Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 27, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-5823 | |
Entity Registrant Name | CNA FINANCIAL CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-6169860 | |
Entity Address, Address Line One | 151 N. Franklin | |
Entity Address, Postal Zip Code | 60606 | |
Entity Address, City or Town | Chicago, | |
Entity Address, State or Province | IL | |
City Area Code | 312 | |
Local Phone Number | 822-5000 | |
Title of 12(b) Security | Common Stock, Par value $2.50 | |
Trading Symbol | "CNA" | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 270,861,737 | |
Entity Central Index Key | 0000021175 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
New York Stock Exchange | ||
Entity Information [Line Items] | ||
Security Exchange Name | NYSE | |
Chicago Stock Exchange | ||
Entity Information [Line Items] | ||
Security Exchange Name | CHX |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | [1] | Jun. 30, 2023 | Jun. 30, 2022 | ||
Revenues | ||||||
Net earned premiums | $ 2,347 | $ 2,155 | $ 4,595 | $ 4,214 | [1] | |
Net investment income | 575 | 432 | 1,100 | 880 | [1] | |
Net investment losses | (32) | (59) | (67) | (70) | [1] | |
Non-insurance warranty revenue | 407 | 392 | 814 | 774 | [1] | |
Other revenues | 7 | 6 | 14 | 13 | [1] | |
Total revenues | 3,304 | 2,926 | 6,456 | 5,811 | ||
Claims, Benefits and Expenses | ||||||
Insurance claims and policyholders’ benefits (re-measurement gain (loss) of $(33), $1, $(34), and $6) | 1,779 | 1,601 | 3,432 | 3,079 | [1] | |
Amortization of deferred acquisition costs | 403 | 374 | 782 | 718 | [1] | |
Non-insurance warranty expense | 384 | 367 | 768 | 721 | [1] | |
Other operating expenses | 346 | 329 | 683 | 655 | [1] | |
Interest | 31 | 28 | 59 | 56 | [1] | |
Total claims, benefits and expenses | 2,943 | 2,699 | 5,724 | 5,229 | ||
Income before income tax | 361 | 227 | 732 | 582 | [1] | |
Income tax expense | (78) | (37) | (152) | (97) | [1] | |
Net income | $ 283 | $ 190 | [2] | $ 580 | $ 485 | [3] |
Basic earnings per share | ||||||
Basic earnings per share (in usd per share) | $ 1.04 | $ 0.70 | $ 2.14 | $ 1.79 | ||
Diluted earnings per share | ||||||
Diluted earnings per share (in usd per share) | $ 1.04 | $ 0.69 | $ 2.13 | $ 1.78 | ||
Weighted Average Outstanding Common Stock and Common Stock Equivalents | ||||||
Weighted average shares outstanding (in shares) | 271.2 | 271.7 | 271.2 | 271.8 | ||
Diluted (in shares) | 272 | 272.6 | 272.1 | 272.7 | ||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Consolidated Statements of Op_2
Consolidated Statements of Operations - (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Insurance claims and policyholders benefits, including policyholders' dividends, remeasurement impact | $ (33) | $ 1 | $ (34) | $ 6 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | [2] | Jun. 30, 2023 | Jun. 30, 2022 | ||
Net income | $ 283 | $ 190 | [1] | $ 580 | $ 485 | [3] |
Other Comprehensive (Loss) Income, net of tax | ||||||
Net unrealized gains and losses on investments | (414) | (2,228) | 248 | (4,875) | ||
Impact of changes in discount rates used to measure long-duration contract liabilities | 256 | 1,507 | (140) | 3,142 | ||
Foreign currency translation adjustment | 34 | (68) | 51 | (82) | ||
Pension and postretirement benefits | 7 | 6 | 14 | 12 | ||
Other comprehensive (loss) income, net of tax | (117) | (783) | 173 | (1,803) | ||
Total comprehensive income (loss) | 166 | (593) | 753 | (1,318) | ||
Net unrealized gains and losses on investments with an allowance for credit losses | ||||||
Other Comprehensive (Loss) Income, net of tax | ||||||
Net unrealized gains and losses on investments | (1) | (2) | (9) | (6) | ||
Net unrealized gains and losses on other investments | ||||||
Other Comprehensive (Loss) Income, net of tax | ||||||
Net unrealized gains and losses on investments | $ (413) | $ (2,226) | $ 257 | $ (4,869) | ||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | ||
Investments: | ||||
Fixed maturity securities at fair value (amortized cost of $41,838 and $41,032, less allowance for credit loss of $22 and $1) | $ 38,728 | $ 37,627 | [1] | |
Equity securities at fair value (cost of $700 and $703) | 683 | 674 | [1] | |
Limited partnership investments | 2,020 | 1,926 | [1] | |
Other invested assets | 71 | 78 | [1] | |
Mortgage loans (less allowance for uncollectible receivables of $30 and $24) | 1,009 | 1,040 | [1] | |
Short term investments | 1,924 | 1,832 | [1] | |
Total investments | 44,435 | 43,177 | [1] | |
Cash | 358 | 475 | [1] | |
Reinsurance receivables (less allowance for uncollectible receivables of $22 and $22) | 5,581 | 5,416 | [1] | |
Insurance receivables (less allowance for uncollectible receivables of $30 and $29) | 3,521 | 3,158 | [1] | |
Accrued investment income | 424 | 402 | [1] | |
Deferred acquisition costs | 885 | 806 | [1] | |
Deferred income taxes | 1,201 | 1,251 | [1] | |
Property and equipment at cost (less accumulated depreciation of $301 and $280) | 246 | 226 | [1] | |
Goodwill | 146 | 144 | [1] | |
Deferred non-insurance warranty acquisition expense | 3,689 | 3,671 | [1] | |
Other assets (includes $15 and $18 due from Loews Corporation) | 2,602 | 2,274 | [1] | |
Total assets | 63,088 | 61,000 | [1] | |
Insurance reserves: | ||||
Claim and claim adjustment expenses | 22,802 | 22,120 | [1] | |
Unearned premiums | 6,978 | 6,374 | [1] | |
Future policy benefits | 13,666 | 13,480 | [1] | |
Short term debt | 792 | 243 | [1] | |
Long term debt | 2,384 | 2,538 | [1] | |
Deferred non-insurance warranty revenue | 4,735 | 4,714 | [1] | |
Other liabilities (includes $14 and $26 due to Loews Corporation) | 3,005 | 2,983 | [1] | |
Total liabilities | 54,362 | 52,452 | [1] | |
Commitments and contingencies (Notes B and F) | [1] | |||
Stockholders' Equity | ||||
Common stock ($2.50 par value; 500,000,000 shares authorized; 273,040,243 shares issued; 270,861,737 and 270,895,902 shares outstanding) | 683 | 683 | [1] | |
Additional paid-in capital | 2,204 | 2,220 | [1] | |
Retained earnings | 9,359 | 9,336 | [1] | |
Accumulated other comprehensive loss | (3,425) | (3,598) | [1] | |
Treasury stock (2,178,506 and 2,144,341 shares), at cost | (95) | (93) | [1] | |
Total stockholders’ equity | 8,726 | 8,548 | [1] | |
Total liabilities and stockholders' equity | $ 63,088 | $ 61,000 | [1] | |
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) - (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | |
Fixed maturities securities at amortized cost | $ 41,838 | $ 41,032 | |
Marketable securities fixed maturities allowance for credit loss | 22 | 1 | |
Equity securities at cost | 700 | 703 | |
Mortgage loans on real estate commercial and consumer allowance for credit loss | 30 | 24 | |
Allowance for uncollectible reinsurance | 22 | 22 | |
Allowance for uncollectible insurance receivables | 30 | 29 | |
Accumulated depreciation on property and equipment | 301 | 280 | |
Other Assets | 2,602 | 2,274 | [1] |
Other Liabilities | $ 3,005 | $ 2,983 | [1] |
Common stock, par value (in usd per share) | $ 2.50 | $ 2.50 | |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | |
Common stock, shares issued (in shares) | 273,040,243 | 273,040,243 | |
Common stock, shares outstanding (in shares) | 270,861,737 | 270,895,902 | |
Treasury stock, shares (in shares) | 2,178,506 | 2,144,341 | |
Related Party | |||
Other Assets | $ 15 | $ 18 | |
Other Liabilities | $ 14 | $ 26 | |
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Cash Flows from Operating Activities | |||
Net income | $ 580 | $ 485 | [1] |
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||
Deferred income tax expense | 21 | (18) | [1] |
Trading portfolio activity | 1 | 7 | [1] |
Net investment losses | 67 | 70 | [1] |
Equity method investees | (29) | 184 | [1] |
Net amortization of investments | (87) | (56) | [1] |
Depreciation and amortization | 28 | 25 | [1] |
Changes in: | |||
Receivables, net | (497) | (614) | [1] |
Accrued investment income | (21) | (6) | [1] |
Deferred acquisition costs | (74) | (63) | [1] |
Insurance reserves | 1,165 | 1,417 | [1] |
Other, net | (217) | (178) | [1] |
Net cash flows provided by operating activities | 937 | 1,253 | [1] |
Dispositions: | |||
Fixed maturity securities - sales | 2,285 | 3,293 | [1] |
Fixed maturity securities - maturities, calls and redemptions | 613 | 1,715 | [1] |
Equity securities | 121 | 193 | [1] |
Limited partnerships | 79 | 101 | [1] |
Mortgage loans | 78 | 76 | [1] |
Purchases: | |||
Fixed maturity securities | (3,506) | (6,251) | [1] |
Equity securities | (126) | (195) | [1] |
Limited partnerships | (245) | (168) | [1] |
Mortgage loans | (53) | (53) | [1] |
Change in other investments | 6 | 15 | [1] |
Change in short term investments | (62) | 868 | [1] |
Purchases of property and equipment | (43) | (25) | [1] |
Other, net | (5) | 0 | |
Net cash flows used by investing activities | (858) | (431) | [1] |
Cash Flows from Financing Activities | |||
Dividends paid to common stockholders | (559) | (765) | [1] |
Proceeds from the issuance of debt | 395 | 0 | |
Purchase of treasury stock | (24) | (21) | [1] |
Other, net | (12) | 0 | [1] |
Net cash flows used by financing activities | (200) | (786) | [1] |
Effect of foreign exchange rate changes on cash | 4 | (12) | [1] |
Net change in cash | (117) | 24 | [1] |
Cash, beginning of year | 475 | 536 | [1] |
Cash, end of period | $ 358 | $ 560 | [1] |
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Prior to Adoption | Effect of Adoption | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained Earnings Prior to Adoption | Retained Earnings Effect of Adoption | Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income Prior to Adoption | Accumulated Other Comprehensive (Loss) Income Effect of Adoption | Treasury Stock | |||||
Total stockholder's equity at beginning of period at Dec. 31, 2021 | [1] | $ 683 | $ 2,215 | $ 9,639 | $ 9,663 | $ (24) | $ (1,360) | $ 320 | $ (1,680) | $ (72) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock-based compensation | [1] | (12) | 17 | ||||||||||||||
Dividends to common stockholders ($0.42, $0.40, $2.04, $2.80 per share) | [1] | (766) | |||||||||||||||
Net income | $ 485 | [2] | $ 518 | $ (33) | 485 | [1] | |||||||||||
Other comprehensive income (loss) | (1,803) | (3,033) | 1,230 | (1,803) | [1] | ||||||||||||
Purchase of treasury stock | (21) | (21) | [1] | ||||||||||||||
Total stockholder's equity at end of period at Jun. 30, 2022 | [1] | $ 9,005 | 683 | 2,203 | 9,358 | (3,163) | (76) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Dividends declared per share (usd per share) | $ 2.80 | ||||||||||||||||
Total stockholder's equity at beginning of period at Mar. 31, 2022 | [1] | 683 | 2,195 | 9,277 | 9,319 | (42) | (2,380) | (1,303) | (1,077) | (77) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock-based compensation | [1] | 8 | 1 | ||||||||||||||
Dividends to common stockholders ($0.42, $0.40, $2.04, $2.80 per share) | [1] | (109) | |||||||||||||||
Net income | $ 190 | [3],[4] | 205 | (15) | 190 | [1] | |||||||||||
Other comprehensive income (loss) | (783) | [4] | (1,410) | 627 | (783) | [1] | |||||||||||
Purchase of treasury stock | [1] | 0 | |||||||||||||||
Total stockholder's equity at end of period at Jun. 30, 2022 | [1] | $ 9,005 | 683 | 2,203 | 9,358 | (3,163) | (76) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Dividends declared per share (usd per share) | $ 0.40 | ||||||||||||||||
Total stockholder's equity at beginning of period at Dec. 31, 2022 | $ 8,548 | [5] | $ 8,825 | $ (277) | 683 | 2,220 | 9,336 | 9,572 | (236) | (3,598) | (3,557) | (41) | (93) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock-based compensation | (16) | 22 | |||||||||||||||
Dividends to common stockholders ($0.42, $0.40, $2.04, $2.80 per share) | (557) | ||||||||||||||||
Net income | 580 | 580 | |||||||||||||||
Other comprehensive income (loss) | 173 | 173 | |||||||||||||||
Purchase of treasury stock | (24) | (24) | |||||||||||||||
Total stockholder's equity at end of period at Jun. 30, 2023 | $ 8,726 | 683 | 2,204 | 9,359 | (3,425) | (95) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Dividends declared per share (usd per share) | $ 2.04 | ||||||||||||||||
Total stockholder's equity at beginning of period at Mar. 31, 2023 | 683 | 2,196 | 9,191 | $ 9,191 | $ 0 | (3,308) | $ (3,308) | $ 0 | (95) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock-based compensation | 8 | 0 | |||||||||||||||
Dividends to common stockholders ($0.42, $0.40, $2.04, $2.80 per share) | (115) | ||||||||||||||||
Net income | $ 283 | 283 | |||||||||||||||
Other comprehensive income (loss) | (117) | (117) | |||||||||||||||
Purchase of treasury stock | 0 | ||||||||||||||||
Total stockholder's equity at end of period at Jun. 30, 2023 | $ 8,726 | $ 683 | $ 2,204 | $ 9,359 | $ (3,425) | $ (95) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Dividends declared per share (usd per share) | $ 0.42 | ||||||||||||||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information.[2]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information.[3]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity - (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (usd per share) | $ 0.42 | $ 0.40 | $ 2.04 | $ 2.80 |
General
General | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
General | General Basis of Presentation The Condensed Consolidated Financial Statements include the accounts of CNA Financial Corporation (CNAF) and its subsidiaries. Collectively, CNAF and its subsidiaries are referred to as CNA or the Company. Loews Corporation (Loews) owned 90% of the outstanding common stock of CNAF as of June 30, 2023. The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, including certain financial statement notes, is not required for interim reporting purposes and has been condensed or omitted. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in CNAF's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) for the year ended December 31, 2022, including the summary of significant accounting policies in Note A. The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. The interim financial data as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 is unaudited. However, in the opinion of management, the interim data includes all adjustments, including normal recurring adjustments, necessary for a fair statement of the Company's results for the interim periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The December 31, 2022 Consolidated Balance Sheet included in this Quarterly Report on Form 10-Q was derived from audited financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC, adjusted for the application of ASU 2018-12 : Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12). Recently Adopted Accounting Standards Updates (ASU) ASU 2018-12: In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-12 The new guidance eliminates the need to hold shadow reserves associated with the Company’s long term care reserves. Under legacy accounting guidance, to the extent that unrealized gains on fixed maturity securities supporting long term care reserves would have resulted in a premium deficiency if realized, a related increase to Insurance reserves was recorded, net of tax, as a reduction of net unrealized gains (losses), through Other comprehensive income (loss) (shadow reserves). The unit of account is the level at which reserves are measured. Under the new guidance, the unit of account used to measure the LFPB is the cohort. Cohorts are comprised of insurance contracts issued no more than one year apart, and must be further disaggregated according to policy benefit and insurance risk characteristics. Under legacy accounting guidance, the LFPB was generally measured at the individual policy level. Under the new guidance, the Net Premium Ratio (NPR) is capped at 100%. To the extent that NPR would otherwise exceed 100%, the LFPB is increased and a loss is recognized immediately in the Company’s results of operations. The NPR cap is applied at the cohort level each quarter when NPR is updated. In contrast, under legacy accounting guidance, premium deficiency testing was performed annually at the product level. See Note F to the Condensed Consolidated Financial Statements for further explanation of the NPR and LFPB calculations. The Company adopted the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. The Company's run-off long term care business is in scope of the new guidance. All prior periods presented in the financial statements have been adjusted to reflect application of the new guidance. The Company’s original locked in discount rate, utilized for purposes of calculating the NPR under the new guidance, was based on the discount rate assumption used to calculate the LFPB immediately prior to the transition date. While the requirements of the new guidance represent a material change from legacy accounting, the new guidance does not impact capital and surplus under statutory accounting practices, cash flows or the underlying economics of the business. In December 2022, the FASB issued ASU 2022-05, Financial Services-Insurance (Topic 944): Transition for Sold Contracts (ASU 2022-05). This guidance permits companies to make an election to exclude from the scope of ASU 2018-12 any insurance contracts that have been de-recognized prior to the effective date of ASU 2018-12, assuming that the company has no significant continuing involvement with the de-recognized contracts. In the fourth quarter of 2022, the Company novated its block of legacy annuity business, which was fully-ceded prior to novation. The Company has elected the ASU 2022-05 transition relief, and has excluded the novated legacy annuity business from the scope of ASU 2018-12. Explanation of ASU 2018-12 Transition Impacts: The following table presents a roll-forward of the pre-transition LFPB balance as of January 1, 2021: (In millions) Balance as of December 31, 2020, as previously reported $ 13,318 Reclassification of reserves for policyholders currently receiving benefits to Future policy benefits (1) 2,844 De-recognition of shadow reserves (3,293) Re-measurement using an upper-medium grade fixed income instrument yield discount rate 6,255 Other adjustments 8 Balance as of January 1, 2021, as adjusted $ 19,132 (1) In conjunction with the adoption of ASU 2018-12, at January 1, 2023, the Company reclassified the long term care reserves for policyholders currently receiving benefits from Claim and claim adjustment expenses to Future policy benefits. This change was applied retrospectively as of January 1, 2021. Shadow reserves associated with the Company’s long term care business were de-recognized as of the transition date in Accumulated other comprehensive income (AOCI). The effect of re-measuring the LFPB at the single-A discount rate as of the transition date was similarly recorded in AOCI. The Company did not have any cohorts for which the NPR exceeded 100% at the transition date. The Company’s practice under legacy accounting guidance was to calculate and record premium deficiency reserves at the policy level. Accordingly, an allocation methodology was not required to assign historical premium deficiency reserves to cohorts upon transition to ASU 2018-12. The following table presents after tax adjustments to the opening balance of Stockholders’ equity resulting from adoption of ASU 2018-12: (In millions) Accumulated other comprehensive income (loss) Retained earnings Balance as of December 31, 2020, as previously reported $ 803 $ 9,081 De-recognition of shadow reserves 2,601 — Re-measurement of LFPB using an upper-medium grade fixed income instrument yield discount rate (4,941) — Other adjustments — (6) Balance as of January 1, 2021, as adjusted $ (1,537) $ 9,075 The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Operations for the three months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Insurance claims and policyholders’ benefits (1) $ 1,583 $ 18 $ 1,601 Income (loss) before income tax 245 (18) 227 Income tax (expense) benefit (40) 3 (37) Net income 205 (15) 190 Basic earnings (loss) per share 0.75 (0.05) 0.70 Diluted earnings (loss) per share 0.75 (0.06) 0.69 (1) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain (loss) of $1 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Operations for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Insurance claims and policyholders’ benefits (1) $ 3,038 $ 41 $ 3,079 Income (loss) before income tax 623 (41) 582 Income tax (expense) benefit (105) 8 (97) Net income 518 (33) 485 Basic earnings (loss) per share 1.91 (0.12) 1.79 Diluted earnings (loss) per share 1.90 (0.12) 1.78 (1) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain (loss) of $6 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on the Condensed Consolidated Balance Sheet as of December 31, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Deferred income taxes $ 1,178 $ 73 $ 1,251 Total assets 60,927 73 61,000 Claim and claim adjustment expenses (1) 25,099 (2,979) 22,120 Future policy benefits (1) 10,151 3,329 13,480 Total liabilities 52,102 350 52,452 Retained earnings 9,572 (236) 9,336 Accumulated other comprehensive income (loss) (3,557) (41) (3,598) Total stockholders' equity 8,825 (277) 8,548 (1) In conjunction with the adoption of ASU 2018-12, at January 1, 2023, the Company reclassified the long term care reserves for policyholders currently receiving benefits from Claim and claim adjustment expenses to Future policy benefits. This change was applied retrospectively as of January 1, 2021. The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Comprehensive Income (Loss) for the three months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Changes in: Net unrealized gains and losses on other investments $ (1,346) $ (880) $ (2,226) Net unrealized gains and losses on investments (1,348) (880) (2,228) Impact of changes in discount rates used to measure long-duration contract liabilities — 1,507 1,507 Other comprehensive income (loss), net of tax (1,410) 627 (783) Total comprehensive income (loss) (1,205) 612 (593) The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Comprehensive Income (Loss) for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Changes in: Net unrealized gains and losses on other investments $ (2,957) $ (1,912) $ (4,869) Net unrealized gains and losses on investments (2,963) (1,912) (4,875) Impact of changes in discount rates used to measure long-duration contract liabilities — 3,142 3,142 Other comprehensive income (loss), net of tax (3,033) 1,230 (1,803) Total comprehensive income (loss) (2,515) 1,197 (1,318) The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Net income $ 518 $ (33) $ 485 Deferred income tax expense (benefit) (10) (8) (18) Changes in: Insurance reserves 1,376 41 1,417 The effects of adoption of ASU 2018-12 on segment results of operations of the Life & Group segment for the three months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Net incurred claims and benefits (1) $ 293 $ 18 $ 311 Core income (loss) before income tax (4) (18) (22) Income tax (expense) benefit on core income (loss) 10 3 13 Core income (loss) 6 (15) (9) (1) The effect of adopting ASU 2018-12 on Net incurred claims and benefits is inclusive of the re-measurement gain (loss) of $1 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on segment results of operations of the Life & Group segment for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Net incurred claims and benefits (1) $ 574 $ 41 $ 615 Core income (loss) before income tax 12 (41) (29) Income tax (expense) benefit on core income (loss) 17 8 25 Core income (loss) 29 (33) (4) (1) The effect of adopting ASU 2018-12 on Net incurred claims and benefits is inclusive of the re-measurement gain (loss) of $6 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on segment results for selected balance sheet lines of the Life & Group segment as of December 31, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Claim and claim adjustment expenses (1) $ 3,674 $ (2,979) $ 695 Future policy benefits (1) 10,151 3,329 13,480 |
Earnings (Loss) Per Share Data
Earnings (Loss) Per Share Data | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share Data | Earnings (Loss) Per Share Data Earnings (loss) per share is based on weighted average number of outstanding common shares. Basic earnings (loss) per share excludes the impact of dilutive securities and is computed by dividing Net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The following table presents the income and share data used in the basic and diluted earnings per share computations. Periods ended June 30 Three Months Six Months (In millions, except per share data) 2023 2022 2023 2022 Net income (loss) (1) $ 283 $ 190 $ 580 $ 485 Common Stock and Common Stock Equivalents Basic Weighted average shares outstanding 271.2 271.7 271.2 271.8 Diluted Weighted average shares outstanding 271.2 271.7 271.2 271.8 Dilutive effect of stock-based awards under compensation plans 0.8 0.9 0.9 0.9 Total 272.0 272.6 272.1 272.7 Earnings (loss) per share (1) Basic $ 1.04 $ 0.70 $ 2.14 $ 1.79 Diluted $ 1.04 $ 0.69 $ 2.13 $ 1.78 (1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. Excluded from the calculation of diluted earnings (loss) per share is the impact of potential shares attributable to exercises or conversions into common stock under stock-based employee compensation plans that would have been antidilutive during the respective periods. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2023 | |
Investments [Abstract] | |
Investments | Investments The significant components of Net investment income are presented in the following table. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Fixed maturity securities $ 482 $ 441 $ 952 $ 870 Equity securities 21 (11) 33 (9) Limited partnership investments 55 6 80 24 Mortgage loans 14 12 28 27 Short term investments 13 2 28 2 Trading portfolio — — 3 1 Other 9 — 14 — Gross investment income 594 450 1,138 915 Investment expense (19) (18) (38) (35) Net investment income $ 575 $ 432 $ 1,100 $ 880 Net investment income (loss) recognized due to the change in fair value of common stock held as of June 30, 2023 and 2022 $ 10 $ (22) $ 7 $ (23) Net investment gains (losses) are presented in the following table. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Net investment gains (losses): Fixed maturity securities: Gross gains $ 8 $ 45 $ 43 $ 71 Gross losses (35) (60) (92) (88) Net investment gains (losses) on fixed maturity securities (27) (15) (49) (17) Equity securities 3 (71) (11) (109) Derivatives — 26 — 55 Mortgage loans (6) — (6) — Short term investments and other (2) 1 (1) 1 Net investment gains (losses) $ (32) $ (59) $ (67) $ (70) Net investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock held as of June 30, 2023 and 2022 $ 3 $ (70) $ — $ (108) The components of available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table. The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Fixed maturity securities available-for-sale: Corporate and other bonds $ 9 $ 21 $ 17 $ 29 Asset-backed 8 (1) 8 1 Impairment losses (gains) recognized in earnings $ 17 $ 20 $ 25 $ 30 The Company also recognized $6 million of losses on mortgage loans during the three and six months ended June 30, 2023 due to changes in expected credit losses. There were no losses recognized on mortgage loans during the three and six months ended June 30, 2022. The following tables present a summary of fixed maturity securities. June 30, 2023 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 24,194 $ 339 $ 1,909 $ 13 $ 22,611 States, municipalities and political subdivisions 8,262 341 793 — 7,810 Asset-backed: Residential mortgage-backed 3,133 4 444 — 2,693 Commercial mortgage-backed 1,843 4 257 7 1,583 Other asset-backed 3,571 9 330 2 3,248 Total asset-backed 8,547 17 1,031 9 7,524 U.S. Treasury and obligations of government-sponsored enterprises 130 — 3 — 127 Foreign government 700 1 50 — 651 Redeemable preferred stock 5 — — — 5 Total fixed maturity securities available-for-sale 41,838 698 3,786 22 38,728 Total fixed maturity securities trading — — — — — Total fixed maturity securities $ 41,838 $ 698 $ 3,786 $ 22 $ 38,728 December 31, 2022 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 23,137 $ 301 $ 2,009 $ — $ 21,429 States, municipalities and political subdivisions 8,918 338 939 — 8,317 Asset-backed: Residential mortgage-backed 3,073 5 447 — 2,631 Commercial mortgage-backed 1,886 4 255 — 1,635 Other asset-backed 3,287 2 361 1 2,927 Total asset-backed 8,246 11 1,063 1 7,193 U.S. Treasury and obligations of government-sponsored enterprises 111 1 2 — 110 Foreign government 617 1 43 — 575 Redeemable preferred stock 3 — — — 3 Total fixed maturity securities available-for-sale 41,032 652 4,056 1 37,627 Total fixed maturity securities trading — — — — — Total fixed maturity securities $ 41,032 $ 652 $ 4,056 $ 1 $ 37,627 The following tables present the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by the length of time in which the securities have continuously been in that position. Less than 12 Months 12 Months or Longer Total June 30, 2023 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 7,681 $ 350 $ 10,087 $ 1,559 $ 17,768 $ 1,909 States, municipalities and political subdivisions 1,486 64 2,783 729 4,269 793 Asset-backed: Residential mortgage-backed 822 35 1,810 409 2,632 444 Commercial mortgage-backed 325 15 1,171 242 1,496 257 Other asset-backed 739 32 1,982 298 2,721 330 Total asset-backed 1,886 82 4,963 949 6,849 1,031 U.S. Treasury and obligations of government-sponsored enterprises 84 2 34 1 118 3 Foreign government 213 8 395 42 608 50 Total $ 11,350 $ 506 $ 18,262 $ 3,280 $ 29,612 $ 3,786 Less than 12 Months 12 Months or Longer Total December 31, 2022 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 15,946 $ 1,585 $ 1,634 $ 424 $ 17,580 $ 2,009 States, municipalities and political subdivisions 4,079 769 456 170 4,535 939 Asset-backed: Residential mortgage-backed 1,406 144 1,143 303 2,549 447 Commercial mortgage-backed 1,167 159 408 96 1,575 255 Other asset-backed 2,087 262 542 99 2,629 361 Total asset-backed 4,660 565 2,093 498 6,753 1,063 U.S. Treasury and obligations of government-sponsored enterprises 76 1 16 1 92 2 Foreign government 473 26 78 17 551 43 Total $ 25,234 $ 2,946 $ 4,277 $ 1,110 $ 29,511 $ 4,056 The following table presents the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution. June 30, 2023 December 31, 2022 (In millions) Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses U.S. Government, Government agencies and Government-sponsored enterprises $ 2,479 $ 334 $ 2,355 $ 337 AAA 1,662 283 1,559 298 AA 4,404 746 4,327 817 A 6,937 703 6,615 749 BBB 12,960 1,513 13,226 1,621 Non-investment grade 1,170 207 1,429 234 Total $ 29,612 $ 3,786 $ 29,511 $ 4,056 Based on current facts and circumstances, the Company believes the unrealized losses presented in the June 30, 2023 securities in a gross unrealized loss position tables above are not indicative of the ultimate collectability of the current amortized cost of the securities, but rather are primarily attributable to changes in risk-free interest rates and a general market widening of credit spreads. In reaching this determination, the Company considered the continued volatility in risk-free rates and credit spreads as well as the fact that its unrealized losses are concentrated in investment grade issuers. Additionally, the Company has no current intent to sell securities with unrealized losses, nor is it more likely than not that it will be required to sell prior to recovery of amortized cost; accordingly, the Company has determined that there are no additional impairment losses to be recorded as of June 30, 2023. The following tables present the activity related to the allowance on available-for-sale securities with credit impairments and purchased credit-deteriorated (PCD) assets. Accrued interest receivable on available-for-sale fixed maturity securities tota led $413 million, $394 million, and $374 million as of June 30, 2023, December 31, 2022, and June 30, 2022 and is excluded from the estimate of expected credit losses and the amortized cost basis in the table included within this Note. (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of April 1, 2023 $ 1 $ 1 $ 2 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded 1 7 8 Available-for-sale securities accounted for as PCD assets 11 — 11 Reductions to the allowance for credit losses: Write-offs charged against the allowance — — — Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — 1 1 Balance as of June 30, 2023 $ 13 $ 9 $ 22 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of April 1, 2022 $ 12 $ 5 $ 17 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — 3 3 Reductions to the allowance for credit losses: Write-offs charged against the allowance 12 — 12 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — (3) (3) Balance as of June 30, 2022 $ — $ 5 $ 5 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2023 $ — $ 1 $ 1 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded 1 7 8 Available-for-sale securities accounted for as PCD assets 20 — 20 Reductions to the allowance for credit losses: Securities sold during the period (realized) 6 — 6 Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis 3 — 3 Write-offs charged against the allowance — — — Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 1 2 Balance as of June 30, 2023 $ 13 $ 9 $ 22 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2022 $ 11 $ 7 $ 18 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — 3 3 Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis — — — Write-offs charged against the allowance 12 — 12 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 (5) (4) Balance as of June 30, 2022 $ — $ 5 $ 5 Contractual Maturity The following table presents available-for-sale fixed maturity securities by contractual maturity. June 30, 2023 December 31, 2022 (In millions) Cost or Estimated Cost or Estimated Due in one year or less $ 988 $ 972 $ 1,012 $ 1,001 Due after one year through five years 11,072 10,443 9,880 9,399 Due after five years through ten years 13,445 12,226 13,788 12,453 Due after ten years 16,333 15,087 16,352 14,774 Total $ 41,838 $ 38,728 $ 41,032 $ 37,627 Actual maturities may differ from contractual maturities because certain securities may be called or prepaid. Securities not due at a single date are allocated based on weighted average life. Investment Commitments As part of its overall investment strategy, the Company invests in various assets which require future purchase, sale or funding commitments. These investments are recorded once funded, and the related commitments may include future capital calls from various third-party limited partnerships, signed and accepted mortgage loan applications, and obligations related to private placement securities. As of June 30, 2023, the Company had commitments to purchase or fund approximately $1,480 million and sell approximately $60 million under the terms of these investments. Mortgage Loans The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (DSCR) and loan-to-value ratios (LTV). June 30, 2023 Mortgage Loans Amortized Cost Basis by Origination Year (1)(2) (In millions) 2023 2022 2021 2020 2019 Prior Total DSCR ≥1.6x LTV less than 55% $ — $ 9 $ 13 $ 111 $ 33 $ 245 $ 411 LTV 55% to 65% — — — — 8 — 8 LTV greater than 65% — 31 11 — — — 42 DSCR 1.2x - 1.6x LTV less than 55% 28 5 49 14 42 51 189 LTV 55% to 65% 12 43 — 24 — 9 88 LTV greater than 65% — 58 — — — — 58 DSCR ≤1.2 LTV less than 55% — 35 — — 34 — 69 LTV 55% to 65% 13 41 — — 43 — 97 LTV greater than 65% 13 27 21 — 23 7 91 Total $ 66 $ 249 $ 94 $ 149 $ 183 $ 312 $ 1,053 (1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index. (2) The amortized cost basis of Mortgage loans as presented in the table above differs from the amount reported in the Condensed Consolidated Balance Sheets because Mortgage loans with a term to maturity of less than one year at the time of origination are classified as Short term investments. As of June 30, 2023, accrued interest receivable on mortgage loans totaled $4 million and is excluded from the amortized cost basis disclosed in the table above and the estimate of expected credit losses. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable. Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are not observable. Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, the Company seeks to price securities using third-party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs the Company believes market participants would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted by the Company. The Company performs control procedures over information obtained from pricing services and brokers to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. Procedures may include i) the review of pricing service methodologies or broker pricing qualifications, ii) back-testing, where past fair value estimates are compared to actual transactions executed in the market on similar dates, iii) exception reporting, where period-over-period changes in price are reviewed and challenged with the pricing service or broker based on exception criteria, and iv) deep dives, where the Company performs an independent analysis of the inputs and assumptions used to price individual securities. Assets and Liabilities Measured at Fair Value Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the United States of America (U.S.) Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock. June 30, 2023 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 137 $ 22,286 $ 971 $ 23,394 States, municipalities and political subdivisions — 7,767 43 7,810 Asset-backed — 6,641 883 7,524 Total fixed maturity securities 137 36,694 1,897 38,728 Equity securities: Common stock 179 — 26 205 Non-redeemable preferred stock 56 422 — 478 Total equity securities 235 422 26 683 Short term and other 1,711 42 — 1,753 Total assets $ 2,083 $ 37,158 $ 1,923 $ 41,164 Liabilities Other liabilities $ — $ 1 $ — $ 1 Total liabilities $ — $ 1 $ — $ 1 December 31, 2022 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 120 $ 21,187 $ 810 $ 22,117 States, municipalities and political subdivisions — 8,274 43 8,317 Asset-backed — 6,405 788 7,193 Total fixed maturity securities 120 35,866 1,641 37,627 Equity securities: Common stock 150 — 35 185 Non-redeemable preferred stock 54 435 — 489 Total equity securities 204 435 35 674 Short term and other 1,608 71 — 1,679 Total assets $ 1,932 $ 36,372 $ 1,676 $ 39,980 Liabilities Other liabilities $ — $ 1 $ — $ 1 Total liabilities $ — $ 1 $ — $ 1 The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of April 1, 2023 $ 912 $ 44 $ 859 $ 29 $ 1,844 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) — — (1) — (1) Reported in Net investment income — — 5 (1) 4 Reported in Other comprehensive income (loss) (15) (1) (7) — (23) Total realized and unrealized investment gains (losses) (15) (1) (3) (1) (20) Purchases 68 — 87 — 155 Sales — — — (2) (2) Settlements (5) — (17) — (22) Transfers into Level 3 11 — — — 11 Transfers out of Level 3 — — (43) — (43) Balance as of June 30, 2023 $ 971 $ 43 $ 883 $ 26 $ 1,923 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Net income (loss) in the period $ — $ — $ — $ (1) $ (1) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Other comprehensive income (loss) in the period (15) (1) (7) — (23) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of April 1, 2022 $ 915 $ 51 $ 604 $ 44 $ 1,614 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (1) — 3 (2) — Reported in Net investment income — — 5 (1) 4 Reported in Other comprehensive income (loss) (82) (5) (52) — (139) Total realized and unrealized investment gains (losses) (83) (5) (44) (3) (135) Purchases 51 — 92 — 143 Sales — — (2) (3) (5) Settlements (37) — (23) 9 (51) Transfers into Level 3 — — 14 — 14 Transfers out of Level 3 — — — — — Balance as of June 30, 2022 $ 846 $ 46 $ 641 $ 47 $ 1,580 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (3) $ (3) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Other comprehensive income (loss) in the period (81) (5) (52) — (138) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2023 $ 810 $ 43 $ 788 $ 35 $ 1,676 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) — — (1) — (1) Reported in Net investment income — — 10 (7) 3 Reported in Other comprehensive income (loss) 9 — — — 9 Total realized and unrealized investment gains (losses) 9 — 9 (7) 11 Purchases 149 — 142 — 291 Sales — — — (2) (2) Settlements (8) — (26) — (34) Transfers into Level 3 11 — 23 — 34 Transfers out of Level 3 — — (53) — (53) Balance as of June 30, 2023 $ 971 $ 43 $ 883 $ 26 $ 1,923 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Net income (loss) in the period $ — $ — $ — $ (7) $ (7) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Other comprehensive income (loss) in the period 9 — (1) — 8 Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2022 $ 937 $ 56 $ 556 $ 29 $ 1,578 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (2) — 5 (3) — Reported in Net investment income — — 6 3 9 Reported in Other comprehensive income (loss) (153) (10) (84) — (247) Total realized and unrealized investment gains (losses) (155) (10) (73) — (238) Purchases 118 — 232 12 362 Sales (5) — (2) (3) (10) Settlements (59) — (40) 9 (90) Transfers into Level 3 10 — 19 — 29 Transfers out of Level 3 — — (51) — (51) Balance as of June 30, 2022 $ 846 $ 46 $ 641 $ 47 $ 1,580 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (1) $ (1) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Other comprehensive income (loss) in the period (153) (10) (83) — (246) Valuation Methodologies and Inputs The following section describes the valuation methodologies and relevant inputs used to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which the instruments are generally classified. Fixed Maturity Securities Level 1 securities include highly liquid government securities and exchange traded bonds, valued using quoted market prices. Level 2 securities include most other fixed maturity securities as the significant inputs are observable in the marketplace. All classes of Level 2 fixed maturity securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology, or a combination of both when necessary. Common inputs for all classes of fixed maturity securities include prices from recently executed transactions of similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Fixed maturity securities are primarily assigned to Level 3 in cases where broker/dealer quotes are significant inputs to the valuation and there is a lack of transparency as to whether these quotes are based on information that is observable in the marketplace. Level 3 securities also include private placement debt securities whose fair value is determined using internal models with some inputs that are not market observable. Equity Securities Level 1 equity securities include publicly traded securities valued using quoted market prices. Level 2 securities are primarily valued using pricing for similar securities, recently executed transactions and other pricing models utilizing market observable inputs. Level 3 securities are primarily priced using broker/dealer quotes and internal models with some inputs that are not market observable. Short Term and Other Invested Assets Securities that are actively traded or have quoted prices are classified as Level 1. These securities include money market funds and treasury bills. Level 2 primarily includes non-U.S. government securities for which all inputs are market observable. Fixed maturity securities purchased within one year of maturity are classified consistent with fixed maturity securities discussed above. Short term investments as presented in the tables above differ from the amounts presented on the Condensed Consolidated Balance Sheets because certain short term investments, such as time deposits and mortgage loans with a term to maturity of less than one year at the time of origination, are not measured at fair value. As of June 30, 2023 and December 31, 2022, there were $65 million and $72 million of overseas deposits within Other invested assets, which can be redeemed at net asset value in 90 days or less. Overseas deposits are excluded from the fair value hierarchy because their fair value is recorded using the net asset value per share (or equivalent) practical expedient. Other Liabilities Level 2 securities include currency forward contracts valued using observable market forward rates. Significant Unobservable Inputs The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value. June 30, 2023 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,415 Discounted cash flow Credit spread 1% - 7% (2%) December 31, 2022 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,177 Discounted cash flow Credit spread 1% - 8% (2%) For fixed maturity securities, an increase to the credit spread assumptions would result in a lower fair value measurement. Financial Assets and Liabilities Not Measured at Fair Value The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables. June 30, 2023 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 1,009 $ — $ — $ 954 $ 954 Liabilities Short term debt $ 792 $ — $ 785 $ — $ 785 Long term debt 2,384 — 2,196 — 2,196 December 31, 2022 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 1,040 $ — $ — $ 973 $ 973 Liabilities Short term debt $ 243 $ — $ 248 $ — $ 248 Long term debt 2,538 — 2,349 — 2,349 The carrying amounts reported on the Condensed Consolidated Balance Sheets for Cash, Short term investments not carried at fair value, Accrued investment income and certain Other assets and Other liabilities approximate fair value due to the short term nature of these items. These assets and liabilities are not listed in the tables above. |
Claim and Claim Adjustment Expe
Claim and Claim Adjustment Expense Reserves | 6 Months Ended |
Jun. 30, 2023 | |
Liability for Claims and Claims Adjustment Expense [Abstract] | |
Claim and Claim Adjustment Expense Reserves | Claim and Claim Adjustment Expense Reserves Claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (IBNR) claims as of the reporting date. The Company's reserve projections are based primarily on detailed analysis of the facts in each case, the Company's experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving trends and settlement practices, loss payments, pending levels of unpaid claims and product mix, as well as court decisions and economic conditions, economic, medical and social inflation, and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves. Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers' compensation, general liability and professional liability claims. Claim and claim adjustment expense reserves are also maintained for the Company's structured settlement obligations. In developing the claim and claim adjustment expense reserve estimates for structured settlement obligations, the Company's actuaries review mortality experience on an annual basis. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the Company's ultimate cost for insurance losses will not exceed current estimates. Catastrophes are an inherent risk of the property and casualty insurance business and have contributed to material period-to-period fluctuations in our results of operations and/or equity. The Company reported catastrophe losses, net of reinsurance, of $68 million and $120 million for the three and six months ended June 30, 2023 and $37 million and $57 million for the three and six months ended June 30, 2022 primarily related to severe weather related events. Liability for Unpaid Claim and Claim Adjustment Expenses The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves. For the six months ended June 30 (In millions) 2023 2022 (1) Reserves, beginning of year: Gross $ 22,120 $ 21,269 Ceded 5,191 4,969 Net reserves, beginning of year 16,929 16,300 Net incurred claim and claim adjustment expenses: Provision for insured events of current year 2,746 2,452 Increase (decrease) in provision for insured events of prior years 37 30 Amortization of discount 22 22 Total net incurred (2) 2,805 2,504 Net payments attributable to: Current year events (287) (233) Prior year events (2,014) (1,882) Total net payments (2,301) (2,115) Foreign currency translation adjustment and other 57 (222) Net reserves, end of period 17,490 16,467 Ceded reserves, end of period 5,312 5,156 Gross reserves, end of period $ 22,802 $ 21,623 (1) In conjunction with the Company's adoption of ASU 2018-12, at January 1, 2023, long term care reserves for policyholders currently receiving benefits were reclassified from Claim and claim adjustment expenses into Future policy benefits and this change was applied retrospectively as of January 1, 2021. See Note A to the Condensed Consolidated Financial Statements for additional information. (2) Total net incurred above does not agree to Insurance claims and policyholders' benefits as reflected on the Condensed Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting and uncollectible reinsurance, which are not reflected in the table above. Net Prior Year Development Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development (development). These changes can be favorable or unfavorable. The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Specialty $ (4) $ (10) $ (4) $ (20) Commercial (13) (22) (15) (24) International — (5) 15 (5) Corporate & Other 35 64 35 64 Total pretax (favorable) unfavorable development $ 18 $ 27 $ 31 $ 15 Following the second quarter annual review of legacy mass tort exposures, unfavorable development of $35 million was recorded within the Corporate & Other segment for the three and six months ended June 30, 2023, primarily driven by higher than expected frequency and severity in abuse claims in older accident years. Unfavorable development of $64 million was recorded within the Corporate & Other segment for the three and six months ended June 30, 2022 largely associated with legacy mass tort abuse claims, including the Diocese of Rochester proposed settlement. The following table presents further detail of the development recorded for the Specialty segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Medical Professional Liability $ — $ 1 $ 9 $ 9 Other Professional Liability and Management Liability (1) 13 (1) 13 Surety (7) (19) (7) (28) Warranty — — (9) (9) Other 4 (5) 4 (5) Total pretax (favorable) unfavorable development $ (4) $ (10) $ (4) $ (20) Three and Six Months 2022 Unfavorable development in other professional liability and management liability was due to higher than expected claim severity and frequency in the Company’s cyber and professional E&O businesses in multiple accident years. Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in recent accident years. Commercial The following table presents further detail of the development recorded for the Commercial segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Commercial Auto $ 11 $ 21 $ 11 $ 21 General Liability 70 41 70 41 Workers' Compensation (96) (82) (98) (84) Property and Other 2 (2) 2 (2) Total pretax (favorable) unfavorable development $ (13) $ (22) $ (15) $ (24) Three and Six Months 2023 Unfavorable development in commercial auto was due to higher than expected claim severity in the Company’s construction business in a recent accident year. Unfavorable development in general liability was due to higher than expected claim severity in the Company's construction and middle market businesses across multiple accident years. Favorable development in workers' compensation was due to favorable medical trends driving lower than expected severity in multiple accident years. 2022 Unfavorable development in commercial auto was due to higher than expected claim severity in the Company’s construction business in multiple accident years. Unfavorable development in general liability was due to higher than expected claim severity in the Company's construction, middle market and small businesses across multiple accident years. Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years. International The following table presents further detail of the development recorded for the International segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Commercial $ (3) $ (4) $ (5) $ (4) Specialty 3 (1) 22 (1) Other — — (2) — Total pretax (favorable) unfavorable development $ — $ (5) $ 15 $ (5) Six Months 2023 Unfavorable development in Specialty was due to higher than expected large loss emergence in the Company's professional liability business in accident year 2017. Asbestos & Environmental Pollution (A&EP) Reserves In 2010, Continental Casualty Company (CCC) together with several of the Company’s insurance subsidiaries completed a transaction with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., under which substantially all of the Company’s legacy A&EP liabilities were ceded to NICO through a Loss Portfolio Transfer (LPT). At the effective date of the transaction, the Company ceded approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves to NICO under a retroactive reinsurance agreement with an aggregate limit of $4 billion. The $1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third-party reinsurance contracts. The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third-party reinsurance related to these liabilities. The Company paid NICO a reinsurance premium of $2 billion and transferred to NICO billed third-party reinsurance receivables related to A&EP claims with a net book value of $215 million, resulting in total consideration of $2.2 billion. In years subsequent to the effective date of the LPT, the Company recognized adverse prior year development on its A&EP reserves resulting in additional amounts ceded under the LPT. As a result, the cumulative amounts ceded under the LPT have exceeded the $2.2 billion consideration paid, resulting in the NICO LPT moving into a gain position, requiring retroactive reinsurance accounting. Under retroactive reinsurance accounting, this gain is deferred and only recognized in earnings in proportion to actual paid recoveries under the LPT. Over the life of the contract, there is no economic impact as long as any additional losses incurred are within the limit of the LPT. In a period in which the Company recognizes a change in the estimate of A&EP reserves that increases or decreases the amounts ceded under the LPT, the proportion of actual paid recoveries to total ceded losses is affected and the change in the deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the LPT. The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders' benefits on the Condensed Consolidated Statements of Operations. The impact of the LPT on the Condensed Consolidated Statements of Operations was the recognition of a retroactive reinsurance benefit of $15 million and $11 million for the three months ended June 30, 2023 and 2022 and $23 million for each of the six months ended June 30, 2023 and 2022. As of June 30, 2023 and December 31, 2022, the cumulative amounts ceded under the LPT were $3.5 billion. The unrecognized deferred retroactive reinsurance benefit was $402 million and $425 million as of June 30, 2023 and December 31, 2022 and is included within Other liabilities on the Condensed Consolidated Balance Sheets. NICO established a collateral trust account as security for its obligations to the Company. The fair value of the collateral trust account was $2.4 billion as of June 30, 2023. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third-party reinsurers related to the majority of the Company’s A&EP claims. Credit Risk for Ceded Reserves The majority of the Company’s outstanding voluntary reinsurance receivables are due from reinsurers with financial strength ratings of A or higher. Receivables due from reinsurers with lower financial strength ratings are primarily due from captive reinsurers and are backed by collateral arrangements. |
Future Policy Benefit Reserves
Future Policy Benefit Reserves | 6 Months Ended |
Jun. 30, 2023 | |
Insurance [Abstract] | |
Future Policy Benefit Reserves | Future Policy Benefits Reserves Future policy benefits reserves are related to the Company's run-off long term care business, which is included in the Life & Group segment. The determination of Future policy benefits reserves requires management to make estimates and assumptions about expected policyholder experience over the remaining life of the policy. Since policies may be in force for several decades, these assumptions are subject to significant estimation risk. As a result of this variability, the Company’s future policy benefits reserves may be subject to material increases if actual experience develops adversely to the Company’s expectations. The LFPB is computed using the net level premium method, which incorporates cash flow assumptions and discount rate assumptions. Under the net level premium method, the LFPB is equal to the present value of future benefits and claim settlement expenses less the present value of future net premiums. Net premiums are equal to gross premiums multiplied by the NPR. The NPR is generally the ratio of the present value of benefits and expense payments to the present value of gross premiums, expected over the lifetime of the policy. As a result of the modified retrospective adoption of ASU 2018-12, the Company’s NPR calculation incorporates the original locked in discount rate and the reserve balance as of the transition date of January 1, 2021. The key cash flow assumptions used to estimate the LFPB are morbidity, persistency (inclusive of mortality), anticipated future premium rate increases and expenses. Morbidity is the frequency and severity of injury, illness, sickness and diseases contracted. Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Future premium rate increases are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown. Expense assumptions relate to claim adjudication. The Company has not elected the practical expedient that allows locking in the expense assumption. The discount rate is determined using the upper-medium grade fixed income instrument yield curve. The Company has elected to update the NPR and the LFPB for actual experience on a quarterly basis. A quarterly assessment is also made as to whether evidence suggests that cash flow assumptions should be updated. Annually in the third quarter, actuarial analysis is performed on policyholder morbidity, persistency, premium rate increases and expense experience. This analysis, combined with judgment, informs the setting of updated cash flow assumptions used to estimate the LFPB. Actuarial analysis includes predictive modeling, actual to expected experience comparisons and trend analysis. Applicable industry research is also considered. Quarterly, to derive the upper-medium grade fixed income instrument yield discount rate assumption, the Company uses a published spot rate curve constructed from single-A rated U.S. dollar denominated corporate bonds. The Company uses linear interpolation to determine yield assumptions for tenors that fall between points for which observable rates are available. For cash flows that are projected to occur beyond the tenor for which market-observable rates are available, the Company applies judgment to estimate a normative rate which the Company grades to over 10 years. Quarterly, the updated NPR is used to derive an updated LFPB as of the beginning of the current quarter measured at the original locked in discount rate. The updated LFPB is then compared to the existing carrying amount of the liability as of the same date (measured at the original locked in discount rate) to determine the re-measurement gain (loss), which is presented parenthetically within the Insurance claims and policyholders’ benefits line on the Condensed Consolidated Statements of Operations. Insurance contracts are grouped into cohorts according to issue year. Contracts assumed through reinsurance are generally included within the same cohorts as contracts issued directly by the Company, according to issue year. The issue year for assumed contracts is defined according to the date that the Company’s assumption of insurance risk incepted. For assumed contracts that were reinsured concurrently with the issuance of the underlying direct contract, issue year is defined as the year that the underlying policy was issued. For contracts that were already in-force when assumed by the Company, issue year is defined as the year in which the reinsurance agreement incepted. For group long term care business, issue year is defined as the year the individual insurance certificate was issued. Long term care is the Company's only long-duration product line, therefore, cohorts are not further disaggregated by product. The following table summarizes balances and changes in the LFPB. (In millions) 2023 2022 Present value of future net premiums Balance, January 1 $ 3,993 $ 4,735 Effect of changes in discount rate (74) (880) Balance, January 1, at original locked in discount rate 3,919 3,855 Effect of changes in cash flow assumptions (1) — — Effect of actual variances from expected experience (1) (85) (37) Adjusted balance, January 1 3,834 3,818 Interest accrual 103 105 Net premiums: earned during period (225) (225) Balance, end of period at original locked in discount rate 3,712 3,698 Effect of changes in discount rate 78 246 Balance, June 30 $ 3,790 $ 3,944 Present value of future benefits & expenses Balance, January 1 $ 17,472 $ 22,745 Effect of changes in discount rate (125) (5,942) Balance, January 1, at original locked in discount rate 17,347 16,803 Effect of changes in cash flow assumptions (1) — — Effect of actual variances from expected experience (1) (51) (43) Adjusted balance, January 1 17,296 16,760 Interest accrual 482 482 Benefit & expense payments (629) (470) Balance, end of period at original locked in discount rate 17,149 16,772 Effect of changes in discount rate 307 1,329 Balance, June 30 $ 17,456 $ 18,101 Net LFPB $ 13,666 $ 14,157 (1) As of June 30, 2023 and 2022, the re-measurement gain (loss) of $(34) million and $6 million presented parenthetically on the Condensed Consolidated Statement of Operations is comprised of the effect of changes in cash flow assumptions and the effect of actual variances from expected experience. The following table presents earned premiums and interest expense associated with the Company’s long term care business recognized on the Condensed Consolidated Statement of Operations. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Earned premiums $ 113 $ 118 $ 228 $ 238 Interest expense 189 189 379 377 The following table presents undiscounted expected future benefit and expense payments, and undiscounted expected future gross premiums. As of June 30 (In millions) 2023 2022 Expected future benefit and expense payments $ 33,287 $ 33,429 Expected future gross premiums 5,536 5,848 Discounted expected future gross premiums at the upper-medium grade fixed income instrument yield discount rate were $3,853 million and $4,204 million as of June 30, 2023 and 2022. The weighted average effective duration of the LFPB calculated using the original locked in discount rate was 12 years as of June 30, 2023 and 2022. The weighted average interest rates in the table below are calculated based on the rate used to discount all future cash flows. As of June 30 As of December 31 2023 2022 2022 Original locked in discount rate 5.25 % 5.29 % 5.27 % Upper-medium grade fixed income instrument discount rate 5.10 4.64 5.23 For the three and six months ended June 30, 2023, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% were $29 million and $42 million. For the three and six months ended June 30, 2022, immediate charges to net income resulting from adverse development that caused the NPR to exceed 100% were less than $1 million. For the three and six months ended June 30, 2023, the portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income were less than $1 million and $11 million. For the six months ended June 30, 2022, the portion of losses recognized in a prior period due to NPR exceeding 100% which, due to favorable development, was reversed through net income was $1 million. There were no such reversals for the three months ended June 30, 2022. |
Legal Proceedings, Contingencie
Legal Proceedings, Contingencies and Guarantees | 6 Months Ended |
Jun. 30, 2023 | |
Legal Proceedings, Commitments and Contingencies, and Guarantees [Abstract] | |
Legal Proceedings, Contingencies and Guarantees | Legal Proceedings, Contingencies and Guarantees The Company is a party to various claims and litigation incidental to its business, which, based on the facts and circumstances currently known, are not material to the Company's results of operations or financial position. Guarantees The Company has provided guarantees, if the primary obligor fails to perform, to holders of structured settlement annuities issued by a previously owned subsidiary. As of June 30, 2023, the potential amount of future payments the Company could be required to pay under these guarantees was approximately $1.5 billion, which will be paid over the lifetime of the annuitants. The Company does not believe any payment is likely under these guarantees, as the Company is the beneficiary of a trust that must be maintained at a level that approximates the discounted reserves for these annuities. |
Benefit Plans
Benefit Plans | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans The components of net periodic pension cost (benefit) are presented in the following table. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Net periodic pension cost (benefit) Interest cost on projected benefit obligation $ 24 $ 16 $ 49 $ 33 Expected return on plan assets (30) (38) (60) (76) Amortization of net actuarial loss 9 8 17 15 Total net periodic pension cost (benefit) $ 3 $ (14) $ 6 $ (28) The following table indicates the line items in which the non-service cost (benefit) is presented on the Condensed Consolidated Statements of Operations. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Non-Service Cost (Benefit): Insurance claims and policyholder's benefits $ — $ (4) $ 1 $ (8) Other operating expenses 3 (10) 5 (20) Total net periodic pension cost (benefit) $ 3 $ (14) $ 6 $ (28) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) by Component | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) by Component | Accumulated Other Comprehensive Income (Loss) by Component The tables below display the changes in Accumulated other comprehensive income (loss) by component. (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of April 1, 2023 $ (15) $ (2,068) $ (584) $ (437) $ (204) $ (3,308) Other comprehensive income (loss) before reclassifications (8) (427) — 256 34 (145) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $2, $4, $2, $—, $— and $8 (7) (14) (7) — — (28) Other comprehensive income (loss) net of tax (expense) benefit of $—, $112, $(2), $(68), $— and $42 (1) (413) 7 256 34 (117) Balance as of June 30, 2023 $ (16) $ (2,481) $ (577) $ (181) $ (170) $ (3,425) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of April 1, 2022, as previously reported $ (6) $ (572) $ (598) $ — $ (127) $ (1,303) Cumulative effect adjustment from accounting change for adoption of ASU 2018-12 (1) net of tax (expense) benefit of $—, $270, $—, $(497), $— and $(227) — 1,288 — (2,365) — (1,077) Balance as of April 1, 2022 (6) 716 (598) (2,365) (127) (2,380) Other comprehensive income (loss) before reclassifications (1) (2,240) — 1,507 (68) (802) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $(1), $3, $1, $—, $— and $3 1 (14) (6) — — (19) Other comprehensive income (loss) net of tax (expense) benefit of $—, $590,$(1), $(400), $— and $189 (2) (2,226) 6 1,507 (68) (783) Balance as of June 30, 2022 $ (8) $ (1,510) $ (592) $ (858) $ (195) $ (3,163) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of January 1, 2023, as previously reported $ (7) $ (2,738) $ (591) $ — $ (221) $ (3,557) Cumulative effect adjustment from accounting change for adoption of ASU 2018-12 (1) net of tax (expense) benefit of $—, $—, $—, $11, $— and $11 — — — (41) — (41) Balance as of January 1, 2023, as adjusted (7) (2,738) (591) (41) (221) (3,598) Other comprehensive income (loss) before reclassifications (16) 225 — (140) 51 120 Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $2, $8, $4, $—, $— and $14 (7) (32) (14) — — (53) Other comprehensive income (loss) net of tax (expense) benefit of $2, $(68), $(4), $37, $— and $(33) (9) 257 14 (140) 51 173 Balance as of June 30, 2023 $ (16) $ (2,481) $ (577) $ (181) $ (170) $ (3,425) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of January 1, 2022, as previously reported $ (2) $ 1,039 $ (604) $ — $ (113) $ 320 Cumulative effect adjustment from accounting change for adoption of ASU 2018-12 (1) net of tax (expense) benefit of $—, $617, $—, $(1,063), $— and $(446) — 2,320 — (4,000) — (1,680) Balance as of January 1, 2022, as adjusted (2) 3,359 (604) (4,000) (113) (1,360) Other comprehensive income (loss) before reclassifications (5) (4,884) — 3,142 (82) (1,829) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $(1), $4, $3, $—, $— and $6 1 (15) (12) — — (26) Other comprehensive income (loss) net of tax (expense) benefit of $1, $1,288, $(3), $(835), $— and $451 (6) (4,869) 12 3,142 (82) (1,803) Balance as of June 30, 2022 $ (8) $ (1,510) $ (592) $ (858) $ (195) $ (3,163) (1) See Note A to the Condensed Consolidated Financial Statements for additional information. Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows: Component of AOCI Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments Net investment gains (losses) Pension and postretirement benefits Other operating expenses and Insurance claims and policyholders' benefits |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company's property and casualty commercial insurance operations are managed and reported in three business segments: Specialty, Commercial and International. These three segments are collectively referred to as Property & Casualty Operations. The Company's operations outside of Property & Casualty Operations are managed and reported in two segments: Life & Group and Corporate & Other. The accounting policies of the segments are the same as those described in Note A to the Consolidated Financial Statements within CNAF's Annual Report on Form 10-K for the year ended December 31, 2022. The Company manages most of its assets on a legal entity basis, while segment operations are generally conducted across legal entities. As such, only Insurance and Reinsurance receivables, Insurance reserves, Deferred acquisition costs, Goodwill and Deferred non-insurance warranty acquisition expense and revenue are readily identifiable for individual segments. Distinct investment portfolios are not maintained for every individual segment; accordingly, allocation of assets to each segment is not performed. Therefore, a significant portion of Net investment income and Net investment gains or losses are allocated primarily based on each segment's net carried insurance reserves, as adjusted. All significant intersegment income and expense have been eliminated. Income taxes have been allocated on the basis of the taxable income of the segments. In the following tables, certain financial measures are presented to provide information used by management to monitor the Company's operating performance. Management utilizes these financial measures to monitor the Company's insurance operations and investment portfolio. The performance of the Company's insurance operations is monitored by management through core income (loss), which is derived from certain income statement amounts. The Company's investment portfolio is monitored by management through analysis of various factors including unrealized gains and losses on securities, portfolio duration and exposure to market and credit risk. Core income (loss) is calculated by excluding from net income (loss) the after-tax effects of net investment gains or losses. The calculation of core income (loss) excludes net investment gains or losses because net investment gains or losses are generally driven by economic factors that are not necessarily reflective of our primary operations. The Company's results of operations and selected balance sheet items by segment are presented in the following tables. Three months ended June 30, 2023 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 812 $ 1,120 $ 302 $ 113 $ — $ — $ 2,347 Net investment income 142 165 25 229 14 — 575 Non-insurance warranty revenue 407 — — — — — 407 Other revenues — 6 1 — 2 (2) 7 Total operating revenues 1,361 1,291 328 342 16 (2) 3,336 Claims, benefits and expenses Net incurred claims and benefits 474 740 185 344 29 — 1,772 Policyholders’ dividends 2 5 — — — — 7 Amortization of deferred acquisition costs 168 175 60 — — — 403 Non-insurance warranty expense 384 — — — — — 384 Other insurance related expenses 94 158 35 31 — — 318 Other expenses 12 10 (5) — 44 (2) 59 Total claims, benefits and expenses 1,134 1,088 275 375 73 (2) 2,943 Core income (loss) before income tax 227 203 53 (33) (57) — 393 Income tax (expense) benefit on core income (loss) (50) (44) (15) 13 11 — (85) Core income (loss) $ 177 $ 159 $ 38 $ (20) $ (46) $ — 308 Net investment gains (losses) (32) Income tax (expense) benefit on net investment gains (losses) 7 Net investment gains (losses), after tax (25) Net income (loss) $ 283 Three months ended June 30, 2022 Specialty Commercial International Life & Group (1) Corporate (In millions) Eliminations Total (1) Operating revenues Net earned premiums $ 794 $ 974 $ 269 $ 118 $ — $ — $ 2,155 Net investment income 100 113 14 201 4 — 432 Non-insurance warranty revenue 392 — — — — — 392 Other revenues — 4 1 1 1 (1) 6 Total operating revenues 1,286 1,091 284 320 5 (1) 2,985 Claims, benefits and expenses Net incurred claims and benefits 456 610 160 311 57 — 1,594 Policyholders’ dividends 2 5 — — — — 7 Amortization of deferred acquisition costs 162 156 56 — — — 374 Non-insurance warranty expense 367 — — — — — 367 Other insurance related expenses 81 134 30 29 1 — 275 Other expenses 12 11 13 2 45 (1) 82 Total claims, benefits and expenses 1,080 916 259 342 103 (1) 2,699 Core income (loss) before income tax 206 175 25 (22) (98) — 286 Income tax (expense) benefit on core income (loss) (45) (37) (7) 13 20 — (56) Core income (loss) $ 161 $ 138 $ 18 $ (9) $ (78) $ — 230 Net investment gains (losses) (59) Income tax (expense) benefit on net investment gains (losses) 19 Net investment gains (losses), after tax (40) Net income (loss) $ 190 (1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. Six months ended June 30, 2023 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 1,609 $ 2,166 $ 592 $ 228 $ — $ — $ 4,595 Net investment income 271 314 48 443 24 — 1,100 Non-insurance warranty revenue 814 — — — — — 814 Other revenues — 13 1 — 5 (5) 14 Total operating revenues 2,694 2,493 641 671 29 (5) 6,523 Claims, benefits and expenses Net incurred claims and benefits 939 1,428 374 655 22 — 3,418 Policyholders’ dividends 3 11 — — — — 14 Amortization of deferred acquisition costs 333 344 105 — — — 782 Non-insurance warranty expense 768 — — — — — 768 Other insurance related expenses 180 300 82 60 1 — 623 Other expenses 26 16 (4) 1 85 (5) 119 Total claims, benefits and expenses 2,249 2,099 557 716 108 (5) 5,724 Core income (loss) before income tax 445 394 84 (45) (79) — 799 Income tax (expense) benefit on core income (loss) (97) (84) (22) 22 15 — (166) Core income (loss) $ 348 $ 310 $ 62 $ (23) $ (64) $ — 633 Net investment gains (losses) (67) Income tax (expense) benefit on net investment gains (losses) 14 Net investment gains (losses), after tax (53) Net income (loss) $ 580 June 30, 2023 (In millions) Reinsurance receivables $ 1,530 $ 1,153 $ 445 $ 100 $ 2,375 $ — $ 5,603 Insurance receivables 1,034 2,050 462 4 1 — 3,551 Deferred acquisition costs 395 359 131 — — — 885 Goodwill 117 — 29 — — — 146 Deferred non-insurance warranty acquisition expense 3,689 — — — — — 3,689 Insurance reserves Claim and claim adjustment expenses 7,183 9,674 2,583 688 2,674 — 22,802 Unearned premiums 3,194 2,882 790 112 — — 6,978 Future policy benefits — — — 13,666 — — 13,666 Deferred non-insurance warranty revenue 4,735 — — — — — 4,735 Six months ended June 30, 2022 Specialty Commercial International Life & Group (1) Corporate (In millions) Eliminations Total (1) Operating revenues Net earned premiums $ 1,566 $ 1,878 $ 533 $ 238 $ (1) $ — $ 4,214 Net investment income 203 231 28 413 5 — 880 Non-insurance warranty revenue 774 — — — — — 774 Other revenues 1 12 — — 3 (3) 13 Total operating revenues 2,544 2,121 561 651 7 (3) 5,881 Claims, benefits and expenses Net incurred claims and benefits 901 1,183 318 615 49 — 3,066 Policyholders’ dividends 3 10 — — — — 13 Amortization of deferred acquisition costs 319 304 95 — — — 718 Non-insurance warranty expense 721 — — — — — 721 Other insurance related expenses 162 264 77 60 3 — 566 Other expenses 25 18 14 5 86 (3) 145 Total claims, benefits and expenses 2,131 1,779 504 680 138 (3) 5,229 Core income (loss) before income tax 413 342 57 (29) (131) — 652 Income tax (expense) benefit on core income (loss) (89) (72) (13) 25 25 — (124) Core income (loss) $ 324 $ 270 $ 44 $ (4) $ (106) $ — 528 Net investment gains (losses) (70) Income tax (expense) benefit on net investment gains (losses) 27 Net investment gains (losses), after tax (43) Net income (loss) $ 485 December 31, 2022 (In millions) Reinsurance receivables $ 1,384 $ 1,062 $ 414 $ 101 $ 2,477 $ — $ 5,438 Insurance receivables 1,082 1,728 369 8 — — 3,187 Deferred acquisition costs 381 321 104 — — — 806 Goodwill 117 — 27 — — — 144 Deferred non-insurance warranty acquisition expense 3,671 — — — — — 3,671 Insurance reserves Claim and claim adjustment expenses 6,878 9,395 2,403 695 2,749 — 22,120 Unearned premiums 3,193 2,425 653 103 — — 6,374 Future policy benefits — — — 13,480 — — 13,480 Deferred non-insurance warranty revenue 4,714 — — — — — 4,714 (1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. The following table presents operating revenues by line of business for each reportable segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Specialty Management & Professional Liability $ 718 $ 680 $ 1,423 $ 1,353 Surety 183 162 351 310 Warranty & Alternative Risks 460 444 920 881 Specialty revenues 1,361 1,286 2,694 2,544 Commercial Middle Market 419 374 817 736 Construction 420 350 805 674 Small Business 160 143 310 281 Other Commercial 292 224 561 430 Commercial revenues 1,291 1,091 2,493 2,121 International Canada 96 91 189 179 Europe 135 118 262 238 Hardy 97 75 190 144 International revenues 328 284 641 561 Life & Group revenues 342 320 671 651 Corporate & Other revenues 16 5 29 7 Eliminations (2) (1) (5) (3) Total operating revenues 3,336 2,985 6,523 5,881 Net investment gains (losses) (32) (59) (67) (70) Total revenues $ 3,304 $ 2,926 $ 6,456 $ 5,811 |
Non-Insurance Revenues from Con
Non-Insurance Revenues from Contracts with Customers | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Non-Insurance Revenues from Contracts with Customers | Non-Insurance Revenues from Contracts with CustomersThe Company had balances of $4.7 billion reported in Deferred non-insurance warranty revenue as of June 30, 2023 and December 31, 2022. For the three and six months ended June 30, 2023, the Company recognized $0.2 billion and $0.6 billion of revenues that were included in the deferred revenue balance as of January 1, 2023. For the three and six months ended June 30, 2022, the Company recognized $0.3 billion and $0.7 billion of revenues that were included in the deferred revenue balance as of January 1, 2022. For the three and six months ended June 30, 2023, non-insurance warranty revenue recognized from performance obligations related to prior periods due to a change in estimate was not material. The Company expects to recognize approximately $0.9 billion of the deferred revenue in the remainder of 2023, $1.2 billion in 2024, $0.9 billion in 2025 and $1.7 billion thereafter. |
General (Policies)
General (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Condensed Consolidated Financial Statements include the accounts of CNA Financial Corporation (CNAF) and its subsidiaries. Collectively, CNAF and its subsidiaries are referred to as CNA or the Company. Loews Corporation (Loews) owned 90% of the outstanding common stock of CNAF as of June 30, 2023.The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Intercompany amounts have been eliminated. |
Use of Estimates | The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. |
Accounting Standards Updates (ASU) Pending Adoption | Recently Adopted Accounting Standards Updates (ASU) ASU 2018-12: In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-12 The new guidance eliminates the need to hold shadow reserves associated with the Company’s long term care reserves. Under legacy accounting guidance, to the extent that unrealized gains on fixed maturity securities supporting long term care reserves would have resulted in a premium deficiency if realized, a related increase to Insurance reserves was recorded, net of tax, as a reduction of net unrealized gains (losses), through Other comprehensive income (loss) (shadow reserves). The unit of account is the level at which reserves are measured. Under the new guidance, the unit of account used to measure the LFPB is the cohort. Cohorts are comprised of insurance contracts issued no more than one year apart, and must be further disaggregated according to policy benefit and insurance risk characteristics. Under legacy accounting guidance, the LFPB was generally measured at the individual policy level. Under the new guidance, the Net Premium Ratio (NPR) is capped at 100%. To the extent that NPR would otherwise exceed 100%, the LFPB is increased and a loss is recognized immediately in the Company’s results of operations. The NPR cap is applied at the cohort level each quarter when NPR is updated. In contrast, under legacy accounting guidance, premium deficiency testing was performed annually at the product level. See Note F to the Condensed Consolidated Financial Statements for further explanation of the NPR and LFPB calculations. The Company adopted the new guidance effective January 1, 2023, using the modified retrospective method applied as of the transition date of January 1, 2021. The Company's run-off long term care business is in scope of the new guidance. All prior periods presented in the financial statements have been adjusted to reflect application of the new guidance. The Company’s original locked in discount rate, utilized for purposes of calculating the NPR under the new guidance, was based on the discount rate assumption used to calculate the LFPB immediately prior to the transition date. While the requirements of the new guidance represent a material change from legacy accounting, the new guidance does not impact capital and surplus under statutory accounting practices, cash flows or the underlying economics of the business. In December 2022, the FASB issued ASU 2022-05, Financial Services-Insurance (Topic 944): Transition for Sold Contracts (ASU 2022-05). This guidance permits companies to make an election to exclude from the scope of ASU 2018-12 any insurance contracts that have been de-recognized prior to the effective date of ASU 2018-12, assuming that the company has no significant continuing involvement with the de-recognized contracts. In the fourth quarter of 2022, the Company novated its block of legacy annuity business, which was fully-ceded prior to novation. The Company has elected the ASU 2022-05 transition relief, and has excluded the novated legacy annuity business from the scope of ASU 2018-12. |
Earnings (Loss) Per Share Data | Earnings (loss) per share is based on weighted average number of outstanding common shares. Basic earnings (loss) per share excludes the impact of dilutive securities and is computed by dividing Net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. |
Future Policy Benefit Reserves | The determination of Future policy benefits reserves requires management to make estimates and assumptions about expected policyholder experience over the remaining life of the policy. Since policies may be in force for several decades, these assumptions are subject to significant estimation risk. As a result of this variability, the Company’s future policy benefits reserves may be subject to material increases if actual experience develops adversely to the Company’s expectations. The LFPB is computed using the net level premium method, which incorporates cash flow assumptions and discount rate assumptions. Under the net level premium method, the LFPB is equal to the present value of future benefits and claim settlement expenses less the present value of future net premiums. Net premiums are equal to gross premiums multiplied by the NPR. The NPR is generally the ratio of the present value of benefits and expense payments to the present value of gross premiums, expected over the lifetime of the policy. As a result of the modified retrospective adoption of ASU 2018-12, the Company’s NPR calculation incorporates the original locked in discount rate and the reserve balance as of the transition date of January 1, 2021. The key cash flow assumptions used to estimate the LFPB are morbidity, persistency (inclusive of mortality), anticipated future premium rate increases and expenses. Morbidity is the frequency and severity of injury, illness, sickness and diseases contracted. Persistency is the percentage of policies remaining in force and can be affected by policy lapses, benefit reductions and death. Future premium rate increases are generally subject to regulatory approval, and therefore the exact timing and size of the approved rate increases are unknown. Expense assumptions relate to claim adjudication. The Company has not elected the practical expedient that allows locking in the expense assumption. The discount rate is determined using the upper-medium grade fixed income instrument yield curve. The Company has elected to update the NPR and the LFPB for actual experience on a quarterly basis. A quarterly assessment is also made as to whether evidence suggests that cash flow assumptions should be updated. Annually in the third quarter, actuarial analysis is performed on policyholder morbidity, persistency, premium rate increases and expense experience. This analysis, combined with judgment, informs the setting of updated cash flow assumptions used to estimate the LFPB. Actuarial analysis includes predictive modeling, actual to expected experience comparisons and trend analysis. Applicable industry research is also considered. Quarterly, to derive the upper-medium grade fixed income instrument yield discount rate assumption, the Company uses a published spot rate curve constructed from single-A rated U.S. dollar denominated corporate bonds. The Company uses linear interpolation to determine yield assumptions for tenors that fall between points for which observable rates are available. For cash flows that are projected to occur beyond the tenor for which market-observable rates are available, the Company applies judgment to estimate a normative rate which the Company grades to over 10 years. Quarterly, the updated NPR is used to derive an updated LFPB as of the beginning of the current quarter measured at the original locked in discount rate. The updated LFPB is then compared to the existing carrying amount of the liability as of the same date (measured at the original locked in discount rate) to determine the re-measurement gain (loss), which is presented parenthetically within the Insurance claims and policyholders’ benefits line on the Condensed Consolidated Statements of Operations. Insurance contracts are grouped into cohorts according to issue year. Contracts assumed through reinsurance are generally included within the same cohorts as contracts issued directly by the Company, according to issue year. The issue year for assumed contracts is defined according to the date that the Company’s assumption of insurance risk incepted. For assumed contracts that were reinsured concurrently with the issuance of the underlying direct contract, issue year is defined as the year that the underlying policy was issued. For contracts that were already in-force when assumed by the Company, issue year is defined as the year in which the reinsurance agreement incepted. For group long term care business, issue year is defined as the year the individual insurance certificate was issued. Long term care is the Company's only long-duration product line, therefore, cohorts are not further disaggregated by product. |
General (Tables)
General (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of new accounting pronouncements and changes in accounting principles | The following table presents a roll-forward of the pre-transition LFPB balance as of January 1, 2021: (In millions) Balance as of December 31, 2020, as previously reported $ 13,318 Reclassification of reserves for policyholders currently receiving benefits to Future policy benefits (1) 2,844 De-recognition of shadow reserves (3,293) Re-measurement using an upper-medium grade fixed income instrument yield discount rate 6,255 Other adjustments 8 Balance as of January 1, 2021, as adjusted $ 19,132 (1) In conjunction with the adoption of ASU 2018-12, at January 1, 2023, the Company reclassified the long term care reserves for policyholders currently receiving benefits from Claim and claim adjustment expenses to Future policy benefits. This change was applied retrospectively as of January 1, 2021. The following table presents after tax adjustments to the opening balance of Stockholders’ equity resulting from adoption of ASU 2018-12: (In millions) Accumulated other comprehensive income (loss) Retained earnings Balance as of December 31, 2020, as previously reported $ 803 $ 9,081 De-recognition of shadow reserves 2,601 — Re-measurement of LFPB using an upper-medium grade fixed income instrument yield discount rate (4,941) — Other adjustments — (6) Balance as of January 1, 2021, as adjusted $ (1,537) $ 9,075 The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Operations for the three months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Insurance claims and policyholders’ benefits (1) $ 1,583 $ 18 $ 1,601 Income (loss) before income tax 245 (18) 227 Income tax (expense) benefit (40) 3 (37) Net income 205 (15) 190 Basic earnings (loss) per share 0.75 (0.05) 0.70 Diluted earnings (loss) per share 0.75 (0.06) 0.69 (1) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain (loss) of $1 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Operations for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Insurance claims and policyholders’ benefits (1) $ 3,038 $ 41 $ 3,079 Income (loss) before income tax 623 (41) 582 Income tax (expense) benefit (105) 8 (97) Net income 518 (33) 485 Basic earnings (loss) per share 1.91 (0.12) 1.79 Diluted earnings (loss) per share 1.90 (0.12) 1.78 (1) The effect of adopting ASU 2018-12 on Insurance claims and policyholders’ benefits is inclusive of the re-measurement gain (loss) of $6 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on the Condensed Consolidated Balance Sheet as of December 31, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Deferred income taxes $ 1,178 $ 73 $ 1,251 Total assets 60,927 73 61,000 Claim and claim adjustment expenses (1) 25,099 (2,979) 22,120 Future policy benefits (1) 10,151 3,329 13,480 Total liabilities 52,102 350 52,452 Retained earnings 9,572 (236) 9,336 Accumulated other comprehensive income (loss) (3,557) (41) (3,598) Total stockholders' equity 8,825 (277) 8,548 (1) In conjunction with the adoption of ASU 2018-12, at January 1, 2023, the Company reclassified the long term care reserves for policyholders currently receiving benefits from Claim and claim adjustment expenses to Future policy benefits. This change was applied retrospectively as of January 1, 2021. The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Comprehensive Income (Loss) for the three months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Changes in: Net unrealized gains and losses on other investments $ (1,346) $ (880) $ (2,226) Net unrealized gains and losses on investments (1,348) (880) (2,228) Impact of changes in discount rates used to measure long-duration contract liabilities — 1,507 1,507 Other comprehensive income (loss), net of tax (1,410) 627 (783) Total comprehensive income (loss) (1,205) 612 (593) The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Comprehensive Income (Loss) for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Changes in: Net unrealized gains and losses on other investments $ (2,957) $ (1,912) $ (4,869) Net unrealized gains and losses on investments (2,963) (1,912) (4,875) Impact of changes in discount rates used to measure long-duration contract liabilities — 3,142 3,142 Other comprehensive income (loss), net of tax (3,033) 1,230 (1,803) Total comprehensive income (loss) (2,515) 1,197 (1,318) The effects of adoption of ASU 2018-12 on the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Net income $ 518 $ (33) $ 485 Deferred income tax expense (benefit) (10) (8) (18) Changes in: Insurance reserves 1,376 41 1,417 The effects of adoption of ASU 2018-12 on segment results of operations of the Life & Group segment for the three months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Net incurred claims and benefits (1) $ 293 $ 18 $ 311 Core income (loss) before income tax (4) (18) (22) Income tax (expense) benefit on core income (loss) 10 3 13 Core income (loss) 6 (15) (9) (1) The effect of adopting ASU 2018-12 on Net incurred claims and benefits is inclusive of the re-measurement gain (loss) of $1 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on segment results of operations of the Life & Group segment for the six months ended June 30, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Net incurred claims and benefits (1) $ 574 $ 41 $ 615 Core income (loss) before income tax 12 (41) (29) Income tax (expense) benefit on core income (loss) 17 8 25 Core income (loss) 29 (33) (4) (1) The effect of adopting ASU 2018-12 on Net incurred claims and benefits is inclusive of the re-measurement gain (loss) of $6 million, which is presented parenthetically on the Condensed Consolidated Statement of Operations. The effects of adoption of ASU 2018-12 on segment results for selected balance sheet lines of the Life & Group segment as of December 31, 2022 were as follows: (In millions) Prior to Adoption Effect of Adoption As reported Claim and claim adjustment expenses (1) $ 3,674 $ (2,979) $ 695 Future policy benefits (1) 10,151 3,329 13,480 |
Earnings (Loss) Per Share Data
Earnings (Loss) Per Share Data (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the income and share data used in the basic and diluted earnings per share computations. Periods ended June 30 Three Months Six Months (In millions, except per share data) 2023 2022 2023 2022 Net income (loss) (1) $ 283 $ 190 $ 580 $ 485 Common Stock and Common Stock Equivalents Basic Weighted average shares outstanding 271.2 271.7 271.2 271.8 Diluted Weighted average shares outstanding 271.2 271.7 271.2 271.8 Dilutive effect of stock-based awards under compensation plans 0.8 0.9 0.9 0.9 Total 272.0 272.6 272.1 272.7 Earnings (loss) per share (1) Basic $ 1.04 $ 0.70 $ 2.14 $ 1.79 Diluted $ 1.04 $ 0.69 $ 2.13 $ 1.78 (1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts have been adjusted to reflect application of the new guidance. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments [Abstract] | |
Net investment income | The significant components of Net investment income are presented in the following table. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Fixed maturity securities $ 482 $ 441 $ 952 $ 870 Equity securities 21 (11) 33 (9) Limited partnership investments 55 6 80 24 Mortgage loans 14 12 28 27 Short term investments 13 2 28 2 Trading portfolio — — 3 1 Other 9 — 14 — Gross investment income 594 450 1,138 915 Investment expense (19) (18) (38) (35) Net investment income $ 575 $ 432 $ 1,100 $ 880 Net investment income (loss) recognized due to the change in fair value of common stock held as of June 30, 2023 and 2022 $ 10 $ (22) $ 7 $ (23) |
Net realized investment gains (losses) | Net investment gains (losses) are presented in the following table. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Net investment gains (losses): Fixed maturity securities: Gross gains $ 8 $ 45 $ 43 $ 71 Gross losses (35) (60) (92) (88) Net investment gains (losses) on fixed maturity securities (27) (15) (49) (17) Equity securities 3 (71) (11) (109) Derivatives — 26 — 55 Mortgage loans (6) — (6) — Short term investments and other (2) 1 (1) 1 Net investment gains (losses) $ (32) $ (59) $ (67) $ (70) Net investment gains (losses) recognized due to the change in fair value of non-redeemable preferred stock held as of June 30, 2023 and 2022 $ 3 $ (70) $ — $ (108) |
Components of net other than temporary impairment losses recognized in earnings by asset type | The components of available-for-sale impairment losses (gains) recognized in earnings by asset type are presented in the following table. The table includes losses (gains) on securities with an intention to sell and changes in the allowance for credit losses on securities since acquisition date. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Fixed maturity securities available-for-sale: Corporate and other bonds $ 9 $ 21 $ 17 $ 29 Asset-backed 8 (1) 8 1 Impairment losses (gains) recognized in earnings $ 17 $ 20 $ 25 $ 30 |
Summary of fixed maturity securities | The following tables present a summary of fixed maturity securities. June 30, 2023 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 24,194 $ 339 $ 1,909 $ 13 $ 22,611 States, municipalities and political subdivisions 8,262 341 793 — 7,810 Asset-backed: Residential mortgage-backed 3,133 4 444 — 2,693 Commercial mortgage-backed 1,843 4 257 7 1,583 Other asset-backed 3,571 9 330 2 3,248 Total asset-backed 8,547 17 1,031 9 7,524 U.S. Treasury and obligations of government-sponsored enterprises 130 — 3 — 127 Foreign government 700 1 50 — 651 Redeemable preferred stock 5 — — — 5 Total fixed maturity securities available-for-sale 41,838 698 3,786 22 38,728 Total fixed maturity securities trading — — — — — Total fixed maturity securities $ 41,838 $ 698 $ 3,786 $ 22 $ 38,728 December 31, 2022 Cost or Gross Gross Allowance for Credit Losses Estimated (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 23,137 $ 301 $ 2,009 $ — $ 21,429 States, municipalities and political subdivisions 8,918 338 939 — 8,317 Asset-backed: Residential mortgage-backed 3,073 5 447 — 2,631 Commercial mortgage-backed 1,886 4 255 — 1,635 Other asset-backed 3,287 2 361 1 2,927 Total asset-backed 8,246 11 1,063 1 7,193 U.S. Treasury and obligations of government-sponsored enterprises 111 1 2 — 110 Foreign government 617 1 43 — 575 Redeemable preferred stock 3 — — — 3 Total fixed maturity securities available-for-sale 41,032 652 4,056 1 37,627 Total fixed maturity securities trading — — — — — Total fixed maturity securities $ 41,032 $ 652 $ 4,056 $ 1 $ 37,627 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | The following tables present the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by the length of time in which the securities have continuously been in that position. Less than 12 Months 12 Months or Longer Total June 30, 2023 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 7,681 $ 350 $ 10,087 $ 1,559 $ 17,768 $ 1,909 States, municipalities and political subdivisions 1,486 64 2,783 729 4,269 793 Asset-backed: Residential mortgage-backed 822 35 1,810 409 2,632 444 Commercial mortgage-backed 325 15 1,171 242 1,496 257 Other asset-backed 739 32 1,982 298 2,721 330 Total asset-backed 1,886 82 4,963 949 6,849 1,031 U.S. Treasury and obligations of government-sponsored enterprises 84 2 34 1 118 3 Foreign government 213 8 395 42 608 50 Total $ 11,350 $ 506 $ 18,262 $ 3,280 $ 29,612 $ 3,786 Less than 12 Months 12 Months or Longer Total December 31, 2022 Estimated Gross Estimated Gross Estimated Gross (In millions) Fixed maturity securities available-for-sale: Corporate and other bonds $ 15,946 $ 1,585 $ 1,634 $ 424 $ 17,580 $ 2,009 States, municipalities and political subdivisions 4,079 769 456 170 4,535 939 Asset-backed: Residential mortgage-backed 1,406 144 1,143 303 2,549 447 Commercial mortgage-backed 1,167 159 408 96 1,575 255 Other asset-backed 2,087 262 542 99 2,629 361 Total asset-backed 4,660 565 2,093 498 6,753 1,063 U.S. Treasury and obligations of government-sponsored enterprises 76 1 16 1 92 2 Foreign government 473 26 78 17 551 43 Total $ 25,234 $ 2,946 $ 4,277 $ 1,110 $ 29,511 $ 4,056 The following table presents the estimated fair value and gross unrealized losses of available-for-sale fixed maturity securities in a gross unrealized loss position for which an allowance for credit loss has not been recorded, by ratings distribution. June 30, 2023 December 31, 2022 (In millions) Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses U.S. Government, Government agencies and Government-sponsored enterprises $ 2,479 $ 334 $ 2,355 $ 337 AAA 1,662 283 1,559 298 AA 4,404 746 4,327 817 A 6,937 703 6,615 749 BBB 12,960 1,513 13,226 1,621 Non-investment grade 1,170 207 1,429 234 Total $ 29,612 $ 3,786 $ 29,511 $ 4,056 |
Debt securities, available-for-sale, allowance for credit loss | (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of April 1, 2023 $ 1 $ 1 $ 2 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded 1 7 8 Available-for-sale securities accounted for as PCD assets 11 — 11 Reductions to the allowance for credit losses: Write-offs charged against the allowance — — — Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — 1 1 Balance as of June 30, 2023 $ 13 $ 9 $ 22 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of April 1, 2022 $ 12 $ 5 $ 17 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — 3 3 Reductions to the allowance for credit losses: Write-offs charged against the allowance 12 — 12 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period — (3) (3) Balance as of June 30, 2022 $ — $ 5 $ 5 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2023 $ — $ 1 $ 1 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded 1 7 8 Available-for-sale securities accounted for as PCD assets 20 — 20 Reductions to the allowance for credit losses: Securities sold during the period (realized) 6 — 6 Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis 3 — 3 Write-offs charged against the allowance — — — Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 1 2 Balance as of June 30, 2023 $ 13 $ 9 $ 22 (In millions) Corporate and other bonds Asset-backed Total Allowance for credit losses: Balance as of January 1, 2022 $ 11 $ 7 $ 18 Additions to the allowance for credit losses: Securities for which credit losses were not previously recorded — — — Available-for-sale securities accounted for as PCD assets — 3 3 Reductions to the allowance for credit losses: Securities sold during the period (realized) — — — Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis — — — Write-offs charged against the allowance 12 — 12 Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period 1 (5) (4) Balance as of June 30, 2022 $ — $ 5 $ 5 |
Contractual maturity | The following table presents available-for-sale fixed maturity securities by contractual maturity. June 30, 2023 December 31, 2022 (In millions) Cost or Estimated Cost or Estimated Due in one year or less $ 988 $ 972 $ 1,012 $ 1,001 Due after one year through five years 11,072 10,443 9,880 9,399 Due after five years through ten years 13,445 12,226 13,788 12,453 Due after ten years 16,333 15,087 16,352 14,774 Total $ 41,838 $ 38,728 $ 41,032 $ 37,627 |
Financing receivable credit quality indicators | The following table presents the amortized cost basis of mortgage loans for each credit quality indicator by year of origination. The primary credit quality indicators utilized are debt service coverage ratios (DSCR) and loan-to-value ratios (LTV). June 30, 2023 Mortgage Loans Amortized Cost Basis by Origination Year (1)(2) (In millions) 2023 2022 2021 2020 2019 Prior Total DSCR ≥1.6x LTV less than 55% $ — $ 9 $ 13 $ 111 $ 33 $ 245 $ 411 LTV 55% to 65% — — — — 8 — 8 LTV greater than 65% — 31 11 — — — 42 DSCR 1.2x - 1.6x LTV less than 55% 28 5 49 14 42 51 189 LTV 55% to 65% 12 43 — 24 — 9 88 LTV greater than 65% — 58 — — — — 58 DSCR ≤1.2 LTV less than 55% — 35 — — 34 — 69 LTV 55% to 65% 13 41 — — 43 — 97 LTV greater than 65% 13 27 21 — 23 7 91 Total $ 66 $ 249 $ 94 $ 149 $ 183 $ 312 $ 1,053 (1) The values in the table above reflect DSCR on a standardized amortization period and LTV based on the most recent appraised values trended forward using changes in a commercial real estate price index. (2) The amortized cost basis of Mortgage loans as presented in the table above differs from the amount reported in the Condensed Consolidated Balance Sheets because Mortgage loans with a term to maturity of less than one year at the time of origination are classified as Short term investments. |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are presented in the following tables. Corporate bonds and other includes obligations of the United States of America (U.S.) Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock. June 30, 2023 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 137 $ 22,286 $ 971 $ 23,394 States, municipalities and political subdivisions — 7,767 43 7,810 Asset-backed — 6,641 883 7,524 Total fixed maturity securities 137 36,694 1,897 38,728 Equity securities: Common stock 179 — 26 205 Non-redeemable preferred stock 56 422 — 478 Total equity securities 235 422 26 683 Short term and other 1,711 42 — 1,753 Total assets $ 2,083 $ 37,158 $ 1,923 $ 41,164 Liabilities Other liabilities $ — $ 1 $ — $ 1 Total liabilities $ — $ 1 $ — $ 1 December 31, 2022 Total (In millions) Level 1 Level 2 Level 3 Assets Fixed maturity securities: Corporate bonds and other $ 120 $ 21,187 $ 810 $ 22,117 States, municipalities and political subdivisions — 8,274 43 8,317 Asset-backed — 6,405 788 7,193 Total fixed maturity securities 120 35,866 1,641 37,627 Equity securities: Common stock 150 — 35 185 Non-redeemable preferred stock 54 435 — 489 Total equity securities 204 435 35 674 Short term and other 1,608 71 — 1,679 Total assets $ 1,932 $ 36,372 $ 1,676 $ 39,980 Liabilities Other liabilities $ — $ 1 $ — $ 1 Total liabilities $ — $ 1 $ — $ 1 |
Table of reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs | The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of April 1, 2023 $ 912 $ 44 $ 859 $ 29 $ 1,844 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) — — (1) — (1) Reported in Net investment income — — 5 (1) 4 Reported in Other comprehensive income (loss) (15) (1) (7) — (23) Total realized and unrealized investment gains (losses) (15) (1) (3) (1) (20) Purchases 68 — 87 — 155 Sales — — — (2) (2) Settlements (5) — (17) — (22) Transfers into Level 3 11 — — — 11 Transfers out of Level 3 — — (43) — (43) Balance as of June 30, 2023 $ 971 $ 43 $ 883 $ 26 $ 1,923 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Net income (loss) in the period $ — $ — $ — $ (1) $ (1) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Other comprehensive income (loss) in the period (15) (1) (7) — (23) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of April 1, 2022 $ 915 $ 51 $ 604 $ 44 $ 1,614 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (1) — 3 (2) — Reported in Net investment income — — 5 (1) 4 Reported in Other comprehensive income (loss) (82) (5) (52) — (139) Total realized and unrealized investment gains (losses) (83) (5) (44) (3) (135) Purchases 51 — 92 — 143 Sales — — (2) (3) (5) Settlements (37) — (23) 9 (51) Transfers into Level 3 — — 14 — 14 Transfers out of Level 3 — — — — — Balance as of June 30, 2022 $ 846 $ 46 $ 641 $ 47 $ 1,580 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (3) $ (3) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Other comprehensive income (loss) in the period (81) (5) (52) — (138) Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2023 $ 810 $ 43 $ 788 $ 35 $ 1,676 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) — — (1) — (1) Reported in Net investment income — — 10 (7) 3 Reported in Other comprehensive income (loss) 9 — — — 9 Total realized and unrealized investment gains (losses) 9 — 9 (7) 11 Purchases 149 — 142 — 291 Sales — — — (2) (2) Settlements (8) — (26) — (34) Transfers into Level 3 11 — 23 — 34 Transfers out of Level 3 — — (53) — (53) Balance as of June 30, 2023 $ 971 $ 43 $ 883 $ 26 $ 1,923 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Net income (loss) in the period $ — $ — $ — $ (7) $ (7) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2023 recognized in Other comprehensive income (loss) in the period 9 — (1) — 8 Level 3 (In millions) Corporate bonds and other States, municipalities and political subdivisions Asset-backed Equity securities Total Balance as of January 1, 2022 $ 937 $ 56 $ 556 $ 29 $ 1,578 Total realized and unrealized investment gains (losses): Reported in Net investment gains (losses) (2) — 5 (3) — Reported in Net investment income — — 6 3 9 Reported in Other comprehensive income (loss) (153) (10) (84) — (247) Total realized and unrealized investment gains (losses) (155) (10) (73) — (238) Purchases 118 — 232 12 362 Sales (5) — (2) (3) (10) Settlements (59) — (40) 9 (90) Transfers into Level 3 10 — 19 — 29 Transfers out of Level 3 — — (51) — (51) Balance as of June 30, 2022 $ 846 $ 46 $ 641 $ 47 $ 1,580 Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Net income (loss) in the period $ — $ — $ — $ (1) $ (1) Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2022 recognized in Other comprehensive income (loss) in the period (153) (10) (83) — (246) |
Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets | The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average rate is calculated based on fair value. June 30, 2023 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,415 Discounted cash flow Credit spread 1% - 7% (2%) December 31, 2022 Estimated Fair Value Valuation Technique(s) Unobservable Input(s) Range Fixed maturity securities $ 1,177 Discounted cash flow Credit spread 1% - 8% (2%) |
Carrying amount and estimated fair value of financial instrument assets and liabilities not measured at fair value | The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables. June 30, 2023 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 1,009 $ — $ — $ 954 $ 954 Liabilities Short term debt $ 792 $ — $ 785 $ — $ 785 Long term debt 2,384 — 2,196 — 2,196 December 31, 2022 Carrying Estimated Fair Value (In millions) Level 1 Level 2 Level 3 Total Assets Mortgage loans $ 1,040 $ — $ — $ 973 $ 973 Liabilities Short term debt $ 243 $ — $ 248 $ — $ 248 Long term debt 2,538 — 2,349 — 2,349 |
Claim and Claim Adjustment Ex_2
Claim and Claim Adjustment Expense Reserves (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Short-duration Insurance Contracts, Net Incurred Claim and Claim Adjustment Expenses [Line Items] | |
Schedule of liability for unpaid claims and claims adjustment expense | The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves. For the six months ended June 30 (In millions) 2023 2022 (1) Reserves, beginning of year: Gross $ 22,120 $ 21,269 Ceded 5,191 4,969 Net reserves, beginning of year 16,929 16,300 Net incurred claim and claim adjustment expenses: Provision for insured events of current year 2,746 2,452 Increase (decrease) in provision for insured events of prior years 37 30 Amortization of discount 22 22 Total net incurred (2) 2,805 2,504 Net payments attributable to: Current year events (287) (233) Prior year events (2,014) (1,882) Total net payments (2,301) (2,115) Foreign currency translation adjustment and other 57 (222) Net reserves, end of period 17,490 16,467 Ceded reserves, end of period 5,312 5,156 Gross reserves, end of period $ 22,802 $ 21,623 (1) In conjunction with the Company's adoption of ASU 2018-12, at January 1, 2023, long term care reserves for policyholders currently receiving benefits were reclassified from Claim and claim adjustment expenses into Future policy benefits and this change was applied retrospectively as of January 1, 2021. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Net prior year development | The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Specialty $ (4) $ (10) $ (4) $ (20) Commercial (13) (22) (15) (24) International — (5) 15 (5) Corporate & Other 35 64 35 64 Total pretax (favorable) unfavorable development $ 18 $ 27 $ 31 $ 15 |
Specialty | |
Short-duration Insurance Contracts, Net Incurred Claim and Claim Adjustment Expenses [Line Items] | |
Net prior year claim and allocated claim adjustment expense reserve development | The following table presents further detail of the development recorded for the Specialty segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Medical Professional Liability $ — $ 1 $ 9 $ 9 Other Professional Liability and Management Liability (1) 13 (1) 13 Surety (7) (19) (7) (28) Warranty — — (9) (9) Other 4 (5) 4 (5) Total pretax (favorable) unfavorable development $ (4) $ (10) $ (4) $ (20) |
Commercial | |
Short-duration Insurance Contracts, Net Incurred Claim and Claim Adjustment Expenses [Line Items] | |
Net prior year claim and allocated claim adjustment expense reserve development | The following table presents further detail of the development recorded for the Commercial segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Commercial Auto $ 11 $ 21 $ 11 $ 21 General Liability 70 41 70 41 Workers' Compensation (96) (82) (98) (84) Property and Other 2 (2) 2 (2) Total pretax (favorable) unfavorable development $ (13) $ (22) $ (15) $ (24) |
International | |
Short-duration Insurance Contracts, Net Incurred Claim and Claim Adjustment Expenses [Line Items] | |
Net prior year claim and allocated claim adjustment expense reserve development | The following table presents further detail of the development recorded for the International segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Pretax (favorable) unfavorable development: Commercial $ (3) $ (4) $ (5) $ (4) Specialty 3 (1) 22 (1) Other — — (2) — Total pretax (favorable) unfavorable development $ — $ (5) $ 15 $ (5) |
Future Policy Benefit Reserves
Future Policy Benefit Reserves (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Insurance [Abstract] | |
Liability for Future Policy Benefit, Activity | The following table summarizes balances and changes in the LFPB. (In millions) 2023 2022 Present value of future net premiums Balance, January 1 $ 3,993 $ 4,735 Effect of changes in discount rate (74) (880) Balance, January 1, at original locked in discount rate 3,919 3,855 Effect of changes in cash flow assumptions (1) — — Effect of actual variances from expected experience (1) (85) (37) Adjusted balance, January 1 3,834 3,818 Interest accrual 103 105 Net premiums: earned during period (225) (225) Balance, end of period at original locked in discount rate 3,712 3,698 Effect of changes in discount rate 78 246 Balance, June 30 $ 3,790 $ 3,944 Present value of future benefits & expenses Balance, January 1 $ 17,472 $ 22,745 Effect of changes in discount rate (125) (5,942) Balance, January 1, at original locked in discount rate 17,347 16,803 Effect of changes in cash flow assumptions (1) — — Effect of actual variances from expected experience (1) (51) (43) Adjusted balance, January 1 17,296 16,760 Interest accrual 482 482 Benefit & expense payments (629) (470) Balance, end of period at original locked in discount rate 17,149 16,772 Effect of changes in discount rate 307 1,329 Balance, June 30 $ 17,456 $ 18,101 Net LFPB $ 13,666 $ 14,157 (1) As of June 30, 2023 and 2022, the re-measurement gain (loss) of $(34) million and $6 million presented parenthetically on the Condensed Consolidated Statement of Operations is comprised of the effect of changes in cash flow assumptions and the effect of actual variances from expected experience. The following table presents earned premiums and interest expense associated with the Company’s long term care business recognized on the Condensed Consolidated Statement of Operations. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Earned premiums $ 113 $ 118 $ 228 $ 238 Interest expense 189 189 379 377 The following table presents undiscounted expected future benefit and expense payments, and undiscounted expected future gross premiums. As of June 30 (In millions) 2023 2022 Expected future benefit and expense payments $ 33,287 $ 33,429 Expected future gross premiums 5,536 5,848 The weighted average interest rates in the table below are calculated based on the rate used to discount all future cash flows. As of June 30 As of December 31 2023 2022 2022 Original locked in discount rate 5.25 % 5.29 % 5.27 % Upper-medium grade fixed income instrument discount rate 5.10 4.64 5.23 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Components of net periodic cost (benefit) | The components of net periodic pension cost (benefit) are presented in the following table. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Net periodic pension cost (benefit) Interest cost on projected benefit obligation $ 24 $ 16 $ 49 $ 33 Expected return on plan assets (30) (38) (60) (76) Amortization of net actuarial loss 9 8 17 15 Total net periodic pension cost (benefit) $ 3 $ (14) $ 6 $ (28) The following table indicates the line items in which the non-service cost (benefit) is presented on the Condensed Consolidated Statements of Operations. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Non-Service Cost (Benefit): Insurance claims and policyholder's benefits $ — $ (4) $ 1 $ (8) Other operating expenses 3 (10) 5 (20) Total net periodic pension cost (benefit) $ 3 $ (14) $ 6 $ (28) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) by Component (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) by Component | The tables below display the changes in Accumulated other comprehensive income (loss) by component. (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of April 1, 2023 $ (15) $ (2,068) $ (584) $ (437) $ (204) $ (3,308) Other comprehensive income (loss) before reclassifications (8) (427) — 256 34 (145) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $2, $4, $2, $—, $— and $8 (7) (14) (7) — — (28) Other comprehensive income (loss) net of tax (expense) benefit of $—, $112, $(2), $(68), $— and $42 (1) (413) 7 256 34 (117) Balance as of June 30, 2023 $ (16) $ (2,481) $ (577) $ (181) $ (170) $ (3,425) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of April 1, 2022, as previously reported $ (6) $ (572) $ (598) $ — $ (127) $ (1,303) Cumulative effect adjustment from accounting change for adoption of ASU 2018-12 (1) net of tax (expense) benefit of $—, $270, $—, $(497), $— and $(227) — 1,288 — (2,365) — (1,077) Balance as of April 1, 2022 (6) 716 (598) (2,365) (127) (2,380) Other comprehensive income (loss) before reclassifications (1) (2,240) — 1,507 (68) (802) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $(1), $3, $1, $—, $— and $3 1 (14) (6) — — (19) Other comprehensive income (loss) net of tax (expense) benefit of $—, $590,$(1), $(400), $— and $189 (2) (2,226) 6 1,507 (68) (783) Balance as of June 30, 2022 $ (8) $ (1,510) $ (592) $ (858) $ (195) $ (3,163) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of January 1, 2023, as previously reported $ (7) $ (2,738) $ (591) $ — $ (221) $ (3,557) Cumulative effect adjustment from accounting change for adoption of ASU 2018-12 (1) net of tax (expense) benefit of $—, $—, $—, $11, $— and $11 — — — (41) — (41) Balance as of January 1, 2023, as adjusted (7) (2,738) (591) (41) (221) (3,598) Other comprehensive income (loss) before reclassifications (16) 225 — (140) 51 120 Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $2, $8, $4, $—, $— and $14 (7) (32) (14) — — (53) Other comprehensive income (loss) net of tax (expense) benefit of $2, $(68), $(4), $37, $— and $(33) (9) 257 14 (140) 51 173 Balance as of June 30, 2023 $ (16) $ (2,481) $ (577) $ (181) $ (170) $ (3,425) (In millions) Net unrealized gains (losses) on investments with an allowance for credit losses Net unrealized gains (losses) on other investments (1) Pension and postretirement benefits Cumulative impact of changes in discount rates used to measure long duration contracts (1) Cumulative foreign currency translation adjustment Total Balance as of January 1, 2022, as previously reported $ (2) $ 1,039 $ (604) $ — $ (113) $ 320 Cumulative effect adjustment from accounting change for adoption of ASU 2018-12 (1) net of tax (expense) benefit of $—, $617, $—, $(1,063), $— and $(446) — 2,320 — (4,000) — (1,680) Balance as of January 1, 2022, as adjusted (2) 3,359 (604) (4,000) (113) (1,360) Other comprehensive income (loss) before reclassifications (5) (4,884) — 3,142 (82) (1,829) Amounts reclassified from accumulated other comprehensive income (loss) net of tax (expense) benefit of $(1), $4, $3, $—, $— and $6 1 (15) (12) — — (26) Other comprehensive income (loss) net of tax (expense) benefit of $1, $1,288, $(3), $(835), $— and $451 (6) (4,869) 12 3,142 (82) (1,803) Balance as of June 30, 2022 $ (8) $ (1,510) $ (592) $ (858) $ (195) $ (3,163) (1) See Note A to the Condensed Consolidated Financial Statements for additional information. |
Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from Accumulated other comprehensive income (loss) shown above are reported in Net income (loss) as follows: Component of AOCI Condensed Consolidated Statements of Operations Line Item Affected by Reclassifications Net unrealized gains (losses) on investments with an allowance for credit losses and Net unrealized gains (losses) on other investments Net investment gains (losses) Pension and postretirement benefits Other operating expenses and Insurance claims and policyholders' benefits |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Significant components of the Company's continuing operations and selected balance sheet items | The Company's results of operations and selected balance sheet items by segment are presented in the following tables. Three months ended June 30, 2023 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 812 $ 1,120 $ 302 $ 113 $ — $ — $ 2,347 Net investment income 142 165 25 229 14 — 575 Non-insurance warranty revenue 407 — — — — — 407 Other revenues — 6 1 — 2 (2) 7 Total operating revenues 1,361 1,291 328 342 16 (2) 3,336 Claims, benefits and expenses Net incurred claims and benefits 474 740 185 344 29 — 1,772 Policyholders’ dividends 2 5 — — — — 7 Amortization of deferred acquisition costs 168 175 60 — — — 403 Non-insurance warranty expense 384 — — — — — 384 Other insurance related expenses 94 158 35 31 — — 318 Other expenses 12 10 (5) — 44 (2) 59 Total claims, benefits and expenses 1,134 1,088 275 375 73 (2) 2,943 Core income (loss) before income tax 227 203 53 (33) (57) — 393 Income tax (expense) benefit on core income (loss) (50) (44) (15) 13 11 — (85) Core income (loss) $ 177 $ 159 $ 38 $ (20) $ (46) $ — 308 Net investment gains (losses) (32) Income tax (expense) benefit on net investment gains (losses) 7 Net investment gains (losses), after tax (25) Net income (loss) $ 283 Three months ended June 30, 2022 Specialty Commercial International Life & Group (1) Corporate (In millions) Eliminations Total (1) Operating revenues Net earned premiums $ 794 $ 974 $ 269 $ 118 $ — $ — $ 2,155 Net investment income 100 113 14 201 4 — 432 Non-insurance warranty revenue 392 — — — — — 392 Other revenues — 4 1 1 1 (1) 6 Total operating revenues 1,286 1,091 284 320 5 (1) 2,985 Claims, benefits and expenses Net incurred claims and benefits 456 610 160 311 57 — 1,594 Policyholders’ dividends 2 5 — — — — 7 Amortization of deferred acquisition costs 162 156 56 — — — 374 Non-insurance warranty expense 367 — — — — — 367 Other insurance related expenses 81 134 30 29 1 — 275 Other expenses 12 11 13 2 45 (1) 82 Total claims, benefits and expenses 1,080 916 259 342 103 (1) 2,699 Core income (loss) before income tax 206 175 25 (22) (98) — 286 Income tax (expense) benefit on core income (loss) (45) (37) (7) 13 20 — (56) Core income (loss) $ 161 $ 138 $ 18 $ (9) $ (78) $ — 230 Net investment gains (losses) (59) Income tax (expense) benefit on net investment gains (losses) 19 Net investment gains (losses), after tax (40) Net income (loss) $ 190 (1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. Six months ended June 30, 2023 Specialty Commercial International Life & Corporate (In millions) Eliminations Total Operating revenues Net earned premiums $ 1,609 $ 2,166 $ 592 $ 228 $ — $ — $ 4,595 Net investment income 271 314 48 443 24 — 1,100 Non-insurance warranty revenue 814 — — — — — 814 Other revenues — 13 1 — 5 (5) 14 Total operating revenues 2,694 2,493 641 671 29 (5) 6,523 Claims, benefits and expenses Net incurred claims and benefits 939 1,428 374 655 22 — 3,418 Policyholders’ dividends 3 11 — — — — 14 Amortization of deferred acquisition costs 333 344 105 — — — 782 Non-insurance warranty expense 768 — — — — — 768 Other insurance related expenses 180 300 82 60 1 — 623 Other expenses 26 16 (4) 1 85 (5) 119 Total claims, benefits and expenses 2,249 2,099 557 716 108 (5) 5,724 Core income (loss) before income tax 445 394 84 (45) (79) — 799 Income tax (expense) benefit on core income (loss) (97) (84) (22) 22 15 — (166) Core income (loss) $ 348 $ 310 $ 62 $ (23) $ (64) $ — 633 Net investment gains (losses) (67) Income tax (expense) benefit on net investment gains (losses) 14 Net investment gains (losses), after tax (53) Net income (loss) $ 580 June 30, 2023 (In millions) Reinsurance receivables $ 1,530 $ 1,153 $ 445 $ 100 $ 2,375 $ — $ 5,603 Insurance receivables 1,034 2,050 462 4 1 — 3,551 Deferred acquisition costs 395 359 131 — — — 885 Goodwill 117 — 29 — — — 146 Deferred non-insurance warranty acquisition expense 3,689 — — — — — 3,689 Insurance reserves Claim and claim adjustment expenses 7,183 9,674 2,583 688 2,674 — 22,802 Unearned premiums 3,194 2,882 790 112 — — 6,978 Future policy benefits — — — 13,666 — — 13,666 Deferred non-insurance warranty revenue 4,735 — — — — — 4,735 Six months ended June 30, 2022 Specialty Commercial International Life & Group (1) Corporate (In millions) Eliminations Total (1) Operating revenues Net earned premiums $ 1,566 $ 1,878 $ 533 $ 238 $ (1) $ — $ 4,214 Net investment income 203 231 28 413 5 — 880 Non-insurance warranty revenue 774 — — — — — 774 Other revenues 1 12 — — 3 (3) 13 Total operating revenues 2,544 2,121 561 651 7 (3) 5,881 Claims, benefits and expenses Net incurred claims and benefits 901 1,183 318 615 49 — 3,066 Policyholders’ dividends 3 10 — — — — 13 Amortization of deferred acquisition costs 319 304 95 — — — 718 Non-insurance warranty expense 721 — — — — — 721 Other insurance related expenses 162 264 77 60 3 — 566 Other expenses 25 18 14 5 86 (3) 145 Total claims, benefits and expenses 2,131 1,779 504 680 138 (3) 5,229 Core income (loss) before income tax 413 342 57 (29) (131) — 652 Income tax (expense) benefit on core income (loss) (89) (72) (13) 25 25 — (124) Core income (loss) $ 324 $ 270 $ 44 $ (4) $ (106) $ — 528 Net investment gains (losses) (70) Income tax (expense) benefit on net investment gains (losses) 27 Net investment gains (losses), after tax (43) Net income (loss) $ 485 December 31, 2022 (In millions) Reinsurance receivables $ 1,384 $ 1,062 $ 414 $ 101 $ 2,477 $ — $ 5,438 Insurance receivables 1,082 1,728 369 8 — — 3,187 Deferred acquisition costs 381 321 104 — — — 806 Goodwill 117 — 27 — — — 144 Deferred non-insurance warranty acquisition expense 3,671 — — — — — 3,671 Insurance reserves Claim and claim adjustment expenses 6,878 9,395 2,403 695 2,749 — 22,120 Unearned premiums 3,193 2,425 653 103 — — 6,374 Future policy benefits — — — 13,480 — — 13,480 Deferred non-insurance warranty revenue 4,714 — — — — — 4,714 (1) As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Revenues by line of business | The following table presents operating revenues by line of business for each reportable segment. Periods ended June 30 Three Months Six Months (In millions) 2023 2022 2023 2022 Specialty Management & Professional Liability $ 718 $ 680 $ 1,423 $ 1,353 Surety 183 162 351 310 Warranty & Alternative Risks 460 444 920 881 Specialty revenues 1,361 1,286 2,694 2,544 Commercial Middle Market 419 374 817 736 Construction 420 350 805 674 Small Business 160 143 310 281 Other Commercial 292 224 561 430 Commercial revenues 1,291 1,091 2,493 2,121 International Canada 96 91 189 179 Europe 135 118 262 238 Hardy 97 75 190 144 International revenues 328 284 641 561 Life & Group revenues 342 320 671 651 Corporate & Other revenues 16 5 29 7 Eliminations (2) (1) (5) (3) Total operating revenues 3,336 2,985 6,523 5,881 Net investment gains (losses) (32) (59) (67) (70) Total revenues $ 3,304 $ 2,926 $ 6,456 $ 5,811 |
General (Narrative) (Details)
General (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2023 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2018-12 [Member] |
CNAF Consolidated | Loews | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Noncontrolling interest, ownership percentage by parent | 90% |
General (Pre-Transition LFPB to
General (Pre-Transition LFPB to Adjusted Opening Balance) (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Present value of future net premiums | |||
Effect of change in cash flow assumptions | $ 0 | $ 0 | |
Reclassification of reserves for policyholders on claim to Future policy benefits | |||
Present value of future net premiums | |||
Effect of change in cash flow assumptions | $ 2,844 | ||
De-recognition of shadow reserves | |||
Present value of future net premiums | |||
Effect of change in cash flow assumptions | (3,293) | ||
Re-measurement using an upper-medium grade fixed income instrument yield discount rate | |||
Present value of future net premiums | |||
Effect of change in cash flow assumptions | 6,255 | ||
Other adjustments | |||
Present value of future net premiums | |||
Effect of change in cash flow assumptions | $ 8 |
General (Effects of Adoption of
General (Effects of Adoption of ASU 2018-12, Stockholders' Equity) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | [2] | Mar. 31, 2022 | [2] | Dec. 31, 2021 | [2] | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | $ 8,726 | $ 8,548 | [1] | $ 9,005 | |||||||
Accumulated Other Comprehensive (Loss) Income | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | (3,425) | $ (3,308) | (3,598) | (3,163) | $ (2,380) | $ (1,360) | $ (1,537) | ||||
Retained Earnings | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | $ 9,359 | 9,191 | 9,336 | $ 9,358 | 9,277 | 9,639 | 9,075 | ||||
Prior to Adoption | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | 8,825 | ||||||||||
Prior to Adoption | Accumulated Other Comprehensive (Loss) Income | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | (3,308) | (3,557) | (1,303) | 320 | 803 | ||||||
Prior to Adoption | Retained Earnings | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | $ 9,191 | $ 9,572 | $ 9,319 | $ 9,663 | 9,081 | ||||||
De-recognition of shadow reserves | Accumulated Other Comprehensive (Loss) Income | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | 2,601 | ||||||||||
De-recognition of shadow reserves | Retained Earnings | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | 0 | ||||||||||
Re-measurement using an upper-medium grade fixed income instrument yield discount rate | Accumulated Other Comprehensive (Loss) Income | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | (4,941) | ||||||||||
Re-measurement using an upper-medium grade fixed income instrument yield discount rate | Retained Earnings | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | 0 | ||||||||||
Other adjustments | Accumulated Other Comprehensive (Loss) Income | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | 0 | ||||||||||
Other adjustments | Retained Earnings | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Total stockholders' equity | $ (6) | ||||||||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information.[2]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
General (Effects of Adoption _2
General (Effects of Adoption of ASU 2018-12, Operations) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Insurance claims and policyholders' benefits | $ 1,779 | $ 1,601 | [1] | $ 3,432 | $ 3,079 | [1] |
Income (loss) before income tax | 361 | 227 | [1] | 732 | 582 | [1] |
Income tax (expense) benefit | 78 | 37 | [1] | 152 | 97 | [1] |
Net income | $ 283 | $ 190 | [1],[2] | $ 580 | $ 485 | [3] |
Basic earnings (loss) per share (in usd per share) | $ 1.04 | $ 0.70 | [1] | $ 2.14 | $ 1.79 | |
Diluted earnings (loss) per share (in usd per share) | $ 1.04 | $ 0.69 | [1] | $ 2.13 | $ 1.78 | |
Insurance claims and policyholders benefits, including policyholders' dividends, remeasurement impact | $ (33) | $ 1 | $ (34) | $ 6 | ||
Prior to Adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Insurance claims and policyholders' benefits | 1,583 | 3,038 | ||||
Income (loss) before income tax | 245 | 623 | ||||
Income tax (expense) benefit | 40 | 105 | ||||
Net income | $ 205 | $ 518 | ||||
Basic earnings (loss) per share (in usd per share) | $ 0.75 | $ 1.91 | ||||
Diluted earnings (loss) per share (in usd per share) | $ 0.75 | $ 1.90 | ||||
Effect of Adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Insurance claims and policyholders' benefits | $ 18 | $ 41 | ||||
Income (loss) before income tax | (18) | (41) | ||||
Income tax (expense) benefit | (3) | (8) | ||||
Net income | $ (15) | $ (33) | ||||
Basic earnings (loss) per share (in usd per share) | $ (0.05) | $ (0.12) | ||||
Diluted earnings (loss) per share (in usd per share) | $ (0.06) | $ (0.12) | ||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
General (Effects of Adoption _3
General (Effects of Adoption of ASU 2018-12, Balance Sheet) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2020 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred income taxes | $ 1,201 | $ 1,251 | [1] | |||
Total assets | 63,088 | 61,000 | [1] | |||
Claim and claim adjustment expenses | 22,802 | 22,120 | [1] | |||
Future policy benefits | 13,666 | 13,480 | [1] | $ 14,157 | $ 19,132 | |
Total liabilities | 54,362 | 52,452 | [1] | |||
Retained earnings | 9,359 | 9,336 | [1] | |||
Accumulated other comprehensive loss | (3,425) | (3,598) | [1] | |||
Total stockholders' equity | $ 8,726 | 8,548 | [1] | $ 9,005 | [2] | |
Prior to Adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred income taxes | 1,178 | |||||
Total assets | 60,927 | |||||
Claim and claim adjustment expenses | 25,099 | |||||
Future policy benefits | 10,151 | $ 13,318 | ||||
Total liabilities | 52,102 | |||||
Retained earnings | 9,572 | |||||
Accumulated other comprehensive loss | (3,557) | |||||
Total stockholders' equity | 8,825 | |||||
Effect of Adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Deferred income taxes | 73 | |||||
Total assets | 73 | |||||
Claim and claim adjustment expenses | (2,979) | |||||
Future policy benefits | 3,329 | |||||
Total liabilities | 350 | |||||
Retained earnings | (236) | |||||
Accumulated other comprehensive loss | (41) | |||||
Total stockholders' equity | $ (277) | |||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information.[2]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
General (Effects of Adoption _4
General (Effects of Adoption of ASU 2018-12, Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net unrealized gains and losses on investments | $ (414) | $ (2,228) | [1] | $ 248 | $ (4,875) |
Impact of changes in discount rates used to measure long-duration contract liabilities | 256 | 1,507 | [1] | (140) | 3,142 |
Other comprehensive income (loss) | (117) | (783) | [1] | 173 | (1,803) |
Total comprehensive income (loss) | 166 | (593) | [1] | 753 | (1,318) |
Net unrealized gains and losses on other investments | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net unrealized gains and losses on investments | $ (413) | (2,226) | [1] | $ 257 | (4,869) |
Prior to Adoption | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net unrealized gains and losses on investments | (1,348) | (2,963) | |||
Impact of changes in discount rates used to measure long-duration contract liabilities | 0 | 0 | |||
Other comprehensive income (loss) | (1,410) | (3,033) | |||
Total comprehensive income (loss) | (1,205) | (2,515) | |||
Prior to Adoption | Net unrealized gains and losses on other investments | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net unrealized gains and losses on investments | (1,346) | (2,957) | |||
Effect of Adoption | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net unrealized gains and losses on investments | (880) | (1,912) | |||
Impact of changes in discount rates used to measure long-duration contract liabilities | 1,507 | 3,142 | |||
Other comprehensive income (loss) | 627 | 1,230 | |||
Total comprehensive income (loss) | 612 | 1,197 | |||
Effect of Adoption | Net unrealized gains and losses on other investments | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net unrealized gains and losses on investments | $ (880) | $ (1,912) | |||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
General (Effects of Adoption AS
General (Effects of Adoption ASU 2018-12, Cash Flows) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net income | $ 283 | $ 190 | [1],[2] | $ 580 | $ 485 | [3] |
Deferred income tax expense | 21 | (18) | [3] | |||
Insurance reserves | $ 1,165 | 1,417 | [3] | |||
Prior to Adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net income | 205 | 518 | ||||
Deferred income tax expense | (10) | |||||
Insurance reserves | 1,376 | |||||
Effect of Adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net income | $ (15) | (33) | ||||
Deferred income tax expense | (8) | |||||
Insurance reserves | $ 41 | |||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
General (Effects of Adoption _5
General (Effects of Adoption ASU 2018-12, Segment Results) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2020 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net incurred claims and benefits | $ 1,772 | $ 1,594 | $ 3,418 | $ 3,066 | |||
Core income (loss) before income tax | 393 | 286 | 799 | 652 | |||
Income tax (expense) benefit on core income (loss) | (85) | (56) | (166) | (124) | |||
Core income (loss) | 308 | 230 | 633 | 528 | |||
Claim and claim adjustment expenses | 22,802 | 22,802 | $ 22,120 | [1] | |||
Future policy benefits | 13,666 | 14,157 | 13,666 | 14,157 | 13,480 | [1] | $ 19,132 |
Life & Group | Operating Segments | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net incurred claims and benefits | 344 | 311 | 655 | 615 | |||
Core income (loss) before income tax | (33) | (22) | (45) | (29) | |||
Income tax (expense) benefit on core income (loss) | 13 | 13 | 22 | 25 | |||
Core income (loss) | (20) | (9) | (23) | (4) | |||
Claim and claim adjustment expenses | 688 | 688 | 695 | ||||
Future policy benefits | $ 13,666 | $ 13,666 | 13,480 | ||||
Prior to Adoption | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Claim and claim adjustment expenses | 25,099 | ||||||
Future policy benefits | 10,151 | $ 13,318 | |||||
Prior to Adoption | Life & Group | Operating Segments | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net incurred claims and benefits | 293 | 574 | |||||
Core income (loss) before income tax | (4) | 12 | |||||
Income tax (expense) benefit on core income (loss) | 10 | 17 | |||||
Core income (loss) | 6 | 29 | |||||
Claim and claim adjustment expenses | 3,674 | ||||||
Future policy benefits | 10,151 | ||||||
Effect of Adoption | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Claim and claim adjustment expenses | (2,979) | ||||||
Future policy benefits | 3,329 | ||||||
Effect of Adoption | Life & Group | Operating Segments | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net incurred claims and benefits | 18 | 41 | |||||
Core income (loss) before income tax | (18) | (41) | |||||
Income tax (expense) benefit on core income (loss) | 3 | 8 | |||||
Core income (loss) | $ (15) | $ (33) | |||||
Claim and claim adjustment expenses | (2,979) | ||||||
Future policy benefits | $ 3,329 | ||||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Earnings (Loss) Per Share Dat_2
Earnings (Loss) Per Share Data (Computations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Earnings Per Share [Abstract] | ||||||
Net income | $ 283 | $ 190 | [1],[2] | $ 580 | $ 485 | [3] |
Basic | ||||||
Weighted average shares outstanding (in shares) | 271.2 | 271.7 | [1] | 271.2 | 271.8 | |
Diluted earnings per share | ||||||
Weighted average shares outstanding (in shares) | 271.2 | 271.7 | [1] | 271.2 | 271.8 | |
Diluted effect of stock-based awards under compensation plans (in shares) | 0.8 | 0.9 | 0.9 | 0.9 | ||
Total (in shares) | 272 | 272.6 | [1] | 272.1 | 272.7 | |
Earnings (loss) per share | ||||||
Basic earnings (loss) per share (in usd per share) | $ 1.04 | $ 0.70 | [1] | $ 2.14 | $ 1.79 | |
Diluted earnings (loss) per share (in usd per share) | $ 1.04 | $ 0.69 | [1] | $ 2.13 | $ 1.78 | |
[1]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Earnings (Loss) Per Share Dat_3
Earnings (Loss) Per Share Data (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||
Treasury stock, shares, acquired (in shares) | 550,000 | 445,000 |
Purchase of treasury stock | $ 24 | $ 21 |
Investments (Net investment inc
Investments (Net investment income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net Investment Income [Line Items] | ||||
Gross investment income | $ 594 | $ 450 | $ 1,138 | $ 915 |
Investment expense | (19) | (18) | (38) | (35) |
Net investment income | 575 | 432 | 1,100 | 880 |
Fixed maturity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 482 | 441 | 952 | 870 |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 21 | (11) | 33 | (9) |
Limited partnership investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 55 | 6 | 80 | 24 |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 14 | 12 | 28 | 27 |
Short term investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 13 | 2 | 28 | 2 |
Trading portfolio | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 0 | 0 | 3 | 1 |
Other | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 9 | 0 | 14 | 0 |
Common Stock | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) recognized due to the change in fair value of common stock held as of June 30, 2023 and 2022 | $ 10 | $ (22) | $ 7 | $ (23) |
Investments (Net realized inves
Investments (Net realized investment gains (losses)) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fixed maturity securities: | ||||
Gross gains | $ 8,000,000 | $ 45,000,000 | $ 43,000,000 | $ 71,000,000 |
Gross losses | (35,000,000) | (60,000,000) | (92,000,000) | (88,000,000) |
Net investment gains (losses) on fixed maturity securities | (27,000,000) | (15,000,000) | (49,000,000) | (17,000,000) |
Equity securities | 3,000,000 | (71,000,000) | (11,000,000) | (109,000,000) |
Derivatives | 0 | 26,000,000 | 0 | 55,000,000 |
Mortgage loans | (6,000,000) | 0 | (6,000,000) | 0 |
Short term investments and other | (2,000,000) | 1,000,000 | (1,000,000) | 1,000,000 |
Net investment gains (losses) | (32,000,000) | (59,000,000) | (67,000,000) | (70,000,000) |
Non-redeemable preferred stock | ||||
Fixed maturity securities: | ||||
Net investment income (loss) recognized due to the change in fair value of common stock held as of June 30, 2023 and 2022 | $ 3,000,000 | $ (70,000,000) | $ 0 | $ (108,000,000) |
Investments (Components of othe
Investments (Components of other-than-temporary impairment losses recognized in earnings) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Impairment losses (gains) recognized in earnings | $ 17 | $ 20 | $ 25 | $ 30 |
Corporate and other bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Impairment losses (gains) recognized in earnings | 9 | 21 | 17 | 29 |
Asset-backed | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Impairment losses (gains) recognized in earnings | $ 8 | $ (1) | $ 8 | $ 1 |
Investments (Summary of fixed m
Investments (Summary of fixed maturity and equity securities) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | $ 41,838 | $ 41,032 | |||||
Gross Unrealized Gains | 698 | 652 | |||||
Gross Unrealized Losses | 3,786 | 4,056 | |||||
Allowance for Credit Losses | 22 | $ 2 | 1 | $ 5 | $ 17 | $ 18 | |
Estimated Fair Value | 38,728 | 37,627 | |||||
Total fixed maturity securities trading | |||||||
Debt securities, amortized cost | 41,838 | 41,032 | |||||
Total fixed maturity securities | 38,728 | 37,627 | [1] | ||||
Corporate and other bonds | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 24,194 | 23,137 | |||||
Gross Unrealized Gains | 339 | 301 | |||||
Gross Unrealized Losses | 1,909 | 2,009 | |||||
Allowance for Credit Losses | 13 | 1 | 0 | 0 | 12 | 11 | |
Estimated Fair Value | 22,611 | 21,429 | |||||
Total fixed maturity securities trading | |||||||
Total fixed maturity securities | 23,394 | 22,117 | |||||
States, municipalities and political subdivisions | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 8,262 | 8,918 | |||||
Gross Unrealized Gains | 341 | 338 | |||||
Gross Unrealized Losses | 793 | 939 | |||||
Allowance for Credit Losses | 0 | 0 | |||||
Estimated Fair Value | 7,810 | 8,317 | |||||
Total fixed maturity securities trading | |||||||
Total fixed maturity securities | 7,810 | 8,317 | |||||
Asset-backed | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 8,547 | 8,246 | |||||
Gross Unrealized Gains | 17 | 11 | |||||
Gross Unrealized Losses | 1,031 | 1,063 | |||||
Allowance for Credit Losses | 9 | $ 1 | 1 | $ 5 | $ 5 | $ 7 | |
Estimated Fair Value | 7,524 | 7,193 | |||||
Total fixed maturity securities trading | |||||||
Total fixed maturity securities | 7,524 | 7,193 | |||||
Residential mortgage-backed | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 3,133 | 3,073 | |||||
Gross Unrealized Gains | 4 | 5 | |||||
Gross Unrealized Losses | 444 | 447 | |||||
Allowance for Credit Losses | 0 | 0 | |||||
Estimated Fair Value | 2,693 | 2,631 | |||||
Commercial mortgage-backed | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 1,843 | 1,886 | |||||
Gross Unrealized Gains | 4 | 4 | |||||
Gross Unrealized Losses | 257 | 255 | |||||
Allowance for Credit Losses | 7 | 0 | |||||
Estimated Fair Value | 1,583 | 1,635 | |||||
Other asset-backed | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 3,571 | 3,287 | |||||
Gross Unrealized Gains | 9 | 2 | |||||
Gross Unrealized Losses | 330 | 361 | |||||
Allowance for Credit Losses | 2 | 1 | |||||
Estimated Fair Value | 3,248 | 2,927 | |||||
U.S. Treasury and obligations of government-sponsored enterprises | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 130 | 111 | |||||
Gross Unrealized Gains | 0 | 1 | |||||
Gross Unrealized Losses | 3 | 2 | |||||
Allowance for Credit Losses | 0 | 0 | |||||
Estimated Fair Value | 127 | 110 | |||||
Foreign government | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 700 | 617 | |||||
Gross Unrealized Gains | 1 | 1 | |||||
Gross Unrealized Losses | 50 | 43 | |||||
Allowance for Credit Losses | 0 | 0 | |||||
Estimated Fair Value | 651 | 575 | |||||
Redeemable preferred stock | |||||||
Fixed maturity securities available-for-sale: | |||||||
Cost or Amortized Cost | 5 | 3 | |||||
Gross Unrealized Gains | 0 | 0 | |||||
Gross Unrealized Losses | 0 | 0 | |||||
Allowance for Credit Losses | 0 | 0 | |||||
Estimated Fair Value | 5 | 3 | |||||
Total fixed maturity securities trading | |||||||
Total fixed maturity securities trading | |||||||
Cost or Amortized Cost | 0 | 0 | |||||
Estimated Fair Value | $ 0 | $ 0 | |||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Gain (Loss) on Securities [Line Items] | |||||
Mortgage loan losses due to changes in expected credit losses | $ 6,000,000 | $ 0 | $ 6,000,000 | $ 0 | |
Commitments to purchase or fund privately placed debt securities | 1,480,000,000 | 1,480,000,000 | |||
Commitments to sell various privately placed debt securities | 60,000,000 | 60,000,000 | |||
Mortgage loans | |||||
Gain (Loss) on Securities [Line Items] | |||||
Financing receivable, accrued interest, after allowance for credit loss | 4,000,000 | 4,000,000 | |||
Fixed maturity securities | |||||
Gain (Loss) on Securities [Line Items] | |||||
Debt securities, available-for-sale, accrued interest, after allowance for credit loss | $ 413,000,000 | $ 374,000,000 | $ 413,000,000 | $ 374,000,000 | $ 394,000,000 |
Investments (Securities in a gr
Investments (Securities in a gross unrealized loss position) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | $ 11,350 | $ 25,234 |
Gross Unrealized Losses, Less than 12 Months | 506 | 2,946 |
Estimated Fair Value, 12 Months or Longer | 18,262 | 4,277 |
Gross Unrealized Losses, 12 Months or Longer | 3,280 | 1,110 |
Estimated Fair Value, Total | 29,612 | 29,511 |
Gross Unrealized Losses, Total | 3,786 | 4,056 |
Corporate and other bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 7,681 | 15,946 |
Gross Unrealized Losses, Less than 12 Months | 350 | 1,585 |
Estimated Fair Value, 12 Months or Longer | 10,087 | 1,634 |
Gross Unrealized Losses, 12 Months or Longer | 1,559 | 424 |
Estimated Fair Value, Total | 17,768 | 17,580 |
Gross Unrealized Losses, Total | 1,909 | 2,009 |
States, municipalities and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 1,486 | 4,079 |
Gross Unrealized Losses, Less than 12 Months | 64 | 769 |
Estimated Fair Value, 12 Months or Longer | 2,783 | 456 |
Gross Unrealized Losses, 12 Months or Longer | 729 | 170 |
Estimated Fair Value, Total | 4,269 | 4,535 |
Gross Unrealized Losses, Total | 793 | 939 |
Asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 1,886 | 4,660 |
Gross Unrealized Losses, Less than 12 Months | 82 | 565 |
Estimated Fair Value, 12 Months or Longer | 4,963 | 2,093 |
Gross Unrealized Losses, 12 Months or Longer | 949 | 498 |
Estimated Fair Value, Total | 6,849 | 6,753 |
Gross Unrealized Losses, Total | 1,031 | 1,063 |
Residential mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 822 | 1,406 |
Gross Unrealized Losses, Less than 12 Months | 35 | 144 |
Estimated Fair Value, 12 Months or Longer | 1,810 | 1,143 |
Gross Unrealized Losses, 12 Months or Longer | 409 | 303 |
Estimated Fair Value, Total | 2,632 | 2,549 |
Gross Unrealized Losses, Total | 444 | 447 |
Commercial mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 325 | 1,167 |
Gross Unrealized Losses, Less than 12 Months | 15 | 159 |
Estimated Fair Value, 12 Months or Longer | 1,171 | 408 |
Gross Unrealized Losses, 12 Months or Longer | 242 | 96 |
Estimated Fair Value, Total | 1,496 | 1,575 |
Gross Unrealized Losses, Total | 257 | 255 |
Other asset-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 739 | 2,087 |
Gross Unrealized Losses, Less than 12 Months | 32 | 262 |
Estimated Fair Value, 12 Months or Longer | 1,982 | 542 |
Gross Unrealized Losses, 12 Months or Longer | 298 | 99 |
Estimated Fair Value, Total | 2,721 | 2,629 |
Gross Unrealized Losses, Total | 330 | 361 |
U.S. Treasury and obligations of government-sponsored enterprises | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 84 | 76 |
Gross Unrealized Losses, Less than 12 Months | 2 | 1 |
Estimated Fair Value, 12 Months or Longer | 34 | 16 |
Gross Unrealized Losses, 12 Months or Longer | 1 | 1 |
Estimated Fair Value, Total | 118 | 92 |
Gross Unrealized Losses, Total | 3 | 2 |
Foreign government | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value, Less than 12 months | 213 | 473 |
Gross Unrealized Losses, Less than 12 Months | 8 | 26 |
Estimated Fair Value, 12 Months or Longer | 395 | 78 |
Gross Unrealized Losses, 12 Months or Longer | 42 | 17 |
Estimated Fair Value, Total | 608 | 551 |
Gross Unrealized Losses, Total | $ 50 | $ 43 |
Investments (Securities in a _2
Investments (Securities in a gross unrealized loss position by ratings) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | $ 29,612 | $ 29,511 |
Gross Unrealized Losses | 3,786 | 4,056 |
U.S. Government, Government agencies and Government-sponsored enterprises | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 2,479 | 2,355 |
Gross Unrealized Losses | 334 | 337 |
AAA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 1,662 | 1,559 |
Gross Unrealized Losses | 283 | 298 |
AA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 4,404 | 4,327 |
Gross Unrealized Losses | 746 | 817 |
A | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 6,937 | 6,615 |
Gross Unrealized Losses | 703 | 749 |
BBB | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 12,960 | 13,226 |
Gross Unrealized Losses | 1,513 | 1,621 |
Non-investment grade | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 1,170 | 1,429 |
Gross Unrealized Losses | $ 207 | $ 234 |
Investments (Allowance on avail
Investments (Allowance on available-for-sale securities with credit impairments and PCD assets activity) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Allowance for credit losses: | ||||
Balance, beginning of period | $ 2 | $ 17 | $ 1 | $ 18 |
Additions to the allowance for credit losses: | ||||
Securities for which credit losses were not previously recorded | 8 | 0 | 8 | 0 |
Available-for-sale securities accounted for as PCD assets | 11 | 3 | 20 | 3 |
Reductions to the allowance for credit losses: | ||||
Securities sold during the period (realized) | 6 | 0 | ||
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis | 3 | 0 | ||
Write-offs charged against the allowance | 0 | 12 | 0 | 12 |
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period | 1 | (3) | 2 | (4) |
Balance, end of period | 22 | 5 | 22 | 5 |
Corporate and other bonds | ||||
Allowance for credit losses: | ||||
Balance, beginning of period | 1 | 12 | 0 | 11 |
Additions to the allowance for credit losses: | ||||
Securities for which credit losses were not previously recorded | 1 | 0 | 1 | 0 |
Available-for-sale securities accounted for as PCD assets | 11 | 0 | 20 | 0 |
Reductions to the allowance for credit losses: | ||||
Securities sold during the period (realized) | 6 | 0 | ||
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis | 3 | 0 | ||
Write-offs charged against the allowance | 0 | 12 | 0 | 12 |
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period | 0 | 0 | 1 | 1 |
Balance, end of period | 13 | 0 | 13 | 0 |
Asset-backed | ||||
Allowance for credit losses: | ||||
Balance, beginning of period | 1 | 5 | 1 | 7 |
Additions to the allowance for credit losses: | ||||
Securities for which credit losses were not previously recorded | 7 | 0 | 7 | 0 |
Available-for-sale securities accounted for as PCD assets | 0 | 3 | 0 | 3 |
Reductions to the allowance for credit losses: | ||||
Securities sold during the period (realized) | 0 | 0 | ||
Intent to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis | 0 | 0 | ||
Write-offs charged against the allowance | 0 | 0 | 0 | 0 |
Additional increases or (decreases) to the allowance for credit losses on securities that had an allowance recorded in a previous period | 1 | (3) | 1 | (5) |
Balance, end of period | $ 9 | $ 5 | $ 9 | $ 5 |
Investments (Contractual maturi
Investments (Contractual maturity) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Investments [Abstract] | ||
Due in one year or less, cost or amortized cost | $ 988 | $ 1,012 |
Due after one year through five years, cost or amortized cost | 11,072 | 9,880 |
Due after five years through ten years, cost or amortized cost | 13,445 | 13,788 |
Due after ten years, cost or amortized cost | 16,333 | 16,352 |
Cost or Amortized Cost | 41,838 | 41,032 |
Due in one year or less, estimated fair value | 972 | 1,001 |
Due after one year through five years, estimated fair value | 10,443 | 9,399 |
Due after five years through ten years, estimated fair value | 12,226 | 12,453 |
Due after ten years, estimated fair value | 15,087 | 14,774 |
Estimated Fair Value | $ 38,728 | $ 37,627 |
Investments (Credit quality ind
Investments (Credit quality indicator) (Details) - Mortgage loans $ in Millions | Jun. 30, 2023 USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
2023 | $ 66 |
2022 | 249 |
2021 | 94 |
2020 | 149 |
2019 | 183 |
Prior | 312 |
Total | 1,053 |
DSCR ≥1.6x | LTV less than 55% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 0 |
2022 | 9 |
2021 | 13 |
2020 | 111 |
2019 | 33 |
Prior | 245 |
Total | 411 |
DSCR ≥1.6x | LTV 55% to 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 0 |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 8 |
Prior | 0 |
Total | 8 |
DSCR ≥1.6x | LTV greater than 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 0 |
2022 | 31 |
2021 | 11 |
2020 | 0 |
2019 | 0 |
Prior | 0 |
Total | 42 |
DSCR 1.2x - 1.6x | LTV less than 55% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 28 |
2022 | 5 |
2021 | 49 |
2020 | 14 |
2019 | 42 |
Prior | 51 |
Total | 189 |
DSCR 1.2x - 1.6x | LTV 55% to 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 12 |
2022 | 43 |
2021 | 0 |
2020 | 24 |
2019 | 0 |
Prior | 9 |
Total | 88 |
DSCR 1.2x - 1.6x | LTV greater than 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 0 |
2022 | 58 |
2021 | 0 |
2020 | 0 |
2019 | 0 |
Prior | 0 |
Total | 58 |
DSCR ≤1.2 | LTV less than 55% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 0 |
2022 | 35 |
2021 | 0 |
2020 | 0 |
2019 | 34 |
Prior | 0 |
Total | 69 |
DSCR ≤1.2 | LTV 55% to 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 13 |
2022 | 41 |
2021 | 0 |
2020 | 0 |
2019 | 43 |
Prior | 0 |
Total | 97 |
DSCR ≤1.2 | LTV greater than 65% | |
Debt Securities, Available-for-sale [Line Items] | |
2023 | 13 |
2022 | 27 |
2021 | 21 |
2020 | 0 |
2019 | 23 |
Prior | 7 |
Total | $ 91 |
Fair Value (Assets and liabilit
Fair Value (Assets and liabilities measured at fair value on a recurring basis) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | |
Fixed maturity securities: | |||
Fixed maturity securities | $ 38,728 | $ 37,627 | [1] |
Equity securities: | |||
Equity securities | 683 | 674 | [1] |
Short term and other | 1,753 | 1,679 | |
Total assets | 41,164 | 39,980 | |
Other liabilities | 1 | 1 | |
Total liabilities | 1 | 1 | |
Corporate and other bonds | |||
Fixed maturity securities: | |||
Fixed maturity securities | 23,394 | 22,117 | |
States, municipalities and political subdivisions | |||
Fixed maturity securities: | |||
Fixed maturity securities | 7,810 | 8,317 | |
Asset-backed | |||
Fixed maturity securities: | |||
Fixed maturity securities | 7,524 | 7,193 | |
Common Stock | |||
Equity securities: | |||
Equity securities | 205 | 185 | |
Non-redeemable preferred stock | |||
Equity securities: | |||
Equity securities | 478 | 489 | |
Level 1 | |||
Fixed maturity securities: | |||
Fixed maturity securities | 137 | 120 | |
Equity securities: | |||
Equity securities | 235 | 204 | |
Short term and other | 1,711 | 1,608 | |
Total assets | 2,083 | 1,932 | |
Other liabilities | 0 | 0 | |
Total liabilities | 0 | 0 | |
Level 1 | Corporate and other bonds | |||
Fixed maturity securities: | |||
Fixed maturity securities | 137 | 120 | |
Level 1 | States, municipalities and political subdivisions | |||
Fixed maturity securities: | |||
Fixed maturity securities | 0 | 0 | |
Level 1 | Asset-backed | |||
Fixed maturity securities: | |||
Fixed maturity securities | 0 | 0 | |
Level 1 | Common Stock | |||
Equity securities: | |||
Equity securities | 179 | 150 | |
Level 1 | Non-redeemable preferred stock | |||
Equity securities: | |||
Equity securities | 56 | 54 | |
Level 2 | |||
Fixed maturity securities: | |||
Fixed maturity securities | 36,694 | 35,866 | |
Equity securities: | |||
Equity securities | 422 | 435 | |
Short term and other | 42 | 71 | |
Total assets | 37,158 | 36,372 | |
Other liabilities | 1 | 1 | |
Total liabilities | 1 | 1 | |
Level 2 | Corporate and other bonds | |||
Fixed maturity securities: | |||
Fixed maturity securities | 22,286 | 21,187 | |
Level 2 | States, municipalities and political subdivisions | |||
Fixed maturity securities: | |||
Fixed maturity securities | 7,767 | 8,274 | |
Level 2 | Asset-backed | |||
Fixed maturity securities: | |||
Fixed maturity securities | 6,641 | 6,405 | |
Level 2 | Common Stock | |||
Equity securities: | |||
Equity securities | 0 | 0 | |
Level 2 | Non-redeemable preferred stock | |||
Equity securities: | |||
Equity securities | 422 | 435 | |
Level 3 | |||
Fixed maturity securities: | |||
Fixed maturity securities | 1,897 | 1,641 | |
Equity securities: | |||
Equity securities | 26 | 35 | |
Short term and other | 0 | 0 | |
Total assets | 1,923 | 1,676 | |
Other liabilities | 0 | 0 | |
Total liabilities | 0 | 0 | |
Level 3 | Corporate and other bonds | |||
Fixed maturity securities: | |||
Fixed maturity securities | 971 | 810 | |
Level 3 | States, municipalities and political subdivisions | |||
Fixed maturity securities: | |||
Fixed maturity securities | 43 | 43 | |
Level 3 | Asset-backed | |||
Fixed maturity securities: | |||
Fixed maturity securities | 883 | 788 | |
Level 3 | Common Stock | |||
Equity securities: | |||
Equity securities | 26 | 35 | |
Level 3 | Non-redeemable preferred stock | |||
Equity securities: | |||
Equity securities | $ 0 | $ 0 | |
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Fair Value (Table of reconcilia
Fair Value (Table of reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | $ 1,844 | $ 1,614 | $ 1,676 | $ 1,578 |
Reported in Net investment gains (losses) | $ (1) | $ 0 | $ (1) | $ 0 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Net investment losses | Net investment losses | Net investment losses | Net investment losses |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other comprehensive income (loss) | Other comprehensive income (loss) | Other comprehensive income (loss) | Other comprehensive income (loss) |
Reported in Other comprehensive income (loss) | $ (23) | $ (139) | $ 9 | $ (247) |
Total realized and unrealized investment gains (losses) | (20) | (135) | 11 | (238) |
Purchases | 155 | 143 | 291 | 362 |
Sales | (2) | (5) | (2) | (10) |
Settlements | (22) | (51) | (34) | (90) |
Transfers into Level 3 | 11 | 14 | 34 | 29 |
Transfers out of Level 3 | (43) | 0 | (53) | (51) |
Balance, Ending, Assets | 1,923 | 1,580 | 1,923 | 1,580 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | (1) | (3) | (7) | (1) |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (23) | (138) | 8 | (246) |
Corporate and other bonds | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 912 | 915 | 810 | 937 |
Reported in Net investment gains (losses) | 0 | (1) | 0 | (2) |
Reported in Other comprehensive income (loss) | (15) | (82) | 9 | (153) |
Total realized and unrealized investment gains (losses) | (15) | (83) | 9 | (155) |
Purchases | 68 | 51 | 149 | 118 |
Sales | 0 | 0 | 0 | (5) |
Settlements | (5) | (37) | (8) | (59) |
Transfers into Level 3 | 11 | 0 | 11 | 10 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, Ending, Assets | 971 | 846 | 971 | 846 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (15) | (81) | 9 | (153) |
States, municipalities and political subdivisions | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 44 | 51 | 43 | 56 |
Reported in Net investment gains (losses) | 0 | 0 | 0 | 0 |
Reported in Other comprehensive income (loss) | (1) | (5) | 0 | (10) |
Total realized and unrealized investment gains (losses) | (1) | (5) | 0 | (10) |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, Ending, Assets | 43 | 46 | 43 | 46 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (1) | (5) | 0 | (10) |
Asset-backed | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 859 | 604 | 788 | 556 |
Reported in Net investment gains (losses) | (1) | 3 | (1) | 5 |
Reported in Other comprehensive income (loss) | (7) | (52) | 0 | (84) |
Total realized and unrealized investment gains (losses) | (3) | (44) | 9 | (73) |
Purchases | 87 | 92 | 142 | 232 |
Sales | 0 | (2) | 0 | (2) |
Settlements | (17) | (23) | (26) | (40) |
Transfers into Level 3 | 0 | 14 | 23 | 19 |
Transfers out of Level 3 | (43) | 0 | (53) | (51) |
Balance, Ending, Assets | 883 | 641 | 883 | 641 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | (7) | (52) | (1) | (83) |
Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance, Beginning, Assets | 29 | 44 | 35 | 29 |
Reported in Net investment gains (losses) | 0 | (2) | 0 | (3) |
Reported in Other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Total realized and unrealized investment gains (losses) | (1) | (3) | (7) | 0 |
Purchases | 0 | 0 | 0 | 12 |
Sales | (2) | (3) | (2) | (3) |
Settlements | 0 | 9 | 0 | 9 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Balance, Ending, Assets | 26 | 47 | 26 | 47 |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Net income (loss) in the period | (1) | (3) | (7) | (1) |
Unrealized gains (losses) on Level 3 assets and liabilities recognized in Other comprehensive income (loss) in the period | 0 | 0 | 0 | 0 |
Reported in Net investment income | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 4 | 4 | 3 | 9 |
Reported in Net investment income | Corporate and other bonds | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 0 | 0 | 0 | 0 |
Reported in Net investment income | States, municipalities and political subdivisions | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 0 | 0 | 0 | 0 |
Reported in Net investment income | Asset-backed | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | 5 | 5 | 10 | 6 |
Reported in Net investment income | Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Reported in Net investment income | $ (1) | $ (1) | $ (7) | $ 3 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Other invested assets overseas deposit | $ 65 | $ 72 |
Fair Value (Quantitative inform
Fair Value (Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets) (Details) $ in Millions | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Estimated fair value | $ 41,164 | $ 39,980 |
Fixed maturity securities | Discounted cash flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Estimated fair value | $ 1,415 | $ 1,177 |
Credit spread | Discounted cash flow | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt securities, available-for-sale, measurement Input | 0.01 | 0.01 |
Credit spread | Discounted cash flow | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt securities, available-for-sale, measurement Input | 0.07 | 0.08 |
Credit spread | Discounted cash flow | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Debt securities, available-for-sale, measurement Input | 0.02 | 0.02 |
Fair Value (Carrying amount and
Fair Value (Carrying amount and estimated fair value of financial instrument assets and liabilities which are not measured at fair value) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | |
Assets | |||
Mortgage loans | $ 1,009 | $ 1,040 | [1] |
Liabilities | |||
Long term debt | 2,384 | 2,538 | [1] |
Carrying Amount | |||
Assets | |||
Mortgage loans | 1,009 | 1,040 | |
Liabilities | |||
Short term debt | 792 | 243 | |
Long term debt | 2,384 | 2,538 | |
Estimated Fair Value | |||
Assets | |||
Mortgage loans | 954 | 973 | |
Liabilities | |||
Short term debt | 785 | 248 | |
Long term debt | 2,196 | 2,349 | |
Level 1 | Estimated Fair Value | |||
Assets | |||
Mortgage loans | 0 | 0 | |
Liabilities | |||
Short term debt | 0 | 0 | |
Long term debt | 0 | 0 | |
Level 2 | Estimated Fair Value | |||
Assets | |||
Mortgage loans | 0 | 0 | |
Liabilities | |||
Short term debt | 785 | 248 | |
Long term debt | 2,196 | 2,349 | |
Level 3 | Estimated Fair Value | |||
Assets | |||
Mortgage loans | 954 | 973 | |
Liabilities | |||
Short term debt | 0 | 0 | |
Long term debt | $ 0 | $ 0 | |
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Claim and Claim Adjustment Ex_3
Claim and Claim Adjustment Expense Reserves (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2010 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Unusual or Infrequent Item, or Both, Net of Insurance Proceeds | $ 68 | $ 37 | $ 120 | $ 57 | ||
Total pretax (favorable) unfavorable development | 18 | 27 | 31 | 15 | ||
Retroactive reinsurance benefit recognized | 15 | 11 | 23 | 23 | ||
Cumulative amounts ceded under AEP Loss Portfolio Transfer | 3,500 | 3,500 | $ 3,500 | |||
Corporate & Other | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Total pretax (favorable) unfavorable development | 35 | $ 64 | 35 | $ 64 | ||
Asbestos and Environmental Reserves | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Net A&EP claim and allocated claim adjustment expense reserves ceded to NICO | $ 1,600 | |||||
Aggregate limit under A&EP Loss Portfolio Transfer | 4,000 | |||||
A&EP claim and allocated claim adjustment expense reserves ceded under existing third party reinsurance contracts transferred to NICO under A&EP Loss Portfolio Transfer | 1,200 | |||||
Reinsurance premium paid to NICO under A&EP Loss Portfolio Transfer | 2,000 | |||||
Net reinsurance receivables transferred to NICO under A&EP Loss Portfolio Transfer | 215 | |||||
Total consideration paid to NICO under AEP Loss Portfolio Transfer | $ 2,200 | |||||
Deferred reinsurance benefit yet to be recognized | 402 | 402 | $ 425 | |||
Fair value of collateral trust account established by NICO under A&EP Loss Portfolio Transfer | $ 2,400 | $ 2,400 |
Claim and Claim Adjustment Ex_4
Claim and Claim Adjustment Expense Reserves (Reconciliation of claim and claim adjustment expense reserves) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Reserves, beginning of year: | ||
Gross | $ 22,120 | $ 21,269 |
Ceded | 5,191 | 4,969 |
Net reserves, beginning of year | 16,929 | 16,300 |
Net incurred claim and claim adjustment expenses: | ||
Provision for insured events of current year | 2,746 | 2,452 |
Increase (decrease) in provision for insured events of prior years | 37 | 30 |
Amortization of discount | 22 | 22 |
Total net incurred | 2,805 | 2,504 |
Net payments attributable to: | ||
Current year events | (287) | (233) |
Prior year events | (2,014) | (1,882) |
Total net payments | (2,301) | (2,115) |
Foreign currency translation adjustment and other | 57 | (222) |
Net reserves, end of period | 17,490 | 16,467 |
Ceded reserves, end of period | 5,312 | 5,156 |
Gross reserves, end of period | $ 22,802 | $ 21,623 |
Claim and Claim Adjustment Ex_5
Claim and Claim Adjustment Expense Reserves (Net prior year development) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total pretax (favorable) unfavorable development | $ 18 | $ 27 | $ 31 | $ 15 |
Specialty | ||||
Segment Reporting Information [Line Items] | ||||
Total pretax (favorable) unfavorable development | (4) | (10) | (4) | (20) |
Commercial | ||||
Segment Reporting Information [Line Items] | ||||
Total pretax (favorable) unfavorable development | (13) | (22) | (15) | (24) |
International | ||||
Segment Reporting Information [Line Items] | ||||
Total pretax (favorable) unfavorable development | 0 | (5) | 15 | (5) |
Corporate & Other | ||||
Segment Reporting Information [Line Items] | ||||
Total pretax (favorable) unfavorable development | $ 35 | $ 64 | $ 35 | $ 64 |
Claim and Claim Adjustment Ex_6
Claim and Claim Adjustment Expense Reserves (Specialty - Net prior year claim and allocated claim adjustment expense reserve development) (Details) - Specialty - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Medical Professional Liability | $ 0 | $ 1 | $ 9 | $ 9 |
Other Professional Liability and Management Liability | (1) | 13 | (1) | 13 |
Surety | (7) | (19) | (7) | (28) |
Warranty | 0 | 0 | (9) | (9) |
Other | 4 | (5) | 4 | (5) |
Total pretax (favorable) unfavorable development | $ (4) | $ (10) | $ (4) | $ (20) |
Claim and Claim Adjustment Ex_7
Claim and Claim Adjustment Expense Reserves (Commercial - Net prior year claim and allocated claim adjustment expense reserve development) (Details) - Commercial - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Commercial | $ 11 | $ 21 | $ 11 | $ 21 |
General Liability | 70 | 41 | 70 | 41 |
Workers' Compensation | (96) | (82) | (98) | (84) |
Property and Other | 2 | (2) | 2 | (2) |
Total pretax (favorable) unfavorable development | $ (13) | $ (22) | $ (15) | $ (24) |
Claim and Claim Adjustment Ex_8
Claim and Claim Adjustment Expense Reserves (International - Net prior year claim and allocated claim adjustment expense reserve development) (Details) - International - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Commercial | $ (3) | $ (4) | $ (5) | $ (4) |
Specialty | 3 | (1) | 22 | (1) |
Other | 0 | 0 | (2) | 0 |
Total pretax (favorable) unfavorable development | $ 0 | $ (5) | $ 15 | $ (5) |
Future Policy Benefit Reserve_2
Future Policy Benefit Reserves - Summary of Balances and Changes (Details) - USD ($) $ in Millions | 6 Months Ended | |||||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Present value of future net premiums | ||||||
Balance, January 1 | $ 3,993 | $ 4,735 | ||||
Effect of changes in discount rate | (78) | (246) | $ (74) | $ (880) | ||
Balance, January 1, at original locked in discount rate | 3,919 | 3,855 | ||||
Effect of changes in cash flow assumptions | 0 | 0 | ||||
Expect of actual variances from expected experience | (85) | (37) | ||||
Adjusted balance, January 1 | 3,834 | 3,818 | ||||
Interest accrual | 103 | 105 | ||||
Net premiums: earned during period | (225) | (225) | ||||
Balance, end of period at original locked in discount rate | 3,712 | 3,698 | ||||
Effect of changes in discount rate | 78 | 246 | 74 | 880 | ||
Balance, June 30 | 3,790 | 3,944 | ||||
Liability for Future Policy Benefit, Expected Future Policy Benefit [Roll Forward] | ||||||
Balance, January 1 | 17,472 | 22,745 | ||||
Effect of changes in discount rate | (307) | (1,329) | (125) | (5,942) | ||
Balance, January 1, at original locked in discount rate | 17,347 | 16,803 | ||||
Effect of change in cash flow assumptions | 0 | 0 | ||||
Effect of actual variances from expected experience | (51) | (43) | ||||
Adjusted balance, January 1 | 17,296 | 16,760 | ||||
Interest accrual | 482 | 482 | ||||
Benefit & expense payments | (629) | (470) | ||||
Balance, end of period at original locked in discount rate | 17,149 | 16,772 | ||||
Effect of changes in discount rate | 307 | 1,329 | 125 | $ 5,942 | ||
Balance, June 30 | 17,456 | 18,101 | ||||
Net LFPB | $ 13,666 | $ 14,157 | $ 13,480 | [1] | $ 19,132 | |
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Future Policy Benefit Reserve_3
Future Policy Benefit Reserves - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Insurance [Abstract] | ||||
Insurance claims and policyholders benefits, including policyholders' dividends, remeasurement impact | $ (33,000,000) | $ 1,000,000 | $ (34,000,000) | $ 6,000,000 |
Liability for future policy benefit, expected future gross premium, discounted, before reinsurance | $ 3,853,000,000 | $ 4,204,000,000 | $ 3,853,000,000 | $ 4,204,000,000 |
Liability for future policy benefit, weighted-average duration | 12 years | 12 years | 12 years | 12 years |
Liability for future policy benefit, adverse development, expense | $ 29,000,000 | $ 1,000,000 | $ 42,000,000 | $ 1,000,000 |
Liability future policy benefit, losses recognized in prior period | $ 1,000,000 | $ 0 | $ 11,000,000 | $ 1,000,000 |
Future Policy Benefit Reserve_4
Future Policy Benefit Reserves - Earned Premiums and Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Insurance [Abstract] | ||||
Earned premiums | $ 113 | $ 118 | $ 228 | $ 238 |
Interest expense | $ 189 | $ 189 | $ 379 | $ 377 |
Future Policy Benefit Reserve_5
Future Policy Benefit Reserves - Undiscounted Expected Future Benefit and Expense Payments and Undiscounted Expected Future Gross Premiums (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Insurance [Abstract] | ||
Expected future benefit and expense payments | $ 33,287 | $ 33,429 |
Expected future gross premiums | $ 5,536 | $ 5,848 |
Future Policy Benefit Reserve_6
Future Policy Benefit Reserves - Weighted Average Interest Rates (Details) | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Insurance [Abstract] | |||
Original locked in discount rate | 5.25% | 5.27% | 5.29% |
Upper-medium grade fixed income instrument discount rate | 5.10% | 5.23% | 4.64% |
Legal Proceedings, Contingenc_2
Legal Proceedings, Contingencies and Guarantees (Narrative) (Details) $ in Billions | Jun. 30, 2023 USD ($) |
Guarantee Obligations | |
Legal Proceedings, Commitments and Contingencies, and Guarantees [Line Items] | |
Guarantor obligations, maximum exposure, undiscounted | $ 1.5 |
Benefit Plans (Components of ne
Benefit Plans (Components of net periodic cost (benefit)) (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost on projected benefit obligation | $ 24 | $ 16 | $ 49 | $ 33 |
Expected return on plan assets | (30) | (38) | (60) | (76) |
Amortization of net actuarial loss | 9 | 8 | 17 | 15 |
Total net periodic pension cost (benefit) | $ 3 | $ (14) | $ 6 | $ (28) |
Benefit Plans (Summary of non-s
Benefit Plans (Summary of non-service cost (benefit) in the condensed consolidated statements of operations (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Net periodic defined benefits expense (reversal of expense), excluding service cost component | $ 3 | $ (14) | $ 6 | $ (28) |
Insurance claims and policyholder's benefits | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Net periodic defined benefits expense (reversal of expense), excluding service cost component | 0 | (4) | 1 | (8) |
Other operating expenses | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Net periodic defined benefits expense (reversal of expense), excluding service cost component | $ 3 | $ (10) | $ 5 | $ (20) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) by Component (Schedule of Accumulated Other Comprehensive Income (Loss) by Component) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||||||||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | [1] | $ 8,548 | |||||||||||
Other comprehensive income (loss) before reclassifications | $ (145) | $ (802) | 120 | $ (1,829) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | (28) | (19) | (53) | (26) | |||||||||
Other comprehensive income (loss) after tax (expense) benefit | (117) | (783) | 173 | (1,803) | |||||||||
Total stockholder's equity at end of period | $ 8,548 | [1] | 8,726 | 9,005 | [2] | 8,726 | 9,005 | [2] | |||||
Income tax effects allocated directly to equity, cumulative effect of change in accounting principle | 11 | $ (446) | $ (227) | ||||||||||
Reclassification from AOCI, tax | 8 | 3 | 14 | 6 | |||||||||
Tax (expense) benefit on other comprehensive income (loss) | 42 | 189 | (33) | 451 | |||||||||
Prior to Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | 8,825 | ||||||||||||
Total stockholder's equity at end of period | 8,825 | ||||||||||||
Effect of Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (277) | ||||||||||||
Total stockholder's equity at end of period | (277) | ||||||||||||
Accumulated other comprehensive income (loss) | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (3,308) | (2,380) | [2] | (1,360) | [2] | (3,598) | (1,360) | [2] | |||||
Total stockholder's equity at end of period | (3,598) | (1,360) | [2] | (3,425) | (3,163) | [2] | (2,380) | [2] | (3,425) | (3,163) | [2] | ||
Accumulated other comprehensive income (loss) | Prior to Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (3,308) | (1,303) | [2] | 320 | [2] | (3,557) | 320 | [2] | |||||
Total stockholder's equity at end of period | (3,557) | 320 | [2] | (1,303) | [2] | ||||||||
Accumulated other comprehensive income (loss) | Effect of Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | 0 | (1,077) | [2] | (1,680) | [2] | (41) | (1,680) | [2] | |||||
Total stockholder's equity at end of period | (41) | (1,680) | [2] | (1,077) | [2] | ||||||||
Net unrealized gains (losses) on investments | Net unrealized gains (losses) on investments with an allowance for credit losses | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (15) | (6) | (2) | (7) | (2) | ||||||||
Other comprehensive income (loss) before reclassifications | (8) | (1) | (16) | (5) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | (7) | 1 | (7) | 1 | |||||||||
Other comprehensive income (loss) after tax (expense) benefit | (1) | (2) | (9) | (6) | |||||||||
Total stockholder's equity at end of period | (7) | (2) | (16) | (8) | (6) | (16) | (8) | ||||||
Income tax effects allocated directly to equity, cumulative effect of change in accounting principle | 0 | 0 | 0 | ||||||||||
Reclassification from AOCI, tax | 2 | (1) | 2 | (1) | |||||||||
Tax (expense) benefit on other comprehensive income (loss) | 0 | 0 | 2 | 1 | |||||||||
Net unrealized gains (losses) on investments | Net unrealized gains (losses) on investments with an allowance for credit losses | Prior to Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (6) | (2) | (7) | (2) | |||||||||
Total stockholder's equity at end of period | (7) | (2) | (6) | ||||||||||
Net unrealized gains (losses) on investments | Net unrealized gains (losses) on investments with an allowance for credit losses | Effect of Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | 0 | 0 | 0 | 0 | |||||||||
Total stockholder's equity at end of period | 0 | 0 | 0 | ||||||||||
Net unrealized gains (losses) on investments | Net unrealized gains (losses) on other investments | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (2,068) | 716 | 3,359 | (2,738) | 3,359 | ||||||||
Other comprehensive income (loss) before reclassifications | (427) | (2,240) | 225 | (4,884) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | (14) | (14) | (32) | (15) | |||||||||
Other comprehensive income (loss) after tax (expense) benefit | (413) | (2,226) | 257 | (4,869) | |||||||||
Total stockholder's equity at end of period | (2,738) | 3,359 | (2,481) | (1,510) | 716 | (2,481) | (1,510) | ||||||
Income tax effects allocated directly to equity, cumulative effect of change in accounting principle | 0 | 617 | 270 | ||||||||||
Reclassification from AOCI, tax | 4 | 3 | 8 | 4 | |||||||||
Tax (expense) benefit on other comprehensive income (loss) | 112 | 590 | (68) | 1,288 | |||||||||
Net unrealized gains (losses) on investments | Net unrealized gains (losses) on other investments | Prior to Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (572) | 1,039 | (2,738) | 1,039 | |||||||||
Total stockholder's equity at end of period | (2,738) | 1,039 | (572) | ||||||||||
Net unrealized gains (losses) on investments | Net unrealized gains (losses) on other investments | Effect of Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | 1,288 | 2,320 | 0 | 2,320 | |||||||||
Total stockholder's equity at end of period | 0 | 2,320 | 1,288 | ||||||||||
Pension and postretirement benefits | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (584) | (598) | (604) | (591) | (604) | ||||||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | (7) | (6) | (14) | (12) | |||||||||
Other comprehensive income (loss) after tax (expense) benefit | 7 | 6 | 14 | 12 | |||||||||
Total stockholder's equity at end of period | (591) | (604) | (577) | (592) | (598) | (577) | (592) | ||||||
Income tax effects allocated directly to equity, cumulative effect of change in accounting principle | 0 | 0 | 0 | ||||||||||
Reclassification from AOCI, tax | 2 | 1 | 4 | 3 | |||||||||
Tax (expense) benefit on other comprehensive income (loss) | (2) | (1) | (4) | (3) | |||||||||
Pension and postretirement benefits | Prior to Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (598) | (604) | (591) | (604) | |||||||||
Total stockholder's equity at end of period | (591) | (604) | (598) | ||||||||||
Pension and postretirement benefits | Effect of Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | 0 | 0 | 0 | 0 | |||||||||
Total stockholder's equity at end of period | 0 | 0 | 0 | ||||||||||
Cumulative impact of changes in discount rates used to measure long duration contracts | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (437) | (2,365) | (4,000) | (41) | (4,000) | ||||||||
Other comprehensive income (loss) before reclassifications | 256 | 1,507 | (140) | 3,142 | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | 0 | 0 | 0 | 0 | |||||||||
Other comprehensive income (loss) after tax (expense) benefit | 256 | 1,507 | (140) | 3,142 | |||||||||
Total stockholder's equity at end of period | (41) | (4,000) | (181) | (858) | (2,365) | (181) | (858) | ||||||
Income tax effects allocated directly to equity, cumulative effect of change in accounting principle | 11 | (1,063) | (497) | ||||||||||
Reclassification from AOCI, tax | 0 | 0 | 0 | 0 | |||||||||
Tax (expense) benefit on other comprehensive income (loss) | (68) | (400) | 37 | (835) | |||||||||
Cumulative impact of changes in discount rates used to measure long duration contracts | Prior to Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | 0 | 0 | 0 | 0 | |||||||||
Total stockholder's equity at end of period | 0 | 0 | 0 | ||||||||||
Cumulative impact of changes in discount rates used to measure long duration contracts | Effect of Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (2,365) | (4,000) | (41) | (4,000) | |||||||||
Total stockholder's equity at end of period | (41) | (4,000) | (2,365) | ||||||||||
Cumulative foreign currency translation adjustment | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (204) | (127) | (113) | (221) | (113) | ||||||||
Other comprehensive income (loss) before reclassifications | 34 | (68) | 51 | (82) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) net of tax | 0 | 0 | 0 | 0 | |||||||||
Other comprehensive income (loss) after tax (expense) benefit | 34 | (68) | 51 | (82) | |||||||||
Total stockholder's equity at end of period | (221) | (113) | (170) | (195) | (127) | (170) | (195) | ||||||
Income tax effects allocated directly to equity, cumulative effect of change in accounting principle | 0 | 0 | 0 | ||||||||||
Reclassification from AOCI, tax | 0 | 0 | 0 | 0 | |||||||||
Tax (expense) benefit on other comprehensive income (loss) | $ 0 | 0 | 0 | 0 | |||||||||
Cumulative foreign currency translation adjustment | Prior to Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | (127) | (113) | (221) | (113) | |||||||||
Total stockholder's equity at end of period | (221) | (113) | (127) | ||||||||||
Cumulative foreign currency translation adjustment | Effect of Adoption | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Total stockholder's equity at beginning of period | $ 0 | 0 | $ 0 | $ 0 | |||||||||
Total stockholder's equity at end of period | $ 0 | $ 0 | $ 0 | ||||||||||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information.[2]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Business Segments (Narrative) (
Business Segments (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Core Segments - Specialty, Commercial and International | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 3 |
Non-Core Segments - Life & Group and Corporate & Other | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 2 |
Business Segments (Income State
Business Segments (Income Statement Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Operating revenues | ||||||
Net earned premiums | $ 2,347 | $ 2,155 | [1] | $ 4,595 | $ 4,214 | [1] |
Net investment income | 575 | 432 | [1] | 1,100 | 880 | [1] |
Non-insurance warranty revenue | 407 | 392 | [1] | 814 | 774 | [1] |
Other revenues | 7 | 6 | [1] | 14 | 13 | [1] |
Total operating revenues | 3,336 | 2,985 | 6,523 | 5,881 | ||
Claims, Benefits and Expenses | ||||||
Net incurred claims and benefits | 1,772 | 1,594 | 3,418 | 3,066 | ||
Policyholders’ dividends | 7 | 7 | 14 | 13 | ||
Amortization of deferred acquisition costs | 403 | 374 | [1] | 782 | 718 | [1] |
Non-insurance warranty expense | 384 | 367 | [1] | 768 | 721 | [1] |
Other insurance related expenses | 318 | 275 | 623 | 566 | ||
Other expenses | 59 | 82 | 119 | 145 | ||
Total claims, benefits and expenses | 2,943 | 2,699 | [1] | 5,724 | 5,229 | |
Core income (loss) before income tax | 393 | 286 | 799 | 652 | ||
Income tax (expense) benefit on core income (loss) | (85) | (56) | (166) | (124) | ||
Core income (loss) | 308 | 230 | 633 | 528 | ||
Net investment gains (losses) | (32) | (59) | (67) | (70) | ||
Income tax (expense) benefit on net investment gains (losses) | 7 | 19 | 14 | 27 | ||
Net investment gains (losses), after tax | (25) | (40) | (53) | (43) | ||
Net income (loss) | 283 | 190 | 580 | 485 | ||
Operating Segments | Specialty | ||||||
Operating revenues | ||||||
Net earned premiums | 812 | 794 | 1,609 | 1,566 | ||
Net investment income | 142 | 100 | 271 | 203 | ||
Non-insurance warranty revenue | 407 | 392 | 814 | 774 | ||
Other revenues | 0 | 0 | 0 | 1 | ||
Total operating revenues | 1,361 | 1,286 | 2,694 | 2,544 | ||
Claims, Benefits and Expenses | ||||||
Net incurred claims and benefits | 474 | 456 | 939 | 901 | ||
Policyholders’ dividends | 2 | 2 | 3 | 3 | ||
Amortization of deferred acquisition costs | 168 | 162 | 333 | 319 | ||
Non-insurance warranty expense | 384 | 367 | 768 | 721 | ||
Other insurance related expenses | 94 | 81 | 180 | 162 | ||
Other expenses | 12 | 12 | 26 | 25 | ||
Total claims, benefits and expenses | 1,134 | 1,080 | 2,249 | 2,131 | ||
Core income (loss) before income tax | 227 | 206 | 445 | 413 | ||
Income tax (expense) benefit on core income (loss) | (50) | (45) | (97) | (89) | ||
Core income (loss) | 177 | 161 | 348 | 324 | ||
Operating Segments | Commercial | ||||||
Operating revenues | ||||||
Net earned premiums | 1,120 | 974 | 2,166 | 1,878 | ||
Net investment income | 165 | 113 | 314 | 231 | ||
Non-insurance warranty revenue | 0 | 0 | 0 | 0 | ||
Other revenues | 6 | 4 | 13 | 12 | ||
Total operating revenues | 1,291 | 1,091 | 2,493 | 2,121 | ||
Claims, Benefits and Expenses | ||||||
Net incurred claims and benefits | 740 | 610 | 1,428 | 1,183 | ||
Policyholders’ dividends | 5 | 5 | 11 | 10 | ||
Amortization of deferred acquisition costs | 175 | 156 | 344 | 304 | ||
Non-insurance warranty expense | 0 | 0 | 0 | 0 | ||
Other insurance related expenses | 158 | 134 | 300 | 264 | ||
Other expenses | 10 | 11 | 16 | 18 | ||
Total claims, benefits and expenses | 1,088 | 916 | 2,099 | 1,779 | ||
Core income (loss) before income tax | 203 | 175 | 394 | 342 | ||
Income tax (expense) benefit on core income (loss) | (44) | (37) | (84) | (72) | ||
Core income (loss) | 159 | 138 | 310 | 270 | ||
Operating Segments | International | ||||||
Operating revenues | ||||||
Net earned premiums | 302 | 269 | 592 | 533 | ||
Net investment income | 25 | 14 | 48 | 28 | ||
Non-insurance warranty revenue | 0 | 0 | 0 | 0 | ||
Other revenues | 1 | 1 | 1 | 0 | ||
Total operating revenues | 328 | 284 | 641 | 561 | ||
Claims, Benefits and Expenses | ||||||
Net incurred claims and benefits | 185 | 160 | 374 | 318 | ||
Policyholders’ dividends | 0 | 0 | 0 | 0 | ||
Amortization of deferred acquisition costs | 60 | 56 | 105 | 95 | ||
Non-insurance warranty expense | 0 | 0 | 0 | 0 | ||
Other insurance related expenses | 35 | 30 | 82 | 77 | ||
Other expenses | (5) | 13 | (4) | 14 | ||
Total claims, benefits and expenses | 275 | 259 | 557 | 504 | ||
Core income (loss) before income tax | 53 | 25 | 84 | 57 | ||
Income tax (expense) benefit on core income (loss) | (15) | (7) | (22) | (13) | ||
Core income (loss) | 38 | 18 | 62 | 44 | ||
Operating Segments | Life & Group | ||||||
Operating revenues | ||||||
Net earned premiums | 113 | 118 | 228 | 238 | ||
Net investment income | 229 | 201 | 443 | 413 | ||
Non-insurance warranty revenue | 0 | 0 | 0 | 0 | ||
Other revenues | 0 | 1 | 0 | 0 | ||
Total operating revenues | 342 | 320 | 671 | 651 | ||
Claims, Benefits and Expenses | ||||||
Net incurred claims and benefits | 344 | 311 | 655 | 615 | ||
Policyholders’ dividends | 0 | 0 | 0 | 0 | ||
Amortization of deferred acquisition costs | 0 | 0 | 0 | 0 | ||
Non-insurance warranty expense | 0 | 0 | 0 | 0 | ||
Other insurance related expenses | 31 | 29 | 60 | 60 | ||
Other expenses | 0 | 2 | 1 | 5 | ||
Total claims, benefits and expenses | 375 | 342 | 716 | 680 | ||
Core income (loss) before income tax | (33) | (22) | (45) | (29) | ||
Income tax (expense) benefit on core income (loss) | 13 | 13 | 22 | 25 | ||
Core income (loss) | (20) | (9) | (23) | (4) | ||
Operating Segments | Corporate & Other | ||||||
Operating revenues | ||||||
Net earned premiums | 0 | 0 | 0 | (1) | ||
Net investment income | 14 | 4 | 24 | 5 | ||
Non-insurance warranty revenue | 0 | 0 | 0 | 0 | ||
Other revenues | 2 | 1 | 5 | 3 | ||
Total operating revenues | 16 | 5 | 29 | 7 | ||
Claims, Benefits and Expenses | ||||||
Net incurred claims and benefits | 29 | 57 | 22 | 49 | ||
Policyholders’ dividends | 0 | 0 | 0 | 0 | ||
Amortization of deferred acquisition costs | 0 | 0 | 0 | 0 | ||
Non-insurance warranty expense | 0 | 0 | 0 | 0 | ||
Other insurance related expenses | 0 | 1 | 1 | 3 | ||
Other expenses | 44 | 45 | 85 | 86 | ||
Total claims, benefits and expenses | 73 | 103 | 108 | 138 | ||
Core income (loss) before income tax | (57) | (98) | (79) | (131) | ||
Income tax (expense) benefit on core income (loss) | 11 | 20 | 15 | 25 | ||
Core income (loss) | (46) | (78) | (64) | (106) | ||
Eliminations | ||||||
Operating revenues | ||||||
Net earned premiums | 0 | 0 | 0 | 0 | ||
Net investment income | 0 | 0 | 0 | 0 | ||
Non-insurance warranty revenue | 0 | 0 | 0 | 0 | ||
Other revenues | (2) | (1) | (5) | (3) | ||
Total operating revenues | (2) | (1) | (5) | (3) | ||
Claims, Benefits and Expenses | ||||||
Net incurred claims and benefits | 0 | 0 | 0 | 0 | ||
Policyholders’ dividends | 0 | 0 | 0 | 0 | ||
Amortization of deferred acquisition costs | 0 | 0 | 0 | 0 | ||
Non-insurance warranty expense | 0 | 0 | 0 | 0 | ||
Other insurance related expenses | 0 | 0 | 0 | 0 | ||
Other expenses | (2) | (1) | (5) | (3) | ||
Total claims, benefits and expenses | (2) | (1) | (5) | (3) | ||
Core income (loss) before income tax | 0 | 0 | 0 | 0 | ||
Income tax (expense) benefit on core income (loss) | 0 | 0 | 0 | 0 | ||
Core income (loss) | $ 0 | $ 0 | $ 0 | $ 0 | ||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Business Segments (Balance Shee
Business Segments (Balance Sheet Information) (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||||
Reinsurance receivables | $ 5,603 | $ 5,438 | |||
Insurance receivables | 3,551 | 3,187 | |||
Deferred acquisition costs | 885 | 806 | [1] | ||
Goodwill | 146 | 144 | [1] | ||
Deferred non-insurance warranty acquisition expense | 3,689 | 3,671 | [1] | ||
Insurance reserves | |||||
Claim and claim adjustment expenses | 22,802 | 22,120 | [1] | ||
Unearned premiums | 6,978 | 6,374 | [1] | ||
Future policy benefits | 13,666 | 13,480 | [1] | $ 14,157 | $ 19,132 |
Deferred non-insurance warranty revenue | 4,735 | 4,714 | [1] | ||
Operating Segments | Specialty | |||||
Segment Reporting Information [Line Items] | |||||
Reinsurance receivables | 1,530 | 1,384 | |||
Insurance receivables | 1,034 | 1,082 | |||
Deferred acquisition costs | 395 | 381 | |||
Goodwill | 117 | 117 | |||
Deferred non-insurance warranty acquisition expense | 3,689 | 3,671 | |||
Insurance reserves | |||||
Claim and claim adjustment expenses | 7,183 | 6,878 | |||
Unearned premiums | 3,194 | 3,193 | |||
Future policy benefits | 0 | 0 | |||
Deferred non-insurance warranty revenue | 4,735 | 4,714 | |||
Operating Segments | Commercial | |||||
Segment Reporting Information [Line Items] | |||||
Reinsurance receivables | 1,153 | 1,062 | |||
Insurance receivables | 2,050 | 1,728 | |||
Deferred acquisition costs | 359 | 321 | |||
Goodwill | 0 | 0 | |||
Deferred non-insurance warranty acquisition expense | 0 | 0 | |||
Insurance reserves | |||||
Claim and claim adjustment expenses | 9,674 | 9,395 | |||
Unearned premiums | 2,882 | 2,425 | |||
Future policy benefits | 0 | 0 | |||
Deferred non-insurance warranty revenue | 0 | 0 | |||
Operating Segments | International | |||||
Segment Reporting Information [Line Items] | |||||
Reinsurance receivables | 445 | 414 | |||
Insurance receivables | 462 | 369 | |||
Deferred acquisition costs | 131 | 104 | |||
Goodwill | 29 | 27 | |||
Deferred non-insurance warranty acquisition expense | 0 | 0 | |||
Insurance reserves | |||||
Claim and claim adjustment expenses | 2,583 | 2,403 | |||
Unearned premiums | 790 | 653 | |||
Future policy benefits | 0 | 0 | |||
Deferred non-insurance warranty revenue | 0 | 0 | |||
Operating Segments | Life & Group | |||||
Segment Reporting Information [Line Items] | |||||
Reinsurance receivables | 100 | 101 | |||
Insurance receivables | 4 | 8 | |||
Deferred acquisition costs | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Deferred non-insurance warranty acquisition expense | 0 | 0 | |||
Insurance reserves | |||||
Claim and claim adjustment expenses | 688 | 695 | |||
Unearned premiums | 112 | 103 | |||
Future policy benefits | 13,666 | 13,480 | |||
Deferred non-insurance warranty revenue | 0 | 0 | |||
Operating Segments | Corporate & Other | |||||
Segment Reporting Information [Line Items] | |||||
Reinsurance receivables | 2,375 | 2,477 | |||
Insurance receivables | 1 | 0 | |||
Deferred acquisition costs | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Deferred non-insurance warranty acquisition expense | 0 | 0 | |||
Insurance reserves | |||||
Claim and claim adjustment expenses | 2,674 | 2,749 | |||
Unearned premiums | 0 | 0 | |||
Future policy benefits | 0 | 0 | |||
Deferred non-insurance warranty revenue | 0 | 0 | |||
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Reinsurance receivables | 0 | 0 | |||
Insurance receivables | 0 | 0 | |||
Deferred acquisition costs | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Deferred non-insurance warranty acquisition expense | 0 | 0 | |||
Insurance reserves | |||||
Claim and claim adjustment expenses | 0 | 0 | |||
Unearned premiums | 0 | 0 | |||
Future policy benefits | 0 | 0 | |||
Deferred non-insurance warranty revenue | $ 0 | $ 0 | |||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Business Segments (Revenues by
Business Segments (Revenues by Line of Business) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Total revenues | $ 3,304 | $ 2,926 | [1] | $ 6,456 | $ 5,811 | |
Total operating revenues | 3,336 | 2,985 | 6,523 | 5,881 | ||
Net investment gains (losses) | (32) | (59) | [1] | (67) | (70) | [1] |
Operating Segments | Specialty | ||||||
Total revenues | 1,361 | 1,286 | 2,694 | 2,544 | ||
Operating Segments | Commercial | ||||||
Total revenues | 1,291 | 1,091 | 2,493 | 2,121 | ||
Operating Segments | International | ||||||
Total revenues | 328 | 284 | 641 | 561 | ||
Operating Segments | Life & Group | ||||||
Total revenues | 342 | 320 | 671 | 651 | ||
Operating Segments | Corporate & Other | ||||||
Total revenues | 16 | 5 | 29 | 7 | ||
Eliminations | ||||||
Total revenues | (2) | (1) | (5) | (3) | ||
Management & Professional Liability | Operating Segments | Specialty | ||||||
Total revenues | 718 | 680 | 1,423 | 1,353 | ||
Surety | Operating Segments | Specialty | ||||||
Total revenues | 183 | 162 | 351 | 310 | ||
Warranty & Alternative Risks | Operating Segments | Specialty | ||||||
Total revenues | 460 | 444 | 920 | 881 | ||
Middle Market | Operating Segments | Commercial | ||||||
Total revenues | 419 | 374 | 817 | 736 | ||
Construction | Operating Segments | Commercial | ||||||
Total revenues | 420 | 350 | 805 | 674 | ||
Small Business | Operating Segments | Commercial | ||||||
Total revenues | 160 | 143 | 310 | 281 | ||
Other Commercial | Operating Segments | Commercial | ||||||
Total revenues | 292 | 224 | 561 | 430 | ||
Canada | Operating Segments | International | ||||||
Total revenues | 96 | 91 | 189 | 179 | ||
Europe | Operating Segments | International | ||||||
Total revenues | 135 | 118 | 262 | 238 | ||
Hardy | Operating Segments | International | ||||||
Total revenues | $ 97 | $ 75 | $ 190 | $ 144 | ||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Non-Insurance Revenues from C_2
Non-Insurance Revenues from Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | [1] | |
Revenue from Contract with Customer [Abstract] | ||||||
Deferred non-insurance warranty revenue | $ 4,735 | $ 4,735 | $ 4,714 | |||
Contract with customer, liability, revenue recognized | 200 | $ 300 | 600 | $ 700 | ||
Deferred non-insurance warranty acquisition expense | $ 3,689 | $ 3,689 | $ 3,671 | |||
[1]As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been adjusted to reflect application of the new guidance. See Note A to the Condensed Consolidated Financial Statements for additional information. |
Non-Insurance Revenues from C_3
Non-Insurance Revenues from Contracts with Customers (Performance obligation) (Details) $ in Billions | Jun. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 0.9 |
Remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1.2 |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 0.9 |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1.7 |
Remaining performance obligation, expected timing of satisfaction, period |