Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Document Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Document Period End Date | Dec. 31, 2019 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Amendment Flag | false | ||
Entity File Number | 001-38769 | ||
Registrant Name | Cigna Corporation | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 82-4991898 | ||
Central Index Key | 0001739940 | ||
Entity Address | 900 Cottage Grove Road | ||
Entity Address City | Bloomfield | ||
Entity Address State | CT | ||
Entity Address Postal | 06002 | ||
City Area | 860 | ||
Local Phone | 226-6000 | ||
Well Known Seasoned Issuer | Yes | ||
Voluntary Filers | No | ||
Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Filer Category | Large Accelerated Filer | ||
Smaller reporting company | false | ||
Emerging growth company | false | ||
Shell company | false | ||
Title of 12(b) Security | Common Stock, Par Value $0.01 | ||
Common stock, par value per share | $ 0.01 | $ 0.01 | |
Trading Symbol | CI | ||
Public float | $ 59.4 | ||
Common Stock outstanding | 372,043,094 | ||
Security exchange name | NYSE | ||
Documents Incorporated By Reference [Text Block] | Part III of this Form 10-K incorporates by reference information from the registrant’s definitive proxy statement related to the 2020 annual meeting of shareholders. |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Premiums | $ 39,714 | $ 36,113 | $ 32,491 |
Net investment income | 1,390 | 1,480 | 1,226 |
Total revenues | 153,566 | 48,650 | 41,806 |
Benefits and Expenses | |||
Pharmacy and other service costs | 97,668 | 4,793 | 2,456 |
Medical costs and other benefit expenses | 30,819 | 27,528 | 25,263 |
Selling, general and administrative expenses | 14,053 | 11,934 | 10,030 |
Amortization of other acquired intangible assets | 2,949 | 235 | 115 |
Total benefits and expenses | 145,489 | 44,490 | 37,864 |
Income from operations | 8,077 | 4,160 | 3,942 |
Interest expense and other | (1,682) | (498) | (252) |
Debt extinguishment costs | (2) | 0 | (321) |
Net realized investment gains (losses) | 177 | (81) | 237 |
Income (loss) before income taxes | 6,570 | 3,581 | 3,606 |
Total income taxes | 1,450 | 935 | 1,374 |
Net Income | 5,120 | 2,646 | 2,232 |
Less: net income (loss) attributable to noncontrolling interests | 16 | 9 | (5) |
Shareholders' net income | $ 5,104 | $ 2,637 | $ 2,237 |
Shareholders' net income per share: | |||
Basic | $ 13.58 | $ 10.69 | $ 8.92 |
Diluted | $ 13.44 | $ 10.54 | $ 8.77 |
Fees and other revenues [Member] | |||
Revenues | |||
Pharmacy revenues, fees and other revenues | $ 9,363 | $ 5,578 | $ 5,110 |
Pharmacy revenues [Member] | |||
Revenues | |||
Pharmacy revenues, fees and other revenues | $ 103,099 | $ 5,479 | $ 2,979 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Comprehensive Income | |||
Net Income | $ 5,120 | $ 2,646 | $ 2,232 |
Other comprehensive income (loss), net of tax | |||
Net unrealized appreciation (depreciation) on securities and derivatives | 957 | (365) | (37) |
Net translation (losses) gains on foreign currencies | (59) | (167) | 301 |
Postretirement benefits liability adjustment | (133) | 127 | 33 |
Other comprehensive income (loss), net of tax | 765 | (405) | 297 |
Total comprehensive income | 5,885 | 2,241 | 2,529 |
Comprehensive income (loss) attributable to noncontrolling interests: | |||
Net income (loss) attributable to redeemable noncontrolling interests | 11 | 9 | 0 |
Net income (loss) attributable to other noncontrolling interests | 5 | 0 | (5) |
Other comprehensive income (loss) attributable to redeemable noncontrolling interests | (5) | (15) | (3) |
Total comprehensive income (loss) attributable to noncontrolling interests | 11 | (6) | (8) |
Shareholders' comprehensive income (loss) | $ 5,874 | $ 2,247 | $ 2,537 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Cash and cash equivalents | $ 4,619 | $ 3,855 | |
Investments | 937 | 2,045 | |
Accounts receivable, net | 10,716 | 10,473 | |
Inventories | 2,661 | 2,821 | |
Other current assets | 1,400 | 1,236 | |
Assets of business held for sale | 9,512 | 0 | |
Total current assets | 29,845 | 20,430 | |
Long-term investments | 21,542 | 26,929 | |
Reinsurance recoverables | 5,100 | 5,507 | |
Deferred policy acquisition costs | 2,958 | 2,821 | |
Property and equipment | 4,417 | 4,562 | |
Goodwill | 44,602 | 44,505 | |
Other intangible assets | 36,562 | 39,003 | |
Other assets | 2,283 | 1,630 | |
Separate account assets | 8,465 | 7,839 | |
TOTAL ASSETS | 155,774 | 153,226 | |
Liabilities: | |||
Current insurance and contractholder liabilities | 4,921 | 6,801 | |
Pharmacy and service costs payable | 10,454 | 10,702 | |
Accounts payable | 5,090 | 4,366 | |
Accrued expenses and other liabilities | 7,347 | 7,071 | |
Short-term debt | 5,514 | 2,955 | |
Liabilities of business held for sale | 6,812 | 0 | |
Total current liabilities | 40,138 | 31,895 | |
Non-current insurance and contractholder liabilities | 16,052 | 19,974 | |
Deferred tax liabilities, net | 9,387 | 9,453 | |
Other non-current liabilities | 4,460 | 3,470 | |
Long-term debt | 31,893 | 39,523 | |
Separate account liabilities | 8,465 | 7,839 | |
TOTAL LIABILITIES | 110,395 | 112,154 | |
Contingencies - Note 22 | |||
Redeemable noncontrolling interests | 35 | 37 | |
Shareholders' Equity | |||
Common stock | [1] | 4 | 4 |
Additional paid-in capital | 28,306 | 27,751 | |
Accumulated other comprehensive income (loss) | (941) | (1,711) | |
Retained earnings | 20,162 | 15,088 | |
Less: treasury stock, at cost | (2,193) | (104) | |
TOTAL SHAREHOLDERS' EQUITY | 45,338 | 41,028 | |
Other noncontrolling interests | 6 | 7 | |
Total equity | 45,344 | 41,035 | |
Total liabilities and shareholders' equity | $ 155,774 | $ 153,226 | |
[1] | Par value per share, $0.01; shares issued, 386 million as of December 31, 2019 and 381 million as of December 31, 2018; authorized shares; 600 million. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares shares in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock shares issued | 385,543 | 381,494 |
Common stock shares authorized | 600,000 | 600,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Total Equity - USD ($) $ in Millions | Total | Shareholders' Equity [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Other noncontrolling interests [Member] |
Total Equity, beginning of period at Dec. 31, 2016 | $ 13,703 | $ 13,699 | $ 74 | $ 2,892 | $ (1,382) | $ 13,831 | $ (1,716) | $ 4 |
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 248 | 248 | 51 | (258) | 455 | |||
Other comprehensive income (loss), net of tax | 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 |
Beginning Balance at Dec. 31, 2016 | 58 | |||||||
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 | ||||
Retirement of treasury stock | 0 | 0 | (13) | (529) | (3,498) | 4,040 | ||
Exchange of Old Cigna common stock | 0 | 0 | (58) | 58 | ||||
Acquisition of Express Scripts (see Note 4) | 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), net of tax | (390) | (390) | (390) | |||||
Net income (loss) | 2,637 | 2,637 | 2,637 | |||||
Common dividends declared (per share: $0.04) | (10) | (10) | (10) | |||||
Repurchase of common stock | (329) | (329) | (329) | |||||
Other transactions impacting noncontrolling interest | 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 | |||||||
Increase (Decrease) In Stockholders Equity [Roll Forward] | ||||||||
Effect of issuing stock for employee benefit plans | 451 | 451 | 555 | (104) | ||||
Other comprehensive income (loss), net of tax | 770 | 770 | 770 | |||||
Net income (loss) | 5,109 | 5,104 | 5,104 | 5 | ||||
Common dividends declared (per share: $0.04) | (15) | (15) | (15) | |||||
Repurchase of common stock | (1,985) | (1,985) | (1,985) | |||||
Other transactions impacting noncontrolling interest | (6) | 0 | (6) | |||||
Total Equity, end of period at Dec. 31, 2019 | 45,344 | $ 45,338 | $ 4 | $ 28,306 | $ (941) | $ 20,162 | $ (2,193) | $ 6 |
Redeemable Noncontrolling Interests | ||||||||
Other comprehensive income (loss) | (5) | |||||||
Net income (loss) | 11 | |||||||
Other transactions impacting noncontrolling interest | (8) | |||||||
Ending Balance at Dec. 31, 2019 | $ 35 |
Consolidated Statemnts of Chang
Consolidated Statemnts of Changes in Total Equity (Parentheticals) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Changes in Total Equity | |||||||||||
Dividends declared per share | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Cash Flows from Operating Activities | ||||
Net Income | $ 5,120 | $ 2,646 | $ 2,232 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 3,651 | 695 | 566 | |
Realized investment (gains) losses | (177) | 81 | (237) | |
Deferred income taxes (benefits) | (313) | (101) | 242 | |
Debt extinguishment costs | 2 | 0 | 321 | |
Net changes in assets and liabilities, net of non-operating effects: | ||||
Accounts receivable | (713) | 705 | (233) | |
Inventories | 149 | (107) | (72) | |
Deferred policy acquisition costs | (242) | (237) | (282) | |
Reinsurance recoverables and other assets | (277) | (234) | 115 | |
Insurance liabilities | 575 | 560 | 506 | |
Pharmacy and service costs payable | (192) | (842) | 35 | |
Accounts payable, accrued expenses and other liabilities | 1,343 | 332 | 696 | |
Other, net | 559 | 272 | 197 | |
Net cash provided by (used in) operating activities | 9,485 | 3,770 | 4,086 | |
Proceeds from investments sold: | ||||
Debt securities and equity securities | 3,487 | 2,655 | 2,012 | |
Investment maturities and repayments: | ||||
Debt securities and equity securities | 1,825 | 2,151 | 2,051 | |
Commercial mortgage loans | 199 | 215 | 335 | |
Other sales, maturities and repayments (primarily short-term and other long-term investments) | 1,311 | 734 | 1,702 | |
Investments purchased or originated: | ||||
Debt securities and equity securities | (4,282) | (5,637) | (5,628) | |
Commercial mortgage loans | (307) | (312) | (430) | |
Other (primarily short-term and other long-term investments) | (1,753) | (1,189) | (1,065) | |
Property and equipment purchases | (1,050) | (528) | (471) | |
Acquisitions, net of cash acquired | (153) | (24,455) | (209) | |
Other, net | (11) | (12) | 0 | |
Net cash provided by (used in) investing activities | (734) | (26,378) | (1,703) | |
Cash Flows from Financing Activities | ||||
Deposits and interest credited to contractholder deposit funds | 955 | 1,040 | 1,230 | |
Withdrawals and benefit payments from contractholder deposit funds | (1,097) | (1,151) | (1,363) | |
Net change in short-term debt | (681) | 1,487 | 80 | |
Payments for debt extinguishment | (3) | 0 | (313) | |
Repayment of long-term debt | (4,491) | (131) | (1,250) | |
Net proceeds on issuance of long-term debt | 0 | 22,856 | 1,581 | |
Repurchase of common stock | (1,987) | (342) | (2,725) | |
Issuance of common stock | 224 | 68 | 131 | |
Other, net | (107) | (312) | (22) | |
Net cash provided by (used in) financing activities | (7,187) | 23,515 | (2,651) | |
Effect of foreign currency rate changes on cash and cash equivalents | (8) | (24) | 55 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,556 | 883 | (213) | |
Cash, cash equivalents and restricted cash, January 1, | 3,855 | 2,972 | 3,185 | |
Cash, cash equivalents and restricted cash, ending balance | 5,411 | 3,855 | 2,972 | |
Cash reclassified to assets held for sale | (743) | 0 | 0 | |
Cash, cash equivalents, and restricted cash per Consolidated Balance Sheets | 4,668 | [1] | 3,855 | 2,972 |
Supplemental Disclosure of Cash Information: | ||||
Income taxes paid, net of refunds | 1,776 | 1,019 | 1,036 | |
Interest paid | $ 1,645 | $ 267 | $ 240 | |
[1] | Includes restricted cash of $26 million reported in Other noncurrent assets and $23 million reported in Long-term investments as of December 31, 2019. |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parentheticals) $ in Millions | Dec. 31, 2019USD ($) |
Other noncurrent assets | |
Restriced cash | $ 26 |
Long Term Investments [Member] | |
Restriced cash | $ 23 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
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 pharmacy, medical, dental, disability, life and accident insurance 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 commercial health and dental insurance, Medicare and Medicaid products and health, life and accident insurance coverages to individuals in the United States and selected international markets. In addition to these ongoing operations, Cigna also has certain run-off operations. The Company reports its results in the following segments. Health Services includes pharmacy benefits management, specialty pharmacy services, clinical solutions, home delivery and health management services. Integrated Medical offers a variety of health care solutions to employers and 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 medical, pharmacy, dental, behavioral health, 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 (including the acquired Express Scripts’ Medicare Part D business) for seniors, Medicaid plans, and individual health insurance coverage both on and off the public exchanges. 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. In December 2019, Cigna entered into a definitive agreement to sell the Group Disability and Life insurance business to New York Life Insurance Company. See Note 5 for further information on the classification of this business as held for sale. Corporate-Owned Life Insurance (“COLI”) offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for 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 with 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: comprised of deferred gains from the sales of these 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 litigation matters, expense associated with our frozen pension plans, severance, certain enterprise-wide projects and intersegment eliminations for products and services sold between segments. Prior to 2019, compensation cost for stock options was also included in Corporate. Beginning in the first quarter of 2019, this cost is allocated and reported by the segments. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management’s estimates and assumptions about medical costs, investment and receivable valuations, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. Recently Adopted Accounting Guidance The Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases¸ as of January 1, 2019 (the adoption date) on a modified retrospective basis for leases in effect as of and after the adoption date. This new guidance requires balance sheet recognition of assets and liabilities arising from leases, as well as additional disclosures regarding the amount, timing and uncertainty of cash flows from leases. We implemented a new lease system and corresponding internal controls to administer our leases and facilitate compliance with this new standard. The Company elected the practical expedient package, allowing us to carry forward the assessment of 1) whether our contracts contain or are leases, 2) lease classification and 3) whether previously capitalized costs continue to qualify as initial direct costs. Upon adoption, we recognized new right-of-use assets and lease liabilities related only to our operating leases, as finance (capital) leases were already reflected on the Company’s Consolidated Balance Sheets. The impact of adoption on our net assets and retained earnings was not material, nor was there a material impact on our Consolidated Statements of Income or Cash Flows. See Note 19 for additional disclosures about the Company’s leases. Accounting Guidance Not Yet Adopted Accounting Standard and Effective Date Requirements and Expected Effects of New Guidance Not Yet Adopted Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020 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, compared with the incurred loss model currently used. Upon adoption, the Company will record an allowance for estimated credit losses on the balance sheet. Subsequent changes in the allowance will be reported in current period earnings. • 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 has completed its evaluation of this new standard and its expected effects on our financial statements and disclosures. We will adopt the standard as of January 1, 2020. • An additional allowance for future expected credit losses under the new model of approximately $ 50 million after-tax will be required, primarily for reinsurance recoverables. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020 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 will adopt this new standard effective January 1, 2020, and we do not expect its impact to be significant. 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, 2022 (early adoption permitted) Requires (for insurance entities that issue long-duration contracts): • Changes in measuring our future policy benefits liability for traditional and limited-pay insurance contracts: - Assumptions used to measure cash flows (such as mortality, morbidity and lapse assumptions) to be updated at least annually with the effect of changes in those assumptions remeasured retrospectively and reflected in current period net income. - Discount rate assumptions to be updated quarterly based on an upper-medium grade fixed-income instrument yield that maximizes the use of observable market inputs with any changes reflected in other comprehensive income. • Deferred policy acquisition costs (DAC) related to long-duration insurance contracts to be amortized on a constant-level basis over the expected term of the contracts. Other related deferred or capitalized balances (such as unearned revenue liability and value of business acquired) may use this simplified amortization method. • Market risk benefits (defined as protecting the contractholder from other-than-nominal capital market risk and exposing the insurer to that risk) to be measured at fair value with changes in fair value recognized in net income each period, except for the effect of changes in the insurance entity’s credit risk to be recognized in other comprehensive income. • Additional disclosures, including disaggregated rollforwards for the liability for future policy benefits, market risk benefits, separate account liabilities and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions and methods used in measurement. • Transition methods at adoption vary: - Changes to the liability for future policy benefits to use a modified retrospective approach applied to all outstanding 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. Remeasuring the future policy benefits liability for the discount rate to be recorded through accumulated other comprehensive income at transition. - Deferred policy acquisition costs to follow the transition method used for future policyholder benefits. - Market risk benefits to be transitioned retrospectively and measured at fair value at the beginning of the earliest period presented. The difference between this fair value and carrying value to be recognized in the opening balance of retained earnings, excluding the effect of credit risk changes that are to be recognized in accumulated other comprehensive income. Expected effects: • The new guidance will apply to our long-duration insurance products predominantly within the International Markets and Group Disability and Other segments. • The Company is evaluating the impact of this guidance and expects to have significant changes to our processes, systems, controls, financial results and disclosures. We continue to monitor developing implementation guidance, particularly with respect to reinsured blocks of business. • Although we continue to evaluate the new requirements and model their impacts across various products, we are not yet able to project or estimate the magnitude or frequency of expected changes to our financial results. However, it is possible that the Company's income recognition pattern could change for several reasons: - Applying periodic assumption updates, versus the current locked-in model, may change our timing of profit or loss recognition. - Amortizing DAC on a constant-level basis over the expected term of the related contracts, versus being tied to the emergence of profit for such contracts. - Measuring market-risk benefit features, such as those provided in our GMDB product, at fair value will subject these liabilities and related reinsurance recoverables to market sensitivity, notably to interest rates. 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 listed in the table of contents. 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. 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. C . Reinsurance Recoverables Reinsurance recoverables represent amounts due from reinsurers for both paid and unpaid claims of the Company’s insurance businesses and are presented net of allowances for uncollectible reinsurance. The allowances were immaterial D. 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. The Company records acquisition costs differently depending on the product line. Acquisition costs for: Supplemental 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 proportion 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 contracts. 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 $ 483 million in 2019, $ 406 million in 2018 and $ 322 million in 2017 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 unearned 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. E. 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 and various other insurance-related assets. See Note 10 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. F. Redeemable Noncontrolling Interest Products and services are offered in Turkey through our joint venture. The Company is the majority equity holder of this joint venture, owning 51%, and accordingly, it is consolidated. Redeemable noncontrolling interest on our Consolidated Balance Sheets represents the Turkey joint venture partner’s preferred and common stock interests in the entity as of December 31, 2019 and 2018. Our joint venture partner may choose to require the Company to purchase their redeemable noncontrolling interest. We also have the right to require our joint venture partner to sell their redeemable noncontrolling interest to us. The redeemable noncontrolling interest was recorded at fair value as of the date 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 the 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. G. Accrued Expenses and Other Current and Non-Current Liabilities Accrued expenses (current) includes financial and performance guarantee liabilities under pharmacy contracts (see section I), management compensation and various insurance-related liabilities, including experience-rated refunds, reinsurance contracts and the risk adjustment and minimum medical loss ratio rebate accruals under The Patient Protection and Affordable Care Act (the “ACA”). Other non-current liabilities include obligations for pension (see Note 16), other postretirement and postemployment benefits, GMIB contract liabilities (see Note 10) and self-insured exposures not expected to be settled within one year. The Company accrues for legal and regulatory matters when a loss contingency is both probable and estimable. The estimated loss is generally recorded in selling, general and administrative expenses and represents the Company’s best estimate of the loss contingency. If the loss estimate is a range, the Company accrues the minimum amount in the range if no amount is better than any other estimated amount in the range. Legal costs to defend the Company’s litigation and arbitration matters are expensed as incurred in cases that 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. Litigation and legal or regulatory matters that the Company has identified with a reasonable possibility of material loss are described in Note 22 to the Consolidated Financial Statements. H. Translation of Foreign Currencies The Company generally conducts its international business through foreign operating entities that maintain assets and liabilities in local currencies that are their functional currencies. The Company uses exchange rates as of the balance sheet date to translate assets and liabilities 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 expenses into U.S. dollars. I. Pharmacy Revenues and Costs Pharmacy revenues . Pharmacy revenues are primarily derived from providing pharmacy benefit management services to clients and customers. Pharmacy revenues are recognized when control of the promised goods or services is transferred to clients and customers, in an amount that reflects the consideration the Company expects to receive for those goods or services. The Company provides or makes available various services supporting benefit management and claims administration and is generally obligated to provide prescription drugs to clients’ members using multiple distribution methods including retail networks, home delivery and specialty pharmacies. These 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). This performance obligation is satisfied as the business stands ready to fulfill its obligation. Revenues for dispensing prescription drugs through retail pharmacies are reported gross and consist of the prescription price (ingredient cost and dispensing fee) contracted with clients, including the customer copayment, and any associated fees for services because the Company acts as the principal in these arrangements. When a prescription is presented to a retail network pharmacy, the Company is solely responsible for customer eligibility, drug utilization review, drug-to-drug interaction review, any required clinical intervention, plan provision information, payment to the pharmacy and client billing. These revenues are recognized based on the full prescription price when the pharmacy claim is processed and approved for payment. The Company also provides benefit design and formulary consultation services to clients and negotiates separate contractual relationships with clients and network pharmacies. These factors indicate that the Company has control over these transactions until the prescription is processed. Revenues 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. 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 estimates and returns have not been material. The Company has elected the practical expedient to account for shipping and handling as a fulfillment activity. 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 compensation if we fail to meet the guarantees. Actual performance is compared to the contractual 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 performance guarantee liability was $ 1.0 billion as of December 31, 2019 and $ 895 million as of December 31, 2018. The Company administers programs through which we may receive rebates and other vendor consideration from pharmaceutical manufacturers. The amounts of such rebates or other vendor consideration shared with pharmacy benefit management services clients vary based on the contractual arrangement with the client and in some cases the type of consideration received from the pharmaceutical manufacturer. Rebates and other vendor consideration payable to pharmacy benefit management services clients are recorded as a reduction of pharmacy revenues. Estimated amounts payable to clients are based on sharing percentages in contractual arrangements between the Company and the client, and are typically adjusted when amounts are collected from pharmaceutical manufacturers. Historically, these adjustments have not been material. Other pharmacy service revenues are earned by distributing 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 are provided. Pharmacy costs . Pharmacy costs include the cost of prescriptions sold, network pharmacy claim costs and copayments. Also included are direct costs of dispensing prescriptions including supplies, shipping and handling, and direct costs associated with clinical programs, such as drug utilization management and medication adherence counseling. Home delivery and specialty pharmacy costs are recognized when the drug is shipped and retail network costs are recognized when the drug is processed and approved for payment. Rebates and other vendor consideration received when providing pharmacy benefit management services are recorded as a reduction of pharmacy costs. Rebates are recognized as prescriptions are shipped or processed and approved for payment. The Company maintains reimbursement guarantees with certain retail network pharmacies. For each such guarantee, the Company records a pharmacy and service costs payable or prepaid asset for applicable retail network claims based on our actual performance throughout the period against the contractual reimbursement rate. The Company’s contracts with certain retail pharmacies give the Company the right to adjust reimbursement rates during the annual guarantee period. Other . Incremental costs of obtaining service and pharmacy contracts for short-term arrangements are expensed as incurred. 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 recognized 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 calculated 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 are 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 our customer demographics and wellness. The Company recognizes periodic changes to 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. These adjustments are estimated quarterly 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 in the year following the contract year. Premium revenue may also include 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 prescribed 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 ACA 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 customers compared to the risk of other customers in the same state and market, considering data obtained from industry studies 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 assured. 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 recognized 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. Charges 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 9 for further information ). K. Fees and Related Expenses The majority of the Company’s service fees are derived from administrative services only (“ASO”) arrangements, fee-for-service clinical solutions and health benefit management services. ASO arrangements allow plan sponsors 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 arrangements are short-term. Contract modifications typically occur on renewal and are prospective in nature. In return for fees from these clients, the Company provides access to our participating provider networks and other services supporting benefit management, including claims administration, behavioral health services, disease management, utilization management and cost containment programs. 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. The Company may also provide performance guarantees that provide potential refunds 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 dollar amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accrued expenses and other liabilities. The amount of revenue deferred is estimated for each type of guarantee using either a most likely amount or expected value method depending on 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 available and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for these performance guarantees during the reporting periods were not material Rebates from pharmaceutical manufacturers for ASO client purchases at retail pharmacies, net of amounts payable to ASO clients, were considered compensation for use of the manufacturer’s products and recorded in fees and other revenues prior to transitioning Integrated Medical’s Commercial customers to Express Scripts’ retail pharmacy network in the third quarter of 2019. After this transition, these rebates are reflected as a reduction to pharmacy costs (See “Pharmacy Costs” above). Expenses associated with administrative programs and services are recognized as incurred in selling, general and administrative expenses. The Company also earns revenue, as part of its integrated pharmacy benefits performance obligation, by offering fee-for-service clinical solutions to our clients, such as drug utilization management and medication adherence counseling. These clinical programs help clients to drive better health outcomes at a lower cost by identifying and addressing potentially unsafe or wasteful prescribing, dispensing and utilization of prescription drugs, and communicating with, or supporting communications with physicians, pharmacies and patients. Fees are billed, due and recognized at contracted rates either on a periodic basis or as services are provided. This recognition pattern aligns with the benefits from services provided. These revenues are reported in fees and other revenues in the Consolidated Statements of Income. Direct costs associated with these programs are recognized in pharmacy and other service costs, and other related expenses are recorded as incurred in selling, general and administrative expenses. The Company also earns fees by providing health benefit management solutions that drive cost reductions and improve quality outcomes. Clients are primarily sponsors of health benefit plans and fees may be stated as a per-member-per-month fee 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 the financial obligation for third-party provider costs for medical services provided to the health plan’s customers. Fees are recorded gross in fees and other revenues in the Consolidated Statements of Income because the Company is acting as a principal in arranging for and controlling the services provided by third-party network providers. Contractual fees vary based on enrollment and provider costs and are billed, due and recognized monthly. Direct costs associated with these programs are recognized in pharmacy and other service costs, and other related expenses are recorded in selling, general and administrative expenses as incurred. Certain health benefit management contracts require the Company to share the results of medical cost experience that differ from specified targets. This variable consideration is estimated at contract inception and adjusted through the contract period. The estimated profits and costs are recognized net in fees and other revenues. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Note 3 - Accounts Receivable, Net Accounting policy. The Company’s accounts receivable balances primarily include amounts due from clients, third-party payors, customers and pharmaceutical manufacturers, and are presented net of allowances. Allowances for doubtful accounts 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 our past experience. We bill pharmaceutical manufacturers based on management’s interpretation of contractual terms and estimate a contractual allowance at the time a claim is processed based on the best information available. Contractual allowances for certain rebates receivable from pharmaceutical manufacturers are determined by reviewing payment experience and specific known items that could be adjusted under contract terms. The Company’s estimation process for contractual allowances for pharmaceutical manufacturer receivables generally results in an allowance for balances outstanding greater than 90 days. Contractual allowances for certain receivables from third-party payors are based on the contractual terms and are estimated based on the Company’s best information available at the time revenue is recognized. Receivables are written off against allowances only when such amounts are determined unrecoverable and all collection attempts have failed. We regularly review the adequacy of these allowances based on a variety of factors, including age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted. The following amounts were included within accounts receivable, net: (In millions) 2019 2018 Noninsurance customer receivables $ 5,143 $ 4,988 Pharmaceutical manufacturers receivable (1) 3,439 3,321 Insurance customer receivables 2,321 1,888 Other receivables 334 276 Total 11,237 10,473 Accounts receivable, net classified as assets held for sale ( 521) Accounts receivable, net per Consolidated Balance Sheets $ 10,716 $ 10,473 (1) Includes receivables from service contracts with customers of $ 285 million at December 31, 2019 and $ 406 million at December 31, 2018. The receivable balances above are reported net of allowances of $ 778 million as of December 31, 2019 and $ 217 million as of December 31, 2018. Reported within these allowances as of December 31, 2019 are contractual allowances for certain rebates receivable from manufacturers of $ 343 million and contractual allowances from third-party payors of $ 135 million based upon the contractual payment terms. See the “Pharmacy Revenues and Costs” section within Note 2 for more information regarding these estimates that reduce revenue. The remaining allowances of $ 300 million include allowances for doubtful accounts based on the factors described above in our Accounting Policy and discounts and claims adjustments issued to customers in the form of client credits. As part of purchase accounting, Express Scripts’ receivables were recorded at their estimated fair values with no allowances as of December 31, 2018. |
Mergers, Acquisitions and Dispo
Mergers, Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions and Dispositions [Abstract] | |
Acquisitions and Dispositions | Note 4 – Mergers, Acquisitions and Dispositions A. 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. The acquired Express Scripts business accelerates Cigna’s strategy by greatly increasing the Company’s ability to put medicine within reach of customers and also making health care more affordable, predictable and simple. Old Cigna shareholders received one share of Cigna common stock in exchange for each share of Old Cigna common stock held immediately prior to the Merger. Express Scripts shareholders received (1) 0.2434 of a share of Cigna common stock and (2) cash of $ 48.75, without interest, subject to applicable withholding taxes (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 available and debt financing discussed further in Note 7. After completing the Merger, shares of Cigna common stock were listed for trading on the New York Stock Exchange. Merger consideration : Total merger consideration 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 shareholders $ 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 shareholders 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 using this same conversion ratio. Vesting periods and the remaining life 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 were generally consistent with the 2018 assumptions disclosed in Note 17, 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 for services that 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 was recognized in 2019 with the balance expected in 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 final estimates of their fair values. During 2019 the Company made immaterial measurement period adjustments to the preliminary purchase price allocation. The impact to any financial statement line item of these measurement period adjustments was not material. The following table summarizes management’s final allocation of fair values of assets acquired and liabilities assumed at the closing date. (In millions) Cash and cash equivalents $ 3,517 Receivables 7,832 Inventories 2,472 Other current assets 600 Property and equipment 2,924 Goodwill 38,364 Other identifiable intangible assets 38,725 Other assets acquired, non-current 314 Total assets acquired 94,748 Other current liabilities 18,479 Long-term debt, including current portion 12,816 Deferred income tax liabilities 9,558 Other liabilities, non-current 1,085 Total liabilities acquired 41,938 Net assets acquired $ 52,810 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. In addition, 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 their amortization periods and method were determined using an income approach that relied heavily on projected future net cash flows including key assumptions for customer attrition, margins, and discount rates. The estimated useful lives reflect the time periods 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 Unaudited pro forma information. The following 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 Merger, 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 incurred 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) 2018 2017 Total revenues $ 149,544 $ 143,288 Shareholders’ net income $ 5,632 $ 4,435 Pro forma shareholders’ net income for the year ended December 31, 2017 includes $ 1.2 billion in integration and transaction-related costs incurred in connection with the acquisition. B. Integration and Transaction-related Costs The Company has incurred costs detailed in the table below related to the acquisition and integration of Express Scripts, the terminated merger with Anthem, Inc. (“Anthem”) and other transactions. These costs consisted primarily of certain projects to integrate the Company’s systems, products and services, fees for legal, advisory and other professional services and certain employment-related costs. Costs in 2018 also included charitable contributions and amortization of certain financing fees and interest expense on the debt issued in the third quarter of 2018 to fund the Express Scripts merger, net of investment income earned on proceeds of the debt issuance. 2019 2018 2017 (In millions) Before-tax After-tax Before-tax After-tax Before-tax After-tax Integration costs $ $ $ $ $ $ Interest expense on newly-issued debt - - 227 179 - - Net investment income on debt proceeds - - ( 123) ( 97) - - Charitable contributions - - 200 158 - - Legal and advisory fees 53 41 204 185 36 23 Bridge facility fees - - 140 111 - - All other transaction-related costs 499 386 204 133 90 69 Tax (benefit) - previously non-deductible costs - - ( 59) Integration and transaction-related costs, net $ 552 $ 427 $ 852 $ 669 $ 126 $ 33 |
Assets and Liabilities of Busin
Assets and Liabilities of Business Held for Sale | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities of Business Held for Sale | Note 5 – Assets and Liabilities of Business Held for Sale Accounting Policy. The Company classifies assets and liabilities as held for sale (“disposal group”) when management commits to a plan to sell the disposal group, the sale is probable within one year and the disposal group is available for immediate sale in its present condition. The Company considers various factors, particularly whether actions required to complete the plan indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. Assets held for sale are measured at the lower of carrying value or fair value less costs to sell. Any loss resulting from the measurement is recognized in the period the held-for-sale criteria are met. Conversely, gains are not recognized until the date of the sale. When the disposal group is classified as held for sale, depreciation and amortization ceases and the Company tests the assets for impairment. In December 2019, Cigna entered into a definitive agreement to sell its Group Disability and Life insurance business to New York Life Insurance Company for $ 6.3 billion. The sale is expected to close in the third quarter of 2020 following applicable regulatory approvals and other customary closing conditions. The Company believes this sale is probable and has aggregated and classified the assets and liabilities directly associated with the pending sale of its Group Disability and Life insurance business as held for sale and has reported them separately on our Consolidated Balance Sheet as of December 31, 2019. The assets and liabilities held for sale were as follows: (In millions) December 31, 2019 Cash and cash equivalents $ 743 Accounts receivable, net 521 Investments 7,709 Other assets 539 Total assets held for sale $ 9,512 Insurance and contractholder liabilities $ 6,308 Other liabilities 504 Total liabilities held for sale $ 6,812 The business did not meet the criteria to be classified as a discontinued operation as the sale of the business will not have a major effect on the Company’s operations and financial results. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 6 – Earnings Per Share (“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: 2019 2018 2017 (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 $ 5,104 $ 5,104 $ 2,637 $ $ 2,637 $ 2,237 $ 2,237 Shares Weighted average 375,919 375,919 246,652 246,652 250,892 250,892 Common stock equivalents 3,898 3,898 3,573 3,573 4,180 4,180 Total shares 375,919 3,898 379,817 246,652 3,573 250,225 250,892 4,180 255,072 EPS $ 13.58 $ ( 0.14) $ 13.44 $ 10.69 $ ( 0.15) $ 10.54 $ 8.92 $ ( 0.15) $ 8.77 The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect was anti-dilutive. (In millions) 2019 2018 2017 Anti-dilutive options 3.5 0.9 0.9 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 7 – Debt The outstanding amounts of debt and finance leases were as follows: December 31, December 31, (In millions) Issuer(s) 2019 2018 Short-term debt Current maturities: $ 1,000 million, 2.25% Notes Express Scripts (1) $ - $ 995 Current maturities: $ 337 million, 7.25% Notes ESI (1) - 343 Current maturities: $ 1,000 million, Floating Rate Notes Cigna 999 - Current maturities: $ 300 million, 5.125% Notes Old Cigna 300 - Current maturities: $ 1,750 million, 3.2% Notes Cigna 1,748 - Current maturities: $ 349 million, 4.125% Notes Cigna 351 - Current maturities: $ 500 million, 2.6% Notes Express Scripts 496 - Current maturities: $ 400 million, Floating Rate Notes Express Scripts 400 - Current maturities: $ 250 million, 4.375% Notes Old Cigna 249 - Commercial paper Cigna/Old Cigna 944 1,500 Other, including finance leases Other 27 117 Total short-term debt $ 5,514 $ 2,955 Long-term debt $ 250 million, 4.375% Notes due 2020 Old Cigna $ - $ 248 $ 300 million, 5.125% Notes due 2020 Old Cigna - 298 $ 500 million, 4.125% Notes due 2020 Medco (1) - 506 $ 500 million, 2.6% Notes due 2020 Express Scripts - 493 $ 1,750 million, 3.2% Notes due 2020 Cigna - 1,743 $ 400 million, Floating Rate Notes due 2020 Express Scripts - 399 $ 1,000 million, Floating Rate Notes due 2020 Cigna - 997 $ 3,000 million, Floating Rate Term Loan due 2021 Cigna - 2,997 $ 500 million, 3.3% Notes due 2021 Cigna/Express Scripts (2) 499 499 $ 300 million, 4.5% Notes due 2021 Cigna/Old Cigna (2) 298 297 $ 78 million, 6.37% Notes due 2021 Other 78 78 $ 1,000 million, Floating Rate Notes due 2021 Cigna 998 996 $ 1,250 million, 3.4% Notes due 2021 Cigna 1,247 1,245 $ 1,248 million, 4.75% Notes due 2021 Cigna/Express Scripts (2) 1,272 1,285 $ 750 million, 4% Notes due 2022 Cigna/Old Cigna (2) 747 746 $ 999 million, 3.9% Notes due 2022 Cigna/Express Scripts (2) 999 998 $ 500 million, 3.05% Notes due 2022 Cigna/Express Scripts (2) 485 481 $ 17 million, 8.3% Notes due 2023 Cigna/Old Cigna (2) 17 17 $ 100 million, 7.65% Notes due 2023 Cigna/Old Cigna (2) 100 100 $ 700 million, Floating Rate Notes due 2023 Cigna 698 697 $ 1,000 million, 3% Notes due 2023 Cigna/Express Scripts (2) 966 959 $ 3,100 million, 3.75% Notes due 2023 Cigna 3,088 3,085 $ 1,000 million, 3.5% Notes due 2024 Cigna/Express Scripts (2) 970 966 $ 900 million, 3.25% Notes due 2025 Cigna/Old Cigna (2) 895 895 $ 2,200 million, 4.125% Notes due 2025 Cigna 2,188 2,187 $ 1,500 million, 4.5% Notes due 2026 Cigna/Express Scripts (2) 1,506 1,508 $ 1,500 million, 3.4% Notes due 2027 Cigna/Express Scripts (2) 1,396 1,386 $ 259 million, 7.875% Debentures due 2027 Cigna/Old Cigna (2) 259 259 $ 600 million, 3.05% Notes due 2027 Cigna/Old Cigna (2) 595 595 $ 3,800 million, 4.375% Notes due 2028 Cigna 3,776 3,774 $ 45 million, 8.3% Step Down Notes due 2033 Cigna/Old Cigna (2) 45 45 $ 190 million, 6.15% Notes due 2036 Cigna/Old Cigna (2) 190 190 $ 2,200 million, 4.8% Notes due 2038 Cigna 2,178 2,178 $ 121 million, 5.875% Notes due 2041 Cigna/Old Cigna (2) 119 119 $ 449 million, 6.125% Notes due 2041 Cigna/Express Scripts (2) 491 493 $ 317 million, 5.375% Notes due 2042 Cigna/Old Cigna (2) 315 315 $ 1,500 million, 4.8% Notes due 2046 Cigna/Express Scripts (2) 1,465 1,465 $ 1,000 million, 3.875% Notes due 2047 Cigna/Old Cigna (2) 988 988 $ 3,000 million, 4.9% Notes due 2048 Cigna 2,964 2,964 Other, including finance leases Other 61 32 Total long-term debt $ 31,893 $ 39,523 (1) Express Scripts Holding Company is identified as Express Scripts. Express Scripts, Inc. is identified as ESI. Medco Health Solutions, Inc. is identified as Medco. (2) Due to the Exchange of legacy Notes for Cigna Notes, there are two series of outstanding Notes. Debt repayment. During 2019, the Company repaid approximately $ 5.2 billion of outstanding obligations, including the $ 3.0 billion term loan, $ 1.3 billion in current maturities of long-term debt, $ 0.7 billion in short term debt and $ 151 million for the early redemption of the Medco Notes. Exchange of Legacy Notes for Cigna Notes and Redemption of Medco Notes. In the fourth quarter of 2019, the Company completed an exchange of $ 12.7 billion of legacy Notes issued by Express Scripts, Medco and Old Cigna for new Notes issued by Cigna with the same interest rates, maturities and other comparable terms. The Company entered into this exchange primarily to simplify its capital structure and reporting obligations. Additionally, in the fourth quarter of 2019, the Company fully redeemed all of the remaining outstanding Medco Notes. As a result of the exchange and redemption, guarantees of obligations under the remaining legacy Notes not exchanged, as well as under Notes issued by Cigna in September 2018 to finance its acquisition of Express Scripts, were released and Cigna is no longer required to separately present Condensed Consolidated Financial Information under Rule 3-10 of Regulation S-X. Term Loan Credit Agreement. Cigna borrowed $ 3.0 billion under its Term Loan Credit Agreement to finance the Merger and to pay fees and expenses of the Merger. As of December 31, 2019, the Company repaid the term loan in full and the agreement was terminated. Notes issued to fund the Express Scripts acquisition. In the third quarter of 2018, the Company issued private placement Notes with registration rights 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. We completed an exchange offer to register such debt in the third quarter of 2019. Revolving Credit Agreements. 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 to issue letters of credit, net of $ 10 million of letters of credit outstanding under the Revolving Credit Agreement as of December 31, 2019. 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. In the fourth quarter of 2019, Cigna entered into an additional 364-day revolving credit agreement that matures in October 2020 and is diversified among 23 banks. Under this revolving credit agreement, Cigna can borrow up to $ 1.0 billion for general corporate purposes. The agreement includes the option to “term out” any revolving loans that are outstanding at maturity by converting them into a term loan maturing on the one-year anniversary of conversion. The revolving credit agreements contain customary covenants and restrictions including a financial covenant that the Company’s leverage ratio may not exceed 60%. Commercial Paper outstanding as of December 31, 2019 had an average interest rate of 2.11%. The Company was in compliance with its debt covenants as of December 31, 2019. Maturities of outstanding long-term debt and finance leases are as follows: Scheduled Maturities (In millions) Long-term Debt (1) Finance Leases 2020 $ 4,549 $ 27 2021 $ 4,376 $ 18 2022 $ 2,249 $ 16 2023 $ 4,917 $ 7 2024 $ 1,000 $ 5 Maturities after 2024 $ 19,581 $ 15 (1) Long-term debt maturity amounts include current maturities of long-term debt and exclude maturities of finance leases. Interest expense on long-term and short-term debt was $ 1.6 billion in 2019, $ 507 million in 2018 and $ 243 million in 2017, excluding $ 209 million after-tax loss on the early extinguishment of debt in 2017 |
Common and Preferred Stock
Common and Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Common And Preferred Stock [Abstract] | |
Common and preferred stock | Note 8 – Common and Preferred Stock As a result of Cigna's acquisition of 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 1 No The following table presents the share activity of Old Cigna and Cigna for the years ended December 31, 2019, 2018 and 2017. (Shares in thousands) 2019 2018 2017 Common: Par value $ 0.25; 600,000 shares authorized - Old Cigna Outstanding - January 1, 243,967 256,869 Issued for stock option exercises and other benefit plans 1,118 2,761 Repurchased common stock ( 1,300) ( 15,663) Balance, December 20, 2018 (Merger Date) 243,785 Exchange of Old Cigna shares for shares of Cigna ( 243,785) Outstanding - December 31, - 243,967 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, - 52,178 Issued - December 31, - 296,145 Common: Par value $ 0.01; 600,000 shares authorized - Cigna Outstanding - January 1, 380,924 - 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 3,413 91 Repurchased common stock ( 11,806) ( 289) Outstanding - December 31, 372,531 380,924 Treasury stock 13,012 570 Issued - December 31, 385,543 381,494 |
Insurance and Contractholder Li
Insurance and Contractholder Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Insurance and Contractholder Liabilities [Abstract] | |
Insurance and Contractholder Liabilities | Note 9 – Insurance and Contractholder Liabilities A. Account Balances – Insurance and Contractholder Liabilities As of December 31, 2019 and 2018, the Company’s insurance and contractholder liabilities were comprised of the following: December 31, 2019 December 31, 2018 (In millions) Current Non-current Total Current Non-current Total Contractholder deposit funds $ 600 $ 7,139 $ 7,739 $ 641 $ 7,365 $ 8,006 Future policy benefits 553 9,281 9,834 740 8,981 9,721 Unpaid claims and claim expenses Integrated Medical 2,875 17 2,892 2,678 19 2,697 Other segments 2,529 3,474 6,003 2,394 3,230 5,624 Unearned premiums 453 360 813 348 379 727 Total 7,010 20,271 27,281 6,801 19,974 26,775 Insurance and contractholder liabilities classified as liabilities held for sale (1) ( 2,089) ( 4,219) ( 6,308) Insurance and contractholder liabilities per Consolidated Balance Sheets $ 4,921 $ 16,052 $ 20,973 $ 6,801 $ 19,974 $ 26,775 (1) Amounts classified as liabilities held for sale primarily include $ 4.9 billion of unpaid claims, $ 717 million of contractholder deposit funds and $ 653 million of future policy benefits. 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, for 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 administration 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 Benefits. 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 10 for additional information) and certain health, life and accident insurance products of our International Markets 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 adverse 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 future 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. B. 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. Accounting policy. The Company uses actuarial principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best estimate of the ultimate liability along with a margin for adverse deviation. This approach is consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. The 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 when actual experience differs from these assumptions. Additionally, the Company evaluates expected future developments and emerging trends that may impact key assumptions. The process used to determine 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 trend. 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) provider claims submission rates; 3) membership and 4) the mix of products. The Company uses historical completion factors combined with an analysis of current trends and operational factors to develop current estimates of completion factors. The Company estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. 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 operational considerations for 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 health benefits offered, including inpatient, outpatient and pharmacy, the impact of copays and deductibles, changes in provider practices and changes in consumer demographics and consumption behavior. The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 2.7 billion at December 31, 2019 and $ 2.5 billion at December 31, 2018. Activity in the unpaid claims liability for the Integrated Medical segment for the years ended December 31 was as follows: (In millions) 2019 2018 2017 Balance at January 1, $ 2,697 $ 2,420 $ 2,261 Less: Reinsurance and other amounts recoverable 264 262 273 Balance at January 1, net 2,433 2,158 1,988 Acquired, net - 40 - Incurred costs related to: Current year 24,368 21,331 19,334 Prior years ( 165) ( 173) ( 227) Total incurred 24,203 21,158 19,107 Paid costs related to: Current year 21,851 18,978 17,179 Prior years 2,196 1,945 1,758 Total paid 24,047 20,923 18,937 Balance at December 31, net 2,589 2,433 2,158 Add: Reinsurance and other amounts recoverable 303 264 262 Balance at December 31, $ 2,892 $ 2,697 $ 2,420 Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business for which the Company administers the plan benefits without any right of offset . See Note 10 for additional 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 as follows: Year Ended (Dollars in millions) December 31, 2019 December 31, 2018 $ % (1) $ % (2) Actual completion factors $ 90 0.4 % $ 92 0.5 % Medical cost trend 75 0.4 72 0.4 Other - - 9 - Total favorable variance $ 165 0.8 % $ 173 0.9 % (1) Percentage of current year incurred costs as reported for the year ended December 31, 2018. (2) Percentage of current year incurred costs as reported for the year ended December 31, 2017. Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or decrease to shareholders’ net income. The primary reason for this difference is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders’ net income if they are offset by increases in the current year provision for moderately adverse conditions. Prior year development increased shareholders’ net income by $ 67 million ($ 85 million before-tax) for the year ended December 31, 2019, compared with $ 77 million ($ 97 million before-tax) for the year ended December 31, 2018. F avorable prior year development in both years reflects lower than expected utilization of medical services. The following table depicts the incurred and paid claims development as of December 31, 2019 (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, 2018 is presented as supplementary information and is unaudited. Incurred Costs Incurral Year 2018 (Unaudited) 2019 Unpaid Claims & Claim Expenses Claims Frequency (In millions) 2018 $ 20,458 $ 20,320 $ 58 2.9 million 2019 23,306 $ 2,386 3.5 million Cumulative incurred costs plus acquired for the periods presented $ 43,626 Cumulative Costs Paid Incurral Year 2018 (Unaudited) 2019 2018 $ 18,192 $ 20,262 2019 20,920 Cumulative paid costs for the periods presented $ 41,182 Outstanding liabilities for the periods presented, net of reinsurance $ 2,444 Other long-duration liabilities not included in development table above 145 Net unpaid claims and claims expenses - Integrated Medical 2,589 Reinsurance and other amounts recoverable 303 Unpaid claims and claim expenses - Integrated Medical $ 2,892 More than 95% 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. C. Unpaid Claims and Claim Expenses – Group Disability and Other and International Markets Accounting policy. Liabilities for unpaid claims and claim expenses are established by book of business within Group Disability and Other and International Markets. Unpaid claims and claim expenses within the Group Disability and Other and International Markets segments consist of (1) case or claims reserves for reported claims that are unpaid as of the balance sheet date; (2) incurred but not reported reserves for claims when 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 these 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 payment 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. The Company immediately records an adjustment in medical costs and other benefit expenses w hen estimates of these liabilities change. Liabilities for unpaid claims and claim expenses within the group disability and life business reflect the following primary products: long-term and short-term disability, life insurance and accident coverages. The majority of the Company’s liability for disability claims consists of “disabled life reserves”, measured as the present value of estimated future benefit payments, including expected development, for each reported claim that is currently receiving benefit payments over the expected disability period or pending a decision on eligibility for benefits. 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 disability 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 Social 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 finalized. 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, the 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 and 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 are as follows: (In millions) 2019 (1) 2018 International Markets $ 844 $ 758 Group Disability and Other Group Disability and Life 4,972 4,674 Other Operations 187 192 Total Group Disability and Other 5,159 4,866 Unpaid claims and claim expenses Group Disability and Other and International Markets $ 6,003 $ 5,624 (1) Includes Unpaid claims amounts classified as Liabilities held for sale. The Company discounts certain liabilities, predominantly long-term disability liabilities, 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 Group Disability and Life unpaid claim discounted liability balance as of December 31 were as follows: (In billions) 2019 (1) 2018 Discounted liabilities $ 4.5 $ 4.2 Aggregate amount of discount $ 1.2 $ 1.1 Range of discount rates 4.0 % - 5.2 % 4.2 % - 5.2 % (1) Includes unpaid claims amounts classified as Liabilities held for sale. 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 insurance contracts or, if short-duration, the liabilities have been fully reinsured. (In millions) 2019 (1) 2018 2017 Balance at January 1, $ 5,432 $ 5,274 $ 4,997 Less: Reinsurance 156 140 123 Balance at January 1, net 5,276 5,134 4,874 Incurred claims related to: Current year 5,616 5,350 5,097 Prior years Interest accretion 152 156 163 All other incurred ( 40) ( 147) ( 43) Total incurred 5,728 5,359 5,217 Paid claims related to: Current year 3,488 3,391 3,229 Prior years 1,873 1,808 1,757 Total paid 5,361 5,199 4,986 Acquisitions - 23 - Foreign currency ( 11) ( 41) 29 Balance at December 31, net 5,632 5,276 5,134 Add: Reinsurance 184 156 140 Balance at December 31, $ 5,816 $ 5,432 $ 5,274 (1) Includes unpaid claims amounts classified as Liabilities held for sale. Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities. The Company’s insurance subsidiaries enter into agreements with other companies primarily to limit losses from large exposures and to permit recovery of a portion of incurred losses. See Note 10 for additional information on reinsurance. The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part of pricing and reserving. Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims and reported in medical costs and other benefit expenses in the income statement. This interest 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 prior year incurred claims for the years ended December 31, 2019 and December 31, 2018 primarily reflect favorable long-term disability and life experience. The favorable experience is driven by higher resolution rate experience relative to expectations reflected in the prior year reserve and lower than expected incidence. Long-term disability development tables. The table below presents information about incurred and paid claims development as of December 31, 2019 (net of reinsurance), total 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 development for the years ended 2012 through 2018 is presented as supplementary information and is unaudited. As permitted under GAAP, the Company presents development 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 2019 Liabilities (1) Frequency 2012 $ 995 $ 951 $ 889 $ 876 $ 883 $ 880 $ 861 $ 860 $ - 21,186 2013 1,063 1,037 1,062 1,072 1,057 1,032 1,030 - 23,526 2014 1,158 1,129 1,167 1,146 1,094 1,081 - 25,324 2015 1,184 1,154 1,185 1,160 1,148 - 25,781 2016 1,246 1,184 1,199 1,202 - 25,577 2017 1,226 1,193 1,207 1 23,959 2018 1,348 1,267 10 25,154 2019 1,434 533 13,061 Cumulative incurred claims for the periods presented $ 9,229 (1) Incurred but not reported amounts are included in 2019 incurred claims. Cumulative Paid Claims Unaudited Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2012 $ 81 $ 288 $ 429 $ 504 $ 571 $ 621 $ 661 $ 693 2013 92 342 503 600 670 732 780 2014 111 379 575 667 743 803 2015 114 417 603 702 783 2016 122 411 598 709 2017 110 396 590 2018 116 434 2019 126 Cumulative paid claims for the periods presented $ 4,918 All outstanding liabilities for the periods presented, net of reinsurance $ 4,311 All outstanding liabilities prior to 2012, net of reinsurance 771 Impact of discounting ( 891) Liability for long-term disability unpaid claims and claim expenses, net of reinsurance (1)(2) $ 4,191 (1) Includes Unpaid claims amounts classified as Liabilities held for sale. (2) Includes approximately $ 3.5 billion of disabled life reserves for individuals on long-term disability. 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 assigned 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. 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, 2019. The average annual percentage payout of incurred claims, net of reinsurance, is approximately 9% in year one, 25% in year two, 16% in year three, 9% in year four, 7% in year five, 6% in year six, 5% in year seven and 4% in year eight. The following table reconciles the long-term disability net incurred and paid claims development table to the liability for unpaid claims and claim expenses in the Company’s Consolidated Balance Sheets as of December 31, 2019. (In millions) Net outstanding liabilities – Group Disability and Life businesses Long-term disability liabilities, net of reinsurance $ 4,191 Other short-duration insurance books of business, net of reinsurance 652 Liabilities for unpaid claims and claim expenses, net of reinsurance 4,843 Reinsurance recoverable on unpaid claims – Group Disability and Life businesses Long-term disability 117 Other short-duration insurance books of business 12 Total reinsurance recoverable on unpaid claims 129 Total liability for unpaid claims and claim expenses – Group Disability and Life businesses 4,972 International Markets segment 844 Other Operations 187 Unpaid claims and claim expenses - Group Disability and Other and International Markets (1) $ 6,003 (1) Includes Unpaid claims amounts classified as Liabilities held for sale. The Group Disability and Life and International Markets books of business, net of reinsurance, also 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, 2019 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Note 10 – Reinsurance 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 must 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. A. 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. The table below includes $ 222 million as of December 31, 2019 and $ 297 million as of December 31, 2018 of current reinsurance recoverables that are reported in other current assets. (Dollars in millions) December 31, December 31, Collateral and Other Terms Line of Business Reinsurer(s) 2019 (1) 2018 at December 31, 2019 Ongoing Operations Integrated Medical, International Markets, Group Disability, COLI (1) Various $ 514 $ 464 Balances range from less than $ 1 million up to $ 72 million. Approximately 70% of the balance is from companies rated as investment grade by Standard & Poor’s. Total recoverables related to ongoing operations 514 464 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,174 3,312 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 787 893 100% secured by assets in a trust. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 711 787 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 238 261 100% secured by assets in a trust. Other Various 71 87 100% secured by assets in a trust or other deposits. Total recoverables related to acquisition, disposition or runoff activities 4,981 5,340 Total reinsurance recoverables $ 5,495 $ 5,804 (1) Includes $ 173 million of recoverables classified as Assets held for sale. 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. B. 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) 2019 2018 2017 Premiums Short-duration contracts Direct $ 35,690 $ 32,148 $ 28,838 Assumed 64 77 199 Ceded ( 203) ( 182) ( 150) Total short-duration contract premiums 35,551 32,043 28,887 Long-duration contracts Direct 4,352 4,268 3,748 Assumed 105 116 130 Ceded Individual life insurance and annuity business sold ( 126) ( 133) ( 143) Other ( 168) ( 181) ( 131) Total long-duration contract premiums 4,163 4,070 3,604 Total premiums $ 39,714 $ 36,113 $ 32,491 Reinsurance recoveries Individual life insurance and annuity business sold $ 238 $ 249 $ 259 Other 157 203 66 Total reinsurance recoveries $ 395 $ 452 $ 325 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. C. 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 $ 3.3 billion remaining at December 31, 2019. GMDB is accounted for as reinsurance and GMIB assets and liabilities 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 exceeds the fair value of the related mutual fund investments at the time of a contractholder’s death. Accounting policy. The Company estimates the 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 the number of 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 in excess of the contractholders’ account value if all contractholders died as of the specified date. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded. December 31, December 31, (Dollars in millions, excludes impact of reinsurance ceded) 2019 2018 Account value $ 9,110 $ 8,402 Net amount at risk $ 1,764 $ 2,466 Average attained age of contractholders (weighted by exposure) 76 74 Number of contractholders (estimated) 200,000 220,000 GMIB The Company reinsured contracts with issuers of GMIB products. The Company’s exposure represents the excess of a contractually guaranteed amount over the level of variable annuity account values. Payment by the Company depends on the actual account value in the related underlying mutual funds and the level of interest rates when the contractholders elect to receive minimum income payments that can only occur within 30 days of a policy anniversary after the appropriate waiting period. The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts including retrocessional coverage from Berkshire. Accounting policy. The Company reports GMIB liabilities and assets as derivatives at fair 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 either 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. Cash 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 of the fair value hierarchy described in Note 12 because assumptions related to future annuitant behavior are largely unobservable. The only assumption expected to impact future shareholders’ net income is non-performance risk. The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company and (b) the GMIB assets to be paid by the reinsurers, after considering collateral. The impact of non-performance risk was immaterial for twelve months ended December 31, 2019 and 2018. GMIB liabilities totaling $ 688 million as of December 31, 2019 and $ 706 million as of December 31, 2018 were reported in accrued expenses and other liabilities and other non-current liabilities. There were three reinsurers covering 100% of the GMIB exposures as of December 31, 2019 and December 31, 2018 as follows: (In millions) Line of Business Reinsurer December 31, 2019 December 31, 2018 Collateral and Other Terms at December 31, 2019 GMIB Berkshire $ 332 $ 341 100% were secured by assets in a trust. Sun Life Assurance Company of Canada 202 208 Liberty Re (Bermuda) Ltd. 179 184 96% were secured by assets in a trust. Total GMIB recoverables reported in other current assets and other assets $ 713 $ 733 Amounts included in shareholders net income for GMIB assets and liabilities were not material in 2019, 2018 or 2017. |
Investments, Investment Income
Investments, Investment Income and Gains and Losses | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Investments | Note 11 – Investments, Investment Income and Gains and Losses Cigna’s investment portfolio consists of a broad range of investments including debt securities, 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 12 for information about valuing the Company’s investment portfolio. Debt securities, commercial mortgage loans, derivative financial instruments and short-term investments with contractual maturities during the next twelve months are classified on the balance sheet as current investments, unless they are held as statutory deposits or restricted for other purposes and then they are classified in long-term investments. Equity securities may include exchange traded funds that are used in our cash management strategy and classified as current investments. All other investments are classified as long-term investments. The following table summarizes the Company’s investments by category and current or long-term classification. December 31, 2019 (1) December 31, 2018 (In millions) Current Long-term Total Current Long-term Total Debt securities $ 928 $ 22,827 $ 23,755 $ 1,320 $ 21,608 $ 22,928 Equity securities - 303 303 377 171 548 Commercial mortgage loans - 1,947 1,947 32 1,826 1,858 Policy loans - 1,357 1,357 - 1,423 1,423 Other long-term investments - 2,403 2,403 - 1,901 1,901 Short-term investments 423 - 423 316 - 316 Total 1,351 28,837 30,188 2,045 26,929 28,974 Investments classified as assets held for sale (1) ( 414) ( 7,295) ( 7,709) Investments per Consolidated Balance Sheets $ 937 $ 21,542 $ 22,479 $ 2,045 $ 26,929 $ 28,974 (1) The table above includes $ 7.7 billion of investments associated with the Group Disability and Life business that is held for sale to New York Life. Under the terms of the definitive agreement, some of the assets currently associated with the Group Disability and Life business can be substituted for other assets. The assets that will transfer to New York Life will be primarily debt securities and to a lesser extent commercial mortgage loans and short-term investments. A. Investment Portfolio Debt Securities Accounting policy. Debt securities (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 debt securities supporting the Company’s run-off settlement annuity business is reported in future policy benefit liabilities rather than accumulated other comprehensive income (loss). The Company records impairment losses in net income for debt securities 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 debt securities before their 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 debt security (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 recognized 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 debt securities were as follows at December 31, 2019: Amortized Fair (In millions) Cost Value Due in one year or less $ 920 $ 932 Due after one year through five years 7,176 7,452 Due after five years through ten years 9,098 9,644 Due after ten years 4,209 5,191 Mortgage and other asset-backed securities 506 536 Total $ 21,909 $ 23,755 Actual maturities of these securities could differ from their contractual maturities used in the table above because issuers may have the right to call or prepay obligations, with or without penalties. Gross unrealized appreciation (depreciation) on debt securities by type of issuer is shown below. Amortized Unrealized Unrealized Fair (In millions) Cost Appreciation Depreciation Value December 31, 2019 Federal government and agency $ 498 $ 235 $ - $ 733 State and local government 729 81 - 810 Foreign government 2,027 230 ( 1) 2,256 Corporate 18,149 1,299 ( 28) 19,420 Mortgage and other asset-backed 506 31 ( 1) 536 Total $ 21,909 $ 1,876 $ ( 30) $ 23,755 Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1) $ 2,229 $ 740 $ ( 4) $ 2,965 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 (1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income. The Company had commitments to purchase $ 98 million of debt securities as of December 31, 2019, bearing interest at a fixed market rate. Review of declines in fair value. Management reviews debt securities 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. Management believes the unrealized depreciation below to be temporary based on this review, and therefore has not impaired these amounts. The table below summarizes debt securities with a decline in fair value from amortized cost by investment grade and by the length of time these securities have been in an unrealized loss position. December 31, 2019 December 31, 2018 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 $ 723 $ 729 $ ( 6) 267 $ 7,127 $ 7,367 $ ( 240) 1,324 Below investment grade $ 340 $ 348 $ ( 8) 355 $ 1,185 $ 1,240 $ ( 55) 1,190 More than one year Investment grade $ 366 $ 378 $ ( 12) 118 $ 3,023 $ 3,181 $ ( 158) 784 Below investment grade $ 84 $ 88 $ ( 4) 93 $ 249 $ 270 $ ( 21) 245 Equity Securities Accounting policy. Changes in the fair values of equity securities that have a readily determinable fair value are reported in net realized investment gains (losses). As of December 31, 2019, the fair values of these securities were $ 64 million and cost was $ 61 million, compared with fair value of $ 415 million and cost of $ 433 million as of December 31, 2018. Private equity securities of $ 192 million as of December 31, 2019, and $ 89 million as of December 31, 2018, without a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The amount of impairments or value changes resulting from observable price changes was not material Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair value with changes in fair value reported in net realized investment gains (losses) and dividends reported in net investment income. As of December 31, 2019, fair values of these securities were $ 47 million and cost was $ 58 million, compared with fair value of $ 44 million and cost of $ 58 million as of December 31, 2018. 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 fixed rates of interest and are secured by high quality, primarily completed and substantially leased operating properties. Commercial mortgage loans are classified as either current or long-term investments based on their contractual maturities. 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 collateral. 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. Writedowns are recorded in realized investments losses. Interest income on impaired loans is only recognized when a payment is received. There were no impaired commercial mortgage loans as of December 31, 2019 or 2018. As of December 31, 2019, virtually all 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, including that borrowers may have the right to prepay their obligations with or without prepayment penalties, the maturity date may be extended or 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 system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on 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 property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the estimated 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, 2019 and 2018: (Dollars in millions) December 31, 2019 December 31, 2018 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% $ 1,136 2.19 $ 1,132 2.14 60% to 79% 723 1.98 650 1.93 80% to 100% 88 1.62 76 1.49 Total $ 1,947 2.09 58% $ 1,858 2.04 58% 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 Company’s investment professionals completed the annual in-depth review in the second quarter of 2019 that included an analysis of each underlying property’s most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimated the current year and future stabilized property income and fair value for each loan. The Company re-evaluates a loan’s credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impacted. Policy Loans Accounting policy. 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 reset 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, 2019 and 2018 is expected to be held longer than one year and may include real estate acquired through the foreclosure of commercial mortgage loans. Additionally, other long-term investments include foreign currency swaps carried at fair value. See discussion 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 unfunded commitment and carrying value information for these investments. The Company expects to disburse approximately 30% of the committed amounts in 2020. Unfunded Carrying value as of December 31, Commitments as of (In millions) 2019 2018 December 31, 2019 Real estate investments $ 788 $ 679 $ 551 Securities partnerships 1,409 1,045 1,379 Other 206 177 24 Total $ 2,403 $ 1,901 $ 1,954 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) 2019 2018 Corporate securities $ 1,985 $ 581 Federal government securities $ 472 $ 82 Foreign government securities $ 65 $ 238 Money market funds $ 631 $ 1,174 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 as discussed in Note 10. Derivatives in the Company’s separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders. Derivative instruments used by the Company typically include foreign currency swap contracts and foreign currency forward contracts. Foreign currency swap contracts periodically exchange 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 three 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. Certain 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 financial strength or credit rating thresholds. These collateral posting requirements vary by counterparty and amounts posted were not significant 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 12. 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 other 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. Gross fair values of our derivative financial instruments are presented in Note 12. As of December 31, 2019 and 2018, and for the years then ended, 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 derivative instruments held by the Company. Notional Value as of (In millions) December 31, December 31, Purpose Type of Instrument 2019 2018 Fair value hedge: To hedge the foreign exchange-related changes in fair values of certain foreign-denominated bonds, primarily Euro and British pounds. The notional value of these derivatives matches the amortized cost of the hedged bonds. Foreign currency swap contracts $ 817 $ 525 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 and Korean Won. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swap contracts and foreign currency forward contracts $ 844 $ 439 Economic hedge: To hedge the foreign exchange-related changes in fair values of a U.S. dollar-denominated investment 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 investment portfolio. Foreign currency forward contracts $ 410 $ 309 The Company’s derivative financial instruments are presented as follows: Fair value hedges of the foreign exchange-related changes in fair values of certain foreign-denominated bonds : Swap fair values are reported in long-term investments or other non-current liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in realized investment gains and losses. The portion of the swap contracts’ changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign-denominated coupons received on the designated bonds. Net interest cash flows are reported in operating activities, while exchanges of notional principal amounts are reported in investing activities. Net investment hedges of certain foreign subsidiaries that conduct their business principally in currencies other than the U.S. dollar: The fair values of the foreign currency swap and forward contracts are reported in other assets or other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in fair value of these instruments are excluded from our effectiveness assessment and recognized in interest expense when coupon payments are accrued or ratably over the term of the instrument. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Cash flows relating to these contracts are reported in investing activities. Economic hedges for derivatives not designated as accounting hedges: Fair values of forward contracts are reported in current investments or accrued expenses and other liabilities. The changes in fair values are reported in realized investment gains and losses. Cash flows relating to these contracts are reported in investing activities. 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, 2019 or 2018. B. 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 net investment income for the years ended December 31 were as follows: (In millions) 2019 2018 2017 Debt Securities $ 986 $ 1,009 $ 946 Equity securities 5 28 14 Commercial mortgage loans 88 78 81 Policy loans 66 70 69 Other long-term investments 167 156 124 Short-term investments and cash 131 194 42 Total investment income 1,443 1,535 1,276 Less investment expenses 53 55 50 Net investment income $ 1,390 $ 1,480 $ 1,226 Real estate investments and securities partnerships with a carrying value of $ 192 million at December 31, 2019 and $ 150 million at December 31, 2018 were non-income producing during the preceding twelve months. C. Realized Investment Gains and Losses Accounting policy. Realized investment gains and losses are based on specifically identified assets and results from sales, investment asset write-downs, changes in the fair values of certain derivatives and equity securities and changes in valuation reserves on commercial mortgage loans. The following realized gains and losses on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business (consistent with accounting for a premium deficiency), 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) 2019 2018 2017 Net realized investment gains (losses), excluding investment asset write-downs $ 189 $ ( 34) $ 268 Write-downs on debt securities ( 12) ( 43) ( 26) Write-downs on other invested assets - ( 4) ( 5) Net realized investment gains (losses), before income taxes $ 177 $ ( 81) $ 237 Net realized investment gains, excluding investment asset write-downs in 2019 and 2017 primarily represent gains on the sales of real estate partnerships and debt securities. Additionally, 2019 included mark-to-market gains and 2017 included gains on sales of equity securities. Net realized investment losses, excluding investment asset write-downs in 2018 represented mark-to-market losses on equity securities and derivatives, partially offset by gains on the sales of real estate partnerships. Realized gains or losses on equity securities still held at December 31, 2019 and 2018 were not material The following table presents sales information for available-for-sale debt securities. 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) 2019 2018 2017 Proceeds from sales $ 3,077 $ 2,625 $ 2,012 Gross gains on sales $ 72 $ 28 $ 103 Gross losses on sales $ ( 19) $ ( 47) $ ( 18) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Note 12 – Fair Value Measurements The Company carries certain financial instruments at fair value in the financial statements including debt securities, certain equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when impaired or when there are observable price changes for equity securities with no readily determinable fair value. Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor. The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant would use to estimate fair value. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining fair value and 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 appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. We conduct an annual on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process. A. Financial Assets and Financial Liabilities Carried at Fair Value The following table provides information as of December 31, 2019 and 2018 about the Company’s financial assets and liabilities carried at fair value. Separate account assets are also recorded at fair value on the Company’s Consolidated Balance Sheets and are reported separately in the Separate Accounts section below as gains and losses related to these assets generally accrue directly to policyholders. (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total As of As of As of As of As of As of As of As of December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2019 2018 2019 2018 2019 2018 2019 2018 Financial assets at fair value Debt securities Federal government and agency $ 197 $ 209 $ 536 $ 501 $ - $ - $ 733 $ 710 State and local government - - 810 985 - - 810 985 Foreign government - - 2,228 2,356 28 6 2,256 2,362 Corporate - - 19,063 18,127 357 234 19,420 18,361 Mortgage and other asset-backed - - 398 372 138 138 536 510 Total debt securities 197 209 23,035 22,341 523 378 23,755 22,928 Equity securities (1) 7 384 72 43 32 32 111 459 Short-term investments - - 423 316 - - 423 316 Derivative assets - - 83 53 - - 83 53 Real estate funds priced at NAV as a practical expedient (2) 184 239 Financial liabilities at fair value Derivative liabilities $ - $ - $ 18 $ 10 $ - $ - $ 18 $ 10 (1) Excludes certain equity securities that have no readily determinable fair value. (2) As a practical expedient, certain real estate funds are carried at fair value based on the Company’s ownership share of the equity of the investee (Net Asset Value (“NAV“)) including changes in the fair value of its underlying investments. The funds have a quarterly redemption frequency, 45- 90 day redemption notice period and $ 56 million in unfunded commitments as of December 31, 2019. 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 narrow 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. Debt and equity securities . Approximately 97 % of the Company’s investments in debt 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 debt securities 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 and economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pricing models. Less than 1 % of the fair value of investments classified in Level 2 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 that 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 short-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 widely published market observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustments for credit risk were required as of December 31, 2019 or 2018. The nature and use of these derivative financial instruments are described in Note 11. Level 3 Financial Assets and Financial Liabilities Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The Company classifies certain newly-issued, privately-placed, complex or illiquid securities in Level 3. Approximately 2 % of debt 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 debt securities, 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 characteristics of the issuer, collateral attributes and prepayment speeds for mortgage and other asset-backed securities. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation as well as the issuer’s financial statements. Quantitative Information about Unobservable Inputs The following table summarizes the fair value and significant unobservable inputs used in pricing the following debt securities that were developed directly by the Company as of December 31, 2019 and 2018. The range and weighted average basis point amounts (“bps”) for liquidity and credit spreads (adjustment to discount rates) reflect the Company’s best estimates of the unobservable adjustments a market participant would make to calculate these fair values. Corporate and government debt securities. The significant unobservable input used to value the following corporate and government debt securities 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. 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. An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations. Fair Value as of Unobservable Adjustment Range (Weighted Average) as of December 31, Unobservable Input December 31, (Fair value in millions ) 2019 2018 December 31, 2019 2019 2018 Debt securities Corporate and government debt securities $ 385 $ 229 Liquidity 70 - 930 ( 280) bps 50 - 930 ( 230) bps Mortgage and other asset-backed securities 138 138 Liquidity 60 - 370 ( 70) bps 60 - 340 ( 70) bps Weighting of credit spreads 240 - 460 ( 330) bps 190 - 340 ( 260) bps Securities not priced by the Company (1) - 11 Total Level 3 debt securities $ 523 $ 378 (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 measurements while decreases in these inputs would result in higher fair value measurements. The 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 Value The following table summarizes the changes in financial assets and financial liabilities classified in Level 3 in 2019 and 2018. Gains and losses reported in these tables may include net changes in fair value that are attributable to both observable and unobservable inputs. (In millions) 2019 2018 Balance at January 1, $ 410 $ 732 Total (losses) included in shareholders’ net income ( 8) ( 22) Gains (losses) included in other comprehensive income 22 ( 8) Gains (losses) required to adjust future policy benefits for settlement annuities (1) 2 ( 8) Purchases, sales and settlements Purchases 72 22 Sales - ( 11) Settlements ( 19) ( 70) Total purchases, sales and settlements 53 ( 59) Transfers into/(out of) Level 3 Transfers into Level 3 170 44 Transfers out of Level 3 (2) ( 94) ( 269) Total transfers into/(out of) Level 3 76 ( 225) Balance at December 31, $ 555 $ 410 Total (losses) included in shareholders’ net income attributable to instruments held at the reporting date $ ( 8) $ ( 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 tables 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 best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Transfers between Level 2 and Level 3 during 2019 and 2018 primarily reflected changes in liquidity and credit risk estimates for certain private placement issuers across several sectors. Separate Accounts 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 generally 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 administrative services are reported in either premiums or fees and other revenues. Investments that are measured using the practical expedient of NAV are excluded from the fair value hierarchy. Fair 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 2019 2018 2019 2018 2019 2018 2019 2018 Guaranteed separate accounts (See Note 22) $ 219 $ 187 $ 271 $ 267 $ - $ - $ 490 $ 454 Non-guaranteed separate accounts (1) 1,450 1,204 5,522 5,216 263 233 7,235 6,653 Subtotal $ 1,669 $ 1,391 $ 5,793 $ 5,483 $ 263 $ 233 7,725 7,107 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 756 732 Total 8,481 7,839 Separate account assets classified as assets held for sale ( 16) Separate account assets per Consolidated Balance Sheets $ 8,465 $ 7,839 (1) Non-guaranteed separate accounts included $ 4.0 billion as of December 31, 2019 and $ 3.8 billion as of December 31, 2018 in assets supporting the Company’s pension plans, including $ 0.2 billion classified in Level 3 as of December 31, 2019 and 2018. Separate account assets classified as Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include: corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and actively-traded institutional and retail mutual fund investments. Separate account assets classified in Level 3 primarily support Cigna’s pension plans and include certain newly-issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above as well as commercial mortgage loans. Activity, including transfers into and out of Level 3, was not material 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 Fair Value as of Commitments Redemption Frequency December 31, as of (if currently Redemption Notice (In millions) 2019 2018 December 31, 2019 eligible) Period Securities partnerships $ 531 $ 477 $ 320 Not applicable Not applicable Real estate funds 220 237 - Quarterly 30 - 90 days Hedge funds 5 18 - Up to annually, varying by fund 30 - 90 days Total $ 756 $ 732 $ 320 As of December 31, 2019, the Company does not have plans to sell any of these assets at less than fair value. These investments are structured to satisfy longer-term investment objectives. Securities partnerships are contractually unredeemable, and the underlying investment assets are expected to be liquidated by the investees within ten years after inception. B. 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. Equity securities with no readily determinable fair value are also measured at fair value when there are observable price changes from orderly transactions with the same issuer. In 2019 there were immaterial no impaired investments written down to their fair values. In 2018, there were immaterial no price changes for the equity securities with no readily determinable fair value. Carrying values represented less than 1% of total investments for both 2019 and 2018. C. 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 fair value disclosure requirements at December 31, 2019 and 2018. In addition to universal life products and finance leases, financial instruments that are carried in the Company’s Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table. December 31, 2019 December 31, 2018 (In millions) Classification in Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,989 $ 1,947 $ 1,832 $ 1,858 Long-term debt, including current maturities, excluding finance leases Level 2 $ 39,439 $ 36,375 $ 40,819 $ 40,829 Fair values of off-balance sheet financial instruments were not material as of December 31, 2019 or 2018. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2019 | |
Variable Interest Entities [Abstract] | |
Variable interest entities | Note 13 – Variable Interest Entities When the Company becomes involved with a variable interest entity and 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 is considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities and has the right to receive benefits or obligation to absorb losses that could be significant to the entity. The Company evaluates the following criteria: the structure and purpose of the entity; the risks and rewards created by, and shared through, the entity; and the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers. The Company determined it was not a primary beneficiary in any material variable interest entities as of December 31, 2019 or 2018. The Company’s involvement in variable interest entities for which 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 Company control decisions that most significantly impact the partnership’s operations and the limited partners do not have substantive kick-out or participating rights. The Company’s maximum exposure to loss from these entities of $ 3.4 billion across approximately 140 limited partnerships as of December 31, 2019 includes $ 1.8 billion reported in long-term investments and commitments to contribute an additional $ 1.6 billion. The Company’s noncontrolling interest in each of these limited partnerships is generally less than 15% of the partnership ownership interests. Other asset-backed and corporate securities. In the normal course of its investing activities, the Company also makes passive investments in certain asset-backed and corporate securities that are issued by variable interest entities whose sponsors or issuers are unaffiliated with the Company. The Company receives fixed-rate cash flows from these investments and the maximum potential exposure to loss is limited to the carrying amount of $ 0.7 billion as of December 31, 2019 that is reported in debt securities. The Company’s combined ownership interests are insignificant The Company is involved with various other variable interest entities with immaterial The Company has not provided, and does not intend to provide, financial support to any of the above entities that it is not contractually required to provide. The Company performs ongoing qualitative analyses of its involvement with these variable interest entities to determine if consolidation is required. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 14 – Accumulated Other Comprehensive Income (Loss) (“AOCI”) AOCI includes unrealized appreciation on securities and derivatives (excluding appreciation on investments supporting future policy benefit liabilities of the run-off settlement annuity business), foreign currency translation and the net postretirement benefits liability adjustment (see Note 16). AOCI includes the Company’s share from unconsolidated entities reported on the equity method. 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. Changes in the components of AOCI were as follows: (In millions) 2019 2018 2017 Securities and Derivatives Beginning balance $ 18 $ 328 $ 365 Reclassification adjustment to retained earnings related to U.S. tax reform legislation - 65 - Reclassification adjustment to retained earnings related to new financial instruments guidance - ( 4) - Reclassification adjustment from retained earnings related to new hedging guidance - ( 6) - Adjusted beginning balance 18 383 365 Appreciation (depreciation) on securities and derivatives 1,266 ( 512) 34 Tax (expense) benefit ( 270) 100 ( 19) Net appreciation (depreciation) on securities and derivatives 996 ( 412) 15 Reclassification adjustment for (gains) losses included in shareholders' net income (net realized investment (gains) losses) ( 49) 60 ( 81) Reclassification adjustment for losses included in shareholders' net income (selling, general and administrative expenses) - - 1 Tax benefit (expense) 10 ( 13) 28 Net (gains) losses reclassified from AOCI to net income ( 39) 47 ( 52) Other comprehensive income (loss), net of tax 957 ( 365) ( 37) Ending balance $ 975 $ 18 $ 328 Translation of foreign currencies Beginning balance $ ( 221) $ ( 65) $ ( 369) Reclassification adjustment to retained earnings related to U.S. tax reform legislation - ( 4) - Adjusted beginning balance ( 221) ( 69) ( 369) Translation of foreign currencies ( 57) ( 167) 306 Tax (expense) ( 2) - ( 5) Net translation of foreign currencies ( 59) ( 167) 301 Less: Net translation of foreign currencies attributable to noncontrolling interests ( 5) ( 15) ( 3) Shareholders' net translation of foreign currencies ( 54) ( 152) 304 Ending balance $ ( 275) $ ( 221) $ ( 65) Postretirement benefits liability Beginning balance $ ( 1,508) $ ( 1,345) $ ( 1,378) Reclassification adjustment to retained earnings related to U.S. tax reform legislation - ( 290) - Adjusted beginning balance ( 1,508) ( 1,635) ( 1,378) Reclassification adjustment for amortization of net losses from past experience and prior service costs (interest expense and other) 62 69 64 Reclassification adjustment for settlement (interest expense and other) 10 - 7 Tax (expense) ( 15) ( 15) ( 24) Net adjustments reclassified from AOCI to net income 57 54 47 Valuation update ( 249) 93 ( 22) Tax benefit (expense) 59 ( 20) 8 Net change due to valuation update ( 190) 73 ( 14) Other comprehensive (loss) income, net of tax ( 133) 127 33 Ending balance $ ( 1,641) $ ( 1,508) $ ( 1,345) |
Organizational Efficiency Plan
Organizational Efficiency Plan | 12 Months Ended |
Dec. 31, 2019 | |
Organizational Efficiency Plan [Abstract] | |
Organizational Efficiency Plan | Note 15 – Organizational Efficiency Plan The Company is continuously evaluating ways to deliver our products and services more efficiently and at a lower cost. During the fourth quarter of 2019, we committed to a plan to increase our organizational alignment, operational efficiency and reduce costs. As a result, we recognized a charge in selling, general and administrative expenses of $ 207 million pre-tax ($ 162 million after-tax) in the fourth quarter of 2019 primarily for severance costs related to headcount reductions. We expect most of the severance to be paid by the end of 2021. (In millions) Fourth quarter 2019 charge $ 207 Less: 2019 payments 2 Balance, December 31, 2019 $ 205 |
Pension
Pension | 12 Months Ended |
Dec. 31, 2019 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefit Plans | Note 16 – Pension A. About Our Plans The Company sponsors U.S. and non-U.S. defined benefit pension plans; future benefit accruals for the domestic plans are frozen. Accounting policy. The Company measures the assets and liabilities of its domestic pension plans as of December 31. Benefit obligations are measured at the present value of estimated future payments based on actuarial assumptions. The Company uses the “corridor” method to account for changes in the benefit obligation when actual results differ from those assumed, or when assumptions change. These changes are called net unrecognized actuarial gains (losses). 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 benefit 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 valuation 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 market-related asset value was approximately $ 4.2 billion, compared with a fair value of approximately $ 4.4 billion at December 31, 2019. B. Funded Status and Amounts Included in Accumulated Other Comprehensive Income The following table summarizes the projected benefit obligations and assets related to our U.S. and non-U.S. pension plans as of, and for the years ended, December 31. Pension Benefits (In millions) 2019 2018 Change in benefit obligation Benefit obligation, January 1 $ 4,741 $ 4,969 Service cost 2 3 Interest cost 194 169 Assumed in acquisition - 137 Litigation settlement 142 32 Loss (gain) from past experience 574 (1) ( 235) Benefits paid from plan assets ( 325) ( 314) Benefits paid — other ( 14) ( 20) Benefit obligation, December 31 5,314 4,741 Change in plan assets Fair value of plan assets, January 1 4,151 4,281 Assumed in acquisition - 96 Actual return on plan assets 594 85 Benefits paid ( 325) ( 314) Contributions 21 3 Fair value of plan assets, December 31 4,441 4,151 Funded status $ ( 873) $ ( 590) Liability in Consolidated Balance Sheets Accrued expenses and other liabilities $ ( 18) $ ( 30) Other non-current liabilities $ ( 855) $ ( 560) (1) Loss reflects a decrease in the discount rate and an unfavorable 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. The Company made immaterial contributions to the qualified pension plans are expected to be immaterial no plan assets for our non-qualified pension plans as they are generally funded on a pay-as-you-go basis. Benefit payments. The following benefit payments are expected to be paid in: Pension (In millions) Benefits 2020 $ 322 2021 $ 312 2022 $ 314 2023 $ 318 2024 $ 318 2025-2029 $ 1,574 Amounts reflected in the pension liabilities shown above that have not yet been reported in net income and, therefore, have been included in accumulated other comprehensive loss consisted of the following as of December 31: Pension Benefits (In millions) 2019 2018 Unrecognized net (losses) $ ( 2,132) $ ( 1,980) Unrecognized prior service cost ( 5) ( 6) Postretirement benefits liability adjustment $ ( 2,137) $ ( 1,986) C. Cost of Our Plans Net pension cost was as follows: Pension Benefits (In millions) 2019 2018 2017 Service cost $ 2 $ 3 $ 3 Interest cost 194 169 186 Expected long-term return on plan assets ( 245) ( 257) ( 260) Litigation settlement 142 32 - Amortization of: Net loss from past experience 59 70 66 Settlement loss 10 - 7 Net plan cost $ 162 $ 17 $ 2 As further discussed in Note 22, Old Cigna and the Cigna Pension Plan (the “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 Plan was ordered to pay $ 32 million representing the attorney fee portion of the settlement. This payment was recognized as an expense in 2018. In the first quarter of 2019, the Plan implemented the court order described in Note 22 resulting in an increase to the pension liability of $ 142 million. The Company reversed a litigation reserve for the expenses recognized for this matter in both 2019 and 2018 aggregating to the same amount resulting in no impact on net income. D. Assumptions Used for Pension 2019 2018 Discount rate: Pension benefit obligation 3.30% 4.23% Pension benefit cost 4.23% 3.51% Expected long-term return on plan assets: Pension benefit cost 6.75% 7.00% Mortality table for pension obligations White Collar mortality table with MP 2019 projection scale RP 2014 with MP 2018 projection scale In 2019, to better align with our mortality experience, the Company adopted the “White Collar mortality table with MP 2019 projection scale” to value our benefit obligations. The Company sets discount rates by applying actual annualized yields for high quality bonds at various durations to the expected cash flows of the pension liabilities. A discount rate curve is constructed 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 believes that this curve is representative of the yields that the Company is 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 investment 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 including expected domestic and foreign GDP growth, employment levels and inflation. Pension Plan Assets As of December 31, 2019, pension assets included $ 4 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 $ 284 million invested directly in funds offered by the buyer of the retirement benefits business, and $ 122 million invested by others. The fair values of pension assets by category are as follows as of December 31, 2019 and 2018. (In millions) 2019 2018 Debt securities: Corporate $ 1,906 $ 1,446 Asset-backed 41 32 Fund investments 460 768 Total debt securities 2,407 2,246 Equity securities: Domestic 582 506 International, including funds and pooled separate accounts (1) 419 360 Total equity securities 1,001 866 Securities partnerships 531 477 Real estate funds, including pooled separate accounts (1) 230 250 Commercial mortgage loans 96 110 Hedge funds 24 36 Guaranteed deposit account contract 100 107 Cash equivalents and other current assets, net 52 59 Total pension assets at fair value $ 4,441 $ 4,151 (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 ( 60% fixed income, 25% public equity securities and 15% 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 changes in market conditions. The Company would expect to further reduce the allocation to equity securities and other investments and increase the allocation to fixed income investments as funding levels improve. See Note 12 for further details regarding how fair value is determined, including the level within the fair value hierarchy and the procedures we use to validate fair value measurements. The Company classifies substantially all debt securities 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. Securities partnerships, real estate and hedge funds are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. See Note 12 for additional disclosures related to these assets invested in the separate accounts of the Company’s subsidiaries. Certain securities as described in Note 12, as well as commercial mortgage loans and guaranteed deposit account contracts, are classified in Level 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 funds that invest 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) 2019 2018 2017 Expense $ 256 $ 196 $ 122 |
Employee Incentive Plans
Employee Incentive Plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee Incentive Plans [Abstract] | |
Employee Incentive Plans | Note 17 – Employee Incentive Plans A. About Our Plans The People Resources Committee (the “Committee”) of the Board of Directors awards stock options, restricted stock grants, restricted stock units, deferred stock and strategic performance shares (“SPS”) to certain employees. The Committee has issued common stock instead of cash compensation. Prior to the acquisition of Express Scripts, the Company issued shares from Treasury stock for these awards. Following the acquisition, original issue shares were used. Awards 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. Information in this footnote includes the effect of the Express Scripts rollover awards unless otherwise indicated. The Company records compensation expense for stock and option awards over their vesting periods primarily 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) 2019 2018 2017 Common shares available for award 23.2 25.7 14.0 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. Options vest over periods ranging from one year 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 fair 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 of 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 4 for further information. 2019 2018 2017 Dividend yield 0.0% 0.0% 0.0% Expected volatility 30.0% 35.0% 35.0% Risk-free interest rate 2.5% 2.5% 1.8% Expected option life 4.4 years 4.4 years 4.3 years Weighted average fair value of options $ 53.10 $ 64.18 $ 46.38 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 table shows the status of, and changes in, common stock options during the last three years. (Options in thousands) 2019 2018 2017 Weighted Weighted Weighted Average Average Average Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - January 1 12,370 $ 125.46 6,156 $ 100.79 7,097 $ 82.01 Granted 1,569 $ 183.41 7,080 $ 143.62 1,230 $ 149.17 Exercised ( 2,297) $ 106.75 ( 771) $ 88.35 ( 2,072) $ 63.41 Expired or canceled ( 204) $ 180.08 ( 95) $ 165.04 ( 99) $ 138.41 Outstanding - December 31 11,438 $ 136.19 12,370 $ 125.46 6,156 $ 100.79 Options exercisable at year-end 8,874 $ 123.87 9,446 $ 114.22 3,894 $ 77.36 Compensation expense of $ 64 million related to unvested stock options at December 31, 2019 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) 2019 2018 2017 Intrinsic value of options exercised $ 180 $ 86 $ 218 Cash received for options exercised $ 224 $ 68 $ 131 Tax benefit from options exercised $ 34 $ 8 $ 41 The following table summarizes information for outstanding common stock options at December 31, 2019: Options Options Outstanding Exercisable Number (in thousands) 11,438 8,874 Total intrinsic value (in millions) $ 781 $ 715 Weighted average exercise price $ 136.19 $ 123.87 Weighted average remaining contractual life 5.6 years 4.7 years C. Restricted Stock The Company awards restricted stock (grants and units) to the Company’s employees that vest over periods ranging from one to three 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 that 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) 2019 2018 2017 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 2,138 $ 168.12 1,295 $ 126.44 1,309 $ 97.78 Awarded 870 $ 183.86 1,451 $ 183.29 451 $ 155.21 Vested ( 964) $ 160.74 ( 560) $ 112.53 ( 409) $ 67.09 Forfeited ( 99) $ 168.68 ( 48) $ 150.84 ( 56) $ 121.74 Outstanding - December 31 1,945 $ 178.78 2,138 $ 168.12 1,295 $ 126.44 The fair value of vested restricted stock at the vesting date for the years ended December 31 was as follows: (In millions) 2019 2018 2017 Fair value of vested restricted stock $ 171 $ 107 $ 62 Approximately 10,300 employees held 1.9 million restricted stock awards at the end of 2019 with $ 160 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 performance 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 at the beginning of the performance period. Holders of these awards receive shares of Cigna common stock at 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. Fair value is determined at the grant date for “market condition” SPSs using a Monte Carlo simulation model and not subsequently adjusted regardless of the final outcome. Expense is initially accrued for “performance condition” SPSs based on the most likely outcome, but evaluated for adjustment each period for updates in the expected outcome. Expense is adjusted to the actual outcome (number of shares awarded times the share price at the grant date) at the end of the performance period. The following table shows the status of, and changes in, SPSs during the last three years: 2019 2018 2017 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 1 707 $ 160.74 778 $ 136.57 942 $ 109.14 Awarded 389 $ 184.72 221 $ 197.51 275 $ 150.06 Vested ( 244) $ 139.27 ( 269) $ 121.57 ( 386) $ 78.91 Forfeited ( 34) $ 178.98 ( 23) $ 158.16 ( 53) $ 138.19 Outstanding - December 31 818 $ 177.94 707 $ 160.74 778 $ 136.57 The fair value of vested SPSs at the vesting date for the years ended December 31 was as follows: 2019 2018 2017 (Shares in thousands; $ in millions) Shares Fair Value Shares Fair Value Shares Fair Value Shares of Cigna common stock distributed upon SPS vesting 254 $ 45 380 $ 73 476 $ 70 Approximately 1,600 employees held 818,000 SPSs at the end of 2019 and $ 58 million of related compensation expense is expected to be recognized over the next two years . The amount of expense for “performance condition” SPSs will vary based on actual performance in 2020 and 2021. E. Compensation Cost and Tax Effects of Share-based Compensation The Company records tax benefits in shareholders’ net income during the vesting period based on the amount of expense being recognized. The difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in net income when stock options are exercised, or when restricted stock and SPSs vest. (In millions) 2019 2018 2017 Total compensation cost for shared-based awards $ 299 $ 180 $ 178 Tax benefits recognized $ 59 $ 36 $ 79 |
Goodwill, Other Intangibles and
Goodwill, Other Intangibles and Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Goodwill, Other Intangibles, and Property and Equipment | Note 18 – Goodwill, Other Intangibles and Property and Equipment A. 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, based on those reporting units’ relative fair values. As a result, goodwill is primarily reported in the Health Services segment ($ 33.7 10.5 0.4 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 a market approach or a discounted 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 within that reporting unit. Projections of future cash flows for each reporting unit are consistent with our annual planning process for revenues, pharmacy costs, benefits expenses, operating expenses, taxes, capital levels and long-term growth rates. Goodwill activity. Goodwill activity during 2019 and 2018 was as follows: (In millions) 2019 2018 Balance at January 1, $ 44,505 $ 6,164 Goodwill acquired, net 103 38,371 Impact of foreign currency translation ( 6) ( 30) Balance at December 31, $ 44,602 $ 44,505 The significant increase in goodwill during 2018 reflects the Company’s acquisition of Express Scripts as further discussed in Note 4. B. Other Intangibles Accounting policy. The Company’s other intangible assets primarily 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 including key assumptions for customer attrition and discount rates. The Company’s definite-lived intangible assets are amortized on an accelerated or straight-line basis, reflecting their pattern of economic benefits, over periods from one 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. The Company’s amortized intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected future undiscounted cash flows generated by the underlying asset group is less than the carrying amount of the asset group, the Company recognizes an impairment charge equal to the difference between the carrying value of the asset group and its estimated fair value. The Company’s indefinite-lived intangible assets are each reviewed for impairment at least annually by comparing their fair value with their carrying value. If the carrying value exceeds fair value, that excess is recognized as an impairment loss. There were no material Components of other assets, including other intangibles. Other intangible assets were comprised of the following at December 31: Accumulated Net Carrying (In millions) Cost Amortization Value 2019 Customer relationships $ 31,184 3,319 27,865 Trade Name - Express Scripts 8,400 8,400 Other 383 86 297 Other intangible assets 39,967 3,405 36,562 Value of business acquired (reported in deferred policy acquisition costs) 643 122 521 Total $ 40,610 3,527 37,083 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 The Company has indefinite-lived intangible assets totaling $ 8.4 billion at December 31, 2019 and 2018, largely consisting of trade names and licenses. C. 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 included 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 useful life of each asset as follows: buildings and improvements, 10 40 three five three seven three 10 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 circumstances 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 2019 Internal-use software $ 6,578 $ 3,282 $ 3,296 Other property and equipment 2,569 1,353 1,216 Total property and equipment 9,147 4,635 4,512 Property and equipment classified as Assets held for sale ( 226) ( 131) ( 95) Total property and equipment per Consolidated Balance Sheet $ 8,921 $ 4,504 $ 4,417 2018 Internal-use software $ 5,694 $ 2,415 $ 3,279 Other property and equipment 2,264 981 1,283 Total property and equipment $ 7,958 $ 3,396 $ 4,562 Components of depreciation and amortization. Depreciation and amortization expense was comprised of the following for the years ended December 31: (In millions) 2019 2018 2017 Internal-use software $ 850 $ 323 $ 298 Other property and equipment 284 146 153 Value of business acquired (reported in deferred policy acquisition costs) 34 16 18 Other intangibles 2,483 210 97 Total depreciation and amortization $ 3,651 $ 695 $ 566 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 2020 $ 2,466 2021 $ 2,386 2022 $ 2,061 2023 $ 1,902 2024 $ 1,773 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 19 – Leases As discussed in Note 2, the Company adopted ASU 2016-02, Leases, as of January 1, 2019. As permitted by the standard, the Company did not restate its Consolidated Financial Statements for periods prior to the adoption date and the required disclosures presented below are prospective from the date of adoption. The Company’s leases are primarily for office space and certain computer and other equipment, and have terms of up to 23 years. Accounting policy. The Company determines if an arrangement is a lease and its lease classification (operating or finance) at inception. Beginning in the first quarter of 2019, both operating and finance leases result in (1) a right-of-use (“ROU”) asset that represents our right to use the underlying asset for the lease term and (2) a lease liability that represents our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are reflected in the following lines in the Company’s Consolidated Balance Sheet: ROU Asset Current Lease Liability Non-Current Lease Liability Operating lease Other assets Accrued expenses and other liabilities (current) Other liabilities (non-current) Finance lease Property and equipment Short-term debt Long-term debt These lease assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Most of the Company’s leases do not provide an implicit rate, so the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease pre-payments made and excludes lease incentives for operating leases. The Company’s expected life of a lease may consider options to extend or terminate a lease when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components that are accounted for as a single lease component. Variable lease payments are expensed as incurred and represent amounts that are neither fixed in nature, such as maintenance and other services provided by the lessor, nor tied to an index or rate. The components of lease expense were as follows: (In millions) Year Ended December 31, 2019 Operating lease cost $ 188 Finance lease cost: Amortization of ROU assets 28 Interest on lease liabilities 3 Total finance lease cost 31 Variable lease cost 50 Total lease cost $ 269 Rental expense under operating lease agreements was $ 162 million for the years ended December 31, 2018 and 2017. Supplemental cash flow information related to leases was as follows: Year ended (In millions) December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 173 Operating cash outflows from finance leases $ 3 Financing cash outflows from finance leases $ 25 ROU assets obtained in exchange for lease obligations: Operating leases $ 89 Finance leases $ 68 The non-cash impact of adopting the new lease guidance was an increase of Other assets of $ 615 million and an increase to Accrued expenses and other liabilities of $ 630 million. Operating and finance lease ROU assets and lease liabilities were as follows at the balance sheet date: (In millions) December 31, 2019 Operating leases: Operating lease ROU assets $ 536 Accrued expenses and other current liabilities $ 166 Other non-current liabilities 465 Total operating lease liabilities $ 631 Finance leases: Property and equipment, gross $ 110 Accumulated depreciation ( 23) Property and equipment, net $ 87 Short-term debt $ 27 Long-term debt 61 Total finance lease liabilities $ 88 As of December 31, 2019, the weighted average remaining lease term was five years for operating leases and five years for finance leases, and the weighted average discount rate was 3.89% for operating leases and 3.77% for finance leases. Maturities of lease liabilities as of December 31, 2019 were as follows: (In millions) Operating Leases Finance Leases 2020 $ 177 $ 28 2021 159 21 2022 133 18 2023 89 8 2024 63 6 Thereafter 74 16 Total lease payments 695 97 Less: imputed interest 64 9 Total $ 631 $ 88 |
Shareholders Equity and Dividen
Shareholders Equity and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Stockholders' Equity And Dividend Restrictions | Note 20 – Shareholders’ Equity and Dividend Restrictions State insurance departments and foreign jurisdictions that regulate certain of the Company’s subsidiaries prescribe accounting practices (differing 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. The statutory net income of the Company’s life, accident and health insurance and HMO subsidiaries for the years ended, and their statutory surplus as of December 31, were as follows: (In billions) 2019 2018 2017 Net income $ 3.8 $ 3.4 $ 2.5 Surplus $ 13.8 $ 12.2 $ 10.4 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 regulatory 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, 2019, these amounts, including restricted GAAP net assets of the Company’s subsidiaries, were as follows: (In billions) 2019 Minimum statutory surplus required by regulators $ 4.8 Investments on deposit with regulatory bodies $ 0.5 Maximum dividend distributions permitted in 2020 without regulatory approval $ 2.9 Maximum loans to the parent company permitted without regulatory approval $ 1.0 Restricted GAAP net assets of Cigna Corporation's subsidiaries $ 15.3 Permitted practices used by the Company’s insurance subsidiaries in 2019 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, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 21 – Income Taxes Accounting policy. Deferred income taxes are reflected in the Consolidated Balance Sheets for differences between the financial and income tax reporting bases of the Company’s 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 a valuation allowance is established to the extent this standard is not met. The deferred income tax provision generally 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 believes the probability that the positions will be sustained is less than 50 percent. The liabilities for uncertain tax positions are classified as current when the position is expected to be settled within 12 months or the statute of limitation expires within 12 months. Income taxes attributable to the Company’s foreign operations are generally provided using the respective foreign jurisdictions’ tax rate. Our capital management strategy to support the liquidity and regulatory capital requirements of our foreign operations and certain international growth initiatives is to retain overseas a significant portion of the earnings generated by our foreign operations. This strategy does not materially limit our ability to meet our liquidity and capital needs in the United States. The Company generally does not intend to repatriate these earnings. A. Income Tax Expense The components of income taxes for the years ended December 31 were as follows: (In millions) 2019 2018 2017 Current taxes U.S. income taxes $ 1,476 $ 804 $ 974 Foreign income taxes 173 185 122 State income taxes 114 47 36 Total current taxes 1,763 1,036 1,132 Deferred taxes (benefits) U.S. income taxes (benefits) ( 236) ( 75) 204 Foreign income taxes 16 8 39 State income tax (benefits) ( 93) ( 34) ( 1) Total deferred taxes (benefits) ( 313) ( 101) 242 Total income taxes $ 1,450 $ 935 $ 1,374 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: 2019 2018 2017 (In millions) $ % $ % $ % Tax expense at nominal rate $ 1,380 21.0 % $ 752 21.0 % $ 1,262 35.0 % Effect of U.S. tax reform legislation - - ( 4) ( 0.1) 232 6.4 Effect of foreign earnings 24 0.4 74 2.1 ( 70) ( 1.9) Health insurance industry tax - - 78 2.2 - - State income tax (net of federal income tax benefit) 32 0.5 10 0.3 23 0.6 Other 14 0.2 25 0.6 ( 73) ( 2.0) Total income taxes $ 1,450 22.1 % $ 935 26.1 % $ 1,374 38.1 % The decrease in the 2019 effective tax rate was due primarily to the suspension of the health insurance industry tax. Tax expense in 2017 was based on a federal income tax rate of 35% and 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. Consolidated pre-tax income from the Company’s foreign operations was approximately 12% of the Company’s pre-tax income in 2019. The comparable amounts in prior years were 15% in 2018 and 14% in 2017. South Korean operations produced a majority of the Company’s foreign pre-tax earnings. B. Deferred Income Taxes Deferred income tax assets and liabilities as of December 31 were as follows: (In millions) 2019 2018 Deferred tax assets (1) Employee and retiree benefit plans $ 511 $ 411 Other insurance and contractholder liabilities 282 396 Loss carryforwards 260 255 Other accrued liabilities 183 341 Other 218 187 Deferred tax assets before valuation allowance 1,454 1,590 Valuation allowance for deferred tax assets ( 196) ( 199) Deferred tax assets, net of valuation allowance 1,258 1,391 Deferred tax liabilities (1) Depreciation and amortization 630 744 Acquisition-related basis differences 9,386 9,863 Policy acquisition expenses 113 211 Unrealized appreciation on investments and foreign currency translation 223 ( 29) Other 293 55 Total deferred tax liabilities 10,645 10,844 Net deferred income tax (liabilities) assets $ ( 9,387) $ ( 9,453) (1) Certain prior year balances have been reclassified to align with the year end 2019 presentation. Management believes that future results will be sufficient to realize a majority of the Company’s gross deferred tax assets. We establish valuation allowances against deferred tax assets when we determine that it is more likely than not that the asset will not be recognized. Valuation allowances have been established against certain federal, state and foreign capital and operating losses. There are multiple expiration dates associated with these losses, though a significant portion expire in 2021. C. Uncertain Tax Positions and Other Tax Matters Reconciliations of unrecognized tax benefits for the years ended December 31 follow: (In millions) 2019 2018 2017 Balance at January 1, $ 928 $ 35 $ 31 Increase due to prior year positions 68 40 - Increase due to business combinations - 860 - Increase due to current year positions 29 6 7 Reduction related to settlements with taxing authorities - ( 1) ( 1) Reduction related to lapse of applicable statute of limitations ( 7) ( 12) ( 2) Balance at December 31, $ 1,018 $ 928 $ 35 Substantially all unrecognized tax benefits would impact shareholders’ net income if recognized. The increase in the liability for uncertain tax positions from 2017 to 2018 was largely due to matters related to Health Services. The Company classifies net interest expense on uncertain 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 on uncertain tax positions was approximately $ 100 million as of December 31, 2019, and immaterial D. Other Tax Matters The statute of limitations for Cigna's consolidated federal income tax returns through 2015 has closed and there are no pending examinations. The Internal Revenue Service (“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. In addition, the Company has pending refund claims for various years. The Company conducts business in a number of state and foreign 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, 2019 | |
Contingencies And Other Matters [Abstract] | |
Contingencies and Other Matters | Note 22 – Contingencies and Other Matters The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business. A. Financial Guarantees: Retiree and Life Insurance Benefits 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 Annuity Company or “Prudential”) has the right to redirect the management of the related assets to provide for benefit payments. As of December 31, 2019, employers maintained assets that exceeded the benefit obligations under these arrangements of approximately $ 450 million. These guarantees are generally provided by the Company with minimal reinsurance from third parties. An additional liability is established if management believes that the Company will be required to make payments under the guarantees; there were no 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, 2019 in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, the filing of tax returns, compliance with law or the identification of outstanding litigation. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable. The Company does not believe that it is possible to determine the maximum potential amount due under these obligations because not all amounts due under these indemnification obligations are subject to limitation. There were no 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. There were no material D. Legal and Regulatory 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 service 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. Disputed tax matters arising from audits by the Internal Revenue Service 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 21. Pending litigation and legal or regulatory matters that the Company has identified with a reasonable possibility of material loss are described below. For material pending litigation and legal or regulatory matters discussed below, the Company provides disclosure in the aggregate of accruals and range of loss, or a statement that such information cannot be estimated. The Company’s accruals for the matters discussed below under “Litigation Matters” and “Regulatory Matters” are immaterial. Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time. In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company. An adverse outcome in one or more of these matters could be material to the Company’s results of operations, financial condition or liquidity for any particular period. The outcomes of lawsuits are inherently unpredictable, and we may be unsuccessful in these ongoing litigation matters or any future claims or litigation. 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 (now Old Cigna) and the Plan on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a cash balance formula. The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), including that the Plan’s cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions. In 2008, the District Court (1) affirmed the Company’s right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Company to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula. 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 and attorneys’ fees and 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 to pay any past due lump sums and back benefits within 90 days of the Order. The attorneys’ fees were paid as ordered in December 2018. In the first quarter of 2019, the Company amended the Plan, notified class participants of their increased benefits and commenced remedy benefit payments out of the Plan, including the past due lump sums and back benefits. See Note 16 for additional information. In April 2019, plaintiffs challenged certain aspects of the methodology used to calculate and pay benefits. In August 2019, the Court denied plaintiffs’ challenge in all but one minor respect that did not result in a material change to the pension obligation. The plaintiffs filed a motion for reconsideration that the Court denied on January 10, 2020 . On January 15, 2020, plaintiffs filed a motion for an equitable accounting and a notice of appeal. 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 the terms of the merger agreement. Also in February 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”) seeking declaratory judgments that the Company’s termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date. The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $ 13 billion, including the lost premium value to the Company’s shareholders caused by Anthem’s willful breaches of the merger agreement. Anthem countersued, alleging its own claims for damages. On February 15, 2017, the Chancery Court granted Anthem’s motion for a temporary restraining order and temporarily enjoined the Company from terminating the merger agreement. In May 2017, the Chancery Court denied Anthem’s motion for a preliminary injunction to enjoin Cigna from terminating the merger agreement but stayed its ruling pending Anthem’s determination as to whether to seek an appeal. Anthem subsequently notified Cigna and the Chancery Court that it did not intend to appeal the Chancery Court’s decision. As a result, the merger agreement was terminated. The litigation between the parties remains pending. A trial was held during the first quarter of 2019. Oral arguments on post-trial briefs were held on November 26, 2019. In February 2020, the Chancery Court issued a letter requesting certain supplemental briefing. The supplemental briefs are due March 6, 2020. We believe in the merits of our claims and dispute Anthem’s claims, and we intend to vigorously defend ourselves and pursue our claims. 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 service issues. Anthem also requested that the court enter declaratory judgment that Express Scripts is required to provide Anthem competitive benchmark pricing, that Anthem can terminate the agreement, and that Express Scripts is required to provide Anthem with post-termination services at competitive benchmark pricing for one year following any termination by Anthem. Anthem claims it is entitled to $ 13 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 Scripts filed its answer denying Anthem’s Allegations in their entirety and asserting affirmative defenses and counterclaims against Anthem. The court subsequently granted Anthem’s motion to dismiss two of six counts of Express Scripts’ amended counterclaims. The current scheduling order runs through the completion of summary judgment briefing in October 2020. There is no tentative trial date. We believe in the merits of our claims and dispute Anthem’s claims, and we intend to vigorously defend ourselves and pursue our claims. Regulatory Matters Civil Investigative Demand . The U.S. Department of Justice (“DOJ”) is conducting an industry-wide investigation of Medicare Advantage organizations’ risk adjustment practices under Medicare Parts C and D including medical chart reviews and health exams. The Company is currently responding to information requests (civil investigative demands) received from the DOJ (U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Southern District of New York). We will continue to cooperate with the DOJ’s investigation. Disability claims regulatory matter . The Company is subject to an agreement with the Departments of Insurance for Maine, Massachusetts, Pennsylvania, Connecticut and California (together, the “Lead States”), originally entered into in 2013, that relates to the Company’s long-term disability claims handling practices. The agreement provides for enhanced procedures related to documentation and disposition. Cigna has cooperated fully with the Lead States and we believe we have addressed the requirements of the agreement. The Lead States initiated a re-examination of our practices. Accordingly, the Company may be subject to additional costs, penalties and requests to change its business practices that could negatively impact future earnings for this business. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Information [Abstract] | |
Segment Information [Text Block] | Note 23 – Segment Information See Note 1 for a description of our segments. Effective with the first quarter of 2019, the Company began allocating compensation cost for stock options to the segments. Prior year segment information was not restated for this change. A description of our basis for reporting segment operating results is outlined below. Intersegment transactions primarily reflect pharmacy sales to insured customers of the Integrated Medical segment. These and other transactions are eliminated in consolidation. The Company uses “pre-tax adjusted income from operations” and “adjusted revenues” as its principal financial measures of segment operating performance because management believes they best reflect the underlying results of business operations and permit 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 Anthem and Coventry Health Care, Inc. (the “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 sheet dates, as well as gains and losses associated 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 ongoing 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. The Company does not report total assets by segment since this is not a metric used to allocate resources or evaluate segment performance. Adjusted revenues is defined as revenues excluding: 1) revenue contributions from transitioning clients; 2) the Company’s share of certain realized investment results of its joint ventures reported in the International Markets segment using the equity method of accounting and 3) special items, if any. The following tables present the special items recorded by the Company in 2019, 2018 and 2017. (In millions) Description of Special Item Charges (Benefits) and Financial Statement Line Item(s) After-tax Before-tax Year ended December 31, 2019 Total integration and transaction-related costs (Selling, general and administrative expenses) $ 427 $ 552 Charge for organizational efficiency plan (Selling, general and administrative expenses) $ 162 $ 207 Charges associated with litigation matters (Selling, general and administrative expenses) $ 41 $ 51 Year ended December 31, 2018 Integration and transaction-related costs - Selling, general and administrative expenses $ 587 $ 748 - Interest expense and other 179 227 - Net investment income ( 97) ( 123) Total integration and transaction-related costs $ 669 $ 852 Charges associated with litigation matters (Selling, general and administrative expenses) $ 19 $ 25 Charges associated with U.S. tax reform - Selling, general and administrative expenses $ 1 $ 2 - Tax (benefit) ( 3) Total (benefits) charges associated with U.S. tax reform $ ( 2) $ 2 Year ended December 31, 2017 Integration and transaction-related costs - Selling, general and administrative expenses $ 92 $ 126 - Tax (benefit) ( 59) Total integration and transaction-related costs $ 33 $ 126 Charges associated with U.S. tax reform - Selling, general and administrative expenses $ ( 36) $ ( 56) - Tax expense 232 Total charges (benefits) associated with U.S. tax reform $ 196 $ ( 56) Debt extinguishment costs $ 209 $ 321 Long-term care guaranty fund assessment (Selling, general and administrative expenses) $ 83 $ 129 Summarized segment financial information for the years ended December 31 was as follows: (In millions) Health Services Integrated Medical International Markets Group Disability and Other Corporate and Eliminations Total 2019 Revenues from external customers (1) $ 107,354 $ 34,861 $ 5,500 $ 4,461 $ - $ 152,176 Inter-segment revenues 2,380 1,180 - 26 ( 3,586) Net investment income 60 478 159 695 ( 2) 1,390 Total revenues 109,794 36,519 5,659 5,182 ( 3,588) 153,566 Revenue contributions from transitioning clients ( 13,347) - - - - ( 13,347) Net realized investment results from equity method subsidiaries (2) - - ( 44) - - ( 44) Adjusted revenues $ 96,447 $ 36,519 $ 5,615 $ 5,182 $ ( 3,588) $ 140,175 Depreciation and amortization $ 3,071 $ 449 $ 87 $ 41 $ 3 $ 3,651 Income (loss) before taxes $ 3,983 $ 3,904 $ 785 $ 562 $ ( 2,664) $ 6,570 Pre-tax adjustments to reconcile to adjusted income from operations Adjustment for transitioning clients ( 1,726) - - - - ( 1,726) (Income) attributable to noncontrolling interests ( 4) - ( 16) - - ( 20) Net realized investment (gains) (2) - ( 112) ( 43) ( 66) - ( 221) Amortization of acquired intangible assets 2,839 69 36 5 - 2,949 Special items Integration and transaction-related costs - - - - 552 552 Charge for organizational efficiency plan - - - - 207 207 Charges associated with litigation matters - ( 30) - - 81 51 Pre-tax adjusted income (loss) from operations $ 5,092 $ 3,831 $ 762 $ 501 $ ( 1,824) $ 8,362 (In millions) Health Services Integrated Medical International Markets Group Disability and Other Corporate and Eliminations Total 2018 Revenues from external customers (1) $ 5,902 $ 31,759 $ 5,174 $ 4,335 $ - $ 47,170 Inter-segment revenues 1,154 573 - 14 ( 1,741) Net investment income 9 459 149 712 151 1,480 Total revenues $ 7,065 $ 32,791 $ 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 integration and transaction-related costs - - - - ( 123) ( 123) Adjusted revenues $ 6,606 $ 32,791 $ 5,366 $ 5,061 $ ( 1,713) $ 48,111 Depreciation and amortization $ 120 $ 466 $ 55 $ 53 $ 1 $ 695 Income (loss) before taxes $ 329 $ 3,342 $ 670 $ 497 $ ( 1,257) $ 3,581 Pre-tax adjustments to reconcile to adjusted income from operations Adjustment for transitioning clients ( 62) - - - - ( 62) (Income) attributable to noncontrolling interests - - ( 14) - - ( 14) Net realized investment losses (2) - 36 61 25 2 124 Amortization of acquired intangible assets 113 99 18 5 - 235 Special items Integration and 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 $ 380 $ 3,502 $ 735 $ 529 $ ( 403) $ 4,743 (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 certain realized investment gains (losses) of its joint ventures reported using the equity method of accounting. (In millions) Health Services Integrated Medical International Markets Group Disability and Other Corporate and Eliminations Total 2017 Revenues from external customers (1) $ 3,250 $ 28,193 $ 4,774 $ 4,363 $ - $ 40,580 Inter-segment revenues 988 476 - 12 ( 1,476) Net investment income 3 366 127 700 30 1,226 Total revenues $ 4,241 $ 29,035 $ 4,901 $ 5,075 $ ( 1,446) $ 41,806 Adjusted revenues $ 4,241 $ 29,035 $ 4,901 $ 5,075 $ ( 1,446) $ 41,806 Depreciation and amortization $ - $ 470 $ 61 $ 31 $ 4 $ 566 Income (loss) before taxes $ 288 $ 2,859 $ 667 $ 614 $ ( 822) $ 3,606 Pre-tax adjustments to reconcile to adjusted income from operations Loss attributable to noncontrolling interests - 1 1 - - 2 Net realized investment (gains) - ( 137) ( 31) ( 69) - ( 237) Amortization of acquired intangible assets - 93 17 5 - 115 Special items Debt extinguishment costs - - - - 321 321 Long-term care guaranty fund assessment - 106 - 23 - 129 Integration and transaction-related costs - - - - 126 126 U.S. tax reform - - - ( 56) - ( 56) Pre-tax adjusted income (loss) from operations $ 288 $ 2,922 $ 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. Revenue from external customers includes pharmacy revenues, premiums and fees and other revenues. The following table presents these revenues by product, premium and service type for the twelve months ended December 31: (In millions) 2019 2018 2017 Products (Pharmacy revenues) (ASC 606) Network revenues $ 50,431 $ 1,415 $ - Home delivery and specialty revenues 47,768 3,997 2,979 Other 4,900 67 - Total pharmacy revenues 103,099 5,479 2,979 Integrated Medical premiums (ASC 944) Commercial Health Insurance 12,523 10,710 9,439 Stop loss 4,328 4,008 3,483 Other 1,040 1,038 917 Government Medicare Advantage 6,314 5,832 5,534 Medicare Part D 1,699 764 764 Other 4,185 4,496 3,494 Total Integrated Medical premiums 30,089 26,848 23,631 International Markets premiums 5,266 5,043 4,619 Domestic disability, life and accident premiums 4,225 4,000 3,973 Other premiums 134 222 268 Total premiums 39,714 36,113 32,491 Services (ASC 606) Fees 9,229 5,558 5,053 Other external revenues 134 20 57 Total services 9,363 5,578 5,110 Total revenues from external customers $ 152,176 $ 47,170 $ 40,580 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) 2019 2018 2017 United States $ 147,332 $ 42,773 $ 36,555 South Korea 2,022 2,093 1,892 All other foreign countries 2,822 2,304 2,133 Total $ 152,176 $ 47,170 $ 40,580 |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and December 31, 2018. 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 quarterly consolidated results. (In millions, except per share amounts) Three Months Ended March 31, June 30, September 30, December 31, Consolidated Results 2019 Total revenues $ 37,946 $ 38,819 $ 38,556 $ 38,245 Income before income taxes 1,788 1,758 1,763 1,261 Shareholders’ net income 1,368 (1) 1,408 (1) 1,351 (1) 977 (1) Shareholders’ net income per share 1 Basic 3.61 3.73 3.60 2.63 Diluted 3.56 3.70 3.57 2.60 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 Basic 3.78 3.32 3.18 0.56 Diluted 3.72 3.29 3.14 0.55 Stock and dividend data 2019 Price range of common stock — high $ 202.02 $ 170.89 $ 185.77 $ 207.28 — low $ 158.58 $ 141.95 $ 145.51 $ 146.50 Dividends declared per common share $ 0.04 $ - $ - $ - 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 $ - $ - $ - (1) Shareholders’ net income includes the following after-tax charges (benefits), described in Note 23 to the Consolidated Financial Statements: March 31, June 30, September 30, December 31, 2019 Integration and transaction-related costs $ 108 $ 115 $ 88 $ 116 2019 Charge for organizational efficiency plan - - - 162 2019 Charges (benefits) associated with litigation matters - 64 ( 23) - Total 2019 charges $ 108 $ 179 $ 65 $ 278 March 31, June 30, September 30, December 31, 2018 Integration and transaction-related costs $ 50 $ 109 $ 108 $ 402 2018 Charges (benefits) associated with litigation matters - - 35 ( 16) 2018 U.S. tax reform - - ( 5) 3 Total 2018 charges $ 50 $ 109 $ 138 $ 389 |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2019 | |
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* Cigna* Old Cigna* (in millions) 2019 2018 2017 Revenues Net investment income $ - $ 123 $ - Intercompany interest income 6 - - Total revenues 6 123 - Operating expenses Selling, general and administrative expenses ( 85) 200 195 Total operating expenses ( 85) 200 195 Income (loss) from operations 91 ( 77) ( 195) Interest and other (expense) ( 1,032) ( 244) ( 246) Intercompany interest (expense) ( 127) ( 5) ( 18) Debt extinguishment costs - - ( 321) Realized investment (loss) - ( 1) - Loss before taxes ( 1,068) ( 327) ( 780) Income tax (benefit) ( 251) ( 74) ( 194) Loss of Parent Company ( 817) ( 253) ( 586) Equity in income of subsidiaries 5,921 2,890 2,823 Shareholders' net income 5,104 2,637 2,237 Shareholders' other comprehensive income (loss), net of tax Net unrealized appreciation (depreciation) on securities and derivatives 957 ( 365) ( 37) Net translation (losses) gains of foreign currencies ( 54) ( 152) 304 Postretirement benefits liability adjustment ( 133) 127 33 Shareholders' other comprehensive income (loss), net of tax 770 ( 390) 300 Shareholders' comprehensive income $ 5,874 $ 2,247 $ 2,537 * As described in Note 4 to the Consolidated Financial Statements, on December 20, 2018, Old Cigna became a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. 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, (in millions) 2019 2018 Assets Cash and cash equivalents $ - $ 243 Short-term investments 30 - Other current assets 4 14 Total current assets 34 257 Intercompany receivable 4,111 - Investments in subsidiaries 77,380 68,969 Other noncurrent assets 19 48 TOTAL ASSETS $ 81,544 $ 69,274 Liabilities Short-term debt $ 4,043 $ - Other current liabilities 457 418 Total current liabilities 4,500 418 Intercompany payable 2,341 4,965 Long-term debt 29,365 22,863 TOTAL LIABILITIES 36,206 28,246 Shareholders’ Equity Common stock (shares issued, 386 and 381 ; authorized, 600 ) 4 4 Additional paid-in capital 28,306 27,751 Accumulated other comprehensive loss ( 941) ( 1,711) Retained earnings 20,162 15,088 Less treasury stock, at cost ( 2,193) ( 104) TOTAL SHAREHOLDERS’ EQUITY 45,338 41,028 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 81,544 $ 69,274 See Notes to Financial 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* Cigna* Old Cigna* (in millions) 2019 2018 2017 Cash Flows from Operating Activities Shareholders’ net income $ 5,104 $ 2,637 $ 2,237 Adjustments to reconcile shareholders’ net income to net cash provided by operating activities Equity in income of subsidiaries ( 5,921) ( 2,890) ( 2,823) Dividends received from subsidiaries 2,457 - 758 Other liabilities 43 412 ( 224) Debt extinguishment costs - - 321 Other, net 20 ( 14) 333 NET CASH PROVIDED BY OPERATING ACTIVITIES 1,703 145 602 Cash Flows from Investing Activities Short-term investment purchased, net ( 30) - ( 6) Other, net - ( 27,115) ( 11) NET CASH (USED IN) INVESTING ACTIVITIES ( 30) ( 27,115) ( 17) Cash Flows from Financing Activities Net change in amounts due to affiliates 2,015 4,437 1,955 Proceeds on issuance of commercial paper 944 - 100 Payments for debt extinguishment - - ( 313) Repayment of long-term debt ( 3,002) - ( 1,250) Net proceeds on issuance of long-term debt - 22,856 1,581 Issuance of common stock 224 1 131 Common dividends paid ( 15) - ( 10) Repurchase of common stock ( 1,987) ( 32) ( 2,725) Tax withholding on stock compensation and other ( 82) ( 49) ( 63) Other ( 13) - - NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ( 1,916) 27,213 ( 594) Net (decrease) increase in cash and cash equivalents ( 243) 243 ( 9) Cash and cash equivalents, beginning of year 243 - 18 Cash and cash equivalents, end of year $ - $ 243 $ 9 * As described in Note 4 to the Consolidated Financial Statements, on December 20, 2018, Old Cigna became a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. See Notes to Financial 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 subsidiaries are recorded using the equity method of accounting. Note 2 – See Note 7 – 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. Debt repayment. During 2019, the Company repaid the $ 3.0 billion term loan. Exchange of Legacy Notes for Cigna Notes and Redemption of Medco Notes. In the fourth quarter of 2019, the Company completed an exchange of $ 12.7 billion of legacy Notes issued by Express Scripts, Medco and Old Cigna for new Notes issued by the Company with the same interest rates, maturities and other comparable terms. The exchange is reflected as a non-cash investing and financing activity. The Company entered into this exchange primarily to simplify its capital structure and reporting obligations. Additionally, in the fourth quarter of 2019, Medco, a subsidiary of the Company, fully redeemed all of the remaining outstanding Medco Notes. As a result of the exchange and redemption, guarantees of obligations under the remaining legacy Notes not exchanged, as well as under Notes issued by the Company in September 2018 to finance its acquisition of Express Scripts, were released and we are no longer required to separately present Condensed Consolidated Financial Information under Rule 3-10 of Regulation S-X. Term Loan Credit Agreement. The Company borrowed $ 3.0 billion under its Term Loan Credit Agreement to finance the Merger and to pay fees and expenses of the Merger. As of December 31, 2019, the Company repaid the term loan in full and the agreement was terminated. Notes issued to fund the Express Scripts acquisition. In the third quarter of 2018, the Company issued private placement Notes with registration rights 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. The Company completed an exchange offer to register such debt in the third quarter of 2019. Maturity of the Company’s long-term debt is as follows: (In millions) 2020 $ 3,099 2021 $ 3,812 2022 $ 1,770 2023 $ 4,699 2024 $ 714 Maturities after 2024 $ 18,638 Note 3 — Intercompany liabilities of the Company consist primarily of payables to Old Cigna of $ 2.3 billion as of December 31, 2019 and $ 4.3 billion as of and December 31, 2018. Interest was accrued at an average monthly rate of 2.58% for 2019 and 2.33% for 2018. Intercompany receivables of the Company consist primarily of net amounts due from Express Scripts Holdings of $ 3.9 billion (consisting of an $ 8.2 billion receivable offset by a $ 4.3 billion payable) as of December 31, 2019. Interest income on the receivable was accrued at an annual fixed rate of 5.5%. Interest expense on the payable was accrued at an average rate of 2.58%. Note 4 — The Company had guarantees of approximately $ 48 million as of December 31, 2019. These guarantees are primarily related to outstanding letters of credit. In 2019, 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, 2019 | |
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 2019 Allowance for doubtful accounts Accounts receivable, net $ 217 $ 51 $ - $ ( 16) $ 252 Deferred tax asset valuation allowance $ 199 $ ( 6) $ 3 $ - $ 196 Reinsurance recoverables $ 2 $ - $ - $ - $ 2 2018 Allowance for doubtful accounts Accounts receivable, net $ 207 $ 18 $ ( 3) $ ( 5) $ 217 Deferred tax asset valuation allowance (1) $ 72 $ ( 5) $ 132 $ - $ 199 Reinsurance recoverables $ 3 $ ( 1) $ - $ - $ 2 2017 Investment asset valuation reserves Commercial mortgage loans $ 5 $ 1 $ - $ ( 6) $ - Allowance for doubtful accounts Accounts receivable, net $ 200 $ 19 $ ( 11) $ ( 1) $ 207 Deferred tax asset valuation allowance $ 87 $ 11 $ ( 26) $ - $ 72 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, 2019 | |
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”). Amounts recorded in the Consolidated Financial Statements necessarily reflect management’s estimates and assumptions about medical costs, investment and receivable valuations, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment. |
Recent Accounting Changes | The Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases¸ as of January 1, 2019 (the adoption date) on a modified retrospective basis for leases in effect as of and after the adoption date. This new guidance requires balance sheet recognition of assets and liabilities arising from leases, as well as additional disclosures regarding the amount, timing and uncertainty of cash flows from leases. We implemented a new lease system and corresponding internal controls to administer our leases and facilitate compliance with this new standard. The Company elected the practical expedient package, allowing us to carry forward the assessment of 1) whether our contracts contain or are leases, 2) lease classification and 3) whether previously capitalized costs continue to qualify as initial direct costs. Upon adoption, we recognized new right-of-use assets and lease liabilities related only to our operating leases, as finance (capital) leases were already reflected on the Company’s Consolidated Balance Sheets. The impact of adoption on our net assets and retained earnings was not material, nor was there a material impact on our Consolidated Statements of Income or Cash Flows. See Note 19 for additional disclosures about the Company’s leases. Accounting Standard and Effective Date Requirements and Expected Effects of New Guidance Not Yet Adopted Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020 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, compared with the incurred loss model currently used. Upon adoption, the Company will record an allowance for estimated credit losses on the balance sheet. Subsequent changes in the allowance will be reported in current period earnings. • 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 has completed its evaluation of this new standard and its expected effects on our financial statements and disclosures. We will adopt the standard as of January 1, 2020. • An additional allowance for future expected credit losses under the new model of approximately $ 50 million after-tax will be required, primarily for reinsurance recoverables. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020 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 will adopt this new standard effective January 1, 2020, and we do not expect its impact to be significant. 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, 2022 (early adoption permitted) Requires (for insurance entities that issue long-duration contracts): • Changes in measuring our future policy benefits liability for traditional and limited-pay insurance contracts: - Assumptions used to measure cash flows (such as mortality, morbidity and lapse assumptions) to be updated at least annually with the effect of changes in those assumptions remeasured retrospectively and reflected in current period net income. - Discount rate assumptions to be updated quarterly based on an upper-medium grade fixed-income instrument yield that maximizes the use of observable market inputs with any changes reflected in other comprehensive income. • Deferred policy acquisition costs (DAC) related to long-duration insurance contracts to be amortized on a constant-level basis over the expected term of the contracts. Other related deferred or capitalized balances (such as unearned revenue liability and value of business acquired) may use this simplified amortization method. • Market risk benefits (defined as protecting the contractholder from other-than-nominal capital market risk and exposing the insurer to that risk) to be measured at fair value with changes in fair value recognized in net income each period, except for the effect of changes in the insurance entity’s credit risk to be recognized in other comprehensive income. • Additional disclosures, including disaggregated rollforwards for the liability for future policy benefits, market risk benefits, separate account liabilities and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions and methods used in measurement. • Transition methods at adoption vary: - Changes to the liability for future policy benefits to use a modified retrospective approach applied to all outstanding 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. Remeasuring the future policy benefits liability for the discount rate to be recorded through accumulated other comprehensive income at transition. - Deferred policy acquisition costs to follow the transition method used for future policyholder benefits. - Market risk benefits to be transitioned retrospectively and measured at fair value at the beginning of the earliest period presented. The difference between this fair value and carrying value to be recognized in the opening balance of retained earnings, excluding the effect of credit risk changes that are to be recognized in accumulated other comprehensive income. Expected effects: • The new guidance will apply to our long-duration insurance products predominantly within the International Markets and Group Disability and Other segments. • The Company is evaluating the impact of this guidance and expects to have significant changes to our processes, systems, controls, financial results and disclosures. We continue to monitor developing implementation guidance, particularly with respect to reinsured blocks of business. • Although we continue to evaluate the new requirements and model their impacts across various products, we are not yet able to project or estimate the magnitude or frequency of expected changes to our financial results. However, it is possible that the Company's income recognition pattern could change for several reasons: - Applying periodic assumption updates, versus the current locked-in model, may change our timing of profit or loss recognition. - Amortizing DAC on a constant-level basis over the expected term of the related contracts, versus being tied to the emergence of profit for such contracts. - Measuring market-risk benefit features, such as those provided in our GMDB product, at fair value will subject these liabilities and related reinsurance recoverables to market sensitivity, notably to interest rates. |
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. |
Revenue Recognition Policy | I. Pharmacy Revenues and Costs Pharmacy revenues . Pharmacy revenues are primarily derived from providing pharmacy benefit management services to clients and customers. Pharmacy revenues are recognized when control of the promised goods or services is transferred to clients and customers, in an amount that reflects the consideration the Company expects to receive for those goods or services. The Company provides or makes available various services supporting benefit management and claims administration and is generally obligated to provide prescription drugs to clients’ members using multiple distribution methods including retail networks, home delivery and specialty pharmacies. These 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). This performance obligation is satisfied as the business stands ready to fulfill its obligation. Revenues for dispensing prescription drugs through retail pharmacies are reported gross and consist of the prescription price (ingredient cost and dispensing fee) contracted with clients, including the customer copayment, and any associated fees for services because the Company acts as the principal in these arrangements. When a prescription is presented to a retail network pharmacy, the Company is solely responsible for customer eligibility, drug utilization review, drug-to-drug interaction review, any required clinical intervention, plan provision information, payment to the pharmacy and client billing. These revenues are recognized based on the full prescription price when the pharmacy claim is processed and approved for payment. The Company also provides benefit design and formulary consultation services to clients and negotiates separate contractual relationships with clients and network pharmacies. These factors indicate that the Company has control over these transactions until the prescription is processed. Revenues 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. 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 estimates and returns have not been material. The Company has elected the practical expedient to account for shipping and handling as a fulfillment activity. 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 compensation if we fail to meet the guarantees. Actual performance is compared to the contractual 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 performance guarantee liability was $ 1.0 billion as of December 31, 2019 and $ 895 million as of December 31, 2018. The Company administers programs through which we may receive rebates and other vendor consideration from pharmaceutical manufacturers. The amounts of such rebates or other vendor consideration shared with pharmacy benefit management services clients vary based on the contractual arrangement with the client and in some cases the type of consideration received from the pharmaceutical manufacturer. Rebates and other vendor consideration payable to pharmacy benefit management services clients are recorded as a reduction of pharmacy revenues. Estimated amounts payable to clients are based on sharing percentages in contractual arrangements between the Company and the client, and are typically adjusted when amounts are collected from pharmaceutical manufacturers. Historically, these adjustments have not been material. Other pharmacy service revenues are earned by distributing 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 are provided. Pharmacy costs . Pharmacy costs include the cost of prescriptions sold, network pharmacy claim costs and copayments. Also included are direct costs of dispensing prescriptions including supplies, shipping and handling, and direct costs associated with clinical programs, such as drug utilization management and medication adherence counseling. Home delivery and specialty pharmacy costs are recognized when the drug is shipped and retail network costs are recognized when the drug is processed and approved for payment. Rebates and other vendor consideration received when providing pharmacy benefit management services are recorded as a reduction of pharmacy costs. Rebates are recognized as prescriptions are shipped or processed and approved for payment. The Company maintains reimbursement guarantees with certain retail network pharmacies. For each such guarantee, the Company records a pharmacy and service costs payable or prepaid asset for applicable retail network claims based on our actual performance throughout the period against the contractual reimbursement rate. The Company’s contracts with certain retail pharmacies give the Company the right to adjust reimbursement rates during the annual guarantee period. Other . Incremental costs of obtaining service and pharmacy contracts for short-term arrangements are expensed as incurred. 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 recognized 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 calculated 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 are 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 our customer demographics and wellness. The Company recognizes periodic changes to 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. These adjustments are estimated quarterly 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 in the year following the contract year. Premium revenue may also include 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 prescribed 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 ACA 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 customers compared to the risk of other customers in the same state and market, considering data obtained from industry studies 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 assured. 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 recognized 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. Charges 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 9 for further information ). K. Fees and Related Expenses The majority of the Company’s service fees are derived from administrative services only (“ASO”) arrangements, fee-for-service clinical solutions and health benefit management services. ASO arrangements allow plan sponsors 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 arrangements are short-term. Contract modifications typically occur on renewal and are prospective in nature. In return for fees from these clients, the Company provides access to our participating provider networks and other services supporting benefit management, including claims administration, behavioral health services, disease management, utilization management and cost containment programs. 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. The Company may also provide performance guarantees that provide potential refunds 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 dollar amount. The Company defers revenue by recording a liability for estimated payouts associated with these guarantees within accrued expenses and other liabilities. The amount of revenue deferred is estimated for each type of guarantee using either a most likely amount or expected value method depending on 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 available and upon final reconciliation and settlement at the end of the guarantee period. Amounts accrued and paid for these performance guarantees during the reporting periods were not material Rebates from pharmaceutical manufacturers for ASO client purchases at retail pharmacies, net of amounts payable to ASO clients, were considered compensation for use of the manufacturer’s products and recorded in fees and other revenues prior to transitioning Integrated Medical’s Commercial customers to Express Scripts’ retail pharmacy network in the third quarter of 2019. After this transition, these rebates are reflected as a reduction to pharmacy costs (See “Pharmacy Costs” above). Expenses associated with administrative programs and services are recognized as incurred in selling, general and administrative expenses. The Company also earns revenue, as part of its integrated pharmacy benefits performance obligation, by offering fee-for-service clinical solutions to our clients, such as drug utilization management and medication adherence counseling. These clinical programs help clients to drive better health outcomes at a lower cost by identifying and addressing potentially unsafe or wasteful prescribing, dispensing and utilization of prescription drugs, and communicating with, or supporting communications with physicians, pharmacies and patients. Fees are billed, due and recognized at contracted rates either on a periodic basis or as services are provided. This recognition pattern aligns with the benefits from services provided. These revenues are reported in fees and other revenues in the Consolidated Statements of Income. Direct costs associated with these programs are recognized in pharmacy and other service costs, and other related expenses are recorded as incurred in selling, general and administrative expenses. The Company also earns fees by providing health benefit management solutions that drive cost reductions and improve quality outcomes. Clients are primarily sponsors of health benefit plans and fees may be stated as a per-member-per-month fee 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 the financial obligation for third-party provider costs for medical services provided to the health plan’s customers. Fees are recorded gross in fees and other revenues in the Consolidated Statements of Income because the Company is acting as a principal in arranging for and controlling the services provided by third-party network providers. Contractual fees vary based on enrollment and provider costs and are billed, due and recognized monthly. Direct costs associated with these programs are recognized in pharmacy and other service costs, and other related expenses are recorded in selling, general and administrative expenses as incurred. Certain health benefit management contracts require the Company to share the results of medical cost experience that differ from specified targets. This variable consideration is estimated at contract inception and adjusted through the contract period. The estimated profits and costs are recognized net in fees and other revenues. |
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. |
Premiums, Accounts and Notes Receivable and Reinsurance Recoverables | Reinsurance recoverables represent amounts due from reinsurers for both paid and unpaid claims of the Company’s insurance businesses and are presented net of allowances for uncollectible reinsurance. The allowances were immaterial Accounting policy. The Company’s accounts receivable balances primarily include amounts due from clients, third-party payors, customers and pharmaceutical manufacturers, and are presented net of allowances. Allowances for doubtful accounts 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 our past experience. We bill pharmaceutical manufacturers based on management’s interpretation of contractual terms and estimate a contractual allowance at the time a claim is processed based on the best information available. Contractual allowances for certain rebates receivable from pharmaceutical manufacturers are determined by reviewing payment experience and specific known items that could be adjusted under contract terms. The Company’s estimation process for contractual allowances for pharmaceutical manufacturer receivables generally results in an allowance for balances outstanding greater than 90 days. Contractual allowances for certain receivables from third-party payors are based on the contractual terms and are estimated based on the Company’s best information available at the time revenue is recognized. Receivables are written off against allowances only when such amounts are determined unrecoverable and all collection attempts have failed. We regularly review the adequacy of these allowances based on a variety of factors, including age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted. |
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. The Company records acquisition costs differently depending on the product line. Acquisition costs for: Supplemental 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 proportion 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 contracts. 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 $ 483 million in 2019, $ 406 million in 2018 and $ 322 million in 2017 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 unearned 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. |
Other Assets, including Other Intangibles | 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 and various other insurance-related assets. See Note 10 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. |
Contractholder Deposit Funds | 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, for 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 administration 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. |
Future Policy Benefits | Accounting Policy - Future Policy Benefits. 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 10 for additional information) and certain health, life and accident insurance products of our International Markets 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 adverse 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 future 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. |
Redeemable Noncontrolling Interests | Products and services are offered in Turkey through our joint venture. The Company is the majority equity holder of this joint venture, owning 51%, and accordingly, it is consolidated. Redeemable noncontrolling interest on our Consolidated Balance Sheets represents the Turkey joint venture partner’s preferred and common stock interests in the entity as of December 31, 2019 and 2018. Our joint venture partner may choose to require the Company to purchase their redeemable noncontrolling interest. We also have the right to require our joint venture partner to sell their redeemable noncontrolling interest to us. The redeemable noncontrolling interest was recorded at fair value as of the date 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 the 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. |
Accounts Payable, Accrued Expenses and Other Liabilities | Accrued expenses (current) includes financial and performance guarantee liabilities under pharmacy contracts (see section I), management compensation and various insurance-related liabilities, including experience-rated refunds, reinsurance contracts and the risk adjustment and minimum medical loss ratio rebate accruals under The Patient Protection and Affordable Care Act (the “ACA”). Other non-current liabilities include obligations for pension (see Note 16), other postretirement and postemployment benefits, GMIB contract liabilities (see Note 10) and self-insured exposures not expected to be settled within one year. The Company accrues for legal and regulatory matters when a loss contingency is both probable and estimable. The estimated loss is generally recorded in selling, general and administrative expenses and represents the Company’s best estimate of the loss contingency. If the loss estimate is a range, the Company accrues the minimum amount in the range if no amount is better than any other estimated amount in the range. Legal costs to defend the Company’s litigation and arbitration matters are expensed as incurred in cases that 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. Litigation and legal or regulatory matters that the Company has identified with a reasonable possibility of material loss are described in Note 22 to the Consolidated Financial Statements. |
Translation of Foreign Currencies | The Company generally conducts its international business through foreign operating entities that maintain assets and liabilities in local currencies that are their functional currencies. The Company uses exchange rates as of the balance sheet date to translate assets and liabilities 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 expenses into U.S. dollars. |
Mergers and Aquisitions | 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 using this same conversion ratio. Vesting periods and the remaining life 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 were generally consistent with the 2018 assumptions disclosed in Note 17, 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 for services that 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 was recognized in 2019 with the balance expected in 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 final estimates of their fair values. During 2019 the Company made immaterial measurement period adjustments to the preliminary purchase price allocation. The impact to any financial statement line item of these measurement period adjustments was not material. The following table summarizes management’s final allocation of fair values of assets acquired and liabilities assumed at the closing date. The fair value of the customer relationships and their amortization periods and method were determined using an income approach that relied heavily on projected future net cash flows including key assumptions for customer attrition, margins, and discount rates. The estimated useful lives reflect the time periods 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 Unaudited pro forma information. The following 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 Merger, 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 incurred 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. |
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 must continue to be reported along with the related reinsurance recoverables. GMDB is accounted for as reinsurance and GMIB assets and liabilities 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 the 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). Accounting policy. The Company reports GMIB liabilities and assets as derivatives at fair 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 either 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. Cash 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 of the fair value hierarchy described in Note 12 because assumptions related to future annuitant behavior are largely unobservable. |
Fair Value Measurements | The Company carries certain financial instruments at fair value in the financial statements including debt securities, certain equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when impaired or when there are observable price changes for equity securities with no readily determinable fair value. Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor. The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument’s fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available, and other market information that a market participant would use to estimate fair value. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models. The Company is responsible for determining fair value and 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 appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. We conduct an annual on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process. Level 1 Financial Assets Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities. A relatively small portion of the Company’s investment assets are classified in this category given the narrow 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. Debt and equity securities . Approximately 97 % of the Company’s investments in debt 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 debt securities 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 and economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pricing models. Less than 1 % of the fair value of investments classified in Level 2 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 that 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 short-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 widely published market observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustments for credit risk were required as of December 31, 2019 or 2018. The nature and use of these derivative financial instruments are described in Note 11. Level 3 Financial Assets and Financial Liabilities Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. The Company classifies certain newly-issued, privately-placed, complex or illiquid securities in Level 3. Approximately 2 % of debt 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 debt securities, 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 characteristics of the issuer, collateral attributes and prepayment speeds for mortgage and other asset-backed securities. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation as well as the issuer’s financial statements. Corporate and government debt securities. The significant unobservable input used to value the following corporate and government debt securities 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. 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. An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations. Significant increases in liquidity or credit spreads would result in lower fair value measurements while decreases in these inputs would result in higher fair value measurements. The 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 tables 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 best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Separate account assets classified as Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include: corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and actively-traded institutional and retail mutual fund investments. Separate account assets classified in Level 3 primarily support Cigna’s pension plans and include certain newly-issued, privately-placed, complex, or illiquid securities that are priced using methods discussed above as well as commercial mortgage loans. Separate account investments in securities partnerships, real estate, and hedge funds are generally valued based on the separate account’s ownership share of the equity of the investee (NAV as a practical expedient) including changes in the fair values of its underlying investments. Substantially all of these assets support the Cigna Pension Plans. Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions such as investments when they become impaired, including investment real estate and commercial mortgage loans, and certain equity securities with no readily determinable fair value. Equity securities with no readily determinable fair value are also measured at fair value when there are observable price changes from orderly transactions with the same issuer. |
Separate Accounts | Separate Accounts 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 generally 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 administrative services are reported in either premiums or fees and other revenues. Investments that are measured using the practical expedient of NAV are excluded from the fair value hierarchy. |
Investments | Debt securities, commercial mortgage loans, derivative financial instruments and short-term investments with contractual maturities during the next twelve months are classified on the balance sheet as current investments, unless they are held as statutory deposits or restricted for other purposes and then they are classified in long-term investments. Equity securities may include exchange traded funds that are used in our cash management strategy and classified as current investments. All other investments are classified as long-term investments. Debt Securities Accounting policy. Debt securities (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 debt securities supporting the Company’s run-off settlement annuity business is reported in future policy benefit liabilities rather than accumulated other comprehensive income (loss). The Company records impairment losses in net income for debt securities 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 debt securities before their 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 debt security (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 recognized 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 debt securities 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. Changes in the fair values of equity securities that have a readily determinable fair value are reported in net realized investment gains (losses). As of December 31, 2019, the fair values of these securities were $ 64 million and cost was $ 61 million, compared with fair value of $ 415 million and cost of $ 433 million as of December 31, 2018. Private equity securities of $ 192 million as of December 31, 2019, and $ 89 million as of December 31, 2018, without a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The amount of impairments or value changes resulting from observable price changes was not material Equity securities also include hybrid investments consisting of preferred stock with call features that are carried at fair 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 collateral. 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. Writedowns are recorded in realized investments losses. Interest income on impaired loans is only recognized when a payment is received. 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 system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on 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 property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the estimated 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’s annual in-depth review of its commercial mortgage loan investments is the primary mechanism for identifying emerging risks in the portfolio. The Company’s investment professionals completed the annual in-depth review in the second quarter of 2019 that included an analysis of each underlying property’s most recent annual financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimated the current year and future stabilized property income and fair value for each loan. The Company re-evaluates a loan’s credit quality between annual reviews if new property information is received or an event such as delinquency or a borrower’s request for restructure causes management to believe that the Company’s estimate of financial performance, fair value or the risk profile of the underlying property has been impacted. Policy Loans Accounting policy. 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 reset 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. Additionally, other long-term investments include foreign currency swaps carried at fair value. 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. 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 as discussed in Note 10. Derivatives in the Company’s separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders. Derivative instruments used by the Company typically include foreign currency swap contracts and foreign currency forward contracts. Foreign currency swap contracts periodically exchange 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 three 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. Certain 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 financial strength or credit rating thresholds. 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 12. 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 other 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. The Company’s derivative financial instruments are presented as follows: Fair value hedges of the foreign exchange-related changes in fair values of certain foreign-denominated bonds : Swap fair values are reported in long-term investments or other non-current liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in realized investment gains and losses. The portion of the swap contracts’ changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign-denominated coupons received on the designated bonds. Net interest cash flows are reported in operating activities, while exchanges of notional principal amounts are reported in investing activities. Net investment hedges of certain foreign subsidiaries that conduct their business principally in currencies other than the U.S. dollar: The fair values of the foreign currency swap and forward contracts are reported in other assets or other liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in fair value of these instruments are excluded from our effectiveness assessment and recognized in interest expense when coupon payments are accrued or ratably over the term of the instrument. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Cash flows relating to these contracts are reported in investing activities. Economic hedges for derivatives not designated as accounting hedges: Fair values of forward contracts are reported in current investments or accrued expenses and other liabilities. The changes in fair values are reported in realized investment gains and losses. Cash flows relating to these contracts are reported in investing activities. B. 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. Accounting policy. Realized investment gains and losses are based on specifically identified assets and results 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. |
Variable Interest Entities | When the Company becomes involved with a variable interest entity and 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 is considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities and 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. |
Leases | Accounting policy. The Company determines if an arrangement is a lease and its lease classification (operating or finance) at inception. Beginning in the first quarter of 2019, both operating and finance leases result in (1) a right-of-use (“ROU”) asset that represents our right to use the underlying asset for the lease term and (2) a lease liability that represents our obligation to make lease payments arising from the lease. These lease assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Most of the Company’s leases do not provide an implicit rate, so the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease pre-payments made and excludes lease incentives for operating leases. The Company’s expected life of a lease may consider options to extend or terminate a lease when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components that are accounted for as a single lease component. Variable lease payments are expensed as incurred and represent amounts that are neither fixed in nature, such as maintenance and other services provided by the lessor, nor tied to an index or rate. |
Pension and other postretirement benefits | Accounting policy. The Company measures the assets and liabilities of its domestic pension plans as of December 31. Benefit obligations are measured at the present value of estimated future payments based on actuarial assumptions. The Company uses the “corridor” method to account for changes in the benefit obligation when actual results differ from those assumed, or when assumptions change. These changes are called net unrecognized actuarial gains (losses). 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 benefit 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 valuation 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. In 2019, to better align with our mortality experience, the Company adopted the “White Collar mortality table with MP 2019 projection scale” to value our benefit obligations. The Company sets discount rates by applying actual annualized yields for high quality bonds at various durations to the expected cash flows of the pension liabilities. A discount rate curve is constructed 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 believes that this curve is representative of the yields that the Company is 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 investment 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 including expected domestic and foreign GDP growth, employment levels and inflation. See Note 12 for further details regarding how fair value is determined, including the level within the fair value hierarchy and the procedures we use to validate fair value measurements. The Company classifies substantially all debt securities 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. Securities partnerships, real estate and hedge funds are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. See Note 12 for additional disclosures related to these assets invested in the separate accounts of the Company’s subsidiaries. Certain securities as described in Note 12, as well as commercial mortgage loans and guaranteed deposit account contracts, are classified in Level 3 because unobservable inputs used in their valuation are significant. |
Employee Incentive Plans | Prior to the acquisition of Express Scripts, the Company issued shares from Treasury stock for these awards. Following the acquisition, original issue shares were used. Awards 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. Information in this footnote includes the effect of the Express Scripts rollover awards unless otherwise indicated. The Company records compensation expense for stock and option awards over their vesting periods primarily 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. Options vest over periods ranging from one year 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 fair 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 of 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. 2019 2018 2017 Dividend yield 0.0% 0.0% 0.0% Expected volatility 30.0% 35.0% 35.0% Risk-free interest rate 2.5% 2.5% 1.8% Expected option life 4.4 years 4.4 years 4.3 years Weighted average fair value of options $ 53.10 $ 64.18 $ 46.38 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 that 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. Fair value is determined at the grant date for “market condition” SPSs using a Monte Carlo simulation model and not subsequently adjusted regardless of the final outcome. Expense is initially accrued for “performance condition” SPSs based on the most likely outcome, but evaluated for adjustment each period for updates in the expected outcome. Expense is adjusted to the actual outcome (number of shares awarded times the share price at the grant date) at the end of the performance period. Compensation Cost and Tax Effects of Share-based Compensation The Company records tax benefits in shareholders’ net income during the vesting period based on the amount of expense being recognized. The difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in net income when 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, based on those reporting units’ relative fair values. As a result, goodwill is primarily reported in the Health Services segment ($ 33.7 10.5 0.4 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 a market approach or a discounted 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 within that reporting unit. Projections of future cash flows for each reporting unit are consistent with our annual planning process for revenues, pharmacy costs, benefits expenses, 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 4. B. Other Intangibles Accounting policy. The Company’s other intangible assets primarily 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 including key assumptions for customer attrition and discount rates. The Company’s definite-lived intangible assets are amortized on an accelerated or straight-line basis, reflecting their pattern of economic benefits, over periods from one 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. The Company’s amortized intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected future undiscounted cash flows generated by the underlying asset group is less than the carrying amount of the asset group, the Company recognizes an impairment charge equal to the difference between the carrying value of the asset group and its estimated fair value. The Company’s indefinite-lived intangible assets are each reviewed for impairment at least annually by comparing their fair value with their carrying value. If the carrying value exceeds fair value, that excess is recognized as an impairment loss. There were no material |
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 included 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 useful life of each asset as follows: buildings and improvements, 10 40 three five three seven three 10 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 circumstances 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 | Note 21 – Income Taxes Accounting policy. Deferred income taxes are reflected in the Consolidated Balance Sheets for differences between the financial and income tax reporting bases of the Company’s 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 a valuation allowance is established to the extent this standard is not met. The deferred income tax provision generally 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 believes the probability that the positions will be sustained is less than 50 percent. The liabilities for uncertain tax positions are classified as current when the position is expected to be settled within 12 months or the statute of limitation expires within 12 months. Income taxes attributable to the Company’s foreign operations are generally provided using the respective foreign jurisdictions’ tax rate. Management believes that future results will be sufficient to realize a majority of the Company’s gross deferred tax assets. We establish valuation allowances against deferred tax assets when we determine that it is more likely than not that the asset will not be recognized. Valuation allowances have been established against certain federal, state and foreign capital and operating losses. There are multiple expiration dates associated with these losses, though a significant portion expire in 2021. |
Commitments and Contingencies | 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 service 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. Disputed tax matters arising from audits by the Internal Revenue Service 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 21. Pending litigation and legal or regulatory matters that the Company has identified with a reasonable possibility of material loss are described below. For 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. |
Assets and Liabilities of Business Held for Sale | Accounting Policy. The Company classifies assets and liabilities as held for sale (“disposal group”) when management commits to a plan to sell the disposal group, the sale is probable within one year and the disposal group is available for immediate sale in its present condition. The Company considers various factors, particularly whether actions required to complete the plan indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. Assets held for sale are measured at the lower of carrying value or fair value less costs to sell. Any loss resulting from the measurement is recognized in the period the held-for-sale criteria are met. Conversely, gains are not recognized until the date of the sale. When the disposal group is classified as held for sale, depreciation and amortization ceases and the Company tests the assets for impairment. In December 2019, Cigna entered into a definitive agreement to sell its Group Disability and Life insurance business to New York Life Insurance Company for $ 6.3 billion. The sale is expected to close in the third quarter of 2020 following applicable regulatory approvals and other customary closing conditions. The Company believes this sale is probable and has aggregated and classified the assets and liabilities directly associated with the pending sale of its Group Disability and Life insurance business as held for sale and has reported them separately on our Consolidated Balance Sheet as of December 31, 2019. The assets and liabilities held for sale were as follows: |
Segment Information | See Note 1 for a description of our segments. Effective with the first quarter of 2019, the Company began allocating compensation cost for stock options to the segments. Prior year segment information was not restated for this change. A description of our basis for reporting segment operating results is outlined below. Intersegment transactions primarily reflect pharmacy sales to insured customers of the Integrated Medical segment. These and other transactions are eliminated in consolidation. The Company uses “pre-tax adjusted income from operations” and “adjusted revenues” as its principal financial measures of segment operating performance because management believes they best reflect the underlying results of business operations and permit 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 Anthem and Coventry Health Care, Inc. (the “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 sheet dates, as well as gains and losses associated 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 ongoing 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. The Company does not report total assets by segment since this is not a metric used to allocate resources or evaluate segment performance. Adjusted revenues is defined as revenues excluding: 1) revenue contributions from transitioning clients; 2) the Company’s share of certain realized investment results of its joint ventures reported in the International Markets segment using the equity method of accounting and 3) special items, if any. |
Accounting Policies - Unpaid Cl
Accounting Policies - Unpaid Claims and Claims Expenses (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Integrated Medical [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liabilities for unpaid claims and claims expenses | 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. Accounting policy. The Company uses actuarial principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best estimate of the ultimate liability along with a margin for adverse deviation. This approach is consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions. The 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 when actual experience differs from these assumptions. Additionally, the Company evaluates expected future developments and emerging trends that may impact key assumptions. The process used to determine 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 trend. 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) provider claims submission rates; 3) membership and 4) the mix of products. The Company uses historical completion factors combined with an analysis of current trends and operational factors to develop current estimates of completion factors. The Company estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. 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 operational considerations for 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 health benefits offered, including inpatient, outpatient and pharmacy, the impact of copays and deductibles, changes in provider practices and changes in consumer demographics and consumption behavior. Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for certain business for which the Company administers the plan benefits without any right of offset 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, the 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 and 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. |
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 Group Disability and Other and International Markets. Unpaid claims and claim expenses within the Group Disability and Other and International Markets segments consist of (1) case or claims reserves for reported claims that are unpaid as of the balance sheet date; (2) incurred but not reported reserves for claims when 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 these 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 payment 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. The Company immediately records an adjustment in medical costs and other benefit expenses w hen estimates of these liabilities change. Liabilities for unpaid claims and claim expenses within the group disability and life business reflect the following primary products: long-term and short-term disability, life insurance and accident coverages. The majority of the Company’s liability for disability claims consists of “disabled life reserves”, measured as the present value of estimated future benefit payments, including expected development, for each reported claim that is currently receiving benefit payments over the expected disability period or pending a decision on eligibility for benefits. 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 disability 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 Social 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 finalized. The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part of pricing and reserving. Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims and reported in medical costs and other benefit expenses in the income statement. This interest 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. |
Accounting Policies - Guarantee
Accounting Policies - Guaranteed Minimum Death Benefits (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Activity in future policy benefits reserves for GMDB business [Line Items] | |
Future Policy Benefits | Accounting Policy - Future Policy Benefits. 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 10 for additional information) and certain health, life and accident insurance products of our International Markets 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 adverse 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 future 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Requirements and Effects of New Accounting Guidance | Accounting Standard and Effective Date Requirements and Expected Effects of New Guidance Not Yet Adopted Measurement of Credit Losses on Financial Instruments (ASU 2016-13) Required as of January 1, 2020 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, compared with the incurred loss model currently used. Upon adoption, the Company will record an allowance for estimated credit losses on the balance sheet. Subsequent changes in the allowance will be reported in current period earnings. • 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 has completed its evaluation of this new standard and its expected effects on our financial statements and disclosures. We will adopt the standard as of January 1, 2020. • An additional allowance for future expected credit losses under the new model of approximately $ 50 million after-tax will be required, primarily for reinsurance recoverables. Simplifying the Test for Goodwill Impairment (ASU 2017-04) Required as of January 1, 2020 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 will adopt this new standard effective January 1, 2020, and we do not expect its impact to be significant. 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, 2022 (early adoption permitted) Requires (for insurance entities that issue long-duration contracts): • Changes in measuring our future policy benefits liability for traditional and limited-pay insurance contracts: - Assumptions used to measure cash flows (such as mortality, morbidity and lapse assumptions) to be updated at least annually with the effect of changes in those assumptions remeasured retrospectively and reflected in current period net income. - Discount rate assumptions to be updated quarterly based on an upper-medium grade fixed-income instrument yield that maximizes the use of observable market inputs with any changes reflected in other comprehensive income. • Deferred policy acquisition costs (DAC) related to long-duration insurance contracts to be amortized on a constant-level basis over the expected term of the contracts. Other related deferred or capitalized balances (such as unearned revenue liability and value of business acquired) may use this simplified amortization method. • Market risk benefits (defined as protecting the contractholder from other-than-nominal capital market risk and exposing the insurer to that risk) to be measured at fair value with changes in fair value recognized in net income each period, except for the effect of changes in the insurance entity’s credit risk to be recognized in other comprehensive income. • Additional disclosures, including disaggregated rollforwards for the liability for future policy benefits, market risk benefits, separate account liabilities and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions and methods used in measurement. • Transition methods at adoption vary: - Changes to the liability for future policy benefits to use a modified retrospective approach applied to all outstanding 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. Remeasuring the future policy benefits liability for the discount rate to be recorded through accumulated other comprehensive income at transition. - Deferred policy acquisition costs to follow the transition method used for future policyholder benefits. - Market risk benefits to be transitioned retrospectively and measured at fair value at the beginning of the earliest period presented. The difference between this fair value and carrying value to be recognized in the opening balance of retained earnings, excluding the effect of credit risk changes that are to be recognized in accumulated other comprehensive income. Expected effects: • The new guidance will apply to our long-duration insurance products predominantly within the International Markets and Group Disability and Other segments. • The Company is evaluating the impact of this guidance and expects to have significant changes to our processes, systems, controls, financial results and disclosures. We continue to monitor developing implementation guidance, particularly with respect to reinsured blocks of business. • Although we continue to evaluate the new requirements and model their impacts across various products, we are not yet able to project or estimate the magnitude or frequency of expected changes to our financial results. However, it is possible that the Company's income recognition pattern could change for several reasons: - Applying periodic assumption updates, versus the current locked-in model, may change our timing of profit or loss recognition. - Amortizing DAC on a constant-level basis over the expected term of the related contracts, versus being tied to the emergence of profit for such contracts. - Measuring market-risk benefit features, such as those provided in our GMDB product, at fair value will subject these liabilities and related reinsurance recoverables to market sensitivity, notably to interest rates. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | (In millions) 2019 2018 Noninsurance customer receivables $ 5,143 $ 4,988 Pharmaceutical manufacturers receivable (1) 3,439 3,321 Insurance customer receivables 2,321 1,888 Other receivables 334 276 Total 11,237 10,473 Accounts receivable, net classified as assets held for sale ( 521) Accounts receivable, net per Consolidated Balance Sheets $ 10,716 $ 10,473 (1) Includes receivables from service contracts with customers of $ 285 million at December 31, 2019 and $ 406 million at December 31, 2018. |
Mergers, Acquisitions and Dis_2
Mergers, Acquisitions and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 shareholders $ 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 shareholders 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 7,832 Inventories 2,472 Other current assets 600 Property and equipment 2,924 Goodwill 38,364 Other identifiable intangible assets 38,725 Other assets acquired, non-current 314 Total assets acquired 94,748 Other current liabilities 18,479 Long-term debt, including current portion 12,816 Deferred income tax liabilities 9,558 Other liabilities, non-current 1,085 Total liabilities acquired 41,938 Net assets acquired $ 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) 2018 2017 Total revenues $ 149,544 $ 143,288 Shareholders’ net income $ 5,632 $ 4,435 2019 2018 2017 (In millions) Before-tax After-tax Before-tax After-tax Before-tax After-tax Integration costs $ $ $ $ $ $ Interest expense on newly-issued debt - - 227 179 - - Net investment income on debt proceeds - - ( 123) ( 97) - - Charitable contributions - - 200 158 - - Legal and advisory fees 53 41 204 185 36 23 Bridge facility fees - - 140 111 - - All other transaction-related costs 499 386 204 133 90 69 Tax (benefit) - previously non-deductible costs - - ( 59) Integration and transaction-related costs, net $ 552 $ 427 $ 852 $ 669 $ 126 $ 33 |
Assets and Liabilities of Bus_2
Assets and Liabilities of Business Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and liabilities held for sale | (In millions) December 31, 2019 Cash and cash equivalents $ 743 Accounts receivable, net 521 Investments 7,709 Other assets 539 Total assets held for sale $ 9,512 Insurance and contractholder liabilities $ 6,308 Other liabilities 504 Total liabilities held for sale $ 6,812 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 2019 2018 2017 (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 $ 5,104 $ 5,104 $ 2,637 $ $ 2,637 $ 2,237 $ 2,237 Shares Weighted average 375,919 375,919 246,652 246,652 250,892 250,892 Common stock equivalents 3,898 3,898 3,573 3,573 4,180 4,180 Total shares 375,919 3,898 379,817 246,652 3,573 250,225 250,892 4,180 255,072 EPS $ 13.58 $ ( 0.14) $ 13.44 $ 10.69 $ ( 0.15) $ 10.54 $ 8.92 $ ( 0.15) $ 8.77 (In millions) 2019 2018 2017 Anti-dilutive options 3.5 0.9 0.9 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt [Table] [Abstract] | |
Short-term and Long-term Debt | December 31, December 31, (In millions) Issuer(s) 2019 2018 Short-term debt Current maturities: $ 1,000 million, 2.25% Notes Express Scripts (1) $ - $ 995 Current maturities: $ 337 million, 7.25% Notes ESI (1) - 343 Current maturities: $ 1,000 million, Floating Rate Notes Cigna 999 - Current maturities: $ 300 million, 5.125% Notes Old Cigna 300 - Current maturities: $ 1,750 million, 3.2% Notes Cigna 1,748 - Current maturities: $ 349 million, 4.125% Notes Cigna 351 - Current maturities: $ 500 million, 2.6% Notes Express Scripts 496 - Current maturities: $ 400 million, Floating Rate Notes Express Scripts 400 - Current maturities: $ 250 million, 4.375% Notes Old Cigna 249 - Commercial paper Cigna/Old Cigna 944 1,500 Other, including finance leases Other 27 117 Total short-term debt $ 5,514 $ 2,955 Long-term debt $ 250 million, 4.375% Notes due 2020 Old Cigna $ - $ 248 $ 300 million, 5.125% Notes due 2020 Old Cigna - 298 $ 500 million, 4.125% Notes due 2020 Medco (1) - 506 $ 500 million, 2.6% Notes due 2020 Express Scripts - 493 $ 1,750 million, 3.2% Notes due 2020 Cigna - 1,743 $ 400 million, Floating Rate Notes due 2020 Express Scripts - 399 $ 1,000 million, Floating Rate Notes due 2020 Cigna - 997 $ 3,000 million, Floating Rate Term Loan due 2021 Cigna - 2,997 $ 500 million, 3.3% Notes due 2021 Cigna/Express Scripts (2) 499 499 $ 300 million, 4.5% Notes due 2021 Cigna/Old Cigna (2) 298 297 $ 78 million, 6.37% Notes due 2021 Other 78 78 $ 1,000 million, Floating Rate Notes due 2021 Cigna 998 996 $ 1,250 million, 3.4% Notes due 2021 Cigna 1,247 1,245 $ 1,248 million, 4.75% Notes due 2021 Cigna/Express Scripts (2) 1,272 1,285 $ 750 million, 4% Notes due 2022 Cigna/Old Cigna (2) 747 746 $ 999 million, 3.9% Notes due 2022 Cigna/Express Scripts (2) 999 998 $ 500 million, 3.05% Notes due 2022 Cigna/Express Scripts (2) 485 481 $ 17 million, 8.3% Notes due 2023 Cigna/Old Cigna (2) 17 17 $ 100 million, 7.65% Notes due 2023 Cigna/Old Cigna (2) 100 100 $ 700 million, Floating Rate Notes due 2023 Cigna 698 697 $ 1,000 million, 3% Notes due 2023 Cigna/Express Scripts (2) 966 959 $ 3,100 million, 3.75% Notes due 2023 Cigna 3,088 3,085 $ 1,000 million, 3.5% Notes due 2024 Cigna/Express Scripts (2) 970 966 $ 900 million, 3.25% Notes due 2025 Cigna/Old Cigna (2) 895 895 $ 2,200 million, 4.125% Notes due 2025 Cigna 2,188 2,187 $ 1,500 million, 4.5% Notes due 2026 Cigna/Express Scripts (2) 1,506 1,508 $ 1,500 million, 3.4% Notes due 2027 Cigna/Express Scripts (2) 1,396 1,386 $ 259 million, 7.875% Debentures due 2027 Cigna/Old Cigna (2) 259 259 $ 600 million, 3.05% Notes due 2027 Cigna/Old Cigna (2) 595 595 $ 3,800 million, 4.375% Notes due 2028 Cigna 3,776 3,774 $ 45 million, 8.3% Step Down Notes due 2033 Cigna/Old Cigna (2) 45 45 $ 190 million, 6.15% Notes due 2036 Cigna/Old Cigna (2) 190 190 $ 2,200 million, 4.8% Notes due 2038 Cigna 2,178 2,178 $ 121 million, 5.875% Notes due 2041 Cigna/Old Cigna (2) 119 119 $ 449 million, 6.125% Notes due 2041 Cigna/Express Scripts (2) 491 493 $ 317 million, 5.375% Notes due 2042 Cigna/Old Cigna (2) 315 315 $ 1,500 million, 4.8% Notes due 2046 Cigna/Express Scripts (2) 1,465 1,465 $ 1,000 million, 3.875% Notes due 2047 Cigna/Old Cigna (2) 988 988 $ 3,000 million, 4.9% Notes due 2048 Cigna 2,964 2,964 Other, including finance leases Other 61 32 Total long-term debt $ 31,893 $ 39,523 (1) Express Scripts Holding Company is identified as Express Scripts. Express Scripts, Inc. is identified as ESI. Medco Health Solutions, Inc. is identified as Medco. (2) Due to the Exchange of legacy Notes for Cigna Notes, there are two series of outstanding Notes. Scheduled Maturities (In millions) Long-term Debt (1) Finance Leases 2020 $ 4,549 $ 27 2021 $ 4,376 $ 18 2022 $ 2,249 $ 16 2023 $ 4,917 $ 7 2024 $ 1,000 $ 5 Maturities after 2024 $ 19,581 $ 15 (1) Long-term debt maturity amounts include current maturities of long-term debt and exclude maturities of finance leases. |
Common and Preferred Stock (Tab
Common and Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Common And Preferred Stock [Abstract] | |
Schedule of issued shares | (Shares in thousands) 2019 2018 2017 Common: Par value $ 0.25; 600,000 shares authorized - Old Cigna Outstanding - January 1, 243,967 256,869 Issued for stock option exercises and other benefit plans 1,118 2,761 Repurchased common stock ( 1,300) ( 15,663) Balance, December 20, 2018 (Merger Date) 243,785 Exchange of Old Cigna shares for shares of Cigna ( 243,785) Outstanding - December 31, - 243,967 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, - 52,178 Issued - December 31, - 296,145 Common: Par value $ 0.01; 600,000 shares authorized - Cigna Outstanding - January 1, 380,924 - 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 3,413 91 Repurchased common stock ( 11,806) ( 289) Outstanding - December 31, 372,531 380,924 Treasury stock 13,012 570 Issued - December 31, 385,543 381,494 |
Insurance and Contractholder _2
Insurance and Contractholder Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details / activity | December 31, 2019 December 31, 2018 (In millions) Current Non-current Total Current Non-current Total Contractholder deposit funds $ 600 $ 7,139 $ 7,739 $ 641 $ 7,365 $ 8,006 Future policy benefits 553 9,281 9,834 740 8,981 9,721 Unpaid claims and claim expenses Integrated Medical 2,875 17 2,892 2,678 19 2,697 Other segments 2,529 3,474 6,003 2,394 3,230 5,624 Unearned premiums 453 360 813 348 379 727 Total 7,010 20,271 27,281 6,801 19,974 26,775 Insurance and contractholder liabilities classified as liabilities held for sale (1) ( 2,089) ( 4,219) ( 6,308) Insurance and contractholder liabilities per Consolidated Balance Sheets $ 4,921 $ 16,052 $ 20,973 $ 6,801 $ 19,974 $ 26,775 (1) Amounts classified as liabilities held for sale primarily include $ 4.9 billion of unpaid claims, $ 717 million of contractholder deposit funds and $ 653 million of future policy benefits. (In millions) 2019 2018 2017 Balance at January 1, $ 2,697 $ 2,420 $ 2,261 Less: Reinsurance and other amounts recoverable 264 262 273 Balance at January 1, net 2,433 2,158 1,988 Acquired, net - 40 - Incurred costs related to: Current year 24,368 21,331 19,334 Prior years ( 165) ( 173) ( 227) Total incurred 24,203 21,158 19,107 Paid costs related to: Current year 21,851 18,978 17,179 Prior years 2,196 1,945 1,758 Total paid 24,047 20,923 18,937 Balance at December 31, net 2,589 2,433 2,158 Add: Reinsurance and other amounts recoverable 303 264 262 Balance at December 31, $ 2,892 $ 2,697 $ 2,420 (In millions) 2019 (1) 2018 International Markets $ 844 $ 758 Group Disability and Other Group Disability and Life 4,972 4,674 Other Operations 187 192 Total Group Disability and Other 5,159 4,866 Unpaid claims and claim expenses Group Disability and Other and International Markets $ 6,003 $ 5,624 (1) Includes Unpaid claims amounts classified as Liabilities held for sale. |
Details of unpaid claim discounted liability | (In billions) 2019 (1) 2018 Discounted liabilities $ 4.5 $ 4.2 Aggregate amount of discount $ 1.2 $ 1.1 Range of discount rates 4.0 % - 5.2 % 4.2 % - 5.2 % (1) Includes unpaid claims amounts classified as Liabilities held for sale. |
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 2019 Liabilities (1) Frequency 2012 $ 995 $ 951 $ 889 $ 876 $ 883 $ 880 $ 861 $ 860 $ - 21,186 2013 1,063 1,037 1,062 1,072 1,057 1,032 1,030 - 23,526 2014 1,158 1,129 1,167 1,146 1,094 1,081 - 25,324 2015 1,184 1,154 1,185 1,160 1,148 - 25,781 2016 1,246 1,184 1,199 1,202 - 25,577 2017 1,226 1,193 1,207 1 23,959 2018 1,348 1,267 10 25,154 2019 1,434 533 13,061 Cumulative incurred claims for the periods presented $ 9,229 (1) Incurred but not reported amounts are included in 2019 incurred claims. Cumulative Paid Claims Unaudited Accident Year 2012 2013 2014 2015 2016 2017 2018 2019 2012 $ 81 $ 288 $ 429 $ 504 $ 571 $ 621 $ 661 $ 693 2013 92 342 503 600 670 732 780 2014 111 379 575 667 743 803 2015 114 417 603 702 783 2016 122 411 598 709 2017 110 396 590 2018 116 434 2019 126 Cumulative paid claims for the periods presented $ 4,918 All outstanding liabilities for the periods presented, net of reinsurance $ 4,311 All outstanding liabilities prior to 2012, net of reinsurance 771 Impact of discounting ( 891) Liability for long-term disability unpaid claims and claim expenses, net of reinsurance (1)(2) $ 4,191 (1) Includes Unpaid claims amounts classified as Liabilities held for sale. (2) Includes approximately $ 3.5 billion of disabled life reserves for individuals on long-term disability. |
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 $ 4,191 Other short-duration insurance books of business, net of reinsurance 652 Liabilities for unpaid claims and claim expenses, net of reinsurance 4,843 Reinsurance recoverable on unpaid claims – Group Disability and Life businesses Long-term disability 117 Other short-duration insurance books of business 12 Total reinsurance recoverable on unpaid claims 129 Total liability for unpaid claims and claim expenses – Group Disability and Life businesses 4,972 International Markets segment 844 Other Operations 187 Unpaid claims and claim expenses - Group Disability and Other and International Markets (1) $ 6,003 (1) Includes Unpaid claims amounts classified as Liabilities held for sale. |
Integrated Medical [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Variances in incurred costs related to prior years' medical costs payable | Year Ended (Dollars in millions) December 31, 2019 December 31, 2018 $ % (1) $ % (2) Actual completion factors $ 90 0.4 % $ 92 0.5 % Medical cost trend 75 0.4 72 0.4 Other - - 9 - Total favorable variance $ 165 0.8 % $ 173 0.9 % (1) Percentage of current year incurred costs as reported for the year ended December 31, 2018. (2) Percentage of current year incurred costs as reported for the year ended December 31, 2017. |
Incurred and paid claims development | Incurred Costs Incurral Year 2018 (Unaudited) 2019 Unpaid Claims & Claim Expenses Claims Frequency (In millions) 2018 $ 20,458 $ 20,320 $ 58 2.9 million 2019 23,306 $ 2,386 3.5 million Cumulative incurred costs plus acquired for the periods presented $ 43,626 Cumulative Costs Paid Incurral Year 2018 (Unaudited) 2019 2018 $ 18,192 $ 20,262 2019 20,920 Cumulative paid costs for the periods presented $ 41,182 Outstanding liabilities for the periods presented, net of reinsurance $ 2,444 Other long-duration liabilities not included in development table above 145 Net unpaid claims and claims expenses - Integrated Medical 2,589 Reinsurance and other amounts recoverable 303 Unpaid claims and claim expenses - Integrated Medical $ 2,892 |
Intenational Markets and Group Disability and Life [Member] | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |
Liability balance details / activity | (In millions) 2019 (1) 2018 2017 Balance at January 1, $ 5,432 $ 5,274 $ 4,997 Less: Reinsurance 156 140 123 Balance at January 1, net 5,276 5,134 4,874 Incurred claims related to: Current year 5,616 5,350 5,097 Prior years Interest accretion 152 156 163 All other incurred ( 40) ( 147) ( 43) Total incurred 5,728 5,359 5,217 Paid claims related to: Current year 3,488 3,391 3,229 Prior years 1,873 1,808 1,757 Total paid 5,361 5,199 4,986 Acquisitions - 23 - Foreign currency ( 11) ( 41) 29 Balance at December 31, net 5,632 5,276 5,134 Add: Reinsurance 184 156 140 Balance at December 31, $ 5,816 $ 5,432 $ 5,274 (1) Includes unpaid claims amounts classified as Liabilities held for sale. |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Effects Of Reinsurance [Line Items] | |
Components of reinsurance recoverables | (Dollars in millions) December 31, December 31, Collateral and Other Terms Line of Business Reinsurer(s) 2019 (1) 2018 at December 31, 2019 Ongoing Operations Integrated Medical, International Markets, Group Disability, COLI (1) Various $ 514 $ 464 Balances range from less than $ 1 million up to $ 72 million. Approximately 70% of the balance is from companies rated as investment grade by Standard & Poor’s. Total recoverables related to ongoing operations 514 464 Acquisition, disposition or runoff activities Individual Life and Annuity (sold in 1998) Lincoln National Life and Lincoln Life & Annuity of New York 3,174 3,312 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 787 893 100% secured by assets in a trust. Retirement Benefits Business (sold in 2004) Prudential Retirement Insurance and Annuity 711 787 100% secured by assets in a trust. Supplemental Benefits Business (2012 acquisition) Great American Life 238 261 100% secured by assets in a trust. Other Various 71 87 100% secured by assets in a trust or other deposits. Total recoverables related to acquisition, disposition or runoff activities 4,981 5,340 Total reinsurance recoverables $ 5,495 $ 5,804 (1) Includes $ 173 million of recoverables classified as Assets held for sale. |
Effects of Reinsurance | (In millions) 2019 2018 2017 Premiums Short-duration contracts Direct $ 35,690 $ 32,148 $ 28,838 Assumed 64 77 199 Ceded ( 203) ( 182) ( 150) Total short-duration contract premiums 35,551 32,043 28,887 Long-duration contracts Direct 4,352 4,268 3,748 Assumed 105 116 130 Ceded Individual life insurance and annuity business sold ( 126) ( 133) ( 143) Other ( 168) ( 181) ( 131) Total long-duration contract premiums 4,163 4,070 3,604 Total premiums $ 39,714 $ 36,113 $ 32,491 Reinsurance recoveries Individual life insurance and annuity business sold $ 238 $ 249 $ 259 Other 157 203 66 Total reinsurance recoveries $ 395 $ 452 $ 325 |
Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Account value, net amount at risk and number of contractholders | December 31, December 31, (Dollars in millions, excludes impact of reinsurance ceded) 2019 2018 Account value $ 9,110 $ 8,402 Net amount at risk $ 1,764 $ 2,466 Average attained age of contractholders (weighted by exposure) 76 74 Number of contractholders (estimated) 200,000 220,000 |
Variable Annuity [Member] | Guaranteed Minimum Income Benefit [Member] | |
Effects Of Reinsurance [Line Items] | |
Components of reinsurance recoverables | (In millions) Line of Business Reinsurer December 31, 2019 December 31, 2018 Collateral and Other Terms at December 31, 2019 GMIB Berkshire $ 332 $ 341 100% were secured by assets in a trust. Sun Life Assurance Company of Canada 202 208 Liberty Re (Bermuda) Ltd. 179 184 96% were secured by assets in a trust. Total GMIB recoverables reported in other current assets and other assets $ 713 $ 733 |
Investments, Investment Incom_2
Investments, Investment Income and Gains and Losses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Investments [Line Items] | |
Investments by category | December 31, 2019 (1) December 31, 2018 (In millions) Current Long-term Total Current Long-term Total Debt securities $ 928 $ 22,827 $ 23,755 $ 1,320 $ 21,608 $ 22,928 Equity securities - 303 303 377 171 548 Commercial mortgage loans - 1,947 1,947 32 1,826 1,858 Policy loans - 1,357 1,357 - 1,423 1,423 Other long-term investments - 2,403 2,403 - 1,901 1,901 Short-term investments 423 - 423 316 - 316 Total 1,351 28,837 30,188 2,045 26,929 28,974 Investments classified as assets held for sale (1) ( 414) ( 7,295) ( 7,709) Investments per Consolidated Balance Sheets $ 937 $ 21,542 $ 22,479 $ 2,045 $ 26,929 $ 28,974 (1) The table above includes $ 7.7 billion of investments associated with the Group Disability and Life business that is held for sale to New York Life. Under the terms of the definitive agreement, some of the assets currently associated with the Group Disability and Life business can be substituted for other assets. The assets that will transfer to New York Life will be primarily debt securities and to a lesser extent commercial mortgage loans and short-term investments. |
Other long-term investments | Unfunded Carrying value as of December 31, Commitments as of (In millions) 2019 2018 December 31, 2019 Real estate investments $ 788 $ 679 $ 551 Securities partnerships 1,409 1,045 1,379 Other 206 177 24 Total $ 2,403 $ 1,901 $ 1,954 |
Schedule of short-term investments and cash equivalents | December 31, December 31, (In millions) 2019 2018 Corporate securities $ 1,985 $ 581 Federal government securities $ 472 $ 82 Foreign government securities $ 65 $ 238 Money market funds $ 631 $ 1,174 |
Schedule of derivative instruments | Notional Value as of (In millions) December 31, December 31, Purpose Type of Instrument 2019 2018 Fair value hedge: To hedge the foreign exchange-related changes in fair values of certain foreign-denominated bonds, primarily Euro and British pounds. The notional value of these derivatives matches the amortized cost of the hedged bonds. Foreign currency swap contracts $ 817 $ 525 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 and Korean Won. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swap contracts and foreign currency forward contracts $ 844 $ 439 Economic hedge: To hedge the foreign exchange-related changes in fair values of a U.S. dollar-denominated investment 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 investment portfolio. Foreign currency forward contracts $ 410 $ 309 |
Components of pre-tax net investment income | (In millions) 2019 2018 2017 Debt Securities $ 986 $ 1,009 $ 946 Equity securities 5 28 14 Commercial mortgage loans 88 78 81 Policy loans 66 70 69 Other long-term investments 167 156 124 Short-term investments and cash 131 194 42 Total investment income 1,443 1,535 1,276 Less investment expenses 53 55 50 Net investment income $ 1,390 $ 1,480 $ 1,226 |
Realized gains and losses on investments | (In millions) 2019 2018 2017 Net realized investment gains (losses), excluding investment asset write-downs $ 189 $ ( 34) $ 268 Write-downs on debt securities ( 12) ( 43) ( 26) Write-downs on other invested assets - ( 4) ( 5) Net realized investment gains (losses), before income taxes $ 177 $ ( 81) $ 237 |
Sales information for available-for-sale fixed maturities and equity securities | (In millions) 2019 2018 2017 Proceeds from sales $ 3,077 $ 2,625 $ 2,012 Gross gains on sales $ 72 $ 28 $ 103 Gross losses on sales $ ( 19) $ ( 47) $ ( 18) |
Debt Securities [Member] | |
Schedule of Investments [Line Items] | |
Investment maturities | Amortized Fair (In millions) Cost Value Due in one year or less $ 920 $ 932 Due after one year through five years 7,176 7,452 Due after five years through ten years 9,098 9,644 Due after ten years 4,209 5,191 Mortgage and other asset-backed securities 506 536 Total $ 21,909 $ 23,755 |
Gross unrealized appreciation (depreciation) on debt securities | Amortized Unrealized Unrealized Fair (In millions) Cost Appreciation Depreciation Value December 31, 2019 Federal government and agency $ 498 $ 235 $ - $ 733 State and local government 729 81 - 810 Foreign government 2,027 230 ( 1) 2,256 Corporate 18,149 1,299 ( 28) 19,420 Mortgage and other asset-backed 506 31 ( 1) 536 Total $ 21,909 $ 1,876 $ ( 30) $ 23,755 Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1) $ 2,229 $ 740 $ ( 4) $ 2,965 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 (1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income. |
Debt securities with a decline in fair value from amortized cost | December 31, 2019 December 31, 2018 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 $ 723 $ 729 $ ( 6) 267 $ 7,127 $ 7,367 $ ( 240) 1,324 Below investment grade $ 340 $ 348 $ ( 8) 355 $ 1,185 $ 1,240 $ ( 55) 1,190 More than one year Investment grade $ 366 $ 378 $ ( 12) 118 $ 3,023 $ 3,181 $ ( 158) 784 Below investment grade $ 84 $ 88 $ ( 4) 93 $ 249 $ 270 $ ( 21) 245 |
Commercial mortgage loans [Member] | |
Schedule of Investments [Line Items] | |
Credit risk profile of commercial mortgage loan portfolio | (Dollars in millions) December 31, 2019 December 31, 2018 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% $ 1,136 2.19 $ 1,132 2.14 60% to 79% 723 1.98 650 1.93 80% to 100% 88 1.62 76 1.49 Total $ 1,947 2.09 58% $ 1,858 2.04 58% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities carried at fair value | (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total As of As of As of As of As of As of As of As of December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2019 2018 2019 2018 2019 2018 2019 2018 Financial assets at fair value Debt securities Federal government and agency $ 197 $ 209 $ 536 $ 501 $ - $ - $ 733 $ 710 State and local government - - 810 985 - - 810 985 Foreign government - - 2,228 2,356 28 6 2,256 2,362 Corporate - - 19,063 18,127 357 234 19,420 18,361 Mortgage and other asset-backed - - 398 372 138 138 536 510 Total debt securities 197 209 23,035 22,341 523 378 23,755 22,928 Equity securities (1) 7 384 72 43 32 32 111 459 Short-term investments - - 423 316 - - 423 316 Derivative assets - - 83 53 - - 83 53 Real estate funds priced at NAV as a practical expedient (2) 184 239 Financial liabilities at fair value Derivative liabilities $ - $ - $ 18 $ 10 $ - $ - $ 18 $ 10 (1) Excludes certain equity securities that have no readily determinable fair value. (2) As a practical expedient, certain real estate funds are carried at fair value based on the Company’s ownership share of the equity of the investee (Net Asset Value (“NAV“)) including changes in the fair value of its underlying investments. The funds have a quarterly redemption frequency, 45- 90 day redemption notice period and $ 56 million in unfunded commitments as of December 31, 2019. |
Level 3 debt and equity securities priced using significant unobservable inputs | Fair Value as of Unobservable Adjustment Range (Weighted Average) as of December 31, Unobservable Input December 31, (Fair value in millions ) 2019 2018 December 31, 2019 2019 2018 Debt securities Corporate and government debt securities $ 385 $ 229 Liquidity 70 - 930 ( 280) bps 50 - 930 ( 230) bps Mortgage and other asset-backed securities 138 138 Liquidity 60 - 370 ( 70) bps 60 - 340 ( 70) bps Weighting of credit spreads 240 - 460 ( 330) bps 190 - 340 ( 260) bps Securities not priced by the Company (1) - 11 Total Level 3 debt securities $ 523 $ 378 (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) 2019 2018 Balance at January 1, $ 410 $ 732 Total (losses) included in shareholders’ net income ( 8) ( 22) Gains (losses) included in other comprehensive income 22 ( 8) Gains (losses) required to adjust future policy benefits for settlement annuities (1) 2 ( 8) Purchases, sales and settlements Purchases 72 22 Sales - ( 11) Settlements ( 19) ( 70) Total purchases, sales and settlements 53 ( 59) Transfers into/(out of) Level 3 Transfers into Level 3 170 44 Transfers out of Level 3 (2) ( 94) ( 269) Total transfers into/(out of) Level 3 76 ( 225) Balance at December 31, $ 555 $ 410 Total (losses) included in shareholders’ net income attributable to instruments held at the reporting date $ ( 8) $ ( 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 2019 2018 2019 2018 2019 2018 2019 2018 Guaranteed separate accounts (See Note 22) $ 219 $ 187 $ 271 $ 267 $ - $ - $ 490 $ 454 Non-guaranteed separate accounts (1) 1,450 1,204 5,522 5,216 263 233 7,235 6,653 Subtotal $ 1,669 $ 1,391 $ 5,793 $ 5,483 $ 263 $ 233 7,725 7,107 Non-guaranteed separate accounts priced at NAV as a practical expedient (1) 756 732 Total 8,481 7,839 Separate account assets classified as assets held for sale ( 16) Separate account assets per Consolidated Balance Sheets $ 8,465 $ 7,839 (1) Non-guaranteed separate accounts included $ 4.0 billion as of December 31, 2019 and $ 3.8 billion as of December 31, 2018 in assets supporting the Company’s pension plans, including $ 0.2 billion classified in Level 3 as of December 31, 2019 and 2018. |
Separate account assets priced at net asset value | Unfunded Fair Value as of Commitments Redemption Frequency December 31, as of (if currently Redemption Notice (In millions) 2019 2018 December 31, 2019 eligible) Period Securities partnerships $ 531 $ 477 $ 320 Not applicable Not applicable Real estate funds 220 237 - Quarterly 30 - 90 days Hedge funds 5 18 - Up to annually, varying by fund 30 - 90 days Total $ 756 $ 732 $ 320 |
Financial instruments not carried at fair value | December 31, 2019 December 31, 2018 (In millions) Classification in Fair Value Hierarchy Fair Value Carrying Value Fair Value Carrying Value Commercial mortgage loans Level 3 $ 1,989 $ 1,947 $ 1,832 $ 1,858 Long-term debt, including current maturities, excluding finance leases Level 2 $ 39,439 $ 36,375 $ 40,819 $ 40,829 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Changes in accumulated other comprehensive income (loss) | (In millions) 2019 2018 2017 Securities and Derivatives Beginning balance $ 18 $ 328 $ 365 Reclassification adjustment to retained earnings related to U.S. tax reform legislation - 65 - Reclassification adjustment to retained earnings related to new financial instruments guidance - ( 4) - Reclassification adjustment from retained earnings related to new hedging guidance - ( 6) - Adjusted beginning balance 18 383 365 Appreciation (depreciation) on securities and derivatives 1,266 ( 512) 34 Tax (expense) benefit ( 270) 100 ( 19) Net appreciation (depreciation) on securities and derivatives 996 ( 412) 15 Reclassification adjustment for (gains) losses included in shareholders' net income (net realized investment (gains) losses) ( 49) 60 ( 81) Reclassification adjustment for losses included in shareholders' net income (selling, general and administrative expenses) - - 1 Tax benefit (expense) 10 ( 13) 28 Net (gains) losses reclassified from AOCI to net income ( 39) 47 ( 52) Other comprehensive income (loss), net of tax 957 ( 365) ( 37) Ending balance $ 975 $ 18 $ 328 Translation of foreign currencies Beginning balance $ ( 221) $ ( 65) $ ( 369) Reclassification adjustment to retained earnings related to U.S. tax reform legislation - ( 4) - Adjusted beginning balance ( 221) ( 69) ( 369) Translation of foreign currencies ( 57) ( 167) 306 Tax (expense) ( 2) - ( 5) Net translation of foreign currencies ( 59) ( 167) 301 Less: Net translation of foreign currencies attributable to noncontrolling interests ( 5) ( 15) ( 3) Shareholders' net translation of foreign currencies ( 54) ( 152) 304 Ending balance $ ( 275) $ ( 221) $ ( 65) Postretirement benefits liability Beginning balance $ ( 1,508) $ ( 1,345) $ ( 1,378) Reclassification adjustment to retained earnings related to U.S. tax reform legislation - ( 290) - Adjusted beginning balance ( 1,508) ( 1,635) ( 1,378) Reclassification adjustment for amortization of net losses from past experience and prior service costs (interest expense and other) 62 69 64 Reclassification adjustment for settlement (interest expense and other) 10 - 7 Tax (expense) ( 15) ( 15) ( 24) Net adjustments reclassified from AOCI to net income 57 54 47 Valuation update ( 249) 93 ( 22) Tax benefit (expense) 59 ( 20) 8 Net change due to valuation update ( 190) 73 ( 14) Other comprehensive (loss) income, net of tax ( 133) 127 33 Ending balance $ ( 1,641) $ ( 1,508) $ ( 1,345) |
Organizational Effiency Plan (T
Organizational Effiency Plan (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organizational Efficiency Plan [Abstract] | |
Organizational Efficiency Rollforward | (In millions) Fourth quarter 2019 charge $ 207 Less: 2019 payments 2 Balance, December 31, 2019 $ 205 |
Pension (Tables)
Pension (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Projected benefit obligations and assets | Pension Benefits (In millions) 2019 2018 Change in benefit obligation Benefit obligation, January 1 $ 4,741 $ 4,969 Service cost 2 3 Interest cost 194 169 Assumed in acquisition - 137 Litigation settlement 142 32 Loss (gain) from past experience 574 (1) ( 235) Benefits paid from plan assets ( 325) ( 314) Benefits paid — other ( 14) ( 20) Benefit obligation, December 31 5,314 4,741 Change in plan assets Fair value of plan assets, January 1 4,151 4,281 Assumed in acquisition - 96 Actual return on plan assets 594 85 Benefits paid ( 325) ( 314) Contributions 21 3 Fair value of plan assets, December 31 4,441 4,151 Funded status $ ( 873) $ ( 590) Liability in Consolidated Balance Sheets Accrued expenses and other liabilities $ ( 18) $ ( 30) Other non-current liabilities $ ( 855) $ ( 560) (1) Loss reflects a decrease in the discount rate and an unfavorable change in the mortality assumption. |
Expected benefit payments | Pension (In millions) Benefits 2020 $ 322 2021 $ 312 2022 $ 314 2023 $ 318 2024 $ 318 2025-2029 $ 1,574 |
Postretirement benefits liability adjustment included in AOCI | Pension Benefits (In millions) 2019 2018 Unrecognized net (losses) $ ( 2,132) $ ( 1,980) Unrecognized prior service cost ( 5) ( 6) Postretirement benefits liability adjustment $ ( 2,137) $ ( 1,986) |
Components of net defined benefit plan costs | Pension Benefits (In millions) 2019 2018 2017 Service cost $ 2 $ 3 $ 3 Interest cost 194 169 186 Expected long-term return on plan assets ( 245) ( 257) ( 260) Litigation settlement 142 32 - Amortization of: Net loss from past experience 59 70 66 Settlement loss 10 - 7 Net plan cost $ 162 $ 17 $ 2 |
Assumptions for pension and other postretirement benefit plans | 2019 2018 Discount rate: Pension benefit obligation 3.30% 4.23% Pension benefit cost 4.23% 3.51% Expected long-term return on plan assets: Pension benefit cost 6.75% 7.00% Mortality table for pension obligations White Collar mortality table with MP 2019 projection scale RP 2014 with MP 2018 projection scale |
Annual expense for 401(k) plans | (In millions) 2019 2018 2017 Expense $ 256 $ 196 $ 122 |
Pension Benefits [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Fair value of pension plan assets | (In millions) 2019 2018 Debt securities: Corporate $ 1,906 $ 1,446 Asset-backed 41 32 Fund investments 460 768 Total debt securities 2,407 2,246 Equity securities: Domestic 582 506 International, including funds and pooled separate accounts (1) 419 360 Total equity securities 1,001 866 Securities partnerships 531 477 Real estate funds, including pooled separate accounts (1) 230 250 Commercial mortgage loans 96 110 Hedge funds 24 36 Guaranteed deposit account contract 100 107 Cash equivalents and other current assets, net 52 59 Total pension assets at fair value $ 4,441 $ 4,151 (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, 2019 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Compensation cost | (In millions) 2019 2018 2017 Total compensation cost for shared-based awards $ 299 $ 180 $ 178 Tax benefits recognized $ 59 $ 36 $ 79 |
Information for stock options exercised | Options Options Outstanding Exercisable Number (in thousands) 11,438 8,874 Total intrinsic value (in millions) $ 781 $ 715 Weighted average exercise price $ 136.19 $ 123.87 Weighted average remaining contractual life 5.6 years 4.7 years |
Black-Scholes option-pricing model assumptions | 2019 2018 2017 Dividend yield 0.0% 0.0% 0.0% Expected volatility 30.0% 35.0% 35.0% Risk-free interest rate 2.5% 2.5% 1.8% Expected option life 4.4 years 4.4 years 4.3 years Weighted average fair value of options $ 53.10 $ 64.18 $ 46.38 |
Status of, and changes in, common stock options | (Options in thousands) 2019 2018 2017 Weighted Weighted Weighted Average Average Average Options Exercise Price Options Exercise Price Options Exercise Price Outstanding - January 1 12,370 $ 125.46 6,156 $ 100.79 7,097 $ 82.01 Granted 1,569 $ 183.41 7,080 $ 143.62 1,230 $ 149.17 Exercised ( 2,297) $ 106.75 ( 771) $ 88.35 ( 2,072) $ 63.41 Expired or canceled ( 204) $ 180.08 ( 95) $ 165.04 ( 99) $ 138.41 Outstanding - December 31 11,438 $ 136.19 12,370 $ 125.46 6,156 $ 100.79 Options exercisable at year-end 8,874 $ 123.87 9,446 $ 114.22 3,894 $ 77.36 |
Status of, and changes in, restricted stock grants and units | (Awards in thousands) 2019 2018 2017 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 2,138 $ 168.12 1,295 $ 126.44 1,309 $ 97.78 Awarded 870 $ 183.86 1,451 $ 183.29 451 $ 155.21 Vested ( 964) $ 160.74 ( 560) $ 112.53 ( 409) $ 67.09 Forfeited ( 99) $ 168.68 ( 48) $ 150.84 ( 56) $ 121.74 Outstanding - December 31 1,945 $ 178.78 2,138 $ 168.12 1,295 $ 126.44 |
Status of, and changes in, strategic performance shares | 2019 2018 2017 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 1 707 $ 160.74 778 $ 136.57 942 $ 109.14 Awarded 389 $ 184.72 221 $ 197.51 275 $ 150.06 Vested ( 244) $ 139.27 ( 269) $ 121.57 ( 386) $ 78.91 Forfeited ( 34) $ 178.98 ( 23) $ 158.16 ( 53) $ 138.19 Outstanding - December 31 818 $ 177.94 707 $ 160.74 778 $ 136.57 |
Employee Stock Option [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Information for stock options exercised | (In millions) 2019 2018 2017 Intrinsic value of options exercised $ 180 $ 86 $ 218 Cash received for options exercised $ 224 $ 68 $ 131 Tax benefit from options exercised $ 34 $ 8 $ 41 |
Shares available for award / Fair value of vested shares | (In millions) 2019 2018 2017 Common shares available for award 23.2 25.7 14.0 |
Restricted Stock Grants And Units [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Shares available for award / Fair value of vested shares | (In millions) 2019 2018 2017 Fair value of vested restricted stock $ 171 $ 107 $ 62 |
Performance Shares [Member] | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |
Shares available for award / Fair value of vested shares | 2019 2018 2017 (Shares in thousands; $ in millions) Shares Fair Value Shares Fair Value Shares Fair Value Shares of Cigna common stock distributed upon SPS vesting 254 $ 45 380 $ 73 476 $ 70 |
Goodwill, Other Intangibles a_2
Goodwill, Other Intangibles and Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Goodwill activity | (In millions) 2019 2018 Balance at January 1, $ 44,505 $ 6,164 Goodwill acquired, net 103 38,371 Impact of foreign currency translation ( 6) ( 30) Balance at December 31, $ 44,602 $ 44,505 |
Components of other assets, including other intangbiles | Accumulated Net Carrying (In millions) Cost Amortization Value 2019 Customer relationships $ 31,184 3,319 27,865 Trade Name - Express Scripts 8,400 8,400 Other 383 86 297 Other intangible assets 39,967 3,405 36,562 Value of business acquired (reported in deferred policy acquisition costs) 643 122 521 Total $ 40,610 3,527 37,083 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 |
Components of property and equipment | Accumulated Net Carrying (In millions) Cost Amortization Value 2019 Internal-use software $ 6,578 $ 3,282 $ 3,296 Other property and equipment 2,569 1,353 1,216 Total property and equipment 9,147 4,635 4,512 Property and equipment classified as Assets held for sale ( 226) ( 131) ( 95) Total property and equipment per Consolidated Balance Sheet $ 8,921 $ 4,504 $ 4,417 2018 Internal-use software $ 5,694 $ 2,415 $ 3,279 Other property and equipment 2,264 981 1,283 Total property and equipment $ 7,958 $ 3,396 $ 4,562 |
Components of depreciation and amortization | (In millions) 2019 2018 2017 Internal-use software $ 850 $ 323 $ 298 Other property and equipment 284 146 153 Value of business acquired (reported in deferred policy acquisition costs) 34 16 18 Other intangibles 2,483 210 97 Total depreciation and amortization $ 3,651 $ 695 $ 566 |
Pre-tax amortization for intangible assets, including internal-use software | (In millions) Pre-tax Amortization 2020 $ 2,466 2021 $ 2,386 2022 $ 2,061 2023 $ 1,902 2024 $ 1,773 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Components of lease expense | ROU Asset Current Lease Liability Non-Current Lease Liability Operating lease Other assets Accrued expenses and other liabilities (current) Other liabilities (non-current) Finance lease Property and equipment Short-term debt Long-term debt (In millions) Year Ended December 31, 2019 Operating lease cost $ 188 Finance lease cost: Amortization of ROU assets 28 Interest on lease liabilities 3 Total finance lease cost 31 Variable lease cost 50 Total lease cost $ 269 |
Supplemental cash flows information related to leases | Year ended (In millions) December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 173 Operating cash outflows from finance leases $ 3 Financing cash outflows from finance leases $ 25 ROU assets obtained in exchange for lease obligations: Operating leases $ 89 Finance leases $ 68 |
Operating and finance lease ROU assets and lease liabilities | (In millions) December 31, 2019 Operating leases: Operating lease ROU assets $ 536 Accrued expenses and other current liabilities $ 166 Other non-current liabilities 465 Total operating lease liabilities $ 631 Finance leases: Property and equipment, gross $ 110 Accumulated depreciation ( 23) Property and equipment, net $ 87 Short-term debt $ 27 Long-term debt 61 Total finance lease liabilities $ 88 |
Maturities of operating lease liabilities | (In millions) Operating Leases Finance Leases 2020 $ 177 $ 28 2021 159 21 2022 133 18 2023 89 8 2024 63 6 Thereafter 74 16 Total lease payments 695 97 Less: imputed interest 64 9 Total $ 631 $ 88 |
Maturities of finance lease liabilities | (In millions) Operating Leases Finance Leases 2020 $ 177 $ 28 2021 159 21 2022 133 18 2023 89 8 2024 63 6 Thereafter 74 16 Total lease payments 695 97 Less: imputed interest 64 9 Total $ 631 $ 88 |
Shareholders Equity and Divid_2
Shareholders Equity and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders Equity And Dividend Restrictions [Abstract] | |
Statutory net income and surplus | (In billions) 2019 2018 2017 Net income $ 3.8 $ 3.4 $ 2.5 Surplus $ 13.8 $ 12.2 $ 10.4 (In billions) 2019 Minimum statutory surplus required by regulators $ 4.8 Investments on deposit with regulatory bodies $ 0.5 Maximum dividend distributions permitted in 2020 without regulatory approval $ 2.9 Maximum loans to the parent company permitted without regulatory approval $ 1.0 Restricted GAAP net assets of Cigna Corporation's subsidiaries $ 15.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Componenets of income taxes | (In millions) 2019 2018 2017 Current taxes U.S. income taxes $ 1,476 $ 804 $ 974 Foreign income taxes 173 185 122 State income taxes 114 47 36 Total current taxes 1,763 1,036 1,132 Deferred taxes (benefits) U.S. income taxes (benefits) ( 236) ( 75) 204 Foreign income taxes 16 8 39 State income tax (benefits) ( 93) ( 34) ( 1) Total deferred taxes (benefits) ( 313) ( 101) 242 Total income taxes $ 1,450 $ 935 $ 1,374 |
Reconciliation of total income taxes to the amount computed using the nominal federal income tax rate | 2019 2018 2017 (In millions) $ % $ % $ % Tax expense at nominal rate $ 1,380 21.0 % $ 752 21.0 % $ 1,262 35.0 % Effect of U.S. tax reform legislation - - ( 4) ( 0.1) 232 6.4 Effect of foreign earnings 24 0.4 74 2.1 ( 70) ( 1.9) Health insurance industry tax - - 78 2.2 - - State income tax (net of federal income tax benefit) 32 0.5 10 0.3 23 0.6 Other 14 0.2 25 0.6 ( 73) ( 2.0) Total income taxes $ 1,450 22.1 % $ 935 26.1 % $ 1,374 38.1 % |
Deferred income tax assets and liabilities | (In millions) 2019 2018 Deferred tax assets (1) Employee and retiree benefit plans $ 511 $ 411 Other insurance and contractholder liabilities 282 396 Loss carryforwards 260 255 Other accrued liabilities 183 341 Other 218 187 Deferred tax assets before valuation allowance 1,454 1,590 Valuation allowance for deferred tax assets ( 196) ( 199) Deferred tax assets, net of valuation allowance 1,258 1,391 Deferred tax liabilities (1) Depreciation and amortization 630 744 Acquisition-related basis differences 9,386 9,863 Policy acquisition expenses 113 211 Unrealized appreciation on investments and foreign currency translation 223 ( 29) Other 293 55 Total deferred tax liabilities 10,645 10,844 Net deferred income tax (liabilities) assets $ ( 9,387) $ ( 9,453) (1) Certain prior year balances have been reclassified to align with the year end 2019 presentation. |
Reconciliation of unrecognized tax benefits | (In millions) 2019 2018 2017 Balance at January 1, $ 928 $ 35 $ 31 Increase due to prior year positions 68 40 - Increase due to business combinations - 860 - Increase due to current year positions 29 6 7 Reduction related to settlements with taxing authorities - ( 1) ( 1) Reduction related to lapse of applicable statute of limitations ( 7) ( 12) ( 2) Balance at December 31, $ 1,018 $ 928 $ 35 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Total integration and transaction-related costs (Selling, general and administrative expenses) $ 427 $ 552 Charge for organizational efficiency plan (Selling, general and administrative expenses) $ 162 $ 207 Charges associated with litigation matters (Selling, general and administrative expenses) $ 41 $ 51 Year ended December 31, 2018 Integration and transaction-related costs - Selling, general and administrative expenses $ 587 $ 748 - Interest expense and other 179 227 - Net investment income ( 97) ( 123) Total integration and transaction-related costs $ 669 $ 852 Charges associated with litigation matters (Selling, general and administrative expenses) $ 19 $ 25 Charges associated with U.S. tax reform - Selling, general and administrative expenses $ 1 $ 2 - Tax (benefit) ( 3) Total (benefits) charges associated with U.S. tax reform $ ( 2) $ 2 Year ended December 31, 2017 Integration and transaction-related costs - Selling, general and administrative expenses $ 92 $ 126 - Tax (benefit) ( 59) Total integration and transaction-related costs $ 33 $ 126 Charges associated with U.S. tax reform - Selling, general and administrative expenses $ ( 36) $ ( 56) - Tax expense 232 Total charges (benefits) associated with U.S. tax reform $ 196 $ ( 56) Debt extinguishment costs $ 209 $ 321 Long-term care guaranty fund assessment (Selling, general and administrative expenses) $ 83 $ 129 |
Summarized segment financial information | (In millions) Health Services Integrated Medical International Markets Group Disability and Other Corporate and Eliminations Total 2019 Revenues from external customers (1) $ 107,354 $ 34,861 $ 5,500 $ 4,461 $ - $ 152,176 Inter-segment revenues 2,380 1,180 - 26 ( 3,586) Net investment income 60 478 159 695 ( 2) 1,390 Total revenues 109,794 36,519 5,659 5,182 ( 3,588) 153,566 Revenue contributions from transitioning clients ( 13,347) - - - - ( 13,347) Net realized investment results from equity method subsidiaries (2) - - ( 44) - - ( 44) Adjusted revenues $ 96,447 $ 36,519 $ 5,615 $ 5,182 $ ( 3,588) $ 140,175 Depreciation and amortization $ 3,071 $ 449 $ 87 $ 41 $ 3 $ 3,651 Income (loss) before taxes $ 3,983 $ 3,904 $ 785 $ 562 $ ( 2,664) $ 6,570 Pre-tax adjustments to reconcile to adjusted income from operations Adjustment for transitioning clients ( 1,726) - - - - ( 1,726) (Income) attributable to noncontrolling interests ( 4) - ( 16) - - ( 20) Net realized investment (gains) (2) - ( 112) ( 43) ( 66) - ( 221) Amortization of acquired intangible assets 2,839 69 36 5 - 2,949 Special items Integration and transaction-related costs - - - - 552 552 Charge for organizational efficiency plan - - - - 207 207 Charges associated with litigation matters - ( 30) - - 81 51 Pre-tax adjusted income (loss) from operations $ 5,092 $ 3,831 $ 762 $ 501 $ ( 1,824) $ 8,362 (In millions) Health Services Integrated Medical International Markets Group Disability and Other Corporate and Eliminations Total 2018 Revenues from external customers (1) $ 5,902 $ 31,759 $ 5,174 $ 4,335 $ - $ 47,170 Inter-segment revenues 1,154 573 - 14 ( 1,741) Net investment income 9 459 149 712 151 1,480 Total revenues $ 7,065 $ 32,791 $ 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 integration and transaction-related costs - - - - ( 123) ( 123) Adjusted revenues $ 6,606 $ 32,791 $ 5,366 $ 5,061 $ ( 1,713) $ 48,111 Depreciation and amortization $ 120 $ 466 $ 55 $ 53 $ 1 $ 695 Income (loss) before taxes $ 329 $ 3,342 $ 670 $ 497 $ ( 1,257) $ 3,581 Pre-tax adjustments to reconcile to adjusted income from operations Adjustment for transitioning clients ( 62) - - - - ( 62) (Income) attributable to noncontrolling interests - - ( 14) - - ( 14) Net realized investment losses (2) - 36 61 25 2 124 Amortization of acquired intangible assets 113 99 18 5 - 235 Special items Integration and 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 $ 380 $ 3,502 $ 735 $ 529 $ ( 403) $ 4,743 (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 certain realized investment gains (losses) of its joint ventures reported using the equity method of accounting. (In millions) Health Services Integrated Medical International Markets Group Disability and Other Corporate and Eliminations Total 2017 Revenues from external customers (1) $ 3,250 $ 28,193 $ 4,774 $ 4,363 $ - $ 40,580 Inter-segment revenues 988 476 - 12 ( 1,476) Net investment income 3 366 127 700 30 1,226 Total revenues $ 4,241 $ 29,035 $ 4,901 $ 5,075 $ ( 1,446) $ 41,806 Adjusted revenues $ 4,241 $ 29,035 $ 4,901 $ 5,075 $ ( 1,446) $ 41,806 Depreciation and amortization $ - $ 470 $ 61 $ 31 $ 4 $ 566 Income (loss) before taxes $ 288 $ 2,859 $ 667 $ 614 $ ( 822) $ 3,606 Pre-tax adjustments to reconcile to adjusted income from operations Loss attributable to noncontrolling interests - 1 1 - - 2 Net realized investment (gains) - ( 137) ( 31) ( 69) - ( 237) Amortization of acquired intangible assets - 93 17 5 - 115 Special items Debt extinguishment costs - - - - 321 321 Long-term care guaranty fund assessment - 106 - 23 - 129 Integration and transaction-related costs - - - - 126 126 U.S. tax reform - - - ( 56) - ( 56) Pre-tax adjusted income (loss) from operations $ 288 $ 2,922 $ 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. (In millions) 2019 2018 2017 Products (Pharmacy revenues) (ASC 606) Network revenues $ 50,431 $ 1,415 $ - Home delivery and specialty revenues 47,768 3,997 2,979 Other 4,900 67 - Total pharmacy revenues 103,099 5,479 2,979 Integrated Medical premiums (ASC 944) Commercial Health Insurance 12,523 10,710 9,439 Stop loss 4,328 4,008 3,483 Other 1,040 1,038 917 Government Medicare Advantage 6,314 5,832 5,534 Medicare Part D 1,699 764 764 Other 4,185 4,496 3,494 Total Integrated Medical premiums 30,089 26,848 23,631 International Markets premiums 5,266 5,043 4,619 Domestic disability, life and accident premiums 4,225 4,000 3,973 Other premiums 134 222 268 Total premiums 39,714 36,113 32,491 Services (ASC 606) Fees 9,229 5,558 5,053 Other external revenues 134 20 57 Total services 9,363 5,578 5,110 Total revenues from external customers $ 152,176 $ 47,170 $ 40,580 |
Revenue from external customers | (In millions) 2019 2018 2017 Products (Pharmacy revenues) (ASC 606) Network revenues $ 50,431 $ 1,415 $ - Home delivery and specialty revenues 47,768 3,997 2,979 Other 4,900 67 - Total pharmacy revenues 103,099 5,479 2,979 Integrated Medical premiums (ASC 944) Commercial Health Insurance 12,523 10,710 9,439 Stop loss 4,328 4,008 3,483 Other 1,040 1,038 917 Government Medicare Advantage 6,314 5,832 5,534 Medicare Part D 1,699 764 764 Other 4,185 4,496 3,494 Total Integrated Medical premiums 30,089 26,848 23,631 International Markets premiums 5,266 5,043 4,619 Domestic disability, life and accident premiums 4,225 4,000 3,973 Other premiums 134 222 268 Total premiums 39,714 36,113 32,491 Services (ASC 606) Fees 9,229 5,558 5,053 Other external revenues 134 20 57 Total services 9,363 5,578 5,110 Total revenues from external customers $ 152,176 $ 47,170 $ 40,580 |
Foreign and U.S. revenues from external customers | (In millions) 2019 2018 2017 United States $ 147,332 $ 42,773 $ 36,555 South Korea 2,022 2,093 1,892 All other foreign countries 2,822 2,304 2,133 Total $ 152,176 $ 47,170 $ 40,580 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 Total revenues $ 37,946 $ 38,819 $ 38,556 $ 38,245 Income before income taxes 1,788 1,758 1,763 1,261 Shareholders’ net income 1,368 (1) 1,408 (1) 1,351 (1) 977 (1) Shareholders’ net income per share 1 Basic 3.61 3.73 3.60 2.63 Diluted 3.56 3.70 3.57 2.60 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 Basic 3.78 3.32 3.18 0.56 Diluted 3.72 3.29 3.14 0.55 Stock and dividend data 2019 Price range of common stock — high $ 202.02 $ 170.89 $ 185.77 $ 207.28 — low $ 158.58 $ 141.95 $ 145.51 $ 146.50 Dividends declared per common share $ 0.04 $ - $ - $ - 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 $ - $ - $ - (1) Shareholders’ net income includes the following after-tax charges (benefits), described in Note 23 to the Consolidated Financial Statements: March 31, June 30, September 30, December 31, 2019 Integration and transaction-related costs $ 108 $ 115 $ 88 $ 116 2019 Charge for organizational efficiency plan - - - 162 2019 Charges (benefits) associated with litigation matters - 64 ( 23) - Total 2019 charges $ 108 $ 179 $ 65 $ 278 March 31, June 30, September 30, December 31, 2018 Integration and transaction-related costs $ 50 $ 109 $ 108 $ 402 2018 Charges (benefits) associated with litigation matters - - 35 ( 16) 2018 U.S. tax reform - - ( 5) 3 Total 2018 charges $ 50 $ 109 $ 138 $ 389 |
Schedule I - Condensed Financ_2
Schedule I - Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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* Cigna* Old Cigna* (in millions) 2019 2018 2017 Revenues Net investment income $ - $ 123 $ - Intercompany interest income 6 - - Total revenues 6 123 - Operating expenses Selling, general and administrative expenses ( 85) 200 195 Total operating expenses ( 85) 200 195 Income (loss) from operations 91 ( 77) ( 195) Interest and other (expense) ( 1,032) ( 244) ( 246) Intercompany interest (expense) ( 127) ( 5) ( 18) Debt extinguishment costs - - ( 321) Realized investment (loss) - ( 1) - Loss before taxes ( 1,068) ( 327) ( 780) Income tax (benefit) ( 251) ( 74) ( 194) Loss of Parent Company ( 817) ( 253) ( 586) Equity in income of subsidiaries 5,921 2,890 2,823 Shareholders' net income 5,104 2,637 2,237 Shareholders' other comprehensive income (loss), net of tax Net unrealized appreciation (depreciation) on securities and derivatives 957 ( 365) ( 37) Net translation (losses) gains of foreign currencies ( 54) ( 152) 304 Postretirement benefits liability adjustment ( 133) 127 33 Shareholders' other comprehensive income (loss), net of tax 770 ( 390) 300 Shareholders' comprehensive income $ 5,874 $ 2,247 $ 2,537 * As described in Note 4 to the Consolidated Financial Statements, on December 20, 2018, Old Cigna became a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. See Notes to Financial Statements on the following pages. (In millions) 2020 $ 3,099 2021 $ 3,812 2022 $ 1,770 2023 $ 4,699 2024 $ 714 Maturities after 2024 $ 18,638 |
Condensed Financial Information Of Parent Company Only, Balance Sheets | As of December 31, (in millions) 2019 2018 Assets Cash and cash equivalents $ - $ 243 Short-term investments 30 - Other current assets 4 14 Total current assets 34 257 Intercompany receivable 4,111 - Investments in subsidiaries 77,380 68,969 Other noncurrent assets 19 48 TOTAL ASSETS $ 81,544 $ 69,274 Liabilities Short-term debt $ 4,043 $ - Other current liabilities 457 418 Total current liabilities 4,500 418 Intercompany payable 2,341 4,965 Long-term debt 29,365 22,863 TOTAL LIABILITIES 36,206 28,246 Shareholders’ Equity Common stock (shares issued, 386 and 381 ; authorized, 600 ) 4 4 Additional paid-in capital 28,306 27,751 Accumulated other comprehensive loss ( 941) ( 1,711) Retained earnings 20,162 15,088 Less treasury stock, at cost ( 2,193) ( 104) TOTAL SHAREHOLDERS’ EQUITY 45,338 41,028 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 81,544 $ 69,274 See Notes to Financial Statements on the following pages. |
Condensed Financial Information Of Parent Company Only, Statements Of Cash Flows | For the years ended December 31, Cigna* Cigna* Old Cigna* (in millions) 2019 2018 2017 Cash Flows from Operating Activities Shareholders’ net income $ 5,104 $ 2,637 $ 2,237 Adjustments to reconcile shareholders’ net income to net cash provided by operating activities Equity in income of subsidiaries ( 5,921) ( 2,890) ( 2,823) Dividends received from subsidiaries 2,457 - 758 Other liabilities 43 412 ( 224) Debt extinguishment costs - - 321 Other, net 20 ( 14) 333 NET CASH PROVIDED BY OPERATING ACTIVITIES 1,703 145 602 Cash Flows from Investing Activities Short-term investment purchased, net ( 30) - ( 6) Other, net - ( 27,115) ( 11) NET CASH (USED IN) INVESTING ACTIVITIES ( 30) ( 27,115) ( 17) Cash Flows from Financing Activities Net change in amounts due to affiliates 2,015 4,437 1,955 Proceeds on issuance of commercial paper 944 - 100 Payments for debt extinguishment - - ( 313) Repayment of long-term debt ( 3,002) - ( 1,250) Net proceeds on issuance of long-term debt - 22,856 1,581 Issuance of common stock 224 1 131 Common dividends paid ( 15) - ( 10) Repurchase of common stock ( 1,987) ( 32) ( 2,725) Tax withholding on stock compensation and other ( 82) ( 49) ( 63) Other ( 13) - - NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ( 1,916) 27,213 ( 594) Net (decrease) increase in cash and cash equivalents ( 243) 243 ( 9) Cash and cash equivalents, beginning of year 243 - 18 Cash and cash equivalents, end of year $ - $ 243 $ 9 * As described in Note 4 to the Consolidated Financial Statements, on December 20, 2018, Old Cigna became a wholly-owned subsidiary of Cigna, and Cigna became the Registrant. See Notes to Financial Statements on the following pages. |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts and Reserves (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 Allowance for doubtful accounts Accounts receivable, net $ 217 $ 51 $ - $ ( 16) $ 252 Deferred tax asset valuation allowance $ 199 $ ( 6) $ 3 $ - $ 196 Reinsurance recoverables $ 2 $ - $ - $ - $ 2 2018 Allowance for doubtful accounts Accounts receivable, net $ 207 $ 18 $ ( 3) $ ( 5) $ 217 Deferred tax asset valuation allowance (1) $ 72 $ ( 5) $ 132 $ - $ 199 Reinsurance recoverables $ 3 $ ( 1) $ - $ - $ 2 2017 Investment asset valuation reserves Commercial mortgage loans $ 5 $ 1 $ - $ ( 6) $ - Allowance for doubtful accounts Accounts receivable, net $ 200 $ 19 $ ( 11) $ ( 1) $ 207 Deferred tax asset valuation allowance $ 87 $ 11 $ ( 26) $ - $ 72 Reinsurance recoverables $ 3 $ - $ - $ - $ 3 (1) Deferred tax valuation allowance amount includes amount assumed from Express Scripts in 2018. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Accounting Guidance Not Yet Adopted (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Allowances for uncollectible reinsurance | |||
Amortization of deferred policy acquisition costs | 483 | $ 406 | $ 322 |
Accounting Standards Update 2016-13 [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Expected effect of new accounting pronouncement | (50) | ||
Accounting Standards Update 2017-04 [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Expected effect of new accounting pronouncement |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Redeemable Noncontrolling Interest (Details) | Dec. 31, 2019 |
Turkey Joint Venture [Member] | |
Redeemable Noncontrolling Interest [Line Items] | |
Percentage ownership in joint venture | 51.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Performance Guarantee Liability (Details) - Performance Guarantee [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pharmacy Benefits Management Services [Member] | |||
Loss Contingencies [Line Items] | |||
Performance guarantee liability | $ 1,000 | $ 895 | |
ASO Health Care Services [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency Accrual, Carrying Value, Provision | |||
Amounts paid for loss contigency |
Accounts Receivable, Net, Inclu
Accounts Receivable, Net, Including Disposal Groups (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, Net [Abstract] | ||
Insurance customer receivables | $ 2,321 | $ 1,888 |
Noninsurance customer receivables | 5,143 | 4,988 |
Pharmaceutical manufacturer receivable | 3,439 | 3,321 |
Other receivables | 334 | 276 |
Total | $ 11,237 | $ 10,473 |
Accounts Recievable, Net (Detai
Accounts Recievable, Net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, Net [Abstract] | ||
Total | $ 11,237,000,000 | $ 10,473,000,000 |
Accounts receivable, net held for sale | (521,000,000) | |
Accounts receivable, net per Consolidated Balance Sheets | 10,716,000,000 | 10,473,000,000 |
Pharmaceutical manufacturer receivables related to noninsurance customer contracts | 285,000,000 | 406,000,000 |
Contractual allowances for certain rebates receivable from manufacturers | 343,000,000 | |
Contractual allowances from third-party payors | 135,000,000 | |
Allowance for doubtful accounts | 300,000,000 | |
Total allowances, Accounts receivable | $ 778,000,000 | 217,000,000 |
Express Scripts Holding Company [Member] | ||
Business Acquisition [Line Items] | ||
Allowances for receivables recorded as part of purchase accounting | $ 0 |
Mergers, Acquisitions and Dis_3
Mergers, Acquisitions and Dispositions - Merger Consideration (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 20, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Merger consideration [Abstract] | ||||
Common shares outstanding | 372,531,000 | 380,924,000 | 0 | |
Common shares outstanding | 372,531,000 | 380,924,000 | 0 | |
Express Scripts Holding Company [Member] | ||||
Merger consideration [Abstract] | ||||
Common shares outstanding | 564,300,000 | |||
Cash consideration per share | $ 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 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 | $ 179.80 | |||
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 |
Mergers, Acquisitions and Dis_4
Mergers, Acquisitions and Dispositions - Purchase Price Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 20, 2018 | Dec. 31, 2017 |
Purchase price allocation [Abstract] | ||||
Goodwill | $ 44,602 | $ 44,505 | $ 6,164 | |
Health Services [Member] | ||||
Purchase price allocation [Abstract] | ||||
Goodwill | $ 33,700 | |||
Express Scripts Holding Company [Member] | ||||
Purchase price allocation [Abstract] | ||||
Cash and cash equivalents | $ 3,517 | |||
Receivables | 7,832 | |||
Inventory | 2,472 | |||
Other current assets | 600 | |||
Property and equipment | 2,924 | |||
Goodwill | 38,364 | |||
Other identifiable intangible assets | 38,725 | |||
Other assets acquired, non-current | 314 | |||
Total assets acquired | 94,748 | |||
Other current liabilities | 18,479 | |||
Long-term debt, including current portion | 12,816 | |||
Deferred income tax liabilities | 9,558 | |||
Other liabilities, non-current assumed | 1,085 | |||
Total liabilities acquired | 41,938 | |||
Total | 52,810 | |||
Express Scripts Holding Company [Member] | Health Services [Member] | ||||
Purchase price allocation [Abstract] | ||||
Goodwill | $ 33,700 |
Mergers, Acquisitions and Dis_5
Mergers, Acquisitions and Dispositions - Intangible Assets (Details) - Express Scripts Holding Company [Member] $ in Millions | Dec. 20, 2018USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total | $ 41,168 |
Customer relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 30,210 |
Customer relationships [Member] | Minimum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 14 years |
Customer relationships [Member] | Maximum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 29 years |
Internal-use software [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 2,443 |
Internal-use software [Member] | Minimum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 3 years |
Internal-use software [Member] | Maximum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Trade Name [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Acquired | $ 115 |
Indefinite-lived Intangible Assets Acquired | $ 8,400 |
Estimated useful life | 10 years |
Mergers, Acquisitions and Dis_6
Mergers, Acquisitions and Dispositions - Pro Forma Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | |||||||||||
Total revenues | $ 38,245 | $ 38,556 | $ 38,819 | $ 37,946 | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 153,566 | $ 48,650 | $ 41,806 |
Shareholder's net income | $ 977 | $ 1,351 | $ 1,408 | $ 1,368 | $ 144 | $ 772 | $ 806 | $ 915 | $ 5,104 | 2,637 | 2,237 |
Express Scripts Holding Company [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total revenues | 2,600 | ||||||||||
Shareholder's net income | |||||||||||
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 |
Mergers, Acquisitions and Dis_7
Mergers, Acquisitions and Dispositions - Transaction-related Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Before-tax [Abstract] | |||||||||||
Interest expense on newly issued debt | $ 0 | $ 227 | $ 0 | ||||||||
Net investment income on debt proceeds | 0 | (123) | 0 | ||||||||
Charitable contributions | 0 | 200 | 0 | ||||||||
Legal and advisory fees | 53 | 204 | 36 | ||||||||
Bridge facility fees | 0 | 140 | 0 | ||||||||
All other transaction-related costs | 499 | 204 | 90 | ||||||||
Transaction-related costs, net | 552 | 852 | 126 | ||||||||
After-tax [Abstract] | |||||||||||
Interest expense on newly issued debt, after-tax | 0 | 179 | 0 | ||||||||
Net investment income on debt proceeds, after-tax | 0 | (97) | 0 | ||||||||
Charitable contributions, after-tax | 0 | 158 | 0 | ||||||||
Legal and advisory fees, after-tax | 41 | 185 | 23 | ||||||||
Bridge facility fees, after-tax | 0 | 111 | 0 | ||||||||
All other transaction-related costs, after-tax | 386 | 133 | 69 | ||||||||
Tax (benefit) - previously non-deductible costs | 0 | 0 | (59) | ||||||||
Transaction-related costs, net - after-tax | $ 116 | $ 88 | $ 115 | $ 108 | $ 402 | $ 108 | $ 109 | $ 50 | $ 427 | $ 669 | $ 33 |
Assets and Liabilities of Bus_3
Assets and Liabilities of Business Held for Sale (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ||
Accounts receivable, net | $ 521 | |
Investments | 7,709 | |
Total assets of business held for sale | 9,512 | $ 0 |
Insurance and contractholder liabilities | 6,308 | |
Total liabilities of business held for sale | 6,812 | $ 0 |
Group Disability And Life [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Consideration | 6,300 | |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ||
Cash and cash equivalents | 743 | |
Accounts receivable, net | 521 | |
Investments | 7,709 | |
Other assets | 539 | |
Total assets of business held for sale | 9,512 | |
Insurance and contractholder liabilities | 6,308 | |
Other liabilities | 504 | |
Total liabilities of business held for sale | $ 6,812 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Shareholders' net income | $ 977 | $ 1,351 | $ 1,408 | $ 1,368 | $ 144 | $ 772 | $ 806 | $ 915 | $ 5,104 | $ 2,637 | $ 2,237 |
Shares: | |||||||||||
Weighted average | 375,919 | 246,652 | 250,892 | ||||||||
Common stock equivalents | 3,898 | 3,573 | 4,180 | ||||||||
Total shares | 379,817 | 250,225 | 255,072 | ||||||||
EPS, basic | $ 2.63 | $ 3.60 | $ 3.73 | $ 3.61 | $ 0.56 | $ 3.18 | $ 3.32 | $ 3.78 | $ 13.58 | $ 10.69 | $ 8.92 |
EPS, effect of dilution | (0.14) | (0.15) | (0.15) | ||||||||
EPS, diluted | $ 2.60 | $ 3.57 | $ 3.70 | $ 3.56 | $ 0.55 | $ 3.14 | $ 3.29 | $ 3.72 | $ 13.44 | $ 10.54 | $ 8.77 |
Employee Stock Option [Member] | |||||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||||
Antidilutive options | 3,500 | 900 | 900 |
Debt - Short-term and Long-term
Debt - Short-term and Long-term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Short-term debt [Abstract] | |||||
Commercial paper | $ 944 | $ 944 | $ 1,500 | ||
Other, including finance leases | 27 | 27 | 117 | ||
Total short-term debt | 5,514 | 5,514 | 2,955 | ||
Long-term uncollateralized debt [Abstract] | |||||
Other, including finance leases | 61 | 61 | 32 | ||
Total long-term debt | 31,893 | 31,893 | 39,523 | ||
Notes issued by Express Scripts, Medco and Old Cigna exchanged for Notes issued by Cigna | $ 12,700 | ||||
Net proceeds on issuance of long-term debt | $ 0 | 22,856 | $ 1,581 | ||
Commercial Paper [Member] | |||||
Short-term debt [Abstract] | |||||
Weighted average interest rate, commercial paper | 2.11% | 2.11% | |||
2.25% Senior Notes [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | $ 0 | $ 0 | 995 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,000 | $ 1,000 | |||
Long-term debt, stated interest rate | 2.25% | 2.25% | |||
7.25% Senior Notes [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | $ 0 | $ 0 | 343 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 337 | $ 337 | |||
Long-term debt, stated interest rate | 7.25% | 7.25% | |||
$1,500 million, 4.5% Notes due 2026 | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,500 | $ 1,500 | |||
Long-term debt, stated interest rate | 4.50% | 4.50% | |||
Long-term debt, excluding finance lease obligations | $ 1,506 | $ 1,506 | 1,508 | ||
$1,500 million, 3.4% Notes due 2027 | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,500 | $ 1,500 | |||
Long-term debt, stated interest rate | 3.40% | 3.40% | |||
Long-term debt, excluding finance lease obligations | $ 1,396 | $ 1,396 | 1,386 | ||
$259 million, 7.875% Debentures due 2027 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 259 | $ 259 | |||
Long-term debt, stated interest rate | 7.875% | 7.875% | |||
Long-term debt, excluding finance lease obligations | $ 259 | $ 259 | 259 | ||
$600 million, 3.05% Notes due 2027 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 600 | $ 600 | |||
Long-term debt, stated interest rate | 3.05% | 3.05% | |||
Long-term debt, excluding finance lease obligations | $ 595 | $ 595 | 595 | ||
$3,800 million, 4.375% Notes due 2028 | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 3,800 | $ 3,800 | |||
Long-term debt, stated interest rate | 4.375% | 4.375% | |||
Long-term debt, excluding finance lease obligations | $ 3,776 | $ 3,776 | 3,774 | ||
$45 million, 8.3% Step Down Notes due 2033 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 45 | $ 45 | |||
Long-term debt, stated interest rate | 8.30% | 8.30% | |||
Long-term debt, excluding finance lease obligations | $ 45 | $ 45 | 45 | ||
$190 million, 6.15% Notes due 2036 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 190 | $ 190 | |||
Long-term debt, stated interest rate | 6.15% | 6.15% | |||
Long-term debt, excluding finance lease obligations | $ 190 | $ 190 | 190 | ||
$121 million, 5.875% Notes due 2041 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 121 | $ 121 | |||
Long-term debt, stated interest rate | 5.875% | 5.875% | |||
Long-term debt, excluding finance lease obligations | $ 119 | $ 119 | 119 | ||
$449 million, 6.125% Notes due 2041 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 449 | $ 449 | |||
Long-term debt, stated interest rate | 6.125% | 6.125% | |||
Long-term debt, excluding finance lease obligations | $ 491 | $ 491 | 493 | ||
$317 million, 5.375% Notes due 2042 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 317 | $ 317 | |||
Long-term debt, stated interest rate | 5.375% | 5.375% | |||
Long-term debt, excluding finance lease obligations | $ 315 | $ 315 | 315 | ||
$1,500 million, 4.8% Notes due 2046 | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,500 | $ 1,500 | |||
Long-term debt, stated interest rate | 4.80% | 4.80% | |||
Long-term debt, excluding finance lease obligations | $ 1,465 | $ 1,465 | 1,465 | ||
$3,000 million, 4.9% Notes due 2048 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 3,000 | $ 3,000 | |||
Long-term debt, stated interest rate | 4.90% | 4.90% | |||
Long-term debt, excluding finance lease obligations | $ 2,964 | $ 2,964 | 2,964 | ||
$1,000 million, 3.875% Notes due 2047 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,000 | $ 1,000 | |||
Long-term debt, stated interest rate | 3.875% | 3.875% | |||
Long-term debt, excluding finance lease obligations | $ 988 | $ 988 | 988 | ||
$250 million, 4.375% Notes due 2020 [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | 249 | 249 | 0 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 250 | $ 250 | |||
Long-term debt, stated interest rate | 4.375% | 4.375% | |||
Long-term debt, excluding finance lease obligations | $ 0 | $ 0 | 248 | ||
$300 million, 5.125% Notes due 2020 [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | 300 | 300 | 0 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 300 | $ 300 | |||
Long-term debt, stated interest rate | 5.125% | 5.125% | |||
Long-term debt, excluding finance lease obligations | $ 0 | $ 0 | 298 | ||
$349 million, 4.125% Notes due 2020 [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | 351 | 351 | 0 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 349 | $ 349 | 500 | ||
Long-term debt, stated interest rate | 4.125% | 4.125% | |||
Long-term debt, excluding finance lease obligations | $ 0 | $ 0 | 506 | ||
$500 million, 2.6% Notes due 2020 [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | 496 | 496 | 0 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 500 | $ 500 | |||
Long-term debt, stated interest rate | 2.60% | 2.60% | |||
Long-term debt, excluding finance lease obligations | $ 0 | $ 0 | 493 | ||
$1,750 million, 3.2% Notes due 2020 [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | 1,748 | 1,748 | 0 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,750 | $ 1,750 | |||
Long-term debt, stated interest rate | 3.20% | 3.20% | |||
Long-term debt, excluding finance lease obligations | $ 0 | $ 0 | 1,743 | ||
$400 million, Floating Rate Notes due 2020 [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | 400 | 400 | 0 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | 400 | 400 | |||
Long-term debt, excluding finance lease obligations | 0 | 0 | 399 | ||
$1,000 million, Floating Rate Notes due 2020 [Member] | |||||
Short-term debt [Abstract] | |||||
Current maturities | 999 | 999 | 0 | ||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | 1,000 | 1,000 | |||
Long-term debt, excluding finance lease obligations | 0 | 0 | 997 | ||
$3,000 million Floating Rate Term Loan due 2021 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | 3,000 | 3,000 | |||
Long-term debt, excluding finance lease obligations | 0 | 0 | 2,997 | ||
$500 million, 3.3% Notes due 2021 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 500 | $ 500 | |||
Long-term debt, stated interest rate | 3.30% | 3.30% | |||
Long-term debt, excluding finance lease obligations | $ 499 | $ 499 | 499 | ||
$300 million, 4.5% Notes due 2021 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 300 | $ 300 | |||
Long-term debt, stated interest rate | 4.50% | 4.50% | |||
Long-term debt, excluding finance lease obligations | $ 298 | $ 298 | 297 | ||
$78 million, 6.37% Notes due 2021 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 78 | $ 78 | |||
Long-term debt, stated interest rate | 6.37% | 6.37% | |||
Long-term debt, excluding finance lease obligations | $ 78 | $ 78 | 78 | ||
$1,000 million, Floating Rate Notes due 2021 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | 1,000 | 1,000 | |||
Long-term debt, excluding finance lease obligations | 998 | 998 | 996 | ||
$1,250 million, 3.4% Notes due 2021 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,250 | $ 1,250 | |||
Long-term debt, stated interest rate | 3.40% | 3.40% | |||
Long-term debt, excluding finance lease obligations | $ 1,247 | $ 1,247 | 1,245 | ||
$1,248 million, 4.75% Notes due 2021 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,248 | $ 1,248 | |||
Long-term debt, stated interest rate | 4.75% | 4.75% | |||
Long-term debt, excluding finance lease obligations | $ 1,272 | $ 1,272 | 1,285 | ||
$750 million, 4% Notes due 2022 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 750 | $ 750 | |||
Long-term debt, stated interest rate | 4.00% | 4.00% | |||
Long-term debt, excluding finance lease obligations | $ 747 | $ 747 | 746 | ||
$999 million, 3.9% Notes due 2022 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 999 | $ 999 | |||
Long-term debt, stated interest rate | 3.90% | 3.90% | |||
Long-term debt, excluding finance lease obligations | $ 999 | $ 999 | 998 | ||
$500 million, 3.05% Notes due 2022 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 500 | $ 500 | |||
Long-term debt, stated interest rate | 3.05% | 3.05% | |||
Long-term debt, excluding finance lease obligations | $ 485 | $ 485 | 481 | ||
$17 million, 8.3% Notes due 2023 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 17 | $ 17 | |||
Long-term debt, stated interest rate | 8.30% | 8.30% | |||
Long-term debt, excluding finance lease obligations | $ 17 | $ 17 | 17 | ||
$100 million, 7.65% Notes due 2023 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 100 | $ 100 | |||
Long-term debt, stated interest rate | 7.65% | 7.65% | |||
Long-term debt, excluding finance lease obligations | $ 100 | $ 100 | 100 | ||
$700 million, Floating Rate Notes due 2023 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | 700 | 700 | |||
Long-term debt, excluding finance lease obligations | 698 | 698 | 697 | ||
$3,100 million, 3.75% Notes due 2023 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 3,100 | $ 3,100 | |||
Long-term debt, stated interest rate | 3.75% | 3.75% | |||
Long-term debt, excluding finance lease obligations | $ 3,088 | $ 3,088 | 3,085 | ||
$1,000 million, 3% Notes due 2023 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,000 | $ 1,000 | |||
Long-term debt, stated interest rate | 3.00% | 3.00% | |||
Long-term debt, excluding finance lease obligations | $ 966 | $ 966 | 959 | ||
$900 million, 3.25% Notes Due 2025 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 900 | $ 900 | |||
Long-term debt, stated interest rate | 3.25% | 3.25% | |||
Long-term debt, excluding finance lease obligations | $ 895 | $ 895 | 895 | ||
$2,200 million, 4.125% Notes due 2025 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 2,200 | $ 2,200 | |||
Long-term debt, stated interest rate | 4.125% | 4.125% | |||
Long-term debt, excluding finance lease obligations | $ 2,188 | $ 2,188 | 2,187 | ||
$1,000 million, 3.5% Notes due 2024 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 1,000 | $ 1,000 | |||
Long-term debt, stated interest rate | 3.50% | 3.50% | |||
Long-term debt, excluding finance lease obligations | $ 970 | $ 970 | 966 | ||
$2,200 million, 4.8% Notes due 2038 [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Long-term debt, face value | $ 2,200 | $ 2,200 | |||
Long-term debt, stated interest rate | 4.80% | 4.80% | |||
Long-term debt, excluding finance lease obligations | $ 2,178 | $ 2,178 | $ 2,178 | ||
Notes issued in 2018 in connection with Express Scripts Merger [Member] | Commercial Paper [Member] | |||||
Long-term uncollateralized debt [Abstract] | |||||
Net proceeds on issuance of long-term debt | $ 20,000 |
Debt - Extinguishment (Details)
Debt - Extinguishment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Extinguishment of Debt [Line Items] | |||
Debt extinguishment costs | $ 2 | $ 0 | $ 321 |
Debt extinguishment costs, after-tax | $ 209 |
Debt - Revolving Credit and Let
Debt - Revolving Credit and Letter of Credit (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Banks | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Line of Credit Facility [Line Items] | |||
Debt covenant compliance | The Company was in compliance with its debt covenants as of December 31, 2019. | ||
Repayment of long-term debt | $ 4,491 | $ 131 | $ 1,250 |
Repayment of short-term debt | 681 | (1,487) | $ (80) |
Repayment of outstanding obligations | 5,200 | ||
$3,000 million Floating Rate Term Loan due 2021 [Member] | |||
Line of Credit Facility [Line Items] | |||
Aggregate principal amount | 3,000 | ||
Repayment of long-term debt | 3,000 | ||
$349 million, 4.125% Notes due 2020 [Member] | |||
Line of Credit Facility [Line Items] | |||
Aggregate principal amount | 349 | $ 500 | |
Repayment of long-term debt | 151 | ||
Long Term Debt Current Maturities Paid [Member] | |||
Line of Credit Facility [Line Items] | |||
Repayment of long-term debt | $ 1,300 | ||
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Leverage ratio covenant | 60.00% | ||
Revolving Credit Facility [Member] | 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 | ||
Revolving Credit Facility [Member] | 364-day Revolving Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of participating banks | Banks | 23 | ||
Credit agreement term | 364 days | ||
Maximum borrowing capacity | $ 1,000 | ||
Letter of Credit [Member] | Revolving Credit And Letter Of Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 500 | ||
Letters of credit outstanding | 10 | ||
Term Loan Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Aggregate principal amount | $ 3,000 |
Debt - Maturities and Interest
Debt - Maturities and Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Maturities Of Debt Excluding Finance Leases [Abstract] | |||
Scheduled maturities, long-term debt, 2020 | $ 4,549 | ||
Scheduled maturities, long-term debt, 2021 | 4,376 | ||
Scheduled maturities, long-term debt, 2022 | 2,249 | ||
Scheduled maturities, long-term debt, 2023 | 4,917 | ||
Scheduled maturities, long-term debt, 2024 | 1,000 | ||
Scheduled maturities, long-term debt, after 2024 | 19,581 | ||
Finance Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Scheduled maturities, finance leases, 2020 | 27 | ||
Scheduled maturities, finance leases, 2021 | 18 | ||
Scheduled maturities, finance leases, 2022 | 16 | ||
Scheduled maturities, finance leases, 2023 | 7 | ||
Scheduled maturities, finance leases, 2024 | 5 | ||
Scheduled maturities, finance leases, after 2024 | 15 | ||
Interest Expense [Abstract] | |||
Interest expense on long-term and short-term debt | $ 1,600 | $ 507 | $ 243 |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 20, 2018 | Dec. 31, 2017 |
Common: Par value $.01 ($.25, Old Cigna), 600,000,000 shares authorized | ||||
Outstanding - beginning balance | 380,924,000 | 0 | ||
Shares issued in connection with acquisition | 137,337,000 | |||
Issued for stock option exercises and other benefit plans | 91,000 | 3,413,000 | ||
Repurchase of common stock | (289,000) | (11,806,000) | ||
Exchange of old Cigna shares for shares of Cigna | 243,785,000 | |||
Outstanding - ending balance | 380,924,000 | 372,531,000 | 0 | |
Treasury stock | 570,000 | 13,012,000 | ||
Issued - December 31 | 381,494,000 | 385,543,000 | ||
Common Stock, par value and shares authorized | ||||
Common stock, par value per share | $ 0.01 | $ 0.01 | ||
Common stock shares authorized | 600,000,000 | 600,000,000 | ||
Preferred Stock [Abstract] | ||||
Preferred Stock, Shares Authorized | 25,000,000 | 25,000,000 | ||
Preferred Stock, Par Value Per Share | $ 1 | $ 1 | ||
Preferred Stock, Shares Outstanding | 0 | 0 | ||
Express Scripts Holding Company [Member] | ||||
Cash consideration per share | $ 48.75 | |||
Per share exchange ratio | 0.2434 | |||
Common: Par value $.01 ($.25, Old Cigna), 600,000,000 shares authorized | ||||
Outstanding - beginning balance | 564,300,000 | |||
Outstanding - ending balance | 564,300,000 | |||
Old Cigna [Member] | ||||
Common: Par value $.01 ($.25, Old Cigna), 600,000,000 shares authorized | ||||
Outstanding - beginning balance | 243,785,000 | 0 | 243,967,000 | 256,869,000 |
Issued for stock option exercises and other benefit plans | 1,118,000 | 2,761,000 | ||
Repurchase of common stock | (1,300,000) | (15,663,000) | ||
Exchange of old Cigna shares for shares of Cigna | (243,785,000) | |||
Outstanding - ending balance | 0 | 243,785,000 | 243,967,000 | |
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 | ||
Issued - December 31 | 0 | 296,145,000 | ||
Common Stock, par value and shares authorized | ||||
Common stock, par value per share | $ 0.25 | |||
Common stock shares authorized | 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 |
Insurance and Contractholder _3
Insurance and Contractholder Liabilities - Account Balances Including Disposal Groups (Details) $ in Millions | Dec. 31, 2019USD ($) |
Insuarance And Contractholder Liabilities Including Disposal Groups [Abstract] | |
Contractholder deposit funds, current, including disposal groups | $ 600 |
Future policy benefits, current, including disposal groups | 553 |
Unearned premiums, current, including disposal groups | 453 |
Total insurance and contractholder liabilities, current, including disposal groups | 7,010 |
Contractholder deposit funds, non-current, including disposal groups | 7,139 |
Future policy benefits, non-current, including disposal groups | 9,281 |
Unearned premiums, non-current, including disposal groups | 360 |
Total insurance and contractholder liabilities, non-current, including disposal groups | 20,271 |
Contractholder deposit funds, including disposal groups | 7,739 |
Future policy benefits, including disposal groups | 9,834 |
Unearned premiums, including disposal groups | 813 |
Total insurance and contractholder liabilities, including disposal groups | 27,281 |
Amounts classified as held for sale: | |
Unpaid claims classified as held for sale | 4,900 |
Contractholder deposit funds classified as held for sale | 717 |
Future policy benefits classified as held for sale | 653 |
Integrated Medical [Member] | |
Insuarance And Contractholder Liabilities Including Disposal Groups [Abstract] | |
Unpaid claims and claim expenses, current, including disposal groups | 2,875 |
Unpaid claims and claim expenses, non-current, including disposal groups | 17 |
Total liability for unpaid claims and claims expenses, including disposal groups | 2,892 |
Other Segments [Member] | |
Insuarance And Contractholder Liabilities Including Disposal Groups [Abstract] | |
Unpaid claims and claim expenses, current, including disposal groups | 2,529 |
Unpaid claims and claim expenses, non-current, including disposal groups | 3,474 |
Total liability for unpaid claims and claims expenses, including disposal groups | $ 6,003 |
Insurance and Contractholder _4
Insurance and Contractholder Liabilities - Account Balances, Reconciliation to Consoliated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Insurance and Contractholder Liabilities [Abstract] | ||
Total insurance and contractholder liabilities, current, including disposal groups | $ 7,010 | |
Total insurance and contractholder liabilities, non-current, including disposal groups | 20,271 | |
Total insurance and contractholder liabilities, including disposal groups | 27,281 | |
Insurance and contractholder liabilities classified as held for sale, Current | (2,089) | |
Insurance and contractholder liabilities classified as held for sale, Non-current | (4,219) | |
Insurance and contractholder liabilities classified as held for sale | (6,308) | |
Current insurance and contractholder liabilities | 4,921 | $ 6,801 |
Non-current insurance and contractholder liabilities | 16,052 | 19,974 |
Insurance And Contractholder Liabilities | $ 20,973 | $ 26,775 |
Insurance and Contractholder _5
Insurance and Contractholder Liabilities - Account Balances (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Insurance and Contractholder Liabilities [Line Items] | ||||
Contractholder deposit funds, current | $ 641 | |||
Future policy benefits, current | 740 | |||
Unearned premiums, current | 348 | |||
Total insurance and contractholder liabilities, current | $ 4,921 | 6,801 | ||
Contractholder deposit funds, non-current | 7,365 | |||
Future policy benefits, non-current | 8,981 | |||
Unearned premiums, non-current | 379 | |||
Total insurance and contractholder liabilities, non-current | 16,052 | 19,974 | ||
Contractholder deposit funds | 8,006 | |||
Future policy benefits | 9,721 | |||
Unearned premiums | 727 | |||
Total insurance and contractholder liabilities | $ 20,973 | 26,775 | ||
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 | |||
Unpaid claims and claim expenses, non-current | 19 | |||
Total liability for unpaid claims and claims expenses | 2,697 | $ 2,420 | $ 2,261 | |
Other Segments [Member] | ||||
Insurance and Contractholder Liabilities [Line Items] | ||||
Unpaid claims and claim expenses, current | 2,394 | |||
Unpaid claims and claim expenses, non-current | 3,230 | |||
Total liability for unpaid claims and claims expenses | $ 5,624 |
Insurance and Contractholder _6
Insurance and Contractholder Liabilities - Integrated Medical - Activity (Details) - Integrated Medical [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Medical Claims Payable Activity [Abstract] | |||
Beginning balance, unpaid claims, gross | $ 2,697 | $ 2,420 | $ 2,261 |
Less: Reinsurance and other amounts recoverable | 264 | 262 | 273 |
Beginning balance, unpaid claims, net | 2,433 | 2,158 | 1,988 |
Acquired net: | 0 | 40 | 0 |
Incurred claims related to: | |||
Current year | 24,368 | 21,331 | 19,334 |
Prior years | (165) | (173) | (227) |
Total incurred | 24,203 | 21,158 | 19,107 |
Paid claims related to: | |||
Current year | 21,851 | 18,978 | 17,179 |
Prior years | 2,196 | 1,945 | 1,758 |
Total paid | 24,047 | 20,923 | 18,937 |
Ending balance, unpaid claims, net | 2,433 | 2,158 | |
Add: Reinsurance and other amounts recoverable | 264 | 262 | |
Ending balance, unpaid claims, gross | 2,697 | $ 2,420 | |
Ending balance, unpaid claims and claims expense including disposal groups, net | 2,589 | ||
Add: Reinsurance and other amounts recoverable, including disposal groups | 303 | ||
Ending balance, unpaid claims including disposal groups, gross | 2,892 | ||
Total of incurred but not reported liabilities plus expected claim development on reported claims, including reported claims in process | $ 2,700 | $ 2,500 |
Insurance and Contractholder _7
Insurance and Contractholder Liabilities - Integrated Medical - Prior Year Development (Details) - Integrated Medical [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 165 | $ 173 | $ 227 |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.80% | 0.90% | |
Favorable (unfavorable) impact of prior year development on shareholders' net income | $ 67 | $ 77 | |
Favorable (unfavorable) impact of prior year development on pre-tax income | 85 | 97 | |
Completion Factors [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 90 | $ 92 | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.40% | 0.50% | |
Medical Cost Trend [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 75 | $ 72 | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.40% | 0.40% | |
Other [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Abstract] | |||
Variance (unfavorable) in incurred costs related to prior years' claims payable | $ 0 | $ 9 | |
Variance (unfavorable) in incurred costs related to prior years' claims payable, percentage | 0.00% | 0.00% |
Insurance and Contractholder _8
Insurance and Contractholder Liabilities - Integrated Medical - Unpaid Claims Development (Details) - Integrated Medical [Member] Claims in Millions, $ in Millions | Dec. 31, 2019USD ($)Claims | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Claims Development [Line Items] | ||||
Incurred claims | $ 43,626 | |||
Cumulative Paid Claims | 41,182 | |||
Outstanding liabilities for the periods presented, net of reinsurance | 2,444 | |||
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 | |
Reinsurance recoverable on unpaid claims | 264 | 262 | 273 | |
Total liability for unpaid claims and claims expenses | 2,697 | $ 2,420 | $ 2,261 | |
Percent of health claims paid within one year | 95.00% | |||
Unpaid claims and claims expense including disposal groups, net | $ 2,589 | |||
Reinsurance and other amounts recoverable, including disposal groups | 303 | |||
Unpaid claims and claims expense including disposal groups, gross | 2,892 | |||
Accident Year 2018 [Member] | ||||
Claims Development [Line Items] | ||||
Incurred claims | 20,320 | 20,458 | ||
Cumulative Paid Claims | 20,262 | $ 18,192 | ||
Outstanding liabilities for the periods presented, net of reinsurance | $ 58 | |||
Claim frequency | Claims | 2.9 | |||
Accident Year 2019 [Member] | ||||
Claims Development [Line Items] | ||||
Incurred claims | $ 23,306 | |||
Cumulative Paid Claims | 20,920 | |||
Outstanding liabilities for the periods presented, net of reinsurance | $ 2,386 | |||
Claim frequency | Claims | 3.5 |
Insurance and Contractholder _9
Insurance and Contractholder Liabilities - Other Segments - Liability Balance Details (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Other Segments [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 5,624 | |
Unpaid claims and claims expense including disposal groups, gross | $ 6,003 | |
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 | |
Unpaid claims and claims expense including disposal groups, gross | 5,159 | |
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 | |
Unpaid claims and claims expense including disposal groups, gross | 4,972 | |
Other Operations [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | 192 | |
Unpaid claims and claims expense including disposal groups, gross | 187 | |
International Markets [Member] | ||
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 758 | |
Unpaid claims and claims expense including disposal groups, gross | $ 844 |
Insurance and Contractholder_10
Insurance and Contractholder Liabilities - Other Segments - Discounted Liabilities (Details) - USD ($) $ in Billions | Dec. 31, 2019 | Dec. 31, 2018 |
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Discounted liabilities | $ 4.5 | $ 4.2 |
Aggregate amount of discount | $ 1.2 | $ 1.1 |
Minimum [Member] | ||
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Range of discount rates | 4.00% | 4.20% |
Maximum [Member] | ||
Short-duration Insurance Contracts Discounted Liabilities [Line Items] | ||
Range of discount rates | 5.20% | 5.20% |
Insurance and Contractholder_11
Insurance and Contractholder Liabilities - Other Segments - Activity in Liabilities for Unpaid Claims and Claims Expenses (Details) - Intenational Markets and Group Disability and Life [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liability For Unpaid Claims And Claims Adjustment Expense [Line Items] | |||
Beginning balance, unpaid claims, gross | $ 5,432 | $ 5,274 | $ 4,997 |
Less: Reinsurance and other amounts recoverable | 156 | 140 | 123 |
Beginning balance, unpaid claims, net | 5,276 | 5,134 | 4,874 |
Incurred claims related to: | |||
Current year | 5,616 | 5,350 | 5,097 |
Interest accretion | 152 | 156 | 163 |
All other prior years | (40) | (147) | (43) |
Total incurred | 5,728 | 5,359 | 5,217 |
Paid claims related to: | |||
Current year | 3,488 | 3,391 | 3,229 |
Prior years | 1,873 | 1,808 | 1,757 |
Total paid | 5,361 | 5,199 | 4,986 |
Acquisitions | 0 | 23 | 0 |
Foreign currency | (11) | (41) | 29 |
Ending balance, unpaid claims, net | 5,276 | 5,134 | |
Add: Reinsurance and other amounts recoverable | 156 | 140 | |
Ending balance, unpaid claims, gross | $ 5,432 | $ 5,274 | |
Ending balance, unpaid claims and claims expense including disposal groups, net | 5,632 | ||
Add: Reinsurance and other amounts recoverable, including disposal groups | 184 | ||
Ending balance, unpaid claims including disposal groups, gross | $ 5,816 |
Insurance and Contractholder_12
Insurance and Contractholder Liabilities - Other Segments - Long-term Disability Claims Development Tables (Details) - Long-term Disability [Member] $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2019USD ($)Claims | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Claims Development [Line Items] | ||||||||
Incurred claims | $ 9,229 | |||||||
Cumulative Paid Claims | 4,918 | |||||||
Outstanding liabilities for the periods presented, net of reinsurance | 4,311 | |||||||
All outstanding liabilities prior to 2012, net of reinsurance | 771 | |||||||
Impact of discounting | (891) | |||||||
Unpaid claims and claims expense including disposal groups, net | $ 4,191 | |||||||
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 assigned 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. | |||||||
Disabled life reserves | $ 3,500 | |||||||
Accident Year 2012 [Member] | ||||||||
Claims Development [Line Items] | ||||||||
Incurred claims | 860 | $ 861 | $ 880 | $ 883 | $ 876 | $ 889 | $ 951 | $ 995 |
Cumulative Paid Claims | 693 | 661 | 621 | 571 | 504 | 429 | 288 | $ 81 |
Incurred But Not Reported Liabilities | $ 0 | |||||||
Claim frequency | Claims | 21,186 | |||||||
Accident Year 2013 [Member] | ||||||||
Claims Development [Line Items] | ||||||||
Incurred claims | $ 1,030 | 1,032 | 1,057 | 1,072 | 1,062 | 1,037 | 1,063 | |
Cumulative Paid Claims | 780 | 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 | $ 1,081 | 1,094 | 1,146 | 1,167 | 1,129 | 1,158 | ||
Cumulative Paid Claims | 803 | 743 | 667 | 575 | 379 | $ 111 | ||
Incurred But Not Reported Liabilities | $ 0 | |||||||
Claim frequency | Claims | 25,324 | |||||||
Accident Year 2015 [Member] | ||||||||
Claims Development [Line Items] | ||||||||
Incurred claims | $ 1,148 | 1,160 | 1,185 | 1,154 | 1,184 | |||
Cumulative Paid Claims | 783 | 702 | 603 | 417 | $ 114 | |||
Incurred But Not Reported Liabilities | $ 0 | |||||||
Claim frequency | Claims | 25,781 | |||||||
Accident Year 2016 [Member] | ||||||||
Claims Development [Line Items] | ||||||||
Incurred claims | $ 1,202 | 1,199 | 1,184 | 1,246 | ||||
Cumulative Paid Claims | 709 | 598 | 411 | $ 122 | ||||
Incurred But Not Reported Liabilities | $ 0 | |||||||
Claim frequency | Claims | 25,577 | |||||||
Accident Year 2017 [Member] | ||||||||
Claims Development [Line Items] | ||||||||
Incurred claims | $ 1,207 | 1,193 | 1,226 | |||||
Cumulative Paid Claims | 590 | 396 | $ 110 | |||||
Incurred But Not Reported Liabilities | $ 1 | |||||||
Claim frequency | Claims | 23,959 | |||||||
Accident Year 2018 [Member] | ||||||||
Claims Development [Line Items] | ||||||||
Incurred claims | $ 1,267 | 1,348 | ||||||
Cumulative Paid Claims | 434 | $ 116 | ||||||
Incurred But Not Reported Liabilities | $ 10 | |||||||
Claim frequency | Claims | 25,154 | |||||||
Accident Year 2019 [Member] | ||||||||
Claims Development [Line Items] | ||||||||
Incurred claims | $ 1,434 | |||||||
Cumulative Paid Claims | 126 | |||||||
Incurred But Not Reported Liabilities | $ 533 | |||||||
Claim frequency | Claims | 13,061 |
Insurance and Contractholder_13
Insurance and Contractholder Liabilities - Other Segments - Annual Percentage Payout of Incurred Claims (Details) - Long-term Disability [Member] | Dec. 31, 2019 |
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 | 25.00% |
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% |
Average annual percentage payout of incurred claims in year eight, net of reinsurance | 4.00% |
Insurance and Contractholder_14
Insurance and Contractholder Liabilities - Other Segments - Reconciliation to the Liability for Unpaid Claims and Claims Expense (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
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 | |
Unpaid claims and claims expense including disposal groups, gross | $ 6,003 | |
International Markets [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 758 | |
Unpaid claims and claims expense including disposal groups, gross | 844 | |
Group Disability And Life [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | 4,674 | |
Unpaid claims and claims expense including disposal groups, net | 4,843 | |
Reinsurance and other amounts recoverable, including disposal groups | 129 | |
Unpaid claims and claims expense including disposal groups, gross | 4,972 | |
Other Operations [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Total liability for unpaid claims and claims expenses | $ 192 | |
Unpaid claims and claims expense including disposal groups, gross | 187 | |
Long-term Disability [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Unpaid claims and claims expense including disposal groups, net | 4,191 | |
Long-term Disability [Member] | Group Disability And Life [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Unpaid claims and claims expense including disposal groups, net | 4,191 | |
Reinsurance and other amounts recoverable, including disposal groups | 117 | |
Other Short-duration Insurance Product Line [Member] | Group Disability And Life [Member] | ||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||
Unpaid claims and claims expense including disposal groups, net | 652 | |
Reinsurance and other amounts recoverable, including disposal groups | $ 12 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Ceded Credit Risk [Line Items] | ||
Current reinsurance recoverables | $ 222 | $ 297 |
Reinsurance recoverables, including disposal groups | 5,495 | |
Reinsurance recoverables | 5,804 | |
Reinsurance recoverables classified as Assets held for sale | 173 | |
Ongoing Operations [Member] | ||
Ceded Credit Risk [Line Items] | ||
Maximum reinsurance recoverable from a single reinsurer | 72 | |
Ongoing Operations [Member] | Maximum [Member] | ||
Ceded Credit Risk [Line Items] | ||
Minimum reinsurance recoverable from a single reinsurer | $ 1 | |
Ongoing Operations [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, including disposal groups | $ 4,981 | |
Reinsurance recoverables | 5,340 | |
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, including disposal groups | 3,174 | |
Reinsurance recoverables | 3,312 | |
Berkshire [Member] | Guaranteed Minimum Death Benefits [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables, including disposal groups | $ 787 | |
Reinsurance recoverables | 893 | |
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, including disposal groups | $ 711 | |
Reinsurance recoverables | 787 | |
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, including disposal groups | $ 238 | |
Reinsurance recoverables | 261 | |
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] | Ongoing Operations [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables, including disposal groups | $ 514 | |
Reinsurance recoverables | 464 | |
Other Retrocessionaires [Member] | Integrated Medical, International Markets, Group Disability, COLI [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables, including disposal groups | 514 | |
Reinsurance recoverables | 464 | |
Other Retrocessionaires [Member] | Other run-off reinsurance [Member] | ||
Ceded Credit Risk [Line Items] | ||
Reinsurance recoverables, including disposal groups | $ 71 | |
Reinsurance recoverables | $ 87 | |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Premiums Earned, Net [Abstract] | |||
Premiums Earned Net | $ 39,714 | $ 36,113 | $ 32,491 |
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 395 | 452 | 325 |
Premiums Written, Net [Abstract] | |||
Direct premiums, written versus earned | |||
Assumed premiums, written versus earned | |||
Ceded Premiums Written Versus Earned | |||
Net premiums, written versus earned | |||
Individual Life Insurance And Annuity Business Sold [Member] | |||
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 238 | 249 | 259 |
Other Subsegments [Member] | |||
Reinsurance Recoveries [Abstract] | |||
Reinsurance recoveries | 157 | 203 | 66 |
Short Duration Contracts [Member] | |||
Premiums Earned, Net [Abstract] | |||
Direct | 35,690 | 32,148 | 28,838 |
Assumed | 64 | 77 | 199 |
Ceded | (203) | (182) | (150) |
Premiums Earned Net | 35,551 | 32,043 | 28,887 |
Long Duration Contracts [Member] | |||
Premiums Earned, Net [Abstract] | |||
Direct | 4,352 | 4,268 | 3,748 |
Assumed | 105 | 116 | 130 |
Premiums Earned Net | 4,163 | 4,070 | 3,604 |
Long Duration Contracts [Member] | Individual Life Insurance And Annuity Business Sold [Member] | |||
Premiums Earned, Net [Abstract] | |||
Ceded | (126) | (133) | (143) |
Long Duration Contracts [Member] | Other Subsegments [Member] | |||
Premiums Earned, Net [Abstract] | |||
Ceded | $ (168) | $ (181) | $ (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, 2019USD ($) |
Ceded Credit Risk [Line Items] | |
Percent of future claim payments reinsured | 100.00% |
Ceded Reinsurance Agreement, Coverage Limit, Amount Remaining | $ 3.3 |
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, 2019USD ($)Contractholders | Dec. 31, 2018USD ($)Contractholders | |
Guaranteed Minimum Death Benefits Account Value, Net Amount at Risk And Average Age Table [Line Items] | ||
Account value | $ 9,110 | $ 8,402 |
Net amount at risk | $ 1,764 | $ 2,466 |
Average attained age of contractholders (weighted by exposure) | 76 years | 74 years |
Number of contractholders, estimated | Contractholders | 200,000 | 220,000 |
Reinsurance - GMIB Reinsurers (
Reinsurance - GMIB Reinsurers (Details) - Guaranteed Minimum Income Benefit [Member] $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Reinsurers | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Ceded Credit Risk [Line Items] | |||
Annuitization election period | 30 days | ||
Number of external reinsurers | Reinsurers | 3 | ||
Percent of GMIB exposures reinsured | 100.00% | ||
GMIB Assets | $ 713 | $ 733 | |
GMIB liabilities | 688 | 706 | |
Amounts included in shareholders net income for GMIB assets | |||
Amounts included in shareholders net income for GMIB liabilities | |||
Berkshire [Member] | |||
Ceded Credit Risk [Line Items] | |||
GMIB Assets | $ 332 | 341 | |
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 | $ 202 | 208 | |
Liberty Re (Bermuda) Ltd. [Member] | |||
Ceded Credit Risk [Line Items] | |||
GMIB Assets | $ 179 | $ 184 | |
Liberty Re (Bermuda) Ltd. [Member] | Ceded Credit Risk Secured [Member] | GMIB Assets [Member] | |||
Ceded Credit Risk [Line Items] | |||
Concentration percentage | 96.00% |
Investments - Investments by Ca
Investments - Investments by Category (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Investments [Line Items] | ||
Current investments | $ 937 | $ 2,045 |
Long-term investments | 21,542 | 26,929 |
Total investments | 22,479 | 28,974 |
Current investments held for sale | (414) | |
Long-term investments held for sale | (7,295) | |
Investments held for sale | (7,709) | |
Current investments, including disposal groups | 1,351 | |
Long-term investments, including disposal groups | 28,837 | |
Total investments, including disposal groups | 30,188 | |
Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 1,320 | |
Long-term investments | 21,608 | |
Total investments | 22,928 | |
Current investments, including disposal groups | 928 | |
Long-term investments, including disposal groups | 22,827 | |
Total investments, including disposal groups | 23,755 | |
Equity securities [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 377 | |
Long-term investments | 171 | |
Total investments | 548 | |
Current investments, including disposal groups | 0 | |
Long-term investments, including disposal groups | 303 | |
Total investments, including disposal groups | 303 | |
Commercial mortgage loans [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 32 | |
Long-term investments | 1,826 | |
Total investments | 1,858 | |
Current investments, including disposal groups | 0 | |
Long-term investments, including disposal groups | 1,947 | |
Total investments, including disposal groups | 1,947 | |
Policy loans [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 0 | |
Long-term investments | 1,423 | |
Total investments | 1,423 | |
Current investments, including disposal groups | 0 | |
Long-term investments, including disposal groups | 1,357 | |
Total investments, including disposal groups | 1,357 | |
Short-term investments [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 316 | |
Long-term investments | 0 | |
Total investments | 316 | |
Current investments, including disposal groups | 423 | |
Long-term investments, including disposal groups | 0 | |
Total investments, including disposal groups | 423 | |
Other long-term investments [Member] | ||
Schedule of Investments [Line Items] | ||
Current investments | 0 | |
Long-term investments | 1,901 | |
Total investments | $ 1,901 | |
Current investments, including disposal groups | 0 | |
Long-term investments, including disposal groups | 2,403 | |
Total investments, including disposal groups | $ 2,403 |
Investments - Investments by _2
Investments - Investments by Category, Alternative (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Investments [Abstract] | ||
Current investments | $ 937 | $ 2,045 |
Current investments held for sale | (414) | |
Current investments, including disposal groups | 1,351 | |
Long-term investments | 21,542 | 26,929 |
Long-term investments held for sale | (7,295) | |
Long-term investments, including disposal groups | 28,837 | |
Total investments | 22,479 | $ 28,974 |
Investments held for sale | (7,709) | |
Total investments, including disposal groups | $ 30,188 |
Investments - Contractual Matur
Investments - Contractual Maturity Periods for Debt Securities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost: | ||
Total amortized cost | $ 22,550 | |
Due in one year or less, including disposal groups | $ 920 | |
Due after one year through five years, including disposal groups | 7,176 | |
Due after five years through ten years, including disposal groups | 9,098 | |
Due after ten years, including disposal groups | 4,209 | |
Mortgage and other asset-backed securities, including disposal groups | 506 | |
Amortized Cost, including disposal groups | 21,909 | |
Fair Value: | ||
Due in one year or less, including disposal groups | 932 | |
Due after one year through five years, including disposal groups | 7,452 | |
Due after five years through ten years, including disposal groups | 9,644 | |
Due after ten years, including disposal groups | 5,191 | |
Mortgage and other asset-backed securities, including disposal groups | 536 | |
Total fair value, including disposal groups | $ 23,755 |
Investments - Gross Unrealized
Investments - Gross Unrealized Appreciation (Depreciation) on Debt Securities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Available-for-sale Securities [Line Items] | ||
Total amortized cost | $ 22,550 | |
Unrealized Appreciation | 852 | |
Unrealized (Depreciation) | (474) | |
Fair Value | 22,928 | |
Amortized Cost, including disposal groups | $ 21,909 | |
Unrealized Appreciation, including disposal groups | 1,876 | |
Unrealized (Depreciation), including disposal groups | (30) | |
Fair Value, including disposal groups | 23,755 | |
Commitments to make additional investments | 98 | |
Run-off Settlement Annuity Business [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total amortized cost | 2,264 | |
Unrealized Appreciation | 479 | |
Unrealized (Depreciation) | (40) | |
Fair Value | 2,703 | |
Amortized Cost, including disposal groups | 2,229 | |
Unrealized Appreciation, including disposal groups | 740 | |
Unrealized (Depreciation), including disposal groups | (4) | |
Fair Value, including disposal groups | 2,965 | |
Federal government and agency [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total amortized cost | 507 | |
Unrealized Appreciation | 204 | |
Unrealized (Depreciation) | (1) | |
Fair Value | 710 | |
Amortized Cost, including disposal groups | 498 | |
Unrealized Appreciation, including disposal groups | 235 | |
Unrealized (Depreciation), including disposal groups | 0 | |
Fair Value, including disposal groups | 733 | |
State and local government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total amortized cost | 920 | |
Unrealized Appreciation | 66 | |
Unrealized (Depreciation) | (1) | |
Fair Value | 985 | |
Amortized Cost, including disposal groups | 729 | |
Unrealized Appreciation, including disposal groups | 81 | |
Unrealized (Depreciation), including disposal groups | 0 | |
Fair Value, including disposal groups | 810 | |
Foreign government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total amortized cost | 2,214 | |
Unrealized Appreciation | 155 | |
Unrealized (Depreciation) | (7) | |
Fair Value | 2,362 | |
Amortized Cost, including disposal groups | 2,027 | |
Unrealized Appreciation, including disposal groups | 230 | |
Unrealized (Depreciation), including disposal groups | (1) | |
Fair Value, including disposal groups | 2,256 | |
Corporate [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total amortized cost | 18,403 | |
Unrealized Appreciation | 411 | |
Unrealized (Depreciation) | (453) | |
Fair Value | 18,361 | |
Amortized Cost, including disposal groups | 18,149 | |
Unrealized Appreciation, including disposal groups | 1,299 | |
Unrealized (Depreciation), including disposal groups | (28) | |
Fair Value, including disposal groups | 19,420 | |
Mortgage and other asset-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total amortized cost | 506 | |
Unrealized Appreciation | 16 | |
Unrealized (Depreciation) | (12) | |
Fair Value | $ 510 | |
Amortized Cost, including disposal groups | 506 | |
Unrealized Appreciation, including disposal groups | 31 | |
Unrealized (Depreciation), including disposal groups | (1) | |
Fair Value, including disposal groups | $ 536 |
Investments, Investment Incom_3
Investments, Investment Income and Gains and Losses - Securities with a Decline in Fair Value (Details) - Debt Securities [Member] $ in Millions | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
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) | |
Available For Sale Securities Continuous Unrealized Loss Position1 Before Reclassification To Disposal Group Assets Held For Sale [Abstract] | ||
Fair value, one year or less, including disposal groups | $ 723 | |
Amortized cost, one year or less, including disposal groups | 729 | |
Unrealized depreciation, one year or less, including disposal groups | (6) | |
Fair value, more than one year, including disposal groups | 366 | |
Amortized cost, more than one year, including disposal groups | 378 | |
Unrealized depreciation, more than one year, including disposal groups | $ (12) | |
Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 1,324 | |
Available For Sale Securities Continuous Unrealized Loss Position1 Before Reclassification To Disposal Group Assets Held For Sale [Abstract] | ||
Number of issues, total, including disposal groups | 267 | |
Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 784 | |
Available For Sale Securities Continuous Unrealized Loss Position1 Before Reclassification To Disposal Group Assets Held For Sale [Abstract] | ||
Number of issues, total, including disposal groups | 118 | |
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) | |
Available For Sale Securities Continuous Unrealized Loss Position1 Before Reclassification To Disposal Group Assets Held For Sale [Abstract] | ||
Fair value, one year or less, including disposal groups | $ 340 | |
Amortized cost, one year or less, including disposal groups | 348 | |
Unrealized depreciation, one year or less, including disposal groups | (8) | |
Fair value, more than one year, including disposal groups | 84 | |
Amortized cost, more than one year, including disposal groups | 88 | |
Unrealized depreciation, more than one year, including disposal groups | $ (4) | |
Below Investment Grade [Member] | One Year Or Less [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 1,190 | |
Available For Sale Securities Continuous Unrealized Loss Position1 Before Reclassification To Disposal Group Assets Held For Sale [Abstract] | ||
Number of issues, total, including disposal groups | 355 | |
Below Investment Grade [Member] | More Than One Year [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Number of issues, total | 245 | |
Available For Sale Securities Continuous Unrealized Loss Position1 Before Reclassification To Disposal Group Assets Held For Sale [Abstract] | ||
Number of issues, total, including disposal groups | 93 |
Investments, Investment Incom_4
Investments, Investment Income and Gains and Losses - Equity Securities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments [Abstract] | ||
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 | ||
Fair equity securities that have a readily determinable fair value, including disposal groups | 64 | |
Amortized cost of equity securities that have a readily determinable fair value, including disposal groups | 61 | |
Carrying value of private equity securities that do not have a readily determinable fair value, including disposal groups | $ 192 |
Investments, Investment Incom_5
Investments, Investment Income and Gains and Losses - Hybrid Securities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Investments [Line Items] | ||
Hybrid securities | $ 44 | |
Hybrid instruments, cost | $ 58 | |
Hybrid securities, including disposal groups | $ 47 | |
Hybrid instruments, cost, including disposal groups | $ 58 |
Investments, Investment Incom_6
Investments, Investment Income and Gains and Losses - Credit Risk Profile, Commercial Mortgage Loans (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Schedule of Investments [Line Items] | ||
Commercial mortgage loan | $ 1,858 | |
Commercial mortgage loans, including disposal groups | $ 1,947 | |
Weighted Average [Member] | ||
Schedule of Investments [Line Items] | ||
Average Debt Service Coverage Ratio | 2.04 | |
Average Loan-to-Value Ratio | 58.00% | |
Average Debt Service Coverage Ratio, including disposal groups | 2.09 | |
Average Loan-to-Value Ratio, including disposal groups | 58.00% | |
Below 60% [Member] | ||
Schedule of Investments [Line Items] | ||
Commercial mortgage loan | $ 1,132 | |
Commercial mortgage loans, including disposal groups | $ 1,136 | |
Below 60% [Member] | Weighted Average [Member] | ||
Schedule of Investments [Line Items] | ||
Average Debt Service Coverage Ratio | 2.14 | |
Average Debt Service Coverage Ratio, including disposal groups | 2.19 | |
60% to 79% [Member] | ||
Schedule of Investments [Line Items] | ||
Commercial mortgage loan | $ 650 | |
Commercial mortgage loans, including disposal groups | $ 723 | |
60% to 79% [Member] | Weighted Average [Member] | ||
Schedule of Investments [Line Items] | ||
Average Debt Service Coverage Ratio | 1.93 | |
Average Debt Service Coverage Ratio, including disposal groups | 1.98 | |
80% to 100% [Member] | ||
Schedule of Investments [Line Items] | ||
Commercial mortgage loan | $ 76 | |
Commercial mortgage loans, including disposal groups | $ 88 | |
80% to 100% [Member] | Weighted Average [Member] | ||
Schedule of Investments [Line Items] | ||
Average Debt Service Coverage Ratio | 1.49 | |
Average Debt Service Coverage Ratio, including disposal groups | 1.62 |
Investments, Investment Incom_7
Investments, Investment Income and Gains and Losses - Impaired Commercial Mortgage Loans (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Impaired [Line Items] | ||
Impaired commercial mortgage loans, gross | $ 0 | $ 0 |
Investments, Investment Incom_8
Investments, Investment Income and Gains and Losses - Other Long-Term Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Long Term Investments [Line Items] | ||
Percentage of the committed amounts expected to be disbursed in the next fiscal year | 30.00% | |
Other long-term investments | $ 1,901 | |
Other long-term investments, including disposal groups | $ 2,403 | |
Unfunded Commitments | 1,954 | |
Real Estate Entities [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 679 | |
Other long-term investments, including disposal groups | 788 | |
Unfunded Commitments | 551 | |
Security Partnerships [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | 1,045 | |
Other long-term investments, including disposal groups | 1,409 | |
Unfunded Commitments | 1,379 | |
Other Long Term Investments [Member] | ||
Other Long Term Investments [Line Items] | ||
Other long-term investments | $ 177 | |
Other long-term investments, including disposal groups | 206 | |
Unfunded Commitments | $ 24 |
Investments, Investment Incom_9
Investments, Investment Income and Gains and Losses - Short-Term Investments and Cash Equivalents (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Short Term Investments And Cash Equivalents [Line Items] | |||
Net proceeds on issuance of long-term debt | $ 0 | $ 22,856 | $ 1,581 |
Corporate Securities [Member] | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | 581 | ||
Short-term investments and cash equivalents, including disposal groups | 1,985 | ||
Federal goverment securities | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | 82 | ||
Short-term investments and cash equivalents, including disposal groups | 472 | ||
Foreign government [Member] | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | 238 | ||
Short-term investments and cash equivalents, including disposal groups | 65 | ||
Money Market Funds [Member] | |||
Short Term Investments And Cash Equivalents [Line Items] | |||
Short-term investments and cash equivalents | $ 1,174 | ||
Short-term investments and cash equivalents, including disposal groups | $ 631 |
Investments, Investment Inco_10
Investments, Investment Income and Gains and Losses - Derivative Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Derivative contract term | 3 months | |
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 | |
Notional amount, including disposal groups | 817 | |
Designated as Hedging Instrument [Member] | Net Investment Hedge [Member] | Foreign Currency Swaps [Member] | ||
Derivative [Line Items] | ||
Notional amount | 439 | |
Notional amount, including disposal groups | 844 | |
Non designated [Member] | Forward Contracts [Member] | ||
Derivative [Line Items] | ||
Notional amount | $ 309 | |
Notional amount, including disposal groups | $ 410 |
Investments, Investment Inco_11
Investments, Investment Income and Gains and Losses - Concentration of Risk (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shareholders' Equity [Member] | Investments [Member] | Maximum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Investments, Investment Inco_12
Investments, Investment Income and Gains and Losses - Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 1,443 | $ 1,535 | $ 1,276 |
Less: investment expenses | 53 | 55 | 50 |
Net investment income | 1,390 | 1,480 | 1,226 |
Non-income producing real estate investments and securities partnerships, carrying value | 192 | 150 | |
Debt Securities [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 986 | 1,009 | 946 |
Equity securities [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 5 | 28 | 14 |
Commercial mortgage loans [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 88 | 78 | 81 |
Policy Loans [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 66 | 70 | 69 |
Other Long Term Investments [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | 167 | 156 | 124 |
Short-term investments and cash [Member] | |||
Schedule Of Investment Income Reported Amounts By Category [Line Items] | |||
Gross investment income | $ 131 | $ 194 | $ 42 |
Investments, Investment Inco_13
Investments, Investment Income and Gains and Losses - Realized Gains and Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Realized Gains (Losses) on Investments [Line Items] | |||
Net realized investement gains (losses), excluding investment asset writedowns | $ 189 | $ (34) | $ 268 |
Net realized investment gains (losses), before income taxes | 177 | (81) | 237 |
Sales Information for available-for-sale debt securities [Abstract] | |||
Proceeds from sales, debt securities | 3,077 | 2,625 | 2,012 |
Gross gains on sales | 72 | 28 | 103 |
Gross losses on sales | (19) | (47) | (18) |
Debt Securities [Member] | |||
Realized Gains (Losses) on Investments [Line Items] | |||
Write-downs | (12) | (43) | (26) |
Other [Member] | |||
Realized Gains (Losses) on Investments [Line Items] | |||
Write-downs | 0 | (4) | $ (5) |
Equity securities [Member] | |||
Realized Gains (Losses) on Investments [Line Items] | |||
Realized gains (losses) on investments still held at reporting date |
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, 2019 | Dec. 31, 2018 | |
Financial assets at fair value: | ||
Debt securities | $ 22,928 | |
Equity securities | 415 | |
Debt securities, including disposal groups | $ 23,755 | |
Equity securities, includling disposal groups | $ 64 | |
Financial liabilities at fair value: | ||
Redemption Frequency | quarterly redemption frequency | |
Unfunded Commitments | $ 56 | |
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: | ||
Debt securities | 22,928 | |
Equity securities | 459 | |
Short-term investments | 316 | |
Real estate funds priced at NAV as a practical expedient | 239 | |
Debt securities, including disposal groups | $ 23,755 | |
Equity securities, includling disposal groups | 111 | |
Short-term investments, including disposal groups | 423 | |
Real estate funds priced at NAV as a practical expedient, including disposal groups | 184 | |
Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 53 | |
Derivative assets, including disposal groups | 83 | |
Financial liabilities at fair value: | ||
Derivative liabilities | 10 | |
Derivative liabilities, including disposal groups | 18 | |
Federal government and agency [Member] | ||
Financial assets at fair value: | ||
Debt securities | 710 | |
Debt securities, including disposal groups | 733 | |
Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 710 | |
Debt securities, including disposal groups | 733 | |
State and local government [Member] | ||
Financial assets at fair value: | ||
Debt securities | 985 | |
Debt securities, including disposal groups | 810 | |
State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 985 | |
Debt securities, including disposal groups | 810 | |
Foreign government [Member] | ||
Financial assets at fair value: | ||
Debt securities | 2,362 | |
Debt securities, including disposal groups | 2,256 | |
Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 2,362 | |
Debt securities, including disposal groups | 2,256 | |
Corporate [Member] | ||
Financial assets at fair value: | ||
Debt securities | 18,361 | |
Debt securities, including disposal groups | 19,420 | |
Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 18,361 | |
Debt securities, including disposal groups | 19,420 | |
Mortgage and other asset-backed [Member] | ||
Financial assets at fair value: | ||
Debt securities | 510 | |
Debt securities, including disposal groups | 536 | |
Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 510 | |
Debt securities, including disposal groups | 536 | |
Fair Value Inputs Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 209 | |
Equity securities | 384 | |
Short-term investments | 0 | |
Debt securities, including disposal groups | 197 | |
Equity securities, includling disposal groups | 7 | |
Short-term investments, including disposal groups | 0 | |
Fair Value Inputs Level 1 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 0 | |
Derivative assets, including disposal groups | 0 | |
Financial liabilities at fair value: | ||
Derivative liabilities | 0 | |
Derivative liabilities, including disposal groups | 0 | |
Fair Value Inputs Level 1 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 209 | |
Debt securities, including disposal groups | 197 | |
Fair Value Inputs Level 1 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 0 | |
Debt securities, including disposal groups | 0 | |
Fair Value Inputs Level 1 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 0 | |
Debt securities, including disposal groups | 0 | |
Fair Value Inputs Level 1 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 0 | |
Debt securities, including disposal groups | 0 | |
Fair Value Inputs Level 1 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 0 | |
Debt securities, including disposal groups | 0 | |
Fair Value Inputs Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 22,341 | |
Equity securities | 43 | |
Short-term investments | 316 | |
Debt securities, including disposal groups | 23,035 | |
Equity securities, includling disposal groups | 72 | |
Short-term investments, including disposal groups | 423 | |
Fair Value Inputs Level 2 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 53 | |
Derivative assets, including disposal groups | 83 | |
Financial liabilities at fair value: | ||
Derivative liabilities | 10 | |
Derivative liabilities, including disposal groups | 18 | |
Fair Value Inputs Level 2 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 501 | |
Debt securities, including disposal groups | 536 | |
Fair Value Inputs Level 2 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 985 | |
Debt securities, including disposal groups | 810 | |
Fair Value Inputs Level 2 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 2,356 | |
Debt securities, including disposal groups | 2,228 | |
Fair Value Inputs Level 2 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 18,127 | |
Debt securities, including disposal groups | 19,063 | |
Fair Value Inputs Level 2 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 372 | |
Debt securities, including disposal groups | 398 | |
Fair Value Inputs Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 378 | |
Equity securities | 32 | |
Short-term investments | 0 | |
Debt securities, including disposal groups | 523 | |
Equity securities, includling disposal groups | 32 | |
Short-term investments, including disposal groups | 0 | |
Fair Value Inputs Level 3 [Member] | Other derivatives [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Derivative assets | 0 | |
Derivative assets, including disposal groups | 0 | |
Financial liabilities at fair value: | ||
Derivative liabilities | 0 | |
Derivative liabilities, including disposal groups | 0 | |
Fair Value Inputs Level 3 [Member] | Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Subtotal | 378 | |
Fair Value Inputs Level 3 [Member] | Federal government and agency [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 0 | |
Debt securities, including disposal groups | 0 | |
Fair Value Inputs Level 3 [Member] | State and local government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 0 | |
Debt securities, including disposal groups | 0 | |
Fair Value Inputs Level 3 [Member] | Foreign government [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 6 | |
Debt securities, including disposal groups | 28 | |
Fair Value Inputs Level 3 [Member] | Corporate [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | 234 | |
Debt securities, including disposal groups | 357 | |
Fair Value Inputs Level 3 [Member] | Mortgage and other asset-backed [Member] | Fair Value, Measurements, Recurring [Member] | ||
Financial assets at fair value: | ||
Debt securities | $ 138 | |
Debt securities, including disposal groups | $ 138 |
Fair Value Measurements - Level
Fair Value Measurements - Level 2 Financial Assets and Financial Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Percent of debt and equity securities classified in Level 2, including disposal groups | 97.00% | |
Maximum percentage of investments classified in Level 2 representing foreign bonds priced using unadjusted broker quotes, including disposal groups | 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 | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Percent of debt and equity securities classified in Level 3, including disposal groups | 2.00% | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Debt securities | $ 378 | |
Debt securities, including disposal groups | $ 523 | |
Fair Value, Measurements, Recurring [Member] | Fair Value Inputs Level 3 [Member] | Debt Securities [Member] | Securities not priced by the Company [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Debt securities | 11 | |
Debt securities, including disposal groups | 0 | |
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] | ||
Debt securities | $ 229 | |
Debt securities, including disposal groups | $ 385 | |
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% | |
Unobservable adjustment, liquidity, including disposal groups | 9.30% | |
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% | |
Unobservable adjustment, liquidity, including disposal groups | 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% | |
Unobservable adjustment, liquidity, including disposal groups | 2.80% | |
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] | ||
Debt securities | $ 138 | |
Debt securities, including disposal groups | $ 138 | |
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% | |
Unobservable adjustment, weighting of credit spreads | 3.40% | |
Unobservable adjustment, liquidity, including disposal groups | 3.70% | |
Unobservable adjustment, weighting of credit spreads, including disposal groups | 4.60% | |
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% | |
Unobservable adjustment, weighting of credit spreads | 1.90% | |
Unobservable adjustment, liquidity, including disposal groups | 0.60% | |
Unobservable adjustment, weighting of credit spreads, including disposal groups | 2.40% | |
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% | |
Unobservable adjustment, weighting of credit spreads | 2.60% | |
Unobservable adjustment, liquidity, including disposal groups | 0.70% | |
Unobservable adjustment, weighting of credit spreads, including disposal groups | 3.30% |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Financial Assets (Details) - Debt and Equity Securities [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 410 | $ 732 |
Total gains (losses) included in shareholders' net income | (8) | (22) |
Gains (losses) included in other comprehensive income | 22 | (8) |
Gains (losses) required to adjust future policy benefits for settlement annuities | 2 | (8) |
Purchases, sales, and settlements: | ||
Purchases | 72 | 22 |
Sales | 0 | (11) |
Settlements | (19) | (70) |
Total purchases, sales, settlements | 53 | (59) |
Transfers into/(out of) Level 3: | ||
Transfers into Level 3 | 170 | 44 |
Transfers out of Level 3 | (94) | (269) |
Total transfers into/(out of) Level 3 | 76 | (225) |
Ending Balance | 410 | |
Ending Balance, including disposal groups | 555 | |
Total gains (losses) included in income attributable to instruments held at the reporting date | $ (8) | (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, 2019 | Dec. 31, 2018 | |
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | $ 454 | |
Non-guaranteed separate accounts | 6,653 | |
Subtotal | 7,107 | |
Non-guaranteed separate accounts priced at NAV as a practical expedient | 732 | |
Total separate account assets | $ 8,465 | 7,839 |
Guaranteed separate accounts, including disposal groups | 490 | |
Non-guaranteed separate accounts, including disposal groups | 7,235 | |
Subtotal, including disposal groups | 7,725 | |
Non-guaranteed separate accounts priced at NAV as a practical expedient, including disposal groups | 756 | |
Total separate account assets, including disposal groups | 8,481 | |
Pension Benefits [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Non-guaranteed separate accounts | 3,800 | |
Non-guaranteed separate accounts, including disposal groups | 4,000 | |
Fair Value Inputs Level 1 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 187 | |
Non-guaranteed separate accounts | 1,204 | |
Subtotal | 1,391 | |
Guaranteed separate accounts, including disposal groups | 219 | |
Non-guaranteed separate accounts, including disposal groups | 1,450 | |
Subtotal, including disposal groups | 1,669 | |
Fair Value Inputs Level 2 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 267 | |
Non-guaranteed separate accounts | 5,216 | |
Subtotal | 5,483 | |
Guaranteed separate accounts, including disposal groups | 271 | |
Non-guaranteed separate accounts, including disposal groups | 5,522 | |
Subtotal, including disposal groups | 5,793 | |
Fair Value Inputs Level 3 [Member] | ||
Financial assets and financial liabilities carried at fair value [Line Items] | ||
Guaranteed separate accounts | 0 | |
Non-guaranteed separate accounts | 233 | |
Subtotal | 233 | |
Guaranteed separate accounts, including disposal groups | 0 | |
Non-guaranteed separate accounts, including disposal groups | 263 | |
Subtotal, including disposal groups | 263 | |
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 | |
Non-guaranteed separate accounts, including disposal groups | 200 | |
Separate Account Assets [Member] | ||
Transfers into/(out of) Level 3: | ||
Financial assets classified in Level 3, period increase (decrease) |
Fair Value Measurements - Sep_2
Fair Value Measurements - Separate Account Assets, Reconciliation to Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Total separate account assets, including disposal groups | $ 8,481 | |
Separate account assets classified as assets held for sale | (16) | |
Separate account assets | $ 8,465 | $ 7,839 |
Fair Value Measurements - Sep_3
Fair Value Measurements - Separate Account Assets Priced at NAV (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 56 | |
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 | |
Fair value, including disposal groups | $ 184 | |
Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | 320 | |
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 | |
Fair value, including disposal groups | 756 | |
Security Partnerships [Member] | Separate Account Assets [Member] | ||
Fair Value Investments, Entities That Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 320 | |
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 | |
Fair value, including disposal groups | $ 531 | |
Expected liquidation period after inception | 10 years | |
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 | |
Fair value, including disposal groups | $ 220 | |
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 | |
Fair value, including disposal groups | $ 5 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured Under Certain Conditions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Impaired [Line Items] | ||
Realized investment losses on assets measured at fair value under certain conditions, after-tax | $ 0 | |
Realized investment gains on equity securities with no readily determinable fair value | $ 0 | |
Maximum [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Assets measured at fair value under certain conditions 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, 2019 | Dec. 31, 2018 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial mortgage loans | $ 1,858 | |
Commercial mortgage loans, including disposal groups | $ 1,947 | |
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 finance leases | 39,439 | 40,819 |
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 | |
Commercial mortgage loans, including disposal groups | 1,989 | |
Carrying Reported Amount Fair Value Disclosure [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Commercial mortgage loans | 1,858 | |
Commercial mortgage loans, including disposal groups | 1,947 | |
Long-term debt, including current maturities, excluding finance leases | $ 36,375 | $ 40,829 |
Fair Value Measurements - Off-B
Fair Value Measurements - Off-Balance Sheet Financial Instruments (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
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, 2019USD ($)LimitedPartnerships | |
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 | $ 3.4 |
Number of limited partnerships defined as variable interest entities | LimitedPartnerships | 140 |
Carrying amount of assets | $ 1.8 |
Commitments to contribute additional cash, amount | $ 1.6 |
Securities limited partnerships and real estate limited partnerships [Member] | Maximum [Member] | |
Variable Interest Entity [Line Items] | |
Ownership percentage | 15.00% |
Other asset-backed and corporate securities [Member] | |
Variable Interest Entity [Line Items] | |
Maximum exposure to loss related to arrangements with variable interest entity | $ 0.7 |
Carrying amount of assets | $ 0.7 |
Other asset-backed and corporate securities [Member] | Maximum [Member] | |
Variable Interest Entity [Line Items] | |
Ownership percentage | |
Other various variable interest entities [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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | $ (1,711) | ||
Other comprehensive income (loss) attributable to redeemable noncontrolling interests | (5) | $ (15) | $ (3) |
Accumulated other comprehensive income (loss), ending | (941) | (1,711) | |
Securities and Derivatives [ Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 18 | 383 | 365 |
Other comprehensive income (loss) before reclassifications, pre-tax | 1,266 | (512) | 34 |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | (270) | 100 | (19) |
Other comprehensive income (loss) before reclassifications, after-tax | 996 | (412) | 15 |
Reclassification adjustment, tax (expense) benefit | 10 | (13) | 28 |
Reclassification adjustment, after-tax | (39) | (47) | 52 |
Shareholders' other comprehensive income (loss), net of tax | 957 | (365) | (37) |
Accumulated other comprehensive income (loss), ending | 975 | 18 | 383 |
Securities and Derivatives [ Member] | Previously Reported [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 18 | 328 | 365 |
Accumulated other comprehensive income (loss), ending | 18 | 328 | |
Securities and Derivatives [ Member] | Restatement Adjustment [Member] | Reclassification adjustment to retained earnings related to U.S. tax reform legislation [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 0 | 65 | 0 |
Accumulated other comprehensive income (loss), ending | 0 | 65 | |
Securities and Derivatives [ Member] | Restatement Adjustment [Member] | Reclassification adjustment to retained earnings related to new financial instruments guidance [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 0 | (4) | 0 |
Accumulated other comprehensive income (loss), ending | 0 | (4) | |
Securities and Derivatives [ Member] | Restatement Adjustment [Member] | Reclassification adjustment to retained earnings related to new hedging guidance [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 0 | (6) | 0 |
Accumulated other comprehensive income (loss), ending | 0 | (6) | |
Securities and Derivatives [ Member] | Selling, general and administrative expenses [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | 0 | 0 | 1 |
Securities and Derivatives [ Member] | Net Realized Investment Gains [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | (49) | 60 | (81) |
Translation of foreign currencies [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (221) | (69) | (369) |
Other comprehensive income (loss) before reclassifications, pre-tax | (57) | (167) | 306 |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | (2) | 0 | (5) |
Other comprehensive income (loss) before reclassifications, after-tax | (59) | (167) | 301 |
Other comprehensive income (loss) attributable to redeemable noncontrolling interests | (5) | (15) | (3) |
Shareholders' other comprehensive income (loss), net of tax | (54) | (152) | 304 |
Accumulated other comprehensive income (loss), ending | (275) | (221) | (69) |
Translation of foreign currencies [Member] | Previously Reported [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (221) | (65) | (369) |
Accumulated other comprehensive income (loss), ending | (221) | (65) | |
Translation of foreign currencies [Member] | Restatement Adjustment [Member] | Reclassification adjustment to retained earnings related to U.S. tax reform legislation [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 0 | (4) | 0 |
Accumulated other comprehensive income (loss), ending | 0 | (4) | |
Postretirement benefits liability [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (1,508) | (1,635) | (1,378) |
Other comprehensive income (loss) before reclassifications, pre-tax | (249) | 93 | (22) |
Other comprehensive income (loss) before reclassifications, tax (expense) benefit | 59 | (20) | 8 |
Other comprehensive income (loss) before reclassifications, after-tax | (190) | 73 | (14) |
Reclassification adjustment, tax (expense) benefit | (15) | (15) | (24) |
Reclassification adjustment, after-tax | 57 | 54 | 47 |
Shareholders' other comprehensive income (loss), net of tax | (133) | 127 | 33 |
Accumulated other comprehensive income (loss), ending | (1,641) | (1,508) | (1,635) |
Postretirement benefits liability [Member] | Previously Reported [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | (1,508) | (1,345) | (1,378) |
Accumulated other comprehensive income (loss), ending | (1,508) | (1,345) | |
Postretirement benefits liability [Member] | Restatement Adjustment [Member] | Reclassification adjustment to retained earnings related to U.S. tax reform legislation [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Accumulated other comprehensive income (loss), beginning | 0 | (290) | 0 |
Accumulated other comprehensive income (loss), ending | 0 | (290) | |
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 | 62 | 69 | 64 |
Reclassification adjustment for settlement losses [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Reclassification adjustment, pre-tax | $ 10 | $ 0 | $ 7 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Realized investment (gains) losses | $ (177) | $ 81 | $ (237) |
Selling, general and administrative expenses | (14,053) | (11,934) | (10,030) |
Interest expense and other | 1,682 | 498 | 252 |
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 | (49) | 60 | (81) |
Selling, general and administrative expenses | 0 | 0 | 1 |
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] | |||
Interest expense and other | 62 | 69 | 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] | |||
Interest expense and other | $ 10 | $ 0 | $ 7 |
Organizational Efficiency Plan
Organizational Efficiency Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||||
Charge | $ 207 | $ 207 | |||
Payments | 2 | ||||
Balance | 205 | 205 | |||
Charge for organizational efficiency plan, after-tax | 162 | $ 0 | $ 0 | $ 0 | $ 162 |
Employee Severance [Member] | Selling, general and administrative expenses [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charge for organizational efficiency plan, after-tax | $ 162 |
Pension - About our Plans (Deta
Pension - About our Plans (Details) - Pension Benefits [Member] - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Market-related valuation of pension plan assets | $ 4,200 | ||
Plan assets at fair value | $ 4,441 | $ 4,151 | $ 4,281 |
Pension - Funded Status (Detail
Pension - Funded Status (Details) - Pension Benefits [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in benefit obligation [Abstract] | |||
Benefit obligation, January 1 | $ 4,741,000,000 | $ 4,969,000,000 | |
Service cost | 2,000,000 | 3,000,000 | $ 3,000,000 |
Interest cost | 194,000,000 | 169,000,000 | 186,000,000 |
Assumed in acquisition | 0 | 137,000,000 | |
Partial litigation settlement - attorneys' fees | 142,000,000 | 32,000,000 | |
(Gain) loss from past experience | 574,000,000 | (235,000,000) | |
Benefits paid from plan assets | (325,000,000) | (314,000,000) | |
Benefits paid - other | (14,000,000) | (20,000,000) | |
Benefit obligation, December 31 | 5,314,000,000 | 4,741,000,000 | 4,969,000,000 |
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, January 1 | 4,151,000,000 | 4,281,000,000 | |
Assumed in acquisition | 0 | 96,000,000 | |
Actual return on plan assets | 594,000,000 | 85,000,000 | |
Benefits paid | (325,000,000) | (314,000,000) | |
Contributions | 21,000,000 | 3,000,000 | |
Fair value of plan assets, December 31 | 4,441,000,000 | 4,151,000,000 | $ 4,281,000,000 |
Funded Status | (873,000,000) | (590,000,000) | |
Current liability recorded in Accrued expenses and other liabilities | (18,000,000) | (30,000,000) | |
Non-current liability recorded in Other non-current assets | (855,000,000) | $ (560,000,000) | |
Qualified Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Contributions | |||
Expected total pension plan contributions for next fiscal year | |||
Non-qualifed Plan [Member] | |||
Change in plan assets [Roll Forward] | |||
Fair value of plan assets, December 31 | $ 0 |
Pension - Benefit Payments (Det
Pension - Benefit Payments (Details) - Pension Benefits [Member] $ in Millions | Dec. 31, 2019USD ($) |
Benefit payments including expected future services [Abstract] | |
Paid in 2020 | $ 322 |
Paid in 2021 | 312 |
Paid in 2022 | 314 |
Paid in 2023 | 318 |
Paid in 2024 | 318 |
Paid in 2025-2029 | $ 1,574 |
Pension - Amounts included in A
Pension - Amounts included in Accumulated Other Comprehensive Income (Details) - Pension Benefits [Member] - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Amounts included in AOCI [Abstract] | ||
Unrecognized net gains (losses) | $ (2,132) | $ (1,980) |
Unrecognized prior service cost | (5) | (6) |
Postretirement benefits liabilty adjustment | $ (2,137) | $ (1,986) |
Pension - Cost of our Plans (De
Pension - Cost of our Plans (Details) - Pension Benefits [Member] - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of net pension and other postretirement benefits cost [Abstract] | |||||
Service cost | $ 2 | $ 3 | $ 3 | ||
Interest cost | 194 | 169 | 186 | ||
Expected long-term return on plan assets | (245) | (257) | (260) | ||
Amortization of prior service cost | 59 | 70 | 66 | ||
Litigation settlement - plan ammendment | $ 142 | $ 32 | 142 | 32 | 0 |
Settlement loss | 10 | 0 | 7 | ||
Net plan cost | $ 162 | $ 17 | $ 2 |
Pension - Assumptions Used (Det
Pension - Assumptions Used (Details) - Pension Benefits [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Assumptions for pension and other postretirement benefits [Abstract] | ||
Discount rate: Benefit obligation | 3.30% | 4.23% |
Discount rate: Benefit cost | 4.23% | 3.51% |
Expected long-term return on plan assets: Benefit cost | 6.75% | 7.00% |
Mortality table for pension, current year | White Collar mortality table with MP 2019 projection scale | |
Mortality table for pension, prior year | RP 2014 with MP 2018 projection scale |
Pension - Pension Plan Assets (
Pension - Pension Plan Assets (Details) - Pension Benefits [Member] - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets invested in separate accounts of subsidiaries | $ 4,000 | ||
Plan assets invested in funds offered by the buyer of the retirement benefits business | 284 | ||
Plan assets invested by others | 122 | ||
Plan assets at fair value | 4,441 | $ 4,151 | $ 4,281 |
Debt Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 2,407 | 2,246 | |
Target allocation percentages | 60.00% | ||
Corporate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 1,906 | 1,446 | |
Asset-backed [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 41 | 32 | |
Fund Investments {Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 460 | 768 | |
Equity securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 1,001 | 866 | |
Target allocation percentages | 25.00% | ||
Domestic [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 582 | 506 | |
International, including funds and pooled seperate accounts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 419 | 360 | |
Other Plan Asset Categories [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation percentages | 15.00% | ||
Securities Partnerships [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 531 | 477 | |
Real estate, including pooled separate accounts [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 230 | 250 | |
Commercial mortgage loans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 96 | 110 | |
Hedge Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 24 | 36 | |
Guaranteed Deposit Account Contract [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | 100 | 107 | |
Cash equivalents and other current assets, net [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets at fair value | $ 52 | $ 59 |
Pension - 401(k) Plans (Details
Pension - 401(k) Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension and Other Postretirement Benefit Plans [Abstract] | |||
Expense for matching contributions in the 401K plan | $ 256 | $ 196 | $ 122 |
Employee Incentive Plans - Abou
Employee Incentive Plans - About our Plans (Details) - shares shares in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Employee Incentive Plans [Abstract] | |||
Common shares available for award | 23.2 | 25.7 | 14 |
Employee Incentive Plans - Stoc
Employee Incentive Plans - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | ||||||
Compensation cost | $ 299 | $ 180 | $ 178 | |||
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 | 30.00% | 35.00% | 35.00% | |||
Risk-free interest rate | 2.50% | 2.50% | 1.80% | |||
Expected option life | 4 years 4 months 24 days | 4 years 4 months 24 days | 4 years 3 months 18 days | |||
Weighted average fair value of options | $ 53.10 | $ 64.18 | $ 46.38 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||||
Options outstanding - January 1 | 12,370 | 6,156 | 7,097 | |||
Options Granted | 1,569 | 7,080 | 1,230 | |||
Options Exercised | (2,297) | (771) | (2,072) | |||
Options Expired or canceled | (204) | (95) | (99) | |||
Options outstanding - December 31 | 11,438 | 12,370 | 6,156 | |||
Options Exercisable - Number (in thousands) | 8,874 | 9,446 | 3,894 | |||
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 | $ 125.46 | $ 100.79 | $ 82.01 | |||
Weighted Average Exercise Price - Options Granted | 183.41 | 143.62 | 149.17 | |||
Weighted Average Exercise Price - Options Exercised | 106.75 | 88.35 | 63.41 | |||
Weighted Average Exercise Price - Options Expired or canceled | 180.08 | 165.04 | 138.41 | |||
Weighted Average Exercise Price - Options Outstanding - December 31 | $ 136.19 | $ 125.46 | $ 100.79 | |||
Options Exercisable - Weighted Average Exercise Price | $ 123.87 | $ 114.22 | $ 77.36 | |||
Related compensation expense to be recognized | $ 64 | |||||
Period over which compensation expense will be recognized | 2 years | |||||
Information For Stock Options Exercised Details [Abstract] | ||||||
Intrinsic value of options exercised | $ 180 | $ 86 | $ 218 | |||
Cash received for options exercised | 224 | 68 | 131 | |||
Tax benefit from options exercised | $ 34 | $ 8 | $ 41 | |||
Information for Outstanding Common Stock Options [Abstract] | ||||||
Options Outstanding - Number (in thousands) | 11,438 | 6,156 | 6,156 | 11,438 | 12,370 | 6,156 |
Options Outstanding - Total intrinsic value | $ 781 | |||||
Options Outstanding - Weighted Average Exercise Price | $ 125.46 | $ 125.46 | $ 82.01 | $ 136.19 | $ 125.46 | $ 100.79 |
Options Outstanding - Weighted average remaining contractual life | 5 years 7 months 6 days | |||||
Options Exercisable - Number (in thousands) | 8,874 | 9,446 | 3,894 | |||
Options Exercisable - Total Intrinsic Value | $ 715 | |||||
Options Exercisable - Weighted Average Exercise Price | $ 123.87 | $ 114.22 | $ 77.36 | |||
Options Exercisable - Weighted Average Remaining Contractual Life | 4 years 8 months 12 days | |||||
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, 2019USD ($)Employees$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ | $ 299 | $ 180 | $ 178 |
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 | 2,138 | 1,295 | 1,309 |
Awarded | shares | 870 | 1,451 | 451 |
Vested | shares | (964) | (560) | (409) |
Forfeited | shares | (99) | (48) | (56) |
Outstanding - December 31 | shares | 1,945 | 2,138 | 1,295 |
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 | $ 168.12 | $ 126.44 | $ 97.78 |
Awarded | $ / shares | 183.86 | 183.29 | 155.21 |
Vested | $ / shares | 160.74 | 112.53 | 67.09 |
Forfeited | $ / shares | 168.68 | 150.84 | 121.74 |
Outstanding - December 31 | $ / shares | $ 178.78 | $ 168.12 | $ 126.44 |
Fair value of shares vested | $ | $ 171 | $ 107 | $ 62 |
Number of employees holding share-based payment awards | Employees | 10,300 | ||
Related compensation expense to be recognized | $ | $ 160 | ||
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 | 1 year | ||
Restricted Stock Grants And Units [Member] | Maximum [Member] | |||
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Award vesting period | 3 years |
Employee Incentive Plans - Stra
Employee Incentive Plans - Strategic Performance Shares (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Employees$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | |
Employee Incentive Plan Aggregate Disclosures [Line Items] | |||
Compensation cost | $ | $ 299 | $ 180 | $ 178 |
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 | 707,000 | 778,000 | 942,000 |
Awarded | 389,000 | 221,000 | 275,000 |
Vested | (244,000) | (269,000) | (386,000) |
Forfeited | (34,000) | (23,000) | (53,000) |
Outstanding - December 31 | 818,000 | 707,000 | 778,000 |
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 | $ 160.74 | $ 136.57 | $ 109.14 |
Awarded | $ / shares | 184.72 | 197.51 | 150.06 |
Vested | $ / shares | 139.27 | 121.57 | 78.91 |
Forfeited | $ / shares | 178.98 | 158.16 | 138.19 |
Outstanding - December 31 | $ / shares | $ 177.94 | $ 160.74 | $ 136.57 |
Employee Service Share-based Compensation, Additional Disclosures [Abstract] | |||
Shares of Cigna common stock distributed upon SPS vesting | 254,000 | 380,000 | 476,000 |
Fair value of shares vested | $ | $ 45 | $ 73 | $ 70 |
Number of employees holding share-based payment awards | Employees | 1,600 | ||
Related compensation expense to be recognized | $ | $ 58 | ||
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 - Comp
Employee Incentive Plans - Compensation Cost and Tax Effects of Share-based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Incentive Plans [Abstract] | |||
Compensation cost | $ 299 | $ 180 | $ 178 |
Tax benefits recognized in earnings based on expense | $ 59 | $ 36 | $ 79 |
Goodwill, Other Intangibles, an
Goodwill, Other Intangibles, and Property and Equipment - Goodwill Activity (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $ 44,505 | $ 6,164 |
Goodwill acquired, net | 103 | 38,371 |
Impact of foreign currency translation | (6) | (30) |
Goodwill, Ending Balance | 44,602 | $ 44,505 |
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 | $ 400 |
Goodwill, Other Intangibles, _2
Goodwill, Other Intangibles, and Property and Equipment - Amoritzation Periods (Details) | 12 Months Ended |
Dec. 31, 2019 | |
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, _3
Goodwill, Other Intangibles, and Property and Equipment - Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite Lived Intangible Assets Net [Line Items] | ||
Impairments of other intangible assets | ||
Finite-lived intangible assets, cost | $ 40,411 | |
Finite-lived intangible assets, accumulated amortization | 3,405 | 1,408 |
Finite-lived intangible assets, net | 39,003 | |
Indefinite-lived intangible assets, Express Scripts Trade Name | 8,400 | 8,400 |
Intangible assets, gross | 39,967 | |
Intangible assets, net | 36,562 | 39,003 |
Value of business acquired, cost | 643 | 665 |
Value of business acquired, accumulated amortization | 122 | 102 |
Value of business acquired, net | 521 | 563 |
Total, cost | 40,610 | 41,076 |
Total, accumulated amortization | 3,527 | 1,510 |
Total, net | 37,083 | 39,566 |
Customer relationships [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Finite-lived intangible assets, cost | 31,184 | 31,451 |
Finite-lived intangible assets, accumulated amortization | 3,319 | 1,213 |
Finite-lived intangible assets, net | 27,865 | 30,238 |
Other intangibles [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Finite-lived intangible assets, cost | 383 | 560 |
Finite-lived intangible assets, accumulated amortization | 86 | 195 |
Finite-lived intangible assets, net | 297 | 365 |
Trade Names [Member] | ||
Finite Lived Intangible Assets Net [Line Items] | ||
Indefinite-lived intangible assets, Express Scripts Trade Name | $ 8,400,000 | $ 8,400,000 |
Goodwill, Other Intangibles, _4
Goodwill, Other Intangibles, and Property and Equipment - Useful Life (Details) | 12 Months Ended |
Dec. 31, 2019 | |
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, _5
Goodwill, Other Intangibles, and Property and Equipment - Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Property and equipment including Assets held for sale, cost | $ 9,147 | |
Property and equipment including Assets held for sale, accumulated amortization | 4,635 | |
Property and equipment including Assets held for sale, net carrying value | 4,512 | |
Property and equipment classified as Assets held for sale, cost | (226) | |
Property and equipment classified as Assets held for sale, accumulated amortization | (131) | |
Property and equipment classified as Assets held for sale, net carrying value | (95) | |
Cost | 8,921 | $ 7,958 |
Accumulated amortization | 4,504 | 3,396 |
Net carrying value | 4,417 | 4,562 |
Internal-use software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment including Assets held for sale, cost | 6,578 | |
Property and equipment including Assets held for sale, accumulated amortization | 3,282 | |
Property and equipment including Assets held for sale, net carrying value | 3,296 | |
Cost | 5,694 | |
Accumulated amortization | 2,415 | |
Net carrying value | 3,279 | |
Total other property and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment including Assets held for sale, cost | 2,569 | |
Property and equipment including Assets held for sale, accumulated amortization | 1,353 | |
Property and equipment including Assets held for sale, net carrying value | $ 1,216 | |
Cost | 2,264 | |
Accumulated amortization | 981 | |
Net carrying value | $ 1,283 |
Goodwill, Other Intangibles, _6
Goodwill, Other Intangibles, and Property and Equipment - Depreciation and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | $ 3,651 | $ 695 | $ 566 |
Internal-use software [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 850 | 323 | 298 |
Other property and equipment [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 284 | 146 | 153 |
Value of business acquired [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | 34 | 16 | 18 |
Other intangibles [Member] | |||
Depreciation And Amortization By Type [Line Items] | |||
Depreciation and amortization | $ 2,483 | $ 210 | $ 97 |
Goodwill, Other Intangibles, _7
Goodwill, Other Intangibles, and Property and Equipment - Amortization for Intangible Assets (Details) $ in Millions | Dec. 31, 2019USD ($) |
Goodwill Other Intangibles And Property And Equipment [Abstract] | |
Estimated pre-tax intangible asset amortization expense in 2020 | $ 2,466 |
Estimated pre-tax intangible asset amortization expense in 2021 | 2,386 |
Estimated pre-tax intangible asset amortization expense in 2022 | 2,061 |
Estimated pre-tax intangible asset amortization expense in 2023 | 1,902 |
Estimated pre-tax intangible asset amortization expense in 2024 | $ 1,773 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Components of lease expense [Abstract] | ||||
Operating lease cost | $ 188 | |||
Finance lease cost: | ||||
Amortization of right-of-use assets | 28 | |||
Interest on lease liabilities | 3 | |||
Total finance lease costs | 31 | |||
Variable lease cost | 50 | |||
Total lease costs | 269 | |||
Supplemental cash flow information related to leases [Abstract] | ||||
Operating cash flows from operating leases | 173 | |||
Operating cash flows from finance leases | 3 | |||
Financing cash flows from financing leases | 25 | |||
Right-of-use asset obtained in exchange for operating lease obligations | 89 | |||
Right-of-use asset obtained in exchange for financing lease obligations | 68 | |||
Operating and finance lease ROU assets and liabilities [Abstract] | ||||
Operating lease right-of-use assets | 536 | |||
Accrued expenses and other current liabilities | 166 | |||
Other non-current liabilities | 465 | |||
Total operating lease liabilities | $ 631 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets noncurrent | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Expenses And Other Liabilities | |||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other non-current liabilities | |||
Finance leases: Property and equipment, gross | $ 110 | |||
Finance leases: Property and equipment, accumulated depreciation | (23) | |||
Finance leases: Property and equipment, net | 87 | |||
Finance leases: Short-term debt | 27 | $ 117 | ||
Finance leases: Long-term debt | 61 | 32 | ||
Total finance lease liabilities | $ 88 | |||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment | |||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Short Term Borrowings And Long Term Debt Current | |||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt, carrying value | |||
Weighted average remaining lease term, operating leases | 5 years | |||
Weighted average remaining lease term, finance leases | 5 years | |||
Weighted average discount rate, operating leases | 3.89% | |||
Weighted average discount rate, finance leases | 3.77% | |||
Net rental expense for operating leases | $ 162 | $ 162 | ||
Accounting Standards Update 2016-02 [Member] | ||||
Operating and finance lease ROU assets and liabilities [Abstract] | ||||
Operating lease right-of-use assets | $ 615 | |||
Total operating lease liabilities | $ 630 | |||
Accrued Expenses And Other Liabilities [Member] | ||||
Operating and finance lease ROU assets and liabilities [Abstract] | ||||
Total operating lease liabilities | $ 166 | |||
Other Liabilities Noncurrent [Member] | ||||
Operating and finance lease ROU assets and liabilities [Abstract] | ||||
Total operating lease liabilities | $ 465 | |||
Maximum [Member] | ||||
Leases [Line Items] | ||||
Term length for operating leases | 23 years |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Maturities of operating lease liabilities [Abstract] | |
2020 | $ 177 |
2021 | 159 |
2022 | 133 |
2023 | 89 |
2024 | 63 |
Thereafter | 74 |
Total operating lease payments | 695 |
Less: imputed interest, operating leases | 64 |
Total operating lease liabilities | 631 |
Maturities of finance lease liabilities [Abstract] | |
2020 | 28 |
2021 | 21 |
2022 | 18 |
2023 | 8 |
2024 | 6 |
Thereafter | 16 |
Total finance lease payments | 97 |
Less: imputed interest, finance leases | 9 |
Total finance lease liabilities | $ 88 |
Shareholders Equity and Divid_3
Shareholders Equity and Dividend Restrictions (Details) - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statutory Accounting Practices [Line Items] | |||
Statutory net income | $ 3.8 | $ 3.4 | $ 2.5 |
Statutory surplus | 13.8 | $ 12.2 | $ 10.4 |
Minimum statutory surplus required by regulators | 4.8 | ||
Investments on deposit with regulatory bodies | 0.5 | ||
Maximum dividend distributions permitted in 2020 without regulatory approval | 2.9 | ||
Maximum loans to parent company permitted without regulatory approval | 1 | ||
Restricted GAAP net assets of Cigna Corporation's subsidiaries | $ 15.3 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current taxes | |||
U.S. income taxes | $ 1,476 | $ 804 | $ 974 |
Foreign income taxes | 173 | 185 | 122 |
State income taxes | 114 | 47 | 36 |
Total taxes, current | 1,763 | 1,036 | 1,132 |
Deferred taxes (benefits) | |||
U.S. Income taxes (benefits) | (236) | (75) | 204 |
Foreign income taxes (benefits) | 16 | 8 | 39 |
State income taxes (benefits) | (93) | (34) | (1) |
Total taxes (benefits), deferred | (313) | (101) | 242 |
Total income taxes | $ 1,450 | $ 935 | $ 1,374 |
Income Taxes - Reconciliation t
Income Taxes - Reconciliation to Nominal Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of total taxes to nominal federal rate, amount [Abstract] | |||
Tax expense at nominal rate | $ 1,380 | $ 752 | $ 1,262 |
Effect of U.S. tax reform legislation | 0 | (4) | 232 |
Effect of undistributed foreign earnings | 24 | 74 | (70) |
Health insurance industry tax | 0 | 78 | 0 |
State income taxes (net of federal income tax benefit) | 32 | 10 | 23 |
Other | 14 | 25 | (73) |
Total income taxes | $ 1,450 | $ 935 | $ 1,374 |
Reconciliation of total taxes to nominal federal rate, percent [Abstract] | |||
Tax expense at nominal rate | 21.00% | 21.00% | 35.00% |
Effect of U.S. tax reform legislation | 0.00% | (0.10%) | 6.40% |
Effect of undistributed foreign earnings | 0.40% | 2.10% | (1.90%) |
Health insurance industry tax | 0.00% | 2.20% | 0.00% |
State income taxes (net of federal income tax benefit) | 0.50% | 0.30% | 0.60% |
Other | 0.20% | 0.60% | (2.00%) |
Total income taxes | 22.10% | 26.10% | 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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 12.00% | 15.00% | 14.00% |
Concentration Risk, Benchmark Description | pre-tax income | ||
Concentration Risk, Additional Characteristic | foreign operations |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets [Abstract] | ||
Employee and retiree benefit plans | $ 511 | $ 411 |
Other insurance and contractholder liabilities | 282 | 396 |
Loss carryforwards | 260 | 255 |
Other accrued liabilities | 183 | 341 |
Other | 218 | 187 |
Deferred tax assets before valuation allowance | 1,454 | 1,590 |
Valuation allowance for deferred tax assets | (196) | (199) |
Deferred tax assets, net of valuation allowance | 1,258 | 1,391 |
Deferred tax liabilities [Abstract] | ||
Depreciation and amortization | 630 | 744 |
Acquisition-related basis differences | 9,386 | 9,863 |
Policy acquisition expenses | 113 | 211 |
Unrealized appreciation (depreciation) on investments and foreign currency translation | 223 | (29) |
Other | 293 | 55 |
Total deferred tax liabilities | 10,645 | 10,844 |
Total deferred tax liabilities | $ (9,387) | $ (9,453) |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of unrecognized tax benefits details [Abstract] | |||
Balance at January 1, | $ 928 | $ 35 | $ 31 |
Increase due to prior year positions | 68 | 40 | 0 |
Increase due to business combination | 0 | 860 | 0 |
Increase due to current year positions | 29 | 6 | 7 |
Reduction related to settlements with taxing authorities | 0 | (1) | (1) |
Reduction related to lapse of applicable statute of limitations | (7) | (12) | (2) |
Changes in uncertain tax positions | |||
Balance at December 31, | 1,018 | 928 | 35 |
Liability for net interest expense on uncertain tax positions | $ 100 |
Contingencies and Other Matte_2
Contingencies and Other Matters - Guarantees (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | |
Guarantee Obligations [Line Items] | |
Maximum Exposure, Undiscounted | $ 450,000,000 |
Guarantee obligations carrying value | 0 |
Financial Guarantee [Member] | Retiree and Life Insurance Benefits [Member] | Minimum [Member] | |
Guarantee Obligations [Line Items] | |
Assets maintained by employers | 450,000,000 |
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) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Amara cash balance pension plan litigation [Member] | |
Contingency Accrual [Roll Forward] | |
Amounts paid for loss contigency | $ 32 |
Guaranty Fund Assessments [Member] | |
Contingency Accrual [Roll Forward] | |
Charges for loss contingency, pre-tax | |
Pending Litigation [Member] | Pricing concessions through remaining contract term [Member] | Express Scripts litigation with Anthem [Member] | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Loss Contingency, Damages Sought | 13,000 |
Pending Litigation [Member] | Pricing concessions after remaining term of agreement [Member] | Express Scripts litigation with Anthem [Member] | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Loss Contingency, Damages Sought | 1,800 |
Pending Litigation [Member] | Damages for service issues [Member] | Express Scripts litigation with Anthem [Member] | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Loss Contingency, Damages Sought | $ 150 |
Contingencies and Other Matte_4
Contingencies and Other Matters - Anthem Litigation (Details) $ in Millions | Dec. 31, 2019USD ($) |
Contingencies And Other Matters [Abstract] | |
Termination fee payable to Company | $ 1,850 |
Positive Outcome Of Litigation [Member] | Minimum [Member] | |
Gain Contingencies [Line Items] | |
Damages sought | $ 13,000 |
Segment Information - Special I
Segment Information - Special Items (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Before-tax [Abstract] | |||||||||||
Integration and transaction-related costs | $ 552 | $ 852 | $ 126 | ||||||||
Charge for organizational efficiency plan | $ 207 | 207 | |||||||||
Charges associated with litigation matters | 51 | 25 | |||||||||
Selling, general and administrative expense, provisional | (56) | ||||||||||
Selling, general and administrative expense, measurement period adjustment | 2 | ||||||||||
Total charges (benefits) associated with U.S. tax reform | 2 | (56) | |||||||||
Debt extinguishment costs | 321 | ||||||||||
Long-term care guaranty fund assessment | 129 | ||||||||||
After-tax [Abstract] | |||||||||||
Integration and transaction-related costs | 116 | $ 88 | $ 115 | $ 108 | $ 402 | $ 108 | $ 109 | $ 50 | 427 | 669 | 33 |
Charge for organizational efficiency plan | 162 | 0 | 0 | 0 | 162 | ||||||
Charges (benefits) associated with litigation matters | 0 | (23) | 64 | 0 | (16) | 35 | 0 | 0 | $ 41 | 19 | |
Selling, general and administrative expense, provisional | (36) | ||||||||||
Selling, general and administrative expense, measurement period adjustment | 1 | ||||||||||
Tax expense, provisional | 232 | ||||||||||
Tax expense, measurement period adjustment | (3) | ||||||||||
Total charges (benefits) associated with U.S. tax reform | 3 | (5) | 0 | 0 | (2) | 196 | |||||
Debt extinguishment costs | 209 | ||||||||||
Long-term care guaranty fund assessment | 83 | ||||||||||
Total impact of special items, after-tax | $ 278 | $ 65 | $ 179 | $ 108 | $ 389 | $ 138 | $ 109 | $ 50 | |||
Selling, general and administrative expenses [Member] | |||||||||||
Before-tax [Abstract] | |||||||||||
Integration and transaction-related costs | 748 | 126 | |||||||||
After-tax [Abstract] | |||||||||||
Integration and transaction-related costs | 587 | 92 | |||||||||
Interest expense and other [Member] | |||||||||||
Before-tax [Abstract] | |||||||||||
Integration and transaction-related costs | 227 | ||||||||||
After-tax [Abstract] | |||||||||||
Integration and transaction-related costs | 179 | ||||||||||
Net Investment Income [Member] | |||||||||||
Before-tax [Abstract] | |||||||||||
Integration and transaction-related costs | (123) | ||||||||||
After-tax [Abstract] | |||||||||||
Integration and transaction-related costs | $ (97) | ||||||||||
Tax Expense [Member] | |||||||||||
After-tax [Abstract] | |||||||||||
Integration and transaction-related costs | $ (59) |
Segment Information - Summarize
Segment Information - Summarized Segment Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | $ 152,176 | $ 47,170 | $ 40,580 | ||||||||
Net investment income | 1,390 | 1,480 | 1,226 | ||||||||
Total revenues | $ 38,245 | $ 38,556 | $ 38,819 | $ 37,946 | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | 153,566 | 48,650 | 41,806 |
Revenue from transitioning clients | (13,347) | (459) | |||||||||
Net realized investment results from equity method subsidiaries | (44) | 43 | |||||||||
Special items reported in transaction-related costs | (123) | ||||||||||
Adjusted revenues | 140,175 | 48,111 | 41,806 | ||||||||
Depreciation and amortization | 3,651 | 695 | 566 | ||||||||
Income (loss) before income taxes | 1,261 | $ 1,763 | $ 1,758 | $ 1,788 | $ 228 | $ 1,033 | $ 1,102 | $ 1,218 | 6,570 | 3,581 | 3,606 |
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | (1,726) | (62) | |||||||||
(Income) loss attributable to non-controlling interests | (20) | (14) | 2 | ||||||||
Net realized investments (gains) losses | (221) | 124 | (237) | ||||||||
Amortization of acquired intangible assets | 2,949 | 235 | 115 | ||||||||
Special items [Abstract] | |||||||||||
Integration and transaction-related costs | 552 | 852 | 126 | ||||||||
Charge for organizational efficiency plan | $ 207 | 207 | |||||||||
Charges associated with litigation matters | 51 | 25 | |||||||||
U.S. Tax reform | 2 | (56) | |||||||||
Debt extinguishment costs | 321 | ||||||||||
Long-term care guaranty fund assessment | 129 | ||||||||||
Pre-tax adjusted income (loss) from operations | 8,362 | 4,743 | 4,006 | ||||||||
Health Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 107,354 | 5,902 | 3,250 | ||||||||
Integrated Medical [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 34,861 | 31,759 | 28,193 | ||||||||
International Markets [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 5,500 | 5,174 | 4,774 | ||||||||
Group Disability and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 4,461 | 4,335 | 4,363 | ||||||||
Operating Segments [Member] | Health Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 60 | 9 | 3 | ||||||||
Total revenues | 109,794 | 7,065 | 4,241 | ||||||||
Revenue from transitioning clients | (13,347) | (459) | |||||||||
Net realized investment results from equity method subsidiaries | 0 | 0 | |||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 96,447 | 6,606 | 4,241 | ||||||||
Depreciation and amortization | 3,071 | 120 | 0 | ||||||||
Income (loss) before income taxes | 3,983 | 329 | 288 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | (1,726) | (62) | |||||||||
(Income) loss attributable to non-controlling interests | (4) | 0 | 0 | ||||||||
Net realized investments (gains) losses | 0 | 0 | 0 | ||||||||
Amortization of acquired intangible assets | 2,839 | 113 | 0 | ||||||||
Special items [Abstract] | |||||||||||
Integration and transaction-related costs | 0 | 0 | 0 | ||||||||
Charge for organizational efficiency plan | 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 | ||||||||||
Pre-tax adjusted income (loss) from operations | 5,092 | 380 | 288 | ||||||||
Operating Segments [Member] | Integrated Medical [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 478 | 459 | 366 | ||||||||
Total revenues | 36,519 | 32,791 | 29,035 | ||||||||
Revenue from transitioning clients | 0 | 0 | |||||||||
Net realized investment results from equity method subsidiaries | 0 | 0 | |||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 36,519 | 32,791 | 29,035 | ||||||||
Depreciation and amortization | 449 | 466 | 470 | ||||||||
Income (loss) before income taxes | 3,904 | 3,342 | 2,859 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | 0 | |||||||||
(Income) loss attributable to non-controlling interests | 0 | 0 | 1 | ||||||||
Net realized investments (gains) losses | (112) | 36 | (137) | ||||||||
Amortization of acquired intangible assets | 69 | 99 | 93 | ||||||||
Special items [Abstract] | |||||||||||
Integration and transaction-related costs | 0 | 0 | 0 | ||||||||
Charge for organizational efficiency plan | 0 | ||||||||||
Charges associated with litigation matters | (30) | 25 | |||||||||
U.S. Tax reform | 0 | 0 | |||||||||
Debt extinguishment costs | 0 | ||||||||||
Long-term care guaranty fund assessment | 106 | ||||||||||
Pre-tax adjusted income (loss) from operations | 3,831 | 3,502 | 2,922 | ||||||||
Operating Segments [Member] | International Markets [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 159 | 149 | 127 | ||||||||
Total revenues | 5,659 | 5,323 | 4,901 | ||||||||
Revenue from transitioning clients | 0 | 0 | |||||||||
Net realized investment results from equity method subsidiaries | (44) | 43 | |||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 5,615 | 5,366 | 4,901 | ||||||||
Depreciation and amortization | 87 | 55 | 61 | ||||||||
Income (loss) before income taxes | 785 | 670 | 667 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | 0 | |||||||||
(Income) loss attributable to non-controlling interests | (16) | (14) | 1 | ||||||||
Net realized investments (gains) losses | (43) | 61 | (31) | ||||||||
Amortization of acquired intangible assets | 36 | 18 | 17 | ||||||||
Special items [Abstract] | |||||||||||
Integration and transaction-related costs | 0 | 0 | 0 | ||||||||
Charge for organizational efficiency plan | 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 | ||||||||||
Pre-tax adjusted income (loss) from operations | 762 | 735 | 654 | ||||||||
Operating Segments [Member] | Group Disability and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | 695 | 712 | 700 | ||||||||
Total revenues | 5,182 | 5,061 | 5,075 | ||||||||
Revenue from transitioning clients | 0 | 0 | |||||||||
Net realized investment results from equity method subsidiaries | 0 | 0 | |||||||||
Special items reported in transaction-related costs | 0 | ||||||||||
Adjusted revenues | 5,182 | 5,061 | 5,075 | ||||||||
Depreciation and amortization | 41 | 53 | 31 | ||||||||
Income (loss) before income taxes | 562 | 497 | 614 | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | 0 | |||||||||
(Income) loss attributable to non-controlling interests | 0 | 0 | 0 | ||||||||
Net realized investments (gains) losses | (66) | 25 | (69) | ||||||||
Amortization of acquired intangible assets | 5 | 5 | 5 | ||||||||
Special items [Abstract] | |||||||||||
Integration and transaction-related costs | 0 | 0 | 0 | ||||||||
Charge for organizational efficiency plan | 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 | ||||||||||
Pre-tax adjusted income (loss) from operations | 501 | 529 | 517 | ||||||||
Corporate and eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net investment income | (2) | 151 | 30 | ||||||||
Total revenues | (3,588) | (1,590) | (1,446) | ||||||||
Revenue from transitioning clients | 0 | 0 | |||||||||
Net realized investment results from equity method subsidiaries | 0 | 0 | |||||||||
Special items reported in transaction-related costs | (123) | ||||||||||
Adjusted revenues | (3,588) | (1,713) | (1,446) | ||||||||
Depreciation and amortization | 3 | 1 | 4 | ||||||||
Income (loss) before income taxes | (2,664) | (1,257) | (822) | ||||||||
Pre-tax adjustments to reconcile adjusted income from operations [Abstract] | |||||||||||
Adjustment for transitioning clients | 0 | 0 | |||||||||
(Income) loss attributable to non-controlling interests | 0 | 0 | 0 | ||||||||
Net realized investments (gains) losses | 0 | 2 | 0 | ||||||||
Amortization of acquired intangible assets | 0 | 0 | 0 | ||||||||
Special items [Abstract] | |||||||||||
Integration and transaction-related costs | 552 | 852 | 126 | ||||||||
Charge for organizational efficiency plan | 207 | ||||||||||
Charges associated with litigation matters | 81 | 0 | |||||||||
U.S. Tax reform | 0 | 0 | |||||||||
Debt extinguishment costs | 321 | ||||||||||
Long-term care guaranty fund assessment | 0 | ||||||||||
Pre-tax adjusted income (loss) from operations | (1,824) | (403) | (375) | ||||||||
Corporate Non-segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | 0 | 0 | 0 | ||||||||
Intersegment eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | (3,586) | (1,741) | (1,476) | ||||||||
Intersegment eliminations [Member] | Health Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | (2,380) | (1,154) | (988) | ||||||||
Intersegment eliminations [Member] | Integrated Medical [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues from external customers | (1,180) | (573) | (476) | ||||||||
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 | $ (26) | $ (14) | $ (12) |
Segment Information - Revenue f
Segment Information - Revenue from External Customers (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue from External Customer [Line Items] | |||
Premiums | $ 39,714 | $ 36,113 | $ 32,491 |
Revenues from external customers | 152,176 | 47,170 | 40,580 |
Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 30,089 | 26,848 | 23,631 |
Revenues from external customers | 34,861 | 31,759 | 28,193 |
International Markets [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 5,266 | 5,043 | 4,619 |
Revenues from external customers | 5,500 | 5,174 | 4,774 |
Health Services [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues from external customers | 107,354 | 5,902 | 3,250 |
Group Disability and Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues from external customers | 4,461 | 4,335 | 4,363 |
Product [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 103,099 | 5,479 | 2,979 |
Network Pharmacy [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 50,431 | 1,415 | 0 |
Home Delivery And Specialty [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 47,768 | 3,997 | 2,979 |
Other Pharmacy [Member] | |||
Revenue from External Customer [Line Items] | |||
Pharmacy revenues, fees and other revenues | 4,900 | 67 | 0 |
Service [Member] | |||
Revenue from External Customer [Line Items] | |||
Fees | 9,229 | 5,558 | 5,053 |
Other external revenues | 134 | 20 | 57 |
Pharmacy revenues, fees and other revenues | 9,363 | 5,578 | 5,110 |
Medical Risk Products [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 12,523 | 10,710 | 9,439 |
Stop Loss [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 4,328 | 4,008 | 3,483 |
Other Commercial Medical Products [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 1,040 | 1,038 | 917 |
Medicare Advantage [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 6,314 | 5,832 | 5,534 |
Medicare Part D [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 1,699 | 764 | 764 |
Other Government Products [Member] | Integrated Medical [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 4,185 | 4,496 | 3,494 |
Disability Life Accident [Member] | Group Disability and Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | 4,225 | 4,000 | 3,973 |
Other [Member] | Group Disability and Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Premiums | $ 134 | $ 222 | $ 268 |
Segment Information - Foreign a
Segment Information - Foreign and U.S. Revenues (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 152,176 | $ 47,170 | $ 40,580 |
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 | 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% | 5.00% | 5.00% |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 147,332 | $ 42,773 | $ 36,555 |
South Korea [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | 2,022 | 2,093 | 1,892 |
All Other Countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues from external customers | $ 2,822 | $ 2,304 | $ 2,133 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Results | |||||||||||
Total revenues | $ 38,245 | $ 38,556 | $ 38,819 | $ 37,946 | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | $ 153,566 | $ 48,650 | $ 41,806 |
Income (loss) before income taxes | 1,261 | 1,763 | 1,758 | 1,788 | 228 | 1,033 | 1,102 | 1,218 | 6,570 | 3,581 | 3,606 |
Shareholders' net income | $ 977 | $ 1,351 | $ 1,408 | $ 1,368 | $ 144 | $ 772 | $ 806 | $ 915 | $ 5,104 | $ 2,637 | $ 2,237 |
Shareholders' net income per share: | |||||||||||
EPS, basic | $ 2.63 | $ 3.60 | $ 3.73 | $ 3.61 | $ 0.56 | $ 3.18 | $ 3.32 | $ 3.78 | $ 13.58 | $ 10.69 | $ 8.92 |
EPS, diluted | 2.60 | 3.57 | 3.70 | 3.56 | 0.55 | 3.14 | 3.29 | 3.72 | 13.44 | 10.54 | 8.77 |
Stock and Dividend Data | |||||||||||
Price range of common stock - high | 207.28 | 185.77 | 170.89 | 202.02 | 226.61 | 208.73 | 182.10 | 227.13 | |||
Price range of common stock - low | 146.50 | 145.51 | 141.95 | 158.58 | 176.52 | 166.88 | 163.80 | 163.02 | |||
Dividends declared per share | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0 | $ 0 | $ 0 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 |
Special items | |||||||||||
Integration and transaction-related costs | $ 116 | $ 88 | $ 115 | $ 108 | $ 402 | $ 108 | $ 109 | $ 50 | $ 427 | $ 669 | $ 33 |
Charge for organizational efficiency plan | 162 | 0 | 0 | 0 | 162 | ||||||
Charges (benefits) associated with litigation matters | 0 | (23) | 64 | 0 | (16) | 35 | 0 | 0 | $ 41 | 19 | |
U.S. tax reform | 3 | (5) | 0 | 0 | $ (2) | $ 196 | |||||
Total impact of special items, after-tax | $ 278 | $ 65 | $ 179 | $ 108 | $ 389 | $ 138 | $ 109 | $ 50 |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||||||||||
Net investment (income) | $ 1,390 | $ 1,480 | $ 1,226 | ||||||||
Total revenues | $ 38,245 | $ 38,556 | $ 38,819 | $ 37,946 | $ 14,300 | $ 11,457 | $ 11,480 | $ 11,413 | 153,566 | 48,650 | 41,806 |
Operating expenses: | |||||||||||
Selling, Genernal and Administrative Expense | 14,053 | 11,934 | 10,030 | ||||||||
Total benefits and expenses | 145,489 | 44,490 | 37,864 | ||||||||
Income from operations | 8,077 | 4,160 | 3,942 | ||||||||
Interest expense and other | (1,682) | (498) | (252) | ||||||||
Debt extinguishment costs | (2) | 0 | (321) | ||||||||
Net realized investment gains (losses) | 177 | (81) | 237 | ||||||||
Income (loss) before income taxes | 1,261 | 1,763 | 1,758 | 1,788 | 228 | 1,033 | 1,102 | 1,218 | 6,570 | 3,581 | 3,606 |
Income tax expense (benefit) | 1,450 | 935 | 1,374 | ||||||||
Shareholders' net income | $ 977 | $ 1,351 | $ 1,408 | $ 1,368 | $ 144 | $ 772 | $ 806 | $ 915 | 5,104 | 2,637 | 2,237 |
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Shareholders' comprehensive income (loss) | 5,874 | 2,247 | 2,537 | ||||||||
Cigna [Member] | |||||||||||
Revenues | |||||||||||
Net investment (income) | 0 | 123 | |||||||||
Intercompany interest income | 6 | 0 | |||||||||
Total revenues | 6 | 123 | |||||||||
Operating expenses: | |||||||||||
Selling, Genernal and Administrative Expense | (85) | 200 | |||||||||
Total benefits and expenses | (85) | 200 | |||||||||
Income from operations | 91 | (77) | |||||||||
Interest expense and other | (1,032) | (244) | |||||||||
Intercompany interest income (expense) | (127) | (5) | |||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Net realized investment gains (losses) | 0 | (1) | |||||||||
Income (loss) before income taxes | (1,068) | (327) | |||||||||
Income tax expense (benefit) | (251) | (74) | |||||||||
(Loss) of parent company | (817) | (253) | |||||||||
Equity in income from subsidiaries | 5,921 | 2,890 | |||||||||
Shareholders' net income | 5,104 | 2,637 | |||||||||
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Net unrealized appreciation (depreciation) on securities and derivatives | 957 | (365) | |||||||||
Net translation (losses) gains on foreign currencies | (54) | (152) | |||||||||
Postretirement benefits liability adjustment | (133) | 127 | |||||||||
Shareholders' other comprehensive income (loss) | 770 | (390) | |||||||||
Shareholders' comprehensive income (loss) | $ 5,874 | $ 2,247 | |||||||||
Old Cigna [Member] | |||||||||||
Revenues | |||||||||||
Net investment (income) | 0 | ||||||||||
Intercompany interest income | 0 | ||||||||||
Total revenues | 0 | ||||||||||
Operating expenses: | |||||||||||
Selling, Genernal and Administrative Expense | 195 | ||||||||||
Total benefits and expenses | 195 | ||||||||||
Income from operations | (195) | ||||||||||
Interest expense and other | (246) | ||||||||||
Intercompany interest income (expense) | (18) | ||||||||||
Debt extinguishment costs | (321) | ||||||||||
Net realized investment gains (losses) | 0 | ||||||||||
Income (loss) before income taxes | (780) | ||||||||||
Income tax expense (benefit) | (194) | ||||||||||
(Loss) of parent company | (586) | ||||||||||
Equity in income from subsidiaries | 2,823 | ||||||||||
Shareholders' net income | 2,237 | ||||||||||
Shareholders' other comprehensive income (loss), net of tax: | |||||||||||
Net unrealized appreciation (depreciation) on securities and derivatives | (37) | ||||||||||
Net translation (losses) gains on foreign currencies | 304 | ||||||||||
Postretirement benefits liability adjustment | 33 | ||||||||||
Shareholders' other comprehensive income (loss) | 300 | ||||||||||
Shareholders' comprehensive income (loss) | $ 2,537 |
Schedule I - Condensed Financ_4
Schedule I - Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets | ||||||
Cash and cash equivalents | $ 4,619 | $ 3,855 | ||||
Other current assets | 1,400 | 1,236 | ||||
Total current assets | 29,845 | 20,430 | ||||
Other noncurrent assets | 2,283 | 1,630 | ||||
TOTAL ASSETS | 155,774 | 153,226 | ||||
Liabilities: | ||||||
Short-term debt | 5,514 | 2,955 | ||||
Total current liabilities | 40,138 | 31,895 | ||||
Long-term debt | 31,893 | 39,523 | ||||
Other non-current liabilities | 4,460 | 3,470 | ||||
TOTAL LIABILITIES | 110,395 | 112,154 | ||||
Shareholders Equity: | ||||||
Common stock (shares issued, 296; authorized, 600) | [1] | 4 | 4 | |||
Additional paid-in capital | 28,306 | 27,751 | ||||
Accumulated other comprehensive loss | (941) | (1,711) | ||||
Retained earnings | 20,162 | 15,088 | ||||
Less: treasury stock, at cost | (2,193) | (104) | ||||
Total shareholders' equity | 45,338 | 41,028 | ||||
Total liabilities and shareholders' equity | 155,774 | 153,226 | ||||
Cigna [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | 0 | 243 | $ 243 | $ 0 | ||
Short-term investments | 30 | 0 | ||||
Other current assets | 4 | 14 | ||||
Total current assets | 34 | 257 | ||||
Intercompany receivable | 4,111 | 0 | ||||
Investments in subsidiaries | 77,380 | 68,969 | ||||
Other noncurrent assets | 19 | 48 | ||||
TOTAL ASSETS | 81,544 | 69,274 | ||||
Liabilities: | ||||||
Short-term debt | 4,043 | 0 | ||||
Other current liabilities | 457 | 418 | ||||
Total current liabilities | 4,500 | 418 | ||||
Intercompany payable | 2,341 | 4,965 | ||||
Long-term debt | 29,365 | 22,863 | ||||
Other non-current liabilities | 0 | 0 | ||||
TOTAL LIABILITIES | 36,206 | 28,246 | ||||
Shareholders Equity: | ||||||
Common stock (shares issued, 296; authorized, 600) | 4 | 4 | ||||
Additional paid-in capital | 28,306 | 27,751 | ||||
Accumulated other comprehensive loss | (941) | (1,711) | ||||
Retained earnings | 20,162 | 15,088 | ||||
Less: treasury stock, at cost | (2,193) | (104) | ||||
Total shareholders' equity | 45,338 | 41,028 | ||||
Total liabilities and shareholders' equity | $ 81,544 | $ 69,274 | ||||
Old Cigna [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | $ 9 | $ 18 | ||||
[1] | Par value per share, $0.01; shares issued, 386 million as of December 31, 2019 and 381 million as of December 31, 2018; authorized shares; 600 million. |
Schedule I - Condensed Financ_5
Schedule I - Condensed Financial Information, Balance Sheets - Parentheticals (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | |||
Common stock shares issued | 385,543,000 | 381,494,000 | |
Common stock shares authorized | 600,000,000 | 600,000,000 | |
Cigna [Member] | |||
Consolidated Balance Sheets | |||
Common stock shares issued | 386,000,000 | 381,000,000 | |
Common stock shares authorized | 600,000,000 | 600,000,000 | |
Old Cigna [Member] | |||
Consolidated Balance Sheets | |||
Common stock shares issued | 0 | 296,145,000 | |
Common stock shares authorized | 600,000,000 |
Schedule I - Condensed Financ_6
Schedule I - Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows from Operating Activities | |||||||||||
Shareholders' net income | $ 977 | $ 1,351 | $ 1,408 | $ 1,368 | $ 144 | $ 772 | $ 806 | $ 915 | $ 5,104 | $ 2,637 | $ 2,237 |
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||
Other liabilities | 1,343 | 332 | 696 | ||||||||
Debt extinguishment costs | 2 | 0 | 321 | ||||||||
Other, net | 559 | 272 | 197 | ||||||||
Net cash provided by (used in) operating activities | 9,485 | 3,770 | 4,086 | ||||||||
Cash Flows from Investing Activities | |||||||||||
Short term investments purchased | (1,753) | (1,189) | (1,065) | ||||||||
Other, net | (11) | (12) | 0 | ||||||||
Net cash provided by (used in) investing activities | (734) | (26,378) | (1,703) | ||||||||
Cash Flows from Financing Activities | |||||||||||
Net change in short-term debt | (681) | 1,487 | 80 | ||||||||
Payments for debt extinguishment | (3) | 0 | (313) | ||||||||
Repayment of long-term debt | (4,491) | (131) | (1,250) | ||||||||
Net proceeds on issuance of long-term debt | 0 | 22,856 | 1,581 | ||||||||
Issuance of common stock | 224 | 68 | 131 | ||||||||
Repurchase of common stock | (1,987) | (342) | (2,725) | ||||||||
Other, net | (107) | (312) | (22) | ||||||||
Net cash provided by (used in) financing activities | (7,187) | 23,515 | (2,651) | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,556 | 883 | (213) | ||||||||
Cash and cash equivalents, January 1, | 3,855 | 3,855 | |||||||||
Cash and cash equivalents, ending balance | 4,619 | 3,855 | 4,619 | 3,855 | |||||||
Cigna [Member] | |||||||||||
Cash Flows from Operating Activities | |||||||||||
Shareholders' net income | 5,104 | 2,637 | |||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||
Equity in income from subsidiaries | (5,921) | (2,890) | |||||||||
Dividends received from subsidiaries | 2,457 | 0 | |||||||||
Other liabilities | 43 | 412 | |||||||||
Debt extinguishment costs | 0 | 0 | |||||||||
Other, net | 20 | (14) | |||||||||
Net cash provided by (used in) operating activities | 1,703 | 145 | |||||||||
Cash Flows from Investing Activities | |||||||||||
Short term investments purchased | (30) | 0 | |||||||||
Other, net | 0 | (27,115) | |||||||||
Net cash provided by (used in) investing activities | (30) | (27,115) | |||||||||
Cash Flows from Financing Activities | |||||||||||
Net change in amounts due to (from) affiliates | 2,015 | 4,437 | |||||||||
Net change in short-term debt | 944 | 0 | |||||||||
Payments for debt extinguishment | 0 | 0 | |||||||||
Repayment of long-term debt | (3,002) | 0 | |||||||||
Net proceeds on issuance of long-term debt | 0 | 22,856 | |||||||||
Issuance of common stock | 224 | 1 | |||||||||
Common dividends paid | (15) | 0 | |||||||||
Repurchase of common stock | (1,987) | (32) | |||||||||
Tax withholding on stock compensation and other | (82) | (49) | |||||||||
Other, net | (13) | 0 | |||||||||
Net cash provided by (used in) financing activities | (1,916) | 27,213 | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (243) | 243 | |||||||||
Cash and cash equivalents, January 1, | $ 243 | 0 | 243 | 0 | |||||||
Cash and cash equivalents, ending balance | $ 0 | $ 243 | $ 0 | 243 | 0 | ||||||
Old Cigna [Member] | |||||||||||
Cash Flows from Operating Activities | |||||||||||
Shareholders' net income | 2,237 | ||||||||||
Adjustments to reconcile shareholders' net income to net cash provided by (used in) operating activities: | |||||||||||
Equity in income from subsidiaries | (2,823) | ||||||||||
Dividends received from subsidiaries | 758 | ||||||||||
Other liabilities | (224) | ||||||||||
Debt extinguishment costs | 321 | ||||||||||
Other, net | 333 | ||||||||||
Net cash provided by (used in) operating activities | 602 | ||||||||||
Cash Flows from Investing Activities | |||||||||||
Short term investments purchased | (6) | ||||||||||
Other, net | (11) | ||||||||||
Net cash provided by (used in) investing activities | (17) | ||||||||||
Cash Flows from Financing Activities | |||||||||||
Net change in amounts due to (from) affiliates | 1,955 | ||||||||||
Net change in short-term debt | 100 | ||||||||||
Payments for debt extinguishment | (313) | ||||||||||
Repayment of long-term debt | (1,250) | ||||||||||
Net proceeds on issuance of long-term debt | 1,581 | ||||||||||
Issuance of common stock | 131 | ||||||||||
Common dividends paid | (10) | ||||||||||
Repurchase of common stock | (2,725) | ||||||||||
Tax withholding on stock compensation and other | (63) | ||||||||||
Other, net | 0 | ||||||||||
Net cash provided by (used in) financing activities | (594) | ||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (9) | ||||||||||
Cash and cash equivalents, January 1, | $ 9 | $ 9 | 18 | ||||||||
Cash and cash equivalents, ending balance | $ 9 |
Schedule I - Condensed Financ_7
Schedule I - Condensed Financial Information, Short-term and Long-term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||||
Repayment of long-term debt | $ 4,491 | $ 131 | $ 1,250 | ||
Notes issued by Express Scripts, Medco and Old Cigna exchanged for Notes issued by Cigna | $ 12,700 | ||||
Net proceeds on issuance of long-term debt | 0 | 22,856 | 1,581 | ||
Maturities Of Debt Excluding Finance Leases [Abstract] | |||||
Scheduled maturities, long-term debt, 2020 | 4,549 | 4,549 | |||
Scheduled maturities, long-term debt, 2021 | 4,376 | 4,376 | |||
Scheduled maturities, long-term debt, 2022 | 2,249 | 2,249 | |||
Scheduled maturities, long-term debt, 2023 | 4,917 | 4,917 | |||
Scheduled maturities, long-term debt, 2024 | 1,000 | 1,000 | |||
Scheduled maturities, long-term debt, after 2024 | 19,581 | 19,581 | |||
$349 million, 4.125% Notes due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayment of long-term debt | 151 | ||||
Long-term debt, face value | 349 | 349 | 500 | ||
Cigna [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayment of long-term debt | 3,002 | 0 | |||
Notes issued by Express Scripts, Medco and Old Cigna exchanged for Notes issued by Cigna | 12,700 | ||||
Net proceeds on issuance of long-term debt | 0 | $ 22,856 | |||
Maturities Of Debt Excluding Finance Leases [Abstract] | |||||
Scheduled maturities, long-term debt, 2020 | 3,099 | 3,099 | |||
Scheduled maturities, long-term debt, 2021 | 3,812 | 3,812 | |||
Scheduled maturities, long-term debt, 2022 | 1,770 | 1,770 | |||
Scheduled maturities, long-term debt, 2023 | 4,699 | 4,699 | |||
Scheduled maturities, long-term debt, 2024 | 714 | 714 | |||
Scheduled maturities, long-term debt, after 2024 | 18,638 | 18,638 | |||
Cigna [Member] | Notes issued in 2018 in connection with Express Scripts Merger [Member] | |||||
Debt Instrument [Line Items] | |||||
Net proceeds on issuance of long-term debt | $ 20,000 | ||||
Cigna [Member] | $349 million, 4.125% Notes due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayment of long-term debt | 3,000 | ||||
Long-term debt, face value | $ 3,000 | $ 3,000 | |||
Old Cigna [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayment of long-term debt | 1,250 | ||||
Net proceeds on issuance of long-term debt | $ 1,581 |
Schedule I - Condensed Financ_8
Schedule I - Condensed Financial Information, Intercompany Balances (Details) - Cigna [Member] - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Old Cigna [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany liabilities | $ 2.3 | $ 4.3 |
Average monthly interest rate on intercompany payables | 2.58% | 2.33% |
Express Scripts Holding Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany receivables | $ 8.2 | |
Intercompany liabilities | 4.3 | |
Intercompany receivables, net | $ 3.9 | |
Average monthly interest rate on intercompany payables | 2.58% | |
Interest rate, intercompany receivables | 5.50% |
Schedule I - Condensed Financ_9
Schedule I - Condensed Financial Information, Guarantees (Details) - Cigna [Member] | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Guarantee Obligations [Line Items] | |
Guarantee obligations carrying value | $ 48,000,000,000 |
Payments made on guarantees | $ 0 |
Schedule II - Valuation and Q_3
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commercial mortgage loans [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 0 | $ 5 | |
Charged (Credited) to costs and expenses | 1 | ||
Charged (Credited) to other accounts | 0 | ||
Other deductions | (6) | ||
Balance at end of period | 0 | ||
Premiums, accounts and notes receivable [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 217 | 207 | 200 |
Charged (Credited) to costs and expenses | 51 | 18 | 19 |
Charged (Credited) to other accounts | 0 | (3) | (11) |
Other deductions | (16) | (5) | (1) |
Balance at end of period | 252 | 217 | 207 |
Deferred tax asset valuation allowance [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 199 | 72 | 87 |
Charged (Credited) to costs and expenses | (6) | (5) | 11 |
Charged (Credited) to other accounts | 3 | 132 | (26) |
Other deductions | 0 | 0 | 0 |
Balance at end of period | 196 | 199 | 72 |
Reinsurance recoverables [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 2 | 3 | 3 |
Charged (Credited) to costs and expenses | 0 | (1) | 0 |
Charged (Credited) to other accounts | 0 | 0 | 0 |
Other deductions | 0 | 0 | 0 |
Balance at end of period | $ 2 | $ 2 | $ 3 |
Uncategorized Items - ci-201912
Label | Element | Value |
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (15,000,000) |
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 58,000,000 |
Retained Earnings [Member] | ||
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (15,000,000) |
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 68,000,000 |
Accumulated Other Comprehensive Income [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 |
Cumulative effect on equity in period of adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (15,000,000) |