||||||
Long-term care guaranty fund assessment | 106 | ||||||||||
Risk corridor allowance | 124 | ||||||||||
Pre-tax adjusted income (loss) from operations | 3,502 | 2,922 | 2,592 | ||||||||
Operating Segments [Member] | Health Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 9 | 3 | 3 | ||||||||
Total revenues | 7,065 | 4,241 | 4,066 | ||||||||
Revenue from transitioning clients | (459) | ||||||||||
Net realized investment results from equity method subsidiaries | 0 | ||||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 6,606 | 4,241 | 4,066 | ||||||||
Depreciation and amortization | 120 | 0 | 0 | ||||||||
Income (loss) before income taxes | 329 | 288 | 268 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | (62) | ||||||||||
(Income) loss attributable to non-controlling interests | 0 | 0 | 0 | ||||||||
Net realized investments (gains) losses | 0 | 0 | 0 | ||||||||
Amortization of acquired intangible assets | 113 | 0 | 0 | ||||||||
Special items [Abstract] | |||||||||||
Transaction-related costs | 0 | 0 | 0 | ||||||||
Charges associated with litigation matters | 0 | 0 | |||||||||
U.S. Tax reform | 0 | 0 | |||||||||
Debt extinguishment costs | 0 | ||||||||||
Long-term care guaranty fund assessment | 0 | ||||||||||
Risk corridor allowance | 0 | ||||||||||
Pre-tax adjusted income (loss) from operations | 380 | 288 | 268 | ||||||||
Operating Segments [Member] | International Markets [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 149 | 127 | 113 | ||||||||
Total revenues | 5,323 | 4,901 | 4,537 | ||||||||
Revenue from transitioning clients | 0 | ||||||||||
Net realized investment results from equity method subsidiaries | 43 | ||||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 5,366 | 4,901 | 4,537 | ||||||||
Depreciation and amortization | 55 | 61 | 61 | ||||||||
Income (loss) before income taxes | 670 | 667 | 497 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | ||||||||||
(Income) loss attributable to non-controlling interests | (14) | 1 | 18 | ||||||||
Net realized investments (gains) losses | 61 | (31) | 2 | ||||||||
Amortization of acquired intangible assets | 18 | 17 | 21 | ||||||||
Special items [Abstract] | |||||||||||
Transaction-related costs | 0 | 0 | 0 | ||||||||
Charges associated with litigation matters | 0 | 0 | |||||||||
U.S. Tax reform | 0 | 0 | |||||||||
Debt extinguishment costs | 0 | ||||||||||
Long-term care guaranty fund assessment | 0 | ||||||||||
Risk corridor allowance | 0 | ||||||||||
Pre-tax adjusted income (loss) from operations | 735 | 654 | 538 | ||||||||
Operating Segments [Member] | Group Disability and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 712 | 700 | 705 | ||||||||
Total revenues | 5,061 | 5,075 | 5,108 | ||||||||
Revenue from transitioning clients | 0 | ||||||||||
Net realized investment results from equity method subsidiaries | 0 | ||||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 5,061 | 5,075 | 5,108 | ||||||||
Depreciation and amortization | 53 | 31 | 29 | ||||||||
Income (loss) before income taxes | 497 | 614 | 324 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | ||||||||||
(Income) loss attributable to non-controlling interests | 0 | 0 | 0 | ||||||||
Net realized investments (gains) losses | 25 | (69) | (54) | ||||||||
Amortization of acquired intangible assets | 5 | 5 | 5 | ||||||||
Special items [Abstract] | |||||||||||
Transaction-related costs | 0 | 0 | 0 | ||||||||
Charges associated with litigation matters | 0 | 0 | |||||||||
U.S. Tax reform | 2 | (56) | |||||||||
Debt extinguishment costs | 0 | ||||||||||
Long-term care guaranty fund assessment | 23 | ||||||||||
Risk corridor allowance | 0 | ||||||||||
Pre-tax adjusted income (loss) from operations | 529 | 517 | 275 | ||||||||
Corporate and eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | (1,590) | (1,446) | (1,268) | ||||||||
Revenue from transitioning clients | 0 | ||||||||||
Net realized investment results from equity method subsidiaries | 0 | ||||||||||
Special items reported in transaction-related costs | (123) | ||||||||||
Adjusted revenues | (1,713) | (1,446) | (1,268) | ||||||||
Depreciation and amortization | 1 | 4 | 1 | ||||||||
Income (loss) before income taxes | (1,257) | (822) | (527) | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | ||||||||||
(Income) loss attributable to non-controlling interests | 0 | 0 | 0 | ||||||||
Net realized investments (gains) losses | 2 | 0 | (1) | ||||||||
Amortization of acquired intangible assets | 0 | 0 | 0 | ||||||||
Special items [Abstract] | |||||||||||
Transaction-related costs | 852 | 126 | 166 | ||||||||
Charges associated with litigation matters | 0 | 0 | |||||||||
U.S. Tax reform | 0 | 0 | |||||||||
Debt extinguishment costs | 321 | ||||||||||
Long-term care guaranty fund assessment | 0 | ||||||||||
Risk corridor allowance | 0 | ||||||||||
Pre-tax adjusted income (loss) from operations | (403) | (375) | (362) | ||||||||
Corporate Non-segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 0 | 0 | 0 | ||||||||
Net investment income | 151 | 30 | 21 | ||||||||
Intersegment eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | (1,741) | (1,476) | (1,289) | ||||||||
Intersegment eliminations [Member] | Integrated Medical [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | (573) | (476) | (395) | ||||||||
Intersegment eliminations [Member] | Health Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | (1,154) | (988) | (894) | ||||||||
Intersegment eliminations [Member] | International Markets [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 0 | 0 | 0 | ||||||||
Intersegment eliminations [Member] | Group Disability and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | $ (14) | $ (12) | $ 0 |
Segment Information - Revenue f
Segment Information - Revenue from External Customers (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from External Customer [Line Items] | |||
Premiums | $ 36,113 | $ 32,491 | $ 30,824 |
Revenues from external customers | 47,170 | 40,580 | 38,691 |
Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 26,848 | 23,631 | 22,262 |
Revenues from external customers | 31,759 | 28,193 | 26,695 |
International Markets [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 5,043 | 4,619 | 4,273 |
Revenues from external customers | 5,174 | 4,774 | 4,424 |
Health Services [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues from external customers | 5,902 | 3,250 | 3,169 |
Group Disability and Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues from external customers | 4,335 | 4,363 | 4,403 |
Product [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 5,479 | 2,979 | 2,966 |
Home Delivery And Specialty [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 3,997 | 2,979 | 2,966 |
Network Pharmacy [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 1,415 | 0 | 0 |
Other Pharmacy [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 67 | 0 | 0 |
Service [Member] | |||
Revenue from External Customer [Line Items] | |||
Fees | 5,558 | 5,053 | 4,844 |
Other external revenues | 20 | 57 | 57 |
Pharmacy revenues, fees and other revenues | 5,578 | 5,110 | 4,901 |
Medical Risk Products [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 10,710 | 9,439 | 7,911 |
Stop Loss [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 4,008 | 3,483 | 3,082 |
Other Commercial Medical Products [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 1,038 | 917 | 886 |
Medicare Advantage [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 5,832 | 5,534 | 6,621 |
Medicare Part D [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 764 | 764 | 1,122 |
Other Government Products [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 4,496 | 3,494 | 2,640 |
Disability Life Accident [Member] | Group Disability and Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 4,000 | 3,973 | 4,002 |
Other [Member] | Group Disability and Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | $ 222 | $ 268 | $ 287 |
Segment Information - Foreign a
Segment Information - Foreign and U.S. Revenues (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 47,170 | $ 40,580 | $ 38,691 |
Revenues From External Customers [Member] | Geographic Concentration Risk [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration Risk, Benchmark Description | Consolidated revenues from external customers | ||
Concentration Risk, Additional Characteristic | Single foreign country | ||
Revenues From External Customers [Member] | Geographic Concentration Risk [Member] | Maximum [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration Risk, Percentage | 5.00% | ||
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 42,773 | 36,555 | 35,011 |
South Korea [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | 2,093 | 1,892 | 1,666 |
All Other Countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 2,304 | $ 2,133 | $ 2,014 |
Segment Information - Concentra
Segment Information - Concentration Risk (Details) - CMS [Member] - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Net receivables from CMS | $ 0.7 | $ 0.5 | |
Revenue Consolidated [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.00% | 16.00% | 19.00% |
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 | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated Results | |||||||||||
Total revenues | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 10,632 | $ 10,372 | $ 10,374 | $ 10,428 | $ 48,650 | $ 41,806 | $ 39,838 |
Income (loss) before income taxes | 228 | 1,033 | 1,102 | 1,218 | 758 | 824 | 1,134 | 890 | 3,581 | 3,606 | 2,979 |
Shareholders' net income | $ 144 | $ 772 | $ 806 | $ 915 | $ 266 | $ 560 | $ 813 | $ 598 | $ 2,637 | $ 2,237 | $ 1,867 |
Shareholders' net income per share: | |||||||||||
EPS, basic | $ 0.56 | $ 3.18 | $ 3.32 | $ 3.78 | $ 1.09 | $ 2.25 | $ 3.2 | $ 2.34 | $ 10.69 | $ 8.92 | $ 7.31 |
EPS, diluted | 0.55 | 3.14 | 3.29 | 3.72 | 1.07 | 2.21 | 3.15 | 2.3 | $ 10.54 | $ 8.77 | $ 7.19 |
Stock and Dividend Data | |||||||||||
Price range of common stock - high | 226.61 | 208.73 | 182.1 | 227.13 | 212.46 | 188.36 | 173.21 | 154.83 | |||
Price range of common stock - low | 176.52 | 166.88 | 163.8 | 163.02 | 183.08 | 166.81 | 146.7 | 133.52 | |||
Dividends declared per share | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0 | $ 0 | $ 0 | $ 0.04 | |||
Special items | |||||||||||
U.S. tax reform | $ 3 | $ (5) | $ 0 | $ 0 | $ 196 | $ 0 | $ 0 | $ 0 | $ (2) | $ 196 | |
Debt extinguishment costs | 0 | 209 | 0 | 0 | 209 | ||||||
Long-term care guaranty fund assessment | 0 | 0 | 0 | 83 | 83 | ||||||
Transaction-related costs | 402 | 108 | 109 | 50 | 25 | 6 | (47) | 49 | 669 | $ 33 | $ 147 |
Charges associated with litigation matters | (16) | 35 | 0 | 0 | $ 19 | $ 25 | |||||
Total special items | $ 389 | $ 138 | $ 109 | $ 50 | $ 221 | $ 215 | $ (47) | $ 132 |
Schedule I - Condensed Financ_3
Schedule I - Condensed Financial Information, Statements of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||||||||||
Net investment (income) | $ (1,480) | $ (1,226) | $ (1,147) | ||||||||
Total revenues | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 10,632 | $ 10,372 | $ 10,374 | $ 10,428 | 48,650 | 41,806 | 39,838 |
Operating expenses: | |||||||||||
Selling, Genernal and Administrative Expense | 11,934 | 10,030 | 9,790 | ||||||||
Total operating expenses | 44,490 | 37,864 | 36,750 | ||||||||
Income from operations | 4,160 | 3,942 | 3,088 | ||||||||
Interest expense and other | (498) | (252) | (278) | ||||||||
Debt extinguishment costs | (321) | 0 | (321) | 0 | |||||||
Realized investment (gains) losses | 81 | (237) | (169) | ||||||||
Income (loss) before income taxes | 228 | 1,033 | 1,102 | 1,218 | 758 | 824 | 1,134 | 890 | 3,581 | 3,606 | 2,979 |
Income tax expense (benefit) | 935 | 1,374 | 1,136 | ||||||||
Shareholders' net income | $ 144 | $ 772 | $ 806 | $ 915 | $ 266 | $ 560 | $ 813 | $ 598 | 2,637 | 2,237 | 1,867 |
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Net unrealized appreciation (depreciation) on securities and derivatives | (365) | (37) | (60) | ||||||||
Net translation (losses) gains on foreign currencies | (152) | 304 | (95) | ||||||||
Postretirement benefits liability adjustment | 127 | 33 | 23 | ||||||||
Shareholders' other comprehensive income (loss) | (390) | 300 | (132) | ||||||||
Shareholders' comprehensive income (loss) | 2,247 | 2,537 | 1,735 | ||||||||
Cigna [Member] | |||||||||||
Revenues | |||||||||||
Net investment (income) | 123 | ||||||||||
Total revenues | 123 | ||||||||||
Operating expenses: | |||||||||||
Selling, Genernal and Administrative Expense | 200 | ||||||||||
Total operating expenses | 200 | ||||||||||
Income from operations | (77) | ||||||||||
Interest expense and other | (244) | ||||||||||
Intercompany interest income (expense) | (5) | ||||||||||
Debt extinguishment costs | 0 | ||||||||||
Realized investment (gains) losses | (1) | ||||||||||
Income (loss) before income taxes | (327) | ||||||||||
Income tax expense (benefit) | (74) | ||||||||||
(Loss) of parent company | (253) | ||||||||||
Equity in income from subsidiaries | 2,890 | ||||||||||
Shareholders' net income | 2,637 | ||||||||||
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Net unrealized appreciation (depreciation) on securities and derivatives | (365) | ||||||||||
Net translation (losses) gains on foreign currencies | (152) | ||||||||||
Postretirement benefits liability adjustment | 127 | ||||||||||
Shareholders' other comprehensive income (loss) | (390) | ||||||||||
Shareholders' comprehensive income (loss) | $ 2,247 | ||||||||||
Old Cigna [Member] | |||||||||||
Revenues | |||||||||||
Net investment (income) | 0 | 0 | |||||||||
Total revenues | 0 | 0 | |||||||||
Operating expenses: | |||||||||||
Selling, Genernal and Administrative Expense | 195 | 281 | |||||||||
Total operating expenses | 195 | 281 | |||||||||
Income from operations | (195) | (281) | |||||||||
Interest expense and other | (246) | (244) | |||||||||
Intercompany interest income (expense) | (18) | (3) | |||||||||
Debt extinguishment costs | (321) | 0 | |||||||||
Realized investment (gains) losses | 0 | 0 | |||||||||
Income (loss) before income taxes | (780) | (528) | |||||||||
Income tax expense (benefit) | (194) | (146) | |||||||||
(Loss) of parent company | (586) | (382) | |||||||||
Equity in income from subsidiaries | 2,823 | 2,249 | |||||||||
Shareholders' net income | 2,237 | 1,867 | |||||||||
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Net unrealized appreciation (depreciation) on securities and derivatives | (37) | (60) | |||||||||
Net translation (losses) gains on foreign currencies | 304 | (95) | |||||||||
Postretirement benefits liability adjustment | 33 | 23 | |||||||||
Shareholders' other comprehensive income (loss) | 300 | (132) | |||||||||
Shareholders' comprehensive income (loss) | $ 2,537 | $ 1,735 |
Schedule I - Condensed Financ_4
Schedule I - Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets | ||||||
Cash and cash equivalents | $ 3,855 | $ 2,972 | $ 3,185 | $ 1,968 | ||
Other current assets | 1,236 | 820 | ||||
Total current assets | 20,430 | 9,311 | ||||
Investments in subsidiaries | 0 | 0 | ||||
Other noncurrent assets | 1,630 | 1,431 | ||||
TOTAL ASSETS | 153,226 | 61,759 | ||||
Liabilities: | ||||||
Short-term debt | 2,955 | 240 | ||||
Total current liabilities | 31,895 | 11,009 | ||||
Long-term debt | 39,523 | 5,199 | ||||
Other non-current liabilities | 3,470 | 2,838 | ||||
TOTAL LIABILITIES | 112,154 | 47,999 | ||||
Shareholders Equity: | ||||||
Common stock (shares issued, 296; authorized, 600) | [1] | 4 | 74 | |||
Additional paid-in capital | 27,751 | 2,940 | ||||
Accumulated other comprehensive loss | (1,711) | (1,082) | ||||
Retained earnings | 15,088 | 15,800 | ||||
Less: treasury stock, at cost | (104) | (4,021) | ||||
Total shareholders' equity | 41,028 | 13,711 | ||||
Total liabilities and shareholders' equity | 153,226 | 61,759 | ||||
Cigna [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | 243 | $ 0 | ||||
Short-term investments | 0 | |||||
Other current assets | 14 | |||||
Total current assets | 257 | |||||
Intercompany receivable | 0 | |||||
Investments in subsidiaries | 68,969 | |||||
Other noncurrent assets | 48 | |||||
TOTAL ASSETS | 69,274 | |||||
Liabilities: | ||||||
Short-term debt | 0 | |||||
Other current liabilities | 418 | |||||
Total current liabilities | 418 | |||||
Intercompany payable | 4,965 | |||||
Long-term debt | 22,863 | |||||
Other non-current liabilities | 0 | |||||
TOTAL LIABILITIES | 28,246 | |||||
Shareholders Equity: | ||||||
Common stock (shares issued, 296; authorized, 600) | 4 | |||||
Additional paid-in capital | 27,751 | |||||
Accumulated other comprehensive loss | (1,711) | |||||
Retained earnings | 15,088 | |||||
Less: treasury stock, at cost | (104) | |||||
Total shareholders' equity | 41,028 | |||||
Total liabilities and shareholders' equity | $ 69,274 | |||||
Old Cigna [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | 9 | $ 18 | $ 16 | |||
Short-term investments | 63 | |||||
Other current assets | 31 | |||||
Total current assets | 103 | |||||
Intercompany receivable | 200 | |||||
Investments in subsidiaries | 22,631 | |||||
Other noncurrent assets | 221 | |||||
TOTAL ASSETS | 23,155 | |||||
Liabilities: | ||||||
Short-term debt | 231 | |||||
Other current liabilities | 270 | |||||
Total current liabilities | 501 | |||||
Intercompany payable | 2,980 | |||||
Long-term debt | 5,112 | |||||
Other non-current liabilities | 851 | |||||
TOTAL LIABILITIES | 9,444 | |||||
Shareholders Equity: | ||||||
Common stock (shares issued, 296; authorized, 600) | 74 | |||||
Additional paid-in capital | 2,940 | |||||
Accumulated other comprehensive loss | (1,082) | |||||
Retained earnings | 15,800 | |||||
Less: treasury stock, at cost | (4,021) | |||||
Total shareholders' equity | 13,711 | |||||
Total liabilities and shareholders' equity | $ 23,155 | |||||
[1] | Par value per share, $0.01 in 2018 and $0.25 in 2017; shares issued, 381 million in 2018 and 296 million in 2017; authorized shares, 600 million in 2018 and 2017. |
Schedule I - Condensed Financ_5
Schedule I - Condensed Financial Information, Balance Sheets - Parentheticals (Details) - shares | Dec. 31, 2018 | Dec. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||||
Common stock shares issued | 381,494,000 | 296,145,000 | 0 | |
Common stock shares authorized | 600,000,000 | 600,000,000 | ||
Cigna [Member] | ||||
Consolidated Balance Sheets | ||||
Common stock shares issued | 381,000,000 | |||
Common stock shares authorized | 600,000,000 | |||
Old Cigna [Member] | ||||
Consolidated Balance Sheets | ||||
Common stock shares issued | 0 | 296,145,000 | 296,145,000 | |
Common stock shares authorized | 600,000,000 | 600,000,000 | 600,000,000 |
Schedule I - Condensed Financ_6
Schedule I - Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | |||||||||||
Shareholders' net income | $ 144 | $ 772 | $ 806 | $ 915 | $ 266 | $ 560 | $ 813 | $ 598 | $ 2,637 | $ 2,237 | $ 1,867 |
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||
Other liabilities | 332 | 696 | 171 | ||||||||
Debt extinguishment costs | $ 321 | 0 | 321 | 0 | |||||||
Other, net | 272 | 197 | 134 | ||||||||
Net cash provided by (used in) operating activities | 3,770 | 4,086 | 4,026 | ||||||||
Cash Flows from Investing Activities | |||||||||||
Short term investments purchased | (1,189) | (1,065) | (1,698) | ||||||||
Other, net | (12) | 0 | (101) | ||||||||
Net cash provided by (used in) investing activities | (26,378) | (1,703) | (2,574) | ||||||||
Cash Flows from Financing Activities | |||||||||||
Net change in amounts due to (from) affiliates | 0 | 0 | 0 | ||||||||
Net change in short-term debt | 1,487 | 80 | (148) | ||||||||
Payments for debt extinguishment | 0 | (313) | 0 | ||||||||
Repayment of long-term debt | (131) | (250) | (131) | (1,250) | 0 | ||||||
Net proceeds on issuance of long-term debt | $ 20,000 | 22,856 | 1,581 | 0 | |||||||
Issuance of common stock | 68 | 131 | 36 | ||||||||
Repurchase of common stock | (342) | (2,725) | (139) | ||||||||
Other, net | (312) | (22) | (72) | ||||||||
Net cash provided by (used in) financing activities | 23,515 | (2,651) | (225) | ||||||||
Net increase (decrease) in cash and cash equivalents | 883 | (213) | 1,217 | ||||||||
Cash and cash equivalents, January 1, | 2,972 | 3,185 | 2,972 | 3,185 | 1,968 | ||||||
Cash and cash equivalents, December 31, | 3,855 | 2,972 | 3,855 | 2,972 | 3,185 | ||||||
Cigna [Member] | |||||||||||
Cash Flows from Operating Activities | |||||||||||
Shareholders' net income | 2,637 | ||||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||
Equity in income from subsidiaries | (2,890) | ||||||||||
Dividends received from subsidiaries | 0 | ||||||||||
Other liabilities | 412 | ||||||||||
Debt extinguishment costs | 0 | ||||||||||
Other, net | (14) | ||||||||||
Net cash provided by (used in) operating activities | 145 | ||||||||||
Cash Flows from Investing Activities | |||||||||||
Short term investments purchased | 0 | ||||||||||
Other, net | (27,115) | ||||||||||
Net cash provided by (used in) investing activities | (27,115) | ||||||||||
Cash Flows from Financing Activities | |||||||||||
Net change in amounts due to (from) affiliates | 4,437 | ||||||||||
Net change in short-term debt | 0 | ||||||||||
Payments for debt extinguishment | 0 | ||||||||||
Repayment of long-term debt | 0 | ||||||||||
Net proceeds on issuance of long-term debt | 22,856 | ||||||||||
Issuance of common stock | 1 | ||||||||||
Common dividends paid | 0 | ||||||||||
Repurchase of common stock | (32) | ||||||||||
Tax withholding on stock compensation and other | (49) | ||||||||||
Net cash provided by (used in) financing activities | 27,213 | ||||||||||
Net increase (decrease) in cash and cash equivalents | 243 | ||||||||||
Cash and cash equivalents, December 31, | $ 243 | 243 | |||||||||
Old Cigna [Member] | |||||||||||
Cash Flows from Operating Activities | |||||||||||
Shareholders' net income | 2,237 | 1,867 | |||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||
Equity in income from subsidiaries | (2,823) | (2,249) | |||||||||
Dividends received from subsidiaries | 758 | 580 | |||||||||
Other liabilities | (224) | (9) | |||||||||
Debt extinguishment costs | 321 | 0 | |||||||||
Other, net | 333 | 187 | |||||||||
Net cash provided by (used in) operating activities | 602 | 376 | |||||||||
Cash Flows from Investing Activities | |||||||||||
Short term investments purchased | (6) | (3) | |||||||||
Other, net | (11) | (8) | |||||||||
Net cash provided by (used in) investing activities | (17) | (11) | |||||||||
Cash Flows from Financing Activities | |||||||||||
Net change in amounts due to (from) affiliates | 1,955 | (78) | |||||||||
Net change in short-term debt | 100 | (100) | |||||||||
Payments for debt extinguishment | (313) | 0 | |||||||||
Repayment of long-term debt | (1,250) | 0 | |||||||||
Net proceeds on issuance of long-term debt | 1,581 | 0 | |||||||||
Issuance of common stock | 131 | 36 | |||||||||
Common dividends paid | (10) | (10) | |||||||||
Repurchase of common stock | (2,725) | (139) | |||||||||
Tax withholding on stock compensation and other | (63) | (72) | |||||||||
Net cash provided by (used in) financing activities | (594) | (363) | |||||||||
Net increase (decrease) in cash and cash equivalents | (9) | 2 | |||||||||
Cash and cash equivalents, January 1, | $ 9 | $ 18 | $ 9 | 18 | 16 | ||||||
Cash and cash equivalents, December 31, | $ 9 | $ 9 | $ 18 |
Schedule I - Condensed Financ_7
Schedule I - Condensed Financial Information, Short-term and Long-term Debt (Details) $ in Millions | Dec. 31, 2018USD ($) |
Maturities Of Debt Excluding Capital Leases [Abstract] | |
Scheduled maturities, long-term debt, 2019 | $ 1,337 |
Scheduled maturities, long-term debt, 2020 | 4,700 |
Scheduled maturities, long-term debt, 2021 | 7,378 |
Scheduled maturities, long-term debt, 2022 | 2,250 |
Scheduled maturities, long-term debt, 2023 | 4,917 |
Scheduled maturities, long-term debt, after 2023 | 20,582 |
Cigna [Member] | |
Maturities Of Debt Excluding Capital Leases [Abstract] | |
Scheduled maturities, long-term debt, 2019 | 0 |
Scheduled maturities, long-term debt, 2020 | 2,750 |
Scheduled maturities, long-term debt, 2021 | 5,250 |
Scheduled maturities, long-term debt, 2022 | 0 |
Scheduled maturities, long-term debt, 2023 | 3,800 |
Scheduled maturities, long-term debt, after 2023 | $ 11,200 |
Schedule I - Condensed Financ_8
Schedule I - Condensed Financial Information, Intercompany Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cigna [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany liabilities | $ 4,965 | |
Cigna [Member] | Old Cigna [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany liabilities | $ 4,300 | |
Average monthly interest rate on intercompany payables | 2.33% | |
Old Cigna [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany liabilities | $ 2,980 | |
Old Cigna [Member] | Cigna Holdings Incorporated [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany liabilities | $ 2,800 | |
Average monthly interest rate on intercompany payables | 1.47% |
Schedule I - Condensed Financ_9
Schedule I - Condensed Financial Information, Guarantees (Details) $ in Billions | Dec. 31, 2018USD ($) |
Cigna [Member] | |
Guarantee Obligations [Line Items] | |
Guarantee obligations carrying value | $ 19.6 |
Schedule II - Valuation and Q_3
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commercial mortgage loans [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 0 | $ 5 | $ 15 |
Charged (Credited) to costs and expenses | 0 | 1 | 0 |
Charged (Credited) to other accounts | 0 | 0 | 0 |
Other deductions | 0 | (6) | (10) |
Balance at end of period | 0 | 0 | 5 |
Premiums, accounts and notes receivable [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 207 | 200 | 75 |
Charged (Credited) to costs and expenses | 18 | 19 | 134 |
Charged (Credited) to other accounts | (3) | (11) | (8) |
Other deductions | (5) | (1) | (1) |
Balance at end of period | 217 | 207 | 200 |
Deferred tax asset valuation allowance [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 72 | 87 | 71 |
Charged (Credited) to costs and expenses | (5) | 11 | 21 |
Charged (Credited) to other accounts | 132 | (26) | (5) |
Other deductions | 0 | 0 | 0 |
Balance at end of period | 199 | 72 | 87 |
Reinsurance recoverables [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 3 | 3 | 3 |
Charged (Credited) to costs and expenses | (1) | 0 | 0 |
Charged (Credited) to other accounts | 0 | 0 | 0 |
Other deductions | 0 | 0 | 0 |
Balance at end of period | $ 2 | $ 3 | $ 3 |
Uncategorized Items - ci-201812
Label | Element | Value |
Common Stock [Member] | ||
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (10,000,000) |
Shareholders' Equity [Member] | ||
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 58,000,000 |
Additional Paid In Capital [Member] | ||
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 68,000,000 |